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Feb 12

The Story is True!

My Chinese story (as referred to last week in this blog) is as follows. I offer this story as a follow-up and commentary about the recent Court of International Trade (CIT) affirmation of its decision to apply “trade remedy orders,” AKA penalties, charges, fees and such, on the Chinese curtainwall manufacturers shipping what most feel are unfairly priced products into the USA. I applauded this decision, spoke strongly in favor of it, and feel it is appropriate … however.

Approximately 10 or so years ago, a very close friend of mine opened a specialty parts distribution business on the near west side of Chicago. The items he intended to distribute were primarily going to be sold to auto repair dealers and body shops although he also sold products to secondary retailers and walk-in customers. He had a very narrow line of items but in almost no time at all, he reached a volume level that allowed him to expand his territory and add employees. While he only sold in the greater Chicago area when he first opened, within less than two years he was selling his products as far west as Indianapolis and north into Detroit. He added a second truck and driver to make deliveries, hired a full-time sales person and was doing remarkably well. I talked with him on a regular basis and he had started talking about opening up in Atlanta which he felt was a market he could compete in. About 90 percent of the items he sold came from China. On more than one occasion I questioned him about the quality of his Chinese products and he said he had no complaints and they were well received because they were substantially cheaper than the identical domestically manufactured items.

After about four years of solid business growth, he called me one night and asked me to meet him for breakfast. We met and I could tell the minute I saw him that there was a problem. The problem was that the items he was bringing in from China had been targeted for some type of an embargo and tariff and that it now looked like his costs for the items being imported could go up by as much as 20 to 25 percent and there was simply no way he could pass those kinds of increases along. He was worried to the point of being physically ill. We talked for a while and came up with an idea or two for him to pursue, but I didn’t feel very good about his situation when we parted that day.

About five days later, my good friend asked me to again meet him for breakfast. I did so and I couldn’t believe how upbeat he was. He told me everything had worked out. I asked him if the embargos or tariffs or whatever had been dropped and he said “no” but that he had now met with his import contact and was told not to worry because whatever the added costs might be, they (the Chinese supplier) would take care of it. He would not see any price increase as a result of any U.S. governmental action. The Chinese government would cover it! No, we are not talking about multimillion dollar shipments in my example, but I’m going to guess (and I hope I am wrong) that in the end, the CIT’s efforts will slow things down a bit in the curtainwall arena, but that in the long run, nothing much is going to change. And that saddens me.

Health Insurance – Politics – Etc.

As I have stated on a number of occasions, I try to avoid political commentary in my blogging. There are enough political commentators to go around already and some of them will say whatever they think will increase their ratings whether they actually believe what they are saying or not. HOWEVER, I feel compelled to make a few comments and I trust that you will forgive me if I disagree with your view of things.

First, during the past five months or so, I have had plenty of contact with my insurance company which happens to be the largest insurer in my state. Actually, as of the end of November, 2013, I was no longer covered by them … they sent a very short and simple letter simply stating that my policy was running out and could not be renewed. Fortunately, I was more or less prepared for this and had signed up with a new insurer in time to not have a gap in coverage. I still have a number of issues with the first provider and have filed complaints with my state’s insurance commissioner and have talked with an attorney about my options. It is not going well with these people and while I had hoped for a better handling of all of this, I was not surprised by the way they treated me. I am not a fan of insurance companies. I have dealt with them enough during my adult life to believe that they are motivated by the same thing that motivates all “for-profit” businesses … MONEY! Nothing more and nothing less.

Secondly, it is a travesty that in a country as affluent as ours, people have to worry about getting healthcare when they are in need. And the cost of healthcare is ridiculous. I can give you a number of personal, recent examples of how outrageous costs have become for even the simplest of procedures. I had never had much experience with any of this until my recent health problems and I was in absolute shock at some of the fees charged by the medical profession for some of the simplest matters. Shock is probably not strong enough of a word here!

Thirdly, and lastly, when the current “Affordable Health Care Act” was proposed, discussed, and ultimately signed into law, I made the statement that I was quite concerned about … even though I didn’t know any more about it than Nancy Pelosi … for one primary reason alone. And that reason was this – the insurance industry, who is not in my opinion an industry known for integrity, fairness and generosity, did not oppose it. And at that point, I started to believe that we (and the program itself) were in trouble.

A Tough Winter Indeed

Haven’t had a winter like this in decades in my part of the country and maybe some parts of the Southeast can claim that they have never had a winter like this. But on the positive side, some of the winter scenes produced by all of the snow and ice have been absolutely beautiful. Even some of the sunsets. Maybe I’ll share a couple more photos next week. The one below is of a typical sunset this winter as seen from my back porch.

winter 002_format

The Broken Tomato”Update

Well, this really surprised me. I received an advance copy of the “Grand City Ledge Update” (a bi-weekly newsletter produced for the residents of Grand Ledge, Mich., and therein publisher Kal Smith referenced and made a couple of very nice comments about “The Broken Tomato.” Mr. Smith has no direct ties to our industry and I have never met or talked with him so I thought it was quite kind of him to give the book a plug. Much appreciated and thank you so much to those of you who have purchased the book and a special thanks to those of you who have sent me comments about it. I save every one of them!

The Sports Thing

I am enjoying watching the Olympic coverage of the winter games in Sochi although I knew going in that some of the judging could be suspect and that virtually all of the participants are, in actuality, professionals … meaning they are paid for what they do athletically in one way or the other. And the best is yet to come … men’s hockey starts today although the women’s hockey games, in spite of some really bad officiating, have been fun too. And now, because I can’t help myself, I will once again make public my prediction(s) … men’s hockey will see the gold go to Canada with the USA getting the silver and Sweden the bronze. In women’s hockey, USA will get gold (and yes, I know the Canadians beat them in the preliminary round) with Canada getting silver and I have no idea who to pick for the bronze. You know, sooner or later I’m going to get lucky and be right on one of these … don’t you think?

The Quotable Thing

This week’s quote got to me from Wayne Rethford, by way of Kathy Bimber through Amy Newling. It’s pretty good and might even apply to some of you … okay, some of US!

“I used to be indecisive. Now I’m not so sure.”

Have a Wonderful Week, Everyone!

5 comments

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  1. Tim McNeil

    Lyle (Rich), as always, a great blog. I think we may be copesetic as to how we feel about the insurance industy.

    Recieved your book in my mailbox yesterday and am devouring it with a relish! (Pun most certainly intended.) Had to work 10 hours today, or believe me I would be near finished now. Next chapter – 11…seriously. (Can’t help myself.)

    P.S. Paste – who knew?

    Back to the book!

    Best Regards,
    Tim

    1. Lyle R. Hill

      Thank you Tim … for both the nice comments as well as for purchasing “The Broken Tomato” which I truly hope you enjoy. I think there is a chance that you might recognize a couple of the characters in there also. Sorry you are working so hard … good chance I will see you on the 23rd! LRH

  2. Patrick

    Mr. Hill, exactly HOW LONG ago was it that the Chinese arrangement you refer to in your story took place? The Chinese government might not be in the same positon to arbitrarily subsidize any and all Chinese manufacturers who get into the situation you describe. Things are changing there I believe. Patrick

    1. Lyle R. Hill

      Patrick … I’m not sure exactly HOW LONG ago it was but as noted in the story itself, approximately 10 years ago although perhaps a little longer. And you are right, of course, that things are changing there and everywhere else for that matter. LRH

  3. Maury Wilmoth

    Rich, I discovered your blog today and I tonight when I get home I will look into ordering a copy of “The Broken Tomato.” Shipping to Canada may double the cost of the book , but I’m sure the wisdom contained within it will be worth the premium. Perhaps Amazon Canada will give me a discount if I mention you have endorsed the Canadians for the gold. If you need to build international credibility for the book, I will will be happy to send a picture of me reading it while wearing something distinctly Canadian.

    Best wishes to you and Sandy.

    Maury and Jennifer

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