Climate change has been a very prevalent world issue. In recent years, further action has been taken and been demanded. Therefore, it has begun to affect business more and more. At the Paris summit last year, world leaders set out strict goals to reduce carbon emission. A large percentage of world greenhouse gas emissions are attributed to gasoline-powered vehicles, which means that automakers will have to take action.

Volkswagen, one of the biggest automobile producers in the world, has announced that they are transitioning completely to electric cars. This BHAG (big, hairy, audacious goal) was set in motion as a study reported that the last gasoline car should be sold by about 2035 in order to meet goals set out in the Paris summit. Since electric cars have fewer components than gasoline ones, the company will need less labor. Volkswagen has also taken this action towards reducing carbon emissions to combat the bad press they have been receiving after the diesel scandal. They released that the switch will result in a “five figure number” of job cuts in the long run. Furthermore, a report stated that Volkswagen’s works council expects to lose up to 25,000 jobs over the next ten years. This does not necessarily mean that the car company will be firing thousands of people. The head of personnel, Karlheinz Blessing, has even stressed to the press that there will be no layoffs. But the company must downsize if they intend to completely shift to electric products. Therefore, it is evident that they will simply not be replacing employees as they retire. Even though they will be cutting down their workforce, which means fewer wages to pay, it is unclear whether or not costs will go up for the company. Changing their product line means different components will go into the cars, and depending on the cost of these materials, production costs will either increase or decrease. Volkswagen’s cash flow may follow suit.

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link: http://www.cbc.ca/news/business/volkswagen-jobs-electric-cars-1.3826279

Almost all of us with access to Wi-Fi and a personal computer have Netflix. If not, you certainly know of the gigantic entertainment company that spans across nations. The company, founded in 1997 in Scotts Valley, California, initially provided DVDs by mail to subscribers, and eventually became the largest online streaming service for movies and television shows. The company’s success can even be seen in their share price, as their initial public offering (IPO) in 2002 was fifteen US dollars per share, and it has now sitting at $101.47. Their business model consists of a flat monthly payment that gives users unlimited streaming of whatever entertainment you desire through their website. However, since the company is present in over 190 countries, streaming options vary depending on your location. These ‘geo-restrictions’ are a legally binding result of Netflix’s country-exclusive licensing agreements with Hollywood. As we’ve learnt in class, Hollywood would be an important stakeholder in Netflix, since they can easily affect the operations of the company by terminating licensing agreements and depleting their content.

When some subscribers tire from the selection Netflix offers them or they simply want access to a certain show not available in their own country, they resort to third party companies to help them get around these regulations. ‘Unblocking’ companies posed a big problem to Netflix’s business, as they would essentially hack Netflix’s system, allowing subscribers access to Netflix selections in any location they want and hurting the company’s legal agreements with entertainment providers. The ongoing fight between the multinational company and unblocking services has recently calmed down. We see examples of many companies, one after the other, giving up in their fight to bypass Netflix’s borders, as written about in the CBC news article I cited below. Relating to when we talked about costs and the importance of cash flow in class, it was most likely getting too costly for these companies to continuously change their strategy in bypassing a huge company’s country restrictions. The services could have run out of cash flow, from not enough paying subscribers and increasing costs. Either way, it was clearly not profitable anymore to fight Netflix, and the multinational company came out on top.

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The article I read on CBC News is part of a segment called “Trudeau Tracker”, which examines the performance of the new Liberal government and how it is following through with promises made during the election. The segment focused on health care. In their platform, the Liberals pledged an immediate commitment of an additional $3 billion into home care (which is supportive care provided in-home by licensed healthcare professionals or caregivers) over four years in order to improve and increase the services our country offers.

Despite the obvious need, the March budget did not allocate any money to home care. This means that in order to keep their promise, the Liberals will have to spend $3 billion over the next three years in home care alone (one billion each year). To put this in perspective, the recent budget only allows for $290 million to be spent over two years to other various health initiatives relating to things like nutrition, cancer and food safety. The amount the government promised to put into home care facilities is about ten times this.

Home care is actually a lower cost solution to long-term care services, and if it were widely accessible, this would open up a lot of space in hospitals and other facilities for patients in acute situations. This clearly affects the GDP and relates to expansionary fiscal policy, which is not something our previous prime minister supported. The Liberals committed to this policy, and the $3 billion into home care would be a great example of increased government spending and where the money could potentially be going. Yet, they failed to follow through with their commitment in the first year, which is problematic due to the amount of money they would have to spend in the following years to live up to their promise.

Higher government spending should raise the GDP and be a positive impact on our economy, despite the amount of debt our country is in. This is the goal of expansionary fiscal policy. More money in this section for increased services will automatically create more jobs, which in turn should raise the GDP and improve the economy by lower unemployment rates and higher consumption.

On a personal note, my family is affected because my grandmother is someone in need of home care assistance. She requires daily nurse visits, as well as support from mental health care officials. The addition of money into home care services could be beneficial for her.

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