Car parts

Also in the Journal is a story about the “outsider” running Fiat and apparently doing well so far. Part of his cost-cutting approach has been to lay off managers rather than close factories. The story says this guy maintains that: “Labor is only 6% to 7% of the cost of making a car.”

Is that right? It surprised me. Certainly the impression I’ve gotten from the restructuring tactics of the big U.S. automakers has been that labor-related costs are a huge problem. It’d be interesting to see a breakdown of those costs. How much is materials? How much is R&D? How much is marketing? How much is executive/management-related?

Shipping Views

Flickr photo by FREITAG ®.

Too bad it isn’t available online for free, but the August 10 New York Review of Books has a good writeup by Witold Rybcznski on three recent books about shipping and transportation; two are specifically about shipping containers, how they came to be standardized with specific dimensions and so on. Here’s the part I agree with most heartily:

Globalization is often described as involving the movement of information, people, and employment, but it is largely about the movement of goods, and the cheapest way to move products around the globe is in containers … It is likely that without container shipping, the economic upsurge of China would not have occurred as quickly as it did … Likewise, third-world countries would be unable to sell many of their products to European and American markets without extremely cheap shipping. Modern manufacturing, in which components are made on one continent and assembled in another, would also be impractical without rapid, predictable, and cheap shipping. In a world of high technology, the story of the container is a useful reminder of the continued importance of old-fashioned mechanics.

Given my interest in shipping containers, I was fascinated to learn, through this post on We Make Money Not Art, about a store in Zurich made from “17 rusty, recycled freight containers.” The store belongs to a company called Freitag, whose founder said in a mini-interview on the site: “Freitag bags are made of used truck tarps, bicycle innertubes and car seatbelts. Hamburg is one of the biggest logistic Mecca of Europe – the perfect location for a FREITAG flagship shop. Inspired by the trucks and the harbour, we placed a 40″ Container (artificial) into our shop-location. For the shop concept in Zurich we took it one (or even two) steps further: an entire building assembled from 17 used freight containers.”

Freitag’s Flickr stream includes several sets of photos of the shop’s construction, and its final state (see above). Pretty cool.