April 2008 Archives
I made my first trip this week to ExCeL, the pocket-sized, hard-to-reach rival to Birmingham's NEC.
As you might guess from that first sentence, yes - I am a little bit biased in my opinion. But I approached the experience with an open mind and an open wallet.
Worryingly, despite the grumbles I heard from both visitors and event organisers about the Docklands venue, I also heard that a parallel event is likely to be pulled from the NEC. This is even though, as I now know from practical experience, the journey between Birmingham and London (or vice-versa) is considerably more straightforward than the journey from most of London to eastern Docklands.
The reason for my visit: I was asked to share my wisdom with a queue of newly created and wannabe SMEs who had booked to hear about media relations. The event was a two-day show, but scared off by London hotel prices I decided to travel down each day. I went once by car, once by train.
How do you feel if you get a free gift of an electronic gadget, but then have to buy the batteries to make it work?
Do you remember the story of a radio station offering a free trip to watch the Champions League final in Athens? A winner was all ready to soak up the atmosphere in the Greek capital, only to find out he'd actually won the chance to watch the game on TV at a restaurant called Athens.
It was supposed to be a joke, they said. But Ofcom didn't find it that funny (they actually described it as a "serious breech") and so the result was a publicity stunt that generated bad publicity.
The following is another tale of a special offer that wasn't all it was cracked up to be. The amount at stake is only a few pounds, but the value of the lost goodwill to the business is, I would suggest, considerably more.
News in the Post today (read Duncan Tift's article here) that Shanghai Auto (SAIC) remains committed to the Longbridge site comes as welcome news given the uncertainty created in the wake of the recently announced StadCo pullout from MG TF production.
That MG TF production will finally restart in July this year also comes as some relief after lengthy delays given concerns over the quality of parts coming from China.
Let's get things in perspective, though. The TF is basically a 15-year old design with nearly all of the parts brought in from China. It is not a sustainable project beyond the very short term. And with StadCo leaving, we now basically see a screwdriver operation with very few linkages into the local economy and fewer benefits than we'd hoped for in terms of economic development.
That Shanghai are going ahead at all is the crucial thing, though. This keeps them interested in a site whether further production and R&D may come in time. It's here where the case needs to be made to SAIC. And there is a strong case to be made.
Depending on whether or not you are involved in the construction industry, this story in last week's Post may have passed you by. But it has had significant ramifications throughout the construction industry. 112 firms (with three more named today) - including a number based in the West Midlands - have been named by the Office of Fair Trading as having been involved in illegal anti-competitive behaviour.
There are two main allegations:
(i) A firm is invited to bid for a contract. It doesn't want the job. Nor does it want to offend a client by refusing to bid - it wants to get offered work in the future. It therefore agrees with others to offer a bid that it knows is too high to be successful.
(ii) A small number of firms (assumed to be 9) have gone further. They agreed who would win between themselves. The successful firm then made compensation payments to the others.
The story comes with a significant word of caution. The OFT's report is actually confidential and has yet to be released. The 112 firms have until 30 June to respond and no-one has been found guilty of anything. All we have to go on is this press release from the OFT itself.
However, if true, the allegations are pretty serious. They relate to ÃÂ£3 billion worth of public contracts let over a four year period. To perhaps over-simplify things a bit, the named firms have been stealing from the public purse and face the prospect of significant fines - which could be up to 10% of the accused firms' global turnovers. If all of the accused get the maximum fine, the total payable to the government could exceed ÃÂ£2 billion.
So what should we make of it all? The first thing to stress is that construction is of fundamental importance to the UK economy - contributing roughly 10% of our GDP and employing between 1.5 and 2 million people. The second is that the industry has taken the story very seriously with a leading trade journal launching a campaign to reassure clients of the industry's ethics and a trade body, the Construction Confederation, issuing a robust defence of the industry.
I must admit to being confused and concerned as to the whole affair. Based on my own experience, the suggestion that the industry is crooked to the core is plain wrong. I am also keen to reserve judgment until all of the companies named have had the chance to respond - at the moment, all we have are the OFT's allegations. On the other hand, if people have been defrauding the public purse, then it is quite right that they should be held to account although Stephen Gruneberg, a senior lecturer at the University of Westminster, has actually suggested that bid rigging is an inevitable consequence of an industry where firms have to incur significant costs up front when submitting bids which they only recoup if they win.
My overriding hope is that the whole mess gets sorted sooner rather than later.
It's been an interesting week for women in positions of power. Firstly, Silvio Berlusconi angered his European neighbours (and a few others besides), by claiming that the Spanish Cabinet was "too pink", suggesting that the number of women would make it difficult to lead.
On the other side of the pond, Hillary Clinton declared 'the tide is turning', after winning the Pennsylvania primary on Tuesday. This announcement was brought to me via a news item on a commercial radio station, which chirperly announced, "The sound of high heels could soon be heard around the Oval Office."
OK, so I wasn't expecting in-depth political analysis from this particular broadcaster, but these images of woman appear so out-dated and superficial, and beg the question: how far have we really moved on in the past 100 years?
One of the top stories on Digg as I sit at my computer tonight surrounds the new 'Britannica Webshare' program introduced by Encyclopedia Britannica. The new service provides 'free' access to an online version of the encyclopedia, but interestingly only to those users classed as 'web publishers'. The definition (considering these guys write encyclopedias) seems a bit soft - "This program is intended for people who publish with some regularity on the Internet, be they bloggers, webmasters, or writers. We reserve the right to deny participation to anyone who in our judgment doesn't qualify." The apparent half empty offer of 'free' in this new service got me thinking about the importance of acknowledging and adapting to changes in businesses models quickly, rather than persisting long term with a strategy that was doomed from the start. In this case, even when Britannica is seemingly making strides to become more au fait with new trends, it's clear that they can still slip up with the particulars.
Things don't look too positive over attempts to restart MG car production at Longbridge. The announcement last week that StadCo is pulling out of producing car bodies (probably because of delays, unecrtainties and limited volumes if and when cars are ever actually made), has left other suppliers wondering what is going on and whether production is now feasible at all.
I'm sure that there have been some people at Nanjing who have been genuine in wanting to restart small scale MG car production at Longbridge. However, it is a small firm with few resources and doesn't really have much of a track record in developing and producing quality cars. It has had 3 years since it acquired MG Rover and has yet to get its act together at Longbridge. Little wonder people are growing increasingly sceptical of it really making a go of this.
Its takeover by Shanghai at the start of this year raised hopes that the bigger firm could now commit resources and bring R&D back to Longbridge. Well, the StadCo pullout has blown a big hole in that plan and urgent answers are now needed as to what is going on.
Ideally, of course, we'd like to see car manufacturing and R&D come back to Longbridge. It's just that many are wondering if this will ever happen.
Has anyone worked out just how much the local elections will be costing Birmingham businesses?
Twice in two weeks many thousands of people will need to take time off or arrange (and pay for) childcare because schools are closed. Just think of the disruption that means for working parents and the companies that employ them.
I am currently on the naughty step at home. Mrs P sent me into town at the weekend to buy a travel guide for our forthcoming holiday and I made an unauthorised purchase. I should have known better.
But what a great unauthorised purchase. I wholeheartedly recommend Birmingham: Shaping the City by Ben Flatman to one and all.
It starts with a handy reminder of our proud architectural heritage and an explanation of where it all went wrong after the War. Ben doesn't mince his words when describing "the damage wreaked upon the city" by "notorious acts of architectural vandalism". Next, Ben highlights projects which have contributed to our recent urban regeneration. And it is a pretty eclectic mix. For each, you get the details of the construction team and the actual cost, some great pictures (courtesy of photo editor, Craig Holmes) and an analysis of the architectural merits. The book ends with the hopes and aspirations of Ben and others for the future.
I have rarely understood why , in today's day and age, so many people want to buy a house, when it clearly makes no sense for them to do so.
The actual fact is most people have no idea what it means to own a house, they are in my view blatantly negligent.
The baby boomers had this sorted. They bought houses, they built the equity, they managed their debt. and lived and worked in relatively compact geographies.
Today, or atleast from 1997 onwards and from 2002 onwards in particular, people buy a house, go on an extension 'binge' spend all the equity on holidays and by the time the 2 years of their fixed term are up, they are ready to remortgage.