Saturday, March 19, 2011

Nearly Half a Million Japanese in Shelters, as Tolls Rise and Foreigners Flee
By PATRICK J. LYONS NY TIMES
With the world’s attention riveted on the unfolding nuclear crisis in northeast Japan, the more immediate toll from the powerful earthquake and tsunami continued to mount on Thursday, as more deaths were confirmed, more foreigners prepared to leave the country and more of the disaster’s wide-reaching effects came into focus.
Japanese officials said confirmed deaths had climbed on Thursday to 5,692, and that the names of 9,506 people missing and unaccounted for had been registered. But many thousands more are believed missing.
Nearly a week after the earthquake struck, the national police agency said that more than 452,000 people were staying in schools and other shelters, where supplies of fuel, medicine and other necessities were running short.

In a tsunami-battered neighborhood in Sendai, the major city nearest the quake’s epicenter, there is still no running water. One resident, Noriko Sawaki, told The Associated Press that just living day to day was exhausting. “It’s frustrating, because we don’t have a goal, something to strive for,” she said. “This just keeps on going.”
In a smaller town, Kesennuma, people stood in long lines after a supermarket, picked bare over the last few days, got a delivery of supplies that included instant rice packets and diapers. The NHK broadcasting network reported that each person was limited to 10 items.
Foreign governments stepped up efforts to move their citizens out of harm’s way or out of Japan entirely.

The United States, which called on Wednesday for Americans to stay at least 50 miles from the stricken nuclear plant in Fukushima Prefecture, drafted plans on Thursday for voluntary evacuations of families and dependents of military personnel and embassy employees in Japan, including those at air and naval bases 200 miles or more from the plant. Japan has ordered evacuations within 12 miles of the plant, and told those within 18 miles to remain indoors.
Capt. Eric Gardner, the commanding officer at the Atsugi Naval Air Facility, told Reuters that the military would be able to fly out about 10,000 people a day. Some would be sent to American bases in South Korea, he said in a recorded message to base personnel. In all, the American military has more than 55,000 troops and more than 43,000 dependents based in Japan, as well as thousands of civilian employees and contractors, the news agency said.

In addition, the State Department said late Wednesday that it had authorized the voluntary departure of about 600 family members of diplomatic staff in Tokyo, Nagoya and Yokohama.

Study-abroad programs in Japan have also been affected. Two American schools, the University of Kansas and Temple University, said Thursday that they would bring home their students, The A.P. said.

Commercial airlines around the world dispatched more and larger aircraft to Tokyo to help thousands of people leave the country, even as they altered or suspended service.

After 25 passengers arriving in Taiwan and 3 arriving in Seoul were found to have radiation levels slightly higher than normal, officials around the world said they would screen travelers from Japan. Homeland Security Secretary Janet Napolitano said that both passengers and cargo arriving in the United States from Japan were being checked out of an abundance of caution.

Trace amounts of radiation were later found on luggage, passengers and the air filtration system of a plane arriving from Japan at O’Hare International Airport in Chicago, CBS News reported, citing city officials. The amounts found were not said to pose any threat.

Some foreign airlines have relocated operations to southern cities, but are continuing to operate flights with one eye on the radiation gauge.
“We can keep flying even if the situation deteriorates further,” Christoph Franz, chief executive of Lufthansa, told Reuters in Frankfurt. “But never say never; we don’t know what will happen there over the coming days and weeks.
Britain said it was chartering jets to fly between Tokyo and Hong Kong, and that Britons directly affected by the tsunami would not be charged for the flight. The French Embassy has arranged for special Air France flights. Air India stepped up its flight schedule and sent Boeing 747 jumbo jets, rather than the smaller aircraft it usually uses on the route.

The prime minister of Sweden, Fredrik Reinfeldt, told the newspaper Svenska Dagbladet on Thursday that his government was making plans to evacuate all of its citizens from Japan. The Czech military evacuated some of its citizens from Japan on special flights, The A.P. said.

The United Nations Food and Agriculture Organization said in a report issued Thursday that there was no evidence that food exports from Japan posed any risk, Bloomberg News reported.

“Food safety concerns are restricted to food from the affected zone around the Fukushima Daiichi nuclear power plant,” the organization said. “Given the reported safety measures, it would be unlikely that food production or harvesting is taking place in the evacuated area.”

For their part American meat and seafood producers said they would step up shipments to Japan to replace stocks that were destroyed and production disrupted by the earthquake and tsunami , The A.P. reported. Sendai is an important processing center for Alaskan seafood catches.

Experts offered rising preliminary estimates of how much it would cost Japan to rebuild. The 3M company, an American manufacturer with extensive operations in Japan, said the bill may run to $150 billion, half again as much as the Insurance Information Institute estimated a day earlier. “Economic activity will probably fall initially,” the 3M report said, “but perversely, after a lull, the necessary rebuilding work will actually create faster growth.”

The International Monetary Fund said that Japan had the financial means to recover, and that the country had not requested any help from the fund. “The most important impact on Japan is the humanitarian one,” Caroline Atkinson, a spokeswoman, said at a news conference, according to Bloomberg News. “We believe that the Japanese economy is a strong and wealthy society, and the government has the full financial resources to address those needs.”

Even so, currency traders bid the Japanese yen up to near record highs against the dollar and euro on Thursday, apparently driven in part by Japanese investors and companies retrieving assets from overseas to help at home, though Japanese officials insisted that the surge in the value of the yen this week was mostly due to speculation.














































Friday, March 18, 2011

Report Finds Wide Abuses by Police in New Orleans
By CAMPBELL ROBERTSON NY TIMES
NEW ORLEANS — Justice Department officials on Thursday released the findings of a 10-month investigation into this city’s Police Department, revealing a force that is profoundly and alarmingly troubled and setting in motion a process for its wholesale reform.

The report describes in chilling detail a department that is severely dysfunctional on every level: one that regularly uses excessive force on civilians, frequently fails to investigate serious crimes and has a deeply inadequate, in many cases nonexistent, system of accountability.

Using the report as a guideline, federal and local officials will now enter into negotiations leading to a consent decree, a blueprint for systemic reform that will be enforced by a federal judge.

“There is nobody in this room that is surprised by the general tenor and the tone of what this report has to say,” said Mitch Landrieu, the mayor of New Orleans, at a news conference attended by city and federal officials.

But, added Mr. Landrieu, who publicly invited federal intervention in the Police Department just days after his inauguration in May, “I look forward to a very spirited partnership and one that actually transforms this Police Department into one of the best in the country.”

The city’s police chief, Ronal Serpas, said he fully embraced the report and would be going over its findings with senior leadership later in the day.

While the report describes an appalling array of abuses and bad practices, it does not address in detail any of the nine or more federal criminal investigations into the department. These inquiries have already led to the convictions of three police officers, one for fatally shooting an unarmed civilian and another for burning the body.

Justice Department officials chose to exclude the information gleaned in the criminal inquiries to keep a wall between those investigations and the larger civil investigation into the practices of the department. But there were more than enough problems left to uncover.

While other departments generally have problems in specific areas, like the use of excessive force, “New Orleans has every issue that has existed in our practice to date, and a few that we hadn’t encountered,” said Thomas E. Perez, assistant attorney general for the Justice Department’s civil rights division.

The report reveals that the department has not found a policy violation in any officer-involved shooting for the last six years, though federal officials who reviewed the records found that violations had clearly occurred. The department’s canine unit was so badly mismanaged — the dogs were so aggressive they frequently attacked their handlers — that federal officials encouraged the department to suspend it last year even though the investigation was still under way.

The report details a record of discriminatory policing, with a ratio of arrests of blacks to whites standing at nearly 16 to 1. Calls for police assistance by non-English speakers often went unanswered.

The report also found that the police “systemically misclassified possible sexual assaults, resulting in a sweeping failure to properly investigate many potential cases of rape, attempted rape and other sex crimes.”

The problems described in the report go beyond policy failings, depicting a culture of dysfunction that reaches all facets of the department. The recruitment program is described as anemic, training as “severely deficient in nearly every respect,” and supervision as poor or in some cases nonexistent.

The department has attracted this level of scrutiny before. As bad as it appears now, the police force was far more troubled in the mid-1990s. Two officers from that era are now on death row, and the number of murders in the city at the time soared above 400.

Federal agents conducted a similar investigation of the department, but there was less cooperation by local officials and, crucially, there was no consent decree.

While the department improved for a time, the structural problems remained and festered, as Thursday’s report makes clear.

This time, there will be federal court oversight, and there is already widespread consensus that systemic police reform is needed. Confidence in the department is so low that prosecutors have trouble finding juries, as so many prospective jurors declare that they would not put any trust in the testimony of a New Orleans police officer.

The robust citizen engagement that has been a significant factor in the city’s recovery from Hurricane Katrina has also changed the dynamic, officials said. While the New Orleans police force may be troubled to a rare degree, federal officials also described the city’s appetite for systemic reform as unprecedented.

Federal officials said the team of agents assigned to investigate the department worked with police leadership as well as rank-and-file officers. Investigators also reached out to community leaders to a degree that they had not previously done.

Still, officials acknowledge that changing the department’s entrenched culture will be hard and will take years. Though Mr. Serpas, who was an officer during the reform efforts in the 1990s, has already begun addressing many of the concerns, news reports of police abuses during the Mardi Gras season have come out in the past few weeks, and the number of homicides is still stubbornly high.

“I’m not naïve about the hard work that lies ahead,” Mr. Perez said, adding that he was still optimistic. “I’m certain that we’re in a qualitatively different position than we were 10 years ago.”

Community advocates viewed the day’s announcement with a mix of hope and skepticism. Some groups had been trying to draw attention to police abuse in the city for years before their complaints were noticed by law enforcement.

“Nobody believed anything we said,” said Norris Henderson, a founder of a group for former prisoners called Voice of the Ex-Offender. He said he was encouraged that community groups were so involved in the federal inquiry, but was concerned about the level of involvement going forward.

“Will we be a part of the conversation?” he asked. “Just going to the quote-unquote criminal justice folks, well, y’all the folks responsible for this damn problem.”

Thursday, March 17, 2011

Ex-Revere library chief indicted on embezzling charges
By Katheleen Conti Boston Globe
After a two-year investigation, the former director of the Revere Public Library has been indicted on charges that he embezzled at least $200,000 in city funds by purchasing items for himself or to sell online for his profit over four years.
Robert E. Rice Jr., 45, of Rowley, was indicted by a grand jury Tuesday on 21 felony counts, including three counts of larceny over $250, three counts of embezzlement by a city officer, and 15 counts of procurement fraud, according to Suffolk District Attorney Daniel F. Conley’s office.

Each count of larceny and procurement fraud carries a penalty, on conviction, of up to five years in prison, while each embezzlement count carries up to 10 years, according to Jake Wark, spokesman for the Conley’s office. Rice is scheduled to be arraigned April 1 in Suffolk Superior Court.

Rice, who has been the director of the Pelham, N.H., Public Library since October 2009, did not return a call for comment. He had resigned as Revere’s library director, a post he held for 12 of the 27 years he was employed there, immediately after the allegations surfaced in January 2009 through a routine city audit of his department.

Mayor Thomas G. Ambrosino of Revere said that while he felt there was evidence of criminal activity, the number of counts against Rice was unexpected.

“It seems like a lot of counts, but the city believes there was a lot of evidence of criminal activity and evidence of fraud,’’ Ambrosino said. “It was certainly surprising at the time. He had never given any indication that he was doing anything improper until our auditors looked at his procurement records. In many respects, we continue to implement the controls that allowed us to uncover this fraud.’’

Ambrosino said the extent of the alleged embezzlement was not known to city officials the day they first questioned Rice. The mayor said he hopes that if Rice is convicted, the city recoups some of its losses with monies Rice still has invested in the city’s pension fund.

Rice is accused of billing the city for the purchase of books, software, DVDs, and collectible curios that he kept for himself or sold on eBay, according to Conley’s office. In some cases, Rice allegedly kept money refunded to the city for items that were ordered but not shipped.

George M. Anzuoni, the city’s finance director, said Rice allegedly altered purchase orders and requisitions “to read as other items.’’

Revere Police Captain Michael Murphy called the investigation tedious but “quite historic’’ in scope, and said he has never seen the likes of it in his 25 years in the department. The investigation looked into alleged offenses dating to 2005 and was led by Revere police with the help of outside auditors and the New England State Police Information Network.

“He’s alleged to have purchased many things . . .’’ Murphy said, “some of which had been library related and then misappropriated, and others that did not seem on their face to have much to do with the library.’’

The charges still baffle some Revere officials.

“I knew him, and he seemed like a straight shooter, and I was shocked when I heard of the allegations,’’ said Councilor Anthony T. Zambuto. “But if they’re indicting at this point, where there’s smoke, there’s probably fire.’’

Councilor George Rotondo called the charges troubling, saying that the city needs to move forward.

“A wise thing to do at this point is double check the way we conduct business in the city and implement strict auditing procedures and move on from there,’’ Rotondo said.

Francis Garboski, chair of the Pelham Public Library Board of Trustees, said in a statement that the board is surprised by the indictments, and that members were aware of “issues regarding his prior position’’ when Rice was hired.

“Nevertheless, we were satisfied with his explanation, and his references were excellent,’’ Garboski said. “Bob’s service to the Pelham Public Library has been nothing short of exemplary. . . . We have complete confidence in our director to effectively run the library and have no evidence to question his ability to perform his job. This board will continue to support him and look forward to putting this unpleasant situation behind us.’’

Katheleen Conti can be reached at kconti@globe.com.

Monday, March 14, 2011

A Look at the Mechanics of a Partial Meltdown
By HENRY FOUNTAIN NY TIMES

The difference between a partial meltdown and a full meltdown at a nuclear plant is enormous, both in the degree of damage and in the potential release of radiation, experts in nuclear power said.

A partial meltdown, like those suspected at two reactors in northeastern Japan over the weekend, may not necessarily mean that any of the uranium fuel in the core has melted, experts said. The fuel rods may be only damaged, a portion of them having been left uncovered by cooling water long enough to crack, allowing the release of some radioactive elements in the fuel.

But in a full meltdown — which could occur within hours if all cooling water was lost and the rods became completely uncovered — melting is all but guaranteed, as thousands of fuel pellets fall to the bottom of the reactor and heat themselves into a molten pool at several thousand degrees Fahrenheit.

While it is considered highly unlikely that a full meltdown would result in a nuclear chain reaction, experts said, such lava-like fuel might breach the reactor’s pressure vessel and then its containment, leading to widespread release of radioactivity.

To avoid such a catastrophe, workers at the two reactors have tried to pump enough seawater into them to keep the cores completely covered. But unless normal cooling systems can be restored, they will have to keep pumping seawater for weeks.

“You’re looking at several thousands of gallons a day potentially out as long as a year,” said Arnold Gundersen, a former nuclear engineer who worked on reactors of the same design as those in Japan.

The Japanese reactors, made by General Electric and built in the 1970s, have thousands of thin, 12-foot-long fuel rods stacked like straws inside a pressure vessel made of steel up to 6 inches thick. The rods, tubes made of a zirconium alloy, contain ceramic pellets of uranium oxide that are about the size of a fingertip.

Ordinarily, this fuel core is kept submerged in water that circulates to remove the heat of nuclear fission, making steam that is used to turn turbines to generate electricity.

With loss of power and pumps after the earthquake, the fission reactions at the plants were successfully halted. But there is much residual heat in the reactors, both because they operated at about 550 degrees Fahrenheit and because the radioactive elements in the fuel continue to produce heat as they decay. Without pumps to circulate the water, it will boil off quickly.

That apparently is what happened at least one of the reactors, leaving the upper part of the cores uncovered until technicians, in what has been described as a desperate measure, rigged up a way to pump seawater in. The sea water is laced with boric acid, which would quench a fission reaction if one began.

Once part of the core is exposed, the zirconium starts to oxidize, or rust, extremely rapidly, becoming brittle and cracking. The rusting also results in the production of explosive hydrogen; the cracking allows the most volatile radioactive elements in the fuel, like iodine and cesium, to escape. To prevent pressure buildup, the gases are allowed to vent into the containment, and in this case must have leaked or were vented through the containment into outside air.

As the rods crack apart, the pellets inside them can start to fall out, which engineers call a washout.

“There’s nothing holding them there,” said Margaret Harding, a consultant who worked on reactor designs for General Electric for 27 years. But since lower parts of the core are undamaged, the pellets may end up in various places around the reactor, not necessarily in a clump on the floor. “It’s not guaranteed you’re going to have melting,” she said.

At the Three Mile Island accident in Pennsylvania in 1979, in which the core was partly uncovered, robotic cameras later determined that melting had occurred. In the Chernobyl accident in 1986, considered the world’s worst, a power surge led to explosions and a reactor fire, sending an enormous plume of radioactive material into the air.

If a full meltdown were to occur at one of the Japanese reactors — meaning operators were unable to keep pumping water and the core became completely uncovered — molten fuel would soon pool on the floor of the pressure vessel. “The worst case is that the molten mass leaves the vessel and creates a steam explosion,” Mr. Gunderson said. “That would destroy the containment.”

Sunday, March 13, 2011

A Changed Starbucks. A Changed C.E.O.
By CLAIRE CAIN MILLER
NY TIMES
RAISE your hand if you remember when Starbucks seemed cool.
Anyone?
Think back. To before the planet groaned with 17,000 Starbucks shops. Before the pumpkin spice lattes and the Ciao Amore CDs. Before the Strawberries & Crème Frappuccino ice cream, the Starbucks cream liqueur, the Pinkberry-inspired Sorbetto.

In short, to before Howard D. Schultz and his trenta-size ambition turned a few coffeehouses here into the vast corporate Empire of the Bean.

The world has often seemed three espressos behind Mr. Schultz — which is why the low-key guy sitting in his office here doesn’t quite seem like Howard Schultz.

Did he just say “but”? As in, “We have won in many ways, but ...”? Was that a “we” instead of an “I”? A note of humility?

Yes, this is Howard Schultz: the man who willed Starbucks onto so many street corners — and then, for a moment, looked as if he might lose it all.

Not even Mr. Schultz could have predicted how Starbucks would change our culture when its first shop opened here, in Pike Place Market, on March 30, 1971. Like it or not, Starbucks became, for many of us, what we talk about when we talk about coffee. It changed how we drink it (on a sofa, with Wi-Fi, or on the subway), how we order it (“for here, grande, two-pump vanilla, skinny extra hot latte”) and what we are willing to pay for it ($4.30 for the aforementioned in Manhattan).

But during the depths of the recession, Starbucks nearly drowned in its caramel macchiato. After decades of breakneck expansion under Mr. Schultz, tight-fisted consumers abandoned it. The company’s sales and share price sank so low that insiders worried Starbucks might become a takeover target.

So, after an eight-year hiatus, an alarmed Mr. Schultz returned as chief executive in January 2008. He shut 900 shops, mostly in the United States, drastically cut costs and put the company back on course.

Friends and colleagues say this hellish experience left Mr. Schultz a changed man. Starbucks, these people say, is no longer “The Howard Schultz Show.” The adjective that many use to characterize his new self is “humble” — a word that few would have applied to him before.

“Everything Starbucks did in the past, more or less, had worked,” Mr. Schultz said in an interview in January at the company’s headquarters, with a view of Puget Sound south of downtown Seattle. “Every store we opened was successful, every city, every country.”

He continued: “Growth had a life of its own — and that’s O.K., when you’re hitting the cover off the ball every time, but at some point, nothing lasts forever.”

One thing hasn’t changed: the man dreams big. In that same interview, Mr. Schultz spoke of expanding into still more products and in markets like China. He is pushing, of all things, a brand of instant coffee. The words “Starbucks Coffee” were just removed from the company’s green mermaid logo because he wants to waltz his brand up and down the grocery aisles. On Thursday, he announced that the company had struck a deal with Green Mountain Coffee Roasters to distribute Starbucks coffee and teas for Keurig single-serving systems. Shares of Starbucks jumped nearly 10 percent on the news, reaching their highest level since 2006. The stock closed at $36.56 on Friday.

Mr. Schultz and his colleagues say Starbucks will keep its feet on the ground this time, but some outsiders have doubts. Detractors say Starbucks long ago ceded its role as a gourmet tastemaker to become a “billions-and-billions served” chain like McDonald’s. Starbucks — “Charbucks,” to those who complain that its heavily roasted coffee tastes burned — will never rekindle the old romance, these people say.

“Has anybody said they came back because people love the coffee again?” asks Bryant Simon, a history professor at Temple University and author of “Everything but the Coffee: Learning About America From Starbucks.”

“They came back because they’re remaking themselves as a brand that competes on value, largely — a brand that’s everywhere, easily accessible, predictable,” Mr. Simon says.

HOWARD SCHULTZ, now 57, is a tall, sinewy man with a toothy grin and a silky sales pitch. He rarely sticks to script, preferring to speak off the cuff, whatever his audience. In conversations, he leans in, locks eyes and gives the impression that, right now, there is no one else in the world he would rather be talking to. When he speaks of “soul” and “authenticity” and “love,” you could almost forget that he runs a multibillion-dollar business that has become an uneasy symbol of globalization. Or that the British actor Rupert Everett once likened Starbucks to a metastasizing cancer.

The story of Mr. Schultz’s life and career has been told many times, not least by Mr. Schultz. (His second book, “Onward: How Starbucks Fought for Its Life Without Losing Its Soul,” is to be published on March 29.) But some highlights bear repeating:

He grew up poor in the Bay View housing projects in Canarsie, Brooklyn, received a football scholarship to Northern Michigan University and, after a variety of jobs, joined the fledging Starbucks in 1982, as head of marketing. Inspired by Italy’s coffee culture, he left Starbucks and opened his own coffee shop. Then, in 1987, he bought Starbucks, which at the time had all of six shops. By 1995, Starbucks had 677 shops. By 2000, it had 3,501, and that year Mr. Schultz stepped aside as C.E.O.

And so it went for Starbucks, one success after another, until the recession hit and exposed the company’s overreach to the world.

In December 2007, Mr. Schultz was worried that the Starbucks brand was losing its luster, and he and the board decided that in the new year, they would push aside Jim Donald and announce that Mr. Schultz would return as C.E.O. That month, Mr. Schultz, his wife, Sheri, and their two children flew to Hawaii for their annual getaway.

But on the beach in Kona, he just couldn’t relax. He kept checking the company’s daily sales figures and was horrified to see that they were falling by double digits.

Also in Hawaii then was his friend Michael Dell, who had recently returned to run Dell Inc. On a long bicycle ride along the coast, Mr. Dell told Mr. Schultz that when he returned to Dell, he wrote what he called a “transformational agenda.” Mr. Schultz then created his own plan for Starbucks.

His goals were to fix troubled stores, to rekindle an emotional attachment with customers and to make longer-term changes like reorganizing executives and revamping the supply chain.

He returned to Seattle, handed copies of his plan to the company’s senior executives and posed the big question: Are you in, or are you out? Eight of those top 10 executives have since departed.

“What the company needed then was what he used to be to us — the innovation, the refusal to not be a champion,” says Troy Alstead, the chief financial officer. “A lot of people were questioning, in that span before he came back, ‘Were we done?’ And Howard came back, and it wasn’t even a question anymore.”

MR. SCHULTZ usually rises at 4 a.m., without an alarm, downs a Starbucks Sumatran coffee at home, followed by a short double latte or espresso macchiato from one of two Starbucks stores he visits on his way to work. He arrives in his office by 6:30.

Friends and colleagues agree that he is as fanatical as ever about Starbucks. Millard Drexler, the chief executive of J. Crew, recently e-mailed Mr. Schultz to complain that the coffee lids at a Starbucks on Astor Place in Manhattan kept spilling coffee on his shirt. Mr. Schultz’s reply: “On it.”

Mr. Drexler, who has a habit of e-mailing C.E.O.’s with complaints, says: “I can give you many more examples when they say, ‘I’ll send this to a research department or a gatekeeper.’ ” But, he says of Starbucks, “to have that kind of quality control they have around the world is pretty extraordinary.”

It was on such a morning in early 2008 that Mr. Schultz was convinced he had a product that would re-energize the company’s tired sales. It was called Sorbetto after the Italian for “sorbet,” and the drink was a twist on Pinkberry, the frozen yogurt chain in which Mr. Schultz is an investor.

Mr. Schultz had flown to Italy to taste the ingredients of his new product and thought he had the next Frappuccino. By that summer, 300 Starbucks locations in California were bathed in pink to promote the new drink. Starbucks had shipped in ingredients from Italy, and Mr. Schultz had primed investors.

But customers didn’t like the sugary concoction. And neither did Starbucks baristas, who had to spend an hour and a half cleaning the Sorbetto machines at the end of their shifts. A few months later, Mr. Schultz abandoned Sorbetto.

“Sorbetto, we did too quickly, and that was my fault,” Mr. Schultz says.

The headlong introduction was a mistake, but it was also classic Schultz.

“He likes things moving quickly, he likes people to be decisive, he’s got this energy level, this need for driving and for winning, and I think at times it’s hard for some people to keep up,” says Michelle Gass, the president of Seattle’s Best Coffee, which Starbucks owns. After his missteps, Ms. Gass says, Mr. Schultz has become more disciplined and a better listener.

Mr. Schultz concedes that he can no longer run Starbucks through the Cult of Howard. And he readily acknowledges that he badly misread the economy and underestimated the extent to which his customers would pull back during the recession.

At the time, he says, he had a hard time accepting that Starbucks would become a poster child for excess.

After his return, he halted new store openings and, with a P.R. flourish, closed every Starbucks in the nation for three hours to retrain baristas. The chain ran its biggest ad campaign ever, emphasizing the quality and freshness of its coffee. It ordered baristas to dump brewed coffee after 30 minutes.

But growth in same-store sales dipped below zero for the first time ever, and the company’s share price kept falling. It was a new feeling for Mr. Schultz, like the A student who breezes into college and then gets C’s.

Executives concluded that Starbucks had to close 200 American shops. The board suggested 600. Executives said that if sales and the economy got worse, they would also cut $400 million in costs. The board said no, let’s start cutting costs immediately, while closing locations. Starbucks ultimately closed 900 locations worldwide and cut $580 million in costs. As the decline in same-store sales neared 10 percent, board members asked executives to model what would happen if the sales slide hit 20 percent — which once would have been unthinkable.

“Nobody knew where the bottom was,” recalls James G. Shennan Jr., a venture capitalist who has been on the company’s board since 1990. “The general agreement around the table was we better have the doomsday plan.”

In December 2008, almost a year after he returned as C.E.O., Mr. Schultz flew to New York on the company jet. He and his team were scheduled to meet with analysts from Wall Street, where Mr. Schultz, once a darling, was now being doubted as never before.

On the plane, he reviewed the grim quarterly numbers: Profits were underwhelming, and holiday sales looked dreadful. Just before the meeting, the company’s chief financial officer, Pete Bocian, resigned.

Mr. Schultz reread the script for the presentation — and didn’t like what he saw. He worried that the stock price might drop so low that someone would swoop in and buy the company.

He summoned his executives to his Fifth Avenue apartment. Late into the night, around the dining room table, they revised the presentation.

The next day, as the executives rehearsed, Mr. Schultz kept interrupting. Vivek Varma, who had recently joined Starbucks as head of public affairs, told him that he should leave.

No one could remember anyone talking like that to Mr. Schultz. But he left. The next day, he and the other executives painted a somber picture for analysts and laid out the recovery plans. Rather than plunge, the company’s share price rose 20 cents that day.

Over the next year, Starbucks made much deeper and more difficult changes than Mr. Schultz had originally envisioned. By April 2009, same-store sales, though still down from a year earlier, were finally rising. By the holidays, they had turned positive.

INSTANT coffee: the very words leave a bad taste in many people’s mouths. But Starbucks has been developing instant coffee in earnest since 2006. Mr. Schultz says his industry considers instant a “death category.” It is, however, a $20 billion one.

Before he returned, Mr. Schultz complained that if Apple could develop the iPod in less than a year, Starbucks could surely develop an instant coffee in that time. Finally, in January 2009, the new product, Via, was scheduled for a full-scale introduction.

But there was a problem: market research was showing that skeptical customers needed a lesson about instant coffee. Some executives worried that a big rollout might flop. Ms. Gass and a few others told Mr. Schultz that Starbucks should delay Via and introduce it in two cities before going national.

“That was hard for him,” Ms. Gass says. But rather than overrule his executives, as he might have in the past, Mr. Schultz agreed. It turned out to be the right decision. After testing Via in Seattle and Chicago, Starbucks rewrote the plan for a nationwide introduction. For instance, instead of just giving away free samples, which customers forgot in the bottom of their briefcases, purses and backpacks, it prepared Via in the stores and gave customers a blind taste test.

In 2010, sales of Via were over $200 million. The instant coffee is now also sold in grocery stores and in Britain, Canada, Japan and the Philippines.

The methodical introduction of Via offered a sharp contrast to the old Howard Schultz whose gut told him — wrongly — that Sorbetto would be a winner. But he has also gone so far as to embrace big-company ideas like focus groups, which he used to shun. Delegating, and accepting other people’s conclusions, is now easier for him. “There’s been more arguing, challenging and debate in the last two to three years than there’s ever been,” says Mr. Alstead, the chief financial officer.

Mr. Schultz’s take: “What leadership means is the courage it takes to talk about things that, in the past, perhaps we wouldn’t have, because I’m not right all the time.”

Born entrepreneurs are not necessarily born managers. You need creativity and drive to start a company, discipline and delegation to run one. In the last year, people who work closely with Mr. Schultz say, he has shown he can make the leap.

Perhaps the bigger question is whether Mr. Schultz can, as he likes to say, preserve Starbucks’s soul, or whatever soul it has left. In a switch, the company is designing new stores with local woods, furniture and art, to make them feel more like a neighborhood shop. It is also buying specialty beans in limited supply, as artisanal shops do.

Whether Starbucks can recapture a neighborhood feel, as Mr. Schultz insists, is anyone’s guess. For many people, especially in areas where carefully made, lighter-roast coffee from the likes of Stumptown and Intelligentsia is trendy, Starbucks has become a place to go for free Wi-Fi, or to use the restroom, or to buy a coffee on the go.

There is a market for a convenient coffee chain, as the recent Starbucks sales rebound shows. But some customers and analysts say that the mass-market approach conflicts with Mr. Schultz’s vision of a global giant that somehow feels local everywhere.

Mr. Simon of Temple University says: “When you’re selling stuff people don’t need, you’ve got to be selling something else, and that’s what Starbucks lost. There’s a kind of dissonance between the messaging and the actual practice.”

Mr. Schultz no longer plans to blanket the United States with new Starbucks stores, sometimes with multiple locations on one block — a practice that inspired a contest on Flickr to see how many Starbucks shops people could fit into a single photograph. Instead, like so many other executives, he has his sights on China. Starbucks already has roughly 430 stores in mainland China and plans to have 1,500 there by 2015. India beckons as well. The company also plans to sell a wider variety of drinks and foods in grocery stores and its own shops, like Kind fruit and nut bars, which Starbucks put on the map.

IT may be difficult to believe, but there was a time when McDonald’s was a novelty. But, like Ray Kroc, who took over a small hamburger business and built it into the most successful fast food operation in the world, Mr. Schultz has learned that growth can be seductive, and that it can exact a price.

Starbucks and its leader are more measured than during his last stint in the corner office. “I think we are very conscious of the things that we have done wrong over the years, particularly when we just got caught up in the growth phase,” says Mr. Shennan, the Starbucks director. “We are not going to do that again under Howard’s management, I tell you, or the current board’s.”

In January, three years after his return, Mr. Schultz stood before 1,100 employees at the headquarters here. Three thousand more from around the world were patched in via Webcast. The company had finished its strongest holiday season ever, and Mr. Schultz had just unveiled its new, “coffee”-less logo. Yet his words were laced with caution.

“We have won in many ways,” he said, “but I feel it’s so important to remind us all of how fleeting success and winning can be.”

Saturday, March 12, 2011

John Gilmer’s Last Stand
By DANIEL W. CROFTS NY TIMES
Disunion follows the Civil War as it unfolded.
Library of Congress John A. GilmerWriting from Greensboro, N.C., in March 1861, the week after Abraham Lincoln took power, Representative John A. Gilmer sent a rapid-fire sequence of letters to William Henry Seward, the new secretary of state. “I am here in the very midst of the South,” Gilmer implored Seward, “and I beg you to weigh well the suggestions which I make to you.” He described the nervous impetuousness among secessionists, who were beginning to believe that fighting and bloodshed were necessary to sustain their flagging revolution. Their only hope was to instigate a collision between federal and state forces in the Deep South.

To prevent that from happening, Gilmer advised, the federal government must voluntarily relinquish the two Deep South coastal forts that it still controlled: Fort Pickens, offshore from Pensacola, Fla., and Fort Sumter, in the harbor of Charleston, S.C. Gilmer knew that his advice would be painful: Sumter had become a symbol of Union and nationality, a rebuke to secessionist claims to have created a separate nation. When Maj. Robert Anderson transferred his forces from a vulnerable position on shore to Sumter, which sat on an artificial island, in late December, he was instantly hailed across the North as a hero.

But Gilmer believed that Sumter could drag the country into civil war. As he well knew from his home state, the fear of “coercion” — that is, the use of federal force against the seceding states — continued to prop up the floundering secession cause in the Upper South. “The only thing now that gives the secessionists the advantage of the conservatives,” Gilmer wrote, “is the cry of coercion — that the whipping of a slave state, is the whipping of slavery.” He wanted to extinguish this dangerous firebrand.

Library of Congress William Henry SewardGilmer’s four intense, passionate letters to Seward were among the most important documents written during the months between the 1860 election and the start of the war. If the peace were to hold, Gilmer offered perhaps the only plausible road map. What’s more, the hurried correspondence between Gilmer, a North Carolinian, and Seward, an eminent New Yorker, gives lie to the notion that the North and South were two two utterly divergent regions — on the contrary, even as the voices of secessionists and Northern radicals grew ever louder, men on both sides sought desperately to find a resolution to the crisis.

Gilmer’s first letter sketched his plan for saving the Union. Gilmer believed the Deep South could not successfully maintain its independence if the Upper South — where two-thirds of white Southerners lived — remained in the Union. Eventually, Gilmer predicted, the Upper South would “unite cordially with the free states” to pressure the Lower South to return to the Union. The essential prerequisite was an interval of time — perhaps a year or two — to allow new, strongly pro-Union leadership to take power in the Upper South. At the same time, the experience of going “out into the cold for a while” would diminish popular enthusiasm for independence in the Deep South.

A man of medium height with a “strong compact form and powerful muscular development,” Gilmer conveyed “an atmosphere of hope, confidence, and cheerfulness.” Born on a farm in 1805, he grew up wearing homespun clothes but became one of North Carolina’s most accomplished lawyers. Observers recalled how his “full round face” with “laughing dark eyes” was framed by thick hair and long sideburns. Photos show that the chin beard he wore as a youth was clean-shaven by his middle years.

Gilmer ventured into politics in the 1840s. After representing his home of Greensboro and its adjacent rural districts in the state senate for a decade, he won a seat in Congress in 1857. Re-elected in 1859, he was chosen to lead the Southern Opposition Party in the House, a bloc of almost two dozen former Whigs. At the start of the session, his party put him forward as a compromise choice for speaker of the House. But even though he owned 53 slaves, Gilmer was distrusted by Southern Rights absolutists. They feared the Opposition would become more formidable if North-South tensions ebbed — and that an arrangement between the Opposition and the hated “Black Republicans” might evolve.

Democrats had reason to worry. Although Lincoln was elected president entirely with Northern votes, he wanted to include one or more Southerners in his cabinet, in order to show that his administration would be national, not sectional. At the behest of Seward, whom Lincoln persuaded to take the top cabinet post as secretary of state, the president-elect secretly agreed that Seward and his right-hand man, Thurlow Weed, might offer Gilmer a cabinet seat. Lincoln had reservations about selecting a non-Republican, but he respected Gilmer, knew that he was an intense Unionist, and knew too that he had been a long-term Whig.

For two months, Gilmer weighed Lincoln’s offer, but in the end he declined. He was disappointed that Republicans would not offer the South a symbolic concession regarding slavery in the territories, and he was alarmed to see the initial version of Lincoln’s Inaugural Address, which promised to reclaim federal property in Confederate hands and closed with an ominous threat to defend the Union by force if necessary. Gilmer’s refusal must have distressed Seward, who was struggling desperately to move Lincoln in a more conciliatory direction.

To make matters worse, Lincoln discovered on his first full day in office that Major Anderson was running low on food at Sumter, and that he no longer felt able to defend himself against the powerful weapons Confederates installed at other points in the harbor. Gen. Winfield Scott, who had masterminded the abortive mission to reinforce Sumter in early January, weighed in to say that it would be futile to attempt the same thing again. Thus the acute phase of the Sumter tangle landed in Lincoln’s lap just as he started his presidency.

Gilmer’s letters to Seward, sent on March 7, 8, 9 and 12, each would have reached Washington a few days later. At just this time, Seward tried to push Lincoln toward withdrawal. Seward had loyally toed the line for Lincoln up until this point, while at the same time reassuring Southern Unionists that the new administration would, in the end, swallow the bitter pill.
An unfolding history of the Civil War with photos and articles from the Times archive and ongoing commentary from Disunion contributors.
Suddenly — acting with courage, or audacity, or hubris, or insubordination, or treachery, or desperation or some combination of these qualities — Seward leaked word that Sumter would soon be abandoned. He knew in advance that Lincoln and other Republicans dreaded the impact this news would have on the party, especially among hardliners. Seward gambled that the story could be managed if announced quickly, so as to blame the outgoing Buchanan administration for leaving Sumter indefensible. Most of all, Seward gambled that Lincoln would ultimately support him.

Seward judged that giving up on Sumter was the only way Lincoln could uphold his inaugural appeal for peace. But that address had also included a promise “to hold, occupy, and possess the property and places belonging to the government.” What it boiled down to was this: Were peace and Sumter compatible? And if not, which would take priority?

Unionists in the Upper South jubilantly received news of the supposed coming Sumter evacuation. It had “acted like a charm,” one wrote to Seward, and given them “great strength.” When, after several days, nothing happened, however, they became anxious. The weeks dragged by, and contradictory reports flew along the telegraph lines. Was the apparent promise not to be kept?

Finally, on April 12, Gilmer posted another letter to Seward. “I am so deeply distressed that my heart seems to melt within me,” he wrote. “If what I hear is true that we are to have fighting at Sumter or Pickens, it is what the disunionists have most courted, and I seriously apprehend that it will instantly drive the whole South into secession.” That same day, at dawn, Confederate cannons already had opened the bombardment of Sumter.
Sources: Gilmer’s letters to Seward, in the William Henry Seward Papers at the University of Rochester, were published a century ago as an appendix to Frederic Bancroft, “The Life of William H. Seward,” two vols. Thanks to Google Books, interested readers may consult them through the hyperlink. The original and revised versions of Lincoln’s Inaugural Address, with Seward’s modifications indicated, may be found in Roy P. Basler, ed, “The Collected Works of Abraham Lincoln.” See also Daniel W. Crofts, “Reluctant Confederates: Upper South Unionists in the Secession Crisis“; David M. Potter, “Lincoln and His Party in the Secession Crisis“; and Russell McClintock, “Lincoln and the Decision for War: The Northern Response to Secession.”

Daniel W. Crofts is a professor at the College of New Jersey
Copyright 2011 The New York Times Company

Friday, March 11, 2011

1 Million Workers. 90 Million iPhones. 17 Suicides. Who’s to Blame?
By Joel Johnson Wired March 2011
The work at Foxconn's Shenzhen plant can be repetitive, exhausting, and alienating—like manufacturing jobs anywhere in the world.

It’s hard not to look at the nets. Every building is skirted in them. They drape every precipice, steel poles jutting out 20 feet above the sidewalk, loosely tangled like volleyball nets in winter.

The nets went up in May, after the 11th jumper in less than a year died here. They carried a message: You can throw yourself off any building you like, as long as it isn’t one of these. And they seem to have worked. Since they were installed, the suicide rate has slowed to a trickle.

My tour guides don’t mention the nets until I do. Not to avoid the topic, I don’t think—the suicides are the reason I am at a Foxconn plant in Shenzhen, a bustling industrial city in southern China—but simply because they are so prevalent. Foxconn, the single largest private employer in mainland China, manufactures many of the products—motherboards, camera components, MP3 players—that make up the world’s $150 billion consumer-electronics industry. Foxconn’s output accounts for nearly 40 percent of that revenue. Altogether, the company employs about a million people, nearly half of whom work at the 20-year-old Shenzhen plant. But until two summers ago, most Americans had never heard of Foxconn.

That all changed with the suicides. There had been a few since 2007. Then a spate of nine between March and May 2010—all jumpers. There were also suicides at other Foxconn plants in China. Although the company disputes some cases, evidence gathered from news reports and other sources indicates that 17 Foxconn workers have killed themselves in the past half decade. What had seemed to be a series of isolated incidents was becoming an appalling trend. When one jumper left a note explaining that he committed suicide to provide for his family, the program of remuneration for the families of jumpers was canceled. Some saw the Foxconn suicides as a damning consequence of our global hunger for low-cost electronics. Reports from inside the factories warned of “sweatshop” conditions; old allegations of forced overtime burbled back to life. Foxconn and its partners—notably Apple—found themselves defending factory conditions while struggling to explain the deaths. “Suicides in China Prompt Damage Control,” blared The New York Times.

I seem to be witnessing some of those damage-control efforts on this still-warm fall day as two Foxconn executives—along with a liaison from Burson-Marsteller, a PR firm hired to deal with the post-suicide outcry—lead me through the facility. I have spent much of my career blogging about gadgets on sites like Boing Boing Gadgets and Gizmodo, reviewing and often praising many of the products that were made right here at Foxconn’s Shenzhen factory. I ignored the first Foxconn suicides as sad but statistically inevitable. But as the number of jumpers approached double digits, latent self-reproach began to boil over. Out of a million people, 17 suicides isn’t much—indeed, American college students kill themselves at four times that rate. Still, after years of writing what is (at best) buyers’ guidance and (at worst) marching hymns for an army of consumers, I was burdened by what felt like an outsize provision of guilt—an existential buyer’s remorse for civilization itself. I am here because I want to know: Did my iPhone kill 17 people?

My hosts are eager to help me answer that question in the negative by pointing out how pleasant life in the factory can be. They are quick with the college analogies: The canteens and mess halls are “like a college food court.” The living quarters, where up to eight workers share rooms about the size of a two-car garage, are “like college dorms.” The avenues and boulevards in the less industrial parts of the campus are “like malls.”

For all their defensiveness, my guides are not far off the mark. The avenues certainly look more like a college campus than the dingy design-by-Communism concrete canyons I half expected to find. Sure, everything on the Foxconn campus is a bit shabby—errant woody saplings creep out of sidewalk cracks, and the signage is sometimes rusty or faded—more community college than Ivy League, perhaps. But it’s generally clean. Workers stroll the sidewalks chatting and laughing, smoking together under trees, as amiable as any group of factory workers in the first world.

But “college campus” doesn’t quite capture the vastness of the place. It’s more like a nation-state, a gated complex covering just over a square mile, separated from the rest of Shenzhen’s buildings by chain link and concrete. It houses one of the largest industrial kitchens in Asia—perhaps the world. Shenzhen itself was developed over the past three decades as one of party leader Deng Xiaoping’s Special Economic Zones—a kind of capitalist hot spot. The experiment was a rousing success. Millions of workers, gambling that low but dependable wages would be more readily found in Shenzhen, migrated from the poor, rural western provinces, packing into the tenement complexes that soon riddled the city. Factory work offered a chance to change their lives and the lives of their families back home, but it offered little in the way of security. Many companies did not supply housing, leaving workers to find shelter in dodgy slums or encouraging them to sleep on the assembly line. When they did provide lodging, it was typically a dorm room crammed with bunk beds.

According to company lore, Foxconn founder Terry Gou was determined to do things differently. So when the firm built its Longhua factory in Shenzhen, it included onsite dormitories—good ones, designed to be better than what workers could afford on their own. Terry Gou built on-campus housing, I am told, because Terry Gou cared about the welfare of his employees.

Up went a factory, up went a dorm. Up went an assembly line, up went a cafeteria. While other companies’ workers fended for themselves or slept under the tables they worked at, Gou’s employees were well fed, safe from the petty crime of a growing metropolis, and surrounded by peers and advocates.

It rings as unalloyed munificence—until a man puts his foot on the edge of a roof, looks across the campus full of trees and swimming pools and coffee shops, and steps off into nothing.


Foxconn executives compare their plant to a college campus, and they aren't far off—the facilities contain everything from dormitories to counseling centers.
Photo: Tony Law

In the part of our minds where Americans hold an image of what an Asian factory may be, there are two competing visions: fluorescent fields of chittering machines attended by clean-suited technicians, or barefoot laborers bent over long wooden tables in sweltering rooms hazed by a fog of soldering fumes.

When we buy a new electronic device, we imagine the former factory. Our little glass, metal, and plastic marvel is the height of modern technological progress; it must have been made by worker-robots (with hands like surgeon-robots)—or failing that, extremely competent human beings.

But when we think “Chinese factory,” we often imagine the latter. Some in the US—and here I should probably stop speaking in generalities and simply refer to myself—harbor a guilty suspicion that the products we buy from China, even those made for American companies, come to us at the expense of underpaid and oppressed laborers.

From what I can tell, though, the reality is more banal than either of those scenarios. This is what it’s like to work at the Foxconn factory: You enter a five- or six-story concrete building, pull on a plastic jacket and hat, and slip booties over your shoes. You walk up a wide staircase to your assigned floor, the entirety of which lies open under unwavering fluorescent light.

It’s likely that your job will require you to sit or stand in place for most of your shift. Maybe you grab components from a bin and slot them into circuit boards as they move down a conveyer. Or you might tend a machine, feeding it tape that holds tiny microprocessors like candy on paper spools. Or you may sit next to a refrigerator-sized machine, checking its handiwork under a magnifying glass. Or you could sit at a bench with other technicians placing completed cell-phone circuit boards into lead-lined boxes resembling small kilns, testing each piece for electromagnetic interference.

If you have to go to the bathroom, you raise your hand until your spot on the line can be covered. You get an hour for lunch and two 10-minute breaks; roles are switched up every few days for cross-training. It seems incredibly boring—like factory work anywhere in the developed world.

You work 10 hours or so, depending on overtime. You walk or take a shuttle back to your dorm, where you share a room with up to seven other employees that Foxconn management has selected as your bunkmates. You watch television in a common room with bench seating, on an HDTV that seems insultingly small compared with the giant units you and your coworkers make every day. Or maybe you play videogames or check email in one of the on-campus cybercafes, perhaps sharing a semiprivate “couple’s booth” with a girlfriend or boyfriend.

In the morning, you clean yourself up in your room’s communal sink or in one of the dorm’s showers, then head back to the production line to do it all over again.

A report by the UK’s The Mail on Sunday in 2006 accused Foxconn of forcing workers to pull long shifts to meet unrealistic quotas. That report prompted an audit from Apple, which found “no instances of forced overtime” but noted that “employees worked longer hours than permitted by our Code of Conduct”—over 60 hours a week. (Apple has performed such audits every year since.)

Last April, the Chinese newspaper Southern Weekend sent a young reporter into Foxconn to work undercover for a month; he returned with bleak tales of hopelessness and “voluntary overtime affidavits.” An October report by Students and Scholars Against Corporate Misbehavior, a Hong Kong-based labor rights group, found that workers at Foxconn’s Shenzhen plant worked 13 days straight, 12 hours a day, to produce the first generation of Apple’s iPad. Foxconn has denied the reports and said it complies with all Chinese regulations regarding working hours and overtime.

That 17 people have committed suicide at Foxconn is a tragedy. But in fact, the suicide rate at Foxconn’s Shenzhen plant remains below national averages for both rural and urban China, a bleak but unassailable fact that does much to exonerate the conditions at Foxconn and absolutely nothing to bring those 17 people back.

But the work itself isn’t inhumane—unless you consider a repetitive, exhausting, and alienating workplace over which you have no influence or authority to be inhumane. And that would pretty much describe every single manufacturing or burger-flipping job ever.

I walk one afternoon to the brassiest concentration of Shenzhen’s manufacturing power, the SEG Square electronics market in the Futian district. My Taiwanese guide, Paul, has spent the better part of a decade in Shenzhen as a steward for Western electronics companies seeking to procure components or goods from one of the city’s thousands of suppliers. Here in SEG Square, the products of those suppliers fill glass cases and hang from pegboards in vast, low-ceilinged grottoes that would echo if they weren’t crammed wall to wall with vendors’ stalls. Elsewhere in Shenzhen, such markets are stocked with bamboo knickknacks and counterfeit puffy vests; this one is filled with obviously fake iPhone chargers.

SEG Square’s markets are crowded, loud, and mildly mephitic from cigarette smoke and the odor of fresh-baked electronics. Whole floors are dedicated to knockoffs, not just at-first-glance-perfect clones of popular products but also cargo-cult evocations, like FM radios cast from a third-generation iPhone mold that probably wasn’t convincingly accurate in the first place. It all looks like so much junk, but there is something touching about it. Each item was once the moment’s work of a human being.

Paul has seen his share of factories in Shenzhen over the years. I ask him about Foxconn, and he echoes the sentiment I’ve heard from others: Whatever problems Foxconn has, it’s still one of the top places to work in the area. “In terms of infrastructure, Foxconn is by far the best factory in China,” he says. We stop to haggle with a vendor over five nonfunctional dummy iPhones (in mythic white) that I want to buy as gag gifts for friends back home. “But how much of that is a facade?” Paul asks, citing the LCD monitors that grace the company’s assembly lines—ostentatious symbols of modernity that provide little benefit to the worker. “Pointless waste of electricity.”

As for the Cyberfox Café, Foxconn’s onsite Internet lounge, where I recently ate a fine bowl of bitter melon soup? “It might look huge, but considering the size of Foxconn’s workforce,” Paul says, “it can’t even serve 5 percent of the employees.”

Even if it is one of the better places to work in Shenzhen (at least for entry-level factory jobs), by the middle of 2010, after `, it was clear to Foxconn management that they were no longer running an anonymous manufacturing company. Foxconn was now a billion-dollar avatar of globalization, and they were feeling the rubbernecked gape of international scrutiny.

The living quarters on the Shenzhen campus were recently handed off to property management companies that are more experienced at addressing the living needs of employees. Foxconn hopes the outside firms will be quicker to respond to tenant complaints, although some critics suggest that the company hopes to outsource some of the blame as well. (When Foxconn constructs new inland factories, the living quarters will be managed in partnership with local governments.)

Foxconn has also built onsite counseling facilities, which are staffed by psychologists and counselors. I toured two such facilities. One, sharing storefront space on a busy avenue, has agents who can help workers replace lost keycards or buy prepaid mobile-phone cards to call home; this place was fairly busy. Another, off the main drag, was a full-on care center with music-therapy rooms, private counseling, and lounge areas; when I visited, it was nearly empty. In one room, a life-size Weeble Wobble with a scowling face could be smacked with a padded baseball bat. (It relieved my own stress for a moment.)

But the most ambitious effort to address worker morale is a modest-looking electronics store on the Foxconn campus, right next to a shop selling fresh fruit. It’s called Ten Thousand Horses Galloping. (I’m assured the name has more pizzazz in Chinese.) Inside, you can buy rice cookers and desk fans and phones. It’s like a RadioShack without the DIY components, or a Best Buy without the large appliances or racks of media. And according to Foxconn executives, it’s the future of their company.

Foxconn campuses already have company stores where workers can buy the products they manufacture at discounted prices. Ten Thousand Horses Galloping is designed to be an electronics store for the rest of China. Foxconn plans to offer franchises to employees and even grant them a little startup capital.

The idea is to give some lucky, hard-working employees a way to bring a touch of entrepreneurial spirit back to their home provinces, especially in the poorer west. The workers get to own their own businesses; Foxconn gets to supply the stores with goods. To date, Foxconn has granted franchises to 60 employees and several more to outsiders.

Foxconn positions Ten Thousand Horses Galloping as a new direction for the company, one that allows it to shift into retail while tapping into the cream of the roughly million-strong workforce it has cultivated in China. But the store also offers another benefit to Foxconn, one that wasn’t even needed until recently: employee retention. In recent years, factories have been sprouting up in China’s interior to take advantage of cheaper labor. Workers aren’t flocking to Shenzhen as they did a decade ago, when it was one of the only places to get a manufacturing job. “Now that work opportunities are increasing in the interior regions of the country, would-be migrants are willing to take a lower salary at home to stay with their families,” says Benjamin Dolgin-Gardner, general manager of Shenzhen CE and IT Limited. Even Foxconn itself is building a facility in Hunan, after being lured by multibillion-dollar tax and investment incentives from the provincial government.

Shenzhen may soon relinquish its role as the stoked furnace of the Chinese dream. But will that mean even greater expansion of the middle class, with commensurate benefits—or just the same old system shifted a thousand miles to the west?


The Foxconn counseling centers provide employees with everything from life-size punching bags to music therapy— employees can even reload their calling cards.
Photo: Tony Law


Since Foxconn installed nets on all buildings at its Shenzhen campus, the suicide rate among employees has declined dramatically.
Photo: Tony Law

In America, we have wrestled with the idea of divine sanction since the country’s inception. Some of us believe we have a God-given dominion over the earth; others argue that we’re bound to a larger Gaian system and are, at our best, caretakers.

My heart is with the caretakers. But I believe that humankind made a subconscious collective bargain at the dawn of the industrial age to trade the resources of our planet for the chance to escape it. We live in the transitional age between that decision and its conclusion.

In this middle age, the West built a middle class. It’s now eroding and may be less enduring than the American Dream itself—a dream we exported to the rest of the world by culture and conquest. Nevertheless, most Americans have food, cars, gadgets. How can we begrudge a single person these luxuries if we want them ourselves?

By many accounts, those unskilled laborers who get jobs at Foxconn are the luckiest. But eyes should absolutely remain on Foxconn, the eyes of media both foreign and domestic, of government inspectors and partner companies. The work may be humane, but rampant overtime is not. We should encourage workers’ rights just as much as we champion economic development. We’ve exported our manufacturing; let’s be sure to export trade unions, too.

I’ve written thousands of posts, millions of words, about things. Usually things with electricity in them. Doing this for a living, on and off, for the better part of a decade, has greatly—perhaps fundamentally—changed how I perceive the world around me. I can no longer look at the material world as a collection of objects but instead see interfaces, histories, and materials.

To be soaked in materialism, to directly and indirectly champion it, has also brought guilt. I don’t know if I have a right to the vast quantities of materials and energy I consume in my daily life. Even if I thought I did, I know the planet cannot bear my lifestyle multiplied by 7 billion individuals. I believe this understanding is shared, if only subconsciously, by almost everyone in the Western world.

Every last trifle we touch and consume, right down to the paper on which this magazine is printed or the screen on which it’s displayed, is not only ephemeral but in a real sense irreplaceable. Every consumer good has a cost not borne out by its price but instead falsely bolstered by a vanishing resource economy. We squander millions of years’ worth of stored energy, stored life, from our planet to make not only things that are critical to our survival and comfort but also things that simply satisfy our innate primate desire to possess. It’s this guilt that we attempt to assuage with the hope that our consumerist culture is making life better—for ourselves, of course, but also in some lesser way for those who cannot afford to buy everything we purchase, consume, or own.

When that small appeasement is challenged even slightly, when that thin, taut cord that connects our consumption to the nameless millions who make our lifestyle possible snaps even for a moment, the gulf we find ourselves peering into—a yawning, endless future of emptiness on a squandered planet—becomes too much to bear.

When 17 people take their lives, I ask myself, did I in my desire hurt them? Even just a little?

Sunday, March 06, 2011

The Minds of the South
By MICHAEL O'BRIEN NY TIMES

Disunion follows the Civil War as it unfolded.
Early 1861 found the 23-year-old Henry Adams in Washington, working as the private secretary to his father, Charles Francis Adams, a representative from Massachusetts. Adams was a keen observer even at that early age, and he focused much of his attention on the Southern political delegations going through the throes of secession. To Adams, the Southerners were little more than madmen. In a Jan. 8 letter to one of his brothers, he wrote, “I do not want to fight them … They are mad, mere maniacs, and I want to lock them up till they become sane; not kill them. I want to educate, humanize, and refine them, not send fire and sword among them.”

Such stereotypes, though, ran counter to the way most Southerners saw themselves. To them, they were among the best and the brightest of their time: they read and wrote political philosophy, they studied statistics, they took an interest in sociology, they travelled and kept up with the latest European trends and they were fastidious Biblical and classical scholars. Above all, they had regularly produced philosophically adept politicians, not only in the earliest generation (Thomas Jefferson, James Madison) and in the middle generation (John C. Calhoun), but in the generation that opted for secession. To them the decision to secede was not rash, but rational, the result of reasoned discussion. On Feb. 18, 1861, the South Carolinian diarist Mary Chesnut wrote, “This southern Confederacy must be supported now by calm determination — & cool brains,” and she did not doubt that the decision to leave the Union evidenced a coolness of calm judgment.

She was not wrong. Historical evidence abounds that Southerners were not stupid or close–minded, let alone mad, but rather as capable of well-informed analysis as anyone else (though also as capable of making the wrong analysis). For good or ill, theirs was a culture which believed that ideas mattered and had consequences. In this spirit, the case for secession had been reasoned out over generations, in books, periodicals, pamphlets, sermons and speeches. It was not something invented, in a moment of panic after Lincoln’s election, but a machine made by many hands, which needed only to be started up when the moment seemed right. If secession was a mistake, as events were to prove, it was an intellectual blunder, not because it was incoherent as an assertion of political principle, but because it fatally mistook Northern resolve and failed.

Library of CongressAn 1861 Currier & Ives cartoon depicting secession as a race off of a cliff. “We go it blind!” yells the figure depicting Alabama.
Antebellum Southerners had often disagreed with one another, and secession was no exception. It is probable that, at least before the summer of 1861, more Southerners opposed secession than agreed with it. Despite this habit of dissent, however, a few ideas had focused debate on what it meant to be a Southerner. Slavery was seen as fundamental to social order, though opinion was divided about why. Almost everyone agreed that the Bible and Christianity sanctioned the institution, some thought its contribution to sustaining racial hierarchy was indispensable, and no one doubted that the Southern economy would be wrecked by the elimination of forced labor.

Like other Americans, Southerners were interested in ideas of progress, thought themselves modern and understood how deeply enmeshed they were in modern capitalism. Most were earnest free traders. But, more than most Americans, Southerners had a sharp sense that progress did not come easily, that there were usually hard choices to be made about how its benefits could best be shared. It would be nice, they said, if everyone could painlessly benefit from progress. But many believed that tradeoffs were a “necessity,” a term that cropped up frequently in debates: among other “necessities,” they believed, was that in order for the majority whites of European descent to prosper, many — including Africans, Indians and Mexicans — had to lose out. A few Southerners felt guilty about this, many were smug and not a few respectfully blamed God for arranging life this way. The point is, they thought and argued about it, at length and in depth. Contrary to Henry Adams’s impression, ideas mattered in the Old South.

One idea in particular had gained purchase by the end of the antebellum era. Southerners were less interested in individualism than they had been in the 18th century, and more interested in the proposition that community was desirable and that a government which did not rest on shared social habits must fail. The “South” was one such community, but states even more so. Whereas a state in 1776 was mostly a polity, by 1860 it was thought to be a social world, with its own literature, habits, character and cultural institutions.

This emphasis on local values was not always in conflict with Unionism; Calhoun, for example, had been a dogged Unionist all his life, as well as a devoted South Carolinian. For all that, the cultural institutions of the states grew more elaborate, while those of the nation remained thinner. By 1860 there was a South Carolina Historical Society, but not yet an American Historical Association. There was a University of Virginia, but not a national university. So, when tensions within the Union grew intolerable, Southerners had alternatives — their states, their South, their version of American — ready to hand.

Indeed, the options seemed all the more attractive because they seemed so conformable to the political traditions of 1776. As Jefferson Davis put it in his inaugural address as provisional president of the Confederacy, “Our present position … illustrates the American idea that government rests upon the consent of the governed, and that it is the right of the people to alter or abolish a government whenever it becomes destructive of the ends for which it was established.”

This contrasted with prevailing Unionist ideas, articulated by Abraham Lincoln, which held that first there had been an American people and a Union, and then this Union had sanctioned the political subdivisions that were the states. But Davis believed this was backward: first there had been the individual colonies, which had broken with Britain and had established themselves as sovereign states, and then these states had agreed to create the United States as a workmanlike compact. The states that had made the compact were entitled to unmake it, if they followed the appropriate democratic procedures of consulting the popular will.

This was not just a difference of convenience, but a philosophical division about the nature of the state and time. Unionists were inclined to the view that, with the creation of the American republic, history had stopped and that the Union was literally perpetual, at least as long as the whole American people found it satisfactory. Davis thought that history could move on, that the political geography of God’s purposes for Americans could be rearranged without serious damage to providence.

As William Henry Trescot, one of the earliest proponents of secession, had put it in 1850, “We believe that the interests of the southern country demand a separate and independent government … The Union has redeemed a continent to the Christian world … It has developed a population with whom liberty is identical with law, and in training thirty-three States to manhood, has fitted them for the responsibility of independent national life … It has achieved its destiny. Let us achieve ours.”

Today Americans necessarily embrace the Unionist point of view of 1861, so that talk like Trescot and Davis’s gets branded as extremist and incoherent. Yet it was not always so: many American political thinkers before 1860 dissented from Lincoln’s version of history and thought Davis’s compact theory to be, at a minimum, a cogent proposition.

This much is clear: far from being a case of the crazy South splitting from the wise North, in 1861 the balance of rationality and irrationality was poised. Both sides had a delicate mix of wisdom and folly, clarity and confusion, altruism and self–interest. Neither had a marked advantage when it came to rationality or madness. And neither had the least idea what war would mean, as is often the way with the best and the brightest.
Michael O’Brien is a professor of American history at Cambridge University

Copyright 2011 The New York Times