THE nDERBIRD Focus on the Americas An assessment of the grain markets by 2 Thunderbird alumni and other sources. Special Report New York based group trains Mexico's 5 managers. Essay A Thunderbird Campus professor sees 6 German investments on the rise. News Items of interest on campus and in the 7 news. l.QuePasa? Alumni gatherings across the country and THE 8 THUnDERBIRD around the world. is the quarterly alumni publication of American Campus speakers Graduate School of International Management. Vistors to campus who have enhanced the 9 T -Bird experience. Profiles T -Birds volunteer in human resources 10 management. 11 Thunderbird Fund '79 Contacts Editor: Dawn Wardle-Corley Resource Person/Alumni Association Staff: Donna Cleland 12 roster. KeUyHodge Update Contributing Writers: Victoria Baird' 67 Class notes on T-Birds around the world. Theodore Troy '57 14 Professor Helmut Roessler Special Correspondent: Randi Steinberg Design: Pat Kenny Sincere thanks to: Steve Orr, '79, Tom Brennan, '79, Debasish Banerjee, '80, Professor Shoshana Tancer and Dr. Parry Dixon. Full cover: Harvesting wheat fields in Kansas. Courtesy of the Audiovisual Department of Farmland Industries, Inc. Center photographs: Left: Maturing wheat. Courtesy of the Audiovisual Department of Farmland Industries, Inc. Center: Crops from the Andes mountains in Peru which are believed to be ·the wild predecessors to the hybrid corn and potatoes we eat today. Photo by George B. Carver, '80. Right: North Dakota sunflowers. Photo by Mike Paulson. The theme for this issue of the Thunderbird Magazine is the Americas, both North and South. It is particularly fitting because as most of you know, American Graduate School of Interna­ tional Management started out 33 years ago as the American Institute of Foreign Trade and focused exclusively on Latin America. Since then, we have expanded to encompass the entire world, while teaching eight different languages. In spite of this and after all these years, Spanish is still the most popular language. We offer Portugese and even though it is the language of only a few countries like Brazil, it still has a loyal following of student majors. This past Fall, about 26 percent of \ the student body were from foreign countries. This includes 14 from Brazil, nine from Venezuela, eight from Mexico, three from Chile, two each from Peru, Bolivia and Nicaragua and one each from Argentina and Colom­ William Voris bia. President Because of our 33 years of concen­ tration on Latin America, we havE more of our graduates there than in any other region of the world, except the United States and Canada. For instance, there are 142 Thunderbirds in Brazil, seven of them with Cater­ pillar Tractor Company and 106 in Venezuela, five are with Publicidad Siboney. Mexico has 129 Thunder­ birds, five with Citibank. We had over 240 company visits to the campus this past year recruiting our graduates and it's amazing how many of them have major operations in Latin America. Invariably they are optimistic about the economic .potential of many of the countries in that region. The soybean fields of Iowa . Courtesy of the Audiovisual Department of Farmland Industries, Inc. Focus on the Americas Shifting the alliance to COlnlnodities by Dawn Wardle-Corley Consumer demand for better, high Company, "Sunflowers lend them­ (Editor's note: We wrote to a number of protein diets is continually on the rise. selves to being grown here. Within the Thunderbird alumni contacts in the Many developing nations are actively next five years, sunflowers will be as Americas, asking their opinions regarding seeking grain for their hog and poultry important as corn and soybeans." He the cash commodities market. Because we populations. Buyers are looking pri­ added that there is a move afoot to are limited by space, not all the T-Bird marily to the United States' industries develop a sunflower futures contract in responses we received can be included. To as inexpensive suppliers of grain and Minneapolis, Minnesota. Although ali, we wish to express our sincere thanks grain derivatives. this scheme is still in the thinking for their assistance.) New grain markets are responding stages, it does indicate confidence in to needs for low cholesterol, high sunflowers as a considerable money This rapidly growing industry protein linoleic oils as alternatives to maker. provides investors with a cheap, safe wheat and corn. For instance, Canada Tom Brennan, '79, a program source for their money in lieu of an has financed the production of rape coordinator of marketing development unstable stock market. While a reces­ seed because of its high (40 percent) oil with American Soybean Association sion looms ahead, cash commodities, content. Another item to watch is and Paul Fribourg, merchandiser in particularly the grain markets, are a sunflowers. Said George Douglas, '76, charge of U.S. wheat exports and brightening light amidst an uncertain a merchandiser for Continental Grain economic future. Federal Savings and Loan Association stresses the importance of the Soviet Union as a buyer of U.s. grain. Yet, one new development according to Paul Fribourg is the "emergence of the Far East as a major buyer of commodities, in particular, Korea, Japan, Taiwan and China. This really has been booming in the past years and prob­ ably will continue to do so." Many Latin American countries continue to buy great quantities of grain. At the same time, Japanese com­ panies have shown interest in obtaining the middleman's profits by going to the source. "Japan has started investing directly in grain export facilities in the U.S.," said Fribourg. For instance, he noted the recent Mitsui purchase of Cooke Industries elevators in New Orleans, Louisiana. Another Japanese company, Zeno, has announced plans to build a grain Wheat harvest in Kansas. Courtesy of the Audiovisual Department of Farmland Industries, Inc. elevator in New Orleans. As a U.S. co-op, Zeno is just one example of a wheat commodities futures for trend toward the expansion of a Continental Grain Company agree. cooperative system in the U.s. "The demand for sunflowers is Still, dominance in all the grain increasing because it is more price markets remains with the U.S. "This competitive," said Brennan. Rapid year was the first year that U.S. development of grain substitutes is just soybean production was more than one trend in the commodities industry. corn or wheat. The value of the crop is While U.S. grain companies possess a $14 to $15 billion. Of that amount, $7 vast majority of the world grain billion plus will be exported on a market, South American nations have country by country basis mostly to emerged as competitors. Both Brazil Japan and Europe. The Soviet Union is An older combine. Courtesy of the and Argentina are becoming aggres­ purchasing large quantities of soybean Ross Industries Department of Cargill, Inc. sive exporters of soybeans and soybean and soybean meal. India is one of the oil. largest importers of soybean meal," Craig Starkey, '60, vice president and noted Len Brockman, '75, American director of economic research for First Soybean Association's division manager for Latin America. admits that many people are analyzing Said Paul Fribourg, "The U.S. is the the price of commodities to gold. "The major corn producing country in the price of soybeans in relation to gold world and will maintain dominance in has made our commodities cheap. It's the corn market while Latin America done nothing but bring people into the increases soybean production." commodities market," he indicated. In In response to inquiries as to accordance, Len Brockman observed, whether commodities cartels could be "Two days ago (Oct. 31) an ounce of successful, our sources were skeptical. gold at $378 could buy 21 barrels of George Douglas indicated that com­ Saudi Arabian light crude and that modities must have captive markets in ounce of gold can buy 57 vessels of order to be profitable. Len Brockman soybeans. This compares to 19 barrels responded, "No, unless it's a product of light crude and 30 vessels of like petroleum which has a low price soybeans at the price of $243 per ounce elasticity of demand." Brockman noted a year ago." that too many countries grow wheat The grain industry is one of the for a cartel to be successful. "Only in fastest growing markets in the U.S. years of drought or famine might it today. In terms of world trade, it is work, because demand is larger than clearly at the top. An expanding supply. In years of large surpluses you international industry means more can't operate a cartel because it's jobs for T -Birds and, in light of the cheaper to dump on the market at a Courtesy of the Port Authority of New York. numerous visits to Thunderbird by lesser price than to keep in storage." recruiters last Fall, this is proving true. Commodities cartels might work in During Fall of 1979, six major U.S. the short run, according to Craig As the dollar continues to devalue, grain corporations sent job recruiters Starkey, but as time wears on, he said investors are shifting their alignment to the Thunderbird Campus, showing they would fail. from the dollar to precious metals and their confidence in the quality of our For different reasons, Paul Fribourg the grain markets. "You've got to find graduates. By comparison, during the is doubtful about cartels. He said, something else to set value to commod­ Fall of 1978, three grain corporations "Even OPEC is having major prob­ ities," said Fribourg. "This does put the sent recruiters to the school. lems. In a cartel you've got two ways it U.S. in a more competitive position in Continued success of the grain can fall apart.