Great read, Eleonora! I agree with Danny; while it may seem that refocusing operations in the U.S. is approximately net-neutral for GM, the likely increase in material costs alone, may yield to increased costs for GM and therefore increased prices for consumers. Additionally, isolationists policies are a headache for companies like GM. As you pointed out, GM only generates 30% of its sales from the U.S. Yet, it is still considered to be an “American” company due to its roots. Shouldn’t the company’s manufacturing footprint reflect its global sales to optimize supply chain efficiency? How can the U.S. coerce companies to be more “American” when they have in fact become “global”? I believe companies like GM should think more carefully about all of their stakeholders (incl. shareholders and customers) when reacting to isolationist trade policies.
Thanks, Aditya. Agreed, changes in climate have definitely affected agricultural output the world over. I worked with reinsurance companies for a couple of years (insurers of insurance companies), and one key data point that was widely understood was the rise of sea surface temperatures over the past couple of centuries (see fig. 1: https://www.epa.gov/climate-indicators/climate-change-indicators-sea-surface-temperature). Warmer sea surface temperatures meant higher chances of natural disasters such as hurricanes and tropical storms, which can have meaningful impact on agricultural output. Great that growers like Sula are working to mitigate the consequences of climate change, but I believe growers should unite with executives in other industries to fight the root causes of climate change, thereby avoiding further damages to crops.
Thanks, Bettina! I worked with one of Airbus’ suppliers on many of its planes, including the A320, and the upcoming A380 and A320neo. Unfortunately, Airbus has been facing major delays on the delivery of these platforms. I wonder how they can use new digital innovations to optimize their supply chain. They should be able to use new technologies to understand supply chain issues earlier, and perhaps use a building information modeling software to help them better understand how one supplier challenge may affect a delivery in the future. This will save them from the embarrassment they are currently having with the A380.
Thanks, Bahia for this thoughtful article. This seems to be a classic case of focusing on the wrong stakeholders. With the progress that Tesla has shown with electric vehicles (and autonomous electric vehicles, soon), I believe consumers are going to begin demanding changes from car companies. Why purchase a non-fuel efficient SUV, or even a mildly fuel-efficient one, when I can purchase a Model X, which looks great and is much better for the climate? As demand continues to grow, prices for these vehicles will come down, eventually becoming standard. Auto companies have been focused on doing the bare minimum for too long, and looking at governments and investors (backward-looking stakeholders to a large extent) to determine what they need to do for the next five years. The companies that will be willing to buck the trend and move fastest towards a truly efficient model are likely to be the only survivors ten years out.
Great article Niko! The Jet.com acquisition was definitely a step in the right direction. I’m surprised Walmart didn’t decide to wall off Walmart.com as a separate division and allow it to make the kinds of investment that would make it a better competitor to Amazon. When Amazon makes very large investments (in drone technology or purchasing Whole Foods), equity investors essentially make those investments “risk-free” by rallying behind the stock and allowing Amazon to raise more money at a higher valuation and using that cash to pay for the investments. If Walmart chose to do the same, they could essentially have very cheap capital from their .com division; this would enable them to make investments in companies like Symbiotic (autonomous warehouse), or drone-delivery technology. Walmart’s biggest issue may not be the foresight of its management team, but the limitations of being a non-tech publicly traded company!