Subscribers to this blog probably got an update last night that should have included a link to Mike Bellamy’s interview during the recent Global Sources trade show in Hong Kong. Sorry for the omission, but please take the time to watch.
And send in your vote on whether Mike should shave his beard! What’s up with that?!
Happy Thanksgiving to all!
I received a very interesting email from a prospective client. He is concerned that the Americans working for PassageMaker have lost their patriotism for the USA.
This is an interesting conundrum. How do you promote business in China, without seeming to run down your home country?
Here is my [edited] response for what it is worth:
Thank you for your email. All of us at PassageMaker look forward to working with you.
I appreciate your feedback vis-a-vis patriotism. I cannot speak for Mike and Brian, as they have both married into China as it were, but I can tell you that I consider [it PassageMaker’s role to help American businesses] remain viable.
I spent most of my life in the US automotive industry, and the corporate buyers began pressuring us in the mid-to-late 1980s to move production, first to Mexico (after 6 trips to check it out, we decided to pass); to eastern Europe (we had a great 12 year relationship with an excellent supplier in Plzen, Czech Republic); to the Asian Tigers (we started sourcing in Taiwan in 1991 and I lived in Singapore in 1994); and now to China. Left to ourselves, we likely never would have moved anything anywhere.
PassageMaker recognizes that outsourcing is a sensitive subject with many clients, but the sad reality is that buyers expect a “world price”. Having worked in manufacturing for over 20 years, starting with my first job in a machine shop at 14, I know that sometimes American companies can deliver that price. I know my company in Virginia does just that. But many companies, especially start-ups, cannot. They don’t have the tooling, equipment or expertise in place to meet the expectations of the market.
China has a role to play, and that is where PassageMaker comes in. Our goal is to help foreign companies be successful in their dealings with China. If by helping an American company successfully manage their China supply chain, I can make the USA operation more profitable, everyone wins.
While the economic and political environment in the USA are causes for great concern, I agree with your assessment of America [as the exceptional and indispensable ‘city on a hill’ with its best days ahead of it]. It is why I live here.
PassageMaker intends to be a truly global company, with Assembly Centers in every major market. PassageMaker-Mexico will likely be next, but PassageMaker-USA is also on the list. We already have sales presence in USA, EU, Mexico and Brazil [with Asia, India and Africa on their way]. We want to be able to offer a comprehensive supply chain solution, including the option to assemble or complete manufacturing in America, regardless of where the core components are made.
I appreciate your concern and would be happy to discuss this further. Please feel free to call me on my cell.
Whether or not this prospective client takes me seriously has yet to be seen, but my email was sincere. I take no joy in the apparent slow death of American manufacturing, but I also do not think I am the one doing the killing.
I’ve been cogitating recently on some of the marketing campaigns out there that seem almost designed to not sell the product or otherwise turn off customers. What the **** were they thinking?
The creepy plastic faced Burger King ad campaign has won awards in the ad industry, but resulted in a declining market share for the client. I refuse to take my kids there. The food is nasty anyway.
Microsoft’s TV ads for their new “decision engine” Bing show people experiencing “search overload syndrome“. Apparently, people using those other plain old search engines get too many random results and become confused. It’s never happened to me, or anyone I know, but let’s do a little test.
Google “china assembly and inspection“. PassageMaker is #1 and #2 on the natural results.
Yahoo “china assembly and inspection“. PassageMaker is #1 and #2 on the natural results.
Ask “china assembly and inspection“. PassageMaker is #1, #2 and #3 on the natural results.
Now Bing “china assembly and inspection“. PassageMaker is #1 and #2 on the natural results.
Wow. Do you think they can ask the advertising agency for their money back?
Although Bing is prettier and it is nice to see our friends at China Quality Focus at #4 in their natural results, their ad campaign turns me off. If you have to tear down your competition to sell your product, you don’t have much of a product. To the folks in Redmond, how about making amends for the twin travesties of Vista and Office 2007 by givingaway the upgrade to Windows 7 instead of charging $200, before everyone calls it quits and switches to Mac?
What’s next? Ads warning everyone away from that horrible Firefox 3.5, now that it has taken 25% market share? Not bad for a free browser developed by an not-for-profit foundation. Oh, and it’s the best product on the market. That’s got to hurt.
I switched to Firefox after buying a new HP laptop earlier this year with Vista (yes, I know). I had no choice as the old XP machine was nearly dead and wasn’t ready to make the running transition to Mac (though after 6 months of Vista, I am now). The default security settings made Internet Explorer 7 completely unusable – after 3 or 4 days of trying to figure out how to configure the security settings to allow normal browsing without constant warnings, blocked pages, etc., I installed Firefox and I will never go back to IE. They lost me for good.
US Cellular is aggressively promoting their new “battery swap” program with radio ads in my area. The idea is you forget to charge your battery, so you drive to the store to swap your perfectly good but temporarily depleted battery for a fully charged one. I guess they figure if you are in the store anyway for such a reason, you might just be dumb enough to renew your contract ahead of schedule, buy a new phone when the old one still works, etc. The first thought I had when I heard this campaign was “boy, business must really stink”. Are uncharged batteries a problem requiring a multi-million dollar as campaign? I have a charger in my car, in my office and a spare in my brief case. Methinks poor phone sales are the problem, so how about reducing the prices on the plans or offering better phones?
Yesterday my wife told me about a phone book salesman (I still can’t stop laughing at that one) who came into the boutique where she works and tried to renew the ad for this year’s yellow pages. This was the second salesman from the same company that day to visit with the shop owner trying to get this ad. The owner says no, she’s launching her website this month, she’s well established, premium location, and she doesn’t need the print ad anymore. The salesman responds with “everyone who cancelled their ads last year went out of business”. What?! That is the worst line I’ve ever heard, even if true! How about encouraging her to buy the ad to promote the new website? Keeping the ad for her older clientele or new students at the local colleges? There apparently is a rung lower than used car salesman.
Now Apple is trying to charge $1000 in China for an iPhone that is Made in China when in the USA it costs $600? My first impression was maybe I need to reconsider that Mac purchase. How is charging nearly twice the price not trying to alienate the PRC market? There are many other options for smartphones in PRC than the USA. I mean, why not just post the “ no dogs or Chinese” signs (supposedly an urban myth, but you get my point)! Dan Welygan, one of our sales reps and formerly a project manager in our Shenzhen office tells me this is common practice, to charge outlandish prices to capture the cream of the market. I am sure he is correct, but considering it lacks wi-fi, and the Hong Kong versions have been available on the gray market for 2 years, this is not exactly a new device. I’ll be watching to see what happens with Droid or some other iPhone killer when it hits the China market. My gut tells me this is a mis-step for Apple.
The primary reason why I joined PassageMaker was because it was a positive environment and a positive message. We sell Trust & Transparency – the services themselves are almost incidental. Sourcing Feasibility Studies, Vendor Coordination, Assembly-Inspection-Packaging, Logistics, VAT Planning, Factory Formation , etc., all provide solid value to the client, and are so flexible and fungible that we can do pretty much whatever the client needs.
I tell all our sales reps that they don’t need to talk down our competition. There are other good companies doing business in China. It is foolish to pretend otherwise. We don’t need gimmicks or mascots or incentives. We are selling exceptional service, fair pricing and peace of mind. What more do we need?
The truth shall set you free.
Great article sent by a friend in DC on the health hazards of living in China. A few things that stuck out:
1 – Micro-particulate pollution – in terms of the human cost, this is more concerning than CO2:
Another way to know this is via a clandestine air-quality station that the U.S. Embassy has built in Beijing. The Chinese government does not report, and may not even measure, what other countries consider the most dangerous form of air pollution: PM2.5, the smallest particulate matter, tiny enough to work its way deep into the alveoli. Instead, Chinese reports cover only the grosser PM10 particulates, which are less dangerous but more unsightly, because they make the air dark and turn your handkerchief black if you blow your nose. (Spitting on the street: routine in China. Blowing your nose into a handkerchief: something no cultured person would do.) These unauthorized PM2.5 readings, sent out on a Twitter stream (BeijingAir), show the pollution in Beijing routinely to be in the “Very Unhealthy” or “Hazardous” range, not seen in U.S. cities in decades.
2 – Despite the pollution, it is a exciting and energizing place to be:
The positive aspect is, there’s a lot to take your mind off your health. “I am amazed at how well people do here, considering,” another Western-trained doctor said. “It is an exciting place. It’s a historic time. People seem to feel alive.” That made sense when I heard it—in China I had felt terrible, but alive—and makes me say that foreigners who want to go should not be deterred.
3 – Drink beer:
…I naively drank bottled water in a Buddhist-run vegetarian restaurant—and on the way out saw a waiter filling the “Evian” bottles from a hose.
Point 1 is dead on – the air is toxic – but the trade off (for expats anyway) is Point 2. The minute I landed in Singapore in 1994 I knew I had found my path. Asia, and Chinese Asia in particular, became my focus. It is still exciting today. I imagine London in the Victorian era, NYC in the 1920’s, LA in the 1950’s, etc., were also as exciting (and polluted). Can China fix this? Of course, and they will as their economy develops. As I’ve said before, modern environmentalism is a luxury good.
Mike Bellamy went to Asia the same time I did, and he’s been there full time since 1998, and the excitement has not worn off. Most of the expats on the PassageMaker team have put down roots. We have real bricks-and-mortar in place. So if you need something done in China, rest assured that we are experienced and motivated to make your project a success.
And Point 3? Beer, especially from the large export breweries (many foreign owned), is safe to drink, because it is bottled, capped, carbonated and alcoholic. Chinese beer is served in large recyclable bottles, but the nature of the brewing and bottling process means that if it makes it to your table, it’s clean. All the water is purified as the first step in brewing, otherwise you foul the fermentation. Were it biologically contaminated, it would result in a burst bottle from the build up of gasses. Also, Chinese beer is relatively low in alcohol, so having a beer with lunch is not going to ruin the rest of your day.
When in doubt, have a beer.
Well, finally recovered from Halloween. Kids had a great time, as did the adults. And yes, ALL of the store-bought costumes were Made in China. How odd it must be to mass produce accoutrement for another country’s holidays. What would an American printing company think if it were asked to print ghost money or bake moon cakes for China?
One of our sales reps, Allan Tsang, directed me to this film, Mardi Gras: Made in China. I’ve only seen the trailer (and it is NOT SAFE FOR WORK), but I will have to track down the full version pronto. And not for that reason. Get your mind out of the gutter.
How bizarre and fascinating that the currency for drunken debauchery and exhibitionism (which also fuels the Girls Gone Wild DVD empire – and no, I will not provide a link) are plastic beads made by earnest teenaged factory workers half way around the world in Fuzhou Province. What a world.
My biggest project this year is the development of an international team of sales representatives to promote PassageMaker. While the roster is not complete by any stretch, we have a good start, with representatives in Brazil, Europe, Mexico and the USA. We will be adding more photos and bios shortly, and I will post updates as appropriate.
We are currently seeking representation in India. If anyone is interested, please contact me directly.
I love it when a plan comes together…
I’ve written about this before. Mike Bellamy asked me to avoid politics in this blog. Which is mostly fine, because generally I am sick of politics.
But there are times when it is really, really, really, reeeeaaaaally hard, and this is one of those times. Why? Well, I’ve been going through the follow-ups from the recent Global Sources trade shows and one thing stands out like a sore thumb – the shortage of Americans in attendance.
I’ve spent the last 7 months putting together a group of sales reps to better serve our clients and help PassageMaker grow. We have 8 reps serving USA and Canada (more on the way), but my top priority was to establish reps in key foreign markets – Mexico, Brazil and Europe are already place, and I am working on covering the rest of the globe – but I had no idea this effort would pay off so soon.
Easily 85% of the follow-ups are non-USA leads. In years past, at least 60-70% were American. The reason for this reversal is disheartening. The USA is mired in recession, with a shortage of business credit, rising unemployment, etc.; while the rest of the world is recovering nicely. It does not have to be this way. As a small business owner, it is mighty disheartening to see so much indecision and ineptitude in Washington. When you have no clue what to expect next, caution dictates you batten down the hatches. The economy will not really get going again until people can plan for the future. And the solons in DC haven’t a clue the havoc they are creating.
And that is the extent of my political commentary for today. Have a great weekend.
Very interesting podcast sent by Dan Welygan, formerly a project manager for PassageMaker, and now our sales rep covering Washington and Oregon.
I was interested to hear the author’s view of Tiananmen, and it is largely spot on. His story on KFC ignores that they pioneered this Asian-flavored version of an American also-ran for 20+ years in Japan before KFC entered China. He doesn’t understand the historical legacy of Buick in China (it was the car of the Emperor), but he is exactly right about China’s willingness to accept direct foreign investment. India is the prime example of a country that shot itself in the foot by closing off foreign investors. I think many Indians realize this is a big factor in why they trail their rival.
Well worth your time to listen.
Julien Roger, Managing Director of our sister company, China Quality Focus, sent me this short article on a declaration of China’s commitment to improving quality control.
Now the cynic in me would like to make a snarky comment on the pointlessness of such government pronouncements right about now, but I won’t for two reasons:
China is still a darned challenging place to do business, and I don’t see that changing. If I didn’t believe PassageMaker had a bright future ahead of it helping our clients succeed on Planet China, I wouldn’t waste my time here. But I do see the progress China is making, and have to give credit where credit is due.
The Law of Conservation of Filth: In order for something to get clean, something else must get dirty.
Corollary to the Law of Conservation of Filth: It is possible for everything to get dirty and nothing to get clean.
This is one of Murphy’s Laws. I used it in my answer when asked recently about whether “green” technology had caught on yet in China. Short answer, not yet.
Sadly, many products are just plain dirty to make and China is using the energy resources they have available (coal), and the production technologies that are easiest and least costly to adopt – that is the “brown” versions. Environmentalism as currently practiced in the West is essentially a luxury good, and I have yet to see a “green” technology that actually costs less than the “brown” alternative. Only by penalizing the “brown” and subsidizing the “green” can the case be made.
That is not to say that things aren’t changing in China. This article on the recent record-setting pollution in Hong Kong highlights the issue:
The problem of air pollution in Hong Kong prompted Australia earlier this year to include a health alert in its advice to travellers to the southern Chinese city, warning that it could aggravate some medical conditions.
Pollution has in recent years become an increasing health and economic headache for the authorities in the city of seven million.
Emissions from the factory belt in southern China over Hong Kong’s northern border combined with local emissions from power plants and transport to generate a thick haze over the city for large parts of last year.
The government has stepped up efforts to cut vehicle emissions, including offering tax concessions to users of environmentally-friendly hybrids.
Now the article does not make completely clear which government is trying to curb vehicle emissions – the Hong Kong Special Administrative Region’s (HKSAR) relatively independent government or the PRC government across the border. I suspect it is HKSAR, as I have seen no such effort in PRC, and it makes sense for HKSAR to do so. It is a wealthy city and clean air is a sign that you’ve reached a level of affluence where the manufacturing and resource extraction is no longer the driver of your economy (e.g., Singapore).
Most of the great cities around the world have traveled this path. The early industrial towns of England had skies so black with coal soot that children developed rickets from lack of sunshine. The industrial hinterlands of New York City poisoned the oyster beds surrounding the city, forcing a culinary switch from the local seafood to hotdogs. The Cuyahoga River famously caught fire in Cleveland in 1969 (and at least 9 other times going back to 1868). Rob Gifford in his brilliant book, China Road, writes about the terror of bicycling through a northern Chinese coal town.
I am not trying to weigh in on global warming or pollution in general. Everyone wants clean air and water. It is just that the Kyoto Protocol was doomed to failure on Day 1, as it exempted the developing world, especially China and India. It also failed to recognize that wealth is created in the manufacturing sector, and changing production methods and energy sources was not going to be easy or inexpensive. Such improvements can only be effectively implemented with a level playing field (compliance costs equal to all competitors). In a free trade environment, the cost advantages to sourcing in China, Mexico, India, etc., insured that the Protocol would fail. No wonder the US Senate voted unanimously to reject it. While some in the developed world may speak blithely about bankrupting core industries like coal, China and India do not have the luxury (yet) to pursue such a path. They each have over a billion overwhelmingly poor mouths to feed.
PassageMaker can help find Chinese firms who use green technology – like the Hong Kong-owned plating company we found for one project that recycles 100% of its effluent – as our clients’ require it. However, such suppliers are the exception to the rule and always more expensive. Our Sourcing Feasibility Study is just that – a study to determine if the client’s goals are feasible. Often clients want a “green” product for a “brown” price. And most of the time, that’s not feasible. Yet.
PassageMaker is a US-owned boutique firm providing a comprehensive and customized service to clients who wish to outsource aspects of their manufacturing and supply chain management. We have our own ISO certified manufacturing facilities in Shenzhen and are member or contributor of the following:
