August 7th
Today the group met with representatives from LAN Airlines, the
School of Engineering of the Pontifice Universidad Catholica de Chile, and Pacific-Hydro.
LAN Airlines (Chile's flag air carrier) has just concluded a merger with TAM Airlines (the flag carrier of Brazil). LAN has had consistent profitability while the
airline industry as a whole has not enjoyed similar success. With the LAN / TAM merger, the new company (LATAM) is positioned to be the number one carrier in all of
South America. LAN brings a strong financial position to the merger and attributes
their success to their focus on Safety, a diversified Passenger/Cargo model, their
Innovation and Low Cost domestic model, providing World Class cargo and
passenger Service to customers, and their Financial Strength. LAN and TAM are traded
publicly, but are both family owned enterprises. The two families built a
strong relationship over the last several years, and they had to work together
to fend off regulators that sought to prevent the merger of two powerful
companies. The bonding between these families that occurred during this long merger process is likely to prove to be a
highly valued intangible asset to the new company as it moves forward to take
on new market challenges and the challenges of integrating the 2 companies into
a single, more efficient, lean enterprise.
The meeting with the School of Engineering at the Catholic
University of Chile focused upon the graduate school. They have established a
professional graduate degree in Industrial and Systems Engineering. This
provides the ability for working professionals to get an advanced degree while
continuing to hold a full time job in the industry. The school has also established
alliances with other universities such as the University of Colorado, MIT,
Stanford, Notre Dame, and Ecole Polytechnica. The undergraduate engineering
programs are a little different from
that of much of the rest of the world, and typically require 5 to 5 ½ years.
This approach is likely to change in the future, to allow students to graduate and enter the work
force at a point equivalent to achieving a Bachelors degree in the US, and
taking about 4 or 4 ½ years of university study.
The briefing from Pacific Hydro provided a view of the measures
that a company takes to exercise Social Responsibility. Pacific Hydro is primarily
engaged in creating “River Run” hydro electric plants. These are not large
dams, rather, the facility uses the river flow rather than creating a reservoir
behind a dam. The environmental impact due to any construction project is what is
of the most concern to the communities that will be in proximity to the power projects.
The Pacific Hydro objective is to first educate the stakeholders and to
maintain two way communication to ensure that misunderstandings do not damage relationships.
Pacific Hydro creates funds which can be used by the impacted communities to
address issues important to them. These can be as simple as bringing
entertainment to their community, and as forward looking as funding training
programs to increase production of local goods for sale to others outside their
communities.
It was a busy day as we met with three different enterprises
at different locations in the city. But logistics were manageable, as we were
able to walk to the first and last meetings from our hotel. The weather is
beautiful…and the sky was more clear than we’ve seen so far. The snow capped mountains
are very scenic, and required many bytes of camera capacity to be expended by
the group. I’m already starting to think that this trip will end too soon for
most of us. Santiago is a wonderful city which feels very European, but also
has something else, which is harder to describe that makes it seem more
accessible. The type of city that a foreigner could call home with not too much
effort.
