New economy fervor with an old-world accent
Digby Jones isn't your normal buttoned-down British business speaker.
Last Monday, he was the only man wearing shirtsleeves at the British-Polish Chamber of Commerce breakfast in the Sheraton Hotel ballroom. Jones looked more like he belonged in the high-tech world of California's Silicon Valley.
Maybe that was intentional. As the new chief of the Confederation of British Industry, he chose Poland for his first foreign trip. In his speech, he stressed that he wasn't afraid to speak the heretofore unspeakable about the competitive challenges facing British business both home and abroad.
A case in point is the nationalist firestorm over BMW's sell-off of the Rover car factory in Longbridge, 800 yards from where Jones grew up. There are 8,000 jobs directly at risk as a result of the sell-off, with another 40,000 indirectly linked to the car company. Jones said he understands the trauma the sell-off has caused, but added that if an American car company and not a German one had been facing the Rover decision, "they would have done exactly the same thing."
According to Jones, the brand was in trouble, debts were mounting and the pound is uncommonly strong. Rover's is not the only case in which the U.K. has emerged as being perceived as too expensive for foreign investors, he said. The Finns recently decided to invest their state-of-the-art paper mill machinery in their Portuguese, and not their Midland, plant.
When British consultant Donald M. Blair asked Jones why British exports to Poland had fallen 13% in the past two years at a time when exports from other countries were rising, Jones punted.
"Are you saying this is not because the (strong) pound makes these goods more expensive?" he asked. "What I'd like to know is the percentage of American exports here because the dollar and pound sterling have been tracking each other ... I would say it has nothing to do with sentiment. I would say that the purchaser is choosing less expensive items."
Jones noted that Poland looms large in British business plans for the future. The carmaker LDV (formerly Leyland) has entered into a joint venture with Daewoo to make a minivan here. Poland is LDV's "first country for expansion," Jones said. He added that LDV, which is located in Birmingham, will manufacture and assemble some parts there and some here.
In addition, he said that while some European Union (EU) countries fear the impact of Poland's huge agriculture sector once it joins the EU, the British welcome the possible confrontation.
"There is a serious feeling that when Poland comes in, it will destroy the common agriculture policy, which the British think would be great. They see Poland as an agent of change," he said.
He added, however, that the "huge changes in the next 20 years will test politicians' resolve" in dealing with farmers, much as the miners' strikes tested Margaret Thatcher and the Rover revolt is a frontline political issue today.
In June, the British-Polish Chamber of Commerce is planning a workshop between the Polish and the West Midlands. Is that bad or fortuitous timing?
"Bad days are just good days in disguise," Jones said. "Right now, there are a lot of grieving people but they have got to look forward, develop new skills and new markets." The Polish workshops could be one of those steps forward, he said.
Jones had only one cautionary warning for Poland: "Don't sell yourself as a cheap-labor market. You'll put a millstone around your neck for all time." And besides, he said, "Poland won't be as cheap as China. And it will not have to be as cheap." Instead, it can sell itself as a market of highly skilled technical people.
Big developments ahead:
A 10-year-anniversary celebration for Lynka will take place in Krakow. The bash will celebrate the T-shirt company's success, which began when John Lynch and Ann Kalin came to Poland as business advisers and stayed as investors.
Avon Investments, which has had phenomenal success in spreading its on-the-ground network of people selling beauty products, is set to reveal their next investment strategy next week.
This is insider-dealing time for Citibank and Bank Handlowy executives, who are sorting out who will do what, and where, in the merged banking structure.
"Can't talk wait a month or so," said a smiling Handlowy retail chief, Maciej Lebkowski.
The Citibank (Poland) board president, Shirish Apte, said most of the plans have been worked out but he won't talk about it until everything is nailed down. "I'm superstitious," he added. Small wonder, given that Citibank got its chance to do a deal with Handlowy when the BRE Bank-Handlowy merger came unexpectedly unglued after the Treasury Ministry protested what they saw as a too low per-share price.
