In the News

Remi Cornubert

Le Figaro Economie (16 April 2008) quoted Remi Cornubert in an article about a joint development and manufacturing agreement between Nissan and Chrysler. Remi says that the agreement allows both automakers to achieve economies of scale and offer a full range of vehicles in multiple markets. Remi says: "Joint projects make it possible to limit development costs while bringing flexibility of operation."

Randy Babbitt

Bloomberg (15 April 2008) quoted Randy Babbitt in an article about the proposed merger of Delta and Northwest. Randy says: "It's a marriage made in heaven. The merger cures a weakness for each of them, one in the Atlantic and one in the Pacific.''

The Oliver Wyman Communication, Media & Technology practice's Video-on-Demand Study (15 April 2008), which found that U.S. consumers will pay $7-9 for earlier-release, high-definition video-on-demand and Internet rental movies, was carried and commented on by multiple entertainment industry media outlets, including Video Business, www.engadgethd.com, www.I4U.com, www.newteevee.com, and www.tvpredictions.com.

Niko Herrmann

Air Cargo Week (14 April 2008) carries a bylined article by Niko Herrmann entitled "Finding Success as an All-Cargo Startup." Niko writes that despite record oil process, there will still be growth opportunities (but not necessarily profit growth) for freighter operators and for new entrants. He describes the five major business designs of all-cargo airlines, notes the key market and customer information required for starting an all-freighter airline, discusses aircraft choice as a critical success factor for start-ups, and touches on the role of product offering, value proposition, and operating philosophy.

Markus Franke

Horizont (10 April 2008) carried an interview with Markus Franke about several Middle East-based airlines entering the German market with a marketing focus based on sponsorship of soccer and Formula 1. Markus says: "Obviously a strong brand doesn't hurt, but without adequate capacity, even the most beautiful brand isn't interesting to the customer." Commenting on the potential effect of this competition, he adds: "It is not clear if this will have an effect on the German aviation market and large carriers like Lufthansa. A lot depends on the passenger traffic these carriers can attract and on the connection quality of their hubs."

Romed Kelp

VerkehrsRundschau (10 April 2008) carried a bylined article by Romed Kelp about a new Oliver Wyman study about cooperation in commercial vehicle service and sales. Large commercial fleets demand increasing service requirements, usually offered by OEMs, and the study measures how manufacturers can cooperate and where advantages for customers can be found. Romed says: "We discovered that specific customer needs have not completely been covered by manufacturers yet. For OEMs, service cooperation will become attractive, especially far from their home markets, when two manufacturers cooperate in markets where no one OEM has a clear lead. In mid-size European markets, both partners could save a substantial amount."

Olivier Fainsilber

Le Monde (14 April 2008) quoted Olivier Fainsilber in a front-page story about the proposed merger of Delta and Northwest. Olivier says that consolidation of U.S. airlines is inevitable, and that the Delta-Northwest merger will quickly spur other merger agreements among U.S. carriers because each subsequent merger will have a decreased change of being approved by regulators; it's also necessary to move quickly because leaders chosen in the upcoming U.S. election may be less receptive to airline mergers and the job losses that industry consolidation may bring.

Christian Kleinhaus

BR television (8 April 2008) interviewed Christian Kleinhans in a story about increasing customer demands adding to the challenge of choosing a new car in the middle segment. The interview notes that the question of which car technologies are sustainable is becoming more and more important. Christian refers to the Oliver Wyman "Car Innovation 2015" study, which analyzes more than 300 automotive concepts. Commenting on alternative fuel options, he says: "The combustion engine fueled by natural gas should be considered, but only by those drivers who don’t use their car very often. Even if natural gas is 50 percent cheaper than gasoline, a single fill-up would only last 300 kilometers."

Adrian Slywotzky

Business Week (7 April 2008) quotes Adrian Slywotzky and cites "The Upside" in its Business Week 50 Best Performers of 2008 cover story. Commenting on firms in the BW 50 that are positioned to profit in both good times and bad, Adrian says: "Warren Buffett himself said that it's harder for companies to sustain their growth, but managing risk well is one way to do it."

Bill Rennicke

Logistics Management (7 April 2008) quoted Bill Rennicke in an article about proposed changes to U.S. freight railroad antitrust laws. Bill says: "The bottom line is this goes back to the amount of private sector capital that is going to be required in the industry. The DOT is predicting an 88 percent increase in railroad freight tonnage by 2035. So if you are going to have private capital come into an industry, investors want to invest in something where they are not going to be blindsided by changes in regulatory structure." He adds that those shippers that are paying higher rates due to differential pricing are taking “artificial” action through antitrust to draw a line that cuts off the high end of the differential pricing curve, which will in turn drive funds out of a system, which is entirely dependent on private sector capital for future infrastructure and expansion. Bill concludes: "If shippers are not willing to accept the higher cost of capital and government does not step in, the railroads are going to start pricing to cut off certain types of traffic, because if they cannot get the money to grow the system shippers will be affected because the capacity won’t be there."

August Joas

Wirtschaftswoche (7 April 2008) quoted August Joas in an article about the post-Chrysler-affiliation Mercedes-Benz brand. The article notes that Mercedes-Benz is the only German brand within the top ten global brand names; in fact, according to industry experts the company's economic turnaround is strongly supported by the durability of the star symbol as an image. August says: "On average Daimler’s customers are a bit older, but in general these customers are willing to spend a lot of money. They also have a strong loyalty to the brand."

Remi Cornubert

Le Figaro Economie (5 April 2008) quoted Remi Cornubert in an article about a recent jump in the sales of Smart cars. Remi says: "People want smaller vehicles to use in the city, and small cars are also now more acceptable from an ecological point of view as well. It is important to note, however, that these cars, because they consume less, also make it possible for drivers to reduce their overall automotive budget."

Manny Hontoria

Emirates Business 24/7 (3 April 2008) quoted Manny Hontoria in an article about Middle East postal companies. Manny says that regional postal firms have great potential to generate significant value but have limited time before regulatory liberalization and e-commerce erode their competitive edge. He notes: "There is a growing demand for quality services and postal companies should capture this opportunity. We may be looking at approximately two years from now before the sector becomes liberalized, allowing new players into the market." Manny adds that postal firms need to address both governance and recruitment-related issues. He concludes: "Another challenge is attracting the right kind of people to do the job. Shortage of talent is a critical concern for the industry."

Niko Herrmann

touristik aktuell and Travel One (1 April 2008) quoted Niko Herrmann in articles about an Oliver Wyman study of airline global distributions systems (GDS) costs. The study evaluates the existing models for tackling high GDS costs. Niko says: "The GDS are based upon an oligopoly that makes it difficult for the airlines to negotiate market-driven costs. Lufthansa has developed a very flexible model to achieve cost reduction. This model is already well-prepared for the expected deregulation of the European Code of Conduct for CRS." Lastly, Niko notes that in the Lufthansa model the airline itself controls the GDS cost offset and can adjust the fees accordingly any time.

Christian Heiss

Handelsblatt (1 April 2008) quoted Christian Heiss in an article about the weak dollar making the U.S. a more attractive sourcing site. Christian says: "If large manufacturers want to change their suppliers, it will take up to 24 months." He adds that the U.S. infrastructure/logistics and the English language are strong advantages compared with low-cost countries in Eastern Europe and Far East. Christian concludes: "This is a clear advantage especially for German premium manufacturers in the automotive industry."

Alan Feibelman

SNL Energy's M&A Review (April 2008) quoted Alan Feibelman and carried an abstract of the Utilities practice's perspective on "Making Utility M&A Succeed in 2008." Alan notes that despite many hurdles, mergers and acquisition deals are getting done. However, obtaining the necessary regulatory approvals requires persistence and resilience, and creating lasting value from a merger or acquisition remains a tough proposition.

Bernard Demeure

L'Expansion (1 April 2008) quoted Bernard Demeure about the attempts of perfume and cosmetics retailer Marionnaud to reinvent itself to compete with stores like Sephora and Nocibe. Bernard says: "Their first challenge is to reduce a very large set of product offerings to concentrate on the most relevant ranges."

Manny Hontoria

International Freighting Weekly (31 March 2008) quoted Manny Hontoria in a story about the Middle East logistics market. Manny says: "The market is evolving and generalist players will not be able to survive. Logistics providers need to have a deep understanding of their customers' needs and should add value in their niche areas, be it auto parts, pharmaceuticals, or retail. Or else they should be able to find commonality with their customers' problems and provide solutions for issues such as time-definite transportation." He adds "Making good choices in terms of who you want to work with, and how you want to work, is important. A focused approach is necessary as a number of companies are coming in to capitalize on the boom in logistics without any significant plan."

Greg Gardner

The Detroit News (28 March 2008) quoted Greg Gardner in an article about the effects on U.S. automakers of a strike at American Axel. Commenting on the ability of the company's factories in Mexico and overseas to absorb work from the striking Michigan and New York plants, Greg says: "It's not something that can be done overnight. It depends on how much excess capacity they have in Mexico - and they've already taken on additional work there (because of the strike)." He adds that labor costs account for 12-14 percent of a part's price, so American Axle will have to determine if lower labor costs offset increased transportation costs, including fuel, and logistical problems. Greg also says: "It's harder to deliver just in time when you're going from Mexico to Oshawa, Ontario, or Fort Wayne, Indiana."

Thomas Kutzsch

Produktion (27 March 2008) carried a bylined commentary by Thomas Kautzsch about the state of the German mechanical engineering sector. Thomas notes that the sector is growing, profitable, employing more people, and is an export champion. He adds, however, that the industry's success is not shared equally, and notes that in the current boom many companies postponed essential structural cost-cutting efforts. Lastly, Thomas says that many market leaders do not know where their future revenue and profit growth will come from. He writes: "At the moment, the market is about 15 percent above the long-term trend line, and unless some of these critical issues are addressed the end of the investing boom will come."