Reuben Mark is famous for his longevity -- and his consistency. In his 19 years as chairman and CEO of Colgate-Palmolive, (CL) he has rarely stumbled at delivering consistent earnings growth.
But following Colgate's 10% fall in third-quarter earnings, Mark is moving quickly to overhaul the consumer-products giant, which has become an innovation laggard and an advertising dullard. He's jettisoning the laundry suds business to focus on oral care and higher-margin products. Twenty-six factories will close and 4,400 jobs will be cut. The expected savings of $300 million per year will be plowed into product development and advertising, where rival Procter & Gamble (PG) outspends Colgate 5 to 1. Wall Street liked what it heard: It pushed Colgate shares up 8.2% on Dec. 7, to $50.07.
Mark, 65, remains cagey about succession. Still, he says he is launching a "four-year business-building and profitability-increasing effort." Hardly the words of a chief executive with one foot out the door.
The U.S. may be moving closer toward taking real action on global warming. On Dec. 8, a long-awaited report from the National Commission on Energy Policy, a bipartisan group created by the Hewlett Foundation and partners, called for mandatory caps on emissions of greenhouse gases. The report advocates everything from boosts in auto fuel economy and renewable energy to more diverse supplies of oil and gas. With a membership that includes former ConocoPhillips (COP) Chairman Archie Dunham and other conservatives close to the Bush Administration, the group hopes to break the logjam in Washington.
The auto industry has decided to fight California's efforts to regulate greenhouse gas emissions. The industry's lobby group, the Alliance of Automobile Manufacturers, along with General Motors (GM), Ford (F), Chrysler (DCX), and Toyota (TM) and a few others, have filed a lawsuit in federal court in Fresno, Calif. They're challenging a rule enacted by the California Air Resources Board in September that would force the industry to cut carbon dioxide emissions by about 30%, starting in 2009. Since CO2 emissions can only be reduced by boosting fuel economy, the industry claims that California's law is effectively a fuel-economy regulation. The carmakers may have a case. The U.S. Environmental Protection Agency ruled in September, 2003, that CO2 can't be regulated as a pollutant. But California contends that its right to enforce its own air quality regulations, which predate federal rules, is guaranteed by the federal Clean Air Act.
Truce or dare? On Dec. 6, Lazard Chairman Michel David-Weill finally agreed to permit chief Bruce Wasserstein to move forward in taking the firm public. But if New York's brash dealmaker fails to list shares of Lazard, one of the last private investment banks, by the end of 2005, his contract will end prematurely. David-Weill hired Wasserstein in 2001 to run Lazard with an employment pact that ends in 2006. If Lazard goes public, the firm will have to dole out a large chunk of the money raised to buy out David-Weill and other partners.
The California Public Employees' Retirement System, the nation's largest pension fund, will now reveal the size of the fees it pays hundreds of money managers, including such well-known firms as the Carlyle Group and Kohlberg Kravis Roberts. CalPERS will also disclose the returns from each manager. CalPERS will release the data to settle a lawsuit brought by a nonprofit coalition that argued the fees are public data. Money managers doing business with the fund are among the largest campaign contributors to politicians who either appoint representatives to the CalPERS board or sit on the board.
-- Credit Suisse Group (CSR) plans to streamline the operations of its investment bank Credit Suisse First Boston.
-- Nortel Networks (NT) will begin filing its delayed financial reports on Jan. 10.
-- Martha Stewart (MSO) will team up with reality-show guru Mark Burnett to host a daily TV show in fall 2005.
Shares of Sirius Satellite Radio (SIRI) are falling back to earth. After tripling since deejay Howard Stern's August signing, the stock fell 23%, to $6.90, on Dec. 8. Wall Street is worried about big payments for programming and low average revenue per subscriber.