The globalization bomb; and the after effects
Winners and losers in the game of opening up economies

Yet, that is not the whole truth. Look at the four spectacular successes of the post Second World War era. Three of them - Japan, Germany and South Korea - have something very significant in common. Not only are all three key strategic allies of the United States, but Uncle Sam continues to have a massive military presence in all the three countries. This deeply significant coincidence is usually overlooked by the global media. You could say that the citizens of Germany, South Korea and Japan are so passionately in love with Uncle Sam (really hard to believe!) that they have voluntarily asked thousands of American troops to be present in their countries. Yet, no matter what spin you put, the sheer presence of the troops can only convince those who chose to be blind that South Korea, Japan and Germany can do anything - Uncle Sam be damned!

The reality is: top policy makers in the three countries were smart enough to realize that it pays to be a strategically (client state?) of the US. In contrast, India and many other Third World countries were foolish enough to go with Soviet Union or follow a romantic notion of non-alignment during the Cold War era. So, America pumped in massive capital into the three countries and gave virtual carte blanche to exporters from these countries. One could say that Sony, Matsushita, Toyota, Honda, Sharp, LG, Samsung and Hyundai, to name just a few, are the by products of this strange mixture of globalization, free trade, strategic alliances and imperialism!

China is similar and also uniquely different from the three. After the US forged a relationship with China in 1973 to contain Soviet Union, a series of events led socialist China to open up its economy and the US found an opportunity to use multinationals to spread the gospel of capitalism in the land of the Dragon. You could say that the Chinese policy makers in the late 1970s-led by Deng Xiao Peng were smart enough to realize that 'engagement' with the US is better than ideological enmity. That's where China was and is similar to Japan, Germany and South Korea. But it is also significantly different. Since the end of the Second World War, China has never been a strategic ally of the US and the very thought of American troops in China is akin to Sonia Gandhi espousing Hindutva!

This geopolitical reality and the emergence of China as a possible strategic competitor of the US are then manifested in the fault lines that have seen the virtual disintegration of the WTO. Take the case of India. Though it is emerging as a strategic ally of Uncle Sam, it will probably never be a key ally (client state again?) the way Germany, Japan and South Korea are! Many policy makers and corporate captains in India seem to be worried about WTO's inevitable collapse & the possibly damaging consequences it could have on their and India's growth prospects. They need not worry. There are two lessons India needs to learn. The first: China managed most of its spectacular growth during the 1990s and early 21st century without being a member of WTO (China formally joined the WTO in 2002).

The second lesson: the whole world is relying on bilateral and multilateral trade agreements to pursue trade and prosperity. ASEAN, EU, NAFTA and Mercosur (see table) are just some examples of how nation states pay their obeisance to Smith and Ricardo while remaining mindful of geopolitical and strategic interests. Free Trade Agreements are another instrument that countries have been using more intensively to reap the benefits of trade. Prime Minister Manmohan Singh and Commerce Minister Kamal Nath must be aware of the value of what Smith and Ricardo preached. They would also be aware of what Lord Clive did to India. In reality, they should be raising a toast to the demise of WTO and pursuing trade as a strategic objective!

The Vanguard of Vicissitude

When Henry Ford was inventing the first Ford automobile, he couldn't have possibly imagined that one day, those would be Asian countries that would dictate the future growth of the automobile industry; and much less that those would be Asians who would be running his companies in disparate countries. And in our attempts to document this saga of cutthroat competition in the global automobile industry, came our sojourn to amazing Chennai - a city in India, and home to the headquarters of Ford India - to meet one such Asian, who stakes his claim to the fact that he is the youngest and first ever Indian to head Ford's operations in India in the capacity of President and Managing Director. And his name is Mathew...Arvind Mathew.

If you caught the similarities with Broccoli's Brit spy, so did we; much in his demeanour, and much more in his deportment - professional, and of the very course, otherwise too. Fighting the gift ed South Indian traffic, we drove an hour out of Chennai to get to Ford's plant at the appointed time. Interestingly, there are no outside cars allowed inside the plant; however, we were quite smartly driven inside to Arvind's corporate office in a bevy of Ford cars. Meeting Arvind was quite a pleasant surprise, as many of the predispositions one had nurtured based on secondary information were proven quite to the contrary, if not further. A mechanical engineer from the Birla Institute of Technology and Science, Pilani, Arvind completed his MS in mechanical engineering and later did his MBA from the University of Michigan. As is evident, Arvind's stint with Ford goes a long way back. When Arvind joined Ford India in 1990, he knew that the Indian customer was educated and well versed with the latest trends & products.

Arvind immediately realised the need to ensure that Ford India should always focus on what customers want. "If you're able to satisfy customers, only then will they come back..." Arvind advises. Under Arvind's erudition, a rich experience in new vehicle programmes and his vast international experience, Ford's growth in India is poised to leap forward. However, the Indian market is highly competitive, contemplates Arvind, where Ford operates and targets the mid-size segment with Ford Fiesta, Fusion and Ikon, and especially in Delhi and Mumbai. Arvind divulges that many of Ford's brands are positioned as the entry level options for consumers buying their first cars. Arvind claims that these customers, rather than preferring to first buy a small car, directly jump on to the mid-size bandwagon. And rightly so, proving critics wrong, Ford recently registered a massive jump of 83% in the mid-size car segment, as it sold an astounding 14,125 cars during the first quarter of the year 2006, as compared to 7,607 cars sold in the corresponding period last year.

The reason for customers directly choosing Ford in the mid-size segment, Arvind articulates, is Ford's clear focus on matching quality with price, "I want to be number one in providing the bestengineered car to my customer at an affordable price." It is perhaps Ford's factory in Manaimala Nagar in Chennai that can take the credit for Ford's changing fortunes. The plant has a manufacturing footprint to cater to domestic as well as export requirements. Appreciating the fact that handling global quality parameters requires broader competencies, Arvind divulges, "We have special programmes to support our suppliers with training, management advice and to promote technology transfer." So will Ford never enter the small car segment?

Arvind points out that Ford "always had plans to enter the small car segment," but has other higher priority options to introduce. Giving a judgement on the potential of Asian markets, Arvind thumps for the Chinese promise, "In Asia...in my perspective, China is the major market." He further elaborates that the Indian automobile industry has been following a very traditional 'normal' growth model, while that of China is in leaps and bounds. As our conversation moves further, Arvind shares an amazing insight that within the total workforce of 2,000 people, the percent of workers that were on strike at that particular moment of time was zero. Th e amazing part of this comes from the fact that in any factory, on an average, between 3 to 5% of workers are generally on strike. And one of course cannot forget the imbroglio that both Honda and Toyota suffered in India when more than 90% of their workers struck work in the recent past.

So where's the method in the madness for Mathew? When it comes to following a leadership model to motivate his employees, Arvind stresses aggressively on two pillars. Number one is his religious commitment to team building, which, Arvind shares, is the core competence of Ford in India, and which they tactically instil into employees through structured intervention measures, "A very important part of our culture is that we always develop a team among our engineers and workers; the workers should have an ability to work in the team and the ability to communicate." To an extent that any worker can freely talk to any senior at any point during official work. Arvind emphatically believes that it is physically impossible for a single person to perform the entire job, "You have to depend on team work and each one of the team must have a very global outlook."

As an unbelievable corollary, at Ford, there is no division of labour, thus re-enforcing the 'team is bigger than self ' philosophy. Number two, Arvind upholds that a leader has to understand different angles of not just technical problems but also of organisational issues. Spice it up with the zest for global awareness, and voila, you have the true blue Ford leader. Arvind himself has lived in five different countries and held various positions in countries like America, Germany, Spain, Turkey and United Kingdom. Very surprisingly, while conjecturing on the importance of innovation, Arvind champions the fact quite pronouncedly that not all employees need be innovative; some people in the organization obviously should be allowed to practice innovation - since building and designing of a car is a complex job - but others should focus most imperatively on process controls and maintaining benchmarks.

Programmes like Six Sigma and Kaizen, which are omnipresent across Ford's plants, prove the two ends of the process control & innovation spectrum. But at the same time, Arvind opines that without values, work commitments can be at best hollow. Integrity, respect and honesty are the traits that Arvind considers the most vital values that a leader can nurture within himself and his people; integrity, in particular, is the value that Arvind considers most precious in terms of professional orientation. At the same time, Arvind has his priorities clearly laid down in his personal life. He campaigns, "My personal goal in life is to have fun. If you aren't having fun, you should move on and do something else in life."

He makes sure that he spends private time exclusively with his family, which includes his wife Ann and two sons Rohit (15) and Samir (16), both studying in school. But the quality in Arvind that hit us most compellingly and emotionally was Arvind's attitude to never give up, despite vicissitudes of magnanimous proportions. Perhaps some of his past experiences (for example, in Turkey in 1999, a new assembly plant he was building collapsed because of a massive earthquake; but he rebuilt it within two months) have gone a long way in tanning up the leather and mettle of this vanguard of Ford; giving us the hint of the moniker "The Vanguard of Vicissitude!"; a moniker that stayed with us much longer than the emotion of the moment...