Uncontrolled Spin: The Power and Danger of Spin ("Un"missable Series Book 1) (6 page)

Sean nods and says, “Nevertheless, the abundance of research and academic inquiry clearly delineates a pattern of social injustice based upon prejudices and socioeconomic stratification, correct?”

“Ah, yes,” Hugo answers, “the majority of the individuals falling within Brazil’s low-income category appear to include women, many of whom are single parents due to Brazil’s high divorce rates, and the uneducated, many of whom are living in the agricultural northeast and racially are either Afro-Brazilian or members of Brazil’s indigenous tribes. Individuals living in the southeast seems to fare better socioeconomically due to the greater access to education facilities and higher-paying employment opportunities. Clearly, the ethnographic tendency in Brazil’s government is to either ignore or condone racial or social prejudice, based on geographical, economic, and employment stratifications.” Hugo polishes off his drink as Sean considers all he has presented. Sean realizes there are tremendous opportunities for the right American company looking to make a difference, not only in Brazil, but also in the company’s growth potential strategies.

“Very interesting,” Sean tells Hugo. “You have been very helpful and have given me a lot to consider. Anyway, as I said before, Mr. Stevens has hired me to devise not only the current strategy for our environmental issues, but also a recovery strategy for Diablo Mining in Brazil and also worldwide.”

Sean elaborates further by clarifying for Hugo that fees for his services will be handled entirely by Mr. Stevens. Hugo admits he is surprised and appreciates that Mr. Stevens is concerned enough about his ongoing relationship with Diablo Mining that he is willing to fix the problems they are about to create. Sean lays out for Hugo a two-pronged approach, starting in Brazil, which will be based upon the law-abiding practices of Diablo Mining.

“However,” Sean says, “since many of the company’s opponents have presented some valid points on this type of strip mining, we intend for you to be positioned as the driving force in correcting these practices. You will sponsor legislation in Brazil on new environmentally friendlier industry standards. Globally, you will become the face for environmentally sensitive mining and restoration after operational completion. You will design economically feasible solutions, and I will provide the marketing expertise to convince the concerned global citizens that these practices will allow the mining industry to coexist with the environment for the benefit of all concerned. If necessary, Mr. Stevens will provide up to two million U.S. dollars to Diablo Mining for industry lobbying and political contributions where necessary.”

Hugo appears satisfied with the deal after the offer of this additional support, and the two once again return to more pleasant after dinner conversation.

After a few polite inquiries into Sean’s business life, Hugo finally breaks down and asks what he’s been wondering since Sean brought it up. “Why the sudden interest in the fashion industry and Brazil’s marketing areas?”

Sean chuckles, “I had the CEO of a fledgling fashion apparel company come into my office with the desire that SGM represent her. I told her I wasn’t interested in becoming involved in the fashion industry and dismissed her.”

Hugo gives Sean an all-knowing smile, his teeth very white against his tanned skin. “She must be extremely attractive, eh? For you to be reconsidering…”

Sean looks slightly puzzled. “Why does everyone immediately jump to that conclusion?” Hugo gives him a deadpan look, and finally Sean nods, then recovers with, “But that isn’t the reason I’m considering accepting her as a client. She recovered very nicely with a gift basket and good scotch, and so I did some research. The fashion industry is a two-hundred and fifty-billion-dollar industry in the United States alone, so I could see some tremendous income potential for the right designer. Furthermore, this woman’s company is performing slightly better than the statistical norm.”

Hugo sighs. “Ah, what we fools will do for a beautiful woman.”

Sean chuckles but protests, “Not at all. My inquiry has been strictly for business purposes.”

Hugo replies, “Well, if you are truly conducting business research, then you would probably be interested in knowing that my cousin owns an apparel factory that Nike has just abandoned. I believe my cousin would be willing to cut a very favorable lease deal for the right manufacturer. Since it’s already set up for apparel, very little modification would need to be made for production to be up and running. It would take maybe six months? Would you be interested in seeing it tomorrow?”

Sean considers for a moment, then says slowly, “For research purposes only, of course. Why did Nike leave the factory?”

“They built one of their own. They were tired of leasing, I suppose.”

The two men agree that Hugo will pick Sean up the next morning at 9:00 to tour the vacant factory, which is approximately a forty-five minute drive from the villa. They bid each other a good evening, and Sean retires to his suite.

The next morning, Sean meets Hugo in the cobblestone driveway, and they travel forty-five minutes south of the villa. Upon arrival, they meet Hugo’s cousin, Ricardo Montes. Sean is amazed by the condition of the well-manicured facility. After a tour, he is convinced it is state-of-the-art. It is air-conditioned, with a fully functional ventilation system and well-equipped work stations. Ricardo asks the typical questions associated with initial tenant evaluation, but he is also concerned about the integrity of the potential future business considering renting the facility.

Ricardo explains, “Most of the displaced workers who couldn’t move with Nike are still in the area and would be available immediately to resume production with very little training necessary. Are you sure that this business you are considering representing would be an appropriate fit? I do not want to get screwed over again, like I was with Nike.”

Sean reassures Ricardo while attempting to process that these possibilities exist. A fully trained staff, a modern facility, and a landlord willing to bargain to fill an otherwise difficult facility to lease seemed too good to be true.

“I will be meeting with my potential client in a couple of weeks, and I will get back to you with some feedback early next month. Other than that, I can’t really reassure you about much else.”

Ricardo asks Hugo in Portuguese if Sean is seriously interested, and Hugo confirms that Sean is, in fact, a real bona fide prospect with the capability to have his clients deliver what he promises.

Ricardo turns back to Sean. “I have been delighted to meet you. I will e-mail a preliminary proposal to you, for your possible client’s consideration.”

“Thank you,” Sean replies. “Are you willing to negotiate the terms?”

Ricardo nods hesitantly. “I’m willing to negotiate a fairly favorable contract for the right U.S. company willing to commit to at least a ten-year lease arrangement.”

“And what about a right of first refusal to purchase and an option to buy?”

Ricardo says, “Absolutely, these provisions can be worked through and included in any arrangement.”

Satisfied, Sean shakes Ricardo’s hand. All three men go to a local cantina, enjoy more pleasant conversation and local cuisine, and then Hugo and Sean depart back to the villa.

When they arrive, Sean invites Hugo for drinks by the pool, and Hugo accepts and peppers Sean with many questions regarding his opinion of the factory.

Sean plays it very cool, being as vague as possible without being rude. “I have to discuss matters with my client, as I’m sure you understand. At the moment, I am unable to commit on her behalf.” Hugo frowns and Sean realizes he needs to throw some type of bone to maintain the opportunity. He sighs. “However, I’m delighted by the facility, and I can see several benefits for my prospective client, should she choose to utilize it in a global growth strategy, especially in the emerging Latin American markets we discussed last night. I will absolutely suggest this is the best move for her, but I will also need to explore her financial tolerance for this type of rapid expansion, as well as the appropriate timing for it within the fashion industry.”

Hugo’s informational needs are satisfied for the moment, and he stands and shakes Sean’s hand before leaving the villa. “Thank you for your time, Mr. Green,” he says, and Sean returns the pleasantry.

After Hugo has gone, Sean calls Mark Stevens to let him know the deal is completed with Diablo Mining and to thank him for the use of the villa over the weekend. Next, Sean begins the intense process of market research and preliminary outlines for his discussion with Jessica Silva, appreciating how delightful doing research is when it’s done poolside.

CHAPTER 6

INITIAL ANALYSIS

A
s Sean considers the possibilities for Jessica’s company, he is struck by the fact that for the first time in a long time, he will need to consider his client’s financial ability to implement the strategy he develops. The relocation or opening of an additional facility is an aggressive transition into a new global strategy, which will most likely be beyond Jessica’s ability to accomplish. He makes a note for himself to determine the strength of “Beauty Something’s” brand within its niche market.

God, I need to get the name of this company into my brain correctly, then evaluate it solely upon its public recognition and credibility within the fashion industry.
But to him, the name still seems trite, juvenile, and insignificant.
But hell, what do I know about women’s fashion?
He decides to have Evelyn assign one of his best researchers to answer these questions prior to his next visit with Jessica.

Perhaps the most difficult issue to wrap his head around is the level of political corruption a U.S. company will be forced to deal with in Brazil’s political environment. Mark, Hugo, and Ricardo will be able to shed some light on this issue and what will be expected in order to make things happen quickly. Next, Sean develops a preliminary benefits list for potential employees, health care coverage, marriage counseling, and family planning education, as well as literary and basic budgeting for the undereducated employees. Sean also makes sure the benefits include scholarship opportunities for the employees’ children and educational programs so the workers will be able to complete high school and strive for college completion as well, in order to qualify for management positions within the organization. Considering the setup of the factory, Sean realizes there is also plenty of space to provide on-site day care for working moms, the costs of which the employees could reimburse, in full or just partially. Perhaps the biggest bonus the “Beauty Whatever” could offer is discounted clothing and bonuses paid in clothing to appease workers’ need for social status along with their appetite for middle-class identification.

Most of the programs can be provided by the organization at limited or no expense for the facility employees, and can even be offered to the general public for a small fee to offset the organizations expenses,
Sean thinks, nodding to himself. With the general concepts done, Sean starts to focus on the financial ramifications of this type of programming and expansion. Since he knows absolutely nothing about fashion costing per item, markup, or shipping expenses, he decides to speak with Mark, specifically about the ease or difficulty of getting the products out of the country and into the United States. He decides against doing it over the weekend, and then spends the majority of his time at the villa drawing out a variety of figures for the fashion industry, in preparation for checking costs.

While on the corporate jet back to San Francisco, Sean calls Mark, then Evelyn. He discovers from Mark that shipping, via air service, to the United States will add approximately five percent to the overall production costs, regardless of the product, as long as none of the products are considered hazardous material. During his following conversation with Evelyn, Sean instructs her to have one of his researchers conduct preliminary market cost analysis on the fashion industry in the United States and Latin America, specifically focusing on production, shipping, and quality control issues in the niche market industry and on Beauty Boutique’s market placement.