David Kelly's Blog

Last weekend in Bellingham, Washington I was faced with a new situation – a Walmart with out a single plastic bag to bag up your purchases in. Instead you were suppose to bring your own bag from home, go without the bag or buy a paper bag for five cents. An employee explained that this was not Walmart’s policy but rather a new law by the Bellingham government.

The current hatred to plastic bags is nothing new. Just yesterday Fort Collins in Colorado decided to consider joining the list of bag-free cities. Even developing countries like Uganda and India are thinking to completely ban the distribution of plastic bags.

While reusable bags initially were the big benefits of the environmental movement away from plastic bags. They have increasing received bad press for unhygienic growth hubs for bacteria and inconvenience. Being able to be made up of recyclable material and fully compostable after use, paper bags have been the benefiting the most from the bans.

A recent India Times article confirms this with literally hundreds of new paper bag manufactures sprouting up around Delhi after a city-wide ban of plastic bags. The new law while ruining some plastic bag businesses has become a boom for paper bags. It will be interesting if this new competition will be able to get paper bags down to a cost naturally competitive with plastic bags. This shows the profound effect government regulations have on a economy.

sources

http://articles.economictimes.indiatimes.com/2012-10-20/news/34606531_1_paper-bags-plastic-bags-premier-bags

http://denver.cbslocal.com/2012/11/13/fort-collins-joins-list-of-cities-considering-plastic-bag-ban/

http://articles.kspr.com/2012-11-01/reusable-bags_34863109

American Airlines has been feeling the pains of bankruptcy recently with ongoing lawsuits, arguments with unions, and pilots purposely delaying planes. A recent post-bankruptcy decision has been causing planes to be delayed even more. A Dallas Morning News article says that changing aircraft cleaning from an American Airlines employed union to a non-union contractor (Airserv) which has meant “hundreds of American Airline’s flights have been delayed” due to inexperienced employees.

As a current active worker at Dallas Fort Worth Airport, I have seen the airport personally change dramatically over the past year. While the airport has experienced rapid growth with new international carriers, the airport is American’s hub and as such is directly tied to American’s well being. Airserv only recently entered DFW airport providing wheelchair and golf cart service to American’s disabled customers and after hour ground servicing of planes. Many of the employees were transferred from another contractor under the name “Prospect”.

One of the problems mentioned in the article is that workers don’t have proper badge access for cleaning the aircraft. Badges are expensive (about $150 for a one year access badge) and require additional training for the SATA badge that is required for aircraft cleaners. In the past American got around this problem by having the cleaning crew supervisor “escort” fellow employees onto the aircraft. A SATA badge holder can escort approximately 7 others through security. It is unclear why Airserv did not exploit this same option. When working at the airport I was issued a badge although a less expensive non-SATA “green” badge.

It is a disappointment that American could not make this adjustment more smoothly. I really like the way WestJet takes care of aircraft cleaning. No cleaning crew just flight attendants, the captain and 1^st officer make sure the plane is ready for its next flight. If American adopted this model they could have been avoided the hassle of this situation.

sources:

http://www.janiservinc.com/site/wp-content/uploads/2012/08/aircraft-cleaning.jpg

http://www.bizjournals.com/dallas/blog/morning_call/2012/11/american-airlines-flights-delayed-by.html

A new lawsuit between music conglomerate EMI and upstart “Redigi” introduces an interesting new question – Is it possible to resell digital goods?

Redigi is in the business of selling “preowned” MP3’s. The way it works is simply, you download software that sniffs around your music library for legal digital music. After it finds the songs it deems legal you are given the option to resell the song. If you decide to proceed your song is wiped off your hard drive and uploaded to Redigi. Once your song is sold you get a 20% cut of the price. The biggest difference between buying the MP3s “new” versus preowned is that- the customer pays only 60% of what a “new” music download would cost.

Of course record companies are understandably upset about this, saying that the practice is ripe for copyright infringement. In their lawsuit EMI is demanding 150,000USD per song sold on Redigi’s website. However Redigi is not very concerned (at least that is how they act) saying that their software insures only legal use. They even have plans for entering the e-book business. I find this case very difficult to take a side with. I am very impressed with Redigi’s creativity with this new concept. This really could change the way we buy music. Right now I personally rarely buy music online. I find buying the tangible CD used off of eBay or amazon is usually cheaper. However computers and software are easily malleable and there should not be people getting rich off of copyright infringement.

sources:

http://www.lexology.com/library/detail.aspx?g=b070120f-2db3-4c0d-8792-6b4d715c97b1

Ecolab, a US based company specializing in food safety and sanitation products, is building a new factory in Jiangsu Province. The new factory will be Ecolab’s largest in the Asia Pacific region with a production capacity of approximately 150 metric tons. China’s most recent 5 year plan stated that one of their goals is to improve food safety throughout the country. Ecolab is eager to capitalize in this market selling everything from hand soap to specialized conveyor belt soap. With government support of Ecolab’s business, Ecolab will be receiving a tax benefit to help break ground on this new project.

This story shows globalization in action. By having a domestic plant in China, Ecolab will be able to save on shipping cost, currency exchange, and offer a more “local” buying experience for their Chinese clients. As CEO Douglas Baker said “We are doing this for two reasons. It costs a lot of money to ship our products. It gives clients a natural currency offer. If they buy, manufacture, pay labor and sell locally, currency is not a strategic problem.”  Ecolab’s building of this factory shows its commitment to becoming a dominant force in China domestically. Just as KFC in China will offer corn and soup adaptable to local taste, Ecolab is finding that centralizing production, marketing, and distribution in their target market helps the bottom line.

sources:

http://europe.chinadaily.com.cn/epaper/2012-10/05/content_15797034.htm

http://www.ecolab.com.cn/en

While newspapers continue to cover the Samsung-Apple tablet and smart phone patent battle in the court room. A much smaller case has recently developed over toy tablets.

Meet Nabi. The Nabi was introduced by Fuhu (a company made up by Acer, Foxconn, and Kingston) back in late 2011. The Nabi is a tablet computer but is designed for children, it offers popular games like Angry Birds and also educational software.  At launch it was announced that Toys R US (a popular big box toy store in North America) would be the exclusive distributor of the tablet. Excutives in both companies were very excited about the product, expecting it to be a big hit during the 2011 Christmas season.

However, Fuhu was not happy. Fuhu complains that Toys R US did virtually no promotion and as such only sold 20,000 units and failed to reorder. Their agreement was terminated shortly afterwards in January 2012.

So, Toys R US, no longer selling the Nabi wanted to come up with a solution for the 2012 Christmas season. Meet the Tabeo-

The Tabeo looks startling similar to the Nabi. So Fuhu is launching a court case against Toys R US for design infringement. They especially noted the rubber bumper around the edge of both devices, and that both devices ran on an Android Ecosystem. Personally I find both designs very similar. It makes me wonder what Toy’s R US was thinking ….. turning a sour relationship even more sour.

I did find Fuhu’s settlement demands to be excessive. They stated they want every Tabeo turned over to their company and an unspecified amount of money. Why do they need all the devices? Do they want to burn them or something? Just claim monetary damages and be happy – my opinion.

sources:

http://www.bbc.com/news/technology-19711476

Foxconn is currently the largest exporter in mainland China. The Taiwanese company does OEM manufacturing for some of the largest electronic companies in the world, including Apple, HP, and Sony. However, even a company with 1.3 million employees struggles to keep up with demand for the brand new iPhone 5.

A CNN news story shows just how far they have gone, recruiting colleges in China to have “internship programs” with them at their factories. Foxconn says students will learn “relevant industry experience” and “identify participants in the internship program who have the potential to be excellent full-time employees”. However, many students are complaining that their assembly line work was forced by their colleges and was not helpful in their education.

I can understand why Foxconn would have an internship doing such basic work. The student can learn about corporate culture and one of the largest companies in the world. There is a reason why students everywhere taking entry level jobs at McDonalds is not frowned upon. The fact is that even in these environments there is a lot to learn. Also, Foxconn understandably needs a large number of temporary workers during the launch of the iPhone. Temporary “interns” can be part of that solution.

I do find the universities forcing these students to do these internships is unacceptable. While the students were paid, it does not make sense to pay tuition and then be kicked right back out the door to do manual labor. Also if the college believes internships are essential for graduation they should at least allow students to go out and find their own that might fit their needs better. Overall an extremely poor decision on the colleges part.

Sources:

http://www.cnn.com/2012/09/11/business/china-foxconn-apple-intern/?hpt=hp_t3

http://www.chinadaily.com.cn/china/2012-09/07/content_15741204.htm

photo : http://www.appleiphonegadget.org/wp-content/uploads/2012/09/Hon-Hai.jpg