Wednesday, March 31, 2010

Some sense on patents please

On Monday Judge Robert Sweet struck a blow for common sense in that mind boggling area of Patents in the US. He invalidated several patents on two breast cancer risk genes in the human body issued to a bio tech firm. He had a breathtakingly simple logic – you can’t patent a product of nature !

The principle of protecting innovation through patents has been rather stretched in the US. All sorts of stuff gets patented. Many of these are primarily designed to block, or sue, others. The Patent Office uses the criteria of novel, non obvious and useful in determining whether a submission qualifies for a patent. It should also add non trivial, non absurd and non laughable as criteria !

For your reading pleasure here are some actual patents issued in the US

-Method of stopping a stolen car without a high-speed chase, utilizing a bar code (well ; the barcode is to identify the vehicle; the method of stopping it is to switch off the engine)

- Anti-Eating Mouth Cage (presumably a weight reduction “device”)

- Electrified table cloth (to discourage bugs from crawling on to the table cloth)

- Beerbrella (an umbrella attached to the beer can to keep the sun off your beer)

- Method of exercising a cat (waving a laser pointer and making the cat jump up and down)

- Device for the treatment of hiccups (a glass that delivers a mild electric shock when drinking to make you stop hiccuping)

- Motorized Ice Cream Cone (Instead of licking the cream manually, you stick out your tongue, the cone rotates and you can make designs on the ice cream without having to move your tongue)

- Animal Ear Protection (a device for preventing long eared dogs from getting their ears dirty from their food bowl)

- Device For Moistening The Adhesive Coating On Postage Stamps and Envelopes ( No kidding – the patent says, the applicator may be a human tongue)

- Hands free towel carrying system (A towel with a loop for hanging from the neck)

- Linear putter device of a golf club (well; a golf club)

- Equidae Excrement Receptacle (in plain English, a horse diaper)

- Hijacker Injector (a hypodermic injection apparatus that is installed on the seat and which the cabin crew can remotely activate to inject a hijacker)

- Gas Factory (a devise to strap on a cow’s back which taps the methane emitted by cows and converts into a biomass)

- Airplane moisturizer (a mask you wear which captures the moisture you exhale and gives it back to you when you inhale)

- Hand near mouth alarm (another dieter’s aid)

- Ultimate umbrella (a huge baseball cap mounted on your head)

- Cheese filtered cigarette (apparently hard cheese is a good filter and you can get a cheesy flavour to the smoke)

One of the readers of this blog actually worked for the US Patent office. Would welcome his rebuttal of this piece.

Tuesday, March 30, 2010

Bailout or Bonanza ?

Mr Vikram Pandit
Chief Executive officer
Citigroup Inc.
New York
United States of America

Dear Mr Pandit

You are probably used to receiving hate mail, but here’s a letter that you might be very pleased to read.

I read in the Wall Street Journal that the United States Government is planning to sell its 27% holding in Citigroup over the next few months. It is heartening to note that US tax payers are expected to make a profit of $ 7bn from their original “bailout” money that they gave to Citigroup. You have not only paid back the entire amount, but also let the taxpayer make a profit of $ 7 bn.

Yours was the last bank from which the government is completely recovering the money it lent under the Troubled Asset Relief Program, more popularly called as the bank bailout. The US government invested a total of $165bn in all the banks and in the end it has made a 14% return ; not bad considering that if the tax payer had invested in the S&P index at the same period he would have lost 3% by now.

This is of course only the banks – the government has lost money on the support it gave the auto companies like GM and Chrysler, insurance companies, like AIG and of course Freddie Mac and Fannie Mae. But then these are not banks. Public perception has been that the bailouts were some sort of a dole for bankers and aroused all the attendant anger against bank bonuses. The truth is that the bankers actually made a whopping profit for the tax payer , which the tax payer would not have otherwise earned. I would therefore suggest that the bankers be awarded extra bonuses !

Killjoys such as Simon Johnson, of the Massachusetts Institute of Technology have said that “it's baloney to say we've made money off the bank bailouts", because the banks actually survived only because of the government largesse to AIG who then paid back their dues to the banks. But that’s like saying that businesses make a profit only because government built the roads on which the companies can move their materials. The reality is that the “bailout” of the banks has gone incredibly well for the tax payer . Can you fail again please, so that we can once more bail you out and make these profits all over again ?? Only half joking.

I am well aware that you were summoned before the US Congress’s House Finance Committee in Feb 2009, when things were looking bleak, and you were railed at by pompous Congressmen. If they have any sense of fair play, they should be summoning you to the House again and showering you with praise. Of course, such magnanimous behaviour cannot be expected of elected representatives, so I suggest that you derive vicarious pleasure by cocking your nose, sticking your tongue out and saying “Boooo” to them while making a face.

I am also aware that while you achieved all this, you have taken home a salary of $1. The taxpayer has made money; the shareholders have made money, the customers have been protected and for all this, you are being rewarded an annual remuneration of $1. This is a crying shame. I propose that you be awarded a bonus of some $10m for outstanding achievement.

Yours sincerely

Just an ordinary Joe

Saturday, March 27, 2010

With malice towards one and all

Such was the title of Khushwant Singh’s column in the Illustrated Weekly of India. Both the gentleman and the magazine are perhaps unfamiliar to the “teenagers”(the list now officially includes ambulisamma and Vishal) who visit this blog. But there was a time when it was the only English magazine in India and Khushwant Singh, as its editor, was the most famous journalist. Despite the title, the column was usually humorous, although he did take pot shots at all sorts of people.

This light hearted Sunday post is in similar vein, the writer having woken up today in an impish mood.

In every country there are provincial jokes, and China is no exception. This popular tale sent me rambling off.

An alien came down to earth and landed in China. It first landed in Beijing. Immediately the people decided that it was a great political victory that must be showcased to the world as proof of the supremacy of the Communist Party and the Han race. The alien then went to Shanghai. Here the people argued as to the most effective way of making money from it; how it can be traded, showcased, etc etc. Then the alien landed at Guangzhou (my place). Here the people debated on how to cook and eat it !

Now what would happen if the alien went to various other places. Here is some wild conjecture.

The alien went to Britain. It was immediately told to curtsy to the Queen, stand a round of drinks in the local pub and asked whether it was a Manchester United or Liverpool supporter. The Sun published a topless photo of the alien in Page 3 and hinted that Naomi Campbell had already had an affair with it.

In France, the alien was told to speak in French, consume 3 bottles of wine at lunch, go on strike for half a day and take a holiday for the remainder of its stay.

In Germany the alien was asked how to curb inflation, not to support Greece, pulled up for driving at less than 200mph on the autobahn and told that it was as glamorous as Frau Merkel.

The alien went to Japan. After being photographed a million times, and reprimanded that it didn’t bow properly, the alien was bribed by all the political parties and told to visit the Yasukuni shrine. Its tongue was then cut off and eaten as sushi.

Off it went to Thailand. It was promptly captured as a slave and put to work in a go-go bar in Patpong Road. When it escaped, it was given a red shirt, told to demonstrate against the government, shut down Suvarnabhumi airport and preferably egest on the floor in the arrivals hall.

In Singapore, it was told not to chew gum, enrolled in a marriage class advising how to produce more children and caned on the back 6 times for not genuflecting in front of the Minister Mentor, or whatever he is called now.

In Dubai, it was asked to speak Malayalam. Its passport was snatched away by a Shekih and it was enlisted as a labourer building Burj II. It was then taken up and down Sheikh Zayed road at 700 mph and then deposited in a gold souk.

Off it went, to the US of A. It was denied entry for 7 hours at immigration because its Alien P2FB visa was not in order. It was then promptly sued for $ 7 trillion for causing mental anguish to the immigration officer by being an alien. The Tea Party Movement announced that its arrival was proof of the failure of Obamacare and Fox News interviewed it along with Sarah Palin.

And last of all, it came to India. It could not land in Mumbai because a certain Thackeray declared that it would not be allowed to land there as it was not a Manoos. 24 PILs were filed that the alien was a terrorist and must be deported immediately. Mayawati wanted 23.4% reservation for aliens in government jobs. A despondent alien finally made its way to Chennai. Here it met Gils, wearing a red trouser and a green shirt. And what did Gils do ? He promptly took it to a movie (movie review to appear next week in Gils’ blog). The alien could bear all what was inflicted on it in all other countries, but this was too much. It promptly decided that it could stand Earth no more and fled back to where it came from.

Wednesday, March 24, 2010

The bribery mess at Daimler

The bribery mess at Daimler makes sorry reading. Every party involved is showing up in the worst possible manner. Whatever promoted a global corporation of the standing of Daimler to be in this situation ?

The case is as follows. Daimler is accused by the US authorities of paying bribes of tens of millions of dollars in over 22 countries over a 10 year period. Daimler, it is reported, has agreed to pay a $185 m fine to settle civil and criminal charges. Daimler, it is alleged, set up shell companies to channelise the bribes, Bribes have included gifting an armoured car to a Turkmenistan official, siphoning of funds to the bank account of the wife of an official in China, 10% kickback to Iraqi government under Saddam Hussein, and so on and so on. It makes sordid reading.

First culprit is Daimler , of course. This has been going on systematically over a number of years. A lot of people have turned a blind eye to the goings on. At best, this can be calculated ignorance, and at worst, active encouragement. The amount of money involved has not been much. It is estimated that through all this bribery Daimler earned a profit of $50 m which is a drop in the ocean that Daimler is. Did this really matter so much to stoop to the level of blatant bribery. Why did they do this ?? Why on earth would an organization of the stature of Daimler take such risks for such a measly reward ?

The affair came to light through a whistle blower, in the then Chrysler wing of Daimler. An internal auditor at Chrysler blew the whistle. He went to his boss. His boss told him to keep quiet. He went to his boss’s boss. Who also did nothing. In due course, he was transferred and then sacked. Classic fate of whistle blowers. So much for whistle blowing mechanisms, hotlines, Sarbanes Oxley provisions, etc etc. Total muck on the faces of the people who handled the whistle blower. And equal muck on the face of those responsible for running Daimler’s ethics practices.

Lets turn to the position of the German government. Normally the German authorities are at the forefront of actions against bribery and corruption. They acted famously in a case involving Siemens a few years ago. Daimler is a German company. But they have been prosecuted by the US government. The German authorities have not yet brought any charges. What were they doing. A charitable explanation is that they were sleeping. At the very least they should look sheepish – a German headquartered corporation’s behaviour in 22 countries has been acted against in the US, not Germany.

The only party coming out of this without a stink is the US authorities. They are usually very rigorous in pursuing acts of wrong doing relating to bribery and corruption. They went after Daimler through a variety of laws that gave them jurisdiction, even though Daimler is German company and these acts happened outside the US. Other countries would do well to emulate the US authorities who simply do not compromise on such matters.

This affair makes this writer wring his hands in despair. Multinational companies are accused of all sorts of things all over the world. The very world multinational is construed to be a very dirty world. The majority of such accusations are blatantly false. They are the product of jealousy, misguided nationalism and downright lies. For the large part, multinationals behave honourably across the world and often much better than their local counterparts. I have some credentials to say so – I have worked in multinationals all through my career, and seen very many of them operating across many countries. But then there are also cases like Daimler. They deserve to be given exemplary punishment – not only because of the shame of what they did, but also because mud sticks on very many other more responsible companies because of their actions.

Tuesday, March 23, 2010

The millionth Maruti

You may have noticed the news item that Maruti announced that it had rolled out its millionth car in a single year ; apparently it joins global giants like Toyota, GM, Ford etc ; a handful of companies to have achieved this. For non Indian readers of this blog, Maruti is a Suzuki controlled Indian car company that’s the market leader in India. Such statistics mean little except dubious PR value. But it certainly set me off to wax nostalgic about when Maruti first came.

Readers of this blog are refreshingly young. Teenagers like AJCL, Gils, Deepa, Sandhya, et all, were hardly born when the first Maruti car rolled out on Indian roads :) Being slightly elder to this sprightly young lot, I have some credentials to a “those were the days” kind of post.

This is the late seventies; early 80s. India was firmly a socialist country. This was the time we actually amended the preamble to the Constitution to include the words socialist India (it still sits in the preamble). The Taliban would have been very comfortable in that setting – anything that even remotely connoted luxury was considered unethical. No colour TV (poor nation cannot afford it). Entertainment meant watching Sholay for the 37th time. No credit cards – not allowed. No foreign travel – daily allowance of forex, even if you did, was $20. In this wonderfully socialist state, a car was basically considered indecent.

So you had a choice of an Ambassador(Morris Oxford, which was discontinued in the UK in 1959) or a Premier (Fiat 1100 – god knows when it was discontinued in Italy). You had a scintillating choice of colours – black or white. They were considered “rugged” and “for Indian roads”. Every 20kms or so, you stopped your car , opened the hood, let out the steam, poured some water in, waited for some time and then drove off.

Sanjay Gandhi, an Indian politician, (or more accurately the son of a Prime Minister) was a car nut. He started Maruti. Of course that went against every fundamental grain of socialism. But Sanjay Gandhi being Sanjay Gandhi – he could do what he wanted. So this was positioned as a car for the masses. Our enlightened leaders, being what they are, agreed that this was very socialist. Sanjay Gandhi passed away in an air accident before the first car rolled out but by then the project had gone far too ahead to be reversed. So, on came the JV with Suzuki. Out rolled the Maruti 800 in 1983.

The sight of a Maruti 800 on the Indian road was a turning point in Indian’s economic history. It was a small car – a tiny car in order to keep with the socialist aspirations. But it was a car that was light years ahead of the Ambassador and the Premier. It was derided and mocked at for not being rugged enough to handle the Indian roads. It was joked that at the slightest touch, it would crumble and crush the occupant. It was jeered that at the smallest puddle usually found on the road, it would drown. But surprise, surprise, it actually was the more robust one. It broke down the least. It rarely stalled even in the Bombay rains.

At first it was a luxury symbol. Only the very rich bought it. Therefore the hilarious sight of a chauffeur driven Maruti 800 which, as it passed, usually generated hoots of derisory laughter from cab drivers driving the battle tanks that the Ambassador (in Calcutta) or Premier (in Bombay) were.

But slowly and surely, it became a hit. It changed India. Ambassador and Premier are blessedly no more. Maruti Suzuki itself is still the largest player in the market. But the Maruti 800 itself is now being phased out as newer models galore have taken to the streets. But it deserves a special place in India’s recent history. It heralded the takeoff of India. India would never be the same again.

Sunday, March 21, 2010

Kill the killjoys

Pepsico will announce today that it will cut levels of salt, sugar and saturated fats in its top-selling products by a quarter during the coming decade amid rising pressure from governments to encourage healthier eating. At the same time it will be increasing whole grain, fruit, vegetable, nut, seed and low-fat dairy content. Other food companies are all doing the same thing, bowing down to a variety of pressure groups – governments, WHO and a sundry assortment of noise makers.

All food companies live in mortal terror of getting sued. McDonalds is the one that is most vulnerable – that’s why it is falling over itself to offer “healthy options”. This is to give Joe Public the perverse satisfaction of ordering a Big Mac and a Diet Coke !

Some obese overweight individual is going to win $100m from some food company – its only a matter of time. It’s a question of when, not if.

Can my voice be heard in this cacophony please. I do not want a healthy alternative – when I want that I will go elsewhere. When I buy a Pepsi, I want a sugary fizzy drink. When I open a packet of Lays, I want greasy wonderfully tasting chips. When I go to McDonalds, I want a Big Mac (no beef please), Large fries and a Coke. I don’t want some self appointed nanny to tell me what I should eat.

My body and my eating is my own responsibility. I have enough information in the world as to what is good and what is not. I don’t want more labeling – as it is, I can’t read the fine print any more; labels are increasingly like legal documents and not an information source. I will decide how healthy I want to be. I am adult enough to know how much of what food to eat. Most times, I will eat nutritious and good food. But sometimes I want to eat something that’s fun; and it doesn’t matter if its not loaded with the milk of human kindness.

People do not need nannying. The whingers who claim to have been misled into obesity are just that – whingers. Nobody forced them to eat like a pig. And those trying to make a case against food companies are simply gold diggers.

Can somebody tell me the difference between these lot and the Taliban ? The Taliban do not want music, TV, films, etc to “corrupt the mind”. The anti obesity lot are no different – they are equal killjoys. Can they mind their own business and leave us alone, please.

Saturday, March 20, 2010

Chinese cities you may not have heard of

Mark’s China Blog is one of the best China blogs around. Mark used to live in Xi’an until late last year when he returned back to his native US. He continues to write on China – his posts are meticulously researched , very interesting and has a very balanced perspective on this fascinating country.

He’s currently writing a series called – Chinese cities you’ve never heard of, but should know. It’s a brilliant series and this Sunday post is just a link to his blog. I am willing to bet that non Chinese readers of this blog would not have heard of these cities and this series is a fascinating peep into urban China. For Chinese readers of this blog, it is worth your while to dodge the jindun gongcheng and reach there - you will find a Sinophile’s perspective on your cities interesting. Either way it’s a wonderful read.

Happy reading !

Thursday, March 18, 2010

To recall or not to recall ?

"To recall , or not to recall; that is the question". With due apologies to Shakespeare, this could very well be the modern day conundrum for businesses. The travails of Toyota , with its recalls, are very well known. What prompted this post is the news of recall of 1.2 million high chairs (the sort you strap your child to), because they could pose a fall hazard to children.

Readers of this blog know well that this writer is an opinionated individual, prone to verbal excesses and assumes a god given right to hold a point of view on any subject under the sun. The less he knows about a topic, the more strident is his opinion ! For a change, here is a topic on which he confesses to not being sure about; hence both sides of the coin in this post.

The case in question is about high chairs produced by a certain manufacturer in the US. Apparently the risk is that "screws holding the front legs of the high chair can loosen and fall out" and cracking plastic brackets can cause the high chair to "tip over unexpectedly." No less an august body than the The Consumer Product Safety Commission has issued this opinion. The company is complying. A million plus high chairs are being recalled.

In today’s world, at the slightest hint of a product risk, companies have to run like Usain Bolt and announce a global product recall. Otherwise they will be accused of negligence and delay in recalling and get sued. They will hauled in front of US Congress / British Parliament / Lesotho’s Politburo and bullied by the revered elected representatives.

The case for – There can be no compromises on product safety. Period. A dangerous product has to be removed from the market, before it can do more harm. It is because this requirement is so stringent that product safety features have gone up a thousand fold. Consumers can now trust and buy a product knowing that it won’t be unsafe or do them physical harm. It is better to be safe than to be sorry; so at the first whiff of a problem, get it out of the market. Speed is essential – else companies and regulatory authorities can spend months or years debating about the issue and the risk continues. How many injuries should happen, or lives lost, before the action is taken ??

The case against – There is no such thing as a risk free world. It is the inherent nature of screws that they can loosen. In this case there have been 24 reports of scratches, bumps and bruises. Does that justify 1 million chairs to be recalled. There will always be the odd circumstance in any product where potentially something unsafe could happen. Does it mean that at the first whiff, you first recall and argue later. Recalls are incredibly expensive – at the end the consumer pays for all this as there is no free lunch. If there is a genuine and widespread safety fear, the product must be recalled. But not at the first scent of scaremongering.

Which is right ? I don’t know. Would you like to throw some light ?

Wednesday, March 17, 2010

Don't vote for XYZ Inc.

Murray Hill is running for the US Congress. At first glance, nothing seems to be wrong with that – surely anybody can run for Congress. But then Murray Hill is unique and a first. For its full name is Murray Hill Inc. It’s a company; not a person. An interesting article in the Economist (click here) examines this quirky issue superbly.

This is a consequence of a landmark US Supreme Court judgment in January. In a bitterly divided 5-4 decision, the Supreme Court ruled that the First Amendment free speech rights extended to corporations. The biggest impact of this ruling would be that no limits can be placed on political contributions by businesses. The impact of business on politics is bound to increase, and this has generally been considered to be not a good thing.

But another consequence of the decision seems to be what Murray Hill is contemplating. It faces huge hurdles for sure – there must be a myriad of other laws that require a candidate to be of flesh and blood. As The Economist says, Murray Hill is sure to fall foul of one requirement– all candidates have to be 18 years of age or above and Murray Hill Inc is only 5 years old ! In any case, it has little chance of getting elected – its slogan is “put people second” and “create the best democracy money can buy”. After all Murray Hill is a PR company trying to gain some publicity.

But underneath this lurks a real issue, The rather blas̩ view in The Economist that companies can be pressurised to act responsibly in engagement with the political process is dangerous. Businesses will not act responsibly Рthey will act precisely in their own self interest and to hell with everything else. After all that is their charter. They will lobby furiously for breaks; they will compete for pork; they will finance candidates who will do them favours after getting elected.

The Supreme Court decision has raised alarms across the US. The Court appears to have become as bitterly divided as the US nation itself – there is a big drift to the extremes on both sides of the political divide. All the “conservatives” on the bench voted for the decision. All the “liberals” dissented.

In my view businesses are crucial to economic activity, but must remain there. There is grave danger in allowing them to be part of the political process. Businesses are not members of society – only people are. Businesses already influence political processes far too much because they finance much of it. By their very nature they cannot aid sensible public policy. They should not be allowed anywhere near it.

There is grave danger in voting for XYZ Inc.


Industry, scholarly and policy discussions about the future of the news industry in North America and Europe continue to focus on how news enterprises can sustain themselves in the 21st century. Publishers keep asserting that things will be fine if they can erect pay walls and charge for news online and they argue that governments should provide legal protections for online news so they can make news a viable digital business product.

Their approach is wrong and ignores the fundamental reality that news has never been a commercially viable product because most of the public has been, and remains, unwilling to pay for news. Consequently, news has always been funded with income based on its value for other things.

Historically, the first collection and dissemination of news was funded in ancient times by emperors and kings, who used governors and officials throughout their realms to collect news and information and send it to the seat of power. Emissaries, consuls, and ambassadors collected foreign news and information in places important for trade or seen as potential threats to the realms. In this Imperial Finance Model, news and information were collected and shared with officials throughout the realms to assist in governance activities. This revenue model was based on official financial support because it served the interests of the state.

In the Middle Ages, a Commercial Elite Finance model developed in which wealthy merchants hired correspondents in cities and states with which they traded to collect information about political and economic developments relevant to their trade. Linen, porcelain, sherry, and spice merchants used the news for commercial advantage and held it in confidence rather than sharing it with others.

In the 18th and 19th centuries a broader Social Elite Finance Model developed to support newspapers that served the needs of the aristocracy and widening merchant class. Even with high cover prices, this model news was not viable and newspapers were subsidized by commercial printing activities and income from other commercial activities, governments and political parties, and merchant associations.

The Mass Media Finance Model appeared in the late 19th and 20th century, made possible by the industrial revolution, urbanization, wage earning, and sale of finished goods. In this model news was provided for the masses at a small fee, but subsidized by advertising sales. Because most of the public was uninterested in day-to-day events and “hard” news, the bulk of newspaper content was devoted to sports, entertainment, lifestyle, and features that increased the willingness of the public to spend pennies for the product.

This mass media financing model remain the predominant model for financing news gathering and distribution, but its effectiveness is diminishing because the “mass” audience is becoming a “niche” audience in Western nations as those less interested in hard news continue abandoning newspapers for television, magazines, and the Internet. This is creating a great deal of uncertainty how society will subsidize and pay for journalism in the twenty-first century.

Focusing on news as a commercial product appears futile and commercial news providers would do well to put their efforts in creating other commercial activities that can subsidize news provision, such as events, education and training, bookstores, travel agencies, and a variety of merchandising activities. Many publishers subsidized news activities with these types of activities a century ago and some continue to do so. It is likely that news providers will rely on a far wider range of revenue streams in the future than merely on the consumer and advertising streams upon which they depend today.

Tuesday, March 16, 2010

Pip pip, toodle-oo; its just not cricket

If ever there was a misleading title to a post, this must be it. This is not about cricket at all. Neither is it about Bertie Wooster. Instead it’s a most ungentlemanly rant.

Readers may recall that I had railed about the behaviour of US Congressmen towards Akio Toyoda here. Something similar has now happened with British MPs and Kraft. This growing trend of activism by politicians towards business is dangerous.

What happened yesterday was this. Kraft was “summoned” to appear before the House of Commons’ business, innovation and skills committee (let us lightly pass over the delicious irony of the words skills and innovation being featured in the same sentence as MPs !) Unlike the brave Toyoda-san, Irene Rosenfeld, Chairman of Kraft ducked this one and sent Marc Firestone Kraft’s head of corporate and legal affairs. Marc Firestone, as far as I know, is a US national. He is not a subject of Her Majesty and British MPs have absolutely no right to behave as they did with him. You can read an account of the select committee hearing here. I happened to listen to snippets of the hearing on BBC Radio yesterday. Marc Firestone was virtually in tears and the bullying by the MPs was downright scandalous.

The problem relates to Cadbury’s Somerdale plant near Bristol. Well before the affair with Kraft, Cadbury had planned to close this factory. During the very public wooing of Cadbury, Kraft unwisely announced that it would not close the factory in a dumb move to get public support. After the deal had been done, Kraft announced that it would close the factory after all, saying that it had not known previously how far advanced the Cadbury closure plans were. Kraft clearly did a mistake, and was blatantly at fault. But the crux of the matter is this – it has done nothing wrong legally.

It is irrelevant to this argument whether Kraft was right or wrong. The British Parliament has no right to demand anything of Kraft US. Sure – it can proceed against Kraft UK. It can certainly action against British nationals, if they have done anything illegal. But other than that, it has no business calling foreign nationals and bullying them.

Unlike Toyoda san, Irene Rosenfeld chose to duck this, but for the wrong reasons. If she had upfront stated that British MPs had no right to demand anything of her, I would have applauded. Of course, saying such a thing would be a PR suicide. Instead she chickened out quietly. That would equally haunt her as a PR disaster worse than if she had come. Some readers of this blog know of an alternate person she could have sent, who I believe would have acquitted himself a little more credibly. On second thoughts, he would never have come; knowing which battles he could win and which he couldn’t. Would love to see some comments on this from those who know him.

This growing political interference with businesses needs to be condemned. I could mouth some obscenities. But then , although the sun has set on the British empire (maybe the MPs haven’t noticed it as yet), some of the glories of British culture are alive and well in the Commonwealth. The British MPs behaved like boors with Marc Firestone. I will express disapproval in a more British way. Pip pip, toodle-oo ; its just not cricket old chap.

Monday, March 15, 2010

Nuclear Noclear

Amidst all the ruckus caused in the Indian Parliament by the Women’s Reservation Bill, you could be forgiven for having not noticed the stalemate regarding the Civil Liability for Nuclear Damage Bill, 2010. You would even be forgiven for yawning at the very mention of this “exciting” piece of legislation. Spare a minute to consider how important this is.

Anybody even remotely familiar with India will easily relate to the abysmal power situation in the country. That Indians have come to accept power cuts as a way of life is a sad commentary on Indian stoicism. The worst way to solve the power situation is for each building and shop to own a DG set – it’s the most inefficient and polluting solution possible and yet this is exactly what we do.

As India grows, its power needs will multiply manifold. Where will this power come from ?? Coal ? Too polluting. Hydel ? Not much scope and in any case the likes of Medha Patkar will make it impossible to implement. Oil ? Will increasingly become unaffordable. Solar ? Too costly and the technology is not developed enough to be deployed on scale. Wind ? Tidal ? Ditto – same problem. There is really only one solution – Nuclear.

The word nuclear raises all sorts of visions of Armageddon. In today’s world there seems to be scare mongering and general distrust of science – witness the furore on genetically modified crops. But nuclear power generation can be as safe as any other means of generation, and less polluting. Sure safety standards have to be incredibly rigorous. But there is no risk free ticket to growth and prosperity. There has to be a balance of growth, risk, environment and a whole host of competing considerations.

This is part of the reason why Manmohan Singh was ready to risk his government to sign the US deal a few years ago. India has since then steadily progressed on this front. Multiple agreements have been signed with France and Russia. Now there needs to be legislation to cap liabilities in case of a nuclear accident , which is why the bill with the highly exciting name was introduced. The cap on liabilities is required to make any supplier of nuclear reactors to do business with you – the threat of unlimited liability is simply not a risk any company would take. At first sight, this might sound like a sell off of interests to US companies ; but it isn’t ; there are already international conventions on this subject - the Vienna Convention on Civil Liability for Nuclear Damage, the Paris Convention on Third Party Liability in the Field of Nuclear Energy, etc. India needed this bill to sign some of the conventions.

Opposition parties have shouted hoarse that this is a sale of national sovereignty to US companies (using whatever lung power they have left after the yelling over the Women’s Reservation Bill). Our elected representatives are not known for their dispassionate evaluation of issues on merit. Very likely, this bill will be shelved. And the power situation will drift, as it always has. Meanwhile, Indians will learn to live with more power cuts. And the rich will keep buying DG sets. And as a nation, we will keep finding the most inefficient way to meet the requirements of power.

I’ll leave you with this thought. When I came to China, I one day asked my IT colleagues, where is the UPS and what is its capacity. I was met by puzzled faces. UPS ?? What is UPS ?? The concept of a power cut is alien in this place.

Saturday, March 13, 2010

And the award goes to .....

This being Oscar season, it is but natural that some awards float around in the blogging world. But I was completely bowled over to receive an award from le embrouille blogueur. For those of you challenged on the intricacies of French, he is the very opposite of “le embrouille”. Superb blogger, who is however in “prison” these days and hence not blogging very often – but when he does, he produces masterpieces. Thank you THE blogueur.

I am much tickled by the “Beautiful Blogger Award”. I have been accused of many things, but beautiful ???? :)!! Whew ! I have been walking around with a silly smile on my face !

Bloggers love to keep chains going. Hence any award or tag comes with conditions. This one says - thou shalt

1) Thank the person who gave you the award
2) Paste the award on your blog
3) Link the person who nominated you for the award
4) Share 7 things you find to be beautiful around you
5) Nominate 7 bloggers or more

No 2, I cannot do – thanks to the Net Nanny. Complaints on this score may be directed to jindun gongcheng !

Nominating 7 or more bloggers is a joyful thing to do – for nothing is more pleasing than thanking the guys and gals who provide so much joy day in and day out. Le embrouille blogeuer has preempted me by awarding AJCL, The Thoughtful Train, Athivas and Adesh, who would have been on top of my list too. I am therefore going to nominate seven other bloggers, whose blogs I am very fond of reading. One favourite blogger I am passing because there’s no more space for awards on her shelf.

1. Sandhya – Superb blogger, who is equally at home writing a senti piece as she is in producing a treatise for publishing in a technical publication. A good friend and a warm commenter on this blog.

2. Deepa – Writes lovely fiction that is blended with reality and lovely reality that is blended with fiction. Trouble is that she writes once in 746 days - having too much fun hobnobbing with millionaires in the promised land. Wake up Deepa !

3. RamMmm – Lovely regular blogger, who makes me barking mad when he writes superb pieces on idlis – Oh the pleasures of life that we miss when we are in Net Nanny’s land.

4. Half Indian – This is supposed to be a blog by Dave Joneja, aged 6, but actually by his wonderful mom who is Chinese and has some of the finest photos you can see in blogosphere.

5. Sri – Although I have done this before, I want to “award” him again and again, for the brave soul has ventured in a brave new direction and deserved all our best wishes. Lovely foodie, travelogue writer , warm human being.

6. Reflections – The Begum is a superb blogger and routinely get 176 comments; for everybody loves her.

7. Gils – Of all the bloggers in this world, this one is totally unique. If your Tamil is not great, you may have some difficulty in following him, but nobody can comment as he does and nobody can blog as he does. In addition to the Beautiful Blogger award, I am inventing a Most Beautiful Commenter award for him.

Here are 7 things which I find beautiful around me in the blogging world

1. A snippet from Chotu
2. A thoughtful hoot from the train
3. A nice tale from the marathon runner
4. Wordless Wednesdays
5. Hope that a post would come from this eminent scholar - just discovered that she has deleted her blog when I tried to link it. OMG - athivas - please get it up again. That's an ORDER !
6. The occasionally literary piece from the Bach and Bradman fan
7. The thought of 46 comments for this post !!!!

Friday, March 12, 2010


Pink Floyd was always a unique rock group and understood its music as a form of artistic expression. It evolved from psychedelic music in the 1960s to progressive rock known for rock instrumental and acoustic effects in the 1970s. The group often saw their albums as integrated works of art in which subsequent tracks built upon earlier ones. They considered their entire recording to be art; that the ordering of tracks was part of the expression and should not be altered, and that the album should be enjoyed as a whole not merely as a collection of individual songs. Even the album covers got special artistic attention reflecting their content and experiences.

The band felt so strongly about the art of its music that it negotiated a contract with EMI that included a provision to “preserve the artistic integrity of the albums.”

Consumers obviously thought Pink Floyd got the art right, helping the group achieve 16 gold, 13 platinum, and 10 multi-platinum albums. Two of its albums sold more than 10 million copies. The group’s recordings are second only to the Beatles recordings in terms of their value, something not missed by the group’s label EMI.

With sales of digital downloads exploding (accounting for nearly $4 billion in industry sales last year), the record company saw gold in selling individual tracks from albums such as “The Dark Side of the Moon” and “The Wall”. It licensed Pink Floyd’s tracks for sale on iTunes. It was like EMI was cutting up a Kandinsky painting and selling the pieces individually.

The band wasn’t amused and headed to court. It argued that it albums were indivisible and that EMI had violated the contract with the group by splitting them up. EMI countered that it was all just a matter of the new way of doing business in the digital age and that the contemporary technology and business model made it necessary to do disaggregate the albums.

This week the court ruled in favor of Pink Floyd, awarding them $60,000 for the contract violation and $90,000 for legal costs. The court said EMI cannot distribute the group’s music "by any other means than the original album, without the consent of Pink Floyd."

The case is another in a long line of disputes over major media and online companies using content without appropriate permissions of copyright owners. These are the same companies that vigorously protect their own interests against individuals and other media companies and that regularly tell legislators they need more rights so they can protect the interests of authors, artists, and performers. The arrogance and duplicity could not be clearer.

It is also a stark reminder that most media enterprises are somewhat unhappy alliances between content creators—whether journalists, authors and writers, filmmakers or performers—and business creators who often have differing perspectives on the roles and functions that media perform for society and the individuals who use media for art and expression.

Saturday, March 6, 2010

Crash, bang, tring tring

National stereotypes are always wrong, but that doesn’t prevent us from indulging in them for fun. This blog has some pretense, to serious, thoughtful(?) and boring discussions on business. But on Sundays, this blogger takes a break to write an irrelevant, and opinionated rant on anything other than business. This Sunday, we shall venture shamelessly into an outrageous extrapolation of day to day incidents into national stereotypes, which are of course wrong - but then, since when has blogging got to be “right” ?

Take this situation you see everyday on the road. Some vehicle has hit another. Nothing much has happened – just a few dents. But what happens next is dependent on where you are.

If you are in Europe – both will stop, get out of the car and start to “talk” to each other. The more northern you are in Europe, it shall be an admonishment for not following the traffic rules and a firm statement that you are in the wrong. The more southern you get, the voices are more raised, shriller and perhaps a few curses shall pepper the dialogue. There will then be a detailed examination of the damage – almost always of the other vehicle; not yours. More dialogue of the above nature. If you happen to come from another country rather the one you currently are in, there shall be disparaging remarks of the driving ability of your countrymen. Europeans love to talk and argue, but do nothing.

If you are in the US of A – both parties are sizing what and how they can sue. And for how much. In which jurisdiction can you sue in order to maximize the chances of winning. You immediately start to evidence the mental anguish, the trauma, the post accident stress syndrome that you are bound to suffer from. You examine whether a case can be made for racial prejudice. You weigh the probability of invoking the Fifth Amendment. Chances are that the first words spoken after the incident is the Miranda warning. Americans love their lawyers and courts.

If you are anywhere in the vicinity of “Tupai”, it all depends on who you are and who the other guy is. If you are a Sheikh then you simply don’t stop; for you can’t be touched. If you are from the Indian subcontinent and the other guy is a Sheikh you just shake your fist at the speeding car and mutter a few curses. If both are either Malayali or Pakistani (the two tribes from the Indian subcontinent that inhabit Dubai), then you deal with the situation as Indians do – see below.

If you are in South Africa, you just take out your guns and shoot each other.

If you are in India, you get out of the vehicle and first bash up the other guy irrespective of who he/she/it is and who is in the wrong. If you are in Calcutta, then nearby minibuses will be stopped in the middle of the road, everybody gets down from the minibus and joins in the bashing up for fun. As you progress in the bashing, wonderfully inventive invective starts to emanate – at the other guy’s mother, sister, mother in law, grandmother, and even perhaps third cousin twice removed. Meanwhile a traffic jam of 1 mile on each side has built up and everybody cranes his neck out to watch. Indian’s are an angry lot and love to display their innovation in cursing and their completely unathletic ability in hitting the other guy.

But the strangest reaction of all happens in China. It never ceases to amaze me. Immediately after the incident , both drivers get out. They don’t even look at each other. They immediately fish out their mobiles and start calling their insurance company. No yelling, no cursing, no casting aspersions on the other guy’s manhood. I swear, I am not making this up. The Chinese love their money !

Wednesday, March 3, 2010

Beware of the super performers !

The mantra of all business (actually most walks of life) is superb & outstanding performance isn’t it ? It shouldn’t ! If this sounds absolutely ridiculous, read on …

Everywhere, the great performers are the stars. They are the ones who get big bonuses. They are the ones who get promoted lightning fast. The division that shows triple digit growth is treated akin to God. The bunch that didn’t meet its target is screwed. The lot that exceeded target by 354% is taken on an all expenses cruise to Hawaii. Right ? Maybe not so right.

One of my blogging friends took a light hearted dig at me for a mantra that features about once every month in this blog – If its too good to be true, its too good to be true ! I have learnt over the years to watch out for superlatives. Good performance – absolutely the minimum. Better than good performance; holy grail. But superfantasticstupendousunbelievable performance ? Take it with a huge pinch of salt.

One of the truisms in the business world is that there are a lot of smart people and lot of smart companies around. Its difficult to beat everybody all the time. It’s the same as in the stock market. Nobody can consistently overperform the index over say 20 years. Not even Warren Buffet. The right investing strategy is to pick an index fund and simply hold it for a long time. Actually all the smart alec fund managers are redundant. In the short run, you can beat everybody by a mile. In the long run it is empirically proven that its tough to beat the index. Good performance is the goal – not superfantastic ….

This post was prompted by the news of the sale of AIG’s Asian businesses to Prudential for $ 35bn. This business, called AIA is a star in Asia. It’s a solid business, performs very well, growing very well, etc etc. In fact most of AIG is like that. Its full of very well run businesses. One division – the Financial Products Division brought the whole house down. They were actually star performers in the years before. The Board should have looked critically at the “star performer”, instead of treating them as royalty. But then business, as indeed life, is full of "If only ...".

I am not making a case for mediocrity. Far from it. I am just cautioning not to go ga ga on exceptional performance. Look at it critically. Is it sustainable ? Was too big a risk taken ? Has there been jugglery with the numbers ? Is something being hidden ?

Superfantasticstupendousunbelievable is applicable only to God. When man lays claim to it, …. Beware. Watch out.

Monday, March 1, 2010

NGO Terrorism

NGOs find companies as soft targets for bullying. Companies, who are incredibly image conscious can easily be bullied – so catch hold of a company, drum up enormous publicity and companies have no choice, but to fall in line with whatever aim that particular NGO is propagating.

Let me state up front – I have no quarrel with many of the objectives that most NGOs are propagating. Some are loony, but most are very laudable. Many NGOs are highly motivated, care genuinely about their cause and altogether want to make the world a better place.

But NGOs have fallen prey to the classic trap of the end justifying the means. The causes that they propagate, relate to public policy. The correct way, in a democracy, is to take these to the voters, convince them of the merits of the policy, get elected to parliament and then pass legislation to that effect. That’s of course inconveniently long and painful and often fails to get voter endorsement. Therefore the quicker, easier (and wrong) way is to bully the soft targets – the corporates.

This post is prompted by the news that Caterpillar finally bowed down to the New York-based pressure group United Against Nuclear Iran (UANI) and announced that its foreign affiliates would suspend sales to Iran. Now American companies are already debarred from operating or selling to Iran, by US law. That’s why you cannot have Windows or MS office in Iran. It also applies to subsidiaries of US based companies. But it does not, and cannot, apply to foreign companies or companies which are not subsidiaries of the US company (much as US Congressmen like to think otherwise, the laws of the United States stop at the boundaries of that country).

UANI has also successfully bullied Siemens, Munich Re and Allianz to "boycott” Iran. There is currently no law in Germany to this effect so UANI has been “naming and shaming” to force companies to do its bidding.

This is a blatantly political issue. We may have our own private views on a nuclear Iran, but its certainly not the lot of companies to take positions on such a matter. This is for governments, parliaments and the United Nations. Companies have no business meddling in political affairs.

Corporates should follow the law of the land. Period. They are not instruments of public policy. The press, and NGOs, have every right to expose companies that violate the law. They have every right to name and shame law breakers. But they have no right to force their own point of view and achieve policy change by bullying companies.

The UANI should really be going to every major government and campaigning them to pass laws to prevent trade with Iran. Sure, that’s fiendishly difficult. But then that’s the route that is legal, ethical and moral. Forcing somebody to do something that he’s not required to do by law is simply immoral.

"The end justifies the means”, is the normal mantra of a terrorist. Do NGOs want to be bracketed with that lot ??