Lehman Brothers Dick Fuld

Former Lehman Brothers employees keep getting a pitchfork in the butt. The latest round of abuse comes from Dick Fuld, Lehman’s former CEO, in response to a bankruptcy examiner’s report released March 11, 2010.

Ex-employees were understandably pissed by the 2,200 page report. A March 13th Wall Street Journal article titled “Lehman Report Confirms Former Employees’ Suspicions” begins:

“For Ted Larkin, a Lehman Brothers technology executive when the firm collapsed, the revelations from a bankruptcy examiner Thursday reinforced his angry hypothesis: That it only took a few executives to put thousands of people out of work.

“It confirms my feelings that the majority of the firm were honest, hard-working people that suffered from the hubris of a few individuals,” said Mr. Larkin.”

Yet four days later, the New York Post reported that Fuld – The Boss – felt vindicated by the same bankruptcy examiner’s report. The article reads:

“Fuld privately believes that the report by examiner Anton Valukas provides proof that he did nothing illegal as he steered Lehman through a financial mess that ultimately led the firm to file the largest bankruptcy in US history…”

Confused? Let’s give Dick some help.

Dear Dick:

Illegal or not, you have screwed thousands of employees. You have trashed the financial world. The ripple effect has been more like a tsunami. Vindicated? PLEASE go to dictionary.com and read the definition, Dick.

Sincerely,

The Dead Company Club

Laurie Phillips is a member of The Dead Company Club. She hasn’t yet seen a company that was destroyed by excellent leadership.

Post from: The Dead Company Club The Dead Company Club is a hobby of the writers at Sundance Research. Sometimes they just need to write about their own stuff.

Lehman Leadership Vindicated?

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“You are not alone.”                                                                                                                                         – Michael Jackson

In a Sigourney Weaver movie, “You are not alone” is a lot less comforting than it is here. There are lots of us, we who “used to work at…” Some of our former companies made a big enough splash with their final cannonball that they’ll be remembered for some time. In that spirit, here are two great articles that take a roll call of the best known companies who no longer exist.

2001 to 2009 was fertile ground for famous corporate bankruptcies.  Gary Bartzel begins with Pacific Gas & Electric in 2001 and covers the great collapses that hit the energy, transportation, communications and financial industries. He ends in 2009 with the annihilation of the Fortune 500 and business as a whole. Just kidding. Only part of the Fortune 500 tanked, but almost all the U.S. auto industry is vying for inclusion.

BloggingStocks.com also took a walk down memory lane and featured this group of defunct companies.  There are some classic names like DeLorean and Pullman (as in choo-choo). There’s a catch-all for “dot-com busts”. They didn’t forget the criminals’ hollow empires like ZZZZ Best, the Ponzi scheme disguised as a carpet cleaning company. Carpet cleaning? Pretty unimaginative but, on the plus side, the work jumpsuit fits about the same as the prison jumpsuit.

BloggingStocks.com reached way back, reminding us that company closures are not a new thing. Remember Standard Oil? Liar. It was shut down by the Sherman Anti-Trust act in 1911. Those wily bastards  split the company into three parts and named them Chevron, Exxon and ConocoPhillips (no relation). Perhaps this arrangement allowed Standard Oil to live on and compete with…itself?

There are more classic bits of Americana such as Burger Chef, PanAm and American Motors. If you were alive at the time, you can’t forget the Gremlin. How about that Pacer? AMC was a specialty manufacturer of truly ugly cars.

Ahhh, the good old days. What other companies do you remember fondly?

Post from: The Dead Company Club The Dead Company Club is a hobby of the writers at Sundance Research. Sometimes they just need to write about their own stuff.

You Are Not Alone

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“Life’s not fair, is it.” James Earl Jones in The Lion King

2008 was a bad year for Lehman Brothers. It was also the last year for them. Their bankruptcy has been blamed for causing the entire recession and/or depression (your choice), making them the first domino of the worldwide financial crisis.

Who Pushed The Domino?

If Lehman was so central to the US financial system, why was the firm left to die? In the triage of bailout they were tagged as “too small and sound to save,” according to The Spoof, a news site specializing in satire and parody. It’s fiction but my enemies tell me that many a true word has been said in jest.

Overall Business Practices Were Too Sound

“Negotiations broke down between Lehman Brother representatives and that of the feds for a federal bailout when the accounting books disclosed that Lehman Bothers did not qualify under the Bush’s “Too Big to Fail” economic doctrine because their capital to debt ratio was too small and their overall business practices to sound.”

“It’s a race to the bottom”

It goes on to say:

“Rogers [CEO of a multinational bank] advises other CEO not to let on that they are in the market for bad loans, or worse yet, financially sound. As now days, it is considered a sign of weakness.

“Tell me how a financially sound institution is supposed to compete with unsound business practices that get rewarded with bailouts from the federal government,” rhetorically asked Rogers. “It’s a race to the bottom and it’s on.”

Work until You’re 90

While I don’t believe Lehman was singularly responsible for starting the financial crisis, should they have been bailed out? Should any of the other financial services bailouts have happened? Did these bailouts actually save any jobs? Or did they just guarantee that we’ll be working into our 90’s in order to pay back the national debt?

Would a bailout have let your company recover or should management have been forced to make tough business decisions to adapt to the economic conditions?

Laurie Phillips never really applied her degree in economics until this past year and now she wishes she had majored in art history. She writes for Sundance Research when she’s not pondering the economy’s effect on people.

Post from: The Dead Company Club The Dead Company Club is a hobby of the writers at Sundance Research. Sometimes they just need to write about their own stuff.

Was Lehman too small to save?

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