When I returned home from traveling abroad a few days ago, a pile of annual reports of companies whose shares I own were waiting in a pile of mail. This is company annual report season. There was something in one report I read that caught my eye because of its association with longstanding debates about government contracting.
The report was from a company called Oceaneering International, a provider of oil exploration equipment. (I actually bought 300 shares of this stock in 1981, over 30 years ago, when a stockbroker said I had no energy stocks in my portfolio and ought to have at least one. Over the 30 years, the value of my investment has gone from $3600 to $62,000 – I wish all my investments had done that well, but that’s another story.)
It turns out that about 10 percent of Oceaneering’s business – called their Advanced Technologies segment – is with the U.S. government, selling engineering services to the Navy and some special-made equipment to NASA and the Defense Department. (I like the fact that they call this “advanced technologies,” as opposed to their other businesses, which are hardly low-tech. More importantly, I think it is good for government contracting to have successful private firms doing a modest portion of their business with the government, rather than leaving the government market for such services and products to government-unique defense contractors or other government contractors who have no experience competing in the hard commercial world.)
Posted on Apr 19, 2012 at 7:27 PM5 comments
Shortly before resigning in disgrace as the Italian prime minister, Silvio Berlusconi famously made a remark that there didn’t seem to be any crisis in Italy, because the restaurants were filled. This does not seem fully to apply to Spain, with its 23 percent unemployment, or even to France, which I am also visiting and which is in better shape than Spain. One of the restaurants I had hoped to eat at while in Barcelona, recommended by the 2009 edition of my Fodor’s guidebook, had closed. A tapas place in Madrid, about which the same guide had said come early or you won’t be able to get a seat for lunch, was largely empty even at 1:30, by which time even the Spanish have begun to sit down for lunch. At 6:30 a Saturday morning, a taxi driver was waiting outside my hotel on the outskirts of Barcelona, patiently hoping for a fare. Nonetheless, luxury consumption is not dead, even in a crisis-hit Eurozone.
Nestle, the Swiss food giant, has in recent years developed a new coffee offering to supplement its longtime megabrand Nescafe, now going downscale and tired except in some developing countries. Called Nespresso, it is a single-serve upscale coffee pouch coming in endless flavors – some of which actually have vintages (!) indicating what year’s coffee crop they come from -- and brewed in striking modernistic for-the-home coffee machines, sold in special stores devoted only to all things Nespresso. (I believe there are now a few of these outlets in the U.S.)
Posted on Apr 17, 2012 at 7:27 PM0 comments
I am in Spain for a few days to teach two executive education half-day classes for the ESADE Business School public administration program, in Madrid and Barcelona. Spain, interestingly, has some of Europe’s finest business schools. The topic: leading change in the public sector.
There is probably no more famous idea about how to get change initiatives started than the metaphor – famed from hundreds of consultant slide shows over the years – of the “burning platform.” The image comes from the idea that workers on oil rigs will feverishly resist any efforts to change how they do their jobs unless and until their rig catches on fire. The basic idea is that organizational employees will resist changing how they work absent a crisis – absent a situation where they must “change or die.”
Well, if this approach has merit, it would have merit here in Spain. Unemployment is officially running at 23 percent, though there is a vibrant underground economy that means these numbers are somewhat exaggerated. The country’s budget deficit hovers at over 10 percent of GNP. As anyone following news from Europe and the Eurozone crisis is aware, the tribulations of the Spanish bond market are the stuff of international headlines.
Posted on Apr 13, 2012 at 7:27 PM1 comments