H-1B VISAS

July 30, 2014


If you manufacture a product or sell to manufacturers you know finding qualified and skilled talent can be a real problem.    According to Logistics Management:

  • Eighty-two percent (82%) of manufacturers surveyed plan to increase US-based production over the next three to five years.
  • Seventy-five percent (75%) report significant shortages of skilled personnel.
  • Eleven percent (11%) estimate a drop in earnings due to the lack of skilled personnel.
  • The US Department of Labor reports that average of manufacturing labor is forty-four (44) years of age as of 2011.  This means a large number of workers will be thinking about retiring over the next few years.  They will have to be replaced.
  • Nearly ten percent (10%) of the companies surveyed spend on average $5,000.00 to train an individual.

With this being the case, more and more companies, universities and research firms are turning toward H-1B visas and possible employment for non-US citizens.  Applying for a non-immigrant visa is generally quicker than applying for a US Green Card; therefore, the H-1B visa is popular for companies wishing to bring in staff for long-term assignment in the US.

The following information is derived from the US Citizenship and Immigration Services web site, the WorkPermit.com web site.   Let’s take a look at H-1B visas and what is involved.

WHO IS ELIGIBLE:

Requirement 1 – You must have an employer-employee relationship with the petitioning U.S. employer.

In general, a valid employer-employee relationship is determined by whether the U.S. employer may hire, pay, fire, supervise or otherwise control the work of the H-1B worker. In some cases, the sole or majority owner of the petitioning company or organization may be able to establish a valid employer-employee relationship, if the facts show that the petitioning entity has the right to control the beneficiary’s employment.

Requirement 2 – Your job must qualify as a specialty occupation by meeting one of the following criteria.

  • A bachelor’s degree or higher degree or its equivalent is normally the minimum requirement for the particular position;
  • The degree requirement is common for this position in the industry, or the job is so complex or unique that it can only be performed by someone with at least a bachelor’s degree in a field related to the position;
  • The employer normally requires a degree or its equivalent for the position; or
  • The nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree.

 

Requirement 3 – Your job must be in a specialty occupation related to your field of study.

This may seem obvious but there has been some confusion relative to this requirement. There are other work-visa types a non-citizen can apply for but an H-1B visa is very specific to profession vs. need.

Requirement 4 – You must be paid at least the actual or prevailing wage for your occupation, whichever is higher.

The prevailing wage is determined based on the position in which you will be employed and the geographic location where you will be working (among other factors). The U.S. Department of Labor (DOL) maintains a database with applicable current prevailing wage levels based on occupation and work location.

Requirement 5 – An H-1B visa number must be available at the time of filing the petition, unless the petition is exempt from numerical limits.

The H-1B visa has an annual numerical limit, or cap, of 65,000 visas each fiscal year. The first 20,000 petitions filed on behalf of beneficiaries with a U.S. master’s degree or higher are exempt from the cap. Additionally, H-1B workers who are petitioned for or employed at an institution of higher education (or its affiliated or related nonprofit entities), a nonprofit research organization, or a government research organization are not subject to this numerical cap.  Cap numbers are often used up very quickly, so it is important to plan in advance if you will be filing for an H-1B visa that is subject to the annual H-1B numerical cap. The U.S. government’s fiscal year starts on Oct. 1. H-1B petitions can be filed up to 6 months before the start date, which is generally April 1 for an October 1 start date.  Even though the H-1B visa is a non-immigrant visa, it is one of the few US visa categories recognized as dual intent, meaning the H-1B visa holder can apply for and obtain a US Green Card while in the US on an H-1B visa. If you are still in the US on an H-1B visa and wish to remain in the US for more than six years, you can apply for permanent residency in the US to receive a Green Card. If you do not gain permanent residency prior to the expiration of your H-1B visa, then you must live outside the US for at least one year before reapplying for another H or L visa.

Personally, I wish we could fill all engineering and manufacturing positions with “home-grown” citizens but if you look at graduation rates for individuals working within the STEM (science, technology, engineering and mathematics) professions, you can see the numbers do not support current needs and certainly will not support significant growth.  H-1B will probably be around for a long time.

 

I welcome your comments.

NASA ORION

July 29, 2014


Information for this post came from the NASA web site.  All of the information relative to the program and the flight hardware is derived from same.

INTRODUTION:

In my opinion, our country made a huge mistake in abdicating our hard-won position relative to manned space flight.  Due to the very near-sighted government types in Washington D.C., we were perfectly willing to let the Russians carry our crews to and from the International Space Station (ISS).  According to CNSNews.com – “Russia will charge the U.S. National Aeronautics and Space Administration (NASA) $71 million to transport just one American astronaut to the International Space Station aboard its Soyuz spacecraft in 2016”.  That’s more than triple the $22 million per seat charged in 2006, according to a July 8 audit report by NASA’s inspector general.   NASA, at this time, has little choice but to pay Russia’s inflated ticket prices.   In August of 2011, the U.S. space agency retired its 30-year-old space shuttle program and now, NASA has no way of getting American astronauts to the space station. The Russian Soyuz is “the only vehicle capable of transporting crew to the ISS”.  During the second half of 2011, the price per seat jumped to $43 million.  The price of purchased seats for launches in 2014 and 2015 are $55.6 million and $60 million, respectively, the audit report noted.  Again, 2016, $71 million for a “ride” to the ISS.   Could we not see that coming? Are they so blind in Washington that the obvious is overlooked? (Maybe we were trying to improve our golf game or possibly attending a fund raiser.) With issues in Crimea and the Ukraine, we may be denied altogether.

Well, NASA does have one program, the ORION that promises to get manned-space efforts back on track.  ORION will push the envelope and investigate manned-space flight well beyond low Earth orbit (LEO).

MISSION:

The spacecraft will launch on Exploration Flight Test-(EFT-1), an un-crewed mission planned for this year, 2014. This test will see Orion travel farther into space than any human spacecraft has gone in more than 40 years. EFT-1 data will influence design decisions, validate existing computer models and innovative new approaches to space systems development, as well as reduce overall mission risks and costs. Lockheed Martin is the prime contractor for EFT-1 flight.  The EFT-1 will take Orion to an altitude of approximately 3,600 miles above the Earth’s surface, more than 15 times farther than the International Space Station’s orbital position.  By flying Orion out to those distances, NASA will be able to see how hardware and software perform in and return from deep space journeys.  A graphic depiction of EFT-1 may be seen with the graphic below.  As you can see, the launch vehicle will be the DELTA IV Heavy Rocket.


THE MISSION

 

The Orion flight test vehicle is comprised of five primary elements which will be operated and evaluated during the test flight:

  • The Launch Abort System (LAS) – Propels the Orion Crew Module to safety in an emergency during launch or ascent
  • The Orion Crew Module (CM) – Houses and transports NASA’s astronauts during spaceflight missions
  • The Service Module (SM) – Contains Orion’s propulsion, power and life-support systems
  • The Spacecraft Adaptor and Fairings – Connects Orion to the launch vehicle
  • The Multi-Purpose Crew Vehicle to Stage Adaptor (MSA) – Connects the entire vehicle structure to the kick stage of the rocket

The JPEGs below will indicate the basic configuration of the system and the five (5) modules comprising the “complete package”.

NASA ORION

FIVE MODULES

GOALS:

In the very first un-manned test mission, the following targets and goals will be explored:

  • Programmatic Risk Reduction – Critical flight data collected from EFT-1 will validate Orion’s ability to withstand re-entry speeds greater than 20,000 miles per hour and safely return the astronauts to Earth.  Reentry at these speeds has not been attempted before.  The ablative shields will be given a remarkable test during reentry.  Other systems will be evaluated relative to reducing possible risks.
  • Technical Risk Reduction – Valuable data about key systems functions and capabilities such as kick stage processing on the launch pad, vehicle fueling and stacking, and crew module recovery will ensure these systems are designed and built correctly.
  • Demonstrates Efficiencies – Gives NASA the chance to continue to refine its production and coordination processes, aligning with the agency’s commitment to build the world’s most cutting-edge spacecraft in the most cost-efficient manner.  We sometimes look at the entirety of the assembly and fail to realize the tremendous number of individual components needing to network and perform together.  This includes the redundant systems certainly required for a complex mission such as this.
  • Enhances and Sustains Industry Partnerships – Orion’s design teams will gain important experience and training to ensure the industry is prepared for a launch of Orion in 2017 aboard the SLS.  John Doan said: “No man is an Island, entire of itself; every man is a piece of the Continent, a part of the main.”  NASA-ORION is the very same way.  The teams will be evaluated as well as the “hardware” to make sure continuous success is obtainable and everyone is on board relative to work assignment and job duties.
  • Skill Sustainment – Focusing on mission flight-test objectives, helps to reduce or eliminate risks to crew, and refines Orion core-systems development.  This is a big objective.  Everyone comes home—and not in a body bag.  The crew must remain safe at all time during takeoff, the mission and reentry.

SUMMARY:

The next few years will be exciting years for NASA and ORION will definitely get us back into space.  Manned missions will once again be on the agenda.  Hopefully, time off will be no detriment to success and mission-critical critical components will meet the demands of NASA engineers and scientists.  I welcome your comments.

 

PHONESATS

July 12, 2014


I really don’t know how I missed this one.   This document deals with “phone sats”.  You can get a better feel for the technology by taking a look at NASA press release 13-107.  Let’s do that right now.

RELEASE: 13-107

NASA Successfully Launches Three Smartphone Satellites

WASHINGTON — Three smartphones destined to become low-cost satellites rode to space Sunday aboard the maiden flight of Orbital Science Corp.’s Antares rocket from NASA’s Wallops Island Flight Facility in Virginia.

The trio of “PhoneSats” is operating in orbit, and may prove to be the lowest-cost satellites ever flown in space. The goal of NASA’s PhoneSat mission is to determine whether a consumer-grade smartphone can be used as the main flight avionics of a capable, yet very inexpensive, satellite.

Transmissions from all three PhoneSats have been received at multiple ground stations on Earth, indicating they are operating normally. The PhoneSat team at the Ames Research Center in Moffett Field, Calif., will continue to monitor the satellites in the coming days. The satellites are expected to remain in orbit for as long as two weeks.

“It’s always great to see a space technology mission make it to orbit — the high frontier is the ultimate testing ground for new and innovative space technologies of the future,” said Michael Gazarik, NASA’s associate administrator for space technology in Washington.

“Smartphones offer a wealth of potential capabilities for flying small, low-cost, powerful satellites for atmospheric or Earth science, communications, or other space-born applications. They also may open space to a whole new generation of commercial, academic and citizen-space users.”

Satellites consisting mainly of the smartphones will send information about their health via radio back to Earth in an effort to demonstrate they can work as satellites in space. The spacecraft also will attempt to take pictures of Earth using their cameras. Amateur radio operators around the world can participate in the mission by monitoring transmissions and retrieving image data from the three satellites. Large images will be transmitted in small chunks and will be reconstructed through a distributed ground station network. The JPEGS shown below will give indication as to the orbit.

phone-sats (1)

 

FLIGHT PATH

The systems are now operating properly and orbiting Earth delivering information that will be used in evaluating the program.  I feel NASA has married the private and public sectors to produce workable technology that will represent much lower costs yet, hopefully, the same results. Time will tell. According to Chad Frost, Chief of the Mission Design Division at NASA Ames, “We all carry around smartphones these days, so we’re intimately familiar with what a smartphone is and what it can do.  And a few years ago, we had the intriguing idea that you might actually be able to build a spacecraft around a smartphone. So, we were very intrigued by the notion that you could build a very small spacecraft based entirely on consumer electronics devices and other low-cost systems.”

THE CONFIGURATION:

JPEGs of the configuration may be seen by the following JPEG:

phonesat_2_5--NASA

PhoneSat is a nano-satellite, categorizing the mass as between one and ten kilograms. Additionally, PhoneSat is a 1U CubeSat, having a volume of around one liter. The PhoneSat Project strives to decrease the cost of satellites while not sacrificing performance. In an effort to achieve this goal, the project is based around Commercial Off-The-Shelf (COTS) electronics to provide functionality for as many parts as possible while still creating a reliable satellite. Two copies of PhoneSat 1.0 were launched mid April 2013 along with an early prototype of PhoneSat 2.0 referred to as PhoneSat 2.0.beta.  PhoneSat 2.4 is sitting on the launch pad ready for lift-off.  The PhoneSats use a Google Nexus smartphone running the Android 2.3.3. operating system.  Two of the PhoneSats have standard smartphone cameras that were used to take images of Earth from space.   The first JPEG in this post shows one of those pictures.

Now, here is a fact that blows me away.  NASA engineers kept the total cost of the components for the three prototype satellites in the PhoneSat project between $3,500 and $7,000 by using primarily commercial hardware and keeping the design and mission objectives to a minimum.
NASA added items a satellite needs that the smartphones do not have — a larger, external lithium-ion battery bank and a more powerful radio for messages it sends from space. The smartphone’s ability to send and receive calls and text messages has been disabled.  Each smartphone is housed in a standard cubesat structure, measuring about 4 inches square. The smartphone acts as the satellite’s onboard computer. Its sensors are used for attitude determination and its camera for Earth observation.

TESTING:

There are several phases to “powering-up” the PhoneSat system.  These are as follows:

Phase 1: After the initialization phase, the phone is in phase 1 in which it performs a health check. During this phase, each sensor and subsystem is checked and data is compiled into a standard health packet, stored in the smartphone’s SD card and transmitted over the beacon radio at a regular interval of 30 seconds. The last 10 health packets are stored in the SD card. After every 10 packets sent, the beacon radio is rebooted. This phase happens during the first 24 hours of the mission. The mission time is kept in the phone throughout the mission so that a system reboot during this phase does not reset the 24 hour countdown A health packet consists of: Satellite ID, restart counter, reboot counter, Phase 1 count, Phase 2 count, time, battery voltage, temp 1, temp 2, accel X, accel Y, accel Z, Mag X, Mag Y, Mag Z, text “hello from the avcs”.

Phase 2: This phase starts once a full system health check has been performed. During this phase, image packets and health packets are sent to Earth through the beacon radio. A health packet is sent once for every 9 image packets downlinked.

This phase can be divided in 3 sub-phases:

• Health Data Measurements: Health data is measured and the 10 most recent samples are stored in the SD card.

• Health Data Downlink: Once 9 packets have been sent through the beacon containing image information, the 10th one is reserved for a health packet.

• Image Sequence: One picture is taken every minute until 100 pictures are taken and stored to the SD card. Pictures are then analyzed and the top image is selected. This image is packetized and compiled into standard image packets. These image packets are transmitted over the beacon radio coupled with health packets in the ratio explained above.

Safe Mode: If the watchdog detects that the phone is not sending any data to the radio for a certain period of time, the spacecraft functionality is reduced to the bare minimum. In this condition, the spacecraft only transmits health data containing the last 10 sensor data values stored in the SD card prior to failure. This mode lasts for 90 minutes. After this period, the spacecraft resumes its normal operations. A safe mode packet consists of: Satellite_ID, last 10 voltage values, last 10 temperature sensor 1 values, last 10 temperature sensor 2 values, text “SAFEMODE”.

TIMELINE:

The timeline for research and development started in 2009. Definite planning has gone into the program.  You may see that timeline below.

TIME LINE

As mentioned above, PhoneSat 2.0 has already been scheduled for launch later on this year, 2014.  The technology is definitely evolving. NASA is working towards extremely low-cost deployments that provide workable communications to government agencies and private concerns.

I welcome your comments.

STRESS

July 9, 2014


It’s amazing how some things you hear stay with you over the years.  My grandfather, W.L., died about forty (40) years ago but I still remember him saying there are three problems that will significant and deleterious stress:  1.) Problems at home, 2.) Problems with health, and 3.) Financial problems. His comments were based upon experience for the most part. He and his wife Elizabeth raised four children during the Great Depression so scraping by was the norm and not the exception.  There were many times, according to him, their food came by virtue of fishing and hunting.  They would barter and bargain with neighbors for many things needed on a daily basis.  As it turns out, his opinion has been confirmed by a study entitled: “The Burden of Stress in America” published by NPR/ Robert Johnson Foundation/Harvard School of Public Health.  This study called “The Burden of Stress in America Survey “was conducted from March 5 to April 8, 2014 with 2,505 respondents. The survey examines the role stress plays in different aspects of Americans’ lives, including the public’s personal experiences of stress in the past month and year, the perceived effects of their stress and causes of that stress, their methods of stress management and their general attitudes about effects of stress in people’s lives.   The methodology is as follows:   From March 3 through April 8, 2014, a nationally representative sample of 2,505 adults age 18 and older were interviewed.  The interviews were conducted in English and Spanish. The margin of error for total respondents is +/- 2.4 percentage points at the 95% confidence level. Of the total sample, 633 said they have experienced a great deal of stress in the past month. The margin of error for this group is +/- 4.6 percentage points at the 95% confidence level.  The results are not surprising but certainly telling. The charts given by this post come from that study.  The text and explanation of the charts is mine.

THE RESULTS:

I can certainly understand why the number one stress in a person’s life is the absence of health, even if those health problems are temporary.  I have been there, done that, got the “T” shirt.  You never forget your time in intensive care.  It’s a game-changer.   As you can see from the bar chart below, problems with health are approximately twice the next most mentioned item on the list.  I have recently experienced the loss of my mother due to Alzheimer’s and even though you know what’s coming, it is a tough pill to swallow.  It is also very interesting to me that finances are NOT on this list even though financial matters can and will exacerbate issues with health and other areas of stress.

MOST STRESSFUL YEAR

In looking at the chart below, the first three (3) items are definitely health related.  It is also apparent those individuals or individual households in the under $20,000 income group have significant reasons for stress related problems.  There also can be made a case for low income fostering poor health conditions.

Groups Experiencing High Stress Levels Last Month

I was somewhat surprised that being the parent of a teen would engender such stress and that stress made the list.  My wife and I have three boys and five grandchildren.  I can relate although we felt this was just a part of parenting.  We did not have issues with alcohol, drugs, sex, etc etc.  Single moms and dads deserve great respect due to the burden they carry in raising a teenager.  It’s “yeoman” work.   Now I know we were lucky.

There are certainly experiences on a daily basis that lend themselves to over-the-top stress.  Several may be seen as follows:

MOST COMMON STRESS RISERS

The top three on this list come as no real surprise.  With cutbacks at work more and more individuals are asked to take on additional responsibilities which mean more time at work and less time with the family.  Fewer vacations.  The “average” full-time employee works 1,700 hours per year and it is estimated that many employees refuse to take all of the vacation time coming to them due to work load and related work environment.   The big surprise is the last on the list. Twenty-eight percent say they are unhappy with their looks.   I would love to know how many people within that 28% are overweight.  (Just a thought.)

10 DAILY EVENTS

It’s very obvious from the chart above that people are very disturbed with political “types” and watching, reading or listening to the news is a great contributor to the stress we experience.    You have heard the phrase, “If it bleeds—it leads”.  Maybe we should have one day devoted to nothing but good news or even better, maybe we should have a “no-TV” night at least once during every week. How about this—let’s FIX our national problems by voting them all out and starting over.  How about that?

The chart below would indicate we sometimes do not have control over the problems, consequently the stress we experience.  Dealing with aging parents and their health, as well as our own, can apply great stress to an everyday life.

EFFECTS OF STRESS

All of this is well and good but how do we deal with stress?  How do we cope?   What are the responses to the stress we feel?  The next two charts will show these responses.

TOP 10 RESPONSES TO STRESS

EFFECTIVENESS OF ACTIONS

We all would love to avoid as much stress as possible under most circumstances.  In our day, unemployment, health, finances, inter-personal relationships and work life all must be dealt with daily. What we can control—we must control.  In my life, simple organization on a daily basis, then a monthly basis helps tremendously. The following very items are things I have found to be great aids to removing as much stress as possible.

  • Keep a daily and monthly planner.  In that planner, put notifications dealing with bills due with specific due dates.
  • Keep a daily telephone log.  Phone calls received and made.  This greatly helps memory and can save the day relative to dates and times when calls are made. I don’t necessarily mean personal calls to family.  All business calls—absolutely.
  • DE-CLUTTER.  Keep a clean desk.
  • FILE or have someone file for you. Get organized. Know where things are.
  • (OK, this one may seem trivial but here it is.)  Have all work materials; i.e. scissors, tape, copy paper, pencils, erasers, staples, file folders, etc. needed on a daily basis in your office. Do not do the “step and fetch-it” day after day.
  • Have a specific time to answer e-mail and return phone calls.  Don’t jump every time you receive an e-mail thinking you have to answer it right away.
  • Refuse to attend meeting you do not feel will produce results relating to your goals, company and personal.  (This is a tough one but get in the habit.)
  • As best you can, save the weekends for yourself.  If you have to work 80 hours a week, put those hour in between Monday and Friday. Most of us have families and they deserve your time as much as your supervisor.  (If you are the boss, realize the boss needs time off for good behavior.)
  • Exercise in a vigorous fashion at least three times per week.
  • Watch what you eat and the portions. DON’T DO FAST FOOD. Eat properly.
  • SLEEP at least eight (8) hours per night.
  • READ. Give up television one or two nights per week and possibly on the weekends.
  • The Internet is a “black hole”. Do NOT waste time on Face Book, Twitter, etc etc.  Your time is valuable.
  • IF YOU LIKE THEM CALL THEM. Forget e-mail to loved ones, friends and family.  Listen to their voice. (NOTE: If you don’t like them forget it.)
  • Remove yourself from toxic people. People who have nothing good to say about anything.

These are just a very few recommendations but I do feel moving towards a condition in which we negotiate the controllable is a great place to be.

I welcome your comments.


Several years ago I traveled with three (3) other guys to participate in the 50th annual Rattlesnake Roundup.  We considered ourselves to be of sound mind although the subject remains for debate.  The annual event is held in Sweetwater, Texas, which is just west of Abilene or about 1,012.12 miles from our east Tennessee location.  Each person drove four (4) hours non-stop, one-way for this adventure.  It took approximately sixteen (16) hours. (Then again, who’s counting?)  I don’t know if you have ever been to Sweetwater but it’s as flat as a table, hot as hell (even in March), dusty as the Sahara and the wind ALWAYS blows.  Even with this being the case, the residents were absolutely convinced the city was the Garden of Eden. “No place I would rather be”, was a frequent comment, even with rattlesnakes in the front yard.  I suppose we all feel that way about our home town.  I certainly do. Well, there are other towns that might not warrant that high praise.  Places more toxic and considerably less desirable.

Forbes Magazine recently published an article called “The Most Miserable Cities in the United States”. They based their examination on the following criteria for the 2013 calendar year:

  • Level of violent crime
  • Unemployment rate
  • Home foreclosures
  • Net migration from city
  • Traffic congestion
  • Local and state taxes
  • Commute times
  • Weather

A fairly complete and meaningful list of specifications for the ranking.

With this being the case, I have listed in reverse order what residents indicate to be the most miserable cities in the United States.  Here we go:

20.) Youngstown, Ohio

19.) Gary, Indiana

18.) Poughkeepsie, New York

17.) Cleveland, Ohio

16.) Atlanta, Georgia

15.) Atlantic City, New Jersey

14.) Milwaukee, Wisconsin

13.) Camden, New Jersey

12.) St. Louis, Missouri

11.) Toledo, Ohio

10.) New York, New York

9.) Lake County, Illinois

8.) Stockton, California

7.) Warren, Michigan

6.) Vallejo, California

5.) Modesto, California

4.) Chicago, Illinois

3.) Rockford, Illinois

2.) Flint, Michigan

1.) Detroit, Michigan

In doing the count, we conclude the following:

  • Three from Ohio
  • Three from Michigan
  • Three from Illinois
  • Three from California
  • Two from New Jersey
  • Two from New York

This list was compiled with no political input considered, just the factors given above.  No Democrat vs. Republican—just the eight (8) items mentioned.  I have been to over half the cities on this list and found them to be nice places to visit.  I honestly feel that when (and if) our economy ever returns to livable conditions and employment improves, turn-a-round will be definitely possible.    Crime remains a HUGE issue with the inner-city.  Gang and drug violence will be forever with us I fear.  I’m not too sure how we deal with that.

FDR was correct when he said, “We have nothing to fear but fear itself”.  Our politicians need to step up, make something happen, forget their “base”, forget their legacy, forget reelection, throw together for the betterment of the populace, and lose the special interest groups.      They can and possibly should be replaced!   I welcome your comments.

ALIBABA

July 3, 2014


One of the services my company (Cielo Technologies, LLC) provides is locating resources for clients, both individual and commercial.  We find people and vendors that can do “stuff”.  People and companies that can perform successfully, on time, following specification given as a part of a contractual arrangement.  In short, we provide sourcing services for commercial concerns.  Ones that can get the job done.

In 2006, I was given a call by a manufacturing company providing extension springs for doors used on residential cooking products.  This company has been in business since 1974 with springs being the first product produced.  Due to decreasing demand for the product and increasing costs for hard-drawn and oil-tempered wire, they made a management decision to out-source manufacturing efforts.   I immediately started searching for vendors, both domestic and foreign.  I looked at thirty-seven (37) companies that I eventually interviewed for the products required.  During that search, the name ALIBABA, came up frequently—very frequently.  Let’s take a look at this company.

HISTORY:

Alibaba Group was established in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou, China.  Jack Ma chose the name because it is well-known around the world and can be easily pronounced in many languages.  According to Mr. Ma,  “One day I was in San Francisco in a coffee shop, and I was thinking Alibaba is a good name. And then a waitress came, and I said do you know about Alibaba?  And she said yes. I said what do you know about Alibaba, and she said ‘Alibaba and 40 thieves’. And I said yes, this is the name!  Then I went onto the street and found 30 people and asked them, ‘Do you know Alibaba?’ People from India, people from Germany, people from Tokyo and China… They all knew about Alibaba.  Alibaba — open sesame.  Alibaba is a kind, smart business person, and he helped the village. So…easy to spell, and globally known. Alibaba opens sesame for small- to medium-sized companies. We also registered the name Alimama, in case someone wants to marry us!”.  E-commerce is global so the company needed a name that was globally recognized.  Alibaba brings to mind “open sesame,” representing the hope that their platforms would open a doorway to improved sales and even fortune for small businesses.  From the outset, the company’s founders shared a belief that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies.  Since launching its first website helping small Chinese exporters, manufacturers and entrepreneurs to sell internationally, Alibaba Group has grown into a global leader in online and mobile commerce. Today the company and its related companies operate leading wholesale and retail online marketplaces as well as Internet-based businesses offering advertising and marketing services, electronic payment, cloud-based computing and network services and mobile solutions, among others.

PRESENT DAY:

As of March 31, 2014, Alibaba employed more than 22,000 people around the world.  Quite a jump from the original eighteen.   As of December 31, 2013, the company maintained seventy-three (73) offices in mainland China and sixteen (16) offices outside mainland China.  In 2012,two of Alibaba’s portals together handled 1.1 trillion yuan ($170 billion) in sales, more than competitors  and e-Bay and Amazon.com combined.  In  March 2013 it was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion.  The following timeline will indicate the growth of the company.

  • In May 2003, Taobao was founded as a consumer e-commerce platform.
  • In December 2004, Alipay, which started as a service on the Taobao platform, became a separate business.
  • In October 2005, Alibaba Group took over the operation of China Yahoo! as part of its strategic partnership with Yahoo! Inc.
  • In November, 2007, Alibaba.com successfully listed on the Hong Kong Stock Exchange.
  • In April 2008, Taobao established Taobao Mall (Tmall.com), a retail website, to complement its C2C marketplace.
  • In September 2008, Alibaba Group R&D Institute was established.
  • In September 2009, Alibaba Group established Alibaba Cloud Computing in conjunction with its 10-year anniversary.
  • In May 2010, Alibaba Group announced a plan to earmark 0.3% of its annual revenues to fund environmental protection initiatives.
  • In October 2010, Taobao beta-launched eTao as a shopping search engine.
  • In June 2011, Alibaba Group reorganized Taobao into three separate companies: Taobao Marketplace, Taobao Mall (Tmall.com) and eTao.
  • In July 2011, Alibaba Cloud Computing launched its first self-developed mobile operating system, Aliyun OS over K-Touch Cloud Smartphone.
  • In January 2012, Tmall.com changed its Chinese name as part of a rebranding exercise.
  • In March 2014, Alibaba group said it will begin the process of filing for an initial public offering in the U.S.
  • Prior to its IPO filing on Form F-1 as a foreign issuer in the U.S., Alibaba undertook an aggressive acquisition spree – previously atypical for the company – acquiring numerous majority and minority stakes in companies including micro-blogging service Weibo, China Vision Holdings, and car sharing service Lyft.
  • On May 6, 2014 Alibaba Group filed registration documents to go public in the U.S. in what may be one of the biggest initial public offerings in American history.
  • On June 5, 2014 Alibaba group agreed to take a 50 percent stake in Guangzhou Evergrande Football Club, winners of 2013 Asian Champions League, for 1.2 billion yuan ($192 million).
  • In June 2014, Alibaba acquired the Chinese mobile internet firm UCWeb. The price of the purchase has not been disclosed, but the company did claim that the acquisition creates the biggest merger in the history of China’s internet sector.

MARKETS AND SALES:

Mr. Ma was definitely on to something as the chart below will indicate.  The projection through 2017 is dramatic.

CHINAS E-COMMERCE MARKET

China’s online shopping market is absolutely dominated by Alibaba.

CHINA'S ON-LINE SHOPPING MARKET

If we look at other companies related to the Internet, we see the following, in billions:

HOW ALIBABA COMPARES WITH OTHER E-COMMERCE SITES

The gross merchandise volume in 2013 looked as follows:

GROSS VOLUME IN MERCHANDISE

As you can see, the company is a “player” on the global stage.

In the very near future, Alibaba will issue an IPO.  At this time, the Wall Street Journal estimates the IPO could be one of the largest in corporate history.  Only time will tell.

By the way, I placed the spring business with a company in Texas.  We wanted to keep the product “at home” for several reasons, 1.) Communication, 2.) Transportation, 3.) Import complexities, 4.) Changing exchange rates and 5.) Buy American.  With this being the case, Alibaba is still a great source for products purchased.  I would invite you to take a look.

I always welcome your comments.

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