Monthly Archives: October 2007

An American Dream on Hold

The immigration pickle we are in is supposedly being debated in the preprimary beanbag in Iowa and New Hampshire. But all I’m hearing is lowest denominator crap about keeping out nasty Mexicans.

Lost in the mush mongering is the diminishing magnetism of America to the best and brightest in the world who are getting the fuzzy message that they are welcome to come as tourists or students but if they expect to stay for a career they’ll have to beat a system that is rigged against the honest and successful would-be immigrant.

I have witnessed this messed up system first hand as my used machine tool business Graff-Pinkert has tried to get Martin Whitfield, a talented Wickman rebuilder a solid immigration status.

When we first started the process to get Martin legal status we were told by everybody we asked that is was impossible unless he won the immigration lottery (the U.S. actually runs a lottery and admits 55,000 people a year who get lucky) Martin would have to wiggle in as a worker who was unobtainable in the American labor pool or as a trainee for a job in which he had unique qualifications. As a Wickman specialist he really had those rare credentials, but we felt the need to hire an immigration attorney who understood the red tape and could navigate Martin through the morass.

The attorney did manage to guide Martin into an 18 month stay at Graff-Pinkert where he proved to be a valuable addition, but then he had to go back to England for three months in order to jump through the next immigration hoop. Graff-Pinkert paid the lawyer’s bill and Martin’s living expenses in Britain while he waited for another window to open.

We were dancing the immigration cha cha cha – three steps forward, three steps back – and each step cost a pretty penny to the legals.

This year we decided to devote fewer resources to Wickman rebuilding and were reluctant to pay many thousands of dollars to the legalistas. We gave Martin several months advanced knowledge of our decision so he could find another position in the U.S., but he was unable to find anybody to hire him with his immigration baggage. He could have found 20 willing employers without the visa issue.

Now Martin is headed back to England to start his quest once again to get to America. If he can find a company in England with an American manufacturing arm, he has a lever to reenter the country. He has a few possibilities.

Meanwhile, his furniture is in storage and his kids are out of school. His spacious apartment in the Chicago suburbs is empty, and his American dream is on hold.

What a country.

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The China Syndrome

Two decades ago, a cashmere sweater was a soft symbol of wealth and status warn by pipe smoking duffers at the club. Eventually women also wanted to wear the wool from the shaggy goat. The boosted demand beyond the capability of shepherds filled in the production shortfall.

But the sharp folk in Bentonville Arkansas who run Wal-Mart believed that cashmere was not the exclusive wool for the rich, and decided cashmere sweaters should be brought to the masses. It was the perfect Christmas present. They asked the disintermediating question, “Why not sell a $49 cashmere women’s sweater, or a $39 or even a $29 one?”

And the Shepherds in China and Mongolia heard them. A herder with 30 goats living in a tent soon had 300 grazing goats. He did what capitalists everywhere do – expand to meet the demand. And shepherds reaped the reward of Wal-Mart’s audacious bet on the desires of its customers to have buttery sweaters for $30 to $40. And soon the Asian shepherds had small homes and televisions and toilets and life was good.

Except 10 times more goats ate all the green grass, and the bigger herds needed to move to greener pastures. The old land turned to dust and the wind blew. Huge clouds of dirt miles long and wide lifted off the ground, browning the local air and ultimately circling the earth. The shepherds had to leave their newly built homes to search for new grass, and China and the world was a dirtier grittier place. But Wal-Mart got their cheaper wool, and you and I got our comfy cardigans.

The net gain for the Chinese economy was real in this case. New sweater factories were built. Girls got jobs at the sewing machines after fleeing the poverty of rural China. The sewing machine firms sold product and the machine guys sold them components for bobbins and stitches. The shepherds tasted prosperity and the goats found more company. But the gains were diminished by the communal degradation of the air pollution. That is not in the Chinese growth statistics, but the people  on the ground know it’s real. This is the yin and yang of “Wild East” growth. Eventually the Chinese people will not take it anymore.

By the numbers, growth will slow and the markets will no longer fawn over the Chinese stocks. The Olympics will come and go. Wal-Mart will still sell cashmere sweaters. I don’t know if they’ll cost more or less than they do today

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Bad to the Bone

I see the Feds bagged some more bad dudes relating to the machining world. Zimmer, DePuy, Smith & Nephew, and Biomet owe $311 million in fines to the Federal Government to settle criminal and civil penalties stemming from kickbacks paid to surgeons doing orthopedic implant procedures. That’s a lot of bone screws.

Zimmer Holdings alone is taking a $169 million write-off in the coming financial quarter. Stryker of Kalamazoo flipped for the prosecution to seal the deal in this case.

Ex-Attorney General John Ashcroft will get in on the gravy train by being appointed the governance monitor for Zimmer.

I find this case particularly seamy after doing a big cover piece on squeaky clean Warsaw, Indiana, in Today’s Machining World last year. I know that doctors routinely take freebies from drug companies and do cheesy speaking engagements for juicy fees, but it appears that the bone cutters had graft down to a science. We all end up paying inflated insurance fees to cover the insider’s chicanery.

We all know that waste is rampant in hospitals. One little tidbit related to the orthopedic racket is the bone screw packaging. Bone screws come in packages of six, which are opened in the operating room. Once the package is opened, any unused bone screws are discarded. The screws sell for $50 to $500 each. I would guess an enterprising scrap dealer might resell them to Russia or Serbia for a tidy profit. With our cockeyed medical payment system we invite this kind of waste.

But now we can all breathe easier, with Ashcroft nosing around the surgeons’ scrubs.

Hopefully with this messy case out of the way the corporate warriors of Warsaw can get back into buying more Citizens, Stars and Tsugamis and build their brands with product quality, not bribes.

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