This guest article was written by William Laraque who is the Managing Director of US-International Trade Services.
Napoleon famously said that an army marches on its stomach. An army, a military, regardless of how high tech, how sophisticated it is, needs to eat. Patton famously said (in the movie at least): “My men can eat their belts, but my tanks gotta have gas.” As a former (not ex but former) Marine logistics officer, I used to calculate the amount of food and fuel a Marine Regimental Landing Team needed to operate successfully for days and weeks. The amounts always astounded my superiors, particularly when it was realized that Abrams tanks get 8 gallons of gas turbine fuel to the mile. No, not 8 mpg!
It was recently revealed that Tesla will produce 50,000 cars in the last half of this year…if it can get the logistics right.
The Logistical Nuances of Dreams and Dreamers
The Tesla battery operated car is one of the dreams of Elon Musk. Now that his dream car has gained traction, crossing the finish line to global success will depend on the usual suspects; improvements in manufacturing processes and logistics, a case of the sublime depending on the mundane.
When Boeing conceived of the Dreamliner, it was envisioned that thousands of parts could be sourced from multiple countries and brought together in an aircraft assembled in the US. The cockpit, the manufacturing of which is Boeing’s core competency, would still be done in the US. Boeing aircraft will be assembled in South Carolina, creating thousands of jobs. Logistics turned out to be the greatest problem for Boeing. The moral of the story is that in an increasingly technological world, such ‘mundane’ areas as logistics can thwart the efforts of the most sophisticated companies.
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In the case of Tesla, the financial press has concentrated on everything but what matters most; logistics!
Dreamers, Fools and Jobs
While our myopic US presidential candidate is calling for building walls against trade and the movement of people, the ‘Uplands’ of the Carolinas are building warehouses and the infrastructure for the coming onslaught…of trade. The widening of the Panama Canal will require the usual suspects; logistics, distribution centers and technologies. Cargo vessels which cannot fit under NY bridges will have to unload their containers in the Carolinas. This will also create jobs, lots of them. The overlooked, the modest disciplines and issues and how well they are executed, will determine who succeeds in the future, just as they have in the past.
GE has moved its gas engine facilities to Canada. EDC will provide the financial support needed to sell these products globally. By the same token, GE is moving production facilities to France in order to take advantage of Coface and to Italy in order to establish independent facilities which can then sell to Iran without violating US sanctions. The absurdity of it all is in regard to job creation. US-based corporations will be creating jobs in Canada, France and Italy; jobs which could have easily been created in the US with a bit of forethought and intelligence.
Barbara Tuchman’s “The March of Folly” and I.F. Stone’s opinions about the ubiquity of folly throughout human history, are certainly compelling explanations of the actions of politicians and generals and their fundamental misunderstanding of how the world works. It works because of the mundane but usual suspects.