Archive for December 14th, 2009

Monday, December 14, 2009

Steiff Stuffed Animals: Closer to Home

Steiff GmbH is reportedly phasing out production in China after six years. Back then, the dapper company had created a cheap brand, Cosy Friends.

One reason to cease the China engagement was quality. The Financial Times Deutschland quotes the company’s executive director as saying that the company had underestimated their own strength: producing a stuffed animal isn’t that easy after all. A strong fluctuation of employees at Steiff’s Chinese contractual partner didn’t help either. It took a seamstress eight to twelve months to meet the standards – but hardly any of them stayed that long. Which made the executive director worry that they might join competing companies.

This doesn’t mean that much of the production that went away years ago will be relocated to Germany. Steiff is expanding its production in Portugal, but particularly in Tunisia. It takes people no shorter there to meet the quality requirements. But the Tunisian employees are unlikely to move to a competitor overnight. Sidi Bouzid, the production site, is far away from the rest of the world, in Tunisia’s hinterland.

Implementing new projects across the Mediterranean is also easier, than communicating across most of Asia. And new products, once they have been made in Portugal or Tunesia, reach their markets much more quickly.

It’s for similar reasons that athletic shoes for the United States’ markets in the 1990s were – or maybe still are – made in Mexico to quite an extent. That said, the really functional (and often more expensive) shoes mostly came from the Far East. As they weren’t subject to frequent, even minor, fashion changes, production processes could go on unchanged for long periods – long enough to produce quantities which would justify the time it took to meet the quality standards of American headquarters. Contrary to stuffed animals, runners are usually no collector’s items.

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Related:
Every Fifth German Company Leaving China, August 4, 2008

Update/Related:
“China is increasingly losing attraction”, The Telegraph, July 3, 2008

Monday, December 14, 2009

Obituary: Paul Samuelson, 1915 – 2009

He was no friend of Schumpeter‘s theory of creative destruction. He advocated the rule of law – capitalism needed rules, he said. In an interview with Der Spiegel a few years ago, he accused America of being a society of “Me, me, me, and now”, not taking tomorrow and other people into consideration. Maybe one out of ten students among young students of mathematics at the Massachusetts Institute of Technology (MIT) were actually born in America – he blamed television. In general, he ovserved, there were too many distractions for young people from training their intelligence.

Paul Samuelson, a renowned American economist, died on Sunday after a brief illness, aged 94.

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