Ducati & Texas Pacific Group †a ”Wild Ride” Leveraged Buyout

Ducati & Texas Pacific Group – A †Wild Ride† Leveraged Buyout 1. What is the nature of the opportunity? Could the Ducati brand be expanded beyond motorcycles? Why or why not? TPG strategy is to invest in undervalued firms’ that usually have been poorly managed. The investments are made in privately hold firms that are either unlisted from the beginning or that is being delisted from the stock exchange under the LBO process. TPG wants to invest in firms with a â€Å"healthy† basis but that are experience some problems that TPG believes’ that they can fix. Does Ducati live up to this? TGP has the opportunity, if the deal goes through, to purchase a controlling stake in Ducati Meccanico, producer of the best motorcycles in the world. The article describes that Ducati was in a great position of becoming for street bikes as what Harley-Davidson was for cruisers. They have a recognized brand, in spite of limited marketing, associated with high performance, i. e. high quality and high technology. Their bikes crushed the competition and won the World Superbike championships for several years in a row; 1990, 1991, 1992, 1994 and 1995. Their racing performance indicated on technical brilliance which is just what street bike customers’ prefer and therefore they had customers on the wait lists to buy their bikes. The core business possible growth was considered as high when comparing their number of sales to Harley-Davidson sales. In addition, to this the market didn’t foresee any new entrants of street bikes which also work in their favor. The manufacturing fundamentals were strong with low fixed costs due to high levels of outsourcing, 85 %. They offered the customers 15 models of bikes in four families founded on seven various engines. Furthermore, the most expensive part of an engine is the crank cases and cylinders but Ducati can keep these costs low since they have high levels of standardization of their engines and therefore only need two crank cases and three cylinders because. All these factors’ make Ducati look like an attractive brand that should have a prosperous economy. But they were under great financial pressure and faced severe problems in both manufacturing and financing. They had no money and weren’t allowed to borrow any either which caused extreme delays on payments to key suppliers. Therefore their factor was full of unfinished/almost-finished bikes. This affected their sales and extended their customer wait lists but it also affected suppliers and some of them went bankrupt. Ducati were short on working capital and the business was so entangled with Cagiva Group, which Ducati was a part of, that the detail’s on Ducati’s performance was not transparent at all. In the time span from 1993 to 1995 there was only a reliable balance sheet from 1995. TPG managed to assemble the profit and losses for the other years. All this together indicates a really poorly handled management. The forecasted EBIT for 1996 was negative and there was an imminent chance that Ducati went bankrupt since they couldn’t meet there payments. This lack of transparency has made it hard to find financing. TPG can succeed if they manage to build a model that captures their payback goal times three in three to five years. They need to find out what the Ducati should be earning and around these assets construct an international company. TPG can expect to take over a mismanaged company under financial pressure/distress but that have great potential in their strong brand and manufacturing fundamentals. To make this work they need to use a capable management team that can build up both the brand and the company. They need arrange the financing to be able to recover from the distress and to start making some money. But as they state in the article they will have to write at least a thousands of checks on their first day. Ducati brand could and should probably be extended beyond motorcycles even though a first step is to close the deal, take control over and built up the company. There for it might not be a good idea, at least not the first thing to start with. As I already pointed out Ducati is in a great position to imitate, for street bikes, what cruisers are for Harley-Davidson. Harley-Davidson has succeeded in creating a life-style brand with as much as 15% of its sales, with a growth potential, coming from just clothing and mechanical accessories. Ducati could look at the products Harley-Davidson is selling and how their selling them. They could also compare with a car company, like Ferrari, that has a lot of clothing and accessories that they sell. Ducati has a great potential to extend beyond motorcycles with motorcycle clothing and accessories and mechanical accessories. There are probably a lot of motorcycle stores that would want to sell their products and they could also sell them through their own shops and from online shops. It is just the imagination, costs and the combination of a balanced brand expansion that sets the limits. 2. How does this deal differ from a typical deal in the US? In terms of deal flow generation, due diligence process, negotiations and context? Deal flow generation The deal flow is the ability used by equity firms to identify attractive potential investment candidates, i. e. the ability to generate deal flow. This flow is generated from a wide range sources’, from for instance the experience and network built up by working in specific businesses to the network of senior corporate executives and it is this flow that discover opportunities that otherwise would have gone by unnoticed. Now days’ investment banks generally works as agents that sells the opportunity to invest for a fee paid by the seller in a sale process akin to an auction. To help Cagiva through its financial distress the Castiglioni brothers wanted to get a bridge loan from DMG so they contacted Razzano but he wasn’t interested in signing them a loan agreement. Instead he saw the potential of an investment and contacted Halpern since they were looking for a joint investment. Due diligence Due diligence is the valuation process undertaken before the parties sign the deal to identify the future of the potential investment but also to estimate the proper price for the investment. Equity firms’ usually creates a model on several hypotheses that captures the payback of the investment. Due diligence is a vital process in investigating the financial health, technology, the market, and the current management. A lot of different sources are used and in connection to this the investing firm usually signs a confidential agreement. The due diligence process generally starts after the parties have signed a Letter of Intent and paves the path to further negotiations between them. TPG have signed a Letter of Intent with the Castiglioni brothers and are trying to build a model that captures their payback. The problem for them is to separate the intertwined Ducati from Cagiva to find out what the Ducati should be earning to be able construct an international company around these assets. Negotiation If the sale is conducted through an auction by an investment bank intermediate the due diligence process often leads to a final proposal by the bidders’ and this is where the negotiation phase starts with chosen bidders. The negotiations then lead to an agreement between the parties. According to the article the negotiations in the US are done more in a linear path but the negotiations with Cagiva can best be described as a circular path. TPG has been negotiated with Ducati for almost a year. This is probably were the cultural difference is most prominent. Americans chose to discuss every issue separately step by step and after every discussion they want to include this in the contract between the parties. Italians see the whole picture in every discussion so when the Americans have decided something new in the next step of the precoess the Italians want to go back to the previous steps and re discuss them. Furthermore, Italians don’t like do business if they can’t trust the other part in America you don’t have to feel the trust since you include every little detail in the arrangement otherwise you can get sued. Maybe that is why the Castiglioni brothers might not trust TPG if they are not willing to re discuss everything again. Maybe that is why they are trying to shop the deal to others even though they have signed a Letter of Intent with TPG. This would never happen in America. But they have not participated in any meetings and in America it would probably not be hard to sign a contract under an LBO situation. TPG believed that their behavior replicated an act of trying to back out of the deal. Context LBO’s in U. S. eems much more organized than in Italy but at the same time this might make it harder to find interesting targets that have the same growth potential or at least the competition of acquire them might be harder. The development of the high-yield markets in Europe compared to US differ since the markets in Europe was not as developed as the US market. This made it harder for TPG to accomplish the same level of leverage as in the US. Halpern compare the debt-to-equity rat io as 2:1 in Italy compared to 3:1 in the U. S. On the other hand TGP were looking for companies that had grown hastily but still was arranged as small company and in Italy companies aspired to be small because of the fact that they then paid less tax. In order to pay even less tax it wasn’t uncommon, according to Halpern, to find relatively small companies with as much as 50 subsidiaries. This is usually not the case in the U. S. To overcome the aim to stay small and to not go public â€Å"Tremonti Law† allowed companies that went public in 1996 a two years tax relief. 3. What is the value of Ducati at the time of the deal? How much should TPG be willing to pay for 51 percent of the equity? Please assume that the target return is 35 percent (annualized). Observe that you are required to value the firm. For the valuation of Ducati, observe that since this is a leveraged buyout, the debt-to-equity ratio will change drastically, and you need to handle this in the appraisal model you use. Furthermore, you need to think about the inputs you shall use in the valuation. How do you determine return on assets? Which risk free rate of interest should be used? Which risk premium should be used? Etc. To value Ducati we can use the APV-model. APV treats the firm as it is all equity financed. A suitable unleveraged beta for the estimation is a beta in the same industry that is all equity financed and the article states that Harley-Davidson don’t have any long-term debt which means that their beta is unleveraged. I will therefore use their beta of 1. 09. We will use CAPM to discount the cash flows and a rule of thumb to know which rate to use is to match the risk free rate with the country that we are going to invest in. The 10-year government bond is 6. 4% in both the US and Italy so this wouldn’t have caused any trouble here. Since the 10-year bond is 6. 74% in both countries we will not add any extra country risk for the investment. The risk premium that we are going to use is 7. 5%. TABEL 119961997199819992000200120022003 EBIT-5. 4+58. 2+79. 4+96. 3+111+123. 3+146 -Taxes(53. 5%)0-31. 1-42. 5-51. 5-59. 4-6. 6-72. 3-78. 1 +Depreciation+6+7. 3+9. 1+11. 1+13. 5+15 . 7+18. 1+20. 7 +Amortization+24. 7+24. 7+24. 7+28. 5+28. 5+28. 5+28. 5+28. 5 -Capex-12. 9-15. 5-20-24-22-24-24-25 Change in Working Capital (see TABEL 2)-0. 9-1. -32. 9-17. 3-2. 9-11. 2-10. 5-10. 3 Total cash flow 13. 342. 317. 843. 168. 766. 37580. 8 +1229. 8 TABEL â€Å"199519961997199819992000200120022003 Cash9. 411. 322. 689. 837. 279. 987. 2132. 2 6%6%6%6%6%6%6% Transaction cash required 9. 411. 322. 628. 532. 636. 2138. 841. 344 Accounting receivables 8084. 583. 2124. 5139. 9141. 6152161. 4170. 6 Inventory5537. 249. 265. 461. 768. 172. 676. 380. 2 Other3. 32. 22. 73. 21516. 81819. 120. 2 Current assets147. 7135. 2157. 7221. 6249. 2262. 7281. 4298. 1315 Accounting payable4030. 350. 478. 794. 4104. 1110. 9116. 6122. 6 Other11. 39. 410. 13. 27. 88. 79. 49. 910. 5 Current Liabilities 51. 339. 760. 991. 9102. 2112. 8130. 3126. 5133. 1 Working Capital 96. 495. 596. 8129. 7147149. 9161. 1171. 6181. 9 Change in Working Capital 0. 9 1. 3 32. 9 17. 3 2. 9 11. 2 10. 5 10. 3 CAPM: Re= R f+? (Rm-Rf) = 0. 0674 + 1. 09 x 7. 5 = 14. 92% Terminal value by with a multiple: TPG is willing to pay 400-500 billion lire for 100% of Ducati. Enterprise value: 280+140=420-40=380 Earnings multiple: (Enterprise value)/(EBITA for 1995)=380/60. 4=6. 3 (how many times this year’s profit is TPG willing to pay for Ducati) We use the multiple on EBITA for 2003 ? 195. 2 x 6. 3 = 1229. 8 (this have to be discounted to present value we will therefore add it to 2003) Value of Ducati if it was all equity financed: 13/1. 1492 + 42. 3/1. 14922 + 17. 8/1. 14923 + 43. 1/1. 14924 + 68. 7/1. 14925 + 66. 3/1. 14926 + 75/1. 14927 + 1310. 6/1. 14928=602. 3 billion lire But Ducati has liabilities so we need to value that as well. TABEL 319961997199819992000200120022003 Net interest expenses1131. 128. 928. 123. 117. 912. 36. 3 Tax shields(53. 5%) 5. 916. 615. 51512. 49. 66. 6 The tax shields illustrate how much less taxes’ Ducati needs to pay because of the interest expenses and that is what we need to discount in order to value Ducati. 5. 9/1. 1125 + 16. 6/1. 11252 + 15. 5/1. 11253 + 15/1. 11254 + 12. 4/1. 11255 + 9. 6/1. 11256 + 6. 6/1. 11257 = 56. 7 billion lire Value of Ducati: 602. 3+56. 7=659 billion lire Value of equity= 659-280=379 billion 4. Should Halpern consider applying a country risk premium in determining the appropriate discount rate for Ducati? They should not consider applying a country risk premium since the Italian the long government bond of Italy and the US are the same, i.. . 6. 74%. 5. Should Halpern walk away from this deal? Why or why not? Ducati has a lot of problems that I already covered under the first question. But as a summery are under great financial pressure and have faced severe problems in both manufacturing and financing. The reporting of their financial performance is not transparent at all instead it is entan gled with the Cagiva Group. This has made it hard for TPG to hunt financing to the LBO. It is perhaps not a surprise but they have a problem with their working capital and the payment delays leave them with a lot of unfinished bikes. This has lead to a decrease of their sales and enlarged wait lists. Then we have a badly manage management by the Castiglioni brothers who continues to shop around for other deals even though they signed the Letter of Intent. There is also the risk of insolvency of Ducati and bankruptcy of Cagiva which have made TPG worried about the Italian legacy. A bankruptcy of Cagiva after a closed deal could lead to a delay of the deal for up to four years and this would be cost them a lot of money. The deal also has a lot of benefits. Ducati is the world leading manufacturer of motorcycles and if managed well they could probably be profitable very soon. They already believe that this want be a problem with Minoli as CEO. The brand is well-known and easy for investors to understand. This opens up the opportunity for IPO which could in fact obtain higher sales compared to trading. TPG has worked with the deal for one year so they have really had time have to plan for the changes in the Ducati. 6. If TPG pursues the deal and purchases a stake in Ducati, what are the critical steps that TPG needs to take in order to make the deal successful? Please be specific in your answer! First of all they need to get the Castiglioni brothers to stop shopping around for other deals. They have â€Å"signed† the deal through the Letter of Intent and it is the brothers and Cagiva responsibility to follow the contract. Maybe easier said than done be the negotiations must continue in order to get a deal. TPG also need to finish their due diligence model so to that they can identify the future of the potential investment but also to estimate the proper price for the investment. It is hard to close a deal otherwise. The due diligence is also important in investigating the financial health, technology, the market, and the current management. If they sign the deal TPG can expect to take over a mismanaged company under financial distress that has great potential through its strong brand and manufacturing fundamentals. To make this work they need to use a capable management team that can build up both the brand and the company. They also need to start up and arrange the NewCO establishment, the senior debt and write at least thousands of checks on their first day.

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Role of Tourism as a Key Economic Activity

Question: Discuss about theRole of Tourism as a Key Economic Activity. Answer: Introduction Tourism is one of the global sources of economic and regional development of countries. The growth and development in tourism industry bring with planning, policies, and practices. In this study, we will understand the tourism contribution t destinations, resources, evaluation and business practices of Australia. From past years, tourism has become one of the major industry and sector or source of income for many countries. The sustainable development of tourism is one of the major responsibility which aims is to achieve a sustainable utilization of resources, preservation of the climatic change, etc. To have positive outcomes; there is a need to focus on affect and impact of environmental, social and economic development is these areas. Australia is a country which is a fast developing nation with its many green and diverse cities and towns. This country also has one of the fastest developing economies. The country has many business hubs and MNCs. There is an increase in the arrivals of tourist by 5 % in the year 2010 when compared to last year tourist. It was approx 5.8 million at the end of October 2010. The Australia is expecting approx 20 million tourists in the year 2020. The cities like Brisbane, Sydney, Melbourne, and many others are the favorite places of tourists. Therefore, we can say that the sustainable development of tourism is an ideal thinking an approach to balance the social, economic and environmental issues. It also helps to ensure the long-term sustainability n the tourism industry of Australia. The Australian government is trying hard to increase the income and revenue from the tourism industry and sustainable development of the same. In Australia, the state of Brisbane has provided a smart state program with $120 million to bring development and growth in that state. Economic Impact of Tourism The sustainable development is providing an economic aspect on the country and global levels. As it minimizes the negative effect and ensures the sustainable use of resources. It is also providing high levels of revenue to the countries (Aldebert, Dang, and Longhi, 2011). Australian Tourism The tourism industry of Australia is acknowledged by the regional societies that act as a social and economic driver. There is a competency so that it helps to provide jobs and employment to the individuals of Australia. The total expenditure for the tourist industry in increased by 5 % that is about AU $59 billion since 2008. The Queensland in Australia is the most visited place of tourist. With this, the government of Australia has developed a model named as tourist impact model that wok for local councils and help (Amelung and Nicholls, 2014) economic impact of the tourism in Australia. It is one of the effective methods of generating income through tourism and also to improve the industry. It also measures the economic activities to focus and gain the future impact to the tourism industry. It acts as a cardiac tonic for the growth of Australian economy (Spilsbury, 2011). The tourism industry is capable of bringing benefits and profits while utilizing cost on the host communities. Equally the cost and gains are collected. The regional development is an effective tool to have fair returns from the efforts that the communities are putting to raise the net tourism revenue. Instead of putting efforts on advertisement and promotion, the government has to concentrate on the sustainable development of destinations. The Australian government is trying hard to increase the income and revenue from tourism (Oldakowski, 2013) industry and sustainable development of the same. In Australia, the state of Brisbane has provided a smart state program with $120 million to bring development and growth in that state. At this place, there are innovative and knowledgeable drives the economic growth so that the problems and challenges can be resolved by using technology that results in improvement of the tourism sector. Hence, the positive development of tourism is dependent on the way it planned and managed (Singh Jaswal, 2014). Sometimes, the economic issues affect the tourism industry in a negative manner. To avoid such situations there is a need to concern on key economic areas (Assaf, Gil-Alana, and Barros, 2011). With the strengthening of the Australian dollar, many of the tourists tighten their wallets. The impact of the strengthen dollar is that the destination of Australia is become expensive for the overseas travelers. It will result in 5 % drop in the tourism. Many hotels, tourist, and traveling agency are getting affected due to this event. The time speeded by the travelers in Australia is also turning down (Rihova, 2013). The flash flood has also created an impact on the tourism industry. It caused the damage of approx AU $6 billion which is included in the budget for reconstruction. The food prices are also increased, and the local business is also affected that are providing goods and services to localities and tourists. The companies are unable to cut the cost so that the national and international tourist can be attracted. In 2011, the two factors, first were strong dollar and second was the flood, affected the tourism industry in Australia and its economic growth (Aslam, 2012). Importance of Tourism Sector Tourism is one of the largest industries that has a good volume of business and potential to give employment opportunities for the generation of individuals. After the World War 2, there is a hike in the tourism sector in the entire parts of the world as it is one of the strategic tools to generate income and foreign direct investment. Sustainability in tourism in the major concern of todays authority because it is the basic need for the planning and development of this industry. The rural development in many places is unable to facilitate the sustainable tourism development successfully. Tourism sector provides a direct and indirect source of revenue. Tourism also generates income for the government, businesses, by sales of products and services, tax, revenues, etc. the income that is captured by the government through tourist industry is used further in the development and growth of this sector only (Ruhanen, Whitford, and McLennan, 2015). Points that will tell the in-depth importance of Tourism Industry- It helps to understand the culture of other countries, It enhances the hospitality in the country. It promotes the culture of one nation to another It enhances the relationships between one nation. It helps to generate income for the people who survive at places where life is almost impossible. The Tourism industry is an industry that assists to make the connection among the people who may belong to different countries. The Environmental Issues of Sustainable Tourism Development Though, the environmental impacts act as a negative outcome for the tourism though the regulatory give importance to this issue. The destinations are designed in a way that they create the least impact on the environment. It also results in the decrease in carbon pollution as currently the Australian tourism is opting for low carbon travel. It has been possible due to the encouragement by the government to the tourists as well as the locals to experience and enjoy low carbon vacations, life style, etc. For this lots of tour packages are provided into village areas and vineyard journeys. To survive in the competition, Australia is trying hard and adopting all the measures that can enhance its tourism. The actively participate in sustainability programs as they are become more conscious of the environment. The government also does the environment audit timely to achieve sustainable tourism development in Australia. The Issues of Sustainable Tourism Development The investments in tourism is a complex problem for every country because it is one of the most segmented and heterogeneous, encompass catering, resorts, and hotels, travel services, etc. sector that is affected by many common issues. Other factors like a trend, climate, depletion of resources, wellness, health, etc. have a negative impact on this businesss attractiveness. The key factors that affect the tourist industry are- Carbon Emissions and Other Emissions We cant say that tourism is one the major contributor to global warming but due to increasing air traffic, the emission of co2 is mixing into the air. It is creating a burden of the regulatory of the tourist industry to eliminate and recycle as much carbon as possible (Moore and Doherty, 2011). Consumption of Energy and Water Resources The luxury demanded by the tourist such as 5-star hotels and services leads to increase in the consumption of energies. Probably, they desire for (Pham et al., 2015) hot water pool, the temperature of rooms, laundry, spa, golf, etc. all result in an increase of energy bills (Cabie, 2014). Employment and Contribute Towards Local Economy This sector is providing most of the job opportunities to the individuals. One of the studies by the world travel organization found that more than 9% of global GDP came from the tourist industry. The Working Conditions As this industry is a significant source of income for people, sometimes it also acts as hard working conditions, low level of remunerations, and only part-time or daily basis contracts specifically in hotel and restaurants sector. Hospitality The demand for hospitality by the tourists is a major concern for the tourism sectors. They want to have marvelous hospitality with all the amenities which acts as a big challenge for the hotel industries. Wellness and Health Issues Obesity, health problems, weakness, food allergies, etc. are growing concern of the health authorities. Many restaurants and hotels are spending millions of dollars to improve the food of their restaurants. They also try to provide health food with good taste. Safety of Food To prevent outbreaks, the hotel industries are trying to maintain the hygiene and full product traceability. Tax and Other Barriers There is a complex franchise, joint ventures, subsidiary systems in the sector of tourism that is the major concern of the regulators and they are concerned to avoid tax for tourism sector (Buchmann, 2014). Security The safety of tourist is also one of the major concerns for the regulators. Many safety and security measures are adopted by them. They are still working on how the attacks can be prevented on clients (Biggs, 2010). Conclusion The sustainable development of tourism of global countries including Australia is in a fast process because it is important for the culture and nature of the same. It influenced the entire social, economic and environment areas as we studied above. To explore the tourism, the Australian government has provided many sustainable practices to protect the development of tourism industry. It not only encourages the domestic tourists but also international tourist to explore the treasures of Australia. Such practices of the government also motivated to corporate, corporations and stake holders to collaborate and contribute so that the tourism industry of Australia can be improved. They can provide economic and social aid to the destination of the Australia, so that tourist industry can survive in such high global competition. Now days, the tourism industry of Australia is giving a significant contribution to the country. It is affecting the lives of many communities of Australia but providing a developed quality of sustainable polices for the tourism development. Despite of all, the country is still facing problems and challenges in many parts including carbon emission, pollution, the natural disaster like floods, increase in the price of food, etc. Many times, huge investment is required in the settlement of all the problems. These issues act as a barrier to the development of Australia tourism. Hence, the government is taking measures of sustainability so that current demand can be fulfilled as well as the future expectations. Many policies and strategies are discussed and implemented towards the sustainable development of tourism industry in Australia. References Aldebert, B., Dang, R. and Longhi, C. (2011). Innovation in the tourism industry: The case of Tourism@. Tourism Management, 32(5), pp.1204-1213. Amelung, B. and Nicholls, S. (2014). Implications of climate change for tourism in Australia. Tourism Management, 41, pp.228-244. Aslam. M. (2012). Issues and challenges in sustainable tourism development in rural areas. [Online]. Accessed on: 22 September 2016. Available on: https://www.researchgate.net/publication/272170293_Issues_and_Challenges_in_Sustainable_Tourism_Development_in_Rural_Areas Assaf, A., Gil-Alana, L. and Barros, C. (2011). Persistence Characteristics of Tourism Arrivals to Australia. International Journal of Tourism Research, 14(2), pp.165-176. Biggs, D. (2010). The Tourism Society's Dictionary for the Tourism Industry. Tourism Management, 31(4), p.556. Buchmann, A. (2014). Insights into domestic horse tourism: the case study of Lake Macquarie, NSW, Australia. Current Issues in Tourism, pp.1-17. Cabie. I. (2014). Sustainable tourism: 10 key issues investors should consider. . [Online]. Accessed on: 22 September 2016. Available on: https://www.theguardian.com/sustainable-business/sustainable-tourism-10-key-issues-investors. Moore, D. and Doherty, A. (2011). United States travel and tourism industry. Hauppauge, N.Y.: Nova Science Publisher's, Inc. Oldakowski, R. (2013). Floridas Tourism Industry. AAG Newsletter. Pham, T., Jago, L., Spurr, R. and Marshall, J. (2015). The Dutch Disease effects on tourism The case of Australia. Tourism Management, 46, pp.610-622. Rihova, I. (2013). Music Festivals and Regional Development in Australia. Tourism Management, 36, p.119. Ruhanen, L., Whitford, M. and McLennan, C. (2015). Indigenous tourism in Australia: Time for a reality check. Tourism Management, 48, pp.73-83. Singh Jaswal, S. (2014). Role of Tourism Industry in Indias Development. J Tourism Hospit, 04(02). Spilsbury, R. (2011). Tourism industry. New York: Rosen Central.

Rhetorical Analysis From One Second to the Next Essay Example

Rhetorical Analysis From One Second to the Next Paper In the film â€Å"From One Second to the Next† by Werner Herzog, he interviews four heartbroken families and the people that were involved in the accidents caused by texting and driving. Being able to see the rhetorical side of this documentary will help the audience to comprehend where the rhetors are coming from and why they made this documentary. This memo will help breakdown some of those questions. Using rhetoric is to persuade the audience to believe the message the rhetor is trying to get across. In this case Herzog’s message, the exigence or the need, would be to show the audience that there are a lot of car accidents and fatalities from texting and driving. With the exigence, as Carroll stated in â€Å"Backpacks vs. Briefcases,† â€Å"You can begin to understand a piece’s exigence by asking, ‘What is this rhetoric responding to?’ ‘What might have happened to make the rhetor respond in this way?’† The rhetor or rhetors of this story is the people telling the story. Covino and Jollifee define rhetor as â€Å"an individual involved in the production of a text, usually a speaker or writer.† In this film there are many rhetors telling their side of the story. The director is also a rhetor because he is the one telling the main story by interviewing and asking the questions, and then editing all of the rhetors stories together to help get the point across to the audience. Different ways the rhetors try to have an affect on the audience would be using logos, pathos and ethos also known as the artistic appeals. The logos of the film would help to point out the statistics to the audience, as it states in the beginning â€Å"Over 100,000 accidents a year involve drivers who are texting. The numbers climb sharply.† In this statement he is showing the statistics in text-related accidents each year. Pathos played a big part in this documentary, using the emotional side to r elate to the audience using dramatic music, how the directo We will write a custom essay sample on Rhetorical Analysis From One Second to the Next specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Rhetorical Analysis From One Second to the Next specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Rhetorical Analysis From One Second to the Next specifically for you FOR ONLY $16.38 $13.9/page Hire Writer

Ground Level Ozone Regulations Essays - Smog, Environment

Ground Level Ozone Regulations Essays - Smog, Environment Ground Level Ozone Regulations What: In 1997 the Environmental Protection Agency(EPA) established new ozone standards. The EPA also placed special restrictions on twenty-two states in the Ohio Valley and Midwest regions to prevent emissions from coal-burning power plants from being carried into the New England States by wind currents. (Tennessee is one of these twenty-two states.) Both of these rulings were recently either struck down or placed on hold by Federal Appeals Courts. Why: The regulations put into place in 1997 by the EPA were more restrictive than the 1990 standards. The regulations limit the amount of ground level ozone and fine particle pollution permitted. Ground level ozone is produced by nitrogen oxide(NOx) which is created by burning fossil fuels. Since gasoline and diesel are both fossil fuels, then NOx is a major component of automobile emissions. Several members of the trucking and fossil fuel industries, as well as members of the twenty-two state region, have challenged the regulations in Federal Court and have been successful in blocking the implementation of the new rules. In the past two months, two separate Federal Court Of Appeals panels have ruled that the EPAs authority to establish clean air standards is not properly delegated by Congress under the Clean Air Act. Therefore, since the EPA is a part of the Executive branch of government and not the Legislative, they have no authority to produce regulations on their own. The plaintiffs in the case also argued that the amount of pollution a person can tolerate has not been established and until it is the EPA should not make the current regulations more restrictive. How: The main actors in this event are the American Trucking Associations and their fellow plaintiffs, the twenty-two state coalition, the EPA, and the Federal Appeals Court. Why would the American Trucking Associations and other fossil fuel burning industries want to limit the EPAs authority? What do they have to gain? Last year, according to the EPAs own press release detailing their enforcement efforts in fiscal year 1998, the EPA referred 266 criminal cases to the Department of Justice, as well as 411 civil court cases. Approximately half of the civil cases required violators to change the way they manage their facilities or to reduce their emissions or discharges. The EPA also assessed almost $93 million dollars in criminal fines and another $92 million in civil penalties. In addition to fines and penalties, polluters spent over $2 billion dollars to correct violations. Not included in this estimate would be the legal expenses incurred or the advertising and marketing costs required to mend a damaged pubic relations image. Clearly it is in the industries best financial interest if the regulations are less restrictive. Many companies that spent large amounts of money to meet the 1990 Clean Air Act standards would have to spend even more to meet the amended 1997 standards. Do the states in the twenty-two state region have another reason to argue against the standards? According to Sean Cavanaghs article in the April 4, 1999 edition of the Chattanooga Times/Free Press, Atlanta lost $700 million in federal roads money as a result of failing to come up with a pollution containment plan. In addition, the state of Georgia had to fund a state superagency to develop and enforce transit plans that meet federal standards. The states joined the industrial groups in claiming that the new standards are too strict and are unnecessary. Chattanooga is not expected to meet the new requirements by the year 2000 deadline and Chattanooga Mayor Kensey and Tennessee Governor Sundquist were two of the public officials who protested the new standards as being too strict. Are the new standards too strict? How does the EPA determine the required levels? According to the press release issued by the EPA following the courts decision, the Federal Courts are not questioning the science and process conducted by the EPA justifying the setting of new, more protective standards. The EPA claims that their standards, which are designed to limit the affects that smog and soot have on people with respiratory problems, protect 125 million Americans including 35 million children. The Federal Courts only have issue with the constitutionality of certain parts of the Clean Air Act that allow the EPA to establish clean air regulations in the interest of public health. The EPA is recommending that the Department of Justice appeal the ruling to the US Supreme Court. Several interest groups are closely watching the case. The powerful industrial and truckers lobby groups are supporting the plaintiffs, while several environmental lobby groups and health associations, such as the American Lung Association, are supporting the EPAs efforts.