Recently in Business Category

My friend David sends along this Financial Times story about how various factors are forcing a fundamental shift in supply chains. Excerpt:

Manufacturers are abandoning global supply chains for regional ones in a big shift brought about by the financial crisis and climate change concerns, according to executives and analysts.

Companies are increasingly looking closer to home for their components, meaning that for their US or European operations they are more likely to use Mexico and eastern Europe than China, as previously.

"A future where energy is more expensive and less plentifully available will lead to more regional supply chains," Gerard Kleisterlee, chief executive of Philips, one of Europe's biggest companies, told the Financial Times.

The story goes on to talk about how the economic downturn, plus concerns about climate change (and resulting new government regulation) are driving this. What seems implicit in Kleisterlee's remark, but doesn't get mentioned in the FT piece, is peak oil.

[An aside -- last week in Alaska, I met an oilfield worker from the North Slope, who asked me what I thought about peak oil. I didn't want to get into an argument, so I gave a noncommittal answer. "Well, up on the slope, we all know it's real," he told me. "Alaska is screwed." We had an interesting conversation from there.]

Anyway, David says that the point I raised in the earlier post about how the military accepts climate change as a clear and present danger, even as many conservatives deny it, might also, per this FT story, be made about business.

Anybody else find this pretty deplorable?

NEW YORK (Reuters) - U.S. service sector employees who receive tips have been excluded from the latest hike in the federal minimum wage that kicked in on Friday, leaving the public to cover the cost of their healthcare, according to economists and advocates.

The federal minimum wage on Friday rose to $7.25 from $6.55. But only seven states guarantee tipped workers the minimum wage, according to a report by the National Employment Law Project, a New York-based advocacy group for low-income workers.

The minimum wage for so-called "tipped" workers has been frozen at $2.13 an hour since 1991, the report found. [Emphasis added--E.M.]

Waitresses and waiters, who comprise the majority of tip-receiving workers, have nearly three times the poverty rate of the nation's workforce, it said.

Wait staff are twice as likely to go without health insurance, partly because few employers help them pay for a health plan.

I know that real-life wages for wait staff may be higher than that minimum number in many markets, but the idea that wait staff are left out of the minimum wage is the one that gets me. Workers in high-end restaurants may be fine, but there are a lot of workers in casual dining places who probably aren't making enough in tips to make up for the difference between their wages and a decent living; and though in some areas wait staff may command more than minimum wage, in other, smaller towns and areas this likely isn't the case.

And in an economic downturn, when people cut back on eating out, order conservatively from a selection of middle or lower-priced menu items, skip appetizers or desserts, and otherwise restrain their spending, people who are dependent on tips as part of their livelihood are going to hurt even more.

I've personally never worked waiting tables at a restaurant; while I did work at a couple of mall-counter places in my college days, these weren't tip-based enterprises and I always earned minimum wage, or just slightly better. So I don't know what it's like to be dependent on tips as part of my pay.

But I do know that people gripe, all the time, about tipping wait staff and how much ought to be left. My husband is of the "figure 20% and then round up to the nearest dollar or two" sort, but both he and I have been surprised, on occasion, to be out eating and to see people put down a dollar or so per person after consuming a ten or fifteen dollar meal each. And I've seen attitudes expressed on the Internet to the effect that a ten-percent tip is perfectly fine for ordinary service, and that going "up" to fifteen or twenty percent should be reserved for extraordinary service.

Frankly, I think wait staff ought to be guaranteed minimum wage in the first place, and that tips should then help them make up the difference between minimum wage and a decent living.

Not long ago, my family and I went out for pizza. The restaurant, like so many these days, is covered with big-screen TVs--but they only play sports, and they keep the volume off, so it's not as annoying as some places can be.

My husband and I were talking. One of the girls grabbed his arm, and said, "Dad, look!" pointing at the TV. His gaze followed her insistent pointing to one of the TV screens, which was playing a commercial.

"No!" he gasped in astonished annoyance, while the girls giggled--they knew Dad would react this way. I turned to look, and saw that the commercial was for Six Flags--and the character on the screen was that creepy faux octogenarian, the guy people everywhere find mind-bogglingly unpleasant: Mr. Six.

Why did Six Flags bring him back? Time wonders, too:

This could be a make-or-break summer for Six Flags. And in the current economic environment, families will likely sacrifice thrill-ride screams for savings. So why, in the face of such serious challenges, would Six Flags respond by rolling out an ad campaign featuring a widely mocked character that the company's own chairman once said is "misguided" and "weakens the brand." Why, just when the stakes are at an all-time high, is a bankrupt company putting that creepy dancing old guy back on our TVs?

His name is Mr. Six -- clever, right? -- and his troll-like antics may prevent you from ever setting foot in a Six Flags park, no matter how exciting that Batman ride is. He first popped up in Six Flag ads in 2004, a geriatric sideshow obviously played by a younger actor. Mr. Six dementedly shimmied to the equally annoying late-'90s dance song "We Like to Party" while in the confines of a Six Flag facility. Dressed in a floppy tuxedo and wearing black-rimmed glasses larger than most skyscraper windows, Mr. Six has a wrinkled face, a victim of makeup malpractice, that looks like "someone left a dead turtle in a stagnant pool of water for a month," in the words of one advertising blogger. A New York City radio host wondered if Mr. Six was actually "Junior Soprano out on a bender." [...]

The new commercials are receiving scathing reviews. "It's a pretty miserable piece of advertising," says Barbara Lippert, a critic for Adweek, the trade publication. "It's as dumb as can be, and talks down to us. He's like an Elmer Fudd who never made it out into the country." Every moment of a 30-second spot is valuable. Why sacrifice precious time to a character with no natural connection to an amusement park? And how, exactly, does a creepy old man in a bow tie appeal to the kids that drive Six Flags' business? "I don't think many 11-year-olds relate to George Burns types," says Lippert. Hey, don't insult a late, great funnyman by comparing him to Mr. Six.

Six Flags has talked to parents, Vieira Barocas insists. And for the most part, their children give Mr. Six rave reviews. "It's not about his age," she says. "It's about his spirit." According to the company, market research shows Mr. Six has fans of all ages. "We know he's a polarizing character," Vieira Barocas says. "But on any day I would rather that someone have an opinion about us and our brand than for him to just melt into the background with all the other advertising that is out there. Would I prefer that you and other critics find him appealing? Absolutely. But I will take the fact that you notice, that you hear our message and that you have a point of view."

The buzz can surely help, but to a point. Is Mr. Six actually driving incremental traffic to Six Flags? Viewers are already cash-strapped. Why potentially turn them off with your spots? "Sure, the ad sticks Six Flags in your mind," says Lippert. "But it's wedged in the area that causes extreme anxiety and annoyance. You're saying, 'Get this out of my lobe.'"

I read my husband that last paragraph when he called from work, and he agreed wholeheartedly with that perspective. Mr. Six does not cause a desire to go to Six Flags, at least not in him; Mr. Six causes him to want to throw things at our TV and swear he'll never expose our kids to the kind of people who think that guy's a hoot.

And that made me wonder about other supposedly "beloved" advertising campaigns or characters that have possibly done more harm than good. Anyone here share my oldest girl's dislike of Ronald McDonald? Anybody (besides me) remember Spuds McKenzie, or thinking he was kind of stupid? The Taco Bell Chihuahua just died on Tuesday--I remember hearing that some people initially thought the ad campaign was insulting, but that seemed to have died away long ago. Thoughts?

How about some insurance characters: Erin Esurance, the Aflac duck, or the Geico gecko? Do the Serta sheep make you think of matressess and a good night's sleep? Do the Chik-fil-A cows make you want chicken--or does the campaign backfire and make you desire a nice porterhouse?

I know there's one "character" that makes me react with almost as much hostility toward our TV as my husband does when Mr. Six appears--and that's the Mucinex, er, thing. When I've got a bad case of congestion from a flu or allergies, the last thing I want to do is visualize little green blobs arranging living-room furniture in my bronchial passages, thank you very much.

It's your turn to rant about the advertising characters you just can't stand! I'm betting some of you have some I haven't thought of in a long time.

So a video game company makes a game and wants to market it. What to do, what to do...oh, hey, how about we hire a bunch of fake Christian protesters to campaign against the game and create interest?

Sounds like the plot of a second-rate movie, right? Except it actually happened:

Los Angeles, Calif., Jun 9, 2009 / 04:52 am (CNA).- Video game giant Electronic Arts has admitted it funded a group of fake protesters who pretended to be Christians as a publicity stunt to spur interest in its upcoming action game very loosely based on Dante's "Inferno."

The game company hired a group of almost 20 people to stand outside the Electronic Entertainment Expo in Los Angeles on Wednesday, the Associated Press says. The phony protesters passed out amateurish material and held signs bearing slogans such as "Trade in Your PlayStation for a PrayStation," "Hell is not a Game" and "EA = Electronic Anti-Christ."

Holly Rockwood, an EA spokeswoman, said the charade was arranged by a viral marketing agency hired by the company.

A web page in the crude style of 1990s web design was also created in connection with the stunt. It depicted crosses crushing the word "sin" and placed images of the King James Bible among phony condemnations and thinly-veiled promotions of the game.

"A video game hero does not have the authority to save and damn... ONLY GOD CAN JUDGE. and he will not judge the sinners who play this game kindly," the site said.

Hard to believe, isn't it? Well, not really, but it does make me wonder whether, among all the various religious protesters who have turned up recently to clamor against entertainment industry offerings and the like there weren't a handful of professionals here and there scattered among the legitimately concerned citizens.

The article goes on to talk about the game:

EA's video game "Dante's Inferno" claims to be inspired by the first book of Dante Alighieri's theological poem "The Divine Comedy." Its character uses a cross as a weapon.

While Dante's epic poem placed his beloved Beatrice in Paradise, the EA game makes its Dante character rescue Beatrice's soul from Lucifer, USA Today says.

Given that information, I wonder that EA didn't hire a bunch of irate literature majors to protest instead. They probably would have worked cheaper than the phony Christians, and would have brought enough actual anger and annoyance with them to create a sense of verisimilitude.

This might be interesting to watch:

WASHINGTON (AP) -- Opponents of Chrysler's sale to Fiat are asking the Supreme Court to block the deal.

Three Indiana state pension and construction funds filed emergency papers at the high court early Sunday to put the sale on hold so they can pursue an appeal.

The federal appeals court in New York approved the sale Friday, but gave objectors until Monday afternoon to try to get the Supreme Court to intervene. Chrysler wants to sell the bulk of its assets to a group led by Italy's Fiat as part of its plan to emerge from bankruptcy protection. [...]

The Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund claim the deal unfairly favors the interests of the company's unsecured stakeholders ahead of those of secured debtholders such as themselves.

The funds also challenged the constitutionality of the Treasury Department's use of Troubled Asset Relief Program, or TARP, funds to supply Chrysler's bankruptcy protection financing. They say the Treasury did so without congressional authority.

The government-sponsored reorganization of the U.S. auto industry, including the Chrysler bankruptcy proceedings, "is a matter of incredibly high profile and importance," the funds said in their request to the high court. "The public is watching and needs to see that, particularly when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch."

Does the constitutional challenge have any merit? Is there anything to the notion that the Treasury Department's use of TARP funds to finance the Chrysler bankruptcy financing needed congressional authority?

Whatever the case, you've got to love the pragmatic quote from Chief Judge Dennis Jacobs:

Chief Judge Dennis Jacobs of the New York-based appeals court asked Thomas Lauria, the lawyer representing the Indiana funds, why he believed his clients would be better off if the deal with Fiat went away and Chrysler was forced to liquidate.

"You can't wait for a better deal to come in from Studebaker," Jacobs said.

No, indeed, they can't.

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