GlobalCorp Annual Report: Management Discussion & Analysis

corporationWhat would happen if a single corporate consortium — let’s call it ‘GlobalCorp’ — achieved its ultimate goal: a ‘corner’ on every business (including the underground economy) everywhere in the world? This would be totally consistent with the mandate of public corporations to ‘maximize shareholder value’. Each year public companies must produce a document called their ‘MD&A’ — their assessment of how well they’ve done in the past year, and what they plan to do next to increase profits further. Here’s what GlobalCorp’s MD&A might look like. I’ve used mostly wording similar to that in real corporate reports.

Latin American Operations: The continued political and labour strife in our Latin American region was a mixed blessing for GlobalCorp this year. Because of labour unreliability, we have had to bring millions of people from our Asian region operations to manage and staff much of our Latin American business this past year. Fortunately there remains a large inventory of Asian workers requesting such placements, which we can draw upon. Our security & incarceration division did great business this year, partly as a result, with revenues from security operations up 17%, and defense sales to Latin American governments up 23%. As these governments no longer have the financial resources to pay for these purchases, we received in lieu of payment 3.6 million square miles of lands, bringing our total holdings in the area to 37%, which under our contracts are tax free in perpetuity. Our mineral and petroleum revenues rose 16% this year, thanks to strife in our African and Middle Eastern region reducing supply from that part of our world, and the insatiable demand from our Asian region. Revenues from pharmaceutical operations rose 28%, boosted mainly by a 116% rise in recreational pharmaceutical sales, the majority of which continues to be exported to our North American region. Tourist services division revenues rose 12% thanks to continued demand worldwide to see our Last AmazonLand theme park and zoo.

European Operations: This region continues to provide stable but unexciting growth. Our agricultural revenues grew 3% thanks to an increase in subsidies, which now exceed $200B per year. Labour costs in the region remain unacceptably high, but the consumers in this region seem prepared to pay that back to us in premium prices for products manufactured in the region. This does allow us to minimize labour transfer costs, and turnover between our companies is low. The product quality of manufactured goods is exceptional, which allows us limited opportunity to sell replacement goods to consumers in this region. Furthermore, these consumers continue to have small families, below replacement levels, so the number of new consumers is unacceptably low. Our political leverage (discussed below) in the region is the lowest in our world, so we have been unable to persuade governments to import more new consumers to stimulate growth. Overall, a disappointing and frustrating year for our operations in this region.

African and Middle Eastern Operations:  It was another sensational year of double-digit growth for our operations in this region. War remains the world’s number one industry, and its most profitable, and this region accounts for over half of war-related business sales. Sales of defense equipment and supplies to governments in this region rose 33%, while sales to opponents of these governments rose 19%. Now that the governments are paying us with land, the opponents of governments just cannot compete with the governments to pay the annual double-digit price increases we have been able to put through on our full defense equipment and supplies line in recent years. While governments in the region are pleased that their opponents are finding it increasingly difficult to pay our prices, some of our shareholders are concerned that without armed opposition, demand for GlobalCorp’s defense products may soon decline. But we assure our shareholders that, because balkanization in the region has resulted in twice as many countries (and hence governments) in the region as there were before, we see almost unlimited growth potential for the defense division as these countries begin focusing more on ‘defense’ from each other. We are pleased to report that as payment for defense revenues, we have now acquired over half of all the land in the region. Our theme parks in the region, especially the religious theme parks, are doing record business, up 128% over last year. Recreational pharmaceutical sales from the region are up 44%, with most of the product going to our consumers in the European and Asian regions. Since most non-government consumers in the region have neither money nor land to offer us, we continue to focus away from supplying this high-risk consumer segment, as governments there have been unwilling to provide subsidies that would provide us with a satisfactory ROI to re-enter this market.

Asian and Pacific Operations: In contrast, non-government consumers in our Asian and Pacific region have been an excellent growth market. We are delighted to see that consumers in this region appear to be emulating the buying behaviours of North American consumers, especially acceptance of the premium value of brand name labels, and of high levels of personal indebtedness — and there are eight times as many of them. Since we acquired the last of the major Asian coal operations and have introduced our new discount nuclear power plant models, energy product division sales to the region have doubled for the third year in a row. And while land acquisition in payment for these purchases has not been as quick as in the rest of the third world, we are pleased to report that this year we acquired Tibet from the government of China, in payment for our construction of the fifth and sixth Chinese mega-dam projects. We welcome all Tibetans to the happy family of GlobalCorp ‘corporate citizens’.

North American Operations: It is hard to separate our reports on North American and Asian/Pacific operations because the two regions have developed such strong consumer emulation and economic co-dependence. We continue our policy of operating manufacturing facilities in North America only if they are staffed by no less than 75% imported workers. This has enabled us to keep costs low and productivity high for these few remaining North American plants. The situation for North-American-born consumers is problematic for several reasons. Their work ethic is poor. They expect high wages. They are over-educated but under-skilled. Because they have had access to inexpensive Asian-made goods, they have been unwilling to pay a premium for domestically-made products, and as a result the European high wages/high prices model simply will not work in North America. In fact, many North Americans from Europe have started returning to Europe, and we are beginning to see a similar ‘reverse-immigration’ to Asia as well. But there simply is no need for a lot of managers, or workers as a whole, in our North American operations. As a result, we are now considering focusing away from the individual North American consumer, except as a market for our Asian consumer goods manufactured products and our Latin American recreational pharmaceutical products. These consumers are already at their debt limits, and their income prospects are not exceptional. These concerns do not apply to the North American governments, however, who continue to be wonderful customers and supporters. We are pleased to report that these governments recently eliminated the last corporate and other taxes on GlobalCorp activities, have been extremely generous selling us very valuable land at reasonable prices and eliminating and under-enforcing regulations affecting our operations. In addition, they continue to provide our North American agricultural division over $200B per year in subsidies. They are also, of course, our number one customer for our number one industry, defense, and their appetite and willingness to pay annual price increases remains substantial. And as a significant part of the consumer population of North America is becoming increasingly violent as their value as both producers and consumers declines, our security and incarceration division is also generating double-digit increases in revenues, as the number of North Americans housed involuntarily in various GlobalCorp-run public facilities approaches three million.

Government and Public Relations: As we have explained in previous MD&A reports, our objective is to establish a true ‘fulfillment’ relationship model with governments the word over: They buy from us, they pay us with money, land or other commodities we find of value, they impose no taxes or regulations on us of any kind. This is a true ‘free-market’ model, one which our shareholders demand and which governments are increasingly providing to us. But it is a continuing struggle, as some consumers continue to try to get governments to impose restrictions on us. And although we are currently unchallenged by competition of any kind, this does not mean it is not a free market. If consumers are not happy with the wage freezes in place in all our facilities world-wide, they are free to set up their own companies (which, thanks to us, are for the most part now tax-free). If they are not happy with the price increases we put through each year on all our products, which we must do to meet shareholder expectations, they are free to look for someone else to buy from, or not buy at all. We are able to take advantage of our global reach, access to the cheapest commodities and labour markets, and economies of scale to produce and offer products at a price that is lower than small producers could match, yet high enough to provide our shareholders with an excellent ROI. To sustain this, we are continually looking for cheaper sources and processes, further reductions to taxes and regulations, and additional government subsidies, but all of these are becoming harder and harder to find, which is why we have started raising prices. We are responsible to our shareholders, and cannot do otherwise. We are not responsible to consumers — it is not our job to provide them with high-paying, interesting employment, or employment at all. That is the job of the government and society through the education system. It is not our job to protect the environment, or the quality of life in all the communities in which we operate. That too is the government’s job. The anti-globalization protesters, unions and eco-terrorists don’t seem to appreciate that their beef should not be with us, it should be with their governments. They can try to persuade governments to regulate the economy more, while we will, as we must, try to persuade them to regulate less. They can use consumer lobbies and their votes, while we will use corporate lobbies and campaign support. Whichever side is more persuasive will win. That’s what freedom is all about.

Image from article in The Economist on Joel Bakan’s The Corporation

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1 Response to GlobalCorp Annual Report: Management Discussion & Analysis

  1. Karla and Natalie says:

    We are discusted with are world today,littering,polution all of that kind of subjects we dont believe in driving vehicles, we cycle and walk everywhere such an easy life that way. We are now moving to the country side as there is not as much world polution and racism and all critical events.As one of us have allergies we need to move away from the smoke produces by a near by factory. We both believe strongly in love, hope and god let there be peace.

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