August 13, 2020

Retro Import From Russia Lures Older, Easier Riders

Think of it as Easy Rider, the golden years.

It started as a matter of survival for the Irbit Motor Works, which for decades had churned out its signature Ural motorcycle with sidecar attachment, but which discovered that its business was sputtering into the Post-Communist sunset like so many other Soviet enterprises.

Irbit found salvation in an unlikely niche market: older American riders seeking utility, not thrills or spills. Suddenly the sidecar, a seemingly anachronistic product evoking a World War II newsreel, had a new life among the late middle-aged.

The company shifted its sales strategy overseas in the 1990s and today, despite its deep roots in Russia as the purveyor to the Red Army, it sends 60 percent of its output to the United States.

For the target male consumer, the born-to-run ideal of a motorcycle mama on the back has given way to a spouse or girlfriend riding alongside, holding the dog or the groceries.

Irbit and its dealerships say older bikers represent their core market, but the bike-sidecar combination has also begun to catch on with a younger generation of riders, couples who find its retro look appealing.

“In the Soviet Union, our motorcycle was a workhorse,” said Vladimir N. Kurmachev, Irbit’s factory director. “Now it is an expensive toy.”

David Reich, 65, a retired carpenter in Salem, Ore., bought a white Ural Patrol from a dealership there last year.

“It’s something my wife and I can both enjoy,” he said in a telephone interview. They considered buying two bikes, he said, but decided on the sidecar so his wife, Jeanne, would not have to get a motorcycle license. Also, they could chat while touring.

“I am having a ball!” Jeanne Reich wrote in an e-mail. “I enjoy cruising along a few inches off the road with nothing to do but take in the view.”

Peter terHorst, the spokesman for the American Motorcyclist Association, said the average age of its 230,000 members was 48. As people’s strength and coordination wane, he said, “you see them transitioning to the sidecar.”

“Older couples say it’s just not comfortable to double up,” Mr. Kurmachev said during a tour of the shop floor, where sidecars are polished, painted and installed standard on nearly every bike.

Irbit, known by its Russian acronym IMZ, says it is the only motorcycle manufacturer in the world selling stock sidecars in volume; some BMW and Harley-Davidson dealers have sold them as options, though Harley is discontinuing sidecar production.

Sidecars, while popular with some riders, still account for a fraction of the motorcycle market in the United States, said Ty van Hooydonk, a spokesman for the Motorcycle Industry Council, a trade group. The makers do not disclose sales figures, he said.

Irbit’s factory sits on the rim of a ramshackle town of wooden buildings and rutted dirt roads on the Siberian side of the Urals, with a statue of Lenin still in the main square. It is operating, but at greatly diminished capacity compared with its 1970s heyday, when it produced up to 130,000 vehicles a year. Assembly lines have closed and the motorcycles are now built by hand.

A ride in a sidecar can be either exhilarating or, for those not accustomed to the sensation, terrifying. Set low to the ground, the sidecar tends to rise into the air on right-hand turns. The bike is street legal in all 50 states. But because the entire three-wheel contraption is legally a motorcycle, no seat belt is provided or required. With United States sales rising, Irbit says it is studying an air bag for the sidecar.

The Ural is a heavy, 40-horsepower motorcycle whose two cylinders jut sideways from the frame. It is modeled after a late-1930s BMW sidecar bike called the R71, which Nazi Germany provided to the Soviet Union after the countries signed a nonaggression pact in 1939. When the Nazis broke this pact and invaded, the Russians used the bike to fight them.

Irbit stopped building military models in 1955 and began focusing on a civilian market of hunters, outdoor enthusiasts and owners of summer homes.

Norman Mayersohn contributed reporting.

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At I.M.F., Maneuvering to Replace Jailed Chief

While Mr. Strauss-Kahn has not yet resigned from his position after being sent on Monday to New York’s notorious Rikers Island jail on accusations of attempted rape, European officials intensified their lobbying for another European to head the fund, citing deepening uncertainties over the continent’s debt crisis.

Since it was formed after World War II, the I.M.F. has traditionally been run by a European, while the World Bank has long been headed by an American. But for the first time, there is a genuine possibility that the I.M.F. position could go to an official from a faster-growing non-Western country, reflecting the shifting global economy.

Policymakers from emerging markets say the time has come for them to exert more influence at the agency as their weight in the world economy has reached critical mass.

Among some potential candidates, modesty was not a characteristic widely on display.

Turkey’s finance minister, Mehmet Simsek, publicly threw his hat into the ring Tuesday, declaring: “I don’t have even the tiniest shortage in terms of experience or knowledge.” Another Turkish official, Kemal Dervis, a widely respected former economy minister, is already seen as a leading candidate for the post.

Finance officials from India, Mexico and South Africa are also being floated.

China, the third largest financial contributor to the I.M.F. after the United States and Japan, has not put forward a candidate of its own. But a ministry spokesman in Beijing said Tuesday that the selection of the next I.M.F. chief needed to be transparent and merit-based.

Experts said the race is wide open.

“Given the severity of the European sovereign debt crisis, there is a case for someone who can bring a good feel for European finance and politics to the job,” said Charles Dallara, a former U.S. Treasury official who is the managing director of the Washington-based Institute for International Finance. “On the other hand, this could be the time for a more open process at the I.M.F. looking at candidates from any number of emerging markets.”

The jockying intensified as questions rose over whether Mr. Strauss-Kahn would formally resign from the I.M.F., where staff members are stupefied by his arrest and worried about the impact on the fund’s credibility. On Tuesday, Austria’s finance minister, Maria Fekter, said Mr. Strauss-Kahn should consider stepping down to avoid further damaging the I.M.F.

Even if Mr. Strauss-Kahn were eventually released on bail, he would almost certainly not be able to leave the state of New York. That would make it impossible for him to fulfull his international obligations as well as requirements that he chair meetings of the I.M.F. executive board in Washington three times a week.

“You can’t run things from Rikers Island,” said one I.M.F. official, who spoke anonymously, citing the sensitivity of the situation.

Senior European officials, led by German Chancellor Angela Merkel, are arguing that only another European can manage the fractured politics and tricky calculus of Europe’s bailouts, especially if a renewed crisis in Greece richochets to other troubled countries. The I.M.F. is overseeing about 100 billion in loans it made to Greece, Ireland and Portugal, and is the principal architect of austerity programs aimed at straightened out the countries’ finances.

As it became clear that legal proceedings would keep Mr. Strauss-Kahn in New York for the foreseeable future, Gordon Brown, Britain’s former prime minister and also chancellor of the exchequer in the Labour government for many years, lost no time renewing his bid, which seemed to have deflated after Prime Minister David Cameron last month threatened to block it.

“Gordon is as keen as ever to put himself forward,” said a former aide, who was not authorized to speak publicly on the matter. “He’s moving up a gear and wants to be considered.”

Katrin Bennhold contributed reporting.

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Economic View: Gauging the Pain of the Middle Class

By far the most visible official summary measure of individual economic well-being is per capita gross domestic product — the annual market value of a country’s final goods and services divided by its population.

The many shortcomings of per capita G.D.P. have been widely discussed. For instance, its failure to account adequately for product quality improvements in areas like computers causes it to understate well-being. And its inclusion of spending on burglar alarms and pollution-control equipment causes it to overstate well-being. The index also completely ignores the effects of changes in the distribution of income.

Although the last flaw is potentially far more serious, it has received little attention, because the costs of income inequality are notoriously hard to measure. Yet a simple supplementary index can be calculated from readily available data that captures one of the most important ways that changing distribution patterns have affected middle-income families.

I call it the toil index. It measures the number of hours that median earners must toil each month to be able to rent a house in a school district of at least average quality. (Could the median earner aspire to any less?) Unlike per capita G.D.P., which, apart from brief recessions, grew at a strong and steady rate from the end of World War II until the recent downturn, the toil index has been much more volatile. Its movements suggest that recent increases in income inequality have imposed substantial economic costs on middle-income families.

From 1950 to 1970, incomes grew rapidly and at about the same rate — almost 3 percent annually, on average — for families at all income levels. From 1970 to 2000, however, that pattern changed sharply. Incomes of the top 1 percent grew more than threefold, while median household income grew less than 15 percent.

Although conventional wisdom has long held that a widening income gap is a problem, there has never been a practical way to measure its actual costs. The toil index tackles that issue.

The index rejects the standard economic assumption that well-being depends primarily on absolute consumption. Instead, it assumes that the context of that consumption is often far more important. Context matters because the brain requires a frame of reference to make any evaluative judgment.

For example, is a particular family’s house adequate? The answer invariably depends on the quality and size of other houses in the surrounding area.

Rising inequality has shifted the context that governs housing choices. Higher incomes at the top have led the wealthy to build bigger mansions, shifting the frame of reference that shapes demands for those with slightly smaller incomes, who travel in overlapping social circles. The near-rich respond by building bigger houses as well, shifting the frame of reference for others just below them, and so on, all the way down the income ladder.

This shift has affected not only subjective evaluations, but also the cost of achieving basic goals, like sending one’s children to a good school. School quality is an inherently relative concept, too, and good schools tend to be in more expensive neighborhoods. The toil index rests on the positive link between a neighborhood’s average housing price and the quality of the school that serves it.

This link implies that the median family must outbid 50 percent of all parents to avoid sending its children to a below-average school. Families that failed to rent or buy a house near the median of the local price range would have to send their children to below-average schools. The only alternative to seeing their children fall behind is to keep pace with what others are spending.

How long must the median earner work to achieve that goal? During the immediate postwar decades, when income distribution was relatively stable, the toil burden for meeting the rent of that median-price home actually declined slightly, from 42.5 hours a month in 1950 to 41.5 in 1970, according to my calculations.

But once inequality began rising sharply, the toil burden began rising in tandem. The median new single-family house in the United States grew from 1,570 square feet in 1970 to more than 2,300 square feet by 2007, an increase that can’t be explained by the paltry growth in median earnings during those years. What changed was the context that governed housing choices.

By 2000, the median worker had to work 67.4 hours a month to put his or her family into the median home. The toil index thus fell by 2.4 percent from 1950 to 1970, but rose by 62.4 percent from 1970 to 2000. Yet all the while, steadily rising per capita G.D.P. painted a substantially rosier picture.

SOME economists invoke the celebrated Pareto Efficiency Principle to argue that rising inequality actually doesn’t matter. This principle, named for the Italian economist Vilfredo Pareto, counts any change as an improvement if it helps some people while not harming others. Because the rich now have much more money than before and others have no less, these economists argue, society as a whole must be better off.

But that view misses something important. As the toil index shows, rising inequality has been costly even for families whose incomes have risen slightly. Such measures remind us that what really matters is families’ ability to achieve their most important goals.  

Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.

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Air Traffic System Update Encounters Turbulence

Those are the changes the Federal Aviation Administration has been promising for years through an ambitious program to modernize the nation’s air traffic system, and replace radars on the ground with satellite technology. The problem is that this new system, called NextGen, will cost an estimated $30 billion to $42 billion to complete. So far, the airlines have been reluctant to put up their half of the money for a system that will not be operational for at least a decade.

But NextGen, which stands for the Next Generation Air Transportation System, received a boost on Friday with House passage of a $59.7 billion bill that finances the F.A.A. over the next four years, providing much-needed stability to the agency’s flagship program. Since 2007, the F.A.A. bill had been repeatedly stalled and its budget temporarily extended 18 times.

The bill, which was approved 223 to 196, largely along party lines, also cuts overall spending on aviation by $4 billion and includes a provision that would curb the right of airline employees to unionize. The bill from the Republican-dominated House must still be reconciled with a vastly different version that the Senate, controlled by Democrats, approved in February. The White House has said it will veto a final bill that includes the labor provision.

And Representative Nick J. Rahall of West Virginia, the ranking Democrat on the House Transportation and Infrastructure Committee, assailed the deep cuts in the F.A.A. budget, which, he noted, came a week after two airliners landed at Washington National Airport without being able to contact the single air traffic controller on duty.

Modernizing the nation’s current air traffic system, which is based on technology invented during World War II, is universally seen as critical to coping with the congested airspace over the United States and to accommodate growing traffic. In its latest forecast, the F.A.A. estimated that United States airlines would carry 1.3 billion passengers in 2031, up from about 700 million in 2011.

Just like GPS for cars, satellite navigation gives pilots their exact location at any given time. Air traffic controllers would not have to wait 30 seconds for the next sweep of their radar screen to know the locations of planes. Radar’s limits means that controllers must now keep planes three miles apart when they approach airports. This limits the number of planes that can land each hour and contributes to the longer lines for takeoff.

“Today’s airspace is woefully antiquated,” said Steve Fulton, who helped pioneer satellite-guided navigation with Alaska Airlines in the 1990s and now works for GE Aviation.

Airlines burn an extra 10 percent of fuel today, he said, as they circle complicated approach routes or are put on a holding pattern by controllers juggling several flights.

“Instead of a chaotic and unplanned and unpredictable system, NextGen would provide precise synchronization,” he said.

Because of the surge in traffic in recent decades, the current system is often operating at the limits of its capacity. Robert W. Mann Jr., an aviation industry expert in Port Washington, N.Y., estimated that delays and airport congestion cost the industry as much as $12 billion a year in lost time and extra fuel costs.

The United States has also been lagging other countries that are already moving into this digital navigation age, including Australia, Canada, China, and several European countries like Sweden.

Yet airlines, which continue to be low in cash, have been reluctant to commit before they get a clearer sense on how the F.A.A. plans to transition to this new technology.

“Basically, it comes down to economics,” Mr. Mann said. “This is an industry that is not operationally driven. It is financially driven. And unfortunately, the airlines have learned to be very circumspect.”

Experts said the repeated delays in financing over the last few years have contributed to NextGen’s slow pace. The F.A.A. also has a history of being unable to complete large-scale investment programs on time and on budget.

In a report last month, the Department of Transportation’s inspector general said that another of the F.A.A.’s major technological programs, called En Route Automation Modernization, was four years behind schedule and could end up costing as much as $500 million more than its initial budget of $2.1 billion. The program, one of the building blocks of NextGen, is intended to track airliners at cruising altitude. It has suffered software glitches, including tagging flight numbers to the wrong planes, at its initial testing centers in Seattle and Salt Lake City.

“Yes, we have not been perfect in the past in technological rollouts,” said Michael P. Huerta, the F.A.A.’s deputy administrator. “But this one is different.”

Of NextGen, he added, “We are beyond this being a research and planning project and we are very much in implementations.”

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