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A Case Study Of Mittal Management

I read "Mittal & Son" (Cover Story, Apr. 16) with delight. I have followed Lakshmi Mittal's career since he initially contracted to operate, and then bought, the Iron & Steel Co. of Trinidad & Tobago in 1989 and at the end of 1994, respectively. I had been one of a number of expats brought in during the late 1970s to 1980 (I'm American) as management and technical staff. Because of deep divisions, nothing was getting done. The government-owned company was hemorrhaging money.

Much to my surprise, Mittal's company brought in its operating team, chose the best from among the local staff, slimmed down the bloated workforce, brought in money to do what was needed, and never looked back. Mittal Steel Point Lisas, as it has now been renamed, became a model of efficiency in a region not always noted for such.

James C. Robinson

Fayetteville, Ga.

"The new alchemy at Sears" (Finance, Apr. 16) is an excellent look into what Edward S. Lampert appears to be doing with brand-based securities.

There is one dimension not mentioned in the article that I suspect may be significant: the tax benefit from holding intellectual property in a low tax-rate jurisdiction (for example, Bermuda) and charging a royalty for its use by operating companies based in higher tax-rate jurisdictions (the U.S.).

This is a path that others have trod already. The Accenture (ACN) trademark is held in Bermuda, and Royal Dutch Shell's (RDS/A) trademarks are held in Switzerland. In both cases, a royalty is charged to the operating companies around the world for the use of the trademarks.

Jonathan Knowles

New York

A security backed by intellectual property was already an old idea when David Bowie sold bonds backed by song royalties in 1997. Mills Music Trust (MMTRS.OB) was created in 1965. Holders of the trust securities got, and continue to get, distributions that result from the trust's receipt of royalties from copyrighted songs. Interestingly, though the trust is over 40 years old and has acquired no additional copyrights, copyright income is stable or growing. You can't keep a good song down.

Louis Hannen

Littleton, N.C.

Let's see if I've got this straight: The National Federation of Independent Business is opposing universal health care to the detriment of half of its membership ("Stopping reform before it starts," Health, Apr. 16)?

A single-payer system is in the best interest of all businesses, large and small, because its costs are less than providing insurance (through a small tax on wages). It will reduce liability and auto insurance, reduce workers' compensation costs, eliminate health benefit management costs, eliminate yearly insurance negotiations, and remove health care from labor negotiations. It'll provide healthier employees, reduce absenteeism, and substantially improve recruiting. It'll also eliminate employee health-related bankruptcies and free up family income for the purchase of more products.

It sounds to me like the NFIB should sit this one out.

Jack E. Lohman

Colgate, Wis.

"Stopping reform before it starts" accurately reports on the widespread opposition to health-care reform by most of our leading small-business organizations. This is perplexing as small businesses are more adversely affected by the current health-care crisis than any other U.S. business sector. In many cases, small businesses have no access to affordable health insurance. And individuals who wish to start small businesses are often unable to do so because of their fear that they will put their family's health care at risk.

All surveys done by our small-business advocacy organization and others reflect this concern, including 64% of the small-business owners in our most recent survey who say that they would like to see a government-sponsored health-care solution.

John Arensmeyer

CEO, Small Business Majority

Sausalito, Calif.

I couldn't help but take notice of "A little shame goes a long way" (News & Insights, Apr. 16) and its relevance to Chicago-based corporations.

The recently released Catalyst census of women in leadership positions at America's largest companies broadly reflects the discouraging news we're seeing: At Chicago's leading public companies, women are losing ground in boardrooms and executive suites. The latest Chicago Network Census of the city's top 50 public companies found a drop for the first time since we began reporting in 1998. What can be done? One tack, suggested in your article, argues for naming the corporate laggards. That is our approach with the census. One hopeful sign: There are fewer companies in Chicago, overall, with no women directors. We also think it is productive to recognize those companies that understand the need to take action.

There is much more that must be done, such as encouraging board nominating committees to be more imaginative in seeking new sources for directors, establishing executive mentoring programs, and insisting that a pipeline of talented women be developed.

Ellen Carnahan

Chair, The Chicago Network


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