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We're only two days out of the summer lull and The Business Press Maven already feels like a baited bull. Here's why, and I warn you, that tie of yours better not be red.
There's no better investment maxim than "sell on the wedding, buy at the wake." This basically means that when everyone is happy, celebrating and full of promise, sell. When bitter tears are being shed, buy. Got that? Well, if you've been gobbling up
shares in light of the giddy, pussycat coverage that came in the wake (the other kind of wake) of the press conference announcing the appointment of Alan Mulally,
veteran, to Ford's top spot -- eh, you don't get it.
See, in the world of business, the press conference is the closest thing there is to a wedding. Everyone is happy and scripted and hope for any type of merger or shifty strategy -- whoops, sorry, shift in strategy -- seems high.
Moreover, the business media never under-functions so reliably as at a press conference. A good spread of free Danish pastries and coffee sometimes lays siege to the media's better judgment. But the larger issue is that the default mode of thought for business journalists is on-one-hand-on-the-other. Speak to both sides, split the difference.
But at many press conferences (see
/AOL, which produced some of the most misguided business coverage since The Business Press Maven was thumb-sucking his way through middle school), both sides are on the same team.
And even when the press conference is not about a merger but an appointment, the business media falls for the new face and new storyline that all the practiced participants in the press conference are peddling. A good business journalist wants to speak to someone who digresses from the party line, and they have to be hunted down outside the press conference.
By the look of the majority of coverage that followed Mulally's appointment and the stock strength that followed it, not too many dissenters were walking the streets of Dearborn, Mich. The coverage was fawning -- unencumbered, shall we say, by much critical thought. A
Detroit Free Press
even led with Mulally's admission
that he drove a Lexus as evidence of a bracing honesty that would be a grand asset in turning Ford around. Uh, what was he going to say -- he drove a Focus?
Make no mistake about it, The Business Press Maven doesn't have anything against Mulally, who may have been the very last person on Bill Ford's wish list (does anyone remember Carlos Ghosn or Dieter Zersche?), the only one crazy enough to say "I do." Outside of Mulally's actually taking this job, I haven't seen evidence of questionable judgment.
But there are some big issues here that should be reported before Bill Ford's joke about keying Mulally's Lexus. For one: Is Ford, who will remain chairman, going to give the newbie any real power? What does it say that as part of his company's vaunted "Way Forward" -- the cornball phrase for the latest, greatest comeback plan -- Bill Ford himself must retreat? Is this "recognition" of where things stand, or too little, too late?
And was this appointment truly a surprise, as everyone said? To me, if other people you've publicly courted bow out and you choose someone with no experience in the industry, it should be defined as an act of desperation, not a surprise.
How about the historical perspective? We keep hearing how unorthodox it was to bring in a non-family member. But has any legacy CEO who grew up in such comfort ever had the innovative eye and hunger to turn around a reeling company in a troubled, changing industry?
And did Mulally lead Boeing to No. 1 status or just keep a seat warm while
fell of its own weight? Come to think of it, Boeing has only one real competitor; the auto industry is teeming with them.
You get the picture. There are a lot of serious questions that should be asked of Ford before happily-ever-after story lines appear and cause the stock to take an undeserved jump.
By contrast, could it be because there was no in-person press conference announcing a replacement with suitable fanfare that
stock got clipped at Sumner Redstone's
latest boardroom shuffle?
Redstone chose a comparatively cold telephone presser on Tuesday, unlike Ford's live setting. If Redstone had used Danish patries, good lighting and a corporate logo backdrop to force some chumminess and high promise down the gullet of the business media about Philippe P. Dauman and Thomas E. Dooley, would the stock have reacted better? Only The Shadow knows.
But The Business Press Maven knows that
wasted a good bit of time Tuesday morning wondering whether Tom Freston had been fired or quit. Given ol' Sumner's history of firing people -- well, duh. Also, as Gawker.com
pointed out in a snarky little entry
(business press, listen to me: A snarky tone is all you have to arm yourself with at these press conferences), Redstone's memo announcing the change didn't bother to say Freston was leaving to pursue other opportunities.
"Leaving to pursue other opportunities" is, of course, corporate speak for, uh, someone leaving to pursue other opportunities, or the fact that the chairman gives enough of a hoot about the departing guy to give him a face-saving phrase. If it's not there, it means the CEO doesn't give a Redstone's ass, which means he got the boot. Which reminds me -- I'm leaving, just for the day, to purse other opportunities. Like breakfast.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.