Archive for October, 2008

Last week I attended a lecture in Sant Cugat Tribuna – a platform for raising business profiles through periodic discussions and lectures addressed to top executives and businessmen and women from all sectors – of the professor Mr. Leopoldo Abadía. Although I have visited many times his blog and intensively read his opinions about the economic crisis and the “subprime” loans, I was still surprised – and even more – I was perplexed and restless after listening to his vision on this so-called financial crisis.

Mr. Leopoldo’s explanations are so simple and easy to understand that it is hard to believe that what he was explaining happened in our present-day society. This has mocked those who rule important financial institutions as they all had been highly swindled.

I still remember a Spanish movie from the 50′s , “The Cheaters”, where Toni Leblanc and Antonio Ozores wisely cheat a silly but miser who accepts to pay less money for the value of a bunch of small papers resembling bank notes. At the end, the two wise guys leave with the money and the avaricious man remains with a bunch of paper notes.

In industrial companies, and I guess also in all others, when we do receive from our suppliers components or goods, we do a quality control by sampling or also using different criteria. This is to maintain or improve the quality of our products and also to maintain the prestige of our company and brands. No matter if we are using certified quality controls or we are outsourcing the quality control in origin: when the products arrive in our facilities, we must double check and do another quality control.

Those banks who accepted a bunch of papers resembling bank notes did not make any quality control. But, what was worst is that they used the money of their customers in exchange of a bunch of small papers. They were cheated, and they acted with big irresponsibility and greed using the money of their customers, customers that trusted in them.

Seems that today some small banks (the big ones are only worried on how to make up the bad results and move them to their annual profit and losses) are trying to know what relies beneath each bunch of small papers they have, and have sadly encountered that what they have is nothing else but “nothing” and that there was no property in exchange to the money they loaned to individuals and companies that had not a healthy financial situation.

Now it is time then to ask where the money from investors is, and if there is a property behind a bunch of only small papers. If this is true, then we must call it as The Big Cheat, and find out who had the malicious idea. If the banks have lost the money of their customers, if honourable investors have lost their money, therefore in which lost arch this money had been sent?.

Who has the Lost Arch? Or, where do you think it is located? That is the question.

Josep Torrents. 26.10.2008

Dedicated to all those Quality Control Managers: do not expect certain qualities and do please make your task even better. And also this is a dedication to Operation Managers, begging them to make sure that what is in their inventories has an updated value.

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The structural financial problems in today’s global world oblige us to shrink the potentiality of many markets worldwide. The sales in many sectors decrease, customers that do not pay their invoices are dramatically increasing, and we all must make much more efforts to do profitable and high-quality sales.

Now it is time for good salesmen. We can recognize them as they are real professional, with high selling skills, and with an attitude that makes them improve everyday. In fact, salesmen that will certainly achieve their goals and budgets. On the contrary, there is another type of salesmen, those who when the economy is in good health, survive and achieve their budgets. However, despite they are good professionals, they cannot perform well in bad periods like nowadays: it is only then when some weaknesses in them arise.

It is also now time for good Commercial Managers and Sales Managers. All must be good salesmen. Although not all good salesmen can also become good Commercial Managers, a Commercial Manager must be a good salesman, understand the difficulties of the moment, take the right decisions and make his or her team lead them.

Next year will be an important year for the professional career of many of those who have sales responsibilities. Their attitude, responsibility, compromise and work capacity, will be decisive for their future. Only if they use all these above mentioned qualities, they will be efficient and succeed. But above all, this will become a success for themselves and also for the company they work for.

It is their great opportunity.

Josep Torrents.


Dedicated to my sales teams and to myself. I will do my utmost to let them accomplish their budgets.

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Shanghai 2008

Shanghai 2008

About two years ago, I wrote to several politicians, business leaders and Economic analysts to share with them my worries about the evolution of certain parameters of capital flows, and about certain ratios of several sector debts, that in my limited vision of that moment, I could not understand, but they seemed already alarming to me.Only two of them answered to me: the first one, a good friend of mine, replied saying that my pessimistic point of view of the future to come was not correct because, although he agreed in some of my opinions, the results forecasted by me were absolutely impossible to happen. He said that if my predictions were true, there would be a major crisis, much higher of what the economic authorities from the countries involved would ever permit. The second, a funny guy who writes editorials in a famous economical newspaper, replied me with a drawing and three laughs “ha, ha, ha” in big letters written with a thick pen.

The truth is that I thought that my points of view and my theories maybe were too catastrophic, and that I should devote Sunday mornings to play golf instead of thinking about writing worrying letters. In fact, the “ha, ha, ha”, upset me and the drawing showed clearly to me his opinion about my eschatological letter.

In August 2007, after a difficult July from a business point of view, and worried because of my responsibility as president of AMEC – a non-profit-making business association of companies in Catalonia promoting exports and its internationalisation – I felt the urge of writing another letter, in which I wanted to make the readers think about different opinions about the society, the university and about companies that deeply worried me. In my letter – written in a style to avoid again being considered catastrophist – I was already speaking about what was then the beginning of the present-day crisis.

I sent this letter to some political and business leaders, and as well, to the media, who published some of my opinions, but who did not understand all the important message concerning the difficulties that would soon come for the companies, the economy and the country.

In AMEC we were expecting more replies than those we got, the majority of them curiously from the political parties in the opposition – who later used some of these opinions of the letter in the Parliament – and few from the different political parties who are now in the government, who thought that my opinions were basically discrepancies to the way they rule the country instead of seeing it as an analysis of the global situation and a clear lack of vision for many years.

I also had to give further explanations in some Minister’s offices and to express my worries, pointing out that my opinions were not intended to be read as an hostile fatwa.

For some years I have been denouncing to the most important authorities of the country as well as openly in different media and forums, the harmful treatment that the spanish Ministry of Finance has given to those companies that made efforts in research and innovation. Many companies have decided to stop investing in research and innovation and others have drastically reduced its investments to avoid the constant persecution of the inspectors and sub-inspectors of the spanish Ministry of Finance that presumably want to get their annual bonuses. Those companies that had a fine, and those companies that have been denied a compensation after investing an important amount of money in research and innovation should be officially compensated and recognized.

It is difficult for a country to improve with a Ministry of Innovation that encourages companies to investigate, and at the same time a Ministry of Finance that does not believe in it, and comes with big and sharp scissors and uses them with those companies that believe that research and innovation are the only ways to guarantee a better future to companies and to the country.

In April 2008, I sent a letter to the president of the European Central Bank, Mr. Jean Claude Trichet, in which I expressed him my worries for the lack of competitiveness for European companies due to the big gap between the USD and Euro, and also the high interest rates in the Euro Zone, both issues putting in big difficulties to European companies to develop their expansion plans. On the other hand, US companies were then very competitive, and could offer in many international markets better prices, obviously thanks to lower interest rates in US. We all know that the competitiveness of American companies is higher than that of European companies, specially with regards to many other reasons different from the interest rates or a strong or weak US Dollar.

In my letter to Mr. Trichet I did point out some solutions to change the interest rates and restore the economy of European companies, that were already losing many business possibilities in many markets not only because of an advantageous American offer but also because of a strong and competitive offer from Chinese and Asia-Pacific companies. His reply was kind and polite, but in his comments was clear that the European Central Bank was then only worried by inflation and that other issues did not matter at all. Now, when we are living in an already industrial crisis – although unbelievable – he did not change their point of views.

Weeks before the presidential elections in Spain – as I was aware of what was to come – I did express loud and crystal-clear in the AMEC-Export magazine that a candidate to become Prime Minister in a country should not offer money coming from a surplus from the taxes that individuals and companies did pay. The candidate won, did give the money from this surplus and today the country is suffering this decision.

When this candidate become Prime Minister, I had the chance to ask him in a meeting organized by the Círculo de Economía in Barcelona if the government would increase the VAT, and I insisted in knowing how much the increase would be and when would it happen.

He replied that there would not be an increase of the VAT. I still think he was wrong, and I am quite sure that before the end of 2008, he will have to decide when and how much he will have to raise this tax, in order to be able to meet the many compromises of his government and as a partial solution to the crisis he finally admitted that exists.

At the end of July 2008, and in the middle of the crisis, I did send a letter to the Spanish Prime Minister to remind him that all individuals as well as the companies in Spain must pay the taxes on time. If we do not pay them on time we must pay important fines. On the other hand, in July 2008 the Ministry of Finance still had not returned to the company I work for the VAT rebates on exports since January 2008. This long delay was seriously affecting our investments and daily plans. Luckily, in early August this issue was solved.

I am quite sure that others like me have experienced similar situations. And I am also convinced that they have also expressed to governments and institutions their worries and the answers that had received were empty, as if the issues that worry companies and individuals were not of their concern.

Frankly speaking, I must say that the present-day crisis is not only due to Wall Street speculators, the subprime culture of “everybody is invited to the party” and to their partners in the US and Europe, but specially to a profound lack of leadership of governments and the society.

Well, in fact, a lack of leadership of individuals that are serious and honest in their daily work, that give trust to others to make of this world of ours a more balanced and responsible, socially speaking.

With this type of persons leading important institutions worldwide, in governments and in companies, there would be no place for speculators in Wall Street and bad politicians in governments.

That is why we should use what we studied in school, colleges and universities every day in our jobs and always bearing in mind that our main professional aim should always contain a veneer of honesty. This would permit us that our generations to come could live in a world in which their economic and political institutions had honest and capable leaders.

Leaders that could guarantee a better future.

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