COURSE CONNECTOR

 ARTICLE SUMMARIES AND QUESTIONS

"The Auto Bailout: How We Did It," pp. 55-71: Steven Rattner was as bemused as anyone as to why he was appointed to President Obama’s auto task force. With little knowledge of manufacturing in general and autos in particular, the head of the investment firm Quadrangle Group hadn't even been to Detroit in three decades. Nevertheless, Rattner accepted the position, leading a team responsible for the hands-on work involved in rescuing two of America’s Big Three automakers. From the start, Rattner and his colleagues were appalled by the stunningly poor management they found, particularly at GM, where they encountered perhaps the weakest finance operation they had ever seen in a major company. That fact, combined with Chrysler's lack of a single Consumer Reports-recommended car, indicated that the case for a bailout for either company was weak. However, as the team surveyed the interconnected web of finance companies, suppliers, and related businesses that would be impacted by the likely alternative — liquidation — it was convinced that restructuring both companies through bankruptcy proceedings was the only responsible choice. Operating under TARP, the team brought the automakers swiftly through the bankruptcy process. Though a full recovery is far from assured for either company, Rattner and his team are satisfied that they have given them the best possible chance.

Students examine the efforts of Steven Rattner and the White House’s auto task force to bring GM and Chrysler successfully through bankruptcy.

Discussion Questions:

1. Why was Steven Rattner initially reluctant to join the auto task force? What persuaded him that it was the right thing to do?

2. What were the respective arguments for rescuing Chrysler or letting it go? Why did President Obama ultimately decide to support Chrysler?

3. Why were the reactions of former GM CEO Rick Wagoner, the GM board of directors, and the general public to the task force's dismissal of Wagoner and hiring of Fritz Henderson as the new GM CEO so surprising to Rattner? What justifications does he offer for the government's involvement in this and other decisions affecting GM?

"40 Under 40: He Measures the Web," pp. 94-98: Omniture is somewhat unique in the world of tech. Unlike most tech companies, the 13-year-old Omniture, whose subscription-based software gives companies live, detailed digital traffic data, is based in Orem, Utah, rather than Sunnyvale or Mountain View, Calif. Instead of having a diverse staff, Omniture primarily employs white males. And on Monday evenings, the entire office generally clears out by six. All of these distinctions are the result of Omniture founder and CEO Josh James's — and 75% of his staffers' — religious faith. As practicing Mormons, they congregate in Utah, not far from Brigham Young University (James is a BYU dropout); they lead fairly traditional lifestyles, with the women staying home to raise children while the men work; and they observe family devotion every Monday evening. None of this, however, has stopped Omniture from making some serious Silicon Valley-like money, or James from taking the twenty-sixth spot on FORTUNE's annual 40 Under 40 list. James is at the center of one of the fastest-growing areas of business today: measuring the web. It's so in demand, in fact, that Adobe just shelled out $1.8 billion to buy Omniture. Whether the quirky James will fit in as a senior vice president at Adobe remains to be seen.

This article profiles Josh James, the founder and CEO of the web analytics firm Omniture, which measures Internet traffic and sells the data to blue-chip clients.

Discussion Questions:

1. Why is the information that Omniture makes available to customers so valuable? How does Adobe plan to integrate Omniture's business into its own?

2. What happened the last time Josh James tried to sell Omniture (then known as MyComputer.com)? How did the experience ultimately help the company grow and evolve?

3. Why was James comfortable making a deal with Adobe? Do you believe Omniture will thrive as an Adobe property? Why or why not?

"Obama & Google: A Love Story," pp. 104-112: Of all President Obama's admirers, his most ardent may just be the folks at Google. Though he has a decidedly anti-corporate worldview, Obama seems to have found a kindred spirit in Google. Google's top executives share the President's cool self-confidence and almost scary intelligence. Like Obama, they believe in increasing support for U.S.-educated engineers, expanding Internet services to poor and rural areas, and codifying "Net neutrality" rules that prohibit network providers from prioritizing traffic and content that run on their networks. Further, Google staffers were among Obama's strongest financial supporters during his presidential campaign, and in turn, at least four current and former Googlers have earned appointments in the administration. But all this cozy behavior has unnerved more than a few observers. Privacy hawks, consumer advocates, right-leaning political groups, and competitors in the tech, media, and communications sectors are starting to fret about the company's growing market power, its Big Brother-like trove of information, and its behavioral advertising practices. Regulators from the Justice Department's antitrust division and the Federal Trade Commission have been asking questions too. As upcoming battles over regulation of the Internet play out, and politicians seek to monitor, discipline, and regulate the company, expect Google's kinship with the President to be sorely tested.

Students take a closer look at the relationship between President Obama and the $22-billion-a-year online-advertising behemoth, Google.

Discussion Questions:

1. Why did the appointment of Google's former head of global public policy, Andrew McLaughlin, as deputy chief technology officer raise eyebrows? In your opinion, does this appointment comply with the President's pledge to close the "revolving door" of industry regulation? Explain.

2. What is Google's challenge now that its profile in Washington is so much greater than it was before President Obama took office? How is the company trying to position itself in order to stay above the political fray?

3. What concerns does Christopher Calabrese, counsel for the American Civil Liberties Union, express regarding Google's stores of data? What defense of Google's practices does CEO Eric Schmidt offer?

"The Fight Over Michael's Millions," pp. 114-127: While the late superstar entertainer Michael Jackson had many obvious talents, business management wasn't one of them. Just two years ago Jackson was headed for financial insolvency, a consequence of having barely worked in nearly a decade, a period during which he fought child molestation charges and became better known for his eccentricities than his musical skills. Though he made some savvy investments early in his career, he piled up about $435 million in debt by the time of his death through a combination of careless financial decisions, an ever-changing parade of business advisers, a mountain of legal bills and other distractions, and uncontrollable spending. Fortunately for his mother and three children, to whom he left the bulk of his estate (currently valued at about $100 million if it were to be liquidated today), Jackson's career is experiencing a posthumous revival unlike any seen since Elvis Presley's untimely death in 1977. This year his estate stands to bring in close to $200 million from music sales, merchandising, and book deals; an exhibition of memorabilia; and a documentary based on rehearsal footage for his planned comeback. Properly managed, Jackson's estate ought to be worth multiples more in time, ensuring a brighter future for his family.

In this article, students read about Michael Jackson's unprecedented posthumous success and its likely effects on his troubled estate.

Discussion Questions:

1. How did Michael Jackson come to acquire ATV Music Publishing? Was it a profitable investment for Jackson in the long run? Explain.

2. How was Jackson able to avoid foreclosure on his Neverland ranch in 2008? What do you think will happen to the property now? Explain.

3. Do you believe AEG is a "corporate villain," as AEG Live president Randy Phillips contends the company has been portrayed since Jackson's death? How will the company recoup its losses from Jackson's unrealized comeback tour?