Tom C. Thompson

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On November 27, 2017, Tom C. Thompson commented on Unilever – Tea Saving Superhero? :

Great write-up! To your first question, you mention that Unilever purchases 10% of the world’s tea production. However, what percentage of the tea crops from farms that Unilever consults with does Unilever purchase? I imagine if Unilever is going through the process of teaching best practices to tea farmers then they are purchasing much more than 10% of the crops grown by those farmers. I think there is something to be said for increasing yields from suppliers that you can rely on. Even if Unilever was able to buy somewhat cheaper leaves from another supplier in a different area, it might be strategically valuable for Unilever to keep Kenyan tea farms viably productive because they have an established supply chain in place and the Kenyan tea product is proven to satisfy customers’ tastes. Looking at it in from a solely business perspective, if climate change does drastically affect tea leaf production, it would only be in Unilever’s best interest to have one of their traditional suppliers be best equipped with the latest farming techniques.

Great write-up! It seems to me that Bombardier already has the hard part over with: the selling of 50.01% of their company to Airbus in order to gain share to the Mobile assembly plant. I’m not expert in free trade agreements, but my feeling is that Bombardier would not do such a drastic move unless it guaranteed the removal of the 300% tariff threatened against them.

My comment to your second question is very similar to Hortense’s above. If Bombardier is serious about competing with Boeing, it might be in the company’s best interest to invest in an American based manufacturing plant regardless of who is President. Just as we saw in the Fuyao glass case, the economics of their decision of whether to build a new plant in China or America naturally worked in favor of the Moraine, Ohio plant. When asked about whether or not the new streak of isolationist policies in the United States has any effect on their company’s plan going forward, she basically answered that it didn’t matter any more. They had already built the Moraine, Ohio plant so any tariffs placed on future imports would not affect them. They essentially touched “home base” and were safe. In my opinion, Bombardier would be short-sighted if they banked on current American political attitudes to reverse in 5-10 years when they could just as easily change back in 15-20.

On November 27, 2017, Tom C. Thompson commented on Jaguar Land Rover: A Bumpy Ride post-Brexit :

A great choice for a topic, great write-up as well! While I’m not nearly as familiar with Brexit as I should be, your questions at the end really interest me. To me, JLR seems like a large enough company to warrant major parts manufacturers re-shoring their operations within the UK.
Some may refuse, but the overall demand is there that someone will be incentivized to step into that void to produce the parts JLR needs. I think of this as more of a short term issue than anything. Hopefully the supply chain will correct for itself in the long term, either in the form of a new free trade agreement being passed between the EU and UK or the eventual building of long term factories on British shores needed to supply JLR at cost effective prices.

I personally think the larger issue is between the UK and the rest of the world. As you point out, JLR sells 56% of its cars to the rest of the world. Will the UK companies maintain the same bargaining power at the trade table that they once had while they were in the EU? If they get a much worse deal than they once had, will JLR be forced to exit some countries? These questions are out of my pay grade, but it makes me also think about the opposite scenario, what if the UK is able to negotiate far superior trade deals since they were one of the stronger countries in the EU? Would JLR flourish under this scenario? Or are the differences in trade agreements so negligible there won’t be that much of a bottom line effect either way.

On November 27, 2017, Tom C. Thompson commented on Big Missiles + Big Data = Small(er) Price Tags? :

Pcoats, great write up. Incredible headline photo. I’m always interested in learning how incredibly complex pieces of machinery get built. I can only imagine the amount of parts that have to come together to build many of the products that Raytheon provides.

And you’re right, supply chain efficiency obviously seems like the biggest point of optimization for a company that sources from over 10,000 suppliers. Multiple different types of suppliers isn’t something we really got into when we did the beer game simulation. It was always just 1 Factory => 1 Distributor => 1 Retailer => 1 Customer. I can see how big data would be able to streamline Raytheon’s process even moreso.

One question I have though is about limiting the number of suppliers that Raytheon sources from. There’s obvious benefits from a logistics perspective for consolidating that number down, but I’m wondering if in some instances that might be counterproductive because you’re eliminating competition between your suppliers. For instance, if big data says to definitively source one product from Supplier A instead of Supplier B and you then sign a long term contract with Supplier A for that product, you’ve effectively eliminated Supplier B from offering a superior product at a cheaper price some years down the road. If you were able to keep Supplier B in the game by still buying, say 25%, of that product from them and then promising that they could earn more market share if they were to compete or surpass Supplier A’s price/quality then that would encourage development and innovation between both Supplier A and B. I’m not sure if this is anywhere close to a real life example, but it was something I thought about when seeing that the number of suppliers decreased.

On November 27, 2017, Tom C. Thompson commented on Wait, Who Owns What? Oseberg’s Digitalization of America’s Land Records :

Cloudy title for the impoverished is a major issue. I had never heard of Landmapp before but that is an incredible product for those without the necessary means to clear up title on lands they should rightfully own. It reminds me a lot of the Mark Zuckerberg Hawaii vacation estate story:

The example you gave of RT building an entire wind farm to mitigate the effects of the shortening ice road season really speaks to the incredible scale of these mining projects.

To your question of whether or not Rio Tinto should share their best practices for climate change risk reduction with competitors, I’m not really sure they could even if they wanted. Many times the new practice that a company comes up with to make a process more efficient is just that, a practice. It is a new method or process, not necessarily a new patent-able technology that the company came up with. For instance, back to the wind farm example, Rio Tinto didn’t invent the wind farm. But if another company decided to move into the Canadian Northwest Territories, then they could plainly see that wind-powered electricity is a necessity to sustainable operations in the area.

However, if Rio Tinto did invent a new climate change risk reducing technology that could be patented, then I would be all for them patenting it and selling it to their competitors at a reasonable rate. There should be an incentive to coming up with new and effective climate change combating technologies and if Rio Tinto did come up with such a technology for it then they should be applauded and rewarded for it.

On November 26, 2017, Tom C. Thompson commented on Will Tesla build the autonomous ride-sharing network of the future? :

Great write-up. I’m always interested in any Tesla headline. The way that Tesla has vertically integrated their supply chain to offer the suite of products at the prices they do is nothing short of amazing. From the Giga-Factory producing cost-efficient batteries to the Powerwall and highway charging stations providing multiple touch points for consumers to keep their cars charged, it is without a a doubt Tesla is the leader in electric vehicles.

I’m confident that Tesla will remain the leader in this technology space as well. However, will Tesla be able to maintain their advantage when it comes to building the best autonomous driving system out there? Sure, Tesla has vehicles with more autonomous driving features than any company’s vehicles today, but what happens in 10 years if Google has a substantially superior product?

I’m not so confident that Tesla will be able maintain the autonomous driving edge it has currently. If they do lose ground in this area to Google, Apple, or Uber, will Elon Musk be able to admit he’s lost and switch over to a competitor’s product on Tesla’s cars? If, in 10 years, Tesla has dominated the new car market, will these companies (Google, Apple, Uber), many of whom have partnered with traditional car manufacturers, allow their system on Tesla’s cars?