Spitting In the Wind By Lou Gutheil Of all the advice I have heard over the years, two thoughts stand “7 above the others in di — hh terms of practicality: “=” hss “Don’t spit into the wind,” and “Never eat the yellow snow.” [have lived in relatively temperate regions for the last 15 years, so al- though the latter is good advice, I’ve not really had to use it. No matter where I’ve been, however, there has always been wind. And, although the advice of not spitting into the wind is intrinsically wise, I have to believe that it has broader applications. Our indus- try is experiencing some very strong winds of change. It would be wise not to spit into them. There has been a rising tide of dis- cussion lately about the need to pro- tect our businesses against the on- slaught of offshore competition. I ap- plaud those who are voicing their opin- ions. Dan Kolt’s recent letter to the editor of this paper was a fine synop- sis on the essence of this important matter. Rob Buksar’s columns have waved the warning flags for months. Meanwhile, others are either burying their heads in the sand, distancing themselves from the “‘rabblerousers,”’ or all-out participating in the ultimate destruction of our economic base and our businesses. Problem No. 1 The winds of change affect many of us. Some who are affected are rebuilders. For the rebuilder, the prob- lem is how to stay in business against low priced finished goods manufac- tured elsewhere. Let me repeat that sentence. I chose those words very carefully. For the rebuilder the prob- lem is how to stay in business against low priced finished goods manufac- tured elsewhere. This is not a new problem. I have observed this situation recur many times over the last 20 years. The es- sential, root problem is always the same: “How am I going to stay alive against others who are trying to eat my lunch with lower priced merchandise?” When you boil this problem down to its essence, it is relatively simple. It is origin of competition, not country of origin that is the fundamental issue. I have watched as unscrupulous competitors put honest businessmen out of business by using every tech- nique imaginable, including inferior products, ridiculous warranties em- ployed as marketing schemes rather than quality support, and of course, even more ridiculous prices. However, we must also face the fact that com- petitive pricing is a legitimate way to gain market share. The guy who loses market share never likes the other guy’s price-cutting. Cutting corners on costs is also a legitimate tactic. But when cutting costs lessens quality and the cost-cutter cov- ers up the inferior quality with mislead- ing advertising and sales pitches, a moral, ethical, and even legal line is crossed. What really gets me riled is when a competitor cuts price for no other reason than he can. It doesn’t matter to him that he will also lose money by doing so, it only matters to him that at the end of the day he takes business away from someone else. This is not competition. This is not growth. This DECEMBER, 1999 is greed. There is a difference. The impact of one man’s greed on the in- nocent guy who is just trying to make a living can be devastating. Problem No. 2 Some of us who are affected are national manufacturers and suppliers. We are faced with the same basic is- sues that the rebuilder is and them some. Consider our competitive situ- ation versus our peers the same as rebuilder versus rebuilder. Consider that we are faced with finding ways to supply reasonable quality parts and lower and lower prices. On a daily basis [hear from rebuilder and distribu- tor customers that “I can buy that cheaper from so and so.” But when the quality issue is put on the table, suddenly quality is not the issue. The fact is, surveys aside, price is almost always the number one issue. Why do suppliers spend so much time quoting rebuilders of all sizes? Because the lowest priced supplier is usually the winner in the quoting game. Quality rarely becomes a real issue until post delivery. And don’t give me any of the ISO, TQM or your company’s “quality standard” baloney. I know who you are and I know what you do. Problem No. 3 Do you really care what the coun- try of origin is? I don’t think so. Most people are, however, influenced by past experience with or reputation of products from a particular country. They tend to broad brush all products from specific countries based on those experience-based or reputation-based prejudices. Oops. Did I step on some toes? Let’s face it. To say, “I don’t want a stamping from Katmandu because I bought a radio from there and it didn’t work,” is prejudicial statement. I sin- cerely believe that if most people Page 1 of 3