North America 2016 Macro Logistics Trends

Richard L. Wottrich, CEO & Senior Consultant, International Services January 1, 2016, Atlanta USA The linked DSI “North America 2016 Macro Logistics Trends” presentation below was adapted from “U.S.-MEXICO SUPPLY CHAIN BLUEPRINT” as presented on April 15, 2015, to the United States-Mexico Chamber of Commerce Mid America Chapter – La Cámara de Comercio México-Estados Unidos (CCMEU) – in Chicago, Illinois USA, by Richard L. Wottrich. “North America 2016 Macro Logistics Trends” conclusions are the result of a DSI consulting assignment with an OEM Class-8 heavy truck parts manufacturer serving major truck manufacturers in North America. “North America 2016 Macro Logistics Trends” [embeddoc...

Tax Inversions – That Giant Whooshing Sound

  by Richard Wottrich, December 20, 2015 By Richard Wottrich, CEO & Senior Consultant, International Services December 20, 2015, Chicago USA  The Prussian general Carl von Clausewitz (1780 – 1831) famously said, “War is merely the continuation of politics by other means.” Ever since humanity organized itself into discreet power centers eons ago, nations have competed for territory, finite resources, people and ideas. The companion of this competition has always been war. If the companion of competition among nations is war, then their offspring is taxation. Those in power use taxation by force to expropriate the labor and wealth of others. Hence in today’s modern world of advanced IT finances, with the movement of money but a click away, the red herring is often proffered by those in power: “Taxation is a moral obligation.” Nothing unleashes the fury of the electorate whipped up by the political elites quicker than the stern lights of a big U.S. multinational corporation leaving the shores of America for more friendly tax climates – a practice known as ‘tax inversion.’ A tax inversion is nominally an American term meaning the re-incorporating or merger a company overseas in order to reduce the tax burden on income earned abroad. Corporate tax inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the U.S. when brought back on shore. This is a tax situation peculiar to the U.S., as it is one of the few countries to tax foreign earnings brought back home after they have already been taxed in their...

Brazil, Oh Snap!

  By Richard Wottrich Featured Case Studies, Global Networking September 2, 2015, Atlanta USA In 2010 a brash Brazilian investment banking friend of mine informed me that, “Our firm will no longer consider deals worth less than $100 million. They are not worth the trouble.” Such was the hubris in Brazil at the time. That was then. This is now. Today Brazil is a shadow of the vision it had for itself just five years ago. Gross Domestic Product (GDP) in Brazil contracted 1.90 percent in the second quarter of 2015 versus 7.5 percent growth in 2010. Brazil has had five straight years of economic malaise. Standard & Poor’s slashed Brazil’s credit rating last year to near speculative territory – a political blow to President Dilma Rousseff, whose efforts to revive the economy from its slump have weakened the country’s finances. Rousseff’s approval rating has fallen as low as 7.7 per cent and her government today hangs by a thread. Brazil has suffered significant economic deterioration since 2010. Rousseff has sung the Siren song of a “new matrix” of economic policies that would revive the Brazil’s slowing growth.  Instead Rousseff oversaw accelerating government spending and Brazil’s central bank has kept its key interest rate at 14.25 percent – one of the highest in the world. Brazilian finance minister Joaquim “Edward Scissorhands” Levy recently said of Brazil “The money is gone,” referring to years of government free-spending. Standard & Poor’s and Moody’s have been holding off downgrading Brazil bonds to junk status, while they wait to see the results of Levy’s budget-cutting efforts. Expect a downgrade in a few months. Brazil’s Debt-to-GDP ratio, 53.4 percent in 2011,...

What is Right with America?

DSI Global View White Paper, Atlanta USA Richard L. Wottrich, CEO & Senior Consultant, International Services June 9, 2015, Chicago USA   Seemingly stuck between escalating cynicism and lack of civility, one wonders at times where America is headed. Saddled with trillions in debt, its economy faces severe pressures. America has mounting challenges abroad; with China tilting at windmills to become a global superpower, with ISIS grasping at illusionary glories of past Caliphates; and with increasing isolationist nihilism at home. We all seem to know what is wrong with America. One might be tempted to wonder, “What is right with America?” The following 21 points might be useful in answering this question: America continues to lead the world with a 2014 GDP of over $17.4 trillion, 40 percent larger than China’s number two ranking at $10.4 trillion and 22.5 percent of the global GDP of $77.3 trillion. America’s economic numbers are transparent and easily obtained, while Chinese data is suspect and subject to political tinkering. America is the top donor of foreign aid in absolute dollar terms and usually is among the first nations to provide aid in major natural disasters. America’s unique global naval force of ten aircraft carrier groups and supporting aircraft are routinely deployed to assist in major disasters around the world and that cost is not included in its foreign aid figures. In 2013 America gave away $37 billion in foreign aid, one third of which was military assistance. The American Peace Corp has over the past 55 years provided 220,000 volunteers who served in 140 countries. The Peace Corps traces its roots and mission to 1960,...

The Technological Singularity

DSI White Paper, DSI Global View LLC By Richard L. Wottrich, Atlanta USA  What is the Technological Singularity? Before we examine this question let us take a brief look at the future of the Cloud [1]. Why is Uber Technologies, Inc., valued at $41 billion? Are similar taxi businesses around the world worth that much? If the taxi business were so valuable then there would be several multinational corporations earning billions in the sector. There are not. Uber this week contacted several major banks to arrange a $1 billion credit revolver. Uber’s net revenues are perhaps $400 million.  Uber’s market-cap-to-revenue ratio is thus 100X plus. As a private company we can only conjecture as to Uber’s profitability, but it most likely is nascent and emerging. It is reasonable to suppose that Uber will go public within several months and then its market capitalization will most certainly escalate again. Why? Uber is deconstructing the entire global business model for logistics and transport sectors. Uber represents a logical migration of power in the automotive industry from owning manufacturing infrastructure capable of producing millions of cars to companies that own Cloud-based mobile ecosystems that empower consumers in transport. There is no logical reason to own a car. It is an expensive liability that sits idly ninety percent of the time. A driving force in owning your own vehicle is the belief that you need the right to drive anywhere, anytime you wish. But if a Cloud-driven Uber ecosystem can deliver a car to you anywhere, anytime you wish at a price considerably less than the annual cost of owning the “hardware,” why own...

Deconstructing Education

DSI Global View White Paper Richard L. Wottrich, CEO & Senior Consultant Atlanta USA “I cannot teach anybody anything. I can only make them think” ― Socrates  As a graduate of Dartmouth College I remember well a certain professor who inspired me to think about ideas. Years later in Istanbul I took the picture above at the entrance to a Muslim school for girls. One marvels at the gulf between the two institutions – and the similarities.  Roughly one in four adults worldwide worked full-time for an employer in 2013 – 26% of the estimated global workforce of 3.4 billion workers (Gallup’s Payroll to Population [P2P] rate). This figure has remained virtually unchanged for five years, while our global population grew by 300 million. Meanwhile over one billion people toil in subsistence agriculture, while according to the politically correct United Nations World Food Programme over 800 million people “do not have enough food to lead a healthy active life” – sometimes referred to as starving to death. Nearly three billion people have access to the Internet for the information flow and market access it provides. In 2015 perhaps 2 billion humans will own a smart phone. These factoids epitomize unprecedented trends in humankind’s technological progress today, while highlighting the trinity of Education, Innovation and Productivity. Of these Education must ultimately be the predominant engine of 21st century growth and prosperity. Nevertheless with over fifty percent of humanity under age 30, only 150 million students are enrolled globally in institutions of higher learning. Half of these students are in China and India and nearly all student enrollment growth occurs in...