Category Archives: Europe

For Want of a Plane

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Michael R. Czinkota

High hopes were placed into the G20 meeting in Buenos Aires. After all, many policy leaders with different voices were present. In particular, German Chancellor Merkel’s role as a seeker of compromise was fully scripted. She was to assure low tariff levels for cars with President Trump, broach new approaches for debt management with Argentina and discuss issues on Ukraine with President Putin. Alas, the expected discussions were disrupted. The Chancellor’s ride did not get there.

When Mrs. Merkel departed Germany, all plans seemed to be on track. Cabinet members, the German Foreign Service team and a gaggle of journalists had moderately filled the Chancellor’s official airplane. But after only one of thirteen hours of flight time the machine had to turn around for an unplanned landing. Communication was on the fritz, gas could not be ditched and the subsequent landing back in Cologne/Bonn was heavy. Harsh as it sounds, parked planes don’t fly.

Minor the inconvenience say you. In an era when the CEO of a declining U.S. multinational firm like GE’s Jeff Immelt always had a back-up plane accompany him, surely all the German Air Force had to do was roll out the spare and fly on. Perish the thought! There was a back-up plane. But it had taken off homeward bound for budget reasons once the main trip seemed on track. Also, the spare crew could not perform within regulation time limits.

The German airline Lufthansa was all out of planes for trips to Argentina. Only the Spanish airline Iberia had a direct hop out of Madrid. Not all passengers were excited when their quite empty cabin was suddenly filled up by bureaucrats and guards. Yet others reported that Mrs. Merkel was quiet, focused and smiling at Selfies.

Wagging tongues have suggested that, in light of the harsh electoral decline of her party, Mrs. Merkel wanted to get re-acquainted with more popular forms of transportation. Others wonder what Germany’s founding Chancellor Bismarck or, worse yet, what President Trump would have said to this failure. Perhaps the lack of a plane tosses Germany, or even the entire European Union into political turmoil.

The problem is not the short-term direct effects, but rather the long-term repercussion which paints reality. How effective are international marketing slogans and expectation emphasizing progress and technology, when the country leader’s plane won’t fly and airports won’t operate? What happens to the brand value of time when a key leader arrives half a day late? How can one be a useful arbiter while not on location? And all this happened just when CEBIT, one of Germany’s largest trade fairs for technology and communication had to close down. Is all this witness to a transition away from leadership struts to execution missteps?

The German aircraft debacle is of major import and impact. Mrs. Merkel may have become more forgiving to her staff. But even though she nods and smiles more, her partners in international discussions take delays very seriously. For them, late is late, which greatly undermines efficiency.

As to President Trump’s perspective on these events, he may worry less than expected. First, the problems reaffirm his demand for a substantial increase in European spending on defense. Of equal importance: why should he care about the quality of German planes – he has his own and they fly.

Professor Czinkota (czinkotm@georgetown.edu) teaches international marketing and trade at Georgetown University and the University of Kent in Canterbury. His latest book is In Search For The Soul of International Business, (Businessexpertptress.com) 2019

No Hostilities Yet

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When nations declare adversity onto each other, there is a lapse of time between the declaration of intention and commencement of hostilities. Implementation can take anywhere from months to years. The Brexit discussions are a major example of such conditions.  Code yellow conditions are now in place between Europe and Britain. My wife and I visited England to explore the current and future status.

Evensong in Canterbury Cathedral, seat of the archbishop, is very British, well attended, firm, strong and uplifting. There are definite advantages to singing one’s prayers. The British production of Jersey Boys was another listening adventure, packed house, lots of fun, energetic singing done well. In London no signs of fear or concern.  St. Martins in the Field did not disappoint with renditions of Mozart at candlelight by a Russian pianist. Trafalgar square was humming and buzzing late into the night as usual. Sticking together while exercising simple precautions is the watch-word.

High tea at Harrods was a pleasant experience- but with a twist! Queen Victoria era tea strainers still capture leaves and uplift the taste. The servers in the tea room are sons and daughters of EU nationality, hailing from Hungary, Romania, Estonia, Albania, and Bulgaria. The clientele is mostly Asian.

Vast sums from abroad are being spent at the store- often supported by personal shoppers so that the customer can rapidly move from Hermes to Gucci. That many prices doubled in the past three years seems not to matter. Newspapers report that some of the more intense shoppers purchase more than $2 million of goods per month in one department store alone, supported by the appropriate credit cards Bank Al-Ahly from Egypt, or Union Pay from China. Support also offers inside Mosques for prayer services.

All local spenders can forget about the doorman calling a taxi for them! The crowds are massive, all walking on the right- which is the wrong- side, indicating that hardly anyone is British. Multilingual store staff tells us that China is the main country of origin. Russians are left in the wake. Maybe the sanctions are working!

The diversity of restaurants has greatly increased. No longer are there just simple choices between British kidney pies and Indian basmati rice. Still, a shame that the Chinese chain HaiDiLao, with all its hype on quality and service, has yet to open in the UK.

Uber is very active so one is no longer dependent on the famous and often not appearing taxi.

Drivers are not happy because their income decreased. Still they do not go to places where customers might naturally congregate, like evening performance conclusions at the Royal Albert Hall. Their argument: what if there are no customers? Hard to argue!

Universities, particularly the mid-grade ones, experience enrollment declines. Costs for non– EU students have skyrocketed. The many students from abroad are mostly bonding and banding among their own nationalities and encounter limited social linkages with Britons. Though internationally oriented it is quite difficult at many institutions to study or write dissertations in a non-English language.

News and discussions have become less interested in the US or Europe. On October 3rd there was more highlight of the Day of the Open Mosque, than of German reunification day.

There are many changes, some subtle, some not so much. The English gardens hidden from the street are still beautifully tended and restful. And when eating, there are still vast pots of delicious clotted cream. Faucets, newly installed, still separate hot and cold water, no mixing allowed!

So much for flexibility, adjustment, and stability. Conditions are not grim. Historically one may think of Hannibal’s closing onto Italy, with Roman defeat highly likely. But it did not happen in 216 B,C. and may well not happen in 2019. In spite of signed documents and grim postulations, there is no commencement of hostilities yet. One could label the current conditions as that of the head burying ostrich, but for now, the feeling is good and the living is easy.

Michael Czinkota (czinkotm@georgetown.edu) teaches International Business at Georgetown University in Washington D.”C. and the University of Kent in Canterbury. His latest book “Searching for the Soul of International Business (BEP) appeared this October.
Ilona Czinkota (iczinkota@gmail.com) is an architect and president of Czinkota AIA LLC

Visit From Ms. Lawless and Ms. Laurence Battaille

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It was a great pleasure to have Martha Lawless (left side), chief of the Services Industry Research Division at the U.S. International Trade Commission, return to my seminar.   Ms. Lawless focused on the latest global regulatory and policy measures in digital trade. She particularly highlighted the rapid emergence of digitally enabled services and manufacturing.

We had a surprise visit from Ms.Laurence Battaille, the Managing Partner of IPAC in Brussels. She shared her work in managing public relations for global firms and explained her firm’s growth in global consulting!

International Food Trucks in Kent

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Many are chosen, but few are selected. Like many other universities, Kent highlights its international orientation. For me, Kent is one of very few universities where international food trucks lure students for breaks and meals. Well done!

Helping Hungary helps us all

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Hungary is a frequent sacrificial  lamb on the altar of international conflict. Hungarians  well remember the occupation by the Ottomans and Islam. Those 150 years brought de-population, destruction of land and buildings, uncontrolled migration and major displacement of resources, but kept Western Europe safe from the Ottoman empire.

On many other occasions, Hungary has taken risks, invested its youth and subjugated its own political ambitions for the sake of Western security. The gratitude for such dedication and depletion of resources has been scant. Occasions where the West shares resources, offers equal treatment or a partnership, remain mostly absent. Hungary continues to suffer from being too close to the East and too far from the West, while being damaged by any conflict between the two.

After centuries of suffering, one would expect today a new era for a united Europe. Since its founding, the European Union was to be driven by cooperation and cohesiveness. Not an easy task since joint undertakings with a large diversity of regions and people require adjustment and flexibility. In a  U.S. comparison, our century and half absence of any break-up is no coincidence. Rather, the fact that overall we stick together is the result of accommodation, restraint , and, in case of conflict, not to insist on a ‘winner takes all’ outcome.

The European Union would do well to learn from the United States and avoid internal separation. Right now, this large group of states is taking punitive measures against some of its own members, particularly those from Central Europe. Sanctions are to demonstrate displeasure with immigration restrictions, judicial appointments, retirement policies and the regulation of  foreign universities. Hungary and Poland are most exposed to EU attacks, particularly for restrictions of immigration.

Three years ago,  migrants started to stream into the EU by the hundreds of thousands from Libya, Syria and Lebanon . Most entered via the first open southern border which was in Hungary. When that country did not receive any outside help or relief,  Hungarian prime minister Orban sharply reduced and controlled the flow of humanity by applying EU rules on registration, documentation, and restriction. He believed that a small country with very limited resources needs to understand, plan and structure for massive population displacements. For his actions, he was thoroughly scolded by many fellow EU members.

It turns out that even large nations with ample resources cannot disregard the consequences  of unplanned for massive migration. Years after complaining about the ‘Hungarian Way’ the EU  imitates what by now have turned out to be  the sound policies of Hungary.  Germany now learns to recognize how fallacious its migration missteps are and will continue to be.

One might assume that Chancellor Merkel would express her gratitude for Hungary’s leadership in policy and implementation. Alas – the contrary is the case. EU debates concerning Hungary are typically rich with displeased looks, invisible barriers and ignominious ignorance. No matter the country’s strong democratic elections and popular support, things in Hungary are seen as ‘just not right’.

The EU’s negative politics towards Hungary are wrong. Many of the loudly pronounced disappointments are nothing but envious efforts to retain local votes in upcoming elections. Some of the EU steps might even reflect an unwillingness to develop and tolerate new approaches and change. The U.S. government should not accept such overpowering opposition to homegrown priorities. It should recognize Hungary as an important ally when it comes to innovation, immigration and intellectual property. Hungary’s government represents, similar to the United States, a country of adjustment with creative directions and a new emphasis.  We should support Hungary in light of the overwhelming and unjustified pressures to which the country is exposed. It is not automatically wrong for a nation’s democratically elected government to move beyond traditional policy boundaries. “No bullying” also applies to the smaller members of the EU. Hungary has the right to pursue its happiness. To Europe we can offer insights from a successful cohesive policy outcome. To Hungary, we should smilingly help when it takes steps which have made America so successful.

Professor Czinkota (Czinkotm@Georgetown.edu) teaches International Business and Trade at Georgetown University and the University of Kent in Canterbury. His forthcoming book in October  is “In Search For The Soul of International Business.