Thinking (dangerously) out loud

Is the plastics industry suffering from trade show burnout? Anecdotal evidence suggests yes. The number of North American plastics-related trade shows has peaked in recent years. Even stoic show veterans who seem genetically adapted to living out of suitcases have begun to complain about the number of shows. Many of these shows are geared for specific market segments, such as medical or packaging, in a particular region, begging the question, “How specialized can a show become and still be a viable investment for an exhibitor or show promoter?” At the recent Modern Mold & Tooling Expo in Detroit, for example, attendees didn’t have to worry about stepping on each other’s toes.

Does this mean we’ll be seeing fewer shows? Not likely. Show promoters argue that it is not the number of shows but the region and market they serve that determines value. Important regional shows, including our beloved Plast-Ex, will continue to be good investments for exhibitors. Sore feet and whining aside, these companies know they’d have to spend five times the money and time to get the same exposure and sales leads they get at most of these shows.

When you should consider firing your customer? How about when they ask you to cough up a five percent cost reduction? Still, there are far worse indiscretions than DaimlerChrysler’s — like not paying at all. The bottom line is getting a handle on the long-term cost/benefit ratio of dealing with a particular customer. One plastics injection molding firm terminated business with 730 of its 850 customers. Despite the decline in its customer base, its revenues have been on the rise, because it is dedicating its resources to companies that fit its core strengths and are interested in forging partnerships

Do politics and business mix? If you have been an even occasional reader of this editor’s view you’ll already know I believe they do. I have not been hesitant to express my preference for government policies that encourage, rather than hinder, investment, innovation and success in the framework of an open and free market. The rationale for this opinion has not been that government has no role, or that corporate interests should always take priority. Rather it is founded on what I see as two more or less indisputable realities.

The first is that people have an almost biological inclination to improve their lots. This is because wealth relieves hard burdens, provides security and enlarges the degree of individual freedom. The second is that private enterprise, not government, ultimately determines the degree of wealth made and distributed in an economy. In Canada, for too long, these realities have taken a back seat to the political and social agendas of left-leaning interest groups and intellectual elitists. Things are changing, perhaps a bit slowly, but moving in the right direction. Canadian business leaders and trade organizations deserve credit for making their cases more effectively with government representatives, courts and the media.

The marriage made in hell. I wouldn’t want to be Dieter Zetsche, the DaimlerChrysler executive parachuted in to resuscitate the ailing Chrysler unit. Morale at Chrysler is understandably low. When it was purchased by Daimler in 1998 it had more than US$9 billion dollars in cash reserves. Today it has less than US$2 billion. Top executive talent has long flown the coop. Most seriously, there are basic differences between the way Germans and North Americans approach designing, building and marketing cars. The key will be whether Zetsche can convince his bosses to stop micro-managing and turn the unit over to managers who understand the North American car market.

e-mail: mlegault@corporate.southam.ca