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From the accounting woes and eventual demise of Enron to the pulling of J.C. Penney's provocative ads, 2001 was a blunder-ful year for American companies.
[an error occurred while processing this directive] By ROBERT TRIGAUX, Times Business Columnist
© St. Petersburg Times
published December 30, 2001
From the start, this year of corporate blunders was bound to be a lulu. Recession, an affliction not endured in the United States in some time, always prompts more silly acts of desperation by business.
When but in hard economic times would we see so many companies trying to break free from the clutter of modern advertising by pushing ads that are in remarkably bad taste or just stupid? I know J.C. Penney wishes in hindsight it had never run a TV ad of a mother urging her daughter to dress more provocatively for school.
When but in our first recession in a decade would we cheer a giant corporation in the spring for its remarkable financial success and cutting-edge vision, then recoil in the fall as it becomes the nation's biggest bankruptcy ever? (In case you've been living in the caves of Tora Bora, its name is Enron.)
Admittedly, I wondered after Sept. 11 if it was appropriate to look back (as I do each year) to chronicle the year's best corporate blunders.
But it has been a year rich in business miscues. The sadness of 9/11 is no excuse to let corporations escape without at least a reminder that bad business behavior, poor judgment and self-serving actions made in pursuit of the almighty dollar are especially uncalled for in a year marked by economic downturn and a shocking homeland attack.
And frankly, many corporate blunders are just plain funny. Anything that might make us chuckle right about now is okay by me. You just have to laugh, or else you'd cry, at corporate moves that seem scripted for Saturday Night Live.
What was Philip Morris thinking this year when it funded a report for the Czech Republic offering a solution to the high costs of pensions for an aging population? The self-serving recommendation: If every Czech smoked cigarettes, more would die young. The result? Fewer old folks. Lower costs. Problem solved! (Even Philip Morris couldn't talk its way out of that one and apologized.)
Sept. 11 in some ways made the year of gaffes and poor taste even worse.
Several major airlines jumped on the chance to lay off tens of thousands of employees while attempting to deny them basic benefits. And here's a Bronx cheer to those businesses that tried to make a quick buck off the terrorist attacks. And don't forget those soppy ads appealing to Americans to go out and buy literally anything to demonstrate 9/11 did not faze us. Did we somehow feel more patriotic snapping up the latest designer sweat shirt?
And there were the Internet pitch men hawking sales of Cipro-wanna-be pills or antibacterial sprays that might possibly, just maybe, kill any anthrax on your incoming mail.
There is a flip side. Sept. 11 also brought out some of the best in corporate America. The shutdown of the stock markets and their reopening one week later was a salute to hard work and enterprise. The zero percent financing offers initiated by General Motors, then Ford, then many other auto manufacturers really did help perk up our struggling economy this fall, even for just a while.
Those deals -- really huge price cuts for most folks who buy on credit -- are subsidies the automakers know quite well will come back to bite them in 2002 and 2003. They offered the deals anyway.
Sept. 11 also served as an overdue wake-up call to people that there's more to life than work, and maybe even than shopping malls. (That may be a partial answer as to why one of the big retail stories of 2001 was the business success of Wal-Mart and other discount chains and the struggles of many upscale stores.) Let's watch this beneficial movement with interest and see if it has made much of an impact a year from now.
In some ways, last year's look at the corporate blunders of 2000 feels like ancient history. Remember the promise of the Internet, symbolized by William "Capt. Kirk" Shatner hyping Priceline.com in garish TV commercials? No more.
Remember the swagger of General Electric's proposed $45-billion takeover of floundering Honeywell, the last bold act of GE chief Jack Welch's career? Never mind.
When was the last time you met -- no, when was the last time you even heard -- the words "day trader" when they were not a punch line? Now they are the answer to a Jeopardy! question under the category Ancient History.
In other ways, what was hinted at in 2000 blossomed in 2001. Pink slip parties, gatherings where recently laid-off tech workers could meet and swap resumes, job leads and gripes, spread from Silicon Valley and New York, finally reaching Florida and the Tampa Bay area this year.
Small wonder. Even before 9/11, U.S. job cuts announced in 2001 far exceeded the 1-million mark. After the attacks, layoffs went into overdrive. Some of the doozies include Motorola and Nortel Networks, both announcing layoffs approaching 50,000. Boeing planned to ax 38,600 (even as it moves its headquarters from Seattle to Chicago). American Express is saying goodbye to more than 14,000. And don't forget Enron.
Thank goodness, the national unemployment rate was low to start. This year delivered so many blunders, big and small, it's hard to know where to start. Clearly, a special award must go to the dysfunctional U.S. Congress. After 9/11 and the compounded impact on the national recession, the House and Senate dithered for months over an economic stimulus package. They failed to deliver.
Another grand-scale boo-boo was the fizzling of energy deregulation. California's nightmarish experience led the way, followed by the collapse of deregulation cheerleader Enron.
Let's give yet another round of applause to the ongoing, multiyear legal spat between Ford and Firestone over flipping Explorers and shredding tire treads. And let's watch the steady and sad diminishing of AT&T, once this country's one and only phone company. Will it even be around on its own this time next year?
On a lesser but more amusing scale, PepsiCo had to wince when teeny-bopper Britney Spears, hired at great expense to promote its flagship Pepsi soda, was spotted in public guzzling Coke and Cadbury's orange Sunkist.
And dare we go a season without a salute to the financial quagmire that is the Tampa Bay Devil Rays balance sheet? The Rays committed a remarkable percentage of the team's payroll to a handful of players who are injured, unlikely to play much any more or were traded but still received money from the Rays. My favorite: high-priced pitcher Juan Guzman who was injured in his very first (and last) game for the home team. At a time when Major League Baseball is clearly looking at the last-place Rays as a potential franchise to eliminate in the future, the team's financial pratfalls are especially glaring.
And how can we exit 2001 without a word about the grab-bag forecasts this fall by the nation's economists? Every day, it seems, another report is issued assuring us that the recession is light and recovery is imminent . . . No, wait, the recession is worse than we presume and recovery will be delayed at least six more months . . . No, wait . . .
There's far better consensus betting on the next Buc's game. I guess it would be rude to suggest we really don't know the depth and duration of a combined recession/terrorism response just yet.
One of my goals is to do away with this annual review at the end of a year when corporate blunders are few and too insignificant to be worthy of mention. We're not there yet, and I'm not holding my breath. Look at the bright side. Given this extraordinary year, things could be a lot worse. Happy New Year.
-- Robert Trigaux can be reached at email@example.com or (727) 893-8405.