Posts

Good Grief President Trump!!

Good Grief President Trump!!

Since your Inauguration barely a week ago – President Trump – you have managed to upset important allies and trading partners, blindsided your national security team, frightened legal immigrants, and angered your own GOP majority in the Congress.

The majority of voters in over 30 states voted for you because they believed you would create jobs — not nationwide and global chaos!

I am troubled by both the pace of activity and the lack of strategic direction in your early actions. What’s the goal?

I was troubled enough to throw down $12.95 for a Kindle copy of your oft referenced “Art of the Deal” to see if I could make sense of the chaos.

Any Art in Your Executive Orders?

So far I’ve learned that Trump, the builder, sees himself as an “idea machine”; an entrepreneur who leaves the details to other people. He dislikes structure. He sometimes enjoys playing the “bad cop”.

His “bad cop” has stirred more global protest in just one week than the United States has seen since the end of the Vietnam War – over 40 years ago.

For a year and half you talked about all the “good deals” you were going to make for America.

It is time to stop stirring up the pot and start delivering DEALS that will keep Americans safe and prosperous at home and abroad.

Those are deals that heal the divisions within the United States as well as between the United States and its allies and “friendenemies” around the world.

Confrontation Does Not Lead to Good Deals

Good deals can be defined as deals where both sides in a negotiation get something they need by giving up something they want.

In my world we call it “finding the win/win”.

In the senior ranks of management consulting firms, my performance was judged on the ability to develop new business and manage executive relationships (i.e. new clients and new projects with existing clients). Execution – getting results – was always the foundation of success but revenue and relationships were the bottom-line.

Building a good deal does not start with a confrontation – as have so many of your actions in the last 10 days.

The art of building relationships and negotiating good deals starts with being a good listener and empathizer – not a frenetic actor!

Robert Gates, the highly respected former CIA Chief and Defense Secretary to both Presidents Bush and Obama, did not support you before the election. But – a patriot – he met with you at Trump Tower after the election.

Gates has generously described you as “thoughtful” and “open to advice”.

I found that description comforting – those are absolutely necessary characteristics in the President of the United States.

But, if you are a good listener, then the next two questions should raise alarm: Who have you asked for advice and – more importantly — who should you ask for advice as the “leader of the free world”?

Why Experience Matters

Based on the public evidence, you appear to be listening less to the experienced generals you’ve appointed to lead your national security team and more to the under skilled sycophants in the White House.

Is proximity the only source of power in your White House?

Press reports and the actions of General Kelly suggest that Homeland Security was not consulted before you issued new travel and immigration restrictions on Muslims from seven countries already under strict review.

Who persuaded you that announcing Mexico would pay for the southern border wall “one way or another” was the way to open negotiations or improve our relationship with Mexico?

Humiliating the Mexican president publicly instead of meeting with him privately this week in Washington makes NO sense!

Your actions and words will make it more difficult from Rex Tillerson (when he is confirmed) and General Kelly to negotiate a border security deal that serves the interests of both Mexico and the United States:

  • Stop illegal immigration transiting Mexico into the United States whether Mexican, Central American, Chinese or would-be terrorists and
  • Stop the drug smuggling that has cost countless lives on both sides of the border.

The reaction by the Mexican people and their political establishment to those words will, also, complicate renegotiation of NAFTA.

Nothing was gained. You can’t even check-off a campaign promise kept.

Start Firing the Right People

This week, President Trump, you need to restart your administration. The success of your Presidency hangs in the balance.

Bold action is required.

You’ve got to eliminate the people who have proven their advice is bad advice.

Time to tell physically and intellectually over-inflated Steven Bannon and the self-aggrandizing political errand boy Stephen Miller “you’re fired”.

Next ask the “4 Stars” what to do with “3 Star” General Michael Flynn. Then follow their advice!

Good luck – the nation is counting on you not to screw this up beyond repair in just two weeks.

Mexico

We Can Fix the Mess NAFTA Created for US/Mexico Trade

The Canada and USA Bi-lateral Free Trade Agreement was implemented in 1990.

At that time I was the Program Manager for a global logistics re-engineering effort at Unisys. This was a first-of-its kind Logistics System (people, process and enabling technology) seamlessly integrating manufacturing plants and distribution centers located in five countries – including the United States and Canada – on three continents.

The system tied every component (by “country of origin”) plus all labor added at every level of the manufacturing process directly to the unique (serial numbered) computer peripheral finished product.

The granular ability to track parts and tie them, across the global supply chain, to the individual worker who had handled them led to an agreement with the US Customs Service to provide entry documents electronically to the US Customs Service for pre- approval.

The team quickly created electronic entry documents to satisfy the new Canadian customs requirements – making Unisys an early beneficiary of the agreement.

After some initial hesitance by the Canadian people – who feared becoming a defacto 51st state – free trade between the USA and Canada has worked very well — accelerating negotiations for a tri-lateral North American Free Trade Agreement (NAFTA) — signed into law by Bill Clinton in 1993.

Why the Assumptions of NAFTA Failed at our Southern Border

NAFTA has not worked as well with Mexico. During negotiations, many acknowledged the challenges of integrating two “developed” economies with a third that was still “developing”. But negotiators underestimated those challenges.

The US government expected that free trade would expand economic opportunity in Mexico. Expanded opportunity, they argued, would reduce the flow of illegal immigrants seeking employment in the United States.

The hopes for a broader improvement in the economic lives of “average” Mexicans have not been realized.

NAFTA and US Jobs

Trade between the United States and Mexico grew exponentially under NAFTA. But as more raw materials moved south to be returned as manufactured goods — the historic USA trade surplus became a persistent 25% trade deficit. https://www.census.gov/foreign-trade/statistics/highlights/topcurmon.html

The deficit will continue to grow as Mexico aggressively imports American manufacturing jobs. http://www.reimagineamerica.org/saving-us-economy-starts-now-keep-oreo-cookies-in-chicago/

But not all job-shifting by US manufacturers to Mexico is negative for American workers.

The “cross border supply chain” has the potential to strengthen employment across North America.

The Ford Solution

Made-in-America is central to Ford Motor’s brand strategy.

When they announced the development of a 2018 manufacturing line in Mexico to build low margin Ford Focus hybrids – they simultaneously announced the existing Michigan plant will be upgraded to produce high priced SUVs and trucks.

The $8/hr jobs go to Mexico to preserve and increase $60/hr jobs in Michigan.

Bombardier – the Canadian airplane manufacturer makes a similar argument — its Mexican fuselage plant results in increased employment in the United States and Canada. http://www.economist.com/news/briefing/21592631-two-decades-ago-north-american-free-trade-agreement-got-flying-start-then-it

US/Canadian Free Trade Suggests a Template

Auto manufacturing on both sides of our northern border increased as a result of liberalized Direct Foreign Investment (FDI) regulations in Canada.

It created a flourishing cross border consumer economy with Canadian “day trippers” flocking to US shopping centers to buy attractively priced merchandise.

The US market for Canadian energy products and precious metals increased as a result of lower costs and ease of transport.

Hollywood studios have taken advantage of the lower production costs in Canada to develop significant satellite operations without fear of intellectual piracy.

USA/Canadian imports and exports tend to balance each other out – resulting in real GDP growth in both countries.

Canada is, also, our most reliable ally. https://www.washingtonpost.com/news/checkpoint/wp/2015/03/11/canadas-highway-of-heroes-the-patriotic-tradition-lives-on-after-afghanistan/

Building a Beneficial US/Mexico Relationship

A mutually beneficial trade relationship with Mexico is entirely possible – a relationship that looks more like our Canadian trading relationship.

More manufacturing jobs are an opportunity to expand the Mexican middle class but not all of those jobs have to come at the expense of American workers.

Rising factory wages in China create an opportunity for Mexico to compete globally to manufacture products destined for North American consumers.

To capitalize on this opportunity, Mexico must rapidly improve public education. The US can help through the Peace Corps, Teach America and other non-governmental organizations.

Build a more Efficient Cross Border Supply Chain

Further, strengthening the North American supply chain so that raw materials, sub-assemblies, and finished goods can move smoothly, safely, rapidly and legally across our southern border will require better highway and rail transport from the Mexican interior.

Joint investment in developing infrastructure – through the Inter-American Development Bank and cross border investment (http://www.marketwatch.com/story/warren-buffett-and-bill-gates-like-railroads-and-you-should-too-2015-09-17) — will create skilled and unskilled labor jobs in Mexico – drawing more economic migrants back to Mexico from the US while growing GDP on both sides of the border.

Renegotiate NAFTA

Growing trilateral GDP was the impetus behind NAFTA. It remains the objective, but the agreement has to be renegotiated with assumptions based on reality.

What is important is to grow the middle class throughout North America. This is not a zero sum game!

The United States and Canada can help accelerate Mexico’s economic development but Mexico must take the first step by cleansing itself of rampant internal corruption.

In addition to demands for better schools, the emerging middle Mexican middle class will demand effective public safety and better social services. NAFTA negotiators must support these demands.

Further, they must link renegotiation to forceful actions by the Mexican government to deal with international drug smuggling and human trafficking.

Nothing undermines NAFTA more than the volatile southern border that has existed since General Pershing chased Poncho Villa back across Rio Grande in 1916!

Tulips

Saving US Economy Starts Now: Keep Oreo Cookies in Chicago

The first item I selected at the grocery store last night was a bunch of fresh tulips with a banner “Grown in California”.

As I was preparing dinner, I turned on the ABC Nightly News. David Muir reported from the newly renovated Renaissance Hotel at Times Square that Marriott Hotel brands were all switching their guest room towels from imports to “MADE IN AMERICA” – without adding a penny of cost to Marriott hotel operations.

Consumers Drive Job Creation

My tulip purchase helped to make and maintain a job for a Californian.

Marriott Hotels’ towel decision has created 150 manufacturing jobs in Georgia.

Those manufacturing jobs will create additional opportunities from cotton farmers to the local diner.

Marriott Hotels’ action is not just good for American workers – it’s classic American marketing. They’ve created a differentiator.

A differentiator is anything that will separate Marriott from the competition– i.e. will cause the consumer to pause — give their offering a second look.

Guests will tell their friends how good they felt wrapping themselves in Made-in-America towels at a Marriott property.

That good feeling — backed up with an effective advertising and free media campaign will garner Marriott brands additional customers this vacation season. http://www.themadeinamericamovement.com/manufacturing/towels-us-marriott-hotels-made-in-usa/

The more effective the strategy is for Marriott, the more quickly their competitors will “catch the wave” of Made in America towels.

Every Presidential Candidate Promises Jobs

According to recent polls, the number one issue in the 2016 Presidential Election is THE ECONOMY.

Every candidate is promising to produce jobs – lots of jobs.

But none of them have explained how they are going to do it.

Maybe we should elect David Muir? Unlike all the leading Presidential candidates, he understands that a dynamic economy is a balance of consumption and production!

The American economy grows, generates real new Gross Domestic Product (GDP) when it creates a demand for American made goods instead of imports. pace at which the economy grows is determined by how fast those dollar bills change hands between producers and consumers within the circle of the US economy.

When consumer goods are imported into the United States rather than manufactured in America, the American economy shrinks because dollars exchange hands between consumers in the United States and producers in other countries.

In Short: Importing consumer goods exports American jobs, wages and consumer dollars.

The Result is a Slowing US Economy

Demand makes economies grow.

In the years after the Second World War Mississippi enjoyed a flourishing textile industry. They grew cotton and turned it into textiles and clothing that we all bought.

In the 1980s and 1990s textile manufacturing jobs in Mississippi began a steady migration to China and other “developing” countries – where wages were lower.

The Congressional Research Service estimates that by 2005 three quarters of the nation’s textile and clothing jobs had been off-shored.

In Mississippi, riverboat gambling became the replacement industry. “Service sector” jobs – waiters, maids, and croupiers – command much lower wages than more highly skilled manufacturing jobs.

Less clothing manufacturing meant less demand for Mississippi cotton. Cotton farmers earn less and employ fewer workers to grow, harvest and gin the cotton.

The result: Fewer jobs, lower paying jobs and reduced profits — a reduction in national consumer demand for “Made-in- Mississippi” — weakened the Mississippi economy.

Mississippi has the highest poverty rate in the United States – with more than 20 percent of their population living below the poverty line.

In 2016 – Plug the Job Leak

Stop the bleeding!

Between 1998 and 2013 fully one third of the manufacturing jobs in the United States disappeared. This extraordinary job loss is magnified by the fact that the US population grew by twelve percent in the same period – widening the gap between good paying jobs and available workers.

Some of the job losses are due to innovation and obsolesce but most can be traced directly to the export of American jobs.

The pattern is continuing in 2015.

Nabisco announced that it is sending 600 unionized jobs from Chicago to Mexico to save $46 million dollars in “costs”.

Bring Oreo Cookies Back to Chicago

The sisterhood of American moms and grandmothers can stop this outrage by refusing to buy the product.

The most powerful weapon Americans possess against job loss is purchasing power.

Just like the union workers who are being shelved by Nabisco – all of us can “go on strike” – boycott Oreos made in Mexico!

I want my grandkid’s Oreos baked by a profit-sharing baker in Chicago.

I’ll pay a little more for bedding manufactured by a profit-sharing seamstress in Vicksburg, Mississippi.

It is a mystery to me that Presidential candidates don’t point to the relationship between “buy American” and “growing” American jobs?

Someone get Hillary and Donald a plate of Chicago baked Oreos!