On the other hand, Hoover, which makes vacuum cleaners since 1907, has shrunk its unionised staff strength from 1,800 just over 1,500 in 1994. The Chinese competitors have been selling cheap vacuum cleaners at $79. Hoovers with price tags of $200 and higher cannot compete and was caught unaware. These Chinese low-end models already have 40% of the market. Hoover tried layoffs, new vacuum-cleaner features etc, but to no avail. On the other hand, the market leader Whirlpool is up 38% in sales revenues and just boosted its 2004 profit outlook. Whirlpool no longer sells vacuum cleaners and diversified into other household appliances.

As mentioned earlier, the Port Authority of Singapore (PSA) also lost its competitiveness when Tanjong Pelepas in Malaysia stole away PSA’s number one and two customers with cheaper pricing. The Singapore government has learnt this lesson and is responding quickly to the threats of low cost budget airlines and regional air hubs. Airlines can also bypass Singapore Changi Airport and fly directly from Australia to Europe or Middle East to US avoiding stop over in Singapore. Singapore Airlines is introducing the budget airline Tiger to compete in this sector as well as to boost its premier airline image through the offers of new planes and non-stop direct flights to the US. Singapore Changi Airport is building a terminal for budget airlines. The Singapore government came down hard on the Singapore airline pilots to ensure that the national airline is not dragged down by labour disputes. The airport terminals are also undergoing renovation and upgrading. The jury is still out as to whether all these proactive measures can effectively maintain the competitiveness of the air transportation and aviation industry in Singapore. However, this is better than waiting for the low cost competitors to gobble your lunch right under your noses.