- •Vocabulary Commentary
- •All yours Manufacturing companies are increasingly using the Internet to give customers the impression of personal service. But true customisation needs new production techniques as well
- •Vocabulary
- •Can Bayer Cure Its Own Headache? Shareholders would like it to shed everything but health care
- •Vocabulary
- •«Байер» перестраивается
- •Nokia's next act Can the Finnish giant stay on top in an age of commodity phones and stalling sales?
- •Vocabulary
- •Canon Cutting Edge By trimming down to four product lines, it's making record profits
- •Halfway down a long road Carlos Ghosn's efforts to meld Nissan with Renault have become the stuff of management legend. But the alliance faces some daunting challenges
- •Can Ford Fix This Flat?
- •Vocabulary
- •Vocabulary
- •A Challenge From the Nimble Newcomers
- •Mergers & Acquisitions Will the latest cycle of European mergers produce better results?
- •Vocabulary
- •Vocabulary Commentary
- •Independent directors at big public companies need to be tougher
- •Vocabulary
- •Vocabulary
- •U r Sakd
- •Is there a nice way?
- •Simon London finds the post of chief operating officer falling prey to a new breed of executive with greater powers and access to the boss
- •The Bottom Line on Options
- •Unit 13 Consolidation
- •Will ceOs Find Their Inner Choirboy?
- •Пролетая над Таити
- •Vocabulary
- •Useful Words and Phrases
- •«Нортел»
- •The Numbers Game Companies use every trick to pump earnings and fool investors. The latest abuse: "Pro forma" reporting"
- •Vocabulary
- •Unit 15
- •I swear… Oaths are only a small step in the business of cleaning up American companies
- •Something must be done
- •Vocabulary
- •Holier Than Thou European sanctimony over American accounting scandals is misplaced
- •Et, the extra-territorial
- •Vocabulary
- •Revenge of the Bean Counters No longer frail in the face of fraud, accounting firms are thriving on new u.S. Laws that give them real clout
- •Half Measures
- •Bad for cfOs, Good for Investors
- •Хранители прозрачности или слуга двух господ
- •Unit 16
- •Up from the ashes Amid a global wave of business failures, American firms are more likely to get a second chance. Unfair competition, or a lesson for Europeans?
- •Eurotunnel vision
- •Vocabulary
- •Var crash
- •Vocabulary
- •Европа уходит за рубеж
- •Goldman's German revolution
- •Have Fat Cats Had Their Day?
- •Unit 18
- •Stronger foundations New proposals for regulating banks are both a step in the right direction and evidence of how hard it is to monitor the riskiness of the banking system
- •Vocabulary
- •Vocabulary
- •Английский характер
- •Unit 19
- •Conflicts, conflicts everywhere Was America wrong to scrap the laws that kept commercial and investment banking apart?
- •Vocabulary
- •Care To Buy Some David Bowie Bonds
- •In Europe, securitization is the hottest way to raise cash
- •Beautifying Branches
- •Instead of axing their branches, banks are inventing new ways to make money out of them
- •Slippery
- •Coffee, Tea, or Mortgage?
- •Life Branches?
- •The world's biggest retailer edges into financial services
- •Гросс-банки сокращаются
- •Feeding Frenzy
- •Tough Questions for aig's Auditors Regulators are probing if PwC let the financial shenanigans slip through
- •Watchdogs with Eyes Wide Shut As investigators pore over the books of aig, it's becoming clear that for years regulators failed to detect lapses
- •Goldman's German Revolution
- •Another Year, Another Scandal
- •Digging out at Allianz The German financial-services giant is back in the black — but still struggling
- •A Dedicated Enemy of Fashion Most companies claim to run their business for the long term. Nestle is one of the few that really does
- •More Pain, Waiting for the Gains Drastic action as gm's cash pile runs down
- •«Морган Стэнли» увольняет сотрудников, чтобы оставшиеся лучше работали
Can Ford Fix This Flat?
Ford Motor's International boss, David W. Thursfield, has sent Ford of Europe its marching orders. Get the fourth-quarter numbers back in the black.
The top brass at Ford Motor Co. in Dearborn, Mich., want visible proof that the elusive turnaround — promised for three years now — is nigh. Last month, Ford announced it expected its European unit to lose $1.2 billion this year, plus second-half restructuring charges of as much as $656 million.
Eking out a small fourth-quarter operating profit is clearly just the start. Despite all the whittling and reengineering to date, the $19 billion unit still suffers from a bloated cost structure and models that make European drivers yawn.
Unless new products can recharge sales, Ford's position is likely to weaken further. UBS Warburg analyst Saul Rubin forecasts a loss of $400 million for Ford Europe. "History does not offer much comfort about the ultimate success of these efforts," says Scott Sprinzen, auto credit analyst at Standard & Poor's in New York, citing repeated attempts to fix Ford Europe. "We believe there's a risk of additional restructuring."
Ford's anxieties about Europe go far beyond stemming the losses from a large division. In late 2001, when Ford's North American operations were floundering, new CEO William C. Ford Jr. adopted Ford Europe's two-and-a-half-year-old turnaround plan as the blueprint for repairing the No. 2 carmaker's core auto operations at home. So red ink in Europe is raising red flags about Ford's broader turnaround efforts.
While the carmaker is progressing toward its goals in cost cutting, plant closings, factory flexibility, and quality in Europe and the U.S.. the success of its next-generation models is still uncertain. In Europe, Ford has delivered more than 80% of the new vehicles that it promised would revive sales, but market share remains weak. In the U.S., where Bill Ford has promised "a product-led recovery" that is just kicking off now, investors remain wary. That's why Rubin titled his latest Ford report: "If Europe Is the Template, Proceed with Caution."
When it comes to the industry mathematics in Europe, Ford's in a bind. Steadily shrinking sales and ebbing market share make it doubly difficult to turn a profit, and the huge fixed costs of excess capacity can quickly wipe out the most diligent effort to cut costs. Ford Europe sells nearly 300,000 fewer cars annually in Western Europe now than it did a decade ago.
The already brutal competition is bound to ratchet up as the Japanese prepare for a major European offensive. Analysts say Ford is among the automakers most vulnerable to losing market share to Toyota, Nissan, and Honda.
To hold their ground, weaker brands such as Ford and Fiat are resorting to profit-eroding discounts, "I cannot see anything happening to reverse the trend. Instead of leading, they are limping behind the competition. The turnaround plan is 10 years late," says analyst Stephen B. Cheetham at Sanford C. Bernstein Ltd. in London.
BusinessWeek
Text 2
У компании «Форд» проблемы
Состояние компании «Форд» (Ford) вызывает все большие опасения. Так, международное рейтинговое агентство «Стандард энд Пуэрз» (Standard & Poor's (S&P)) понизило рейтинг компании, обосновав это «недостаточностью мер, принятых для восстановления конкурентоспособности».
Одна из основных проблем компании — большие долги. По данным на 30 сентября, консолидированный долг компании составил 162 млрд долларов. «Стандард энд Пуэрз» допускает возможность дальнейшего понижения рейтинга компании «Форд». Третий квартал закончился для компании относительно благополучно — чистые убытки оказались значительно ниже прогнозировавшихся.
Однако, несмотря на некоторое оздоровление финансового состояния компании, специалисты «Стандард энд Пуэрз» сомневаются в том, будет ли аккумулировано достаточное количество денежной наличности по сравнению с ожидаемыми расходами. Инвестиционные банки также не рекомендуют своим клиентам вкладывать деньги в ценные бумаги «Форд».
План восстановления, который компания собирается официально представить в ближайшее время, пока никак не влияет на динамику акции «Форд» на рынке. Более того, инвесторы крайне недоверчиво относятся к заявленным в плане мерам по реорганизации.
Дело в том, что компания предполагает уменьшать производственные издержки и бороться с увольнениями. Но первое, по сути, противоречит второму. Уменьшение производственных затрат без сокращения служащих практически неосуществимо. От компании ждут более жесткой и активной политики глубокой реорганизации.
Пока этого нет, перспективы дальнейшего развития «Форд» остаются крайне туманными.
Эксперт
Exercise 7. Translate the following text into Russian.
Detroit's Wounded Giant The world's biggest car firm needs to confront its demons
IN 1943 General Motors invited a promising young author Peter Drucker (who died in November, 2005) to study the company from the inside. The book this sojourn produced influenced generations of leaders and managers. But it was ignored by GM itself, which remained famously bureaucratic and as complacent as one might expect of a company that then dominated the biggest car market in the world. One wonders what a business academic on a similar mission would make of the world's biggest carmaker today: its domestic market share is down to around 25%; it has tumbled back into losses; and it is hobbled by the high wages and generous health benefits promised to its existing and former workers.
Unless GM can magically turn around its falling market share and mounting losses while slashing its labour costs, it could be headed for bankruptcy in a couple of years. It is burning cash at the rate of $5 billion a year and faces extra liabilities of up to $11 billion following the collapse of Delphi, the parts maker spun out of GM six years ago. It is planning to sell a slice of its profitable finance business and has sold at a loss its stake in a Japanese carmaker, Fuji's Subaru, to Toyota - the nemesis that looks set soon to snatch its crown as the world's biggest car firm. Earlier this year, GM even had to pay $2 billion to wriggle out of a promise to buy all of Fiat, Italy's ailing carmaker in which it had unwisely invested $2.4 billion some years ago.
GM's travails are most often discussed in terms of the enormous costs of the pension and health-care promises that it so cavalierly made to employees in easier times. But the company is also like some Gulliver tied down by other, equally damaging, concessions it made to the United Auto Workers Union (UAW), which mean it cannot easily close factories and cut payrolls to adjust to straitened circumstances.
Making these self-inflicted constraints even worse has been GM's inability to do what it once did best: come up with products that American consumers love to buy. For almost a decade GM has sustained its sales volumes only by offering deep price discounts that eat into its already weak profit margins. Ford and the Chrysler division of DaimlerChrysler have been obliged to follow suit. GM has improved the appeal and quality of some products, notably its Cadillac models, but not enough to win the loyalty of American consumers long accustomed to turning to Toyota, Nissan and Honda for everyday transport and to Mercedes and BMW for fancier models.
The Economist
Exercise 8. Write a report and make a presentation on one of the following topics.
-
Renault-Nissan, the past and the future of the alliance.
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Carlos Ghosn - personal profile.
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Carlos Ghosn's track record in turnarounds.
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DaimlerChrysler, a bumpy road to success.
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Compare the two combinations - DaimlerChrysler versus Renualt-Nissan.
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Is Ford Motor Co. still in trouble?
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Is Toyota a full-fledged global company?
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Porsche - VW.
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General Motors - the rise and fall of the giant.
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General Motors and the formation of the management theory (Alfred Sloan, Peter Drucker).
UNIT 7
• Text
THE CASE FOR BRANDS
Far from being instruments of oppression, they make firms accountable to consumers
IMAGINE a world without brands. It existed once, and still exists, more or less, in the world's poorest places. No raucous advertising, no ugly billboards, no McDonald's. Yet, given a chance and a bit of money, people flee this Eden. They seek out Budweiser instead of their local tipple, ditch nameless shirts for Gap, prefer Marlboros to home-grown smokes. What should one conclude? That people are pawns in the hands of giant companies with huge advertising budgets and global reach? Or that brands bring something that people think is better than what they had before? The pawn theory is argued, forcefully if not always coherently, by Naomi Klein, author of "No Logo," a book that has become a bible of the anti-globalisation movement. Her thesis is that brands have come to represent "a fascist state where we all salute the logo and have little opportunity for criticism because our newspapers, television stations, Internet servers, streets and retail spaces are all controlled by multinational corporate interests." The ubiquity and power of brand advertising curtails choice, she claims; produced cheaply in third-world sweatshops, branded goods displace local alternatives and force a grey cultural homogeneity on the world.
Brands have thus become stalking horses for international capitalism. Outside the United States, they are now symbols of America's corporate power, since most of the world's best-known brands are American. Around them accrete all the worries about environmental damage, human-rights abuses and sweated labour that anti-globalists like to put on their placards. No wonder brands seem bad.
Product power or people power
Yet this is a wholly misleading account of the nature of brands. They began as a form not of exploitation, but of consumer protection. In pre-industrial days, people knew exactly what went into their meat pies and which butchers were trustworthy; once they moved to cities, they no longer did. A brand provided a guarantee of reliability and quality. Its owner had a powerful incentive to ensure that each pie was as good as the previous one, because that would persuade people to come back for more.
Just as distance created a need for brands in the 19th century, so in the age of globalisation and the Internet it reinforces their value. A book-buyer might not entrust a company based in Seattle with his credit-card number had experience not taught him to trust the Amazon brand; an American might not accept a bottle of French water were it not for the name of Evian. Because consumer trust is the basis of all brand values, companies that own the brands have an immense incentive to work to retain that trust.
Indeed, the dependence of successful brands on trust and consistent quality suggests that consumers need more of them. In poor countries, the arrival of foreign brands points to an increase in competition from which consumers gain.
Anybody in Britain old enough to remember the hideous Wimpy, a travesty of a hamburger, must recall the arrival of McDonald's with gratitude. Public services live in a No Logo world: attempts at government branding arouse derision. That is because brands have value only where consumers have choice, which rarely exists in public services. The absence of brands in the public sector reflects a world like that of the old Soviet Union, in which consumer choice has little role.
Brands are the tools with which companies seek to build and retain customer loyalty. Because that often requires expensive advertising and good marketing, a strong brand can raise both prices and barriers to entry. But not to insuperable levels: brands fade as tastes change (Nescafe has fallen, while Starbucks has risen); the vagaries of fashion can rebuild a brand that once seemed moribund (think of cars like the Mini or Beetle); and quality of service still counts (hence the rise of Amazon). Many brands have been around for more than a century, but the past two decades have seen many more displaced by new global names, such as Microsoft and Nokia.
Now a change is taking place in the role of brands. Increasingly, customers pay more for a brand because it seems to represent a way of life or a set of ideas. Companies exploit people's emotional needs as well as their desires to consume. Hence Nike's "just-do-it" attempt to persuade runners that it is selling personal achievement, or Coca-Cola's relentless effort to associate its fizzy drink with carefree fun. Companies deliberately concoct a story around their service or product, trying to turn a run-of-the-mill purchase into something more thrilling.
This peddling of superior lifestyles is something that irritates many consumers. They disapprove of the vapid notion that spending more on a soft drink or ice cream can bring happiness or social cachet. Fair enough: and yet people in every age and culture have always hunted for ways to acquire social cachet. For medieval European grandees, it was the details of dress, and sumptuary laws sought to stamp out imitations by the lower orders; now the poorest African country has its clothing markets where second-hand designer labels command a premium over pre-worn No Logo.
The flip side of the power and importance of a brand is its growing vulnerability. Because it is so valuable to a company, a brand must be cosseted, sustained and protected. A failed advertising campaign, a drop-off in quality or a hint of scandal can all quickly send customers fleeing. Indeed, protesters, including Ms Klein's anti-globalisation supporters, can use the power of the brand against companies by drumming up evidence of workers ill-treated or rivers polluted. Thanks, ironically enough, to globalisation, they can do this all round the world. The more companies promote the value of their brands, the more they will need to seem ethically robust and environmentally pure. Whether protesters will actually succeed in advancing the interests of those they claim to champion is another question. The fact remains that brands give them far more power over companies than they would otherwise have. Companies may grumble about that, but it is hard to see why the enemies of brand "fascism" are complaining.
The Economist
Note
sumptuary laws - законы, регулирующие потребление предметов роскоши