The graphics for this blog were developed from a survey by Machine Design and an article written by Steven J. Mraz, October 16, 2012. 

There are several subjects I generally stay away from due to their very nature but since this is an extremely important election year I thought I would venture into the realm of the forbidden.  I think most people, including politicians, are fascinating although I definitely feel politics for the sake of getting one’s way is remarkably detrimental to “good works”.  Quite frankly, I would not give you a bucket of warm spit for what I seen in Washington D.C.  Total lack of cooperation between the parties.  Virtually no resourcefulness in trying to find viable solutions to our most troubling problems, and we have many.  Seeming unwillingness to “cross the isle” and negotiate with people of differing view-points.  I agree with the majority of engineers in that the next President will not matter that much relative to solutions forthcoming.   I would do cartwheels if they would choose one problem; i.e. economy, jobs, schools, health care, immigration, crime, etc. and fix it.  Just one solved problem would restore my diminished faith in their ability to contribute in a worthwhile manner.   With that being said, let’s see what our peers indicate as their views on politics in this political year. 

Engineers tend to view themselves as much less liberal and slightly more conservative than the general public, according to a recent survey of over 1,200 readers of MACHINE DESIGN and Electronic Design magazines. The same survey also found that engineers are more likely to be Republican (42.1%) or Independent (33.7%) voters, as opposed to Democrats (14.5%).  And although over a third of the engineers think Republicans represent the best interests of the engineering community better than Democrats, a majority of engineers (48.1%) believe neither party is really on the side of engineers.

The graphic above will illustrate the percentages of beliefs held by the respondents.   I personally am an independent.  I have voted Republican, Democrat and Independent at times during my adult life-time.  I vote for the person and not the party.  Seems the proper thing to do and signifies my belief that there is nothing inherently wrong with being in either classification relative to the beliefs of the person running.  I definitely am conservative when it comes to all things financial.

The pie-chart above and the one below indicate that I am not alone with that viewpoint.

 In looking at the performance of President Obama, we see the following.

I find it very hard to disagree with this one.  He has been tremendously lack-luster relative to the promises made in 2008, prior to election.  I might mention one thing—one object cannot occupy two places at the same time.  In other words, you can’t be in the Oval Office and on the golf course at the same time.   You can’t sit with Letterman, Steward, and the ladies on the View and pretend you are doing your job.  (Just a thought.)  OK, with that being said, how do we think Romney would do?

Not too optimistic are we?   I would offer a thought that things will not change with either being our next president.  Sill have the same old Congress.  

A whopping 87.9% of the engineers polled have a negative view-point of Congress.  And why not?   They are on vacation until November 13th.   With a 16 trillion dollar deficit, these birds are on vacation—seeing to their reelection.  I will say one thing—they certainly have a great deal in common with Alfred E. Newman—“what, me worry”?

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This blog was inspired by an article published in “Business Finance”, written by Eric Krell, 3 October 2012

 Corporate relocation has been transformed in recent years, giving rise to new threats and certainly new opportunities.  Traditional three-year expatriate assignments are not the only options now available and desired by companies needing talent in a quick and effective manner.   We are all aware of those countries where travel is prohibited by our federal government; i.e. North Korea, Iran, Cuba, etc. but there are other countries that have made the list of “highest-risk destinations.  The International SOS is a global firm that provides local expertise, preventative advice and emergency assistance to clients with employees abroad.  The highest-risk countries on their list include: Nigeria, Pakistan, India, Mexico and Russia.  (Having been to several countries in the Middle-East, I would definitely say that any country in that region MUST be included as a very risky destination.)  The nature of international business risks is changing, as is the male/female ratio of international business travelers.  A recent International SOS survey indicates that European-based international travelers reported a higher occurrence of threats related to travel-related infections and road accidents during the past three years.   Global business involves more germ-related illnesses and much more aggressive driving relative to conditions in the United States and Canada not to mention threats involving kidnapping and ransom.

The number of female business travelers is rising at a tremendous rate.  Women now comprise forty-five (45) percent of the corporate travel market.  International SOS reports a twenty (20) percent increase in the number of female travelers calling its centers for medical and travel-security advice from 2011 to 2012.   

A 2012 KPMG survey of one thousand one hundred and fifty (1,150) senior leaders in mid-sized companies in the United States, Canada, Brazil and Mexico find that:

  • Seventy-five (75) percent of mid-market executives believe global expansion is integral to their company’s growth strategy.  That figure is up fifty-three (53) percent in 2009 and thirty-seven (37) percent in 2007 previous KPMG surveys on the topic.
  • Eighty (80) percent of U.S. mid- market executives think their global expansion plans have been successful in the last two years.
  • Seventy-eight (78) percent of U.S. executives say they plan to increase non-domestic revenues from foreign operations and customers.  This is an increase of sixty-six percent from 2009.

The allure of global operations is boosting the frequency of international assignments. Fifty-seven (57) of the one hundred twenty-two (122) mobility managers indicate they expect to increase relocation volumes during the next two years.  This fact was reported by Cartus 2012 Trends in Global Relocation.  This travel generally involved three categories, as follows:

  1. Commuter Assignments:  Travel between home and destination countries for a specified number of work days per month.
  2. Extended Business Travel:   International travel of o ne to three weeks in duration.
  3. Rotational Assignments:  A series of two or more assignments, which last one to three months.

It is imperative that risk management personnel develop specific strategies relative to travel by their most valuable personnel.  The following list is an excellent place to begin:

  • Increased awareness
  •  Plan with key stakeholders
  •  Expand policies and procedures
  •  Conduct due diligence
  •  Communicate, educate and train
  • Assess risk prior to every employee trip
  •  Track traveling employees at all times
  •  Implement an employee emergency  response system
  •  Implement additional management controls
  • Ensure vendors are aligned

I think, for health reasons alone, traveling “solo” can be tremendously risky. One of the huge issues existing in today’s global travel is the inability to communicate.  (How many U.S. citizens speak Mandarin or Cantonese?)  At any rate, pre-planning is an absolute necessity.

A UNIQUE MOMENT IN HISTORY

October 3, 2012


The following article was written by Mr. Greg Jackson.  Greg and I are partners in the consulting business we manage and run. 

A UNIQUE MOMENT IN HISTORY

2012 harkens back to the turn of the last century, when the invention of the combustion engine and a series of decisions regarding fuel and specifically oil supply would drive global economic decisions over the planet for the next century. This moment is even more influential in that both the energy and fuel markets are being redefined.

But unlike the last century, both the fuel and energy markets will not be reassembled around a single technology or resource near term. Given America’s dependence on foreign oil, an entire nation’s economic infrastructure cannot be uprooted in a moment without collapse. There will necessarily be a transition from our hydrocarbon dependencies. The technology in the near term will not replace hydrocarbons so much as extend the supply by analyzing existing technologies and making them more efficient and environmentally safe. Therefore the shift from hydrocarbon dependency will be more evolution than revolution.

Energy supply in the future will be designed to meet the specific need of a community, a region, and its available resources. Energy delivery in the future no longer contemplates a shift in the global energy infrastructure, nor does it create a new one. Technologies must enable new energy sources to be supplied without government subsidy, be flexible enough to provide energy in isolated environments, and adaptable enough to connect to existing infrastructure.

The Global Market 

The world changed drastically on September 11, 2001. We are forever reminded that we are now living in a global society where each system’s strengths and weakness are capable of impacting all others.

 America’s dependence on hydrocarbons continues to be a lightning rod for social and political debate. This is due in large part to the fact the climate change issue has driven the energy discussion. The debate has obscured the fact that the global financial community and American government have already affected trillions of dollars of investment in hydrocarbon limiting technologies. It has been speculated that Saudi Arabia and its political stability are all that keep oil from inflating to prices of $200– $300 a barrel.

A concern first enunciated during 1973 Arab oil embargo, 9/11 found America importing 50% of its oil. More disturbing yet, we were using 25 percent of the world’s oil while accounting for 5 percent of its population.  9/11 refocused attention on energy and security. Ten years later, the three foundations of US energy policy are oil independence, economic competitiveness, and reduction of greenhouse gas emissions. These three initiatives are linked in such a way as to drive virtually every facet of the economy. According to the British Petroleum Statistical Review [2], world oil reserves are considered to be 1,333.1 billion barrels (2.1195×1011 m3). Of this, 754.2 billion barrels (1.1991×1011 m3), or close to 60% of the world’s oil supply, are located in the Middle East. The United States contains about 2.1% of the world’s oil supply; about 28 billion barrels (4.5×109 m3). About 1/3 of U.S oil consumption comes from domestic supplies, and with current trends in production, U.S. oil reserves are expected to be depleted in about 10 years. The world’s two largest developing economies, China and India, are expected to deplete their reserves in about 10 and 21 years, respectively.

At current rates of production, the oil reserves in the Middle East are expected to be depleted in 85 years. Once the reserves in the U.S., China, and India are depleted, these countries will have to rely much more heavily on oil importation, putting more pressure on oil exporting areas of the world, and thus draining reserves in at a faster rate. The BP Statistical Review predicts the depletion of all the world’s proven oil reserves in 45.7 years.

In 2009, the world consumed 84 million barrels (13,400,000 m3) of crude oil per day, which translates to 30.7 billion barrels (4.88×109 m3) a year. This is a vast amount of nonrenewable energy, and numerous alternative fuel options are being explored to replace this fossil fuel. Of all the options for new fuels, biofuels stand out as the most compatible. The other possible alternatives have a number of technological and economical hurdles that prevent them from being as feasible as biofuels.

In 2010, the United States imported about 4.3 billion barrels (680,000,000 m3) of crude oil. Add to this about 2.01 billion barrels (320,000,000 m3) produced in the United States, and the total consumption in the United States is 6.3 billion barrels (1.00×109 m3) of crude for 2010. Imported oil accounted for 2/3 of the oil supply in the US, with about 42% of imported oil coming from OPEC countries.

There is finally a consensus that as long as gasoline prices remain high, the economy will struggle to recover; that should oil prices drop, our dependence upon foreign supply makes the US economy completely vulnerable to any number of attacks; that we have spent a decade investing in our independence, something Americans hold dear, and that oil use in its current form isn’t helping our global environment.  The fact that the resource is simply running out is no longer the only focus.

Additionally the cost of fuel is penning business profitability from multiple directions, not only from the additional cost of the fuel itself inherent in their products and services, but also the associated energy cost and now the emerging costs of corporate governance over emission standards.

Implementing cost reductions insofar as fuel management is considered no longer optional for businesses to remain competitive and profitable. With a depleting supply of our fuel resources coupled with the necessity to include the cost of emissions in Corporate cost structure, basic laws of economics apply and the lower cost producer will succeed. Consequently technologies that limit cost by reducing emissions will gain an economic advantage.

The technology is there–we must use it.  We must  CARPE DIEM!!

 

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