Thanks for the article / keeping the world safe Jason Bourne! I couldn’t agree more with the assertion that the loss of manufacturing jobs pales in comparison to the potential loss of other jobs in the solar industry, but it seems like our current political climate places a premium on manufacturing jobs when considering outsourcing. Claiming a tariff will help keep American manufacturing alive, especially manufacturing that has likely been subsidized by the government at some point (given the prior clean energy breaks these companies often receive), is usually a winning proposition on the national stage.
I’m also a bit confused by the financial numbers from SunPower over the past 5 years. You’ve established that the industry is growing rapidly and installed capacity doubled last year, but SunPower’s revenue is down significantly since 2014. Has there been something else specific to SunPower that has caused its decline while in a booming industry? You mentioned that they currently have the superior technology, is that not something that is appreciated by the industry? Has the market moved to prefer the low-cost low-efficiency products that are made by competitors? If so, there’s a chance SunPower has larger problems than the impending tariffs.
Thanks for writing this! I agree with your premise that in order for the goals to mean anything, they need to be SMART. However, I’m wondering if it makes sense for H&M to put more specifics around their goals given their current business model. As you mentioned, H&M is based on fast fashion and typically comes in at a much lower price point than its key competitors. Since sustainability usually comes hand in hand with higher costs (at least in the short term), would they continue to execute on their low-cost business model if they were the only large player that was setting tough goals to hit with the WWF?
Additionally, I agree that fashion may simply be structurally wasteful, and luckily the industry has not caught the wrath of environmentalists in the way that other water-intensive industries (e.g., nut growing in California during the drought) have. The idea behind fashion is typically to buy new clothes that look different even though you currently own perfectly suitable ones, with the only difference being a particular style or color. Since there don’t seem to be many innovations that are clearly better for the environment in the industry, one of the best ways to increase sustainability would be to raise consumer awareness about the harmful effects of clothes production on the environment and encourage less excessive purchasing. However, that message would directly contradict H&M’s business, and I doubt that is something they would ever consider.
Great article! Very interesting to see the steps a company will take when such a high tariff eliminates their ability to do business in a country. I think it’d be really tough to maintain confidence in the Bombardier program, but looking at the Delta reaction it seems that they plan on both maintaining their order for the Bombardier jets and insisting that they will not pay the ridiculous 300% tariff. It seems like Delta is trying to see what type of market power it has as the most valuable airline company in the world and a significant employer of American workers and buyer of American manufacturing.
Given that Boeing and Airbus have very comparable airplane offerings, a partnership between Bombardier and Airbus should frighten Boeing as that would be a more complete product offering in the American market. One of the key reasons Delta is contracting Bombardier for these shipments is because they don’t believe another company makes a similar plane, and if a Bombardier-Airbus partnership can deliver superior value to Delta through this program it may tip the scales towards Airbus when Delta makes its next large purchase of new aircraft. While the pushing of the tariffs made sense for Boeing in the immediate term, it may create long-term partnerships that will eventually threaten its position if the next US administration has a different view on protectionist policies.
Great article on an interesting topic! I too was contemplating what might happen to this industry in the future, it seems like digitalization is good for impact outsourcing now, but every advance made by these workers slowly displaces the need for them. However, it seems like this will still be a booming industry in the near to mid future, and hopefully these companies can continue to grow and reach a large portion of the developing world.
I’m more concerned about the future for Samasource as a business. You mentioned that its business model is much more fixed-cost focused and scales less to supply and demand, and in order to break even it has essentially had to help future competitors build models to succeed in the space. Is the goal of Samasource to grow the industry as a whole, or focus on their own viability as business? It seems like the right now they are doing more of the former, which is great for the overall social good but may not be the best business strategy. Do you think they should focus less on the advisory part of their business in order to continue to be the leader in the market? Or would Leila Janah be just as happy seeing this industry take off even if it leaves her own business behind? I’m curious to see where they go in the next few years!
Great piece! I agree with your assertion that heading internationally makes sense, it seems like HHC is in a great position to take advantage of the rapid urbanization occurring overseas.
You mentioned that the business model is based on the ability to sell its properties to third-party developers, and I’m curious what path you’d recommend with their currently owned real estate. Their last 10K had fixed assets pegged at ~$4.7 billion, which is a pretty large amount of real estate holdings compared to its market cap of ~$5.5 billion. If I were a developer and read this article, I would be weary about investing in some of these recently built properties near the water and may look to follow the same strategy you laid out above. In light of that, do you think it’d make sense for HHC to rush and sell its inventory now, even if it means taking a small loss? Or should it continue to go about its usual business and hope the inventory sells similarly to how it has in the past? While I’d be worried about holding onto inventory that may be worthless with rising sea levels, the signal that a below-market sell off would give to both customers and investors doesn’t sound a whole lot better.
Great piece! I agree with the theme of your questions, and believe it might be tough for Sysco to begin sharing some of its data with its partners and other third parties. Sysco’s supply chain is one of its key competitive advantages, as moving $50B of mostly perishable food per year requires an incredibly sophisticated operation. I’m not sure if Sysco management would be willing to open up its supply chain management and potentially allow competitors to gain insights from the Sysco system.
Additionally, I’m curious if a move to blockchain could be implemented across all the parts of the Sysco supply chain. Would some of the smaller farmers that Sysco works with be willing to implement a new system utilizing an unfamiliar technology? Would Sysco be in charge of funding the new systems necessary for a blockchain conversion? The company appears to have taken a substantial amount of debt in preparation for acquisitions, would it make sense to invest in a project that may not necessarily increase revenue, especially if it is used to reduce food waste?
Very interesting read on a $40B company that I knew nothing about! I’m wondering how this shift to more digitalization has been received in Germany. I did a bit of googling (I’m sure your links had the information I needed but my German skills are limited to counting to 10), and it looks like DB’s largest stockholder is the German government and it currently employs ~195K employees in Germany alone. Since a shift to digitalization is typically accompanied by a job loss, is the German government ok with one of its largest employers embarking on what will likely be large job cuts? You mentioned that some of even the most basic hiring has been limited through internal quarreling, and I’m guessing it will only get worse in the future.
I’m also curious how the shift to 3D printing will be regulated. If the eventual goal will be to not only replace current parts but innovate them as well, will that be allowed to happen in what I assume is a highly regulated industry? These trains carry hundreds of thousands of people a day and a faulty part can be catastrophic, I’m not sure if continual product innovation at 3D printing labs will be possible in this industry.
Fun read! While I love the idea of bringing blockchain to US voting, I’m curious if you believe the current US government has the operational ability to implement a new voting system. My understanding is that most of the voting in the US is regulated more by state governments than the federal government (even for federal elections), and a change like this would need to be implemented on a state by state level. I could easily see a scenario where states with a more affluent and computer-literate electorate begin to use this system in the next few years once its efficacy has been proven (e.g., California, Connecticut, Maryland). However, since these states largely lean left, the idea of this voting system might become politicized in a way that makes the remaining states wary of a voting system that is primarily utilized in more Democratic states.
Do you think it’s currently possible to get full state buy-in to a radical change in voting procedure? Which politicians would need to champion this effort to get a bipartisan solution on voting overhaul?