- Chavez wins.
Link: what a win.
Congratulations to Mr Chavez:
Ahem. Has anyone else noticed the uncanny resemblance, both physically and “intellectually”, to South Africa’s Julius Malema?
With 90% of the votes counted, Mr Chavez was sitting with 54%. At which point, opposition candidate Henrique Capriles Radonski conceded the race.
Chavez has used Venezuela’s oil reserves to subsidize food, and to provide low-cost housing and medical help to the poor. And by “used Venezuela’s oil reserves” what we mean is “sold those oil reserves to China”. Which all seems rather short-term to me – but seeing as we humans tend to be all about instant gratification, why would you not hail Hugo as your saviour today?
That said – I do think it’s interesting that despite buying the election with oil money, Chavez still only managed 54% of the vote…
- Another Foxconn protest.
Link: Chinese spring?
For the second time in nearly as many weeks…
Apparently, the issue this time is “meeting Apple’s quality demands” and abuse from the guards. Which makes Apple sound a lot like the devil in the Prada dress.
The quality issue arose because many of the new iPhone 5 users found that their phones had scratches on the back. So some (presumably Apple) quality control inspectors landed on the ground and started to impose themselves. Which led to a short-lived walkout.
But I am highly skeptical of the “quality” issue, having just finished reading a truly fascinating book called “Poorly Made in China”. If anything, I would vote with the whole story being instigated by the Foxconn management in order to push for a price increase. After all, Foxconn Chairman Terry Gou raised pay in order to improve working conditions. And now SOMEONE needs to pay for it. And one thing I’m sure of – in Terry’s mind, it’s not him:
If the world wants better working conditions for Foxconn’s workers, then the world must pay for it.
And sure enough, I read to the end of the article, where a Macquarie analyst in Taipei is quoted as saying this:
“These strikes might send a signal to Apple that it has to set aside a bigger portion of its profit to satisfying these assembly plant workers*. Apple needs Foxconn as it’s the only company out there that has the capacity and ability to amass such a big number of workers to do assembling work. For Apple, Foxconn is pretty much irreplaceable”.
The unscrupulous love the word “irreplaceable”. It is the shift of balance in the game of power between customer and manufacturer.
Currently, Foxconn’s “reported” operating margin is 1.1%. Apple’s is close to 30%. If I know that, Foxconn knows that. And my bet is that we’re about to watch a subtle but substantial margin shift away from Apple. Foxconn, of course, will remain at 1.1% – because it is not the Chinese way to flash one’s success until the battle is done and won.
But Apple will start to talk about “rising input costs” and “slow global recovery”. At that point, take note.
*Read: “Terry Gou”
That’s all for now.
Have a good day.