Government should be less dismissive of Business – given its own record for business disaster

The Manufacturing Indaba is becoming established as a leading forum for discussion of issues affecting the besieged SA manufacturing sector, which has been in decline for some time.

Industry body Manufacturing Circle says 1m jobs could be created if the sector were restored to its rightful place, contributing a far higher share of GDP.

So, it was rather surprising that after a meeting with the manufacturing bosses at the Indaba last week, that Trade and Industry Minister Rob Davies described their plans as “smoke and mirrors”.

Given that the dramatic decline in South African manufacturing has occurred under Rob Davies and his predecessors, it is both unfortunate and disturbing that he was so dismissive of the Manufacturing Circle. He did say he was open to more dialogue. But his message was mixed.

The Manufacturing Circle’s strategy involves the reversal of the decline in the Vaal Triangle, once a heartland of industrial activity.   It also includes a skills initiative, targeting middle management.

And the body holds regular meetings with ministers and officials, for instance to give input on the planning stages of new industrial incentives, or to criticise loony new tax plans – like the new sugar tax.

Maybe business and government aren’t so far apart.  Is it just a matter of mutual respect and good manners?

The timekeeping of ministers and officials is pretty dire, although Davies is better than most.  He appeared to chop and change the time of his own address in the run up to the Indaba, and the event and its fringe SME forum started late on three days out of three. This was due to the late arrival of municipal officials, who then proceeded to give speeches on how wonderful Ekurhuleni is for business.   One MMC even gave an almost identical speech two days in a row, which included a ten-point plan for industrial regeneration.

By the time I had digested this ten-point plan for a second time, I was driven to launch my own ten-pint plan.

These municipal officials say they want their own University.  A good idea, if it provides courses in good manners and timekeeping.

In contrast, the Chairman of the Manufacturing Circle was spotted well over an hour before the start of the Indaba, ensuring his own slide presentation was going to work well, eager to get things moving.

The sour note hit by Rob Davies was a shame, as this Manufacturing Indaba was better organised and better structured than in the past, and even the catering was improved.

We see time and again that Government’s record in business is a disgrace – just look at corrupt state train tenders, the record losses at PetroSA, the continued scandal of mismanagement at SABC and SAA, and so on…….

So, a little more humility, a greater willingness to listen and to learn, might be welcome.

Rob Davies may think he knows it all.  But he doesn’t.

 

Tweet of the Day

Terry F (@daemonic3):  [superfriends lunch]: BATMAN: There’s an underwater nuclear threat

SUPERMAN: Aquaman, go!

AQUAMAN: [stares at watch] Gotta wait 30 minutes

 

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Please let the SAA Chairman Fly Other Airlines.

What a laugh.   Those reports that the less-than-impressive SAA Chairman Dudu Myeni had been spotted on a British Airways flight were a wonderful reminder of about how clueless and arrogant these parastatal parasites are when it comes to reputational damage.   To be fair, though, there’s not much more she can do to damage the reputation of leech-like SAA, an even bigger drain on the national purse than our beloved President.

Were I her spin doctor (our should that be tailspin doctor?) I would have said it was all part of a benchmarking exercise.  She wanted to see how BA do things so she can learn lessons of what is good and less good about SAA. One is tempted, though, to believe the reports that she flew SAA because it offered business class comfort on a route where cattle class was the most the state’s rival service could come up with.

What would I suggest?  I would give Myeni and all the other SAA Board members and execs the right to fly any airline any time, when on official business.  There would be just one catch.   No first class; no business class.   Just the cramped misery of economy.

Let them stop eating cake, and instead get them to taste the pig swill the rest of us are served after being shoe-horned into our economy class seats.   Let them join the long queues for the toilets, read the vomit-spattered in-flight mags which have been there for days or even weeks.

In short.  Let them suffer.

Then just maybe they might concentrate less on plundering the public purse, and more on boosting staff morale, refining the food to humane standards, and finding ways to provide comfortable conditions for the many of us who are larger than four foot tall.

And who knows, if the Board Room chairs are more comfortable than those instruments of torture which they expect the rest of us to occupy, then maybe, just maybe, they will attend a few more Board Meetings?

If they can’t rescue SAA, then let it crash into oblivion.   Then we will have no problem with Ms Myeni flying BA, or whatever other airline she chooses.  She will have saved us billions.

Tweet of the Day

Jewish Comedians (@JewishComedians): Allan Sherman: Somewhere, over the rainbow, Way up tall, There’s a land where they’ve never heard of cholesterol. | #Quotes

 

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Book Review: The Unconventional CEO by Mario Pretorius

Mario Book

Some of my best experiences have been with books, and some of my worst.  As a student, I endured textbooks which were unbelievably badly written.  The authors were clever, knew a lot about their subject, but knew nothing about plain, clear writing.

It’s the same with business books.  You start to read them and before long you realise that your hands still turn the page, your eyes still follow the text, but your brain is on leave.

That is why ‘The Unconventional CEO’ is such a good business book.  It’s a good read.  Now, that’s a rarity.

The author, Mario Pretorius, runs a telecommunications company, and has put his thoughts on management into a slim volume.  If you only read one book on how to run a company, this should be it.  The same applies even more to your boss.

I do have to declare an interest.   Mario is a good mate (which my spell check cheekily changed to ‘good date’!) and asked me to help with the editing of the book.  What a pleasure.

This book is devoid of charts and spreadsheets, devoid of refined theory and lofty prescriptions.

It is a book on how to be the CEO of a business by someone who is the CEO of a business.   It deals with issues in a style which may seem a bit homely, but which contains the wisdom of how things are done, not some theorist’s vision of how thing should be done.

One of my favourite sections deals with what to do when you visit a client.   Mario’s advice is to take along a melktert (Milk Tart), a sweet and delicious traditional South African treat.    This advice may not appear in many business books, but it should be in all of them.

The layout is practical, too.    No long chapters; most fit on a page, a few spill over.  You can dip into it, or read it in one go.   It won’t boggle your brain.

Why take my word for it?   Click on to Amazon and buy the damm thing.  Mario doesn’t need the cash, but chances are that you need the help.

https://www.amazon.com/Unconventional-CEO-conventional-Management-thinking-ebook/dp/B00M8AZ5XW/ref=sr_1_3?ie=UTF8&qid=1498209844&sr=8-3&keywords=The+Unconventional+CEO

 

Tweet of the Day

William R King (@phil_osborne):  According to the directors commentary, Pirates of the Caribbean is historically accurate in the sense that they all wore a ton of mascara

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Do We Need Jobs More than Robots?

IMG_0053

I don’t envy our Trade and Industry Rob Davies. He has a tough job serving a President he wants to remove, and the challenges he faces are really daunting.
He was in action the other week, opening a factory owned by Black Industrialists, which makes industrial cables. The Alberton United Industrial Cables (UIC) factory is testament to genuine BEE, as Davies himself stressed.
This factory will be the only one in Africa to make at least one sort of specialist cable and it was good to see how state grants and incentives have worked well in getting this venture going.
Of course, there is no perfect solution to SA’s industrial ills. This factory is full of machinery imported from China, and does not look as if it will be a major employer.
Same problem at a Germiston factory formally opened last week. Lucchini RS, an Italian manufacturer of forged railway products, has invested R200m in a new factory.
Almost R38m has been given by government in tax and training allowances, and the factory is modern and impressive. So far, so good. But where are the jobs?
We were told 38 or so jobs have been created, which makes it around R1m a job if you look at the state support.
The R1m-a-time job creation initiative will reduce imports, has brought new skills, and will form the foundation for future inward investment. And there are BEE partners who are benefiting, all of whom seemed to have smarter suits than the dti Minister.
But with the economy in recession, with unemployment at crisis levels and rising, are we getting enough job creation?
A review is underway of the whole arsenal of government investment incentives. Let us make sure that job creation remains at the front of our minds.
Of course we want sustainable and skilled jobs. But we need tens of millions of them.
And we just can’t afford to create jobs at R1m a time.

Tweet of the Day.

Sean Leahy (@thepunningman): Interviewer: Under skills you put horse whisperer and able to see ghosts

Me: Ask that horse if you don’t believe me

Interviewer: What horse?

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Is the dti funding the friends of Zuma?

NB.   Since I wrote this piece, the dti has announced that it will be naming recipients of all incentives in 2016/2017, in a new report.    I salute their change of heart.  

This was the piece I wrote earlier this week…..
One shining beacon in any democracy is the flow of information to the people.  Control of that flow is known as propaganda.

So I was quite frankly astounded by the grumpiness and defensiveness today of Trade and Industry (dti) Minister Rob Davies when he was asked for details of the black industrialists who have been receiving billions in funds under his department’s flagship programme, which is being run in alliance with a number of development funding institutions like the IDC.

He told us that so far 46 black industrialists have received support, and he announced that four of these were being showcased.

However, my colleague Terence Creamer from Engineering News and I asked for the full list.  We were told it is not normal practice for recipients of incentives to all be named, even though Terence was able to detail past instances when such information had been sought and produced.

At one stage dti director general Lionel October said he would provide the information to Engineering News, and to other journalists, but there was a reluctance to go wider.

The Minister eventually agreed to consult the recipients of awards to see if they minded their names being published.  Yep.  You read it correctly.   It is their call.

It turned vile when Minister Davies in effect accused me of racism, for seeking details of benefits to black industrialists.   He equated me to people who call blacks monkeys and baboons.  Incredible.

And Lionel chipped in to suggest this was white prejudice.

Now, Davies said in his budget speech: “I am happy to report that as of now we have approved 46 projects run by black industrialists, with Government agencies – including the dti, IDC, PIC and NEF deploying over R2 billion in financial support on top of R122m in grants from the dti.”

Over R2bn of public money deployed.  And yet it is racist to ask for full details of the recipients?

We are living in a country where corruption is rife, where there are daily allegations that a powerful group of businessmen linked to President Zuma are coining it.

I am not saying that one cent of public money from the dti’s black industrialist programme is falling into the wrong hands.

But unless there is full disclosure, what else are we supposed to think?

What on earth could they be trying to hide?

 

Tweet of the Day

the dti (@the_dti):  DG October says Black Industrialists Programme is going well and producing the desired effect

 

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This is life GM. But not as we know it.

It was perhaps naïve to hope that the impact of all the musical chairs at the National Treasury would not spill beyond the bureaucrats and political fat cats.    But then came the ratings downgrades, and yet more political shit with the re-deployment to Eskom of disgraced, tearful CEO Brian Molefe.

And now the news from General Motors.  They are off; leaving SA.

Bugger.

Just as every bit of news of new investment in the auto industry, or in any other branch of manufacturing, should be seen as a vote of confidence in SA, so equally must we worry about withdrawal.

I remember from my time in PE, at school in the late 1960s, that some of my schoolmates were American, their dads working in the auto industry which was even then an important part of the City’s economic infrastructure.   The horrors of apartheid led to some withdrawals from the country, but GM’s return was a blessing.

Is this an isolated problem?   Nope.  Just last month, an important corporate deal involving Pioneer foods collapsed.  And what of the many discussions which take place all the time below the radar, with companies looking at fresh investment in South Africa, or in expansion here?

How many of these investments are turning sour because President Zuma and his cohorts are messing up investor confidence as fast as they mess up the economy.

Trade and Industry Minister Rob Davies is due to deliver his Budget Speech next week, when he will, no doubt, give an update on the billions of rand in incentives which are paid each year to anchor global auto firms in South Africa.

He may be reluctant to express concern at this latest GM bad news, but he must be worried.   As should we all be.

Tweets of the Day

Cirha (@MtikiCVU):  General Motors leaving SA is a huge loss for a country plagued with high rates of unemployment and slow economic growth.

Michael Jordaan (@MichaelJordaan):  First Barclays (UK) and now General Motors (USA) decide to leave SA. Sad but as always it creates opportunity for others.

 

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SA Must Beware New Global Trade Curbs

There are many concerns for the business community in South Africa, but one which is less evident than, say, the political manoeuvres around the Finance Minister is the growing tsunami of global protectionism.

More than once recently, there have been multilateral meetings at which Trump’s US administration has blocked a declaration against protectionism, and both protectionist sentiments around both Brexit and the French elections have shown that this is not just a US threat.

One of the strangest outcomes of America’s AGOA trade concessions to Africa is the difference it makes to a German car manufacturer, BMW.   The detail may have changed since I last researched it, but I am pretty sure that at least for a time BMW was the biggest SA recipient of AGOA benefits.   It has been able to assemble cars in SA, and then to get them into the US market at far lower cost tariffs if they were sent from Europe.  Thanks to AGOA.

The SA government has poured the largest slice of its investment incentive cake into the willing hands of global auto giants.    They get SA benefits to produce the vehicles and then minimal tariffs when they ship them off to the US.

However, AGOA is a unilateral trade concession, at the mercy of the US administration.   And the danger is that Trump will show Africa little mercy.  Ask the Syrians whether or not he is a nice person.

Global trade rules are policed by the World Trade Organisation (WTO), the successor to GATT.  For decades there have been efforts to agree on a new WTO trade round, which would provide additional benefits to SA and other emerging markets.   Most observers believe that Trump’s ‘America First’ philosophy will scupper the current trade round and may ultimately neuter the WTO itself.

Listening to a few recent speeches by SA’s Trade and Industry Minister Rob Davies I have noted his warnings that there is turmoil ahead in world trade, which may be why SA officials are so keen to ensure there is still post-Brexit access to both the UK and the EU.

But what of those investment incentives to which I have been referring, worth tens of billions of rand a year?    Is there much point in encouraging export-focused investment in SA if trade barriers are rising around the world.   If we are to return to a siege economy, and that model did not work too well under apartheid, should we not instead be investing again in siege industries?

Just this week, our beloved President was in the Free State, opening another Special Economic Zone (SEZ) – an area where export-oriented firms can enjoy all sorts of incentives, including a lower tax rate.   Not much point in setting up more SEZs, as the government is doing, unless the export markets remain open and receptive.

It will take much thought and wisdom to chart the way forward, but the first vital step is to raise awareness of the shifts in global trade policy.  It is going to get a lot more scary.

Tweet of the Day

Make your own bacon by tricking a pig into running headlong through a harp.

Frank Whitehouse

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The Great e-Rip-Off.

I am deeply concerned that millions of people may be victims of a discreet but widespread rip-off in the e-world.

I am referring to mugs – like myself – who have purchased digital books and music, and to people who buy data and other cellphone stuff which expires before they can use it.

This has come to me over time, but not before I have spent a lot of hard-stolen cash on limited-access e-shit.

Take an e-book.  They are incredibly convenient.  You can log on – as I have done on countless occasions – to a site like Amazon and purchase a book which can be accessed almost immediately on your Kindle or app.   No postage and packing.    It is there like magic.

But is I it there forever?  Certainly, you can share it with a few friends and family who also have access to your Amazon account.   But can you trade it in when you have finished?   And what happens if you die?   Will it accompany you to Hell?

The problem with e-books is that they are not like real books.  You can’t lend them to friends, or sell them, or donate them to a charity shop.   Their use is limited, restricted.   They can cost a lot of money, but it is for short-term convenience, not for long-term value.   I have similar concerns about digital music and other paid-for e-entertainment.

An even more immediate problem comes when you buy data, or SMSs, or call-time.   Some providers do not let these expire, but the ones I have used do let them expire.  Goodbye.  No refunds available.

The customer purchases something which disappears at the end of the month.   Great for the provider, not so great for the victim.  Terms and conditions will screw you, and I have the financial scars to prove it.

Maybe I am just a sad old cynic who belongs in the Caxton age, but I do feel that the rules and regulations which we mildly accept when we do business with Amazon, or with a cell phone provider, are slanted dramatically against the interests of whoever is coughing up the cash.

Diamonds may be forever.  Data?  Not so much.

 

Tweet of the Day

Jewish Comedians (@JewishComedians):  Rodney Dangerfield: I tell ya, my wife’s a lousy cook. After dinner, I don’t brush my teeth. I count them. | #Quotes

 

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ANN7. In defence of the horrible,

I don’t like what they say…..so I will shut them down.   Ominous words, and a sentiment which has been acted upon by dictators for a long time.   Even today, a shocking number of journalists are murdered around the world for trying to do a good job.

So, when I hear the stupid and thoughtless calls for Gupta TV station ANN7 to be taken off the DSTV satellite service, I recoil in outrage.   A petition?  Do grow up.

I was watching the ANN7 station when Zuma was preparing to announce his Cabinet reshuffle, and they were so ahead of the news that they were the news.   These people were clearly being fed details of the new Cabinet by the Guptas, in much the same way that JZ himself was being fed his instructions.

It may have been a bit devious that ANN7 got its news that way, but good luck to them, say I.  When I was working in Europe I was often on stories alongside some of Fleet Street’s finest.   They would track down the survivors of disasters by ringing hospitals and pretending to be priests or representatives of an Embassy.   They would seek copies of hotel bills by pretending to represent public figures, so they could find details of spending patterns.

Repellent stuff, I agree.    But where do you draw the line?    When one repellent journalist does a massive public service by pointing out how a President milked the taxpayers to build a private residence, or when it was reported that his dying advisor was let out of jail in dire health, only to pop up on the golf course in apparently robust health?   You gotta take the rough edges of journalism if you want the rewards of being informed.

It doesn’t always work.   A recent revelation that former deputy finance minister Mcebisi Jonas was offered hundreds of millions of rand to take on his boss’ job was reported, but not many arrests followed?    Even when juicy stuff is reported, corrupt institutions do not always act on it.    A robust democracy requires a fearless and independent press but also an effective police and judiciary.   We know from dozens of examples that the scale of corruption at the top is mind boggling.  Just because we all know something is wrong doesn’t mean that it will be put right.   It takes more than a long, hot shower to rid a country of the stench of corruption.   But it would be a far harder task without the media, sleazeballs and all.

So, I say it is a small price we will pay if we keep on ANN7, which nobody is obliged to watch, as long as we also keep on the array of independent and effective broadcasters and publications which still expose wrongdoing.  There is an uncanny parallel in the US with Trump attacks on some media outlets.  These are also dangerous, nasty and anti-democratic.

On a similar theme, I have attended a few recent news conferences by our beloved new Finance Minister.    I applaud him for his patience and stamina in listening to a lot of tough questions, and in answering them most of the time.     However, at one recent briefing by the Minister at SARS, one of his flunkies made the repellent suggestion that questions should only be on tax collection matters, and journalists should not deviate from this narrow brief.

Congratulations to the many media representatives who effectively showed the middle finger, and asked what needed to be asked anyway.

And yet we heard the next day that at a loco launch by the president (the loco referring to the front of a train and not to Zuma) journalists were manhandled by Zuma’s bodyguards (who are even larger and more intimidating than his wives).

There may be a power struggle inside the ANC, but there is also a more sinister battle underway between those who believe that a free press, warts and all, is an essential component of a healthy democracy and those whose agenda is neither democratic not healthy.

So, let us keep ANN7 on offer to all who are foolish to accept its dodgy commentary.  At the very least if provides a good laugh for the rest of us, however unintentional.

 

Tweet of the Day

John Darby (@mrjohndarby):  Dr: Does it hurt when I do this?

                                                     Me: Yes, a bit Dr: And now?

                                                     Me: Yes, that’s very painful. Please stop showing me photos of you and my ex.

 

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Will a new SA investment promotion plan actually work?

This country needs to grow faster.  And it needs a spectacular jump in jobs.  It will only achieve these two goals with more investment. A lot more.   Billions and billions more.

So it was encouraging to see the President himself at the dti on Friday to launch a new InvestSA one-stop-shop for investors.

Not that he took it quite as seriously as he might have done.  He was 70 minutes late, which was not just a gross discourtesy to his own ministers and officials, but a way to send just the wrong message to the investors who were also there for the ceremony (nobody would have made the journey just for the food and non-existent booze).

The idea is sensible.  Gather together in one place all the agencies which currently entangle investors in red tape, and offer investors a way to fast-track all the approvals and licences, electricity supply and visas, and so on that they will need to get their projects off the ground.

Of course, the proof of the pudding will be in the eating, for if this new anti-bureaucracy initiative does little to actually fast-track investment, it will have been a waste of everybody’s time, including that of our tardy President.

Let us give them the benefit of the doubt, though.  A similar model has worked elsewhere.

The President also referred to an important new hand-holding initiative, with one or more Ministers being assigned to each major new potential investment, to assist in clearing any obstacles which may lie in the face of aspirant investors.

An excellent initiative, but one which is difficult for we outsiders to monitor.  Trade and Industry Minister Rob Davies said he is hand-holding a big auto investment at Coega and a pharmaceutical one near Durban.  Fingers crossed.

And, of course, we do need more work to ensure investments do actually flow here.    Make it easy for the right people to come and go as they need to.

I remember quite a while back that the local CEO of BMW – a massive investor in SA – couldn’t get a work permit.  That sort of embarrassment cannot recur.

Meanwhile, the scandal of inept staffing at ORT International airport remains a massive stain on the country’s reputation.    The last time I met an international arrival, I had to wait at the arrivals gate almost two hours after disembarkation, as three planes had arrived at almost the same time, bringing many, many tired folk into the country.  And there were just four passport officials processing the long queues of international arrivals.  People were being misdirected to the wrong queues.

What a disgrace.  And such an easy problem to fix……. if you are not a petty bureaucrat in a country ravaged by petty bureaucracy, incompetence and corruption.

So good luck with the one-stop-shop.  Just beware of all those public sector one-stop-shoplifters.

Tweet of the Day

Famous-Quote.net (@famousquotenet):  There is always a well-known solution to every human problem — neat, plausible, and wrong. – H.L. Mencken

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