Tuesday, June 21, 2005

Giving Us the Business

I don't know if it is just me getting older, but I am becoming increasing annoyed at the quality of writing I am finding in both print and electronic media these days. I am not talking about grammar, punctuation, or syntax. I am talking about the shallowness of the thinking that seems to underlie so many articles. It is bad enough that both Time and Newsweek have degenerated to the point where I am not sure whether I am reading a serious news magazine or a tabloid aimed at Wal-Mart checkout lanes. And if I have to turn past another "Special Advertising Section" I think I will puke. But it is what passes for business writing these days that make me wonder about the future of journalism. Please allow me to cite but two examples.

apple computerApple Computer, has been the subject of almost unbelieveably shortsighted and ultimately inaccurate business reporting by people who seem to have decided on their conclusion and then chose their facts accordingly. (sound familiar?) For at least ten years now business writers and computer industry observers have decided that the company must be going out of business, sustained only temporarily by cult-like zombies who don't have better sense than to just do what everybody else seemed to be doing, buying a generic Wintel PC. In fact a website has been keeping track of the Apple deathwatch for a number of years. The Mac Observer currently cites 46 "declared dead" articles since 1995.

Inconveniently, the company not only has survived, it is thriving. These articles seem humorous in hindsight until you think about how many people shied away from buying an Apple computer because of them.

Now with the obvious success of the iPod & the iTunes Store (Apple is no longer a computer company) and the pending switch to Intel processors (The mystique is gone and the cult will disappear) these same geniuses are predicting again the fall of Apple.

Yes, Apple has had its market failures. That sometimes seems to be the price of innovation and leadership. And as long as most PCs are bought for someone else to use - the enterprise market - price and not value will be all some of us choose to see. But one should remember it was only when Apple was run by suits - business types - and started to do what all the business analysts wanted them to do did they go in decline.

Happily for Apple and their customers Steve Jobs is back, that decline is over, and for those of us who simply want the best computer we can afford, we still have a choice; no thanks to Business Week, Money Magazine, PC Magazine, TheStreet.com, and just about every financial analyst on Wall Street.

Check out today's "Apple Courting Core Meltdown" at TheStreet. Core Meltdown? Why doesn't the author take one step further and write "The Possible End of Life on Earth" or "The Sky May Fall"? Yes, there are risks associated with the move to Intel chips. But this article is a great example of the usual glass always being - at best - half empty at Apple Computer.

If you want to really understand Apple, and the poor coverage they get in the business press, I suggest either of the MacJournals.

gmDid you know that General Motors vehicles have included in their sticker price between $1,500 and $2,000 of pension and medical costs while their (foreign) competitors generally have much less? Did you know that is one of the main reasons it lost $1.1 billion in the first quarter of 2005? Well if you did not know you certainly have not been paying attention to the business news recently. For the past couple of months we have been reading over and over this same story in the business press.

GM is now blaming their financial weakness on workers who accepted their generous compensation packages. In effect GM is seen as the victim of it's past labor agreements. Further, if the UAW does not rush back to the bargaining table and see to it that the workers give back some of this money there will be hell-to-pay. After all, what is good for General Motors.... Even George Will became an economist for a day with this message.

I suspect what we have here is a concerted effort by GM management and their PR flacks to put pressure on their union to negotiate money back into GM coffers. So business writers are fed all this pension and medical cost smoke and mirrors, the public believes it is getting expert inside analysis, the publishers their eyeballs, and hopefully - for GM - political pressure will mount on the union. Could George Will really be a shill? You betcha.

EconomistAt least one business magazine refused to play along. The Economist included in their June 9th issue an article titled "The Lost Years." It said in conclusion that,
The carmaker lost $1.1 billion during the first quarter and will not even make a forecast for the rest of the year. The reason for the collapse into loss was a slump in revenues caused by weak products.
The general thrust of the article is that GM has not been making cars good enough to succeed in the market place. That, coupled with other management induced failures, accounts for their current predictament. I suggest you read this article for a whiff a clean, non-Detroit, air.

I also suggest if you want to spend some time in the fountain of youth, drive a current GM car. I drove a recent Pontiac Grand Prix yesterday. It was like 1985 all over again.

GM is a classic example of the failure of success. Not even fawning writers can put this humpty dumpty back on that wall.

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