THE REAL TOOL

On Sunday the Grand Rapids Press ran an interview of Dave Van Andel, one of the Amway heirs who is now running the Van Andel Institute downtown (while selling pills and potions on the side in a non-Amway venture).  There was nothing new in news about the institute, and we have already had plenty to say about the Van Andel Institute, including the absence of Jay's fortune in funding the institute and its relationship to the biotech boondoggle.  So, I no remarks today about that article.

What caught my eye was a tidbit in a sidebar to the Press article, in which Van Andel was on the defensive regarding the "tools and functions" racket that Amway/Quixtar kingpin distributors operate to fleece the flock fooled into thinking they'll get rich selling soap, vitamins, and doo-dads to friends and relatives.  A year ago we ran a three-part series on this scandal within the scandal that is Amway/Quixtar:  "The Pyramid is Crumbling", "The River City Kingpins", and "The Illusion of Wealth".  Read these articles for the full story behind Amway's Mexican stand-off with its key distributors.

Here is what Van Andel had to say to the Press about Amway/Quixtar's failure to rein in the tools scam:

"(Tools) don't have anything to do with us.  That's the frustrating part.  You talk about a tools business, that's a distributor who started that.  They don't have anything to do with us, and we don't, effectively, have any control over that.  You say, 'Well, why don't you do something about it?'  Well, I don'ty have any legal right to do anything about it. ... Unless they break a law or a rule that we have control over, you don't have the power to do anything about it.  That's the frustrating thing.  We're getting beat up for something we really don't have any control over."

Yeah, just like Dick DeVos and his family had no control over Alterra.

What I find noteworthy is that Van Andel does not defend the "tools and functions" trade -- i.e., the fiercely defended monopoly that kingpin Amway/Quixtar distributors hold over the sale of largely worthless motivational materials and seminars to sub-distributors on the pretext that these "tools" will help them get rich selling Amway stuff.  In fact, Van Andel appears to recognize that it is a vile business.

I also find it noteworthy Van Andel's lament that there is nothing he and Amway/Quixtar can do about it.  He says, "They [i.e., the kingpin distributors] don't have anything to do with us."  They don't?  His company's top distributors have nothing to do with the company?  That's a curious view of things.  Don't these distributors have to buy from Amway/Quixtar all the stuff they distribute?  Could not Van Andel demand that Amway/Quixtar refuse to sell to those kingpin distributors they believe are exploiting smaller distributors with the tools racket?

Of course, Van Andel could do that, except ... Well, you see Amway/Quixtar needs the kingpins more than the kingpins need them.  If Amway/Quixtar won't sell the kingpins the stuff that serves as the pretext to con their sub-distributors into buying their "tools" (the big money-maker for the kingpins), then the kingpins will replacy Amway/Quixtar with another multi-level marketing firm and set up a new pretext for peddling their "tools".  So Amway/Quixtar loses a major chunk of business while the kingpins relabel all their motivational tools and seminars and go on their merry way.  That is what Van Andel means when he says Amway/Quixtar has no power over them and their rotten trade.

So who's the real tool in this deal?

Comments

[Steve Smith]

When Mr. Bubble says he and his family had no control over Alterra because they failed to exercise the power they had but didn't use-- well, that's like saying he didn't send jobs to China because, well, the money he saved from closing down all those Michigan jobs was in his China money pocket, you see, and there just wasn't enough in his Michigan money pocket! That's twice he insulted our intelligence by telling a stupidly transparent lie and expected us to swallow it!

[The Executive Director]

Hi, Steve.

I'm a free-trader and, in principle, have no problem with jobs moving around if that's what makes good business sense. (I do think, however, that there are a lot of lousy businessmen who think cheap labor rather than increased productivity is the solution to their financial troubles.)

That said, let me say that Dick DeVos isn't being square with the voters about the Michigan-China jobs issue. China shut down the Amway ponzi scheme and wouldn't let the company do any business there unless it manufactured in China the stuff to be sold in China. In a way, China told Amway that it couldn't run its racket there unless the Chinese got cut in.

So, Amway couldn't supply China from Michigan. That combined with the ponzi scheme in North America declining, Amway had no choice but to cut jobs here and restructure. Because of the nature of Amway's slimy means of growing, it had to come to end at some point -- and it did, accelerating by the fact that opportunities for supplying China from Michigan were curtailed.

All of what happened regarding Michigan jobs at Amway makes business sense, but DeVos can't really explain that to voters without explaining what a rotten business Amway is in the first place.

Regards, Bill