Year of the Executive?
Since Carly Fiorina and Meg Whitman so easily
trounced their opponents last week, some believe this is the Year of the Woman.
Others opined that the primary election results in California, as elsewhere, underscore the
anti-incumbent mood, so that makes this the Year of the Outsider.
Maybe.
But I’m thinking something else. I believe this may be the Year of the
Executive.
Think
about it. This recession has unmasked the enormous financial problems that have
been festering in all levels of government for a generation. Or two.
The Grand Canyon of Boycotts
Los Angeles is a creative place. You can depend on the city to figure out some innovative way to punish businesses.
Just
last week, City Council members decided they didn’t like Arizona’s new
law that cracks down on illegal immigrants, so they came up with an
out-of-the-box way to flog businesses. They ordered city departments to
see if they could kill any contracts with companies headquartered in
that state.
That’ll
teach those companies. How dare they be located in Arizona and actually
sell their goods or services here? Los Angeles will make them hurt.
An American State of Mind
The recent news from the state’s Finance Department about our population growth seemed reassuring enough.
The
city of Los Angeles added an estimated 44,000 residents last year,
bringing the population on Jan. 1 to almost 4,095,000, the department
said April 29.
Likewise, California gained residents, pushing the total population to an estimated 38.6 million.
Ducking Duty With Chapter 9
Lots of businesses know about the magic of bankruptcy court. There, heavy debt
can be lifted. Expensive leases can be undone. Burdensome contracts can
be erased.
Indeed, a bankruptcy judge can make your bad decisions disappear like magic. You can get a do-over.
Businesses know this, which may explain why some business people, including former
Mayor Richard J. Riordan, are urging the city of Los Angeles to file
for bankruptcy.
Holding On To The Recovery
If you’ve been to a lunch meeting, a cocktail reception or most any
gathering of business people in Los Angeles in the last few weeks,
you’ve probably talked about the economy.
Suddenly, it seems, everybody’s asking: Is the economy really recovering? Do you see a turnaround in your business?
The picture is jumbled partly because economic forecasts now are highly
politicized. Liberal organizations and individuals are trumpeting a
Great Recovery, while conservative ones are dismissing any alleged
comeback as too meek or as a temporary bounce. Those divergent stances
are understandable since the economy may play a big role in the
critical elections this fall.
L.A. Story Needed a Happy Ending
The fight to keep LegalZoom.com in Los Angeles was a compelling story. After all, it’s refreshing and fairly rare to see City Hall work with business groups in a business-friendly way.
Los Angeles can seem numbingly inured to the routine in which businesses often leave the city because of high costs, while City Hall seems not to care. But about 18 months ago, when LegalZoom started making noises about moving, it was as if the community stood together and said, “No, not this one. Not this time.”
The Hollywood Chamber of Commerce, City Council President Eric Garcetti and the Mayor’s Office, among others, worked together for months to come up with a way to keep LegalZoom tethered to Los Angeles.
The group’s task was a clear one: They only had to figure a solution or a compromise to a high tax rate that LegalZoom and some similar Internet businesses suddenly had to pay.
Let Stockholders Do Their Share
Last week we saw two attempts to rein in executive compensation in Los Angeles. One attempt was the right way. The other was not only the wrong way, but it could be disastrous for the company. Maybe even lethal.
Let’s look at the right way first.
Barington Capital Group, a New York investment firm with an activist bent, last Monday sent a five-page letter of complaint to the chief of Ameron International Corp. in Pasadena. Barington, claiming to represent a group of shareholders who own 3.7 percent of the company, precisely and dispassionately laid out its argument. Its letter included a chart showing how the stock of the company lagged its peer group as well as two broader market indexes over five time spans.
Barington made other intelligent arguments. It said, for example, that Ameron should cut internal costs since they equal 6 percent of sales vs. only 2 percent at a group of peer companies.
Big Signs, Bigger Problems
Carmen Trutanich has complained that since he came into office as city attorney on July 1, he’s done little but cut.
He faced an immediate 18 percent budget cut. He cut 100 lawyers. Now he faces more cuts. The poor guy. He just keeps cutting and cutting. (Well, one thing he doesn’t seem eager to cut is his own $214,000 salary.)
But I’ve got a question. If he’s really hurting all that much, why is he spending so much time and creative energy on something as silly as his war on supergraphics?
Trutanich a month ago jailed a Hollywood building owner for draping a supergraphic on his building. The jailing was shocking enough, but Trutanich did it late on Friday so the guy would have to spend a whole weekend in the hoosegow. I mean, that’s deviously creative. And bail was set at $1 million. One million? For hanging a big sign?
DWP Hikes a Misuse of Power
Will someone please send Mayor Antonio Villaraigosa a gift subscription to the Wall Street Journal? Or maybe Investor’s Business Daily? (I wouldn’t object if you sent him the Los Angeles Business Journal instead.)
You see, there’s a recession going on. It’s a nasty one. It’s not a secret; it’s been in all the papers. But Villaraigosa apparently hasn’t read about it.
How else can you explain his proposal last week to assess a shocking surcharge on electricity customers of the city’s Department of Water & Power?
Hey, this is a time of deflation. Prices are going down, not up. Wages are being cut. Rents are being chopped, even before leases expire.
The only reason anyone should think – even for a moment – about raising prices now is if they absolutely, positively can’t avoid it. And the reason for raising DWP rates?
Pulling the Plug on Web Reviews
When I wanted to try out a restaurant or a store or hotel that’s new to me, I’d first go online to check out the reviews by patrons.
I wrote that in past tense for a reason: I don’t do that too much anymore. I grew too suspicious of supposed critiques by supposed customers.
You’ve probably noticed that many online reviews fall into one of two categories. Using restaurant reviews as an example, there are the flowery critics (“This breathtaking restaurant is amazingly superb in every imaginable way!”) and there are the snarky ones (“Expensive mush served by resentful dropouts in a hard-to-find place with sticky floors.”).
Reviews in the first category apparently are ginned up by restaurant owners or their mothers or their bankers. Those in the second apparently are written by competitors or ticked-off ex-employees.