"Airbus and EADS are companies that need to be managed like companies and not like international organizations." --Nicolas Sarkozy, President of France, on an agreement between Airbus and its parent company, EADS, to overhaul their French-German co-management structure into one with a single CEO and chairman, as reported in The New York Times
Slide Show >>
The white-collar crime wave has passed its peak, but corporate leaders are still finding creative ways to get themselves in trouble. Sophisticated financial shenanigans are out. Incredibly embarrassing personal misjudgments are in. The executives in question aren't doing the types of things that would result in long jail sentences--more like the kind of stuff that would have gotten them in serious trouble in high school. To find out what punishment they would have faced, we turned to John Buckey, principal of Littleton High School in Littleton, Mass. From the Department of Confirming the Obvious: Our reliance on stored passwords and speed dialing may be dimming our recall.
According to a recent study by Trinity College, Dublin, the more digital info folks have to track, the likelier they are to rely on PDAs, cell phones, and computers to remember it all. And since memory grows weaker when it's not used, this vicious tech cycle leads to forgetfulness.
A quarter of the 3,000 people surveyed, for example, couldn't recite their home phone numbers. On average, the respondents were burdened with five passwords, five PINS, five security IDs, three bank account numbers, and two license plate combinations.
The study offered solace for the gray-haired Luddites among us: Technology-induced memory atrophy seems to hit the techno-smug young harder. In the over-50 set, 87% could recall family birthdays, vs. 40% of the under-30s. Now, where's my Treo...?
As Disney (DIS) prepares for the August TV debut of High School Musical 2, that other kiddie music juggernaut, Kidz Bop, is pushing beyond its CD genre. Launched in 2001 by indie music company Razor & Tie, Kidz Bop, which packages Top 40 songs sung by kids, has sold more than 10 million copies of 11 albums--with Kidz Bop 12 set for release on July 31.
Now, to compete with Disney and others in the crowded kids' music category, Razor & Tie is expanding the brand. Kidz Bop's recently redesigned Web site emphasizes music videos, many made by 6-to-12-year-olds, who upload directly à la YouTube (GOOG). Traffic quadrupled during the new site's first two weeks, when there were more than 1.3 million video-clip streamings by 400,000 unique users. In October, Kidz Bop will also stage a live tour--promoted by Vee, which handles Sesame Street's events--with auditions being held now to pick local talent for shows in 80 cities. Cameras will be rolling, in case the material can be used for a future TV show, says Cliff Chenfeld, one of two former lawyers who founded Razor & Tie in 1990. Today Kidz Bop accounts for roughly half its $75 million in annual music and media revenues. The risk in expanding the brand? Overexposure. A CD every six months or so may have been just enough Kidz Bop for Mom and Dad.
While 2007 has seen plenty of executive misbehavior, so far the number of business crimes, scandals, errors, and calamities lags behind last year's, according to the Institute for Crisis Management. ICM's latest annual survey reveals there were 10,131 negative news items about organizations--mostly corporations--in 2006. The Louisville consultancy compiles its report by tracking such coverage worldwide, searching for keywords like "catastrophe," "labor dispute," "defect," and "recall." ICM defines a business crisis as an event likely to trigger operational or financial problems, along with bad reactions from shareholders and consumers.
ICM President Larry Smith says the 2006 list is notable for its plethora of white-collar crimes, including coverage of the resolution of the Enron saga as court cases continued to play out. The survey also showed that executives and managers were responsible for about 52% of 2006's crises, with workers triggering 29% and outside forces the remaining 19%. And there's a newcomer on ICM's roster of the most crisis-prone industries: To the usual lineup of airlines, drugmakers, and petroleum refiners, it added computer manufacturers. Think Dell's (DELL) exploding laptops, Sony's (SNE) battery recalls, and Hewlett-Packard's (HPQ) spying scandal.
The wisecrack circulating among Trump detractors about Trump Super Premium Vodka: Only something tasteless could succeed with the real estate magnate's name on it. But the vodka's track record is no joke. Helped by sales at Trump's resort properties, it's respectable. Liquor distributor Drinks Americas Holdings (DKAM) says it has shipped 100,000 cases ($37 for a liter bottle) in the 12 months since the brand launched in 2006. That's nowhere near what was logged by brands like Stolichnaya, which sold 2.1 million cases in the U.S. last year. But it's a lot by celebrity-brand standards, especially when the celebrity is a known nondrinker. Indeed, the vodka was the hottest-selling celebrity-branded spirit last year.
Where does it sell? Well, the Donald's hope that a T&T (Trump and tonic) would become the most asked-for vodka drink at big-time bars hasn't been fulfilled. Although trendy hotel bars like Jay-Z's 40/40 Club in Manhattan and the V Bar in Vegas stock it, as do liquor stores, one of the best markets--besides Trump resorts--is duty-free shops. It's "a natural for duty-free," says Los Angeles marketing consultant Kevin Reid, who sees it as "a very desirable souvenir for visiting foreigners."
Trump Vodka is part of a new wave of celebrity booze. Drinks Americas, which also distributes Willie Nelson's Old Whiskey River bourbon, recently signed a deal with Universal Music Group to develop spirits with artists' names. Among the interested performers, says the distributor: Eminem, Snoop Dogg, 50 Cent, Busta Rhymes, Sheryl Crow, and Gwen Stefani.
With the NFL preseason just three weeks away, 10 million fantasy football players are starting to, well, fantasize about ideal rosters. Few will pick as painstakingly as Jeffrey Ohlmann. The University of Iowa management sciences professor has created a computer model that uses three inputs: rankings of NFL ball handlers based on points scored last season, positions to be filled, and guesses about the selection tactics of one's rival "owners." The software, based on analytic tools used to plot the best delivery route or fastest checkout line, advises players about which positions to draft first and which can wait for a later round. Ohlmann and his collaborators now aim to license the model to a fantasy football sponsor, such as CBS (CBS). In the two seasons he's used the program, his team got the most points, but lost in the playoffs: The model can't forecast off days or injuries.
Montargis, a French village that was a cradle of Chinese Communism in the 1920s, is adding a dose of capitalism to attract modern-day Chinese visitors. The town of 15,000, about an hour's drive south of Paris, figures prominently in Chinese revolutionary history because leaders such as Deng Xiaoping and Zhao Enlai were introduced to Marxism while attending work-study programs at local factories.
To publicize the historical tie, the regional government has erected commemorative plaques, set up a Chinese-language Web site, and dispatched a delegation to China last year. But so far, Chinese Communism isn't selling. The town has gotten barely a trickle of the almost 600,000 mainland Chinese tourists who flood into France each year, eager to shop. To remedy that, regional officials are now planning a visitors' center, including a store that will carry perfumes and other high-end French goods. They're also helping Montargis merchants set up value-added-tax refund programs similar to those offered to foreign shoppers by Paris shops.
"Of course we can't compete with the Champs Elysées," says Jean-François Pezaire, chief of staff in the Montargis mayor's office. But better shopping, he says, might entice Chinese tour groups en route from Paris to the Loire Valley to stop at Montargis, at least to pick up a few more mementos.
Many companies patronize the arts, but few, it's safe to say, look to artists for business direction. Maybe they should. Pickhan Heavy Fabrication, a niche metal banger based in the German city of Siegen, says it was transformed after it started making monumental steel sculptures for American artist Richard Serra, the subject of a current retrospective at New York's Museum of Modern Art. Pickhan began to work for Serra in 1997, after the sculptor's Baltimore producer closed. "We had invested in a new machine, and we needed work for it," says Friedhelm Pickhan, the 66-year-old company patriarch. "I didn't know a thing about art."
Building a huge Serra piece is one part heavy industry and one part origami, with workers feeding inches-thick plates of steel in increments through hydraulic presses the size of a house. The expertise gained from this demanding process has won Pickhan contracts to build oil-drilling platform supports and other large-scale industrial gear. Executing Serra's graceful steel curves also taught workers how to make so-called spherical shells--crucial components of high-pressure containers used in building chemical and pharma plants. "We learned an unbelievable amount from him," Pickhan says.
Serra sculptures account for well under 10% of Pickhan Heavy Fabrication's revenues (which the company declines to disclose). But the work continues to have a dramatic effect on the plant's industrial prospects. "We would have never dared do something of this dimension," Pickhan says, gesturing toward pieces of a giant ship's crane. The growing number of large-scale jobs has prompted the company to set up new operations by a canal, so the huge finished products can be hauled away by barge.
By now, the plant, run by Pickhan's son, Uwe, has made some 50 Serra works. "They are the experts, the only ones worldwide who can do it," says Alexander von Berswordt-Wallrabe, the German art dealer who first brought Serra to the Siegen factory. And while Friedhelm Pickhan has seen just a few of the sculptures after they leave the premises, he made it to New York for the spring opening of the MoMA show. Sounding astonished by the reception he got, he says: "The people clapped, and I had to stand up."
THe space suits used by today's astronauts weigh about 300 pounds and are so bulky they severely limit mobility. "You can't do much bending of the arms or legs in that type of suit," says Dava Newman, professor of aeronautics and engineering systems at MIT. Along with colleague Jeffrey Hoffman (a former astronaut), her students, and Cambridge (Mass.) design firm Trotti & Associates, Newman is creating a space suit of the future. Her prototype Bio-Suit, seven years in the making and not yet perfected, is lightweight and flexible. That's because it dispenses with traditional gas pressurization, using instead "mechanical counterpressure" that turns astronauts into high-tech mummies, wrapping them in tight layers of spandex and nylon material to exert the force needed to help counteract the vacuum of space. The finished suit is still about 10 years away, says Newman, whose team is working on getting the Bio-Suit to deliver the required pressure: one-third of that exerted by the earth's atmosphere.