"Detroit east" (Cover Story, July 25/Aug. 1) understated the magnitude of auto operations in Turkey. For instance, in the summary table, I was surprised not to see Tofas, one of the largest manufacturers in the country. Tofas produces Fiat (FIA) automobiles, with a capacity of 250,000 vehicles a year. The country has also become a hub for production of light commercial vehicles. While Ford Motor (F) and Fiat manufacture their newest commercial vehicles exclusively in Turkey for export, others like Hyundai Motor Co. or Peugeot (with Karsan) are revving up the production for the local market.
Sometimes a larger phenomenon such as "competitiveness of European Union accession countries" can be so large that it's difficult to explain with a great deal of clarity. By using the example of just one industry -- autos -- your writers made clear the trade-offs and drama played out by Western, Central, and Eastern European companies.
I noted that the annual production of 300,000 cars was associated with about 3,000 new jobs, or 100 new cars per new employee. At $6 an hour times 2,000 hours worked, a Slovakian employee costs $12,000. At $50 an hour times 1,440 hours, a German employee can cost $72,200. The difference, divided by 100 cars, works out to $602 per car. I read later the estimate that General Motors Corp.'s (GM) Gliwice (Poland) plant will produce $600 to $700 per car in savings, so I was happy this example was consistent!
I am writing on behalf of John Hart, principal of Milio International Ltd., whose company was incorrectly represented in "The Rich boys" (Investigative Report, July 18) as being part of or somehow involved with the network or person of Marc Rich. John Hart did briefly work for Marc Rich & Co. Investments Ltd. in 1998. Hart and his team joined after more than eight years working at Philipp Brothers (Phibro), the commodity trading arm of Salomon Inc. Hart and his team left Marc Rich & Co. after less than six months because of vastly conflicting business philosophies.
Milio International Ltd.
A prestigious business journal should not repeat the simplistic diagnosis made by our politicians ("Thatcher lite?" European Business, July 25/Aug. 1). High salaries are only part of the problem. You can address it, of course, by lowering mandatary unemployment pay for employees by 2%. But that does not justify increasing the value-added tax by 2% -- about 1% would compensate for a 2% reduction in taxes (unemployment pay) for employees, corresponding to the employees' share in gross domestic product.
Why all should pay into unemployment insurance, and why only employees benefit, is beyond me. I am self-employed, one of about 5 million in Germany. I lost all benefits from my unemployment insurance when I quit my job and registered my own company. Now I even pay toward financial-risk-insurance, benefits for which I will never qualify, as I belong to the hostile camp of self-employed. It does not mean that I do not have financial risks; I am writing off an investment of 1 million marks here, as I give up in the face of bureaucratic hassles.
Our politicians do not want to see the simple fact that there is enough employment in Germany. Consider legal seasonal and illegal full-time workers from Poland and elsewhere (who earn more in a week here than they do in a month at home). Why don't our German unemployed take up such jobs? Because they make more money through unemployment benefits. Our university graduates work for six months to qualify for unemployment benefits and then quit; a young teacher told me that this is what the government recommended to her, as they graduate an excess number of teachers.
"SAP: A SEA change in software" (European Business, July 11) explains Web services as software "Legos" -- able to bind business software from different companies together. But just as there are many binding toys like Legos, many competing software-binding systems (SAP, Oracle, Microsoft, etc.) are and will be proposed. Will the different software developers bind to all of them? It is a fact that no other toy binds to any of the toy "binders."
Business software systems need and have their very individualistic user interfaces, concepts, procedures, and methods. So, does binding different softwares mean working with a hodgepodge of different interfaces, etc.? Plus, each business software implements and uses differently data that are actually conceptually identical, e.g. clients, articles, accounts. Does binding mean living with such multiple versions of these data? If so, users will have no need for the freedom to mix software; they will stick to one software supplier.