News & Views

It’s All About Leverage

By James Cruz on Wednesday, August 31st, 2011


I think it may be a sign I’m getting old when I actually start to look at “business news” and “world events” as much as I do sports news.  Having said that, I have read a few very different stories about very different collaborations in the last few days which made something perfectly clear to me…  One major key to surviving (or dare I say thriving) in the recovering economy is leverage.  Leverage is such a simple concept with very broad implications.  Consider the following examples.

This article discusses the recently signed agreement between Exxon-Mobil and the state-owned Russian oil company Rosneft. The agreement calls for collaboration on drilling exploration in some of Russia’s arctic deep sea fields.  Rosneft is leveraging Exxon-Mobil’s extensive experience in arctic drilling, while Exxon-Mobil is diversifying its portfolio of resources.  In the end, each company stands to profit handsomly from the arrangement.

In a completely different industry, there were two major announcements of collaborations in the last week which also demonstrate forms of leverage.  The first is a very interesting collaboration beteween Ford and Toyota to develop hybrid trucks and SUV’s.  This is yet another indication of Toyota’s dedication to vehicle electrification after this news from last year.  News that GM and LG are joining forces is not a surprise (they’ve worked together for years on other high-profile projects like this).  Each of these examples, however, demonstrate how these very large companies, each with their own dedicated manufacturing R&D groups, recognize how leveraging each others’ talents may lead to improved battery manufacturing techniques to aid in the electrification process.  It’s not a stretch to consider that if these collaborations go well – especially the Ford / Toyota venture, they may jointly approach other troublesome industry issues such as automotive lightweighting opportunities.

How do you use leverage to your advantage?  Naturally, I have a suggestion!  Whether you’re too small to have your own applied R&D department or so big that your R&D folks are swamped with more ideas than they can take on, consider using EWI as an extension of your resources.  Our diverse group of engineering consultants have decades of cross-industry experience which gives us perspective to help you see your challenges (and potential solutions) in a whole new light!  If you want more information about how EWI can help with your needs, please feel free to give me a call, or contact someone in our membership department through this online access form.

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