National News

Ford's China conundrum: Big profits, bribery allegations

Marketplace - American Public Media - Fri, 2014-04-04 09:04

At the end of Ford’s assembly line in Chongqing, Plant Manager Greg Brown is counting cars. “If we stand here an hour, we should count 63 cars going by here,” Brown says, peering at a digital sign above us displaying the number of cars that have come off the line already today. “We’re scheduled to build 1,281 vehicles today.”

Ford sold its first passenger car in China in 2003. Last year, it sold close to a million.

Most of them are assembled here in the Southwestern Chinese metropolis of Chongqing, Ford’s largest manufacturing hub outside Michigan. It’s a joint venture with Chinese automaker Chang’an. “In Chongqing, we’re in a fantastic spot, because the growing auto market is out here in the middle and in the West,” says Scott Chang, spokesman for Ford. “So being in Chongqing gives us a great advantage.”

Another advantage is a near endless supply of cheap labor. The Chongqing region is home to low wages, and tens of millions of farmers eager to make more money at a factory close to home. The twenty-first century autoworker is someone like Liu Chan. He's a short, thin assembly line manager wearing a navy blue work suit emblazoned with the joint venture’s official name Chang’an Ford. “I work at the final stage of the assembly line, making adjustments to vehicles coming off the line,” says Liu inside the plant’s break room.

Liu says he works eight hours a day, with few chances for overtime. He has two kids, he owns a Ford Focus, and his wife works here, too. Ford has handpicked Liu to speak with me, and managers won’t let him discuss salary, overtime rates, no numbers.

“But this is Marketplace,” I say to his managers, “we do the numbers.”

Nope, says Ford – those numbers are secret.

So after my day at Ford is through, I return to the factory gates without the looming presence of Ford management, where other workers help me do the numbers.

“My base salary is higher than average - a little over 1,800 yuan a month,” says a worker named Xu.

His salary is equal to $1.80 an hour. Xu works on the assembly line at the plant. He shows me his Ford ID badge, but he asks that his full name not be used. Xu says with overtime and bonuses, he makes around $10,000 (U.S.) a year – enough to buy a modest apartment nearby for his wife, child and his wife’s parents.

He says he feels lucky to have this job. “The workload is very demanding, hours are long, and it’s very tiring,” says Xu, “But my salary is very high compared to work at any other factory around here.”

Xu says getting a job at Ford is so competitive that some people resort to bribing employees in Ford’s HR department just to secure a position at the plant. “It’s pretty common for the most coveted jobs at the company like the quality control department,” says Xu. “They usually have to pay between 3,000 to 5,000 yuan," which works out to be $500-900. “If you’re a woman, it’ll cost you more than double that.”

Xu says that’s because women are generally looking for less labor-intensive but highly coveted administrative roles. Xu says paying for positions at Ford was common a few years ago, but lately it’s less so because of the increasing amount of overtime required to keep up with demand. “I know one person who paid 5,000 yuan to get a job here,” says Xu, “But then he was assigned to work in the welding workshop – a really tough job. He wanted to quit, but he had to stick around to earn back the bribe he had paid.”

Xu says Ford management has made it clear to employees that bribery is illegal and if they knew about this, they’d put a stop to it. But Xu says this would be challenging for the foreign automaker. “There’s a Chinese saying: There are rules that come from above and there are solutions down here on the ground,” Xu says with a laugh.

Ford may not be alone: Marketplace discovered online posts in China by middlemen and job seekers indicating coveted jobs were for sale inside other foreign automakers like Volkswagen and General Motors. Another Ford worker, named Wang – who also didn’t want to give his full name – says he too knows people at Ford who paid bribes for their jobs. He says the problem doesn’t emanate from Ford, but from China. “You might not do this sort of thing in the US, but here in China, bribing someone to get something you want is completely normal and inevitable,” says Wang with a shrug.

Not all the Ford workers Marketplace spoke to in Chongqing talked about others who had paid for positions at the plant. Several assembly line workers said they had never heard of such a thing.

In a written statement to Marketplace, Ford said: “We take these allegations very seriously and have initiated an investigation. Any behavior that violates our policies, such as the alleged behavior, would result in immediate dismissal.”

James McGregor, head of the China region for APCO Worldwide and author of “One Billion Customers: Lessons from the front lines of doing business in China,” says it usually takes foreign companies years to get used to the scale of corruption in China. “Everything you do, every transaction, every deal, every move, every permit, there’s just so many interfaces with the government,” says McGregor.

And at every step, he says, somebody’s taking money. “So when you get into the private companies, that culture that will infect it.”

McGregor’s advice for foreign companies who find this sort of corruption inside their China operation? Don’t be soft.

“You should fire people and you should do it very publicly, and you should turn them over to police authorities,” says McGregor. “Unfortunately what happens in foreign companies a lot is they’ll investigate corruption, and then they’ll quietly pay the people off to go away and inflict some other company because they don’t want the embarrassment.”

Another challenge for companies like Ford is they’re required by Chinese law to partner with a Chinese company. Ford’s Chongqing plant is a 50/50 joint venture with Chang’an, one of China’s big four automakers. Often, Chinese partners bring their own corporate culture to the mix – which can include practices like taking bribes.

Ford employee Xu says many of his colleagues at Chongqing’s Ford plant came from one of the plants owned by the Chinese partner – he says the benefits and pay at Ford are much better. And Xu says lucky for him, he didn’t have to pay to get a job he liked.

Data compiled by Stella Xie.

Why the 'Internet of Things' is still fragile

Marketplace - American Public Media - Fri, 2014-04-04 09:01
Friday, April 4, 2014 - 16:56 George Frey/Getty Images News

A Nest thermostat being adjusted.

In the world of the Internet of Things, every device from your refrigerator to your thermostat seems smart. The idea is, we humans don’t have to set temperatures or see if we’ve run out of milk because the devices will do it for us.

It’s all supposed to be seamless. Until it’s not.

And that brings us to Nest, which is halting sales of its Nest Protect fire alarm and smoke detector. The company said the fire alarm's “wave function,” which allows you to turn off false alarms, can, under certain circumstances, delay an alarm going off in a real fire. 

It appears that the "Internet of Things" isn’t making devices as smart or as seamless as promised. The reason is simple: It's still the early days for the Internet of Things, said Jeremey Jaech, the CEO of SNUPI technologies. He said right now, the business landscape is like the wild west.

"And it’s not at all clear who’s going to win," Jaech said. 

Jaech said there are lots of different start-ups producing almost as many varieties of software and hardware to power the Internet of Things. But these products don’t always speak the same language. And that often means you have to start dealing with a human being in customer support.

"What I would expect to happen, because it’s happened in virtually every other industry, is that you start to see consolidation occur, and standardization will come," Jaech said. 

When winners emerge, everyone in the industry starts speaking the same languages. The technology becomes more seamless, and so the help line becomes less necessary -- maybe.

"There’s a gap between the promise of the technology and the reality of the messiness of our lives," said Jonathan Gaw, an an analyst at IDC. He points to the Nest thermometer, which he owns.

"The promise of the Nest is that it recognizes movements in the household so it can adjust the temperature accordingly," Gaw said. 

But Gaw’s thermostat is hidden behind his big screen TV and so it can't monitor movements. Tony Costa is an analyst at Forrester and he said companies need to start adjusting expectations.

"Consumer electronic companies are used developing devices if something goes wrong with them, it’ll ruin your day," Costa said. "You know if your iphone crashes, it’s kind of a bummer."

But if your fire alarm crashes, that could be fatal. Costa said, these companies are known for pushing the envelope. But when it comes to wiring our lives, they might want something less glitzy but more dependable ... or maybe just a human who can help them out.

Marketplace for Friday April 4, 2014by Queena KimPodcast Title: Why the 'Internet of Things' is still fragileStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

What would full employment feel like?

Marketplace - American Public Media - Fri, 2014-04-04 08:53
Friday, April 4, 2014 - 16:51 John Moore/Getty Images

Applicants line up to speak to prospective employers at a job fair on June 11, 2012 in New York City. 

New jobs numbers show the national unemployment rate is holding steady at 6.7 percent.

The hope is that the number will continue to fall. Borrowing a line from Ludacris, the question for the unemployment rate is: “How low can you go?”

The unemployment rate can’t get to zero. It’s impossible. There will always be people entering the workforce, or between jobs. But just how low the unemployment rate can go is really tough to answer.

“To me, a fair definition of full employment in the United States today would be unemployment under 4 percent,” said Robert Pollin, an economics professor at the University of Massachusetts-Amherst.

Economists disagree about the unemployment rate that will signal the U.S. has achieved to full employment. Some say it’s 5.5 percent, others say it could get down to 2 percent.

There’s more agreement on what a world of full employment feels like. “People who want a job are ready and willing to work. They will find a job,” said L. Randall Wray, an economics professor at the University of Missouri-Kansas City.

It would be an economy where you can feel good about the chances of getting that next job. Your children will be able to get work when they leave school. You’ll be able to plan for the future a little better—maybe buy a house.

“You don’t have to take the worst jobs that come along, just out of fear that you can’t find something better,” Wray said.

In an economy of full-employment, you, the worker, have more control. There are fewer people out there looking to replace you. “When you are at full employment,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, “you are in a situation where employers actually need to bid wages up to get and to keep the workers they need, even for low wage workers.”

At full employment, Bernstein said, we’d likely all get paid more. At the bottom, the middle, and the top of the pay scale.

Marketplace for Friday April 4, 2014 Raghu Manavalan/Marketplace The unemployment rate, from 2008 to March 2014by Adriene HillPodcast Title: What would full employment feel like?Story Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Bush's 'Art Of Leadership' Puts Putin And Others On Display

NPR News - Fri, 2014-04-04 08:21

The 43rd president has taken up art since leaving the White House. The Bush center in Dallas is showing some of his portraits of world leaders. His favorite: that of his father, the 41st president.

» E-Mail This

Mama may have, Papa may have...

Marketplace - American Public Media - Fri, 2014-04-04 08:13
Friday, April 4, 2014 - 08:57 Hulton Archive/Getty Images

Billie Holiday

 From the Marketplace datebook, here's a look at what's coming up April 7:

Marketplace for Thursday April 3, 2014by Millie JeffersonPodcast Title: Mama may have, Papa may have...Story Type: BlogSyndication: PMPApp Respond: No

Tasting French Fries For A Living Can Be A Pain In The Mouth

NPR News - Fri, 2014-04-04 08:04

Food industry "sensory panelists" spend hours chewing, swishing and analyzing food, sometimes to the point of pain. These tests ensure mass-produced products like frozen french fries hit the spot.

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Two Brave Journalists In Afghanistan

NPR News - Fri, 2014-04-04 06:58

The two Associated Press journalists shot in Afghanistan shared a gift for finding the humanity in war zones. Photographer Anja Niedringhaus was killed, and reporter Kathy Gannon was wounded.

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PODCAST: March jobs report

Marketplace - American Public Media - Fri, 2014-04-04 06:56

Employers hired 192,000 people in March. That's a strong showing, but not quite as high as economists had expected. The unemployment rate remained unchanged at 6.7 percent. 
Christopher Low, chief economist at FTN Financial, joined us to discuss.

Also, it appears the jobs market is improving, slowly but surely. But are things really getting better on the ground? We put that question to Ron Martinez, who owns a sports bar in Los Angeles and says he's been hiring.

Meanwhile, take-out is the theme of the day on Wall Street. GrubHub starts trading on the New York Stock Exchange today. In addition to operating its own food delivery app, GrubHub owns online food delivery site, Seamless. Grubhub shares are priced at $26 a piece -- valuing the company at about $2 billion. Why is Grubhub such an attractive investment? Marketplace's Jeff Tyler takes a look.

PODCAST: March jobs report

Marketplace - American Public Media - Fri, 2014-04-04 06:56

Employers hired 192,000 people in March. That's a strong showing, but not quite as high as economists had expected. The unemployment rate remained unchanged at 6.7 percent. 
Christopher Low, chief economist at FTN Financial, joined us to discuss.

Also, it appears the jobs market is improving, slowly but surely. But are things really getting better on the ground? We put that question to Ron Martinez, who owns a sports bar in Los Angeles and says he's been hiring.

Meanwhile, take-out is the theme of the day on Wall Street. GrubHub starts trading on the New York Stock Exchange today. In addition to operating its own food delivery app, GrubHub owns online food delivery site, Seamless. Grubhub shares are priced at $26 a piece -- valuing the company at about $2 billion. Why is Grubhub such an attractive investment? Marketplace's Jeff Tyler takes a look.

Walking through the latest jobs numbers

Marketplace - American Public Media - Fri, 2014-04-04 06:39

The good news:  The U.S. added 192K jobs in March and the unemployment rate is 6.7%!

The bad news:  The U.S. added only 192K jobs in March and the unemployment rate is still 6.7%. 

More jobs, but fewer than expected

“We were looking for a higher number, maybe 230k,” says ITG chief economist Steve Blitz.  “It’s a spin your wheels economy; it is expanding and that’s better than contracting, but we’re not seeing anything to suggest the economy is going to accelerate to a faster pace of growth beyond 2, 2.5%.”

The new jobs don’t pay a lot

The new jobs include a lot of temp positions (29,000),  in sectors that don’t necessarily pay super well:  Restaurants (30,000), ambulatory health care (20,000) including home nursing, Construction (19,000). 

“It’s a great thing that people are finding employment,” says Blitz, “but they’re not the kind of high wage jobs that are going to generate the kind of spending that many are anticipating.”  Including, he says, people at the Federal Reserve.  

Some nice things

The number of long term unemployed (people out of work for 27 weeks and over) is down over the month, and the year. In March of 2013 there were 4.576 million long term unemployed people, in March of 2014 there were 3.739 million.  In February of 2014 we were at 3.849 million.

The long term unemployed are also making up a smaller percentage of all unemployed people.  (35.8% this March compared with 39.1% last March, and 37% in February)

Some major revisions

The Bureau of Labor Statistics adjusted some of its previous estimates.  In January the economy added 144,000 jobs (not 113,000 as originally estimated), and in February the economy added 197,000 jobs (not the 129,000 the BLS originally reported).

A milestone and a mile off

By one measure, we have now surpassed the number of private sector jobs we had at the pre-recession peak in January 2008.  Back then, the private sector was employing 115.977 million people.  In March the private sector employed 116.087 million people. 

But that misses some major points. 

If you look at ALL employment throughout the entire economy - including the public sector - there’s not nearly as much to celebrate.  The pre-recession peak for TOTAL non-farm payroll employment was 138.365 million people back in January of 2008.  In March of 2014, we were tentatively at 137.928 million people with fulltime jobs. So we have 437,000 more to go.

Slow to catch up.  

Nor should we be happy with reaching the number of jobs we had in 2008.  We’ve had lots of new people join the workforce since then. The Hamilton Project (affiliated with the Brookings Institution) keeps track of the “jobs gap,” which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.  Their estimate for when we'll truly catch up to where we would've been? 2020.

Was it the weather after all?

Remember December and January weren’t so hot... neither in temperature nor in jobs.  Whereas in November we added 274,000 jobs,  in December we added 84,000 and in January we added 113,000 144,000.  February wasn’t great either at 129,000 197,000 jobs created.   (Strikethroughs represent the original BLS estimates, they revised their numbers in the March jobs report).   When those initial numbers came out, a lot of people suspected/hoped the weather was behind the drop in new hires. 

Well, after the revisions, it looks like Old Man Winter didn’t slam job growth as much as it looked like at the time.  Weather was certainly a part of the dip, but looking at the overall trend it would appear that the economy was growing at a very lukewarm pace to begin with.   For the foreseeable future, that's what we're going to be stuck with: 2-2.5% growth, estimates Blitz.

Mama may have, Papa may have...

Marketplace - American Public Media - Fri, 2014-04-04 05:57

 From the Marketplace datebook, here's a look at what's coming up April 7:

Racing's Michael Schumacher Has 'Moments Of Consciousness'

NPR News - Fri, 2014-04-04 05:56

The Formula One driving legend suffered a severe head injury while skiing in December. Doctors started to bring him out of a medically induced coma in late January. He is hospitalized in France.

» E-Mail This

Walking through the latest jobs numbers

Marketplace - American Public Media - Fri, 2014-04-04 05:40
Friday, April 4, 2014 - 09:39 MANDEL NGAN/AFP/Getty Images

U.S. President Barack Obama walks with an employee in Fred's Pro Hardware, June 3, 2011 in Toledo, Ohio.

The good news:  The U.S. added 192K jobs in March and the unemployment rate is 6.7%!

The bad news:  The U.S. added only 192K jobs in March and the unemployment rate is still 6.7%. 

More jobs, but fewer than expected

“We were looking for a higher number, maybe 230k,” says ITG chief economist Steve Blitz.  “It’s a spin your wheels economy; it is expanding and that’s better than contracting, but we’re not seeing anything to suggest the economy is going to accelerate to a faster pace of growth beyond 2, 2.5%.”

The new jobs don’t pay a lot

The new jobs include a lot of temp positions (29,000),  in sectors that don’t necessarily pay super well:  Restaurants (30,000), ambulatory health care (20,000) including home nursing, Construction (19,000). 

“It’s a great thing that people are finding employment,” says Blitz, “but they’re not the kind of high wage jobs that are going to generate the kind of spending that many are anticipating.”  Including, he says, people at the Federal Reserve.  

Some nice things

The number of long term unemployed (people out of work for 27 weeks and over) is down over the month, and the year. In March of 2013 there were 4.576 million long term unemployed people, in March of 2014 there were 3.739 million.  In February of 2014 we were at 3.849 million.

The long term unemployed are also making up a smaller percentage of all unemployed people.  (35.8% this March compared with 39.1% last March, and 37% in February)

Some major revisions

The Bureau of Labor Statistics adjusted some of its previous estimates.  In January the economy added 144,000 jobs (not 113,000 as originally estimated), and in February the economy added 197,000 jobs (not the 129,000 the BLS originally reported).

A milestone and a mile off

By one measure, we have now surpassed the number of private sector jobs we had at the pre-recession peak in January 2008.  Back then, the private sector was employing 115.977 million people.  In March the private sector employed 116.087 million people. 

But that misses some major points. 

If you look at ALL employment throughout the entire economy - including the public sector - there’s not nearly as much to celebrate.  The pre-recession peak for TOTAL non-farm payroll employment was 138.365 million people back in January of 2008.  In March of 2014, we were tentatively at 137.928 million people with fulltime jobs. So we have 437,000 more to go.

Slow to catch up.  

Nor should we be happy with reaching the number of jobs we had in 2008.  We’ve had lots of new people join the workforce since then. The Hamilton Project (affiliated with the Brookings Institution) keeps track of the “jobs gap,” which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.  Their estimate for when we'll truly catch up to where we would've been? 2020.

Was it the weather after all?

Remember December and January weren’t so hot... neither in temperature nor in jobs.  Whereas in November we added 274,000 jobs,  in December we added 84,000 and in January we added 113,000 144,000.  February wasn’t great either at 129,000 197,000 jobs created.   (Strikethroughs represent the original BLS estimates, they revised their numbers in the March jobs report).   When those initial numbers came out, a lot of people suspected/hoped the weather was behind the drop in new hires. 

Well, after the revisions, it looks like Old Man Winter didn’t slam job growth as much as it looked like at the time.  Weather was certainly a part of the dip, but looking at the overall trend it would appear that the economy was growing at a very lukewarm pace to begin with.   For the foreseeable future, that's what we're going to be stuck with: 2-2.5% growth, estimates Blitz.

What we look for in a monthly jobs reportby Sabri Ben-AchourStory Type: BlogSyndication: PMPApp Respond: No

Jobless Rate Holds Steady As Employers Add 192,000 Jobs

NPR News - Fri, 2014-04-04 04:05

While job growth appears to have been slightly less than expected in March, the growth in February was revised upward. Meanwhile, the unemployment rate is unchanged at 6.7 percent.

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Fort Hood MP Hailed As Hero For Confronting Shooter

NPR News - Fri, 2014-04-04 03:45

Wednesday's shooting rampage, which left three victims dead and another 16 wounded, ended when Spc. Ivan Lopez reportedly killed himself. The officer had drawn her weapon and engaged the gunman.

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Who's Boosting Box Office Numbers? Report Says Latinos

NPR News - Fri, 2014-04-04 03:03

Although Latinos are 17 percent of the population, they represent almost a third of frequent moviegoers. People of color overall attend movies at rates higher than their percentage of the population.

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Investors hunger for GrubHub

Marketplace - American Public Media - Fri, 2014-04-04 02:56

Momentum is building ahead of the initial public offering for GrubHub.

"So far this year, there have been 65 IPOs, raising $10.7 billion, a level of activity we have not seen since 2000," says Kathy Smith, a principal with Renaissance Capital, which specializes in researching and investing in IPOs.

In the case of GrubHub, Smith says sales are growing by more than 40 percent. 

And with more people using smartphones, the number of consumers using GrubHub could keep growing.

But GrubHub also faces potential challenges from other Internet companies like Yelp and Google.

“All these companies could theoretically can come in and say, ‘Hey, we’re going to be competing against you. Watch out.’ That’s their biggest worry,” says Peter Krasilovsky, a senior analyst with the media-research firm BIA/Kelsey.

AP Photographer Killed, Reporter Wounded By Gunman In Afghanistan

NPR News - Fri, 2014-04-04 02:45

Anja Niedringhaus died and Kathy Gannon was seriously injured when a man opened fire. They were in a car in eastern Afghanistan. The gunman is reported to have been a police officer.

» E-Mail This

Chicago Celebrates A Century Of Baseball At Wrigley Field

NPR News - Fri, 2014-04-04 01:34

It's been the home of the Cubs since 1916, and in all that time, the team has never won a World Series. So why do fans keep showing up? Locals say Wrigley's hallowed status isn't just about baseball.

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Mozilla CEO resigns amid controversy

Marketplace - American Public Media - Fri, 2014-04-04 00:11

After only 11 days on the job, Mozilla CEO Brendan Eich resigned on Thursday. Controversy arose earlier this week when it was discovered that Eich had contributed to the 2008 campaign to ban same-sex marriage in California. Eich initially defended his position on same-sex marriage, arguing it would not affect his leadership role at the company. 

Many Mozilla employees began to voice concerns their new CEO was not fit to head what is seen as a progressive company. And dating website OKcupid earlier this week asked Firefox users to stop supporting Mozilla because of its CEO's politics. 

"In the past couple of days, there's been mounting pressure from people all over the Mozilla community urging him to resign," said Casey Newton, who has been reporting on this for The Verge. "The argument they're making is that he can't be an effective leader when his values opposing same sex marriage oppose those of Mozilla as an organization."

Eich does stand out from a tech community that largely supports gay rights. Jeff Bezos donated heavily to a 2012 campaign in Washington to approve same-sex marriage. However, Newton added that Mozilla as a company stands out from the tech company for another reason as well.

"Mozilla is a really unusual case because it has this policy of openness. And it actually encouraged its employees to get on the Internet, to write blog posts, to tweet about how they felt. So you had this extraordinarily public discussion that would be unimaginable in almost any other company," said Newton.

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