Amazon's War On The House Of Otto, Germany's $18 Billion Family
forbes.com
forbes.com
DHL is not golden either but Hermes is just bad in every aspect. As a private customer in Germany I would try to avoid getting stuff shipped to me through Hermes by all means possible, since you never know who delivers your stuff (high fluctuation of sub-sub contractors) the delivery experience ranges from unacceptable to slightly above sub-par.
http://www.spiegel.de/kultur/tv/ard-film-ueber-lohndumping-d... [German]
http://translate.google.com/translate?hl=en&sl=de&tl=en&u=ht... [Google translate]
What totally pisses me off is, the aura of "charity" that Otto is surrounding around himself. He also got a high German medal (the so called "Große Verdienstkreuz mit Stern") for his charities. With examples like these, German high medals become the same value as the "Nobel Peace Prize" that is given to some of the worst persons that have lived.
I now understand, why some people strictly refuse to be dishonored by such prizes.
Agreed; we need an equivalent to "greenwashing" to describe this behaviour...
If a company want's to do something good they should show it first through their products, trough the resources they are made with and how well they treat their employees.[3]
[1] http://en.wikipedia.org/wiki/Corporate_social_responsibility...
[2] http://www.nytimes.com/2014/02/21/business/media/comcasts-we...
Those that believe in it should go to the worst areas of England and into the slums of the US and see what the results are. England once was one of the wealthiest and best to live in countries of the world. Now, after Thatcher, it is just a hollow carcass, cankered by neo-capitalism. What is left is the reign of the bankers, leaving some tips on the desk for the underdogs.
The UK was in terrible economic shape before Thatcher.
It looks like under Thatcher got inflation under control, unemployment rose, then fell (similar to the US during the same time period) and the economy had a run of growth from '81 to '90 that peaked near 5%.
Not too shabby when you look at the 10 years prior when inflation was 25% and the economy shrank from '74-76.
Britain was regarded as a "sick man of Europe" before Thatcher took office.
What is the impact on the people and the state in general? Which factors are also important in this time.
The thing is, that economic bad times change with better times -- even with no change at all in politics. To consider every time a success of the leading party is often times just statistical brainwashing.
The Germans also had a bigger raise in economy with the opposite politics.
Also look how the long term results are, since the Thatcherian politics are still followed by the successors. The privatization of many areas like railway and water services resulted in worse quality of service. Also the UK today has nearly killed of all its industry base. Instead they have only left their banks, so they are largely susceptible now to blackmail of this sector, that is the reason why the banking sector can not be reorganized in Europe, since it is blocked by the veto of the British.
What is left is a poor leftover of capitalism.
Of course it is white-washed by statistical figures that always skip the negatives, since the advocates of unregulated capitalism want to prove their point.
"unemployment rose, then fell"
http://www.wolframalpha.com/input/?i=uk+unemployment+1984+to...
1970-1979, unemployment was mostly below 5%. It was about 7% after it "fell" post-Thatcher, when it started rising again in 1991. It then fell again, finally getting back to pre-Thatcher levels only sometime post 2000 - where it stayed until the 2009 crash.
"[T]he economy had a run of growth from '81 to '90 that peaked near 5%.
"Not too shabby when you look at the 10 years prior when inflation was 25% and the economy shrank from '74-76."
That's pretty cherrypicky. Let's get a slightly broader view:
http://www.wolframalpha.com/input/?i=uk+real+gdp+per+capita+...
The economy shrank from '74-'76; it also shrank '79-'81 and '90-'91. The years '71-'80 peaked in '73 at over 7% growth (for which the '74-'76 slump may well have been a correction). I'm not sure I'd call it shabby, but I'm not sure it's great, especially with the high unemployment rate.
'Britain was regarded as a "sick man of Europe" before Thatcher took office.'
I'm aware of the perception, and the shifts therein. I was curious as to the accuracy of it.
It was profitable of course! But not for the 99% of the people.
For example a combination of very high inflation (above 15% pa for the 4 years between 1974 and 1977[1]) combined with huge strikes by unions led to incidents like the "three day week"[2] (where the conservative UK government rationed electricity to businesses: they could only use it 3 days per week) and the "Winter of Discontent"[3] (where the Labour government failed to reach a wage control agreement with unions, leading to more strikes and the Thatcher government).
Official unemployment figures throughout the 1970's look much better than today (eg, 5-6% unemployment rather than ~7.5% now), but that doesn't take into account the fact that many were not being paid because of strike action, and also that the high inflation meant people were chronically underpaid (hence the strikes).
http://news.bbc.co.uk/2/hi/uk_news/magazine/6729683.stm is worth reading to get some idea of just how bad it was.
[1] http://safalra.com/other/historical-uk-inflation-price-conve...
I also don't want to say that everything was good before Thatcher or that a socialistic approach is always better or even good. But what I wanted to say, that many of the long term results of Thatcherism are hurting the country till today, even when it was brought out of economic decline.
I think, that neither socialism nor pure thinking that capitalism and market will "just make it all right" work in the long run.
The results of "market makes it alright" are visible in the sweat shops of the 3rd world countries. In the western countries we have a long tradition of market regulation and that is our luck -- but it seems we are running out of luck.
It's not at all clear to me that it was Thatcher's amazing economic policies that turned the economy around rather than the boom years of North Sea oil.
Even if Thatcher's policies did stimulate the economy at the time, from where we're sitting now, what is clear is that that stimulus was not sustainable, and that all that privatisation and the Big Bang did was borrow from the future to splash the cash in the then-present.
Many things Thatcher did were terrible, but at the same time (for example) it's difficult to argue that a national government should be in the business of running road transport for the country[1]. There's a reasonable argument that some utilities work best in state ownership in some cases, but many of the other things that were run by the government prior to Thatcher were complete disasters.
[1] http://en.wikipedia.org/wiki/British_Transport_Commission
A few weeks ago, after asking Hermes to deliver the package to a local Hermes station, it took a lot of discussion with the guy there trying to convince him to go through the packages. With him stating it wasn't delivered, while Hermes confirmed me it was there.
To put it shortly, the package was there and this is a common occurrence with Hermes deliveries.
If you can control which company is handling your deliveries, never ever use Hermes besides sending stuff back to Amazon.
The other challenge is it's hard to change a paternalistic culture where "Dad" is looking out for everyone. It's hard to make change happen, and hard to get people to double down during a crisis. The lethargy at these cultures is palpable.
But since it seems to me, that Hermes was one of the first in the Germany based parcel delivery businesses to use this concept, they have no excuse. What kind of excuse is it anyway to say "the others are doing it too!". Tell that in a courtroom after a murder!
It is the same game, btw. that western companies play in 3rd world companies. They do not open the sweat shops themselves, but work with contractors or sub-contractors or even sub-sub-contractors. And when a sweat shop burns down, to many workers kill themselves (all things that already happen(ed)) or something else happens -- they know about nothing and are horrified by the "bad behavior" of their contractor that they would "never imagine"!
Logistics companies are currently in a hard and cut throat market, and the only place where you can order and be kinda assured that the workers working conditions are o.k. is, I think, Deutsche Post. Doesn't make it right, but as explained above, some of Otto's other endeavours do indeed excel with very good working conditions.
They deliver late or never and sometimes steal my stuff.
Hermes always delivers.
Hong Kong recently raised the minimum wage from 0 to a couple of dollars. (Ie introduced a new one.) Poor People didn't suddenly earn more money.
An acquaintance of mine actually works for Otto and he told me several things. First of all, in the heads of many people at that company the catalogue is still the main driver of revenue. Online is more or less an afterthought. This is also reflected in their average customer who is older and less educated than the average Amazon customer. Secondly, their IT is ancient by Silicon Valley standards. Orders, for instance, are allegedly only processed once at night by batch job, because their infrastructure doesn't support anything else.
All in all, my money is on Amazon and Zalando (basically an Amazon clone supported by the infamous Samwer brothers) who will soon run circles around Otto if they don't catch up fast which isn't an easy thing to do with a slow behemoth of a company like that.
Michael Otto’s family has been as omnipresent in German
postwar retail as Wal-Mart, Sears and Target have in the
U.S. So what does this 70-year-old patriarch of this $18
billion clan most want to talk about? A factory in
Bangladesh.
With gusto he describes how he and Nobel Peace Prize-
winner Muhammad Yunus hatched a plan to build a humane
clothing factory, where all profits would go back into the
community for schools and hospitals. At best, the Otto
Group would recoup its initial investment. Immediately
they faced red tape. Electricity would take five years.
Officials wanted bribes. Otto refused to base a social
business on a corrupt footing and walked away. “It’s
unbelievable,” says Otto, pounding on his wooden desk in
his corner office in Hamburg, Germany. “You would think
the government must be happy somebody is building such a
company and leaving the money in the country.”
...
Have a "recycling" company and need somebody to man one of the electronics burning pits? Get one of those poor guys in they alley to do it. What are his other options?
You may need to bribe others to get away with this, but if those people are also relatively poor, the bribes should be affordable.
If you can find poor people who are really smart and haven't been permanently damaged by their experience (i.e. internalized failure, still believe success is possible, etc.), you can find some really amazing employees, partners, etc. People for whom "find a place to stay in California for a few weeks while looking for a job" is basically impossible.
Although generally my preferred form of helping would involve the corrupt people and some rope; much more efficient.
* In general these businesses do not make their lives better; they're worse off than if they hadn't done business with them in the first place. In general ... ymmv
There was also a documentary about his life-ruining business but the big "benefactor" just found covering slogans to disguise what it is really about: To rip people off. When his other businesses work the same, than it is a big benevolence show. Of course the German government bought the show (why not, our politicians are of the same kind!).
There are other logistic companies that still have far better working conditions. So it is possible.
The whole construction of Hermes is made this way, that the conditions of the workers are bad and Hermes itself can wash their hands of it. Even the small companies in between this "chain of irresponsibility" are complaining of bad conditions and many go bankrupt for Otto's billions.
There are also contractors that admitted that they had to cheat the tax system to stay afloat. Many have gone bankrupt and the people involved are often left without social security. That's all inside the "System Hermes".
Governments exist to protect their citizens, not their businesses.
I totally agree. The problem is that many people defend businesses because, they say, those businesses provide people with jobs. Following this line of thinking, they are willing to completely ignore the shitty practices of said businesses, because in their eyes, jobs > *.
They already are...
http://www.bbc.co.uk/news/business-25034598
http://www.bbc.co.uk/iplayer/episode/b03k5kzp/Panorama_Amazo...
http://www.theguardian.com/technology/2013/dec/01/week-amazo...
Pitchforks or a Basic Income.
Eventually, all jobs will be replaced by software or robotic labor. What then?
EDIT:
"Your Job Taught to Machines Puts Half U.S. Work at Risk" http://www.bloomberg.com/news/2014-03-12/your-job-taught-to-...
I know Europe like to view US as a big monster to scare kids: you better behave or big mean US will eat you!
But is there anything objective that the German gov't is going to help anyone anymore than the US gov't? Maybe healhcare?
A substantial social safety net? Sane workplace hours and practices?
I don't think everyone should copy them. It's like telling Apple to copy Acer or Samsung.
Huh? This comparison confused me. I wonder why the author didn't use the same years? What was the baseline?
But it's fairly ambiguous. It could mean any number of things.
It could also be that the numbers for the Otto Group aren't public for whatever reason.
I see this same phenomenon in software/API documentation too, where you can't tell what is a necessary term to use, and what's an arbitrary label. Most recent case was a vim doc for how to record macros, and gave an example starting with "qq", which will store the macro into the letter q. But you always type q to start the macro, so using an example where the macro also is called 'q' just confuses things. They should have used an example like "qa", where it's clear that q is for all macros, and the second char is where it gets store. (Yes, you can un-ring that bell with further clarification, but it's still a bad example.)
I mean, there's nothing attractive to this story: Amazon is bad on workers and Otto is good, won't get you far. Especially in the Anglo-saxon world.
I can't help but hear a sentiment like "We deserve perpetual success, dammit!"
The company (in this case, Amazon) got great results from its employee, the employee had a good experience (and can leverage it to get a promotion, internally or externally).
I guess it depends on what employees are looking for in their career - to be the best they can be, or live a laid back lifestyle.
edit agree with the comments... this is a too simplified black/white comment. completely agree that finding the right balance between work/non-work on an individual basis is important.
I don't think it's unreasonable to put some grey space between being the best you can be and being laid back. Something like working reasonable hours, being thoroughly successful in your career, and still engaging in outside activities. I think that burning out=being the best you can be is pretty shortsighted.
You're not being the best when you burn out. You're killing yourself and your productivity with it. We have decades of research concluding that productivity falls when you're overworked.
"The company (in this case, Amazon) got great results from its employee, the employee had a good experience"
The employee does not have a good experience when they're working themselves to exhaustion.
"If an employee puts in a solid 2-3 years and delivers great results for a company, "burns out", and then moves on to a new role or company, is that really that bad?"
Yes, because companies shouldn't have to work their employees to the bone to extract value from them. A long time ago, we decided that it's cruel, and created labor laws. Where have you been?
There is a BBC documentary called "How to make a German". I highly recommend watching it. After I watched it, I changed my own personal working style to be more efficient. It shocked me how much a difference it made. Since I am posting on HN during work hours, I can't say I'm doing it perfectly :p
Who is 'we'? You're wearing clothes and using a computer and probably exclusively using products that were made in nation-states that have virtually no labor laws. Where were you when globalization happened?
Regardless of moralizing in Western countries, you have decided it is not cruel to work employees to the bone and discard them when they break. You decided that when you bought the shirt you're wearing and the computer you're using.
Whether or not the status quo is right is one question; but you are wrong about what it is.
If you're willing to condemn a Honduran to sweatshops, but not an American, that says something about you in more than one way.
You seem to want to bring sweatshops to America to make things fair.
How bout we try to just end sweatshops instead.
He could no longer see anything, even though their bedroom was covered with the bright light of a sunny day in spring. As if he knew it was time to go, he held his wife's hand tight. Mustering some energy out of nowhere, gasping for air, he said, "I love you." Before she could answer anything, or even acknowledge his sentiment with a stronger grasp of their hands, he added, "but I really wish we'd been better employees".
There's a big difference between "burning out" and "eh, I'm getting kind of tired of this, I wonder what else is out there..."