Panama, Electric Car Sales, Masters of War, and The Man Who Built McDonald's in Moscow.
December 4, 2023 Volume 4 # 29
A Man, A Plan, A Canal; Panama
The perfect palindorme but not the prefect canal at the moment.
A drought in Central America has left water levels low in the Panama Canal system— which along with locks at the Pacific and Caribbean end includes Lake Gatun. The low water means ships have to lighten their load to make their way through. This is driving up shipping costs. “A bottleneck at the Panama Canal due to low water levels has prompted shippers to divert to Suez, the Cape of Good Hope, or even through the Strait of Magellan off the tip of South America,” writes Fortune. Shippers must be desperate to try the dangerous Strait of Magellan.
This is from a book I read recently about HMS Wager and its disastrous trip around the tip of South America. Gripping read. Not a place to sail.
The Panama Canal actually goes more south to north from Panama City.
Electric Car Sales
Electric car sales now make up 18% of global car sales. The Tesla Model Y is the best selling EV by far and is in fact the best selling car overall worldwide. Chinese EV makers have six separate cars on the list. Germany has only the Volkswagen ID.4.
Not in the USA
The Economist this week pointing out that while Tesla is an American company and the best selling EV brand worldwide, Americans are reluctant to make the switch.
European Car Sales by Country of Origin
When you see the American flag, that’s for Tesla. Sweden buys Volvos.
Critical Minerals
China not only buys a lot of EV’s but it also controls some of the key minerals needed to make batteries and other goodies needed for electric cars.
One late breaking adjustment to the chart: The very ugly dried up Salton Sea near Palm Springs, California, is said to hold enough Lithium to make 375-million EV batteries, according to the US Department of Energy said this week.
You Can’t Sell Arms If You’re Using Them
And that means Russia. Its exports of military gear is down 31%. It is still number two. France is a huge number three. It sells jets, ships and ammunition for all those things.
Composing Sensation
Composer Anne Nikitin on the right and sound engineer Fiona Cruikshank on the left. And right in the middle is Tom Hanks. Anne wrote the original orchestral score for The Moonwalkers: A Journey With Tom Hanks.
Anne Nikitin’s mother, Lucia, is a friend of mine who is justifiably proud of Anne’s success. For Anne this is the latest in a long run of composing successes. Here is a part of the press release: Acclaimed composer Anne Nikitin has written an original orchestral score for The Moonwalkers: A Journey with Tom Hanks.
Her rousing soundscape to this epic experience which offers a unique perspective on humankind’s past and future voyages to the moon, has been recorded by the Royal Philharmonic Orchestra at the iconic Abbey Road Studios. The show will open at London’s Lightroom on 6 December.
Nikitin said: “I’ve been fascinated by space exploration since childhood and still gaze at the night sky in awe and wonder. So, writing music for an immersive exploration of the moon landings has been a dream come true. Working with Tom Hanks, The Moonwalkers team, and recording with the Royal Philharmonic Orchestra at Abbey Road Studios has been one of those unforgettable life experiences.”
TheFull News Release from the Royal Philharmonic Orchestra:
A New Bike Lane
Someone left this bike beside a tree in Vashon Island, Washington, who knows how many years ago. The tree absorbed it, and the bike is now seven feet from the ground.
Essay of the Week
This is an obituary I wrote that ran in this Saturday’s Globe and Mail.
George Cohon, one of Canada’s most famous businessmen, dramatically expanded McDonald’s in Canada and in 1990 broke through the Iron Curtain to open the first McDonald’s in the Soviet Union, a feat that demanded more than a decade of diplomacy, weeks on end in dreary Moscow hotels and a search for the right potatoes to make McDonald’s French fries. Mr. Cohon died in Toronto on Nov. 24 at the age of 86.
This was not just a personal triumph for George,” former Soviet leader Mikhail Gorbachev wrote in the introduction of Mr. Cohon’s autobiography, regarding the arrival of McDonald’s in Moscow. “It was a breakthrough which demonstrated that new economic relations between our country and the rest of the world were possible. It was a symbol of the good will of international business, which would be important in helping us build a democratic society.”
George Alan Cohon was born in Chicago on April 19, 1937. His father, Jack, was a lawyer, and his mother, Carolyn, a housewife. His father also took over a family bakery called Cohon’s Rye Bread. Young George always had a job. He had a strong work ethic from the age of 11.
Mr. Cohon got a law degree from Northwestern University, where he met his future wife, Susan Silver. After graduating, he was drafted into the Air Force. It was not a happy experience. When an overbearing sergeant called him by an antisemitic slur, Mr. Cohon challenged him to an arm wrestle and crushed the man’s fingers. It was not the first or the last antisemitic incident in his life.
After the Air Force, Mr. Cohon started work at his father’s small Chicago law firm, Cohon & Raizes. As a young lawyer he represented a client when the man on the other side of the table was Ray Kroc, who built McDonald’s into a commercial success after he bought it from its two founders.
Mr. Cohon impressed Mr. Kroc, who offered the young lawyer the franchise for Ontario and everything east in Canada except Ottawa. The first McDonald’s outside the United States opened in Richmond, B.C., in 1967.
Mr. Cohon scraped together the US$70,000 (equivalent to $600,000 today). He was 30 years old.
George and Susan Cohon moved to Toronto with their two sons that same year. Mr. Cohon opened his first McDonald’s restaurant in London, Ont., in 1968.
He soon opened other McDonald’s restaurants and repaid the money he had borrowed to buy his franchise. After six years, Mr. Cohon had made McDonald’s the largest fast-food chain in the country and in 1973 he became a Canadian citizen.
Mr. Kroc offered to buy back the Canadian franchise for $1-million in the early 1970s, but Mr. Cohon wisely declined. McDonald’s Canada became the most profitable branch of the McDonald’s empire. Mr. Cohon did eventually exchange his franchise for McDonald’s stock. At one point he was the second-largest shareholder of McDonald’s after Mr. Kroc. The shares would split many times making the young lawyer from Chicago a very rich man.
But Mr. Cohon’s most dramatic business adventure would take place in the Soviet Union, when he set his sights on opening a McDonald’s, the symbol of American capitalism, in Moscow, a shotput toss from the Kremlin, the seat of Soviet power.
It all started at the 1976 Summer Olympics in Montreal, where Mr. Cohon had provided a bus nicknamed Big Mac to ferry athletes around. When he chanced to see a Russian Olympic team on the bus, he and his wife approached the athletes to say hello. The Russian security guard and a nervous Canadian official from External Affairs tried to stop them. The man from External Affairs said they would have to go through protocol to get on the bus.
“My friend, the protocol is I own the bus,” Mr. Cohon said. Super salesman that he was, he produced his McDonald’s business cards that guaranteed the holder a free Big Mac. The athletes loved it, the RCMP and KGB guards melted away and the man from External Affairs was left to sulk.
It was, to borrow a line from Casablanca, the beginning of a beautiful friendship.
“In 1976 at the height of the Cold War, I decided we should open McDonald’s in what was then the Soviet Union. Where do you start when you decide to introduce one of the most potent symbols of Western capitalism into a system dedicated to the very opposite,” Mr. Cohon wrote in his autobiography. “There were no rules, so we invented our own rules.”
His memoir, titled To Russia With Fries (written with ghostwriter David Macfarlane) details the many trips he made to Russia to seek a licence to open a McDonald’s from the apparatchiks who ran the city of Moscow. He and his colleagues would be left cooling their heels in government offices. Once, when Mr. Cohon arrived at a hotel where he had a reservation but was told there was no room, he solved the problem by pulling out the McDonald’s business card. Russians were fascinated at the prospect of a McDonald’s in Moscow.
The man running Moscow didn’t get the concept Mr. Cohon was proposing. “He wanted us to build a big commissary and deliver meals to 400 schools at one end of the city,” Mr. Cohon told a reporter. “I said no, we don’t work that way.” The man from McDonald’s had to explain the idea. He had a 15-minute video produced to explain fast food to Russian audiences.
The Russian invasion of Afghanistan in 1979 derailed the project for a while, but Mr. Cohon was soon back. In a 1988 profile, the writer Larry Black described Mr. Cohon’s drive for a Soviet McDonald’s outlet as “an obsession.”
In 1988 he got close to opening a McDonald’s on Moscow’s Gorky Street. That didn’t happen. By that time McDonald’s Canada had teams in Russia sourcing meat, bread and potatoes. Mr. Cohon sent people to Russia to teach farmers to plant the right kind of potatoes and not use the Soviet potato harvesters which tended to cut the potato into ribbons. He was careful not to upset the Russian farmers, exercising potato diplomacy along with hamburger diplomacy.
The first McDonald’s restaurant finally opened on Moscow’s Pushkin Square on Jan. 31, 1990. People started lining up at 4 a.m. This was the lineup on opening day.
It was worldwide news. Good Morning America and the Today Show went live from Pushkin Square that morning and Dan Rather hosted the CBS Evening News from there as well. CBC News covered it and so did the BBC.
By the end of the day, 30,000 Russian customers had been through the doors. It became the busiest McDonald’s in the world. It was a huge victory.
One of the reasons the fast-food outlet was such a hit with was that customers could buy a hamburger, fries and a Coke with a rubles. Most restaurants kept out locals by charging foreign currency, which only the privileged few had access to.
But by pricing the food in rubles, Mr. Cohon guaranteed ordinary Russians could eat in McDonald’s, though to many a hamburger meal was worth a day’s wages. “George put a sign in every restaurant that said rubles only,” a colleague said.
“George Cohon is literally synonymous with McDonald’s in Russia,” Mr. Gorbachev wrote in To Russia With Fries. “His strong personal identification with McDonald’s is one indication of how much people need and appreciate this successful business.”
In 1991, Mr. Gorbachev was overthrown, and the Soviet Union dissolved, with Boris Yeltsin in charge. This led to more McDonald’s restaurants opening in Russia.
Throughout his restaurants’ expansion, Mr. Cohon was also deeply committed to charity work. In 1982, he established a Canadian branch of Ronald McDonald House Charities, a non-profit organization that provides travel and temporary accommodations for families with seriously ill children. It was a serious charity and one of the main reasons Mr. Cohon was admitted to the Order of Canada.
Mr. Cohon was named to all three levels of the Order of Canada: member in 1987, officer in 1992 and in 2019, companion, the highest level restricted to only 165 living Canadians at any given time. The citation for that last order was as unconventional as Mr. Cohon himself: “Driven by a passion for the well-being of children, George Cohon is a phenomenon who continues to have a life-changing impact on society,” and it went on to praise him for having led efforts “to raise hundreds of millions of dollars through McHappy Day and established Ronald McDonald House Charities in both countries [Canada and Russia].”
Prime Minister Justin Trudeau described Mr. Cohon as “an accomplished businessman who never stopped giving back, and who dedicated himself to lifting others up. Our families’ paths crossed multiple times over the years, and his passion for serving and supporting others was always evident.”
Well-known for his practical jokes, Mr. Cohon once passed himself off as former prime minister Pierre Trudeau on a trip to Israel, though the two men didn’t really resemble each other.
McDonald’s pulled out of Russia last year after the invasion of Ukraine, a country Mr. Cohon’s grandparents left in 1906 after Jews were persecuted in a Czarist pogrom. George’s father, Jack Kaganov, was six months old when he arrived at Ellis Island in New York with his parents. That is when the family name was changed to Cohon.
George Cohon retired from McDonald’s in 1997, though he continued to be active with the Ronald McDonald House charity. He enjoyed visiting the facilities with one of his dogs. One thing he was proud of was saving Toronto’s Santa Claus parade when it threatened to go under due to lack of funding. He was chair of both the Ontario Science Centre and Israeli Bonds Canada.
Mr. Cohon was a keen tennis player and played golf. He joined the Rosedale Golf Club in 1997, but the former manager of the club once testified in court that Mr. Cohon had been kept out earlier because there was a rule against allowing Jewish members. Mr. Cohon was gracious about it, saying in 2004: “The bigger picture that I see is that, if years ago they had a rule that was a bad rule and these people were enlightened enough to change it in this day and age, they should be complimented. That’s what should happen in this day and age, and that’s my take on it.”
Mr. Cohon was a dedicated family man and was great with people, able to talk to the highest officials, such as Mr. Gorbachev, as well as regular patrons at his restaurants.
He had a vacation home in Palm Beach, Fla., where he kept the 38-foot fishing boat McHappy III. Along with his Order of Canada, Mr. Cohon had several honorary degress, Russia’s Order of Friendship and a major award from Israel.
Mr. Cohon leaves his wife, Susan; sons, Mark and Craig; a sister, Sandy Raizes; and three grandchildren.