A Celebration

Every year around this time, Fortune Magazine comes out with a review of the stupidest business moves of the year to date – what they refer to as a mid-year report. Some of their choices are a bit snarky; some of them will make you want to point out that the issues they are mocking really are not as cut-and-dried as they’re making things sound, and some are trivia you probably didn’t care about anyway, but I’d have to say that the majority of them are funny. And this year’s crop includes some good ones…

You can access the article in slideshow format here if you want to, or at least until the CNN site takes it down. I’m just going to touch on a few of the highlights, because there are some things that I don’t honestly think could ever be mocked enough. Like the Segway/General Motors collaboration project, for example. Called a PUMA, the resulting vehicle looks a lot like a wider Segway scooter, only with seats for two people and a windshield/canopy arrangement. Early reviewers immediately started calling it the “electric rickshaw” and mocking it for its limited range (35 miles on a charge), while calmer observers questioned if this was really a good place for GM to be expending resources while on the very brink of bankruptcy. It’s worth noting that there may not be anything wrong with the concept – in fact, the new product may work very well – but the timing was still off…

Then there’s John Thain, the former CEO of Merrill Lynch. During the buyout arrangements with Bank of America, it came to light that Thain had just completed a $1.2 million redecoration of his office in New York. Not really the best thing the CEO of a publically held company to be doing at the best of times (the stockholders have a natural tendency to want to see that money put into dividends or earnings, not perks for the President), but completely asinine for the head of a company facing bankruptcy and liquidation. Given that even a simpleton should have known that the details would eventually leak out, it’s even harder to explain why Mr. Thain thought that spending $87,000 on an area rug or $35,000 for a specialty toilet for his office was a good idea…

I also enjoyed the story about the New York Yankee’s $2,500 seat offering. For those of you who don’t know, cheap seats in the average baseball stadium are generally between $6 and $15, with good seats going from $25 to $80, and individual seats in a luxury skybox running from $100 to $300. There are exceptions, of course, but in Los Angeles (for example) seats in the exclusive Dugout Club section (which includes access to the premium food service venue of the same name) are only $500, and the most expensive regular sears are only about $120. Field level seats in the new Yankee Stadium (just the seats; nothing particularly exclusive) were $2,500, with a season ticket price of $200,000. Yes, that’s roughly the equivalent of buying an entire luxury box (in Phoenix, for example, a box has 25 seats at $100 each); and again, yes, if you wanted a pair of seats for the season in that section it would cost you $400,000. Enough to buy a house in much of America, and enough to buy a really nice house in the Lansing area…

Needless to say, perhaps, $200,000 season tickets are even harder to sell than $2,500 single-game tickets in the middle of an economic crisis, and the seats went unsold. Of course, the Yankees eventually got tired of seeing all of the empty seats on television, and cut the price for those seats by 50% - which still makes them more than twice as expensive as the best seats in the house in L.A. So far, that hasn’t helped, but at least it’s better than some of the other reactions to the financial crisis covered by this same article…

(To be continued!)