"Our goal now will be to prove that Daimler made a mistake because we're going to make [Chrysler] successful." — UAW President Ron Gettelfinger, supporting Cerberus Capital Management's acquisition of Chrysler after his initial opposition to a private equity sale, reported in The New York Times.
During periods when they're out of office, many politicians arrange jobs for loyal former aides. After his unsuccessful 2004 Vice-Presidential bid, John Edwards came up with a creative approach: He started a nonprofit dedicated to fighting poverty. Rather than recruiting outside poverty experts, the Center for Promise & Opportunity became a perch for several once and future Edwards staff members.
The line between an ordinary nonprofit and a group formed to test the political waters can be blurry. But legally there's a big difference. Ordinary nonprofits aren't subject to rules on disclosing donors and limiting contributions; exploratory political groups are. No one has challenged the status of the Edwards center, and experts in the field say it may technically pass muster as an ordinary nonprofit. But at a minimum, it appears to have helped Edwards prepare for the 2008 Presidential race.
Edwards, a former Democratic senator from North Carolina, launched the center in 2005 at the Washington (D.C.) address of his PAC. The nonprofit raised $1.3 million in 2005, the only year for which data are available, and spent some of it on a national speaking tour for Edwards. It also spent $259,000 on consultants. The campaign declines to disclose the donors or consultants. The center is now defunct, and some of its key leaders are now aiding the Edwards campaign. The Edwards campaign says the Center is not connected to a separate Edwards anti-poverty effort at the University of North Carolina.
Edwards' team defends the center. "Obviously, some of the people who had worked for Senator Edwards in government and on his campaign continued to work with him in this effort," says spokesman Eric Schultz. "John Edwards and everyone involved is proud of the organization's work." That work included running a foundation that awarded $300,000 in college aid to 86 North Carolina students in 2006. The Edwards campaign put BusinessWeek in touch with recipient Tony Tyson, 18, who finished his freshman year at North Carolina Agricultural & Technical State University. Tyson calls the scholarship "a golden opportunity." When he returns to campus this fall, he adds, he'll volunteer for Edwards' campaign.
The ball Barry Bonds wallops to become the all-time home run king will be worth plenty. Sports memorabilia dealer Brandon Steiner estimates it may fetch $500,000. Now all the San Francisco Giants slugger has to do is slam it. On May 16, he was just 10 homers shy of Hank Aaron's record 755. Keeping the price to six figures are baseball's steroid scandal and anticipation of Bonds' last homer. Says Michael Barnes, who has brokered the sale of historic baseballs: "That will be the next million-dollar ball."
A long time ago (O.K., it was 1997) in a galaxy far, far away (Marin County, Calif.), George Lucas cut the most lucrative deal in toy licensing history when Hasbro (HAS) licensed the rights to make toys based on the final three installments of the Star Wars franchise. Lucas is still cashing in. On May 10, Hasbro paid the 63-year-old director $200 million to repurchase warrants it had turned over to him as part of the deal--warrants that gave Lucas the right to buy nearly 9% of Hasbro's shares. "We've been buying back a lot of our stock, and this seemed like a good opportunity to pick up a large block," says Wayne Charness, a spokesman for Hasbro.
Although sales of Star Wars merchandise initially came in lower than expected, the relationship with Lucas has been a fruitful one for the toy giant. As recently as 2005, when the series' final installment, Star Wars Episode III: Revenge of the Sith, was released, Star Wars products accounted for nearly $500 million of Hasbro's total sales, or 16%. Lucas is now working on a fourth Indiana Jones film. With its agreement with Lucas good through 2018, Hasbro hopes to get a boost from two TV shows he's planning based on the Star Wars franchise.
With pump prices over $3 a gallon, it's not just consumers who are paying more. Gas stations are, too. The credit-card-processing fees they pay are figured as a percentage of a purchase, and last year, the National Association of Convenience Stores says, those fees surged 22%, to $6.6 billion--partly because high gas prices also drive customers to use credit instead of cash.
National Payment Card, a two-year-old startup in Boca Raton, Fla., aims to bring down both prices and fees with a card customers already have: their driver's license. NPC lets them go online to enter their license number and bank account information, turning the license into a debit card that can be used at the pump with a swipe and a PIN at participating stations. The incentive: a discount of up to 10 cents per gallon.
Retailers get a discount, too. Because NPC uses the lower-cost Automated Clearing House Network to process payments, it charges a flat-rate fee of 15 cents per transaction--50 cents to 70 cents less than the average Visa or MasterCard (MA) fee.
In January, NPC began piloting its technology at a handful of gas stations in Central Texas. Since then it has signed contracts to roll out to five regional convenience store chains starting in June.
Is it safe to give out a driver's license number online? "We urge people to be careful," says Tela Mange, a spokeswoman for the Texas Public Safety Dept., "just as they would with any online transaction."
Rupert Murdoch's $60-per-share bid for Dow Jones & Co. (DJ) and press reports that some in the Ford (F) family want to sell their stake in the carmaker (reports denied by the family) have put the spotlight on dual-class stock structures. The auto dynasty and the clan behind The Wall Street Journal control their companies through Class B shares, which carry super voting power. Often criticized for protecting owners' interests at the expense of shareholder returns, Class Bs can determine if a deal gets done. Here, some notable companies with two-tiered shares.
A growing anti-consumerist movement or just another example of book publishing's copycat tendencies? Suddenly there's a wave of memoirs about yearlong experiments in abstention: Think St. Augustine meets reality TV.
First, in 2006, came Judith Levine's Not Buying It: My Year Without Shopping, an account of how the author and her partner swore off all but the most necessary of purchases.
Just out--and at No. 4 on The New York Times' May 20 best-seller list--is novelist Barbara Kingsolver's Animal, Vegetable, Miracle: A Year of Food Life, about her family's consuming only food raised locally (not to be confused with Plenty: One Man, One Woman, and a Raucous Year of Eating Locally, by Alisa Smith and J.B. Mackinnon).
In June, look for business writer Sara Bongiorni's A Year Without "Made in China": One Family's True Life Adventure in the Global Economy, recounting "a series of small human dramas" in which "shopping trips for items like birthday candles and shoes [became] grinding ordeals."
What's behind the proliferation of these titles? Carole Horne, head buyer at Harvard Book Store in Cambridge, Mass., ties the trend to a "big awakening to environmental issues" and "unease about globalization and sustainability." Bongiorni says Americans increasingly have "a sense that we should be more self-reliant." And Levine, who terms such books "ordeal art," suggests that readers might be vicariously expiating their own sins of indulgence. "Americans," she notes, "are both the world's most extravagant consumers and the most extravagant abstainers."
Vacation season kicks in at the end of May, amid predictions of another summer of air travel hassles. Perhaps as you jostle your way onto another packed plane, you can take some small comfort in this: Statistics posted recently by the Federal Aviation Administration show that unruly passenger incidents continue to decline. In 2006 the number of reported incidents fell to 128, a drop from 202 in the previous year and a plunge from 2004's 304 incidents.
Why? The FAA can't say. But the Air Transport Assn., an airline trade group, credits efforts by its members. Spokesman David Castelveter says more carriers are training employees to handle--or prevent--bad behavior. Gate attendants have been taught to stop unruliness before it starts--by blocking anyone visibly drunk from boarding, for instance.
And when necessary, flight personnel are explaining to belligerent customers that interfering with a crew member's duties is a federal offense. (Unruly passengers can be fined by the FAAup to $25,000 per violation--or brought up on criminal charges.) Corey Caldwell, a spokesperson for the Association of Flight Attendants, says troublemakers still get on board. It's just that crews are defusing incidents before they wind up as a statistic on the FAA's rolls. Castelveter adds that there's also a deterrent factor: "Customers now know there are federal air marshals on board," he says.
The company logos to the left have something in common. They all use the same font: Helvetica. Created by the Haas type foundry in Switzerland, the sleek typeface--an element of many a branding effort--is celebrating its 50th anniversary with an exhibit at New York's Museum of Modern Art. "Helvetica is almost a template" for corporate logos, says Christian Larsen, curator of the MoMA exhibition. Because of its clarity, Larsen says, "consumers read the message, not the typeface."
China's casual attitude toward product piracy costs foreign brands billions of dollars, has drawn withering international criticism, and prompted the U.S. to file a complaint with the World Trade Organization last month. Yet when a YouTube (NWS) video clip of a Beijing area amusement park stocked with Walt Disney (DIS)-like characters hit the Internet --and caught Disney's eye--Beijing took notice.
This isn't the sort of publicity China wants right now as Vice-Premier Wu Yi leads a trade mission to Washington on May 22-24. Waiting for her there: U.S. anger over the mainland's big trade surplus, restrictive currency policy, and intellectual-property rip-offs.
The Disney trouble started when a Japanese TV news crew visited Beijing's Shijingshan Amusement Park during China's spring holidays in early May and shot footage of characters that looked just like Mickey and Minnie Mouse, Snow White, Donald Duck, and other copyrighted properties. Disney lawyers, not amused, contacted Beijing's Copyright Bureau, pointing out that the park has no contractual rights to use the entertainment giant's characters.
Since then Shijingshan park officials have "enacted emergency measures" to resolve the matter, according to the bureau's deputy director, Wang Yefei. Even the Foreign Affairs Ministry weighed in, during a May 10 press briefing usually devoted to weightier matters. "We have noticed the media report," said spokeswoman Jiang Yu, adding that while attention focused on the fake Disneyland, "there are signs that not only are foreign brands such as Disney being hurt by copyright infringement, but also Chinese brands."
By May 12, there were no Disney-like creatures at the park, though attractions with titles like the Adventure of Cinderella were still running. Park General Manager Liu Jingwang said he didn't understand all the fuss. "We have our own mascots," he said. "We don't need to imitate other people." Disney officials seem satisfied for now. "The protection of intellectual property and the guarantee of a quality Disney experience for consumers is vital to our business," said Disney Asia spokeswoman Alannah Goss in an e-mail statement to BusinessWeek, adding that "we appreciate the efforts of the Beijing Copyright Bureau in dealing with this situation."
Warren Buffett is searching for a successor to manage Berkshire Hathaway's (BRK) $62 billion portfolio. As a Buffett-watcher, whom do you suggest?
Mohnish Pabrai of Pabrai Investment Funds has gotten returns of 29% every year since 1999--after hedge fund fees. He's a pure value stockpicker who typically owns just 10 stocks. — Whitney Tilson, managing partner, T2 Partners
Thomas Gayner, CIO at Markel (MKL). He thinks a lot like Warren in the way he picks securities for the insurance company's portfolio. He's a long-term holder. — Thomas Putnam, mutual fund manager, FAM Value Fund (FAMVX)
Bruce Berkowitz, Fairholme Capital Management's founder, would be terrific. He has a wonderful record and knows the culture as a longtime Berkshire stockholder. — Mark Hirschey, Anderson W. Chandler Professor, University of Kansas School of Business