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Home / Business

Biggest turkeys in US business: Musk leads the flock

By Allan Sloan
Washington Post·
21 Nov, 2018 08:42 PM5 mins to read

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Elon Musk has made some shocking business decisions this year. Photo/Bloomberg.

Elon Musk has made some shocking business decisions this year. Photo/Bloomberg.

COMMENT:

Thanksgiving is the quintessential American holiday. One of the ways I celebrate it is by writing about - bad pun intended - business turkeys. You know, the kind of thing that leads people to say, "What a turkey!"

There's been a terrific turkey crop this year - and that's without even including the various foul things that Donald Trump has done. But let's leave Trump's turkeys and those of his opponents for political writers to gnaw on, and stick with business turkeys.

Our lead turkey in the US is Elon Musk of Tesla Motors. Actually, he's a double turkey.

Musk sent out a totally nonsensical tweet in August, when Tesla was trading at $356 a share, saying that he had financing to take the company private at $420.

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Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

The number 420, as even a nonuser like me knows, is associated with marijuana. Which may be why Musk picked that price. Or maybe he was just high when he pushed "send" on his tweet. Who knows?

Musk's bogus claim brought the Securities and Exchange Commission down on him because it affected the market for Tesla stock. Musk then turned himself into a double turkey by declining to go along with a proposed settlement Tesla's lawyers made with the SEC.

Musk's withdrawal understandably enraged the SEC. So when Musk changed his mind again and decided to settle, the SEC whacked him for $20 million personally.

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I wonder how much weed - or how many turkeys to feed the poor - Musk could have bought with that $20 million if he'd kept his mouth shut.

Speaking of non-shut mouths, John Schnatter, the now-ousted founder of Papa John's, is right up there with Musk when it comes to double turkeydom.

But what Schnatter did is considerably nastier than Musk's ratty, rambling behaviour.

Schnatter, whose company was a major pro football sponsor, blamed kneeling National Football League players for the problems Papa John's had selling its overpriced pizza. At best, Schnatter showed poor impulse control; at worst, racism. That gobble-worthy move was followed by a second turkey - his infamous internal email, of which the less said, the better. For that matter, the less said of Schnatter, the better.

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Now, to big-company turkeys.

General Electric's board deserves its own flock. The board let Jeff Immelt, handpicked successor to Jack Welch (remember him?), do enormous deals that have now put GE at risk. Last year, the directors hired GE lifer John Flannery to replace Immelt and try to fix GE. It didn't work.

So this year the board fired Flannery. I hope Flannery's successor, Larry Culp, manages to fix GE. I think highly of Culp - I've done very well as a shareholder in Danaher, the firm he used to run, and I've even nibbled a bit at GE stock since his accession. Which may well end up making me a turkey, too.

At the very least, the GE board members involved in the Immelt and Flannery debacles should don turkey feathers. And perhaps return their directors' fees to GE shareholders. Or donate the fees to charities that help GE workers who have lost their jobs.

Now, two more turkeys from the world of finance.

The first is Toys R Us, the once-dominant retail chain that got slaughtered after the leveraged buyout crowd took it over and loaded it with debt.

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Maybe Toys would have ultimately gone under even without that debt because Amazon.com (whose founder, Jeff Bezos, owns The Washington Post) beat the stuffing out of it.

But at a minimum, the debt and subsequent underinvestment in Toys' business accelerated job losses suffered by thousands of workers who don't have much to be thankful for as the holiday approaches.

Then there's Sears, which finally filed for bankruptcy this year after a decade of being run by Eddie Lampert, a denizen of the hedge-fund world. In person, Lampert's a decent guy - I've met and talked with him a few times - but he wasn't a decent leader of the Sears-Kmart combo.

Sears' long decline despite various games Lampert had the company play with its assets so damaged his reputation that investors fled his funds, reducing his wealth. But his financial suffering doesn't approach that of Sears workers who lost their jobs, or Sears landlords and vendors who got burned.

Finally, there are some of my media colleagues, who were snookered into making a huge deal out of the supposed invasion of the United States by Central American migrants.

The "invasion" struck me as a nothingburger, but it involves things I don't know much about. However, when Washington Post media critic Margaret Sullivan said the coverage was much ado about nothing, that was good enough for me to feel comfortable handing some turkeys to people in my own business.

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And that will do it. Regardless of whether you share my views, let's enjoy the season, declare a truce and try to get along. A happy Thanksgiving to you and yours, and a happy winter festival of your choice.

- Allan Sloan is a columnist for The Washington Post.

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