QUICK NEWS AND INTERESTS 05/05/08

Wrigley’s and Mars dance
Mars and The Oracle from Omaha are tuning a Wrigley’s buyout. I was quite impressed with the company operations when I visited the corporate headquarters in 2006. A staple in Chicago (Wrigley’s), this move will make Mars significantly more competitive on the global perspective (they are no. 1), while providing the Wrigley’s company with a suitable parent company for long term growth. It’s a great deal for Wrigley executives and shareholders who will be paid almost 4 times more than its 5.4 billion in sales. Of course, just about anything that Warren Buffet touches turns to gold, so I have high hopes for the future of both these companies. The blog I read of Bob Reed also reminded me of the deal between P and G and Gillette a few years back (I was based in Boston during this period), which has many similar traits. The long and the sort of it: Berkshire Hathaway is going to make out like a bandit in the Short and Long Run. Surprised?

Just a side note: Impeccably dressed, Bill Jr. commands his company from within a gorgeous neoclassical building that bears his name. Flanked on both sides by gorgeous model-esque assistants, he has the profile and panache, rare in a world of cookie cutter executives. I wish him the best as he moves towards a new direction for his company—it certainly looks like the right move for Wrigley’s. Let us see how the shareholders vote.

Korean firms do not bribe…
Perhaps Filipino’s are starting to wizen up to the structurally ineffective system of bribery before action. Paulino Emano has made quite a stink of this 400 million contract to supply materials. Hanjin has been heavily investing in the Philippines and it would be naïve to think that the latest of several “Filipino Glitches” will not make them think twice in investing in our country. Idealistic—perhaps, but it is certainly not economically advisable. Let us see how this plays out in the coming weeks.

QUICK MOBILITY AND THE INDUSTRY NEWS 05/05/08

Goodbye Microsoft
High fives went all around as the elated Yahoo board celebrated Microsoft’s withdrawal of its bid. I suppose this was expected as Yahoo was dragged kicking and screaming to the negotiating table, by the much larger and strategically logical Microsoft—I do not think they even got to the dirty details of the merger! It was always on a more superficial level.

Steve Ballmer released a letter to Yahoo which outlines the coming difficulties for this Web 1.0 staple: ““This would effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on yahoo.”

Coupled with the loss of good personnel and the inherently weak position of Yahoo in the market, I hope Jerry Yang’s protective nature over the company he started, includes a brilliant strategic plan for the next 2 years (Aren’t emotions supposed to be kept out of business?). Otherwise, we will probably see the return of Microsoft. Well, one can always hope.

Mindshare Event
Good, it’s about time that the RP starts looking in this direction more actively: (http://www.inquirer.net/vdo/player.php?vid=710)

Social Networking Sites For Business
Rapleaf a social web search company has a study that shows that men are more likely to use social networking sites for business—and not to a small degree. This includes sites like Friendster, Facebook, Myspace, Belbo, Etc. I am still trying to get a copy of this study. I need to get on the ball with this—I hardly use my Facebook, what more network for business on it.

GEELY MOVES ONE NOTCH ABOVE ECONO-PEOPLE MOVER

I have to admit that recent Geely creations have gotten significantly better looking, designers are finally digging into the gene pool of Gong Li's rather than the Samo Hung's. A leap forward from their early 1960's to 1970's “Red Flag” limousine (the company still exists today). I'll credit the communists with that monstrosity.

Geely and similar Chinese car companies still have a long road to travel in terms of fit and finish. Dashboard buttons are as large and warped as northern dumplings and poorly spaced. Cheap plastic, interwoven with grainy wood and vinyl leatherette-- why didn't they just outsource the interior work to the fake LV and Gucci factories in Guangzhou? Their interiors are a definite “Class C!”

Design aside, the manufacturing capability of these local companies is surprisingly efficient. Perhaps not the the best or even near the top, but a good, solid middle. These new Geely designs bode well for the future. If they do not conquer the world, at least they have the 1.9 billion strong, local market.

FILIPINOS LOVED THEIR GOLD

Walking through the 4th floor of the Ayala Museum, home to the new Gold exhibit (Opening May), I was stunned by the quality and historical significance of the pieces that are on display. Specifically the collection of Golden deities and burial masks with details that hearken back to our pagan beliefs. The masterpiece in this collection is a massive, finely woven golden....scarf? Sheathe? You will know what I am talking about when you see it.

The level of sophistication that our ancestors had prior to the Spanish is fascinating. Gold, a representation of ones social standing, clearly outlines an evolved social structure that existed before our re-education (dripping with sarcasm) through the Spanish. This collection is of incredible importance to our culture is a Filipino people, and is by far, one of the most significant finds in existence today.

Which also brings to light another concern; how did these donated collections slip below the radar and how many more of these private collections exist? Worse, why do we pretend that these donations deserve public appreciation and recognition-- is it not just another form of theft?

Granted, there is some defense for these collectors. The condition of our national museum is so depressing, that if I had possession of such pieces I would be very hesitant to release them to these institutions. In this I will give the Ayala Museum its due credit. The gold masterpieces are both protected and displayed at a world class standard. It is a wonderfully crafted exhibit that resonates a strong cultural message and makes us proud to be Filipinos.

THE WORLDS CARBON FOOTPRINT

Carbon Neutral (Wikipedia): Being carbon neutral, or carbon neutrality, refers to neutral (meaning zero) total carbon release, brought about by balancing the amount of carbon released with the amount sequestered or offset.

Carbon neutrality is a term that is touted in many circles these days, as companies work to improve our environmental situation. Working towards a carbon neutral or low carbon society is something that I support and as I learn more, feel deeply passionate towards. We are facing a very big climate crisis and I intend to do my part to improve the way we live with our planet.

Ecological, Economical and Social. These are the three principles that should guide all Socially Responsible Investments (SRI) within the green industry. For company management and investors alike, this means a proactive approach towards all parts of your value chain. Take for example a real estate investor. It used to be enough to buy land, relocate people and develop your structure. Today, one responsibly invests in carbon neutral designs, assesses the carbon impact of the site and plans on the effect relocation of individuals has on the environment (I recall the recent headlines with the Subic development of Shimao). Investors should look carefully into these environmentally friendly practices. HSBC has recently claimed they are carbon neutral and take pride in providing loans and assistance to companies working to improve their carbon footprint. Sounds like a lot more work? Well, yes, but it is really more of a mind frame. If we all accept that carbon HAS a cost; that shirt you wear is $10 in materials $5 in carbon emissions used in production, delivery, etc. Then maybe the world can really start understanding that climate change has now become a part of our daily lives.

These days it is becoming publicly laudable for companies and individuals to take proactive steps. Green has nurtured a “cool factor” partially due to the impact of celebrities like Al Gore and Toyotas Prius. I find it fitting that the word cool is used to describe the battle against global warming.

Presently sitting at a Thai restaurant in Hong Kong that like other establishments in this city, blast CFC induced cold air, 247, I recall a recent statistic brought up at one of my recent meetings: “The meat industry produces more carbon than the entire logistics industry.” Interesting. This means that a lot of the carbon neutral gains that we have been developing through complicated regulations and systems within companies (a good number logistics related), can be achieved by a simpler and psychologically powerful effort. Eating less meat. Statistics have also shown that buildings, specifically AMERICAN buildings are the biggest polluters. They are dark monoliths of poor design and excess. They also prove difficult to change. It is astounding to think that for all of the bad press automobiles have on the environment, it is actually the large skyscrapers that do more damage.

A low carbon society and economy is our medium term goal, with carbon neutrality for the long term. Business and government leaders need to educate a public that is aware of the effects of carbon, but may not actively be participating in its minimization. Consumers should understand that low carbon products have a value and that a change in lifestyle does not necessarily have to be as drastic as green pundits make it sound (Eat less meat!). There are costs to inaction and for this reason alone we cannot sit around and wait for the changes to happen. In this regard I feel that scientists and regulators are failing. Programs and projects are fragmented and often times complicated to understand. We need these great brains to spend as much time creating a palatable (clearer) approach for change as they do on finding a solution. If I myself am having a difficult time understanding what sort of changes to make in my organization and what the immediate benefits are, what more companies who are not as exposed to this industry? It is not about just throwing money into projects. It is about finding projects that can be tackled by companies and individuals of different financial, structural, environmental backgrounds. We need to understand how our immediate universe affects the environment and the quantifiable (maybe through carbon credits?) results of our actions.

Experts have given 2015 as the date before irreversible change occurs in our environment. I choose not to dwell on seemingly doomsday predictions, but I do agree that a change needs to be made, and quickly. It is time we all take our part in changing this world.