Tag Archives: business

1. Produce defective cars 2. ? 3. Double profit!

“Profit Doubles at G.M., as It Strives to Move Past Its Litany of Recalls”:

General Motors’ quarterly earnings report on Thursday was noteworthy mostly for what it lacked: another big financial charge for safety recalls.

After running up special charges of nearly $3 billion in the first half of the year for safety problems, G.M., the nation’s biggest automaker, avoided additional charges for recalls in the third quarter.

While G.M. did incur $700 million in costs for fixing recalled vehicles during the quarter, the company had already booked those charges in previous periods….

By accounting for the bulk of its recall costs in the first half of the year, G.M. has turned a corner — at least financially — in its struggle to move beyond the worst safety crisis in its history.

So let me make sure I understand this:  GM is still blowing trainloads of cash fixing its mistakes, but they decided to declare that the money they’re spending now was actually spent earlier in the year, so that their official profit in the first half is below the real figure, and their official profit for the third quarter is above the real figure, and then they get a sunny headline in the New York Times saying they “doubled their profit?”

My grandfather the CPA would not approve.



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Nobody likes us

When Ted Turner told his father he was majoring in classics, he got an angry letter in response.  The senior Turner had little patience for anything theoretical, academic, or abstract:

There is no question but this type of useless information will distinguish you, set you apart from the doers of the world. If I leave you enough money, you can retire to an ivory tower, and contemplate for the rest of your days the influence that the hieroglyphics of prehistoric man had upon the writings of William Faulkner. Incidentally, he was a contemporary of mine in Mississippi. We speak the same language—whores, sluts, strong words, and strong deeds.

It isn’t really important what I think. It’s important what you wish to do with your life. I just wish I could feel that the influence of those oddball professors and the ivory towers were developing you into the kind of a man we can both be proud of. I am quite sure that we both will be pleased and delighted when I introduce you to some friend of mine and say, “This is my son. He speaks Greek.”

I had dinner during the Christmas holidays with an efficiency expert, an economic adviser to the nation of India, on the Board of Directors of Regents at Harvard University, who owns some 80,000 acres of valuable timber land down here, among his other assets. His son and his family were visiting him. He introduced me to his son, and then apologetically said, “He is a theoretical mathematician. I don’t even know what he is talking about. He lives in a different world.” After a little while I got to talking to his son, and the only thing he would talk to me about was about his work. I didn’t know what he was talking about either so I left early.

If you are going to stay on at Brown, and be a professor of Classics, the courses you have adopted will suit you for a lifetime association with Gale Noyes. Perhaps he will even teach you to make jelly. In my opinion, it won’t do much to help you learn to get along with people in this world. I think you are rapidly becoming a jackass, and the sooner you get out of that filthy atmosphere, the better it will suit me.

And here’s Ben Franklin, talking about a member of his philosophical society, the Junto, who just couldn’t manage to fit in:

THOMAS GODFREY, a self-taught mathematician, great in his way, and afterward inventor of what is now called Hadley’s Quadrant. But he knew little out of his way, and was not a pleasing companion; as, like most great mathematicians I have met with, he expected universal precision in everything said, or was forever denying or distinguishing upon trifles, to the disturbance of all conversation. He soon left us.

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John Lackey stands up for himself

From today’s Shaughnessy:

Is he willing to acknowledge that mistakes were made? “I guess. Sure. They’re being made in every clubhouse in the big leagues, then. If we’d have made the playoffs, we’d have been a bunch of fun guys.’’

He’s right!  We think we’re judging people’s behavior, but when we judge in retrospect, we approve and disapprove of the same behaviors, depending on the outcome.  See Phil Rosenzweig’s The Halo Effect for the same phenomenon described at book length.  A firm’s behavior will invariably be described as “daring” and “bold” when the company is doing well.  When the company’s fortunes turn sour, the same set of decisions are retrospectively reclassified as “reckless” and “foolhardy.”

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