Marketplace | Tony Arnold en Chinese counterfeiters churn out fake U.S. IDs

It's no secret by now that Chinese counterfeiters
are the source of many pirated goods here --
from fake Gucci bags to illegally copied DVDs.

But there's a new kind of knock-off making its way from China these days. It seems many in the underage crowd are shelling out their allowance for Chinese-made fake IDs. From WBEZ in Chicago, Tony Arnold reports.

TONY ARNOLD: So I'm here at my computer. I've got a search window up and I'm typing "Buy fake IDs from..." and Google's auto-fill finishes my thought with "from China." It turns out there are any number of websites that offer fake IDs for many of the 50 states. They cost around a hundred bucks. And like other Chinese knock-offs, they're really hard to tell from the original.

MIKE RANKIN: It would take more of a forensic analysis to really detect the fake ID.

Mike Rankin is with the Ohio Bureau of Motor Vehicles. He says customs officials in his state and others have seized thousands of fake IDs from China. Here in Chicago, the number is 1,700 so far this year. Many of the fakes have the same holograms and watermarks states use to ensure authenticity.

RANKIN: It's not just for underage drinking any more. I think it's for persons trying to facilitate a range of fraudulent conduct -- whether it be illegal immigration, obtaining credit.

High-quality printing is a specialty of Chinese counterfeiters, says Chris Bailey. He works in Guangzhou, China, with the company Rouse -- a firm that focuses on intellectual property rights.

CHRIS BAILEY: The counterfeiters want repeat business. They want to be able to sell their products.

Bailey says some companies in China's industrial printing sector have long used their facilities for counterfeits, like packaging for knock-off cigarettes or medicines. It takes the counterfeiters little time to figure out how to make realistic-looking fakes.

BAILEY: Sometimes it's a matter of months, really.

The Chinese government doesn't condone counterfeiting, Bailey says, yet does little to stop it either. But is there always a market for a realistic-looking Illinois driver license courtesy of a factory in Guangdong province?

To find out, I met talked to 20-year-old Michelle, who agreed to meet at a diner to talk about fake IDs -- as long as I didn't use her full name. She's had four fake IDs and they haven't come cheap.

MICHELLE: It was like $100. For that, like, fake fake, another $100. For -- oh, maybe I have spent more than, like, $300 at this point.

As a result of all the risks involved in using a fake -- Michelle has rules for when to use it. No liquor stores. No grocery stores. Just use it to get into clubs. Michelle's other rule about fake IDs: get them from a known source. That's why she says she's not interested in buying a fake Chinese ID online.

ARNOLD: They're supposed to be really good.

MICHELLE: That's what I hear. That's what I hear. Apparently, they're, like, really legitimate. But, quite honestly, I don't want to mess with that. No.

Michelle says she wasn't comfortable sharing personal information online -- and she convinced her friends to back out, too. In the meantime, she's getting by with her current fake until her 21st birthday.

In Chicago, I'm Tony Arnold for Marketplace.

Tue, 20 Sep 2011 23:16:47 GMT
Lean manufacturing catches on with small businesses

Tess Vigeland: The federal government isn't the only one talking about cutting waste and tightening belts. Corporate America's been doing that a lot over the last several years. But one phrase is popping up enough to turn buzzy: "Lean manufacturing." It's changed the way many manufacturers operate -- and not just the big guys. Small businesses are also adopting the management strategy.

Chicago Public Radio's Tony Arnold reports from Northbrook, Ill.

Tony Arnold: Matt Lovejoy's small metal shop, called Acme Alliance, was in financial trouble in the early 2000s. Acme provided big telecommunications companies with small metal parts, like latches and face plates for circuit boards. But when its biggest client -- Lucent -- struggled financially, Acme lost a lot of business. Lovejoy had to scramble to find new customers.

He remembers trying to impress one potential client who came all the way from Sweden. But after just 10 minutes at the plant:

Matt Lovejoy: He turned to me and said that he needed a taxicab back to O'Hare; that the meeting was over, the audit was finished and there was no way he was ever going to buy anything from a factory like this.

In Lovejoy's words, his shop was dirty, dingy and Dickensian. It was clear he would have to make some changes. One evening, he started venting to a client, who told him about a concept he should consider: lean manufacturing.

Lovejoy: We were at a restaurant. Literally, turned over his placemat and got out a Sharpie and drew a value stream map for me.

That map shows every point of the manufacturing process, and what can go wrong along the way. Rearranging the flow of how products are made got Lovejoy excited, so he took the idea and ran with it. And when you hear Lovejoy talk about going Lean now, it's almost as if he found religion.

Lovejoy: It was like being struck by a bolt of lightning. It just made so much sense.

The philosophy of Lean boils down to exactly what it sounds like: cutting excess waste. That can mean anything from supplies that never get used to workers and equipment with too much downtime. For Lovejoy and Acme Alliance, it meant reprioritzing internal operations.

On the factory floor, Lovejoy explains how things are different. Simple things, like organization.

Lovejoy: We don't buy big batches of hydraulic fluid anymore and then figure out where to store it. We know precisely where it goes.

In terms of efficiency, the employees have a more diverse knowledge of the whole shop.

Lovejoy: Here's an example of one operator who's making three different parts.

And giving new powers to all staff.

Lovejoy: Management and line workers, there's very little distinction any more.

One of the most famous examples of a company going Lean is Toyota. It went so far as to give workers the power to stop the assembly line if something went wrong.

James Schrager is a professor of entrepreneurship at the University of Chicago. He says Lean strategies have really taken hold in the auto-making industry.

James Schrager: When the Germans -- the best car builders in the world -- called the Japanese to teach them, you know it's the shot heard round the world.

Schrager says Lean ideals have been gaining popularity among a variety of companies, from the big to the small.

Schrager: It's the present of manufacturing and the future at the same time. What's happening is that the very large companies have had to do it and it's now flowing through the whole system.

But there are instances of Lean ideals being disruptive to the manufacturing process. Daniel Holland analyzes manufacturing companies for Morningstar. He says if a company decides to embrace Lean, it shouldn't do it halfway.

Daniel Holland: The biggest flaw or the biggest issue that you'd come across is perhaps somebody that's doing it and calling it that and they're not really actually doing lean manufacturing or they're not truly adopting the principles.

For Matt Lovejoy at Acme Alliance, he says company sales are holding strong. It now does about $50 million in sales each year -- about 25 percent more than a decade ago. Lovejoy says if that potential client from Sweden were to come back for a tour of the plant, he wouldn't be rushing off to the airport so fast.

In Northbrook, Ill., I'm Tony Arnold for Marketplace.

Fri, 08 Jul 2011 01:00:43 GMT
For some companies, the suburban landscape is losing its shine

HOBSON: Well the State of Michigan has reportedly offered an incentive package worth $50 million to Sears if the company moves its headquarters from Illinois to Michigan. And if Sears does move it could join the ranks of companies abandoning a sprawling corporate campus in the suburbs for more urban digs.

From WBEZ in Chicago, Tony Arnold reports.

TONY ARNOLD: Relocating whole companies from the city to the suburbs caught fire in the 80s and early 90s as corporations looked to cut overhead costs. Looking around Chicago's suburbs you can find the corporate campuses of Kraft, Sara Lee, Motorola Solutions and Sears Holdings, among others. They're hulking presences in their respective suburbs, drawing thousands of employees every weekday.

But now the trend could be reversing itself. United Airlines is in the process of leaving its suburban location and shifting 4,000 people to offices in downtown Chicago. Out East, Swiss bank UBS is considering leaving behind is corporate campus in Stamford, Conn., reportedly for New York City.

PAUL SWINNAND: I do think it's outdated.

Paul Swinnand is an analyst with Morningstar. In Sears' case, he says the company is long overdue for a shakeup. And the best way to do that is recruit younger people. Ditching its current facility in Hoffman Estates could help attract twenty-somethings who crave the excitement of a bustling city.

SWINNAND: Why wouldn't you want your staff, even if they'd be in the Finance Division, to actually be seeing what people are wearing, seeing what people are buying, feeling the vibe of a downtown city?

Officially, a Sears spokesman says the company is considering all its options. The State of Illinois is working on an incentive package of its own to keep the retailer.

Last year, United Airlines decided to move most of its employees from its headquarters near O'Hare Airport.

Jeff Smisek is United's CEO.

JEFF SMISEK: Many of these jobs, certainly, for example, the technology jobs, could be located anywhere and we chose Chicago.

But while United looks for some urban cachet, businesses around the old headquarters have a case of the suburban blues.

Tony LaBosco manages D'Agostino's Auto Repair Service.

TONY LABOSCO: I got people that come here for 28 years since I been here that work for United Airlines that come around. And now they're gonna go downtown. They're not going to come to me any more.

LaBosco says United may be moving downtown to grow but without that traffic from its employees in Elk Grove Village he may be facing layoffs.

In Chicago, I'm Tony Arnold for Marketplace.

Thu, 07 Jul 2011 15:41:00 GMT
Illinois citizens feel squeezed by state tax hikes

Tess Vigeland: Many states are looking for ways to close budget deficits. Most, if not all, are trying to cut spending. And some are considering tax increases. Earlier this year, Illinois raised its personal income tax from 3 to 5 percent.

Tony Arnold met up with one resident at a suburban Chicago coffee shop to explore how personal budgets are being affected by the hike.

Tony Arnold: Heidi Kronenberg is one of about six million Illinois residents who pony up for the state's income tax every pay period.

She's a mother of two and makes $63,000 a year -- just about 10 percent above the Illinois median wage. And she's been paying an extra $85 a month in taxes since the beginning of the year.

Heidi Kronenberg: And so you look at this and it's your pay increase, if you're getting a cost of living increase, that they just took away. It's kind of significant.

Arnold: How much do you watch your income?

Kronenberg: I watch it pretty closely. That's your gas bill or your gas and electric bill that all of a sudden is just gone. I definitely feel it.

Over the course of 2011, Kronenberg will pay about $1,400 more in state income taxes than last year. Illinois legislators passed the increase in January. It's meant to help cut a $13 billion deficit, one of the country's worst among state governments.

Kronenberg: I understand we're in a huge amount of debt. Having, such a high tax increase doesn't really sit very well.

The move left Kronenberg wondering where all her tax dollars go in the first place.

Kronenberg: I'm willing to pay the money. But it would be nice if I could see it going into effect also.

Governor Pat Quinn proposed a $52-billion spending plan for the upcoming budget year. Legislators are putting the finishing touches on their own version. But to give Kronenberg a sense of the state's funding priorities, I showed her a pie chart of Quinn's proposal.

Kronenberg: So it says 48.2 percent for human services.

Health care, child care and services for veterans and the poor.

Kronenberg: 35.5 percent for education. 9.6 for government. That's good. Six for public safety and regulation, which includes prisons. Economic development: .4 percent, quality of life .3 percent. So that's pretty low for quality of life. But at least education is 35.5 and human services is 48.2.

Both of Kronenberg's two kids go to public school. Funding for K-12 is largely intact in current budget outlines. But she cringes at proposed reductions to higher education. Some cuts are likely. The income tax increase might not even erase half the state's red ink.

Arnold: Do you think the state should try to raise more revenue? Work with a bigger pot?

Kronenberg: Yeah. But not from me. Maybe, the federal government.

In Chicago, I'm Tony Arnold for Marketplace Money.

Fri, 27 May 2011 23:37:37 GMT
Roundabouts cause rifts between cities and drivers

Jeremy Hobson: Just west of Minneapolis where I-494 meets Highway 169, they are taking down the stoplights and putting in a roundabout. It's just the latest example of a growing trend in suburbs around the country. The goal is to cut down on traffic congestion as well as accidents.

And as Chicago Public Radio's Tony Arnold reports one village in Illinois is hoping a new roundabout will serve as the cornerstone for new commercial development.

Tony Arnold: When you hear the word "roundabout," you might think of a huge multi-lane traffic circle -- the kind Chevy Chase gets stuck in in "National Lampoon's European Vacation."

"National Lampoon's European Vacation" clip: It's amazing. I cannot get left. There's Big Ben, kids. Parliament.

But the recipe for a typical roundabout these days is a little different. Take an average four-way intersection. Insert four yield signs. Add a round patch of grass in the middle. And voila.

Over the last 20 years, about 2,500 roundabouts have cropped up around the U.S.

Amy Connolly: I'm Amy Connolly, planning director for the Village of Tinley Park.

Connolly's been given the task of developing Tinley Park for the foreseeable future -- and part of that future includes a new roundabout funded by a $2 million grant. It's planned for an intersection meant to connect drivers from the nearby highway to the downtown area. Connolly says it'll help clear the traffic jams that clog the intersection now, and she says it will allow construction of a new commercial development without adding extra congestion. It's also intended to make the area more pedestrian-friendly.

Connolly: We sort of drive on auto-pilot these days but things like roundabouts really force you to sort of slow down and think about what you're doing, and that makes for a safer intersection.

On a recent afternoon, Connolly drives me to South Holland -- two towns over. There we find a model for the Tinley Park roundabout. She says municipalities like roundabouts because they cut down on the electricity costs of running stoplights, and insurance groups show there are fewer serious accidents.

But the real trick could be getting local residents on board. Dave Burke lives by the South Holland roundabout and is unimpressed.

Dave Burke: It doesn't slow the traffic down, nobody knows how to use it.

Not unlike Chevy Chase, who needs a whole day to finally figure out that traffic circle in London.

In Chicago, I'm Tony Arnold for Marketplace.

Wed, 04 May 2011 15:14:48 GMT