Businesses Tell the IRS They Are Not American but Executives Stay in USA

I have previously written about the ethically challenged companies that claim they are not American to avoid paying the taxes that they owe. For some reason the executives, often seem to stay in the USA though? It is sad that such behavior is tolerated.

10 Big Businesses That Have Moved Their Headquarters Abroad to Pay Less U.S. Taxes [the broken link was removed]

Halliburton: Houston-based Halliburton, which offers a broad array of oil-field technologies and services to upstream oil and gas customers worldwide, announced the opening of a corporate headquarters in the United Arab Emirates city of Dubai on March 12, 2007. The company, which was once led by U.S. Vice President Dick Cheney, said that its relocation was part of a strategy that it announced in mid-2006 to concentrate its efforts in the Middle East in order to attract business.

Yes the same company taking billions in Pentagon no-bid contracts (Company Official Defends No-Bid Army Contract [the broken link has been removed] – Halliburton Contract Critic Loses Her Job – Halliburton’s Fleecing Ends — Or Does It? [the broken link was removed]).

And that isn’t all – read this on how they don’t pay social security or unemployment… taxes since they are not an American company when they hire American’s to work for the US government in Iraq. Top Iraq contractor skirts US taxes offshore [the broken link has been removed] – “Kellogg Brown & Root, the nation’s top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.”

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Engineering Innovation

(video link no longer works so it has been removed)

In the webcast Dean Kamen discusses his latest innovation: robotic arms for people (amazing stuff). Once again he is doing great stuff. It is great what engineers can do (many worked together to get the progress so far) when given the opportunity. We need many more such efforts.

The research was funded by DARPA. DARPA, for those that don’t know, also made reading this blog possible. They funded the development of the internet [the broken link was removed]. I was giving a talk, while I was working for the Office of Secretary of Defense Quality Management Office, on Using Quality to Develop an Internet Resource (back before blogs, but after the web, in 1999). I was trimming things as I spoke and cut the tidbit about DARPA and the internet because I figured everyone already knew that (and I had to trim as I was speaking). In discussions afterwards I found many didn’t know DARPA’s involvement.

Related: Better and DifferentWater and Electricity for AllGoogle Innovation

Dean Kamen Lends a Hand, or Two (August 2007):

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Management Improvement Carnival #36

Please submit your favorite management posts to the carnival. Read the previous management carnivals.

  • Adopting Agile Processes by Eric Engelmann – “So scrum is about fixing the system. If you don’t write code, it might not be apparent what’s different about this, so I’ll pull out what I love about it…”
  • Generosity comes with international shipping by Andy – “I am the CEO at Timbuk2…and I wanted to say – thank you for the posting. and tell you I am very proud of the team here.

    1. They made this call on their own.
    2. They broke the rules that should be broken

  • The gemba of poverty by Karen Wilhelm – “But the idea wasn’t to give these things to those in need. It was to keep designing and trying until you had something that could be manufactured at a profit to meet a price point poor people could afford.”
  • Fire Fighting vs. Root Cause Problem Solving by Mark Graban – “The workaround does nothing to prevent the problem from occurring again — this ensures more wasted time and more potential problems in the future.”
  • Coffee cup kanban by Corey Ladas – “the cup is the kanban. The cup-ban doubles as an order form that can encode most combinations that a barista should expect.”
  • Teams and Improvement by John Dowd – “The lesson is that being aware of the existence of interactions and being attentive to their implications is a part of team management.”
  • Conference Calls, Kids, and SMED by Ron Pereira – “Why wait until the machine is stopped to get all the tools and supplies needed? Collect all the tools while the machine is running so you don’t waste time once the machine has stopped.”
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Outsourcing To America

Outsourcing To America [the broken link was removed]

Toyota began operating in North America in the mid-1980s. It currently operates seven automotive plants there, four of which are in the U.S. A fifth plant is under production in Mississippi. Toyota employs 40,000 manufacturing employees in North America.

In addition to the manufacture of cars and trucks, Toyota runs four unit factories in the U.S., where they produce such parts as engines, transmissions and wheels. Toyota also has a wholly owned subsidiary, Bodine Aluminum, an aluminum casting company, which operates three factories in Tennessee and Missouri.

BMW began operations in the U.S. in 1994, when it opened a plant in Spartanburg, S.C. “Some natural hedging was always a part of the long-term strategy, but also we have a corporate strategy of having production follow the market,” says Robert Hitt, BMW’s manager of public affairs. “Our original plan was to have about 2,000 workers here by the year 2000. We are now at 5,400 people here on the site.”

Besides the actual manufacturing of their cars and trucks, Toyota and BMW are using domestic suppliers to provide parts and services for their operations. BMW has over 200 suppliers in North America, 52 of which are located in South Carolina, and 41 of these are new companies started for the purpose of supplying the plant. In South Carolina alone, suppliers of BMW’s Spartanburg plant employ over 14,000 people.

Toyota uses roughly 500 major suppliers in North America. “We’ve always had the philosophy that we should build vehicles where they are sold, so it makes sense to have suppliers close to your manufacturing operations,” says Mike Goss, external affairs manager for Toyota’s engineering and manufacturing division in North America.

Foreign production in the U.S., however, is not limited to the automotive industry…. In fact, almost 1 million Americans get their paychecks from Mexican companies, says Ton Heijmen, senior adviser for outsourcing and offshoring for the Conference Board.

Related: Top 10 Manufacturing Countries 2006Moving Jobs to Silicon Valley from IndiaGlobal Manufacturing Jobs DataToyota in the United States of America EconomyChina Outsourcing Manufacturing to USA

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Paying New Employees to Quit

[the video is no longer available]

Training new employees and then paying them to quit, sounds pretty bizarre; Zappos is not afraid of doing things differently. Why Zappos Pays New Employees to Quit – And You Should Too [Harvard broke the link so I removed it – they should pay those responsible (most likely an executive, technical people know better but bad management breaks things) for not maintaining urls to quit]:

Zappos sells shoes—lots of them—over the Internet. The company expects to generate sales of more than $1 billion this year, up from just $70 million five years ago…

Zappos has also mastered the art of telephone service – a black hole for most Internet retailers. Zappos publishes its 1-800 number on every single page of the site – and its smart and entertaining call-center employees are free to do whatever it takes to make you happy. There are no scripts, no time limits on calls, no robotic behavior, and plenty of legendary stories about Zappos and its customers.

This is a company that’s bursting with personality, to the point where a huge number of its 1,600 employees are power users of Twitter so that their friends, colleagues, and customers know what they’re up to at any moment in time. But here’s what’s really interesting. It’s a hard job, answering phones and talking to customers for hours at a time. So when Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period.

About 10% of employees take them up on the offer.

Do any of you readers want to persuade Zappo’s to buy a couple airlines (Jet Blue and Southwest don’t seem to go where I need to go, too often) a cell phone company, an internet service provider and a credit card company? I could appreciate the good service in those areas 🙂 If I were them I would start with the credit card company – I really don’t understand why someone doesn’t provide good service in that area – with the huge profits it provides and competitors that treat customers like rubes to be fleeced. Airlines you have to be crazy to buy (so don’t try to convince them of that one first).

My friend, Sean Stickle [the broken link was removed], went to work for custom ink a few months ago. I don’t think they offer to pay new employees to leave but they are devoted to customer service and to not just saying customer service is important but focusing attention on delivering it. They publish “Uncensored Customer Reviews” on their home page. There are some companies that really do value customer service even while most companies do everything they can to provide horrible service.

Related: Respect for People – Understanding PsychologyStarbucks: Respect for Workers and Health CareCompany CultureEnhancing Passion in EmployeesRespect for WorkersMistreated Customers Let the World Wide Web Know

Posted in Creativity, Customer focus, Innovation, Management, Respect, webcast | Tagged , | 5 Comments

Why is Customer Service So Bad?

Why is it? I really don’t know. It drives me crazy though – having to put up with horrible service again and again. Is it possible that only a few people actually care about service? I know I care about it, but given the preference of business to continually provide horrible service it should be that you can just provide plan mediocre service and take their business. Yet these companies providing what seems likes worse and worse service somehow stay in business.

Related: Is Bad Service the Industry Standard?Customers Get Dissed and TellPoor Customer Service from Discover Card

Posted in Customer focus, Management | Tagged | 7 Comments

Some Posts from May 2005

Here are just a few posts from 3 years ago this month on the Curious Cat Management Improvement blog: A Traffic Congestion Non-SolutionBrain Joiner on Dr. DemingOpen Source Management TermsGoogle: Good Service not ArbitrageAnnual Report by Warren Buffett

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Deming Auto Repair

Here is an interesting example of an auto repair shop applying Deming’s ideas, AGCO Automotive in Baton Rouge, Louisiana:

In this section we hope to present our business philosophy, through a series of articles written by president Louis Altazan. Our strategy of continual improvement is based on the work of Dr. W. Edwards Deming and has been incredibly successful for us. There is nothing we enjoy more than discussing our methods and invite all questions and comments.

The site includes several interesting articles including, Motivating Our Staff:

Clients often ask how we motivate our staff members. The answer is simple, we don’t. We feel good people are already motivated, what they need is removal of the things that de-motivate them

I also believe this is a far superior state with regard to production, quality, efficiency and human relations than the one that commonly exist in the incentive driven system. It requires management that trust people to do what is best, rather than rely on a system of punishment and reward. It requires management that trust its own ability to share vision and remove obstacles to joy in work. Management’s job shifts from a controller of reward to a leader of an inwardly motivated team of people.

Related: Deming CompaniesStop De-motivating EmployeesDeming Management ThoughtsAt Ford, Quality Was Our Motto in the 1980s
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Well Managed Companies

If a company is dependent on one (or more) people to perform then it is in danger. Processes should be in place that don’t risk the success of the company on the performance of a specific person. If your organization is dependent on a person start taking actions to place the success of the company in reliable processes instead of individual stars.

In many instances the start is as simple as starting to document processes using flowcharts. Another benefit of doing this is that you can then make sensible improvements. It is hard to make reliable improvement hen processes are not documented and instead remain the mysterious realm of individuals within the organization.

Do your outstanding people think their importance is in getting through another day through hard work and individual expertise. While those qualities are good most important to the success of the organization is improving the system not getting through one day. If those seen as the stars are not improving the system and processes then get them to work doing so. They might miss the feeling that the organization is dependent upon them. But it is more important that the organization not improve. And there contributions will still be worthwhile but the organization will be much stronger.

Performance dependent on specific individuals is not robust and not capable of continuous high quality performance.

Related: Bring Me Problems and Solutions if You Have ThemHow to ImproveManagement is Prediction

Posted in Management, Process improvement, Psychology | Tagged , | 3 Comments

Management Improvement Carnival #35

Kevin Meyer is hosting Management Improvement Carnival #35 on the Evolving Excellence blog, some of the highlights include

  • Hidden Problems from TPM Log.  "We must encourage people to speak up and identify problems. We must
    also develop avenues for people to do so in a comfortable manner."
  • It’s the People, Not Just the Tools from Shmula.  “what most folks forget is that ‘Kaizen’ was truly build upon the philosophy that ‘Toyota builds people and then cars’ – that is, Kaizen came from the notion that the collective intelligence of your line workers is valuable and that people, if given the training and the
    chance, can truly do amazing things.”
  • True Work, Apparent Work, and Busy Work from Gemba Panta Rei.  “True work is of course the small amount of work in any process which changes form, fit or function as the customer desires.”
  • Innovation on the Edge from Edge Perspectives.  “Why bother about the edge when everyone knows that all the profit is in the core?”
  • Why Do Employees Underperform? from the Lean Six Sigma Academy.  “Muri means to overburden equipment or operators.  In many cases, muri can be avoided by the implementation of some basic forms of standard work.”

Read past management carnivals.

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