Manufacturing

Barack Obama has labelled Mitt Romney an “Outsourcer-in-Chief” in his latest campaign ads. He’s tapping into a deep well of suspicion about a decades-old business practice.

Andrew Hill

I’m fascinated by the first part in a new FT series on manufacturing, led by our expert Peter Marsh, who has a new book coming out on the topic.

In particular, I love the bar chart in this interactive graphic about the “seven ages of industry“ (click on the “chart” tab when it opens). Read more

The 1993 invention of a high-brightness, blue, light-emitting diode, which opened the way for the now-ubiquitous white LED, is often told as a tale of against-all-odds innovation by a maverick genius. When Nichia of Japan ordered researcher Shuji Nakamura to stop the expensive work on the project it had initially funded, he ploughed on. He secretly sought patents for his breakthrough. He even triggered several explosions in his laboratory.

Andrew Hill

“Day by day Volkswagen… appears less like a public company, and more like a complex oligarchy.” That’s how The Economist began a critique of the German carmaker’s flawed corporate governance – in December 2005.

Not much has changed since, as the latest developments in Wolfsburg suggest. In spite of periodic protests about governance, Ferdinand Piëch, VW’s chairman, has reinforced his hold over the group and is expected to seek another five-year term in the chair. The latest news is that his wife, Ursula, will stand for nomination to the board. This may be, as the FT wrote on Sunday, part of “a fairly well-established tradition of spouses taking up powerful positions at German companies”, citing the board positions held by Friede Springer at Axel Springer, and Liz Mohn, at Bertelsmann. But to anybody outside this tradition of family-controlled companies, it looks distinctly odd. As Dow Jones pointed out in its account, “there are no reports…. that would suggest she has any high-profile corporate management experience“. Read more

Andrew Hill

General Electric’s thinking on leadership has shifted, according to an article in Wednesday’s Wall Street Journal: from breadth to depth. The WSJ writes:

[GE] for decades had made a rigorously applied but generic management tool kit central to its identity. Like all companies, GE wants some of both traits in its leaders, but the balance has tipped toward expertise.

I’m doubtful that the shift is quite as earth-shaking as the WSJ implies. Expertise is one of several attributes GE has long sought in its leaders, along with External Focus, Clear Thinking, Imagination & Courage, and Inclusiveness. In his 2010 letter to shareholders, chief executive Jeff Immelt added some new ones – including the eccentric-sounding goal that its leaders should be “humble listeners”. It already adds up to a pretty demanding checklist, as I wrote at the time. Read more

The pun proved irresistible. “Mystery Ends, Mistry Begins”, ran the headline in India’s Economic Times on the appointment last week of Cyrus Mistry to succeed Ratan Tata at the head of the eponymous tea-to-steel holding company. If the succession was a mystery, it looked to have a pretty feeble final twist.

Andrew Hill

I think most obituaries of Robert Galvin – who helped take Motorola from a family firm to a $11bn leader in mobile phones – understate his contribution to management practice, for he was, at the very least, the godfather of Six Sigma.

The omission is understandable. Six Sigma – which focuses managers obsessively on improving quality and eliminating defects – was the process improvement technique of choice for large companies in the 1990s, but it seems to have faded from public view recently. I spent a day at General Electric’s Crotonville leadership development centre in September and I didn’t hear Six Sigma mentioned once. Yet 15 years ago, when Jack Welch was in his pomp, the air would have been thick with boasts about how many “black belt” leaders of Six Sigma initiatives GE had bred. Read more

Andrew Hill

It’s a cruel coincidence that the latest death knell for Saab comes within days of the latest extension of car guy Bob Lutz’s lease on life.

On Thursday, a Swedish court rejected the carmaker’s attempt to seek protection from its creditors, pushing a decision on potential insolvency into the hands of suppliers and employees awaiting payment for materials and labour. Saab is appealing, but the obituaries for the group – now selling well under 100,000 units annually – are already being written. Read more