The Five Worst CEOs of 2007

[Ishmael]

More unintended consequences.

The Five Worst CEOs of 2007
By Tom Borelli
Saturday, December 29, 2007



As the year comes to a close, it’s time to announce the Five Worst CEOs of 2007. The CEOs shared a common theme: they allowed the liberal agenda embodied by Corporate Social Responsibility (CSR) to drive business decisions.

All of the “winners” are actively seeking federal regulation to address global warming despite the fact they failed to evaluate the economic cost of regulation – higher energy prices, slower economic growth and an increase in job loss – on consumers and future earnings. In addition, the CEOs also failed to anticipate the unintended consequences of promoting global warming fears on their businesses.

The desire for regulation is an outgrowth of CSR where companies are encouraged to assume responsibility for corporate activity beyond current legal requirements and to engage with stakeholders including critic groups seeking to change corporate behavior.

The five worst CEOs of 2007 are:

John Browne of BP. Browne resigned this year partly because his global warming strategy failed miserably. Under Browne’s leadership, BP launched its “Beyond Petroleum” advertising campaign that embraced globalwarming alarmism as a way to

re-brand the company as a responsible company.

The consequences were devastating: the cost and management time of Browne’s environmental strategy led to maintenance and safety lapses, which caused a series of accidents including a deadly refinery explosion and a major oil pipeline leak in Alaska.

To address these issues, BP put aside $ 1.6 billion to settle lawsuits and it promised to invest $ 7 billion to upgrade its U.S. refineries and to repair and replace Alaskan pipelines.

Jeff Immelt of GE. “GE's Environment Push Hits Business Realities” – a front-page Wall Street Journal story – highlighted the downsides of its “ecomagination” marketing campaign that seeks to position the giant conglomerate as an eco-friendly company.

The story makes clear that Immelt’s global warming strategy is causing a series of unintended consequences. For example,the incandescent light bulb – a GE product and invention of its founder ThomasEdison – will be phased out by federal law.

Over the past year, GE lobbyists had to fight hard to defeat outright bans of incandescent bulbs and buy time to restructure its lighting business that currently relies more on traditional bulbs.

GE’s coal business is also feeling the heat from concerns over global warming. While it has invested heavily in Integrated Gasification Combined Cycle (IGCC), a technology that captures carbon dioxide from coal-fired electricity plants, environmentalists have another plan – just ban the use of coal.

This year, environmental activists have been successful in blocking the construction of a number of coal-fired power plants including 8 of11 plants in Texas. The termination of the Texas powerplants resulted in the cancellation of orders for GE’s steam turbines worth hundreds of millions of dollars.

Lee Scott of Wal-Mart. Scott’s global warming strategy is indicative of a classic mistake made by CEOs under social and political pressure: appeal to the liberal elite by adopting an aggressive“green strategy”. By doing so, Scott is selling out its shareholders and low-income customers.

Higher energy prices – a result of global warming regulations – will add to the input costs of Wal-Mart’s business while simultaneously reducing the disposable income of its consumers.

The adverse impact of high-energy prices on its consumers whose annual income is about $ 40,000 is not rocket science. Earlier this year, Scott noted a decline in sales was due to the fact that “many customers are running out of money at theend of the month.”

Indra K. Nooyi of PepsiCo. Under Nooyi’s leadership, PepsiCo is leading the beverage industryin global warming political correctness. The company sponsored Al Gore’s LiveEarth concert to appear in sync with the “environmental generation.”

However, Nooyi is finding out that what makes good publicrelations can be bad for PepsiCo’s Aquafina – the leading brand of bottled water. The latest trend for activists and politicians is to discourage bottled water sales as a way to reduce carbon dioxide emissions. According to its critics, bottled water poses a planetary risk because of the energy it takes to make and transport the product.

In addition to banning the purchase of bottled water by some city governments, Chicago will become the first major U.S. city to add a 5-cent tax per bottle. That will drive the cost of a 24-bottle case of water up about 30 percent.

With the ever-growing thirst for tax revenue, Nooyi has graciously put PepsiCo products on the political firing line.

James Owens of Caterpillar Inc. The construction and mining equipment company’s global warming strategy is jeopardizing its future earnings by working against its customers in the coal industry.

A Congressional Budget Office (CBO) study on the economic impact of cap-and-trade regulation to reduce greenhouse gas emissions would reduce coal production – a key customer for Caterpillar products – up to 40percent.

Amazingly, Owens’ decision was not based on an analytical cost-benefit analysis estimating the impact of the regulations on his company. Rather, Owens’ decision was based on his need to have “a seat at the table” with environmental activists.

By his actions, Owens demonstrated he places more interest in working with environmental special interest groups than conducting his fiduciary responsibility to shareholders.

Ishmael

 

[Myrrdin]

More c&p.

Mattel Learns the High Cost of Low Cost


If there are two words that new parents fear more than "diaper change," it's "lead paint" or "choking hazard." Mattel had the unenviable job this August of telling parents around the world that those Fisher Price toys their babies love to gnaw on were quite possibly smothered in toxic lead paint. Since August 1, the American toymaker has recalled more than 20 million Chinese-made toys for reasons relating to lead toxicity, choking hazards, or tiny magnets that could be swallowed. As a result, Mattel chairman and C.E.O. Robert A. Eckert has been doing back flips all fall to recover the toymaker's image in time for the crucial holiday shopping period.
published on www.portflio.com

 

[Myrrdin]

c&p2

It's been a rough couple of months for Wall Street's chieftains, whose fortunes have soured faster than you could say "credit crunch." Stan O'Neal was ousted from Merrill Lynch at the end of October, just a week before Chuck Prince was dethroned at Citigroup, both in response to their banks' multibillion-dollar write-downs resulting from (what else?) the subprime lending mess. Jimmy Cayne is still teetering atop Bear Sterns, but recent criticism of his ... ehem ... "hands off" management style (including a smack-down in the Wall Street Journal) makes his future as C.E.O. anything but certain.

 

[Cap’n AMatrixca]

I should get fired so good...

 

[Ishmael]

Mattel Learns the High Cost of Low Cost


If there are two words that new parents fear more than "diaper change," it's "lead paint" or "choking hazard." Mattel had the unenviable job this August of telling parents around the world that those Fisher Price toys their babies love to gnaw on were quite possibly smothered in toxic lead paint. Since August 1, the American toymaker has recalled more than 20 million Chinese-made toys for reasons relating to lead toxicity, choking hazards, or tiny magnets that could be swallowed. As a result, Mattel chairman and C.E.O. Robert A. Eckert has been doing back flips all fall to recover the toymaker's image in time for the crucial holiday shopping period.
published on www.portflio.com

Actually I agree to that one with one small proviso. That is a totally consumer driven market. Consumers do have the choice of purchasing more expensive, domestically produced toys. They didn't.

That being said, Eckert jeapordized his companies image and good will by NOT performing quailty control on the incoming product. In this case the manufacturer (Chinese) cut costs to increase their own profits at Mattels expense. That still does NOT excuse Mattels lack of QC.

On the other hand, Chinas manufacturers had a bad year as far as products go. In the end I hear more talk of 'China' than I do Mattel. Shareholder equity took a tumble this year (2.9%), but not as much as the hoopla in the press might lead you to believe. The problems are easily soluble and not strategic in nature.

Ishmael

 

[Ishmael]

I should get fired so good...

No kidding.

Ishmael

 

[Cap’n AMatrixca]

... just once.

 

[Saint Peter]

There seems to be a slight global warming spin to your list. Are you sure these are the worst CEOs? Sounds fishy.

 

[Sean]

There seems to be a slight global warming spin to your list. Are you sure these are the worst CEOs? Sounds fishy.

It's from Townhall.com. Their agenda isn't exactly subtle.

 

[Saint Peter]

It's from Townhall.com. Their agenda isn't exactly subtle.

I think the worst CEO list of '07 should include meth sniffing homosexual evangelical minister Ted Haggard.

Townhall.com must have overlooked that one.

 

[jhuson]

Borelli at his finest:

http://www.youtube.com/watch?v=izQz4I0DgO0&feature=related

 

[Sean]

Borelli at his finest:

http://www.youtube.com/watch?v=izQz4I0DgO0&feature=related

LMAO, that's hilarious.
Funny that Borelli should mention "The Great Global Warming Swindle", maybe he didn't hear that every "fact" in it turned out to be a lie and half the contributors complained that their segments had been edited to completely misrepresent their point.

 

[phrodeau]

Looks to me like such actions also happen to be very good for business, and jumping onto the bandwagon increases the bottom line.

http://money.cnn.com/2007/05/02/magazines/fortune/pluggedin_Gunther.fortune/index.htm

Some people need to take a look beyond their own noses.

 

[Sean]

As for Lord Browne at BP, I seem to remember he resigned because he was caught lying to a court to protect his gay lover from the press.
Nice try though.

 

[cjh]

how do fit toyota in this mix?