Input Manufacturing

Jennifer Johnson, associate in the business litigation group with a focus on product liability at Ice Miller LLP, authored this blog.

Last week I attended the Association of Equipment Manufacturer's Product Liability seminar in Bloomingdale, Ill. The seminar focused on how technical personnel and corporate representatives of equipment manufacturing companies and outside counsel can work together during litigation proceedings for effective litigation tactics and strategies. The topics ranged from coordinating litigation on a national scale to the important role corporate representatives can take in alternative dispute resolution. Some of the key themes which emerged are:

• The importance of a well-organized litigation program at the corporate level. One speaker highlighted the challenges emerging from cooperation and organization of the plaintiffs' bar. For example, many plaintiff's attorneys' associations maintain forums on specific products where the attorneys can share common claims involving a product, document libraries where attorneys can share successful pleadings, and deposition repositories that attorneys can use to research a corporate representative in a matter. In order to combat this cooperation by the plaintiffs' bar, manufacturers need to coordinate their litigation on a company level to ensure that the manufacturer's discovery responses and other pleadings do not contradict those filed in cases in other jurisdictions. The plaintiff's attorneys are sharing these documents and will use them to surprise a corporate representative at deposition or trial. Manufacturers typically accomplish such coordination by employing internal litigation managers or product specialists, or by employing national counsel.
• Recent changes to the Federal Rules of Civil Procedure may benefit manufacturers, specifically changes to Federal Rule of Civil Procedure 26, which governs expert witness discovery. The new version of Rule 26 will provide more protection to communications between counsel and a testifying expert witness. The most relevant changes include that draft expert reports and communications relating to an expert's opinions will no longer be discoverable by the other side.
• Deposition preparation should begin early in a matter. This perspective highlights the importance of, an incident reporting network. After an initial meeting with counsel, the corporate representative should learn why he or she was selected to serve as corporate representative, whether there are any deadlines he or she needs to be aware of, the time frame in which the deposition is likely to occur, and the number of documents that the attorney anticipates the corporate representative will need to review. After this meeting, the corporate representative should have a good sense of whether he is the right witness. If so, the representative should expect to meet with counsel at least one more time where the "nitty gritty" details of the case will be discussed. Corporate representatives should be proactive in preparing for depositions and should not hesitate to contact counsel with questions or concerns.
• One speaker noted that it should not be the objective of the corporate representative to "win" the deposition or trial. Rather, their demeanor should reflect that they are trying to be helpful by educating the jury and/or opposing counsel. Thus, it is important to use basic terms that anyone can understand and to maintain a calm presence in front of the jury or, in the case of a videotaped deposition, the videographer.

Ice Miller represents a number of clients on product liability matters, including those in the agricultural and construction equipment industries. For help or more information about how Ice Miller can assist your business with additional background on the litigation process and the important role corporate representatives and technical personnel play in it, please contact Jim Petersen, Judy Okenfuss, or Jen Johnson.

Post Tags: Agribusiness, Agriculture Law, Product Liability, AEM Conference 2011.

The new year brought good news to the food industry as different courts issued opinions rejecting consumer claims that would likely have had significant impact on the food industry.

In one case, a consumer filed a class action based on an allegation that a product is dangerous and an assertion by the plaintiff that he, and other consumers like him, would not have purchased the product if the manufacturer and sellers of the product had disclosed its dangers.

Another class action was based upon allegations that a product's labels and marketing misrepresented the product's quality or characteristics.

Read the entire article about food companies defending class actions.

Saturday was a free day for the delegation in China.  We took a tour around West Lake, which is a large natural lake in Hangzhou.  It has a very traditional feel – there are beautiful bridges and other archways across the water and you travel in old-style wooden boats.  We also had a chance to tour a tea factory.  Tea is a very important commodity in China.  They showed us how it is grown and processed, explained the different types of teas, the significance of tea and how to drink it (how to hold the cup, etc.).  In the evening we had a large impromptu dinner where the delegates talked about the trip and the benefits of this job mission.  The delegation was very upbeat and very positive.  They felt like there are incredible business opportunities that resulted from this visit.  We hope there will be tangible results announced when we return to Indiana!

Sunday was primarily a travel day to Japan.  There are no direct flights out of Hangzhou, so we had to drive three hours to Shanghai and then fly to Japan.

The contrast between the two countries is interesting.  Of course, there is a long rivalry between the two – our Chinese hosts did not like the idea of us spending time in Japan and vice versa.  They are very competitive with each other, so this was a delicate balance for the delegation to maintain while visiting both countries.  Differences in the cultures are very strong.  China looks to end results and production, while Japan is detail-oriented and very focused on quality over quantity.  Japan is a very urban society, with only four percent of its labor force engaged in agriculture.  The labor force is very well-educated and industrious, with over 42 percent of the work force being female.  Japanese tend to have a high rate of savings and investment.  There is a strong promotion of trade – much more so than in China, obviously, with a communist government – and more open communications.  For example, Japan has embraced Twitter, Facebook and other social media, while under China's government these social mediums are heavily regulated or even not allowed.  There are also differences in how people dress.  Japanese people are very formal and style-conscious, big on designer clothes.  China is very casual and low-key.  There is also a huge difference in population.  China has the well-known one child per family rule, due to the explosive growth here, but Japan's population has recently started shrinking.  Japan is trying to develop social programs and incentives to encourage families to have more children.

Japan is very organized and very structured.  From the minute you land in the airport, there are signs indicating exactly how many minutes the wait will be.  They have individuals constantly monitoring and rushing you through in an orderly manner.  The environment is hurried, rushed and precise.  It's a very clean and neat society.  The streets and sidewalks are immaculate.  The terrible pollution problems I mentioned in an earlier blog about China are completely absent in Japan.  When you enter a building, there is a special machine that covers your umbrella up so that rain does not drip onto the floor.  When you walk by someone in an establishment, they bow to you and greet you.  If a task is done untimely or it takes a period of time to accomplish the task, they are incredibly apologetic, constantly indicating how sorry they were that you waited.  They are a society that very much wants to please you and is incredibly service oriented, polite, and courteous. 

Japan is slightly smaller than California, and about 73 percent of the land is mountainous.  Their economy is the third largest in the world and it is highly efficient and competitive, with areas linked to international trade, but has very low productivity in areas such as agriculture (because of all the mountains) and services.  What little agriculture they have is highly subsidized and protected by the government.  Japan has few natural resources, so trade helps foreign exchange.  Major industries include electronic equipment, food processing, machinery and metals.  Electronics are state-of-the-art and common.  Even curtains are opened and closed electronically.  Televisions and appliances are top-of-the-line.  Japan is very proud of its electronic achievements and they are a fairly successful society.  The GDP is about $5 trillion and the per capita GDP is about $32,700. 

Governor Daniels met today with the senior leadership of Honda, Toyota Motor Corporation and Subaru.   According to Ron Christian (fellow delegation member and executive vice president of Vectren), the governor expressed the appreciation of the people of the state of Indiana for these organizations' continued support of the Indiana economy through their presence of facilities in the state.  He also described the benefits the state provides relative to other locations for existing and expanded operations.  They had a very good exchange with the companies about their operations in the state and continuing opportunities that might exist.

Hangzhou is the wealthiest province in China, mostly due to their successful industries. Near where the delegation is staying are dealers for Lamborghini, Porsche, Bentley, Mercedes – any luxury car you can imagine. It's also very global and Americanized. For instance, we went to dinner last night at an Italian restaurant (in part because we've had a lot of Chinese food already!) that had Mexican food and ESPN was on. As we walked back to our hotel, we heard a rock band playing what sounded like the kind of music you would hear in the U.S. (other than they were singing in Mandarin) and then they broke into "Take Me Home, Country Roads" by John Denver.

Today, we visited a company owned by the Chint Group, which produces low-voltage electrical, power transmission and distribution equipment. They are listed as one of the top Chinese companies by Fortune and are the fourth largest private employer in China, with over $3 billion in revenue. Their subsidiary, Astro Energy, is a leading supplier of solar products in China, a brand-new enterprise only in existence since 2006 with approximately 8,000 employees. They make solar panels and solar cells that can be used for power stations, homes and commercial use on the top of roofs and on the ground. They export most of their products primarily to North America and Europe, with Germany and Spain as the two key purchasers of their products. They are selling in 90 countries worldwide. 

Astro Energy is very big on research and development. They spend about three percent of their revenue on R&D and have a special research and development center. They even have a location in Silicon Valley that focuses on R&D for sales, marketing and manufacturing.   We had a fascinating plant tour. Because of the sensitivity of the equipment, we had to go through an air-cleaning machine. We wore hair nets, jackets and covers over our shoes. Their machines are new, automated and expensive. The equipment was designed in Switzerland. They have a very big focus on quality control. They guarantee their product for 25 years, so it is very important that they create a quality product. Astro Energy is looking for innovation from its employees, and they talk a tremendous amount about safety and environmental protection, and taking care of their employees. It is a publicly-traded company, partially owned by the government, but they talked a lot about their private independence vs. government control.

Astro Energy is a very Americanized company. Their management team is comprised primarily of people that are either from the U.S. or have been educated in the U.S.  Every person we met with was from the U.S. They travel all over the world to various solar-powered trade shows, including the largest in the world which was recently held in Los Angeles. They have a real affinity for America. In the next year, they'd like to have a manufacturing facility in the U.S. This is the second energy-related company we have met with in less than 24 hours whose goal is to have a manufacturing facility in the U.S. Labor costs seem to be very low in China, because so much of the process is automated. 

We spent a lot of time talking about the pros of Indiana and why Indiana would be a great place to locate. It is going to be very important for them to find places in the U.S. with the sourcing and infrastructure resources they need. For instance, they need glass. In Indiana, Muncie has a great glass history and industry!

China is very interested in how government policy interfaces with renewables and renewable energy standards. I think, given the growth in the electric demand in China and the serious air quality issues that they have, out of necessity China is going to be the world leader in renewable energy technology. It is amazing how much growth there has been in such a short amount of time. Many companies that have been in existence for 10 years or less are already doing billions in revenues.

         On Sept. 16, 2010, the United States Environmental Protection Agency (EPA) published a notice in the Federal Register soliciting stakeholder input regarding the agency’s role under the Pollution Prevention Act of 1990 in regulating or encouraging the "green" or sustainable products movement.  The EPA will consider and accept comments until Oct. 19, 2010, on the scope and nature of the agency’s proposed role in the identification, development, manufacturing of, designation and use of "green" or "sustainable" products, as well as views on the major challenges and opportunities in this area.

         Companies may be affected by the EPA’s action on this matter if they manufacture, distribute, label, certify, verify and purchase or use consumer, commercial or industrial products that may be considered as "green," "sustainable" or "environmentally preferable."  Potentially affected entities may include, but are not limited to those industries with the following North American Industrial Classification Codes (NAICS):  23, 31–33, 42, 44, 45, 54, 72, 81 and 92.

         The areas contemplated by EPA for regulation or other action include: 

1.      Assembling information and databases;
2.      Identifying sustainability "hotspots" and setting product sustainability priorities;
3.      Evaluating the multiple impacts of products across their entire life cycle;
4.      Defining criteria for more sustainable products;
5.      Generating eco-labels and/or standards;
6.      Establishing the scientific foundation for these eco-labels and/or standards;
7.      Verifying that products meet standards;
8.      Stimulating the market; and
9.      Developing end-of-life management systems (reuse, recycling, etc.).

         If you would like to discuss the EPA's request for stakeholder input or any of the potential changes to EPA’s role in the "green" movement, please contact Kristina Tridico, Susan Charles or Freedom Smith.  In addition, you can view the Federal Register notice prepared by the EPA to summarize its proposed actions.

John Livengood, President/CEO, Indiana Hotel & Lodging Association
 
Scott Blalock and Cindy Hoye are right in feeling a sense of optimism and renewal. That is especially true for Downtown Indianapolis where there is growing awareness of the powerful economic engine fueled by visitor spending that benefits our entire community. In many other Indiana communities, hospitality is the principal economic activity. Unfortunately, the state of Indiana is not taking full advantage of the income potential from visitor spending. When you talk to policy makers about investing in promotion to grow the hospitality sector and generate more jobs and tax revenue they all too often express disbelief or disregard the facts you present to them. This may be because Hoosiers are used to thinking of Indiana as a manufacturing state or because tourism is not seen as an essential economic activity.

I suspect that policy makers, both in the General Assembly and in the Executive branch of state and local government, don’t understand the role hospitality plays in our quality of life and economic development. Those of us in the hospitality sector need to do a better job of sharing the economic and social value we bring to the table.

Job satisfaction and hiring top managers remain top workforce concerns for Indiana executives.  Finding good management may be a concern, but the ability to find the majority of their workforce isn't causing Indiana leaders restless nights.  Non-skilled, manufacturing and bio-tech/life science workers are abundant.  Engineers and paraprofessional are also easily found.

Although there is a surplus of workers, there may be hope for job hunters.  CEOs of small, medium and large companies are optimistic about hiring in 2010.  We'll see if the hiring in 2010 makes the pool of surplus workers a little shallower.  We'll need to wait for the 2011 report to find out!

Study highlights from 2010 include the following

•  Corporate reputation is back on top as the highest ranked business issue. In 2009 the highest ranked issue was customer loyalty and retention.
•  Cost of living is still seen as the strongest advantage that Indiana has over neighboring states and has been on the rise as the strongest advantage since 2007.
•  CEOs appear optimistic about 2010. There is a stronger likelihood they will pursue adding jobs, green development, outsourcing, mergers and acquisitions, new alliances, and a variety of other forward looking or growth oriented activities, when compared to 2009.
•  CEOs continue to remain positive about Indiana’s ability to attract business to the state.
•  Perceptions regarding the strength of education programs in the areas of advanced manufacturing and alternative energy have increased since 2009.
•  CEOs report that workers lowest in demand are manufacturing, non-skilled and bio-tech/life science workers.

View the 2010 CEO Survey Full Report.

View the 2010 CEO Survey Excutive Summary.

Warning: Portions of the following posting may make your mouth water….

Since our China trip centered on agriculture it makes sense to reflect on what it took to feed our delegation during our trip as well as what it’s going to take to feed future generations of Chinese people.

Each day started with breakfast at our hotel – served buffet style.  Since travelers from around the globe were dining in these same hotels, the buffets truly were international.  From American to Mediterranean to Asian offerings, one could enjoy bacon, eggs and ham, grilled vegetables, cheeses and yogurts, as well as sushi, poached fish, dim sum and miso soup, all before 8:00 a.m.  Fresh fruits and juices – watermelon and carrot were my two favorites – were available as were a variety of pastries and breads.  Tea, of course, was served, brewed in pots with strainers, not in bags.  Coffee was offered  - although the java was not nearly as strong as in the U.S.; for that option one only needed to cross the street to find one of China’s numerous Starbucks.

We were welcomed at numerous meals – both at lunch and dinner – by officials and trip sponsors.  These “banquets” were delectable affairs, allowing the Chinese to showcase their wide-ranging cuisine and attention to detail.  Seated at round tables fitted with a large lazy-susan centerpiece and holding as many as 20 people, members of our delegation and our hosts enjoyed course after course of traditional dishes, typically self-served “home style” from the lazy-susan.  A typical banquet featured 10-12 such courses and ran the gamut from cold appetizer plates to cups of soups to platters of  entrees and vegetables.  I tried everything offered, including duck tongue – it’s tough and tastes like duck!  Each meal included dishes featuring fish, pork, poultry and beef.  Although rice dishes typically were served at each banquet they did not dominate the menu.  Dessert courses consisted mainly of small¸ sweet cakes and large platters of fresh fruit.  A papaya hollowed out and filled with a glutinous filling was a pretty unusual dessert.  Using chopsticks aided portion control,  but I never left a banquet table hungry.  In spite of the number of courses, the banquets were finished in under two hours.

Our schedule kept us from venturing too far into the streets of Hangzhou and Beijing to experience food sold by street vendors, although we did happen upon a block of stands on a side street next to our hotel in Hangzhou.  These vendors offered typical street items – beef, pork and chicken on skewers – but the most interesting choices in the stalls featured tanks filled with live fish, seafood, eels and scorpions.  We passed.

In between meals our days were filled with meetings having to do with getting Indiana products to China or how to partner Indiana companies and universities with research institutions to help China grow more of its own food to help feed its 1.3 billion people.  We visited dairy and pork farms on the outskirts of Beijing and learned about the production obstacles their workers face, some of it centered around needing better equipment and better food supply for pork, beef and poultry products.  At several of these meetings we proudly were offered fruits and vegetables and dairy products including yogurt and ice cream.

It seems as though Indiana and regions of China are poised to partner to bring quality products to a country that will see the population of its rural communities moving to urban areas in mind-boggling numbers, leaving small farmers without markets for their crops and challenging the infrastructure and basic daily needs of the new urbanites who must be absorbed by cities already bursting at their seams.

Our farewell dinner in Beijing featured a trip to a restaurant known for serving one of China’s delicacies, Peking Duck.  We were accompanied there by a young Hoosier, who is studying to be a chef in Beijing, having arrived not long ago with little command of the language and a giant desire to make it in the kitchens of China’s third largest city.  He arranged for us to visit the roasting room, where the ducks are carefully prepared, and then took us to the kitchens to watch the legions of cooks who turned out delicious fare for our delegation – braised pork, marinated beef, kung pao chicken and whole fish.  The crowning entrée – a succulent duck presented with all the “fixins" - reminded us how flat our world really is:  Indiana is the largest producer of ducks sold to China!

So, if reading this column (most of it, anyway!) made you hungry, thank yours truly.

If you’re not hungry because you’ve just finished yet another meal made from food that is affordable, nutritious, safe and delicious, thank a Hoosier farmer.

Our 14 hour flight arrived in Shanghai and we immediately boarded a bus to Hangzhou, which is three hours to the southwest.

As we drove along the interstate it was interesting to see agricultural practices rooted in the past - with small ponds raising ducks and fish and tiny plots of land growing grains and vegetables being tended to by single farmers in wide-brimmed straw hats - surrounded by modern multi-lane highways and new housing starts.

Hangzhou, the capital of Zhejiang - Indiana’s sister province - is a city of over 7 million and has been ranked as one of Mainland China’s best commercial cities, due in part to its ideal location near Shanghai and being nestled in the Yangtze River Delta, which affords a wealth of international trade opportunities to the region. It is also known for being one of China’s “green” cities due to its investment in its environmental resources.

As business has flourished in Hangzhou, the city has earned a reputation as a center for information technology, software development and telecommunications equipment.

Hangzhou is considered a domestic and international tourist destination; in fact Marco Polo declared the city of  Hangzhou, “beyond dispute the finest and the noblest in the world.”  It is known for its lovely West Lake area, home to tea houses and water taxi tours.

Indeed, Hangzhou is a modern marketplace and we are eager to kickoff our trade mission with a meeting tomorrow morning at Zehjiang International Trade Group as we discuss agriculture, jobs and investment opportunities between Indiana and China.  Perhaps the message in my fortune cookie on the long flight over put it best:

“There are many new opportunities that are being presented to you today.”

This morning we met with the chief managing director of Eli Lilly India, Sandeep Gupta.  The delegation was greeted with large bouquets of flowers, lit candles and the tilaka (the name for the Indian dot) was placed on our foreheads.  It was most definitely a warm and friendly greeting.

The Lilly Indian facility was started in 1993 as a joint venture with Ranbaxy Labs.  They currently have over 430 employees and became a Lilly subsidiary in 2001.  Sixty percent of their portfolio focuses on diabetes and another 20 percent on oncology.

India does not yet have a comprehensive patent system.  They did pass a law in 2005 indicating that patents could be obtained and protected in India, but it's been a very slow implementation process.  As a result, there are very few patents, which can prevent companies, like Lilly, from having an even larger presence.

The cost of health care was a topic in this meeting.  The Indian leaders believe health care costs in the U.S. are higher because the U.S. spends a large amount of money on research and development, where most countries do not invest as much in finding cures.  Ninety percent of new molecules discovered are discovered by the U.S.

Of course, pharmaceuticals were also discussed.  Brand name pharmaceuticals are important in India.  The U.S. may have one brand name and several generic brands.  In India, they have multiple brand names and people pay a lot of money for the brand names.  Even with the focus on brand names, 650 million Indians have no access to any medicine – brand name or generic.  Likewise, 80 to 90 percent of Indians are without health care insurance.

We were able to learn about India during or visit to the Lilly facility.  India has approximately 1.2 billion people, four times the number of people in the U.S.  Sixty percent of the Indian population is less than 30 years old, so it's a very young country.  They feel like their current government is very progressive and they reward innovation and try to reduce bureaucracy.

I've mentioned the vast difference in the living standards in rural and urban areas.  Seventy-one percent of the population lives in rural areas and 29 percent live in urban areas.  Population growth is slowing, but the literacy rate is rising, particularly with women.

The impact of the global economy is much less significant on India than with other countries.  For instance, although the global economic downturn affected India, it did not impact it nearly as negatively as some other countries.  India does not have a heavy reliance on exports.   They rely on their own domestic consumption.  They are "domestically led," which means they are somewhat insulated from global downturns and are much less volatile.

India has the fourth largest economy in the world.  In 2014, they expect to pass Japan and become the third largest economy.  Fifty-five percent of their economy is service based.  Their economy used to be 25 percent agriculture, but that's down to 19 percent.  The percentage involved in manufacturing has also decreased, but the service industry has increased.  They compare and contrast themselves frequently to China.  They point out that a large part of China's economy is manufacturing.

While at Lilly, we had a “town hall” type of meeting with the employees and local leaders.

After we left Lilly, we met with Vilasrao Dagadojirao Deshmukh, the minister of heavy industries and public enterprises for the government of India..  He talked about the various industries the government is involved in.  They are running airlines, making watches, running utilities, and a lot of other industries started because of a void from the lack of interest in private companies.  The government is competing with the private sector.  They are in a position now of turning some of these government initiatives into joint ventures and public/private partnerships.

Later in the day, we met with a senior partner in the Indian law firm of Seth Dua and Associates.  The firm has 34 attorneys, which by India’s standards is mid-sized.  Comparatively, Ice Miller has over 250 attorneys.  In India, you must be an Indian lawyer to practice law.  Several of the large law firms recently got into trouble for practicing law when they were not licensed to do so.   U.S. attorneys cannot even advise Indian companies.

Next we met with the minister of urban development, Jaipal Reddy.   The government is taking the problem of housing for the poor very seriously, although this is an overwhelming issue.

This evening there was a reception for the delegation.  The food was fantastic.  It poured down rain, but within a few minutes the heat had dried up all the moisture.

On the very last day in India we were able to visit the tomb of Mahatma Gandhi.  It was a solemn place.  Gandhi derived most of his principles from Hinduism, but believed all religions to be equal.  He was an avid theologian and read extensively about all major religions.  As we left the tomb, I was surrounded by Indian families who wanted to take pictures with me and their children.  I assume it was unusual for them to see the western attire and blonde hair.  There was a high terrorist alert so we were unable to visit any other locations.  We were advised to stay in our hotel, especially me as a blonde female.  It made me realize how I can take for granted how safe we are in the U.S.

We are now on our way home!  I’m ready to be back in Indiana, but I look forward to applying the lessons from this trip to helping Indian companies have even more economic success.

The trade delegation visited Agra, India today.  Agra has a substantial industrial base.  Many manufacturing plants and industry related wholesale markets are prominent here.  In addition to learning about these economic contributors, we were also able to see first hand how the city handles tourism and its impact on Agra's economy.  We were able to visit one of the seven wonders of the world, the Taj Mahal, also known here as "the Taj."

The Taj Mahal has a very important role in the economic viability of Agra.  This magnificent masterpiece attracts from two million to four million visitors each year.  More than 200,000 of those visitors come from overseas.

The Taj Mahal was built by Emperor Shah Jahan as a mausoleum for his third (and favorite) wife, Mumtaz Mahal, who died during the birth of their 14th child.  Construction for the mausoleum began in 1632 and was completed in 1653.  It serves a reminder of the great love story between Shah Jahan and Mumtaz Mahal and what a beautiful reminder it is.

The mausoleum is made completely out of white marble.  The marble is translucent so that, depending on the time of day, it either reflects a pink or white hue.  Within the mausoleum, there are beautiful flowers and vines made up of precious jewels which come from all over the world.  When light hits the flowers, you can see all different shades of red, orange, yellow, green and pink.

The Taj Mahal is built along the banks of the Yamuna river and has two smaller castles on either side.  It is amazing.  I am astounded when I think of the amount of labor and craftsmanship it took to create this piece of art.

On our way to Agra we visited remote areas of India, which have a completely different standard of living than the large cities.  There are wild monkeys everywhere.  When we were at a stop sign or toll road, the monkeys would climb on our vehicle.  There are also wild boars and cows walking around.  Along the rural streets we saw things Americans are used to seeing inside of a home: sleeping, eating, taking a bath, shaving, washing clothes, getting a haircut.  There are a lot of vendors on the street who sell fresh fruit and vegetables.  Refrigeration isn't common in the rural areas, so the street vendors play an important role in supplying fresh produce.

The rural areas also don't have running water.  They use water from the rivers for their daily needs.  It's a very hot time of year and the rivers are very low.  Because of that, you can actually see the trash and pollution in the water.  That was very sad.

In some of the mid-sized cities, cows are in the middle of the road.  We had an interesting experience when a man came up to our bus playing his flute.  He was charming a snake to come out of its container.

I've blogged about some of my thoughts about India and its culture, but I also want to include comments from a few of my fellow delegates.

Bryce Bennett:
The delegation went to Agra today to look at tourism and how the economy can be improved by creating opportunities for employment in the tourism industry.  We saw the different sides of India along the way, from the grand Taj Mahal to the poverty in the slums and the unfortunate living conditions to the environment that has been spoiled along the Indian highways.  It has been a very rewarding experience to learn more about the Indian culture.  We look forward to bringing the ideas and thoughts that we have generated from our trip back to Indiana, and Indianapolis in particular, for the benefit of our citizens.

Sanjay Patel:
We took a trip to Agra today, leaving Delhi around  6 a.m.  From a large city, the nation's capital, we drove through the rural agricultural areas.  We saw the big city lights and were able to compare it to the rural life and heart of Indians working day in and day out just to make it.  We ended up at the Taj Mahal.  I've seen it twice before, but it was much more special this time.  As an adult I can appreciate the true history and architecture of it and the work that went behind it.  We've had the opportunity to really take in what this country stands for.  My parents are from India, so I've been here several times.  This particular trip has opened my eyes on the economic opportunities we can bring back to Indiana.

This morning the delegation met with the Confederation of Indian Industry, which is an entity similar to a Chamber of Commerce.  During this meeting we talked with the executive director of Mahindra, Arun Nanda.  Mahindra is a $6.3 billion company that employs over 100,000 people across the globe.  They manufacture and market utility vehicles and tractors.  They also have a significant presence in information technology (IT), financial services, tourism, infrastructure development, trade and logistics.  The company has three plants in the U.S. (Texas, Tennessee and Georgia) that manufacture tractors and they cater to what they call the "hobby farm market."

We then met with members of the Bombay Chamber of Commerce and Industry, and Dr. Atindra Sen, director general of the chamber. The chamber was established in 1836 and is the oldest chamber in India.  The chamber has 20 subcommittees that focus on different segments of industry such as legal affairs, agribusiness and international trade.

During my conversations with Indian business leaders I've observed that clean technology and "green" or environmentally friendly practices are not widely used in India.  This may be an opportunity for various industry segments within the U.S. to bring their expertise to this market.

What this market is very interested in is quality.  This has been a shift partly because labor costs are increasing and, as a result, product quality has become a focus. 

We've also talked a great deal about the Indian legal system.  In general, the legal system is not highly trusted and people believe someone's word is sufficient to reach an agreement.  The legal system is based on common law and has been largely influenced by the British rule, so it's very similar to our system; however, there are some differences.  They have no juries and no tort law.  Areas such as real estate, corporate, commercial or most types of business transactions are very similar to the U.S. which make it desirable for U.S. companies to want to do business here.  An interesting fact I learned about the court system is that the India Supreme Court is clogged with property cases and it would take approximately 300 years to handle all of the property cases on the current docket.

I referenced a study by Dr. Geert Hofstede on intercultural business communications in my last post.  One area he studied is the Power Distance Index (PDI).  The PDI is a reflection on how much a culture does or does not have hierarchical relationships and respect for authority.  As I've mentioned, India places great importance on hierarchy.  For countries with a high PDI, like India, the study says that people can expect to encounter more bureaucracy in organizations and government agencies.  The property case backlog in the India Supreme Court is a prime example of this indicator.

After the meetings, we went to the Gateway of India, which is a monument located on the waterfront in the Apollo Bunder area in South Mumbai.  The Gateway is an 85 foot high arch.  It was used by fishermen as a jetty and later renovated to be used as a landing place for British governors and other dignitaries.  The arch combines both Hindu and Muslin architectural style and is striking.

During my visit I've come to appreciate many beautiful aspects of Mumbai.  The city lies on the Arabian Sea and has stunning views.  The Bandra Worli Sea Link bridge enhances the beauty of this coastline.  The bridge was recently completed and took six years to build.  It is an operator billed bridge, which means an operator provides the capital to build the bridge and owns it for a certain number of years, possibly 10 years or more, and gets the toll money that then pays for the building of the bridge.

Although Mumbai is a beautiful city, the traffic and congestion hinder its appeal.  Traffic is so bad that very large corporations use helicopters to transport people locally rather than dealing with the traffic.  Because it's so crowded and congested, it's acceptable to be late for appointments, although it's more acceptable to be late when you're meeting with government officials than corporate leaders.  People also honk constantly.  Honking is not considered rude and is used as a way of letting someone know that they're close to you. 

So with all the stress from traffic, how do people relieve the tension?  One way is cricket.  Cricket is the number one sport in India and it's everywhere.  If you go by any park, there are always people playing cricket.  As I mentioned in my last post, it's summer here and the temperature is about 106.  It's incredibly humid and very hot and people are still outside playing cricket!

Pete Bitar is the president and CEO of Xtreme Alternative Defense Systems.

The Defense and Aviation Industry Roundtable, held on Feb. 16, 2010, at the Conrad Indianapolis was a very enjoyable, insightful and educational experience for me. I found myself instantly comfortable with the others there, though many of them I had not yet met.

The breadth of experience represented at the table was vast. There were small and large businesses – prime and sub contractors, and a full range of views and experience which I believe fairly represented the industry as a whole, not just as it exists in our state of Indiana.

I was asked to bring up some of the challenges and opportunities facing small businesses in our industry sector. My answer to the challenges involved things like financing internal R&D as well as bank financing in general. It seems, from my experience, that banks in Indiana in particular, seem to shy away from industries they don’t understand, or simply lump industries together with broad strokes. We have seen as a company our pipeline grow, even as our banks have retracted financing, and not for any financially-driven reasons, but for the fact that they don’t understand the defense sector or that they lump it in generically with automotive, and therefore retract their financing. Small business is especially vulnerable to this. Fortunately, XADS has found other grant and “organic” financing, but it has slowed our ability to do our own R&D to grow forward ahead of customer demand. We are keeping pace, but the lack of financing is hampering our acceleration.

The opportunities I spoke of include the fact that we do indeed have similarities with the automotive and heavy manufacturing industries in the non-defense sector. That said, it seems that as we grow, we are able to tap into the under-utilized talent pool and rapidly retrain that great talent for our industry’s applications. Additionally, the fact that so many automotive-dependent companies have gone down has led to a surge in availability at auction and otherwise of very inexpensive equipment, which has immediate use in our industry. We are picking up tools and tooling for pennies on the dollar here in this State, and that is certainly an advantage – squeezing lemonade out of lemons, in a sense.

My final comments were that because we are in a cutting-edge industry, and that so many major technological leaps in our society over the past 70 years have come from Aerospace and Defense developments, that we have the ability, and I believe the responsibility, to inspire those around us. We can stir up excitement among youth to pursue science and math. We can inspire hope in our communities, and vision, and entrepreneurialism to push for and toward big things. We as an industry have great reach and can transform the Indiana economy, one contract and one job at a time.

I was also quite inspired myself by the others at the table. Their years of experience far outweigh my own, and their breadth of knowledge was humbling to me, but it stirred my heart to want to keep going, to keep fighting and to keep trying in this path I’ve found myself on.

It was my pleasure to be involved in the Defense and Aerospace Roundtable this year, and I look forward to future opportunities to collaborate and learn from the great folks in our industry in this fine state.

My sincere thanks go to Gerry and to Ice Miller for making this event such a success.

The following post was authored by Paul Jones.

The American Recovery and Reinvestment Act (Act) established a new 30 percent investment tax credit for clean technology and advanced energy manufacturers.  On August 13, 2009, the U.S. Treasury Department and the U.S. Department of Energy (DOE) announced that the application period for companies to apply for $2.3 billion in tax credits opens on August 14, 2009.  Applicants must file the preliminary application by September 16, 2009, followed by final applications by October 16, 2009.

According to the announcement, the Internal Revenue Service (IRS) will certify or reject applications by January 15, 2010, and notify the certified projects with the approved amount of their tax credit.  Award recipients can expect to receive acceptance agreements from the IRS by April 16, 2010.

So, what types of businesses might be eligible for this credit?  Essentially, manufacturers of clean technology (including wind turbine gears, carbon sequestration property, solar panels, energy storage systems, etc.).

Read the entire alert regarding the tax credit for advanced energy manufacturers.

Lee Lurton - – Panel Member at the July 9 CEO Breakfast and Discussion
President, Benefit Concepts of Indiana Inc.

Benefit Concepts of Indiana Inc. is an employee benefits broker/consultant with over 100 small to medium sized clients, mostly in the central Indiana area.  There were several areas of the CEO survey that I found particularly interesting and wanted to comment on in this blog.

Comments Regarding Raising Capital:
More of our clients are in survival mode and trying less to raise capital. Few need additional capital for expansion of their business, and the ones who are in the survival mode do not qualify for bank loans.

Comments Regarding Indiana’s Economic Climate:
Thanks in part to the Indiana Economic Development Commission (IEDC) I believe the problems we have here are smaller than the states surrounding us. Indiana is certainly much more "small business friendly" since Mitch Daniels became governor and appointed Mickey Maurer as the first head of the IEDC.

Comments Regarding Talented Managers: 
In difficult economic times good business decisions are more critical than when profits are good and mistakes can be absorbed with good margins. Even a small mistake (bad business decision) in difficult times can have a catastrophic effect on a small business. Being part of the human resource team, we believe that for most businesses their human capital is their most valuable asset. Talented managers are essential at any time, but critical in difficult economic times.

Comments Regarding the Survey Finding that Large Businesses are Cutting Costs in the Current Economic Climate and That Small Business are Seeking to Increase Revenue: 
Upon getting an advance copy of the survey, I did my own small, informal survey and called a few of our clients. This, in addition to conversations with many clients over the last several months leads me to believe that small businesses are cutting costs, just like the larger firms in the survey. One example is of a commercial woodworking firm who told me that when bidding on a project in the past they would expect to bid against four to five competing firms. Now that number may be as high as 20 competing for the same job. Margins were expected to be three to five percent, now with margins lowered to 0 percent they are winning few, if any bids. As a result, for the first time they have closed their production lines for four weeks this summer. Most of our clients are having a difficult time increasing revenue and have been forced to cut costs. This includes any business related to the construction industry, auto, manufacturing and even the service industries.  The majority are taking a very conservative approach to revenue forecasts and many are deciding what additional cost cutting measures may become necessary if the economy does not rebound in the next two to three quarters.

Incentives are on the rise for businesses to provide "green" products and services.  Many consumers are willing to pay a premium for products that are environmentally friendly, and businesses have taken notice.  Buzzwords such as "organic," "recyclable" and "hybrid" are used to distinguish a product from its competitors.  Even the government has increased its focus on encouraging companies to provide environmentally friendly products and services by offering a wide array of tax incentives available to companies and consumers.  It is not surprising that many companies have responded to these incentives by embarking on green marketing campaigns.

However, companies engaged in green marketing are not only increasing their profits, but also their risk.  Lawsuits and class actions accusing companies of "greenwashing" - marketing the environmental friendliness of a company's product in a false or misleading way - have sprung up across the nation.  These lawsuits have been filed against companies in a variety of industries and trades, including construction companies, retailers, automakers, candy makers and manufacturers of cleaning supplies.

In addition to these consumer actions, the Federal Trade Commission (FTC) has also increased its scrutiny of green marketing.  In June 2009, the FTC filed suit against Kmart, Tender Corporation and Dyna-E International for making false and unsubstantiated claims that their products were biodegradable.  The FTC alleged that these claims did not conform with environmental marketing guidelines contained in the "Green Guides," a set of regulations used by the FTC to determine whether a company's environmental marketing constitutes consumer fraud.  A revised version of these guides will be released later this year and will address the changes and growth in green marketing over the past ten years.

Although green marketing is a potentially invaluable tool, companies should ensure that they understand and minimize the risks that are associated with its use.  For further information regarding green marketing and ways to manage its risk, please contact Michael McNally or Jacob Cox in Ice Miller LLP's Competitive Business Practices Litigation Practice Group and members of the Firm's Green Industries Initiative.

Modern agriculture is affected by more than just traditional farm policy - in other words, the statutes and programs that offer financial supports and incentives for production agriculture.  Today, new and changing policies and regulations require different strategic and business planning considerations.  Agriculture policy now is inextricably linked to rural, energy, trade, climate change, nutrition, transportation and infrastructure policies not to mention food safety, financial services and environmental regulations. 
 
This increasingly important set of policy priorities coupled with a new political administration in Washington, D.C. with a strong will to act suggest that the agriculture industry be prepared for something other than the status quo.  In just the last few weeks, several announcements and actions that connect the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA), the Congress, the court system and the agriculture industry support this view. 
 
Consider the following:
 
1.  EPA's greenhouse gas endangerment finding  After a thorough scientific review ordered in 2007 by the U.S. Supreme Court, the EPA issued last week a proposed finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. The gases in question are: carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, per fluorocarbons and sulfur hexafluoride. 
 
As the proposed endangerment finding states, "in both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act."  The report continues, "the science clearly shows that concentrations of these gases are at unprecedented levels as a result of human emissions, and these high levels are very likely the cause of the increase in average temperatures and other changes in our climate." 

Many industries send out warning signals at the first sign of "over-regulation" and agriculture is no exception.  This specific finding is a slippery slope for agriculture - especially the livestock industry that could be subject to new permit requirements for structure construction or modification and ultimately naturally occurring methane emission fees per animal to the tune of $175 per dairy cow, $87.50 per beef cow and $21.87 per hog (according to the American Farm Bureau Federation).  

In response, Nebraska Senator and former Secretary of Agriculture Mike Johanns has co-sponsored legislation that would protect animal agriculture from any greenhouse gas regulations promulgated by EPA.  Citing the significant economic value his state reaps from commercial red meat production, Johanns suggests this "cow tax" could cost Nebraska's farmers and ranchers tens of thousands of dollars per farm per year.
 
Before the finding takes effect, EPA is required to hold it open for public comment for 60 days and then issue proposed regulations which again would be subject to a public comment period. So EPA’s “deliberative process” could take another two years or more. Meanwhile, last week's announcement will increase pressure on Congress to move ahead on climate change legislation.

2.  Comprehensive climate change legislation  Climate change is near the top of the legislative agenda. In the Senate, Energy and Public Works Committee Chairman Barbara Boxer (D-CA) says she’ll do her best to work with anyone who seeks to move legislation quickly.  The House Energy and Commerce Committee is holding hearings now on a draft released by Chairman Rep. Henry Waxman (D-CA) and Rep. Ed Markey (D-MA) that proposes a mandatory cap-and-trade system to reduce greenhouse gas emissions.

The House Agriculture Committee wants a seat at the table on climate change, too. Committee staffers are currently reviewing stakeholder responses to a 29-question survey regarding the role of agriculture and forestry in a carbon reduction program. The input will be used in “crafting principles that could be part of any subsequent legislation,” explained Ag Committee Chairman Collin Peterson, who says the panel will launch its own hearings on the issue in the next few weeks.

3.  EPA does not appeal court decision on pesticide applications  The U.S. Justice Department recently announced it will not appeal a federal court decision that could eventually require farmers to seek permits from the EPA for all pesticide applications and open the door to citizen lawsuits.  The U.S. Court of Appeals 6th Circuit issued the decision on the case, National Cotton Council vs. EPA, in January, nullifying an earlier EPA ruling that allowed chemical applications to be regulated under existing federal pesticide regulations. Instead, the pesticides applied in or near waterways will now be classified under the Clean Water Act. The change, if allowed to stand, carries significant implications for agriculture as a user of pesticides unable to completely control runoff caused by rainfall. 

A wide range of other beneficial pest control activities could be subjected to lawsuits from activists claiming that the use of pesticides is prohibited under the Clean Water Act unless authorized by permit.  This is of great concern to mosquito control officials and pest managers for forests, recreational waterways, irrigation canals and parks. 

In a March 6, 2009 letter, Agriculture Secretary Tom Vilsack asked EPA Administrator Lisa Jackson to seek a rehearing and request reversal of the 6th Circuit's decision. Senate Agriculture Committee Chairman Tom Harkin, (D-IA) and Ranking Member Saxby Chambliss (R-GA) weighed in with a similar letter.  But those requests were rebuffed, and the EPA has indicated they would be requesting a two-year implementation plan for the ruling. 

4.  EPA seeks public comment on raising the ethanol blend level to E15  EPA's broad reach into agriculture also is evident in its renewable fuel mandate authorities.  EPA is currently seeking public comment on a waiver application submitted by representatives of the ethanol industry to authorize up to 15 percent ethanol blends with gasoline.  The 30-day comment period will run through at least May 20, 2009. By law, the EPA is required to grant or deny the request no later than December 1, 2009.  Since 1978, the limit has been a 10 percent volume ethanol blend (E10) for conventional (non flex-fuel) vehicles.

According to the EPA release, the applicants contend that increasing the blend rate is needed to bring greater investment to next generation biofuels technologies and commercialization.  And the higher blend rate is arguably critical to fulfilling the 2007 Energy Independence and Security Act's renewable fuel mandates.  Opponents (typically environmental and consumer groups and small engine and car manufacturers) counter that the increased blend rate might damage pollution control equipment, reduce air quality, and undermine vehicle and equipment performance and warranties.

5.  New environmental and climate position at USDA   Agriculture Secretary Vilsack announced last week the creation of a new environmental and climate position in his inner office.  Robert Bonnie will serve as Senior Advisor to the USDA Secretary for Environment and Climate.   Referencing that two out of the three key goals of President Obama for USDA are tied to the environment, Vilsack will rely on Bonnie to help guide broad natural resource and climate policy and program decisions.  Bonnie has worked for the Environmental Defense Fund (EDF) for over 14 years with extensive experience in carbon credit programs and conservation initiatives for endangered species.

Independently, each of the above should be important to agriculture, but taken collectively they are evidence of an intensifying regulatory landscape for the industry.  Every part of agriculture - from crop and livestock production, food processing and manufacturing to alternative energy production - is affected by these developments.  Increasingly, EPA will be shaping environmental and climate policy that directly affects agriculture.  Climate change legislation and related programs will be developed and implemented - it's not a matter of if, but when and what form.  Agriculture must communicate with the new political and policy leaders, engage in the policy formation and influence more beneficial rather than harmful outcomes for the industry.