BMW and Rosslyn Plants Supply Chain Management and Logistics

BMW and Rosslyn Plants Supply Chain Management and Logistics BMW (Bayerische Motoren Werke), is arguably a luxury car manufacturer. BMW group headquarter is in Munich, Germany, however the company is settle all over the world (BMW Group, 2004) More detailed in (Appendix 1). In the early 1973, BMW opened his first international plant in Rosslyn South Africa (Autointell.com, 2007). Introduction The shifting business conditions of the 21st century has led to companies facing issues ranging from economic uncertainty to new technologies, globalisation and increasing consumer demands. In the automobile industry, as manufacturers design and build vehicles globally, their supply chains turn into increasingly multifaceted with challenges that frequently stand in the way of profitability and higher shareholder value such as long order-to-delivery lead times, unpredictable production schedules, excess inventory across the supply chain, lengthy demand planning cycles and lack of visibility of suppliers. The effect of the global economic meltdown increased the pressure on automotive executives to make right decisions about their supply chain for better performance. This paper will analyze how the German car manufacturer BMW South Africa (SA) at Rosslyn plant operates and how supply chain is conceived, supported, delivered and developed as well as identify the inventory management and the performance improvement that are affected by the identifying the logistics and supply chain management (SCM) systems as a possible strategy to respond to changing consumer demand. BMW Supply Chain Management process Supply chain management (SCM) can be defined as the design and management of seamless, value-added process across organisational boundaries to meet the real needs of the end customer (Fawcett et al., 2007). Generally, SCM involves relationships and managing the inflow and outflow of goods, services and information (network) between and within producers, manufacturers and the consumers (Christopher, 2005; Samaranayake, 2005; Gripsrud, 2006). A supply chain includes all activities, functions and facilities (directly or indirectly) in the flow and transformation of goods and services from the material stage to the end user (Sherer, 2005). It consists of an upstream supplier network and downstream channel (Mangan et al, 2008). The supply chain process at BMW starts from the customer and ends with the customer. BMW uses built-to-order structure to provide their customers what they want. Customer makes their request online or throughout the dealers. The information is then transmitted to Munich (Germany) which is captured in a central database. Bill distribution is done to establish cost of manufacturing and deciding where the car will be manufactured (Academicsjournal.org, 2010). This is informed by the nature and design of the product, the cost involved and the lead time. All parts are complete on built-to-stock foundation on the model life of the car imported. Parts are received at the Cape Town international airport by shipment in the case of South Africa Rosslyn plant (SAP) (Academicsjournal.org, 2010). It is then conveyed to the Rosslyn plant in Pretoria where it is then assembly. After assembled, it is taken to the warehouse where it is transported to the dealers set for collection by the customer (Ka ps, 2006). Several of the manufacturing, distribution of cars, suppliers of parts, exportation, quality values at BMW and the employ of mySAP technology for steering communication. These processes can be explained as follows. Production The production practice of cars goes during different shops where precise technologies are practical to make sure that value cars are delivered to customers. The procedure starts at Body-in-White Shop, where diverse pressed body parts are assembled into a body shell (Academicsjournal.org, 2010). The next procedure is the Paint Shop, where it is painted according to the customers request. At last the painted body goes to Assembly Shop where parts are fixed as per specification ordered by the customer. The essential issue is stretchy manufacturing (Academicsjournal.org, 2010). Paintings of car A painting of car is flexible to manufacture cars which meet the customers exact requests. Colour is an important principle for the customer choosing a car and is an influential marketing tool. Each customer is provided with the specific model require, with personalised features and all the options ordered, calls for an exceptionally high standard, not only in assembly but also in production and vehicle delivery management (Academicsjournal.org, 2010). However, one of the main activities on the assembly line occurs at the mix point: the point at which the engine and drive train are mixed to the body of the car. Improvements are made on the assembly line which has made it possible for BMW plant to produce all the 3 Series 4-door model derivatives and option requirements for the local and export market (Academicsjournal.org, 2010). Suppliers and assembly line BMW Rosslyn plant for example has about 44 local suppliers. Suppliers bring more than 60% of the mechanism of each car to the line. Just in time (JIT) supply processes ensure that certain components of the vehicle are on the assembly line just in time to be fixed to the exact vehicle they are made for. JIT supply systems are used to bring door panels, exhaust systems and rear and front axles to the correct point on the assembly line. Using a JIT supply scheme saves space by minimizing stock on the premise (Acamdemicsjournal.org, 2010). Typically, there is only one and a half hours of stock on the line at any set time which prevents damage to stock transport costs and saves storage. BMW plant delivers world-class worth products to consumers across the globe. All operational production is managed for offering uncompromising, best quality. However each and all procedure in manufacturing involved the car is checked for process inspections and aptitudes are implemented where needed (Acade micsjournal.org, 2010). Distribution BMW plant Vehicle Distribution Centre (VDC) has a distribution facility and a cost-effective storage, allowing the safety and quality protection of the vehicles. A 200-vehicle car-train loads export vehicles use dedicated railway facilities and off-loads each day import vehicles. For example Rosslyn plant has about 196 dealers locally. Vehicles intended for dealers are loaded onto car carriers and to dealerships around the country, which save the vehicle from any marks wear and scratch prior to delivery to a customer (Academicsjournal.org, 2010). All vehicles are inspected by associates VDC prior to loading to guarantee that the highest possible levels of quality delivery to dealers are maintained. The VDC provides a mechanical and paint/body workshop for the service and repair of company vehicles in addition to approve used cars. Manufactured vehicles are then transported to Durban (SA) for export. Transportation of vehicles to Durban port is on a daily basis. BMW South Africa (SA) has two train carriers, each one with a storage capacity of 176 units (Academicsjournal.org, 2010). The trains are used to transport imports units from Durban harbour to the VDC in Rosslyn. The vehicles are loaded onto car carrying vessels at the Durban harbour, known as RORO ships. These ships transport vehicles to several marketplaces at the opposite ends of the earth. Cars are conveyed on a bi-monthly basis to the Far East, USA and Australia, respectively (Academicsjournal.org, 2010). The transit period differs depending to the destination: Japan 23 days, USA 29 49 days, Australia 13 22 days (Academicsjournal.org, 2010). Quality Standards To ensure optimum customer satisfaction, the built quality of the vehicles produced at BMW Rosslyn Plant is measured through a process called Complete Product Audit. This audit compares the quality of a unit to the customers requirements, including technical specifications, fitment and function. These audits are performed throughout the build process at specified points. These strict audit standards are set at BMW Germany by the Central Quality department and are the same for all BMW plant (Academicsjournal.org, 2010). Using mySAP at BMW BMW uses mySAP Automotive to inspect assembly rank in real time. MySAP automotive parts use information and registers production validation every three minutes. Although, parts used during assembly are separately from the inventory count, and costs are posted to calculate the value of work in process. mySAP automotive helps to reduce order-to delivery time, reinforces supply chain activities in the areas of demand planning by tracking, tracing of material deliveries and improves inventory accuracy across BMW plant enabling significant reduction time-to customer (Academicsjournals.org, 2010). It also receives custom-configured manufacturing orders from BMWs planning system which include all the parts necessary to manufacture each car. However, BMW sends these long-horizon forecasts and short-horizon JIT delivery schedules to its suppliers. Larger suppliers receive the information via electronic data interchange (EDI) whereas other suppliers access the mySAP automotive supplier portal , where BMW posts the requirements to present up-to-date information on its delivery needs (Academicsjournals.org, 2010). By using only an Internet browser, suppliers can view this information in real time, including purchase documents, engineering documents, release schedules and invoices. When they ship parts, the suppliers send BMW advance shipping notifications (ASNs) to provide the car manufacturer with exact information on parts counts and delivery dates. Parts arriving at the BMW dock are then received and transferred directly to the line (Academicsjournals.org, 2010). BMW plant has fully integrated systems and network worldwide because BMW uses a service management system as part of a wider plan to improve supply chain lifecycles. The platform is triggered by complexities in the technology embedded in its cars and subsequent demand for systems to support servicing (Academicsjournals.org, 2010). BMW uses a portal to integrate information and systems with its suppliers which leads to faster information platform for communication however -advance technology applications is also used such as mySAP, JIT manufacturing, built-to-order which are all characteristics of lean manufacturing and innovations (Mangan et al, 2008; Academicsjournals.org, 2010). BMW Rosslyn plant logistics Logistics is part of the overall strategy of BMW as is part of the supply chain such as flows of material, information, people and equipment (BMWGroup.com, 2007). Doing logistics involves various activities such sourcing and purchasing inputs, managing inventorying, maintaining warehouses, and arranging transportation and delivery. (Mangan et al, 2010: ) Logistics play an important role in the manufacturing and the production of BMWs products which are shaped by a very highly and flexible efficient production network with mature work practice and the most advanced plants and facilities. As a worldwide player, the BMW Group is represented through its quality products of the BMW, MINI and Rolls-Royce brand in more than 140 countries. A flexible network of 23 production plants in 12 countries ensures that each customer receives the car he has ordered tailored to his specific needs and preferences (BMW Group, 2010). Efficient and flexible assembly at BMW is guaranteed by stylised logistics for an efficient production and a smooth flow of materials. Proficient logistics at BMW ensures accurate delivery of the parts required exactly on time, with a smooth and accurate flow of parts from BMW Group components or supplier (BMW Group, 2007). My SA 2nd automotive receives custom-configured manufacturing orders from BMWs planning system (Sap.com, 2010). The orders include: Mass customization BMW plants were designed to allow maximum flexibility and effective communications two factors that BMW emphasized for customization of its cars. BMW was reputed for its customization program, which allowed buyers to design their own cars from a set of available options. These orders were then transported to the factory which manufactured them according to the requests, which are then delivered to the buyers in the shortest possible time. In manufacturing world, this structure is called mass customization (IcmIndia.org, n.d), which is one of the essential enablers of agile supply chain as it combines both advantages of mass customization with those of production (IcmIndia, n.d; Mangan et al, 2008). Most analysts agree that BMW was one of the prominent implementers of mass customization in the auto industry. BMW promoted differentiation of it products which is an important attribute for luxury car by proving 1000 bumpers variation, 4000 panels choices and 488 different door panels (See Appendix 2 Interesting facts). A very high percentage of their output is already made to order (Autoexpress.co.uk, 2010). Role of supplier and IT BMW suppliers are located near the factory which is makes easy to be accessible and the time waste. The company keep the supplier constantly in the information loop and the information system for assembly. BMW had a very accurate ERP solution established by SAP. It linked the SCM very well. Once the data entered it reached automatically to production areas (Scribd.com, 2010). BMW at Rosslyn plant is typical example of how this IT practice has been organised using synchronised logistics. In the BMW example the incoming trucks are set a pager and preparing the specification by radio frequency identification (RFID) tag on arrival which is sent either straight to one of the waiting area or to the waiting bays. When the next loading bay in the delivery/pickup sequence for a given truck becomes available, the truck is paged to drive up and be unloaded / loaded (Psionteklogix.com, 2010). The RFID unit as well acts as a transponder to recognize the loading bay location of the truck in the factory during its activities, which are monitored by the system. In other instances such as at DaimlerChrysler Bremen the incoming trucks for JIT and JIS (Just-In- Second) deliveries all have GPS and radio data units and they are tracked from their starting point at the supplier to the factory (Psionteklogix.com, 2010). By monitoring the progress of the incoming trucks any dela ys are recognized in advance and the unloading plan amended accordingly. Based on the planned arrival of vehicles, the SyncroSupply system can plan the allocation of unloading bays, forklifts and other equipment essential to unload the goods and get them to their final location in the factory. In addition to supplier vehicles the system also manages internal truck movements, inter factory transfers, milk runs, return of empties (psionteklogix.com 2010, Ciltuck.org.uk, 2010). Performance improvement The automotive industry is currently witnessing rapid increases in the number of models and model variants that are available on the global market. The industry is now required to meet specific customer requirements in terms of specification and delivery date. Therefore, a fundamental change in BMW manufacturer shifted towards build-to-order, suggesting dramatic rise in flexibility and responsiveness across supply chain partners by implemented the leagile framework. Leagile is the combination of the lean and agile paradigms within a total supply chain strategy by positioning the decoupling point so as to customer end of the supply chain (downstream) while providing level scheduling supplier end of the supply chain (upstream) from the marketplace (Mangan et al, 2010). In order to achieve leagile supply chain, the upstream at BMW of the decoupling point have best suit the need for responding to an unpredictable demand designed to be lean while downstream agile (Mangan et al, 2008). Critical analysis Although the efficient supply chain processes and technology following the process needs to be faultless and as quicker as possible for survival in these uncertain times. BMW plant is quite flexible to customer demands giving the choice for them to request the type of cars they want at the appropriate price available. Cars are built-to-customers orders rather than by mass production. For example, differentiation techniques are used during painting as well as choices of the car features for comfort, hence flexible manufacturing. They do not hold inventory because the strategy is focused on built-to-order, so cars are made in sequence as the orders are placed using advanced technology such as mySAP which communicates demand planning across the supply chain (BMWGroup.com, 2004; Mangan et al 2008). Hence, BMW acquire characteristics of lean and agile supply chain (BMWGroup, 2004). Therefore the implementation of a framework for leagile supply chain at BMW is best so as to react to change s in the market (Mangan et al, 2008). Traditionally, the BMW has employed mass production strategy focusing on cost reduction (Zhang and Chen, 2006). However, due to globalisation, changes in the business environment etc, there has been a noticeable shift from the practice (Elkins, 2004; Sweicki and Gerth, 2008). BMW Rosslyn plant and the automobile industry in general have felt the results of the global economic meltdown resulting in a noticeable the actors of the supply decrease in sales and export across the globe (BMWGroup.com, 2007). To alleviate the situation, BMW has focused on strategies cost reduction with suppliers by reducing manufacturing plants. Not surprisingly, cost containment is a concern that figures prominently on the automobile agenda (Mangan et al. 2008). IBM (2009) survey indicates that there are five primary challenges facing auto makers in this economic downturn. This includes risk, customer demand, visibility, cost containment and globalisation which are raising interest rate, raw material, energ y cost and strong fluctuation. In this uncertain business climate, in addition to lean manufacturing, automobile manufacturers should be agile and responsive in addressing change which is BMW characteristics. A superior supply chain is a must to help auto manufacturers redesign and differentiate themselves (Academicsjournals.org, 2010). The application of RFID technology at BMW warehouse has enabled the reading of multiple items simultaneously is an ubiquitous technology which could reduced motivation and job satisfaction which could lead to the reduction of operational performance because employee involvement in system design is important (Mangan et al, 2008). However there is the necessity to redesign and redefine BMW supply chain strategies, operations and layouts thus as to be able to react to varying market demands. It should be accepted that BMW have both lean and agile characteristics and the full implementation of a leagile supply chain is vital for the survival of BMW in th is uncertain business times and for the years to come. Conclusions In a highly challenging and competitive environment such as today, where supply chain is a popular tool for improving the organisational competitiveness, an efficient and effective supply chain strategy is a must for BMW and their component manufacturers so as to meet changing consumer demands.

Learning English Essay

The English language has paced a long way on upgrading the holistic system – personal, professional and economic elevation of peoples’ lives. It has uplifted a country’s modern status through its elaborated way of touching human lives. In the context of complex and fast fluxed present situation, English language to the global market has taken vast undertakings on boasting a country’s development. Thus, English is a prerequisite to the learners who definitely need to be bilingual so as to be flexible to the dynamics of modern changes. To Brown (2000) becoming bilingual is a way of life, for it is difficult for a country to live on isolation, as no nation can afford to rely on its domestic store of knowledge alone, hence there is a need for students to learn English as a second language in the Philippines. English is the language of international communication, higher learning and better career options and choices. And due to its significance as a global language, Philippines’ basic education considers English as a major subject for the elementary and secondary levels of learning. In order to be effective with the current pedagogic system, teaching English as a subject should always be natural, agreeable and stimulating to expect optimum learning results because a motivated student who is eager to learn and acquire language skills, upturn good responses to their mentors. Educators, however, clearly admit that, most of the students commonly encounter difficulties in learning English language as a subject. Though, it provides an immense stream of knowledge to the academic clienteles still the learning of English has for its goal developing communicative competence which is essential in enabling learners to use language in multiple functions both correctly and appropriately. Considering the students as the most crucial key elements for a progressive nation, teachers must channel on numerous ways to prepare students to become proficient and skillful in communication to be more competitive. Moreover, they should profoundly analyze that honing student skills is more than feeding them the right grammar rules or assisting them to master their four macro skills. Tapping their skills and harnessing their full potentials is of great use in promoting interactive and dynamic learning in the classroom using approaches and methodologies from conventional to the non-traditional  if only to provide opportunities for students to learn the English language effectively. The ability of the students to use English is required in interactional learning activities where they create novel utterances and understand meaning in situational context. Sad to say, however, that there is a continuous decline of the quality of English learning in our education today. The language problem, particularly the deteriorating quality of English in many schools poses a threat to the efficiency and quality of the educational system as the English language is the medium of both instruction and the learning process in the secondary and tertiary levels of learning.

Bailout shq

The research paper sheds light on George W. Bush $700 billion bailout package, the underlying cause of its release, expected effects, achieved results and future implication in mitigating the severity of US economy in particular and global in general What makes it important? Economy contaminated, debts and deficits escalating, spraining military, image tattering, all but accompanied with the emergence of a new league of Global contenders.Is the American capitalism on the recede, do we see the fading American way of life’ the demise of American dream, is the prodigious military might losing its edge, are the very foundations of democracy, freedom and justice debauched, has really the Global American leadership paled, is this the emanation of era of vacuity or does there lie hope of return anew? Thus the bailout package ‘last in line of Bush legacy’ bears importance not only from the economic recovery perspective but by shoring up the financial vessel’ it goe s a long way in retaining the unchallenged posture of USS enterprise globally.It holds importance as it allows continuance of strings of recovery initiatives taken year back, in the absence of which the policy posture would not only lose its luster but the effort being applied to buttress the confidence would rather lose its very ground. What’s going to be done in the paper? This paper would steer by discussing root cause that ruptured the great balloon while taking into account the amount and extent of damage the great spread have unfurled. This discourse would then lead by rounding up possible steps’ those have been taken and are about to be, lead by their results and possible ramification for the future.We would then highlight other venues and alternatives’ featuring their pros and cons’ thus rounding up our discussion with the present situation on ground lead by some anticipated prognostication about the future concurring outlook. What would be the ge neral conclusion? Our general conclusion would be as vague as had been and exists to be the statistical forecasting models across the financial colossal and economic capitals. We are lingering on bits of every day stats and results while hoping to gain and engender confidence across horizon of politics, consumers, producers and investors.We would be hanging around the ray of hope and light coming across the hazy fog of doubt and tentativeness. BODY Issue/problem In current situation when the Bail-out is out in the market to do wonders and clean up the mess created by all the wrongs and blunders of nearly a decade, just weeks into passing and the same ‘gurus’ conceive no less then a miracle from this quarter a trillion short’ to halt free fall of economy into an abyss of recession. Full scale implosion has rendered shock waves that have taken tool on global scale, the burst of sub-prime bubble, spiraling commodity prices, wide scale collapses and deafening bailout s.But pundits are still in a fix, as they state current spade of crumpling dominos as mere preliminary shock, precluding the greater quake yet to come. With nearly a trillion in bank losses, yet accounting for just a portion of the total conclusive damage’ has brought financial juggernauts of the likes of JP, Merrill, Lehs, Fan & Freds on their knees and a long queue still in waiting, followed by staggering multi trillion in bail outs, yet the spiral sees no end. The rootsFor the past two decades, Americans ‘distracted’ by the direction that its government showed, has been spending much more then they own or allowed by their means, which can be seen by a steady decline of their saving rates that stood at 11% in 80s to -1% today (Jeremy, 2009). The total debt owed by the public amounts to massive $2. 5 trillion without accounting the sub-prime fiasco (Stout, 2008). Of consumption patterns, last decade saw an enormous increase in spending’ bumped up by soari ng housing prices’ though this had been the era of shrinking real wages.Without the wage increases’ riches were being made by selling homes without ever thinking that for how long this cycle would swing, as the point would ultimately reach when stalemate would occur, when people would be left with no money to buy expensive properties. Without such logical thinking, things went on moving so much so that the American home owners extracted nearly $5 trillion since 2001 in various forms like refinancing their mortgages (Stout, 2008), home equity and selling till the dooms day occurred, when whole system based on faltered assumption on the lines of Dot Com collapsed.The reason it has been called ‘distraction’ is the fact that the policies engineered by the government wrongly encouraged the public to tow the dangerous path of callous burning up of goods and services while giving birth to a banking system that fueled this trend, thus slowly and gradually the stru cture moved away from the production and sales, to the addiction of free goods and manipulation of debts. Its severityBut what can been seen are just the ripples of a much greater storm brewing underneath. The enormity of discomfiture can be sensed from the fact that; much touted Financial Bulwarks which had been the symbols of robustness of Western financial system’ shattered one after the other under the weight of digressive mass that they them selves had accumulated. It’s not just a coincidence that all major heavy weights’ having Market capitalism worth economies of whole continents fell in a domino fashion.Chain reaction that imploded out of stray atoms of greed and insatiability, proliferated all out radiation that not only destroyed what ever came in its radius of hazard but contaminated the whole environment’ with effects ready to haunt for decades if not generations to come. From appalling fall of the Lehman to assuaging of Freddies, from taking over of Bears to engulfing of Lynchs, from engineering of Wachovia to warranting AIG, this is the League of Extraordinary Lineage that formed the first line of casualties and wiped out of the face of financial global map.Institutions that bore the brunt of world wars, civil unrest and the jolt of nine-eleven couldn’t hold onto the tremors of massive mortgage eruption. So immense had been the awe that the birth place of free market is forced to ‘nationalize’ the juggernauts of its economy, leaving far lasting scars on its own face. Whether they could ever be healed, doubt it! This patient needs an all out surgery†¦ Key players US is the economy that is run by banks and its derivative financial institutions’ thus it’s the bankers economy.This is the heartland of capitalism’ the motherland of free economy and the greatest champion of demos-cracy. All this comes into being and blends up when we have a strong financial system making up its ba ckbone. Banking industry spreading over a century has gradually formulated an environment where the resilience of economy rests on credit ‘the practice of lending’, thus making customers or more appropriately the consumers as being the second important tier of whole system.Third comes the government that regulates, governs and looks after the regulatory fabric under whose auspices the system works. Fourth comes the wealthy foreign governments that lend their excesses to the US government, financial institutions and its people, acting as investors willing to quench unsubsiding thirst of the whole nation. One way or the other’ the complicity of all four players is there behind spurring the situation out of control and ultimately collapse.And so is the ensuing blame game that is engulfing both the side of Pacific, where the Eastern coast (of pacific) blames the monetary glut of the west for the flow of excessive credit and hence slipping the market while commentator s on the western front criticizes lax regulations that let the wall street and its giant entities to wreck internal havoc to their economy but slipping nullifying their own regulatory frame works.Who ever was responsible’ but one ground on which every body concedes is the let-go attitude of US government that let the bubble grow out of proportion’ the blind eye they let to this fiasco to happen. On every front’ it’s the people (American tax payers) those are to suffer. They lost the credit, lost their homes, lost jobs, burdened their future and indebted their children. For all the follies committed on Wall Street ‘under the auspices of government’ and the preceding foreclosures and bailouts’ these are the ordinary people who are going to pay for each penny being spent’ form their own pockets.What are they trying to achieve To intoxicate the contaminated body. Over the years’ under lax or almost no rules and regulations, A merican banks and insurance and ‘pre-insurance’ industries accumulated charges worth trillions on their balance sheets, which were backed by literally nothing. Thus over the time’ as the mortgage advances climbed up’ it began to create a much bigger vacuum on their back that suddenly ended up in Boom! A shock that made the whole structure collapse under its own weight.Now the government is trying to cleanse this mess, by buying mountains of crap ‘bad assets’ to clear up bank’s balance sheets, keep them until the economy recovers and to sell them back to public when crap turns into something worthy! 5 Thus the underlying cause of this whole drill is to lighten up the bank’s load so that they could get stand again and start functioning by lending. This is vital as banking industry forms the very backbone of US economy and without it their can not be any recovery.This would lead of credit that serves as a fuel for other economic act ivities, the eased credit would halt the fall of other financial and industrial units thus containing the contagion from spread, this stabilization would enhance the investor’s confidence that would ease up the investing and buying constraint that is the cause of pain from other side of equation. Thus the whole bailout or Emergency Economic Stabilization act is a move to stabilize the economy and retort the keel to its original location. Approaches Let us first segregate the two approaches being proposed by two different sects of economists into plan A and B.The former being proposed by the Government and calls for its take over of the whole crisis, the later one to give market the stimulus to act and heal by its own forces. Intervention on such a colossal scale is inconceivable in a country which had been the forefather of free-market and founder of capitalism. Instead of protecting the American Tax Payers, the elected lot seems hell bent in protecting a few. Despising any s anity what so ever, the American government is ready to buy the unsecured assets (otherwise valued at zero) for $65, having a floating market value of mere 25 cents, thus paying 3200% more of their worth (Baker, 2008).RTC (Resolution Trust Corp) made to trace and capture companies before they begin to collapse (Wilson, 2009). It has been created in light of the current Bail out bill that would allow the government to buy bad loans directly from lenders at lower rates that would relieve banks from carrying dead weights, restructure them and sell them off gradually as the market heals and stabilizes, thus mitigating an immediate and blunt affect to the economy and public. Yes, it worked in 80s and banking on its legacy it should work according to Government speculations’ who says an agency is needed to oilify the chocked financial engine.But this agency would work if we tow for plan A, the Bail out etc. What conflicts exists Starting form the fact that United States is the most indebted nation, with a burden of $12 trillion and yearly obligations amounting $500 billion (Bebchuck, 2008), having Forex reserves less then the tiny Taiwan, followed by record budget and trade deficits. To square all, United States economy was in a quagmire already and it’s in ruination after the Big Bang. Various moves on part of Fed to lubricate the economic engine by throwing billions into the parched market seems of little or no help at all.Melting down of financial bulwarks one after the other is evidence of enormity of damage followed by the deafening bail out plan. Isn’t it absurd that US with no money of its own to even buy the Chinese toys is reeling towards this colossal move. From where all this money would come? Print it! No way; a near trillion worth of ‘printed’ Greenback into the market is going to burst yet another balloon of Inflation and nose dive the already struggling Dollar, leading to a chocking scenario. So what else? Borrow more !Already a single country like China holding nearly a trillion worth of US securities would further make America’ the world’s strongest democracy defer to the largest communists (Harvey, 2008). But would they be willing to buy more of the crap US assets? Let’s just forget the world, See who is borrowing. The US Government, but the Government earns nothing of its own. These are the taxes that make and run governments, so more borrowing means added obligations upon the people of United States and their Children and their Grand Children who are being held hostage for the blunders of their own obdurate corporations (Harvey, 2009).Look at the Horizon and see the doom and gloom ? Bears Stern taken over by JP Morgan, Bank of America taking over the 94 years old Merrill Lynch, world’s top insurer AIG pledging for its own insurance (Whalen, 2008), collapse of the 158 year legacy the Lehman Brothers, which had survived the Civil war, world wars, the 9/11 but couldn ’t hold on for this swap, all costing Fed hundreds of billions (Demyanyk, Yuliya S. and Van Hemert, 2008).? Fed Liquidity Program, Economic stimulus package, Federal Housing Admin scheme and further injections has already amounted to $1 trillion (Demyanyk, Yuliya and Van Hemert, 2008). ? The Bail out of Fannie and Freddie alone have price tag of $200 billion (Bardhan, 2008). All but excluding yet another $700 billion proposed bail out for ‘securing’ the faltering US institutions, amounting to a staggering total of $1. 8 trillion!! (Davidoff and Zaring, 2008)The new bill is being floated to each American citizen, with the liability of $5000 each, while keeping aside the $11. 8 trillion of ‘previous’ debt (Davidoff and Zaring, 2008). Now as far as the talk holds for going social or keeping the system capitalist, it doesn’t matter which one operates unless the operators are responsible and sincere to the people who let them operate on their behal f. It is said that the corporate America seems best in capitalist mode as long as the system churns profits and it immediately retorts to being Socialized when faults surfaces.In today’s scenario when all the elements of a healthy financial system are showing pathological signatures of ailments which had been there for long time, but was let to grow to extent of tumor. Yes the Government should move forward as it is their job to cleanse the system of toxics and let the body heal by itself, but wait what we are seeing? Instead of letting the body to recover and reform in its very own ‘natural’ way, the surgeon general is transplanting the whole organs with ‘expectations’ that they won’t be rebelled. What if they would!Then hope the patient would survive. Potential remedies/solutions †¢ Of all the argument, nothing said goes against capitalism and the market system whose strength can be seen in the spread of wealth and economic upheaval of billions of people out of poverty, but the most impressive of its geniuses is its greater healing capacity, the savior fair to purge itself of infections if any that might arise in its body. Today its like an ailing body which needs medication to the extent of strengthening itself and to mend in its own ‘natural’ way rather then forced ministration†¢ There needs to be a global ruling body on the lines of UN that should govern and check world economies and corporations from detracting into direction that would cause harm on global scale. So does the question that’ as to why despite all the warnings by European Central Bank officials, no pre emptive or lets say preventive step was taken at first to check the bubble to expand to such explosive levels and then from a sudden burst? (Bardhan, 2008) If so why wasn’t there no such levy erected to counter the incumbent tide of destructive tsunami†¢ There are more doubts then ever before that the market me chanism of supply and demand triggering ‘fears’ and the so called jolting of ‘confidence’ of investors, leading to massive buying or selling sprees have grown to be shadowy. Proven recently from the Oil price fiasco, its rise and maniac fall clearly shows the manipulative force acting in an unruly fashion. Check the trend which is drifting more towards exploitive ness then genuine speculation (Murphy, 2008).†¢ The whole banking system should be re organized and re founded on a more solid and sound foundations, with revised rules and regulations to halt such a scenario from erupting ever again. Reinvigorating this industry could include equity investment, recapitalization of the bank assets i. e. purchasing the bad assets for cash that would help the fledging industry with the much needed cash while letting the government to exercise a limited control to steer the institutions out of the doldrums (Schwarcz, 2008).†¢ And off course the US Tax payers should not have been dragged to bear the brunt of the debacle and wrong practices of corporate world, which had grown to be voracious and hoggish in its never ending appetite of leasing and lending for windfall profits. Instead of throwing trillions into this engulfing black hole, people should be given relief by letting them pay back through jobs, raised salaries, slashed interests and extended pay back periods. In this respect the Mortgage assistance is necessary’ this could be done in any form i.e either the home owners be given leverage to pay back the borrowed credit by lowering of interest rates, making the payment schedule long enough that should not hamper the life style or the credit for ownership be converted into something like monthly rent’ that would be nominal enough to ward off the burden and wouldn’t render homes unoccupied. CONCLUSION General conclusion & Internal/External forces An incident that took place inside the United States has become a global issue. Thus its not the US alone that is shaping its course’ there are multiple forces now acting on it.Internally the new US administration has taken a shift towards more of stimulating the economy then to put all eggs in caskets of fallen juggernauts. There’s more of realization in extending a helping hand to the Main Street then the Wall, as they believe in giving a push to the unconventional engines of economy to burn then to rectify the more conventional powerhouses’ demise of which lead to this failure. Externally’ all those capitals and their financial entities that had any link in one form or the other has bore the brunt of the great crumple.It’s the sheer size of US economy that can not be ignored, the after shocks of the quake that jolted this land are still being felt across the globe, that transpired into several global integrated moves and till now’ two G20 summits. Issues have now metamorphed and transpired into trade, barriers, national bailouts, global credit, energy†¦and is growing more complex. At the time when single combined stance is direly needed, there’s temptation across the horizon for receding back and protecting own borders by raising the levies across frontiers.The US with all its bailouts can not even come into being without foreign government’s nodes to finance them, America can heal without others lending life saving medicament on credit. And as the fears grow for more nationalistic approach by the US government getting protectionist while confining its bailout money only to the made by American’s industry, fears for back lash from across the shore’ specifically the Pacific would be harmful. Today America needs world more then the opposite, the current recession has already altered focus and has dragged it away.World has benefited and lately suffered from what came out of US shores, what matters now is’ what comes in! What’s the prese nt trend? ‘Glimmers of Hope’ can best describe the present situation as stipulated by the current US President’ supplemented by words of caution that the economy still needed time and a zealous effort to heal lest recoil. The statement might be true if put into context that the free fall is not that free now and things have begun to look less awry and not outwardly defiled.Stock exchange can be seen to trek towards damage attenuation, SMEs are showing desire for loans thus setting forth the signs that they have begun to trust the banking entity ‘again’, tax reductions announced in all of previous packages would soon bear fruit by leveraging pay checks to ease’ thus paving way for mortgage industry to palliate as it offers worthwhile deals because of the all-time-low prices (Spetalnick, 2009). Global economy has become immensely complicated to predict, overly complex to control and wild enough to steer, once disturbed’ it listens to its own.Economies have momentum; it can not be stopped and accelerated by the push and pull of pedals. So is the current situation, despite all the predictions and dooms day scenarios sketched by ‘eminent’ economist of the looming Depression’ the fall seems to lose it g! the burst seems to lose its steam and indications. Though the foreclosures are still there and so are the job and credit loses but they have simple lost the glitter. With bailout replaced by stimulus, the ointment has been replaced by healthy diet to kindle the body to heal on its own. What’s speculation for the future?â€Å"The American moment is not over, but it must be seized anew† Barack Obama, (McCain, 2009) divulging the very resolution that United States is not ready to subside rather it is there to retrieve the lost insight. USA stands to embark on a path to New Leadership with new vision suffused by common principles of humanity, security, justice and above all’ equality , but how can it assume the burden of Global Leadership amid haze of thickening economic extremity? The new commander-in-chief has got a colossal task on his hands’ would he be able to mould new leaf among the folio of history?Dispelling the Dooms day prognostication and economy-on-the-rupture speculations’ there exist a fair chance that the United States economy would be saved and so be the world. No matter how deep the fissures go’ sheer size of US economy would render it afloat, the world as we know today could not and would not let the economic colossal to collapse. Nevertheless on the realistic front, yes enormous amount of damage still roams across and severe confidence deficit exists both on the producer and consumer side’ that could only be addressed by bitter short term moves and bolder long term policies.References Admin, â€Å"World banks make emergency rate cuts. † 700billiondollarbailoutplan 08 Oct 2008 Web. 18 Apr 2009. http://www. 70 0billiondollarbailoutplan. com/2008/10/world-banks-make-emergency-rate-cuts/ Admin, â€Å"The 8 trillion dollar bailout. † 700billiondollarbailoutplan 06 jan 2009 Web. 19 Apr 2009. http://www. 700billiondollarbailoutplan. com/tag/700-billion-dollar-bailout-plan/ Baker, Dean. â€Å"An interview with Dean Baker on the US$ 700bn bailout of financial institutions. † global subsidies initiative 6 nov 2008 Web. 19 Apr 2009. http://www. globalsubsidies.org/en/subsidy-watch/commentary/an-interview-with-dean-baker-us-700bn-bailout-financial-institutions Bardhan, Ashok Of Subprimes and Subsidies: â€Å"The Political Economy of the Financial Crisis† SSRN (October 2008): http://ssrn. com/abstract=1270196 Bebchuck, Lucian. â€Å"A Plan for Addressing the Financial Crisis . † SSRN 28 Sep 2008 24. Web. 18 Apr 2009. . Christopher, Lamy. â€Å"The Financial Crisis of 2008:† SSRN 05 Oct 2008 Web. 17 Apr 2009. http://ssrn. com/abstract=1274337 Demyanyk, Yuliya S. and Van Hemert, Otto, â€Å"Understanding the Subprime Mortgage Crisis† SSRN 5 Dec 2008 http://ssrn.com/abstract=1020396 Davidoff, Steven M. and Zaring, David T. ,Big Deal: â€Å"The Government's Response to the Financial Crisis† SSRN (November 24, 2008). : http://ssrn. com/abstract=1306342 Harvey, Campbell. â€Å"The Financial Crisis of 2008: What Needs to Happen after TARP. † SSRN 05 Oct 2008 Web. 17 Apr 2009. http://ssrn. com/abstract=1274327 Jeremy, â€Å"Full Text and Details of the Proposed $700 Billion Government Bailout Bill – Draft Submitted Sunday Evening. † genxfinance 28 sep 2008 Web. 19 Apr 2009. McCain, John. â€Å"An Enduring Peace Built on Freedom Securing America's Future . † Foreign Affairs Dec 2007 Web. 19 Apr 2009. Murphy, Austin. An Analysis of the Financial Crisis of 2008: Causes and Solutions† SSRN (November 4, 2008): http://ssrn. com/abstract=1295344 Stout, david. â€Å"The Wall Street Bailout Plan, Explained. â €  the NYT 20 SEP 2008 Web. 18 Apr 2009. . Schwarcz, Steven L. â€Å"Understanding the ‘Subprime' Financial Crisis†SSRN (October 30, 2008). : http://ssrn.com/abstract=1288687 Spetalnick, Matt. â€Å"Obama sees signs of economic progess. † Reuters 11 apr 2009 Web. 19 Apr 2009. . Ryan , Stephen. â€Å"Accounting in and for the Subprime Crisis. † SSRN 26 March 2008 Web. 18 Apr 2009. http://ssrn. com/abstract=1115323 Whalen, Christopher. â€Å"The Subprime Crisis: Cause, Effect and Consequences. † SSRN 1 mar 2008 Web. 18 Apr 2009. . Wilson, Linus. â€Å"Debt Overhang and Bank Bailouts. † SSRN 02 Feb 2009 Web. 17 Apr 2009. http://ssrn. com/abstract=1336288

The current strengths and weaknesses of sterling Free Essay Example, 1000 words

The falling trend of the pound sterling with respect to the Euro can also be seen in Figure 1 (See appendix). (x-rates) The chart that plots the Euro against the Pound Sterling shows how drastically the value of the Sterling fell with respect to the Euro from the year 2008 to the year 2009. What can also be observed is that the value fell the most in January 2009 and since then it has been rising a little, however the value of the sterling is nowhere near the value that was prevalent prior to January 2008. (x-rates) Figure 3 portrays a more recent relation of the Euro with respect to the pound sterling. Taking the Euro as the base category, the graph shows the increase in the number of the British pounds required for the exchange to 1 Euro from Dec 2009 to April 2010. It also shows that the least value of the sterling was recorded in November 2009 at the rate of 0.911551Â £ to 1 â‚ ¬. The value of the sterling with respect to the American Dollar has also fallen considerably. We w ill write a custom essay sample on The current strengths and weaknesses of sterling or any topic specifically for you Only $17.96 $11.86/pageorder now Figure 2 shows this fact. The graph takes the American Dollar as the base currency with the British pounds on the y-axis. (x-rates) What can be seen from the graph is the fact that the number of the British pounds that are required to get a single dollar have increased from December 2009 to April 2010. The value of the sterling fell to the least in these five months when the exchange rate fell to 0.670345 Â £ to 1 $ on 27th March 2010. Although the value of sterling against the major currencies like the American Dollar and the Euro has been falling, the strength of the sterling with respect to other currencies is a good point for the economy of the United Kingdom. Figure 4 reveals that the value of the sterling against the Japanese Yen has risen from December to mid March. (x-rates) The value reached the maximum on 9th November 2009 when just 0.0066 pounds were needed to get 1 Japanese Yen. Now that the trends in the current strengths and weaknesses of the sterling have been discusses it is important to analyse these trends. The Analysis There are various reasons that may be responsible for the downward trend in the value of the sterling against the other major foreign currencies. According to Ellis (2009), the increase in the national debt of the United Kingdom is one of the reasons of the falling sterling value. Since 2008, the national debt has increased to around 20%. In the year 2009 as Ellis (2009) states, the value of the national debt recorded was 804 billion pounds. The increase of the national debt means that the economy is suffering from a budget deficit.