Taken For A Ride

The Book of the Week is “Taken For A Ride, How Daimler-Benz Drove Off With Chrysler” by Bill Vlasic and Bradley A. Stertz, published in 2000.

This was a story not atypical in many ways, of any 1990’s merger between two big-name public companies. One difference, however, was that one was American (Chrysler), and the other, German (Daimler-Benz). Thus, there was the additional difficulty of minimizing employee friction in connection not only with the different corporate cultures, but with the different national cultures.

Another difference was that Daimler and Chrysler weren’t direct competitors– product-wise demographically or geographically, so there was little personnel duplication between them. So minimal employee layoffs were in order.

Initially, Kirk Kerkorian was a major shareholder of Chrysler. In April 1995, his group Tracinda made a tender offer for all of Chrysler, but unwisely publicly admitted it had yet to line up the financing for purchasing the company. The news brought out all the greedy stakeholders: Tracinda’s people, and institutional and individual shareholders of Chrysler. Other parties to the possible transaction included investment bankers, and consultants of various kinds– image, financial, M&A, and legal.

The media stoked public anger at Tracinda for its poor planning (which might have been deliberate, to rattle the target). The Wall Street Journal made the emotionally charged claim that Kerkorian would saddle Chrysler with a heavy debt load if his bid was successful. Of course, regardless of success, he knew he would boost Chrysler’s share price and make more money for himself.

There were various times when different male corporate leaders became angry at others, usually when they felt they had or were going to get, less power or money than they thought they deserved.

For example, anger was directed at Lee Iacocca, former turnaround artist of Chrysler around 1980. At the time of the Kerkorian affair, he was a paid corporate consultant to Chrysler but contracted with Kerkorian, too. So Chrysler revoked the stock options he still had. “He [Iacocca] was… madder than a hornet when he heard he would get only $42 million…”

By the mid-1990’s, auto industry executives knew their companies would be swallowed up by bigger ones if their own companies didn’t make acquisitions or team up with their competitors.

One other possible way to expand was to try to sell cars to Third World countries like Vietnam. However, the bulk of those Asians– who were still farming and fishing– would need to save their entire annual salaries for forty years (!) if they wanted to buy even the lowest-price Chrysler car, the Neon. Besides, their country still had few paved roads, anyway.

In summer 1997, the timing just happened to be right for Daimler and Chrysler to get together with a stock swap (rather than a tender offer– buying the stock from the shareholders to cash them out– make them no longer owners of the stock). Nevertheless, the months-long merger talks had to be kept secret because if the news was prematurely leaked, Chrysler’s stock price would skyrocket, making a deal prohibitively expensive.

Read the book to learn what, in summer 1999, prompted the following: “His aides had never seen Kirk Kerkorian so mad. In two days he lost almost $600 million on his Daimler Chrysler stock” plus all the other details of the whole story.

Women Who Work

The Book of the Week is “Women Who Work, Rewriting the Rules for Success” by Ivanka Trump, published in 2017. As is well known, Ivanka is Donald Trump’s daughter.

This volume described the business the author co-founded in an attempt to persuade females to vote for Trump for president in 2016. It was a redundant, wordy “do’s and dont’s” guide / bragfest (for the author, who used real-life examples from her own personal and professional life), interspersed with interesting research results, for women in the workplace. There were two words used grammatically incorrectly: “architect” was used as a verb, and “evolve” was used as a transitive verb.

Anyway, the Women Who Work website was started in November 2014. The tips provided were mostly common sense, like– listen to your coworkers at meetings, don’t gossip, lead by example, etc. One particularly curious line included: “… being authentic doesn’t mean candidly sharing every thought that comes to mind… using authenticity as an excuse to be unprofessional (“I am who I am!”).”

It was unclear at whom the author was targeting her vast generalizations and a few incorrect assumptions: experienced or inexperienced female workers. The author assumed that the reader had a female boss, worked with females, and worked with a team. She did provide some good tips for entry-level workers. However, she cited a 2014 study of Harvard Business School graduates in connection with gender roles in the home– but obviously, that group isn’t representative of the entire country.

Ivanka had to be vague, as every workplace is different. Her tips were unrealistic for women in male-dominated fields. Besides, the vast majority of employers in this country are still run by men. Ivanka also assumed the reader ran meetings, delivered presentations and managed a team. But if the reader had already reached a position with such responsibilities, she wouldn’t need this book.

The author wrongly assumed that the best way to get a job is through a recruiter. That might be true in some fields, such as information technology. But if the reader is a creative, independent thinker, she might get a job via thorough research on her situation, approaching employers directly, even if she has few or no contacts in the industry.

If the reader was laid off by her employer, Ivanka wrote, “Know that your manager probably doesn’t enjoy the conversation any more than you do and it may not have even been her decision to let you go.”

Letting employees go immediately is a far smarter policy than letting them know one, two or three months in advance of their firing but allows them to keep working. The latter scenario means the now-former employees will have zero productivity, will steal resources from their former employer, and will simply spend all their time looking for a new job.

Fired employees on the same level will be competing with each other for a new job so if they’re smart, they won’t tell the others they’ve been fired, but they’ll certainly be resentful, angry and possibly be sufficiently disgruntled to hurt their former employer.

The former employer thinks they’re saving money by not paying unemployment insurance– avoiding paperwork. They’re providing full pay for three months rather than half pay for six months. It’s actually more costly for them in the long run, in terms of personnel issues. And such former employers usually have unfriendly corporate cultures in the first place.

Ivanka said, “You’re never too old, experienced or far into your career to make a change.” That’s a lie, according to the AARP, which says that cases of age discrimination are on the rise. Nevertheless, young females just entering the workforce might want to read the book to get some tips.

I Love Capitalism – BONUS POST

The Bonus Book of the Week is “I Love Capitalism, An American Story” by Ken Langone, Cofounder of the Home Depot, published in 2018. This is the bragfest of a Wall Streeter, who appears to have bragging rights.

Born in September 1935 in Roslyn Heights, in New York State (on Long Island), Langone caught the entrepreneurial bug early in life. By college, he was selling stationery and neckties.

In the single-digit 2000’s, Langone helped recruit a CEO for Home Depot. In the short term, the CEO greatly improved the numbers that serve as indicators of a company’s financial success. However, the dollar value of the company actually decreased after a few years. His philosophy damaged the corporate culture by violating the company’s philosophical values.

For, the CEO failed to understand that in a customer service business like Home Depot, corporate culture drives the numbers. Employee satisfaction gets the same score as customer service. His replacement “… dressed like a plumber, and he looked like a nerd… [but] he became a rock star to the employees…”

Langone admitted up front that he had mentors and helpers left and right throughout his life. “Some guys who get to be wealthy like to brag about being self-made men. I can’t imagine they’re not leaving somebody out of that equation.” [likely, their daddy.]

Read the book to learn about who assisted Langone in his adventures in capitalism.

onassis (sic)

The Book of the Week is “onassis” (sic) by Will Frischauer, published in 1968. The biographer immediately resorted to a disclaimer on his Acknowledgements page. In compiling this volume, he sourced twelve books in his Bibliography, claimed he drew upon interviews, and fifteen years’ worth of his readings on his subject, conceding that “… in many instances the dividing line between fact and fiction is so blurred…”

Nowadays, an equally vague author, whether authorized or unauthorized– to write about a wealthy alpha male (especially a politician) whose crack public-relations mythmakers gloze over unpleasant details– usually has the goal of rewriting history. That did not appear to be the case, at least with this book.

Born in 1906 in Smyrna, Onassis was of Turkish extraction. He was six years old when his mother passed away. His father lucratively sold tobacco, grain and hides. Sent to a Greek Orthodox (Christian) school, Onassis excelled at water polo and, already fluent in Turkish and Greek– became so in English, French and Italian.

In September 1922, when hostilities flared up between the Turks and Greeks, Onassis helped his family (except for his father, who was arrested early on) survive by playing well with parties on both sides of the conflict. His good relationship with the United States Vice Consul (a neutral party) allowed him to reunite with his older sister, two younger half-sisters and stepmother in Athens, and then travel to bail his father out of jail.

The father was furious that Onassis wasted money to bribe the authorities to get him sprung, as he would’ve been released anyway. The Turks froze foreign bank accounts of the family’s business when they took over Smyrna.

In 1923, taking advice from friends, Onassis got a job with a telephone company. He got away with lying about his age (said he was older) and birthplace to obtain an ID card. Then he felt the need to strike out on his own. His persistence paid off after a number of frustrating weeks, when he was finally able to sell his father’s Oriental tobacco to the Argentinians, who had been importing it from Brazil and Cuba.

Onassis was eventually able to get both Argentinian and Greek citizenship with the use of his dishonest identity-document application. After presiding over a failed cigarette business, in the next five or so years, he made his first million dollars. It was unstated exactly how. It was stated that he made business contacts wherever he went, some of whom he obviously inherited from his father.

Onassis was appointed a trade diplomat for the Argentinian government, and got into the shipping business. He started with used ships with Greek registration, then, in the early 1930’s, to avoid petty bureaucrats, switched to Panamanian registration. Other advantages with the latter included financial transactions that were permitted to be made in any currency, that were tax-free.

Onassis revolutionized the industry by ordering the construction of monster-sized oil tankers– with unprecedented capacities of tens of thousands of tons. The Swedes built the boats, and J. Paul Getty shipped the oil to Japan. Onassis, unlike the competition, also built comfortable living quarters for his ships’ crews, to foster employee loyalty.

During WWII, Onassis broke into the whaling industry, selling whale meat to mink farms and whale livers to the Borden food outfit. After the war, he took a bride; she was seventeen, he was forty. They raised their family in Oyster Bay, Long Island.

Yet another unique shipping-related activity Onassis pioneered, involved a risk-management contractual arrangement for international shipping. Prior to its implementation, he thought he had done his due diligence.

Onassis consulted an attorney to make sure he would be complying with maritime law– as he was purchasing surplus vessels of the United States, but registering them under other countries’ flags for purposes of deregulated operations and tax evasion. Nevertheless, by the mid-1950’s, the American Maritime Commission questioned its legality, anyway.

Read the book to learn additional specifics on how Onassis became rich and famous, and stayed that way.

Bitter Scent – BONUS POST

The Bonus Book of the Week is “Bitter Scent, The Case of L’Oreal, Nazis and the Arab Boycott” by Michael Bar-Zohar, published in 1996.

The complicated history that led up to the situation which monster-sized international health-and-beauty-aids company L’Oreal faced in 1989 was most ironic. It dated back to the start of WWII, when two future executives of L’Oreal and Francois Mitterand (future president of France) became good friends, Nazi collaborators– pro-Vichy propagandists and sabotage-plotters, and then, when the tide of the war changed in 1943, allies of the Allies.

In March 1989, Jean Frydman (Israeli and French citizen, Jew, and former member of the WWII French Resistance,) was vice president of Paravision, his film distribution company. Unbeknownst to him, he resigned from the board of directors of Paravision in a fait-accompli by L’Oreal executives. He was ousted in absentia because he had business dealings in Israel.

Various business entities had significant financial interests in others, among them, Paravision, L’Oreal (based in a Paris suburb) and its international subsidiaries, Columbia Pictures, Nestle and Coca-Cola. L’Oreal executives felt the need to comply with a troublesome policy called the “Arab boycott” — considered ethically repugnant by non-Arab industrialized nations. L’Oreal executives were willing to go through a tremendous amount of trouble (most of which they didn’t anticipate) to comply with the boycott to enhance their business interests, but also arguably, because they were anti-Semitic.

The boycott imposed by the Arab League began in 1948 to financially strangle Israel by banning companies that did business with Israel, from doing business with any Arab countries. L’Oreal needed to get Frydman out of the way so it could say it did no business with Israel. But besides, there was a big-name cosmetics company called Helena Rubinstein located in Israel, with which L’Oreal was affiliated. The Arabs were pressuring L’Oreal to dispose of that asset as well, before it allowed lucrative trade with their side.

When Frydman was gobsmacked by his fellow executives and learned that top people at L’Oreal (including its founder) had been Nazi collaborators, hilarity did not ensue. Instead, an orgy of litigation, fishing expeditions, political machinations, palace intrigue, and of course, a propaganda war did.

Read the book to learn the details of this suspenseful, sordid story.

The Gambler – BONUS POST

The Bonus Book of the Week is “The Gambler, How Penniless Dropout Kirk Kerkorian Became the Greatest Deal Maker in Capitalist History” by William C. Rempel, published in 2018.

Born in Fresno, CA in June 1917, Kerkorian was the youngest of four children of Armenian extraction. In the first half of the twentieth century, he pursued his passions of amateur boxing and piloting planes. His entrepreneurial spirit led him to go into the chartered airplane business. He began associating with unsavory characters when he bet on sports in 1961. His FBI dossier related this factoid that was learned via wiretapping.

Kerkorian dreamed big and took the outrageous risks required to fulfill them. Thanks to his cultivating friends in high places, in the early 1960’s, he managed to borrow a steep $5 million to purchase a DC-8 (jetliner) to expand his transcontinental shuttle service for the U.S. military and other lucrative clients.

In 1963, Kerkorian got into the casino business. He launched an IPO for his holding company in 1965. Then he became aggressive in acquiring companies against their will. Like Western Air Lines. He also opened the biggest hotel/casino in the world in July 1969. He got international celebrities to provide entertainment on opening night just to rub it in the faces of the competition, such as Howard Hughes.

However, one casino Kerkorian took over had been run by the Mob. In late 1969, the IRS forced him to sell a yacht and a plane to pay back-taxes. In 1972, a German bank was dunning him for an amount of money he couldn’t possibly pay. He didn’t worry. He simply ordered that his financially struggling company, MGM, issue a ginormous dividend to himself, and all other holders of the company’s stock. This way, he could pay off his personal bank debt; never mind that MGM risked going bankrupt. Of course some shareholders sued.

Read the book to learn of Kerkorian’s many other adventures in business and pleasure.

Indecent Exposure

The Book of the Week is “Indecent Exposure, A True Story of Hollywood and Wall Street” by David McClintick, published in 1982. This volume with the provocative but misleading title had nothing to do with sex. It actually consisted of a suspenseful, albeit long story seen mostly through the eyes of Alan J. Hirschfield, the CEO and officer at Columbia, the movie company. It was about how a lack of honesty, the power of propaganda, and clashing egos basically resulted in the redistribution of wealth among the wealthy. This sort of thing happens all the time.

In February 1977, then-famous actor Cliff Robertson received a document saying he owed taxes in connection with a check he never received. He later found out that the check had been forged and cashed in his name, by David Begelman, a high-level executive at the aforesaid Columbia.

It was common practice for Hollywood studios to send movie actors checks for thousands of dollars (usually unreported to the IRS) that defrayed a small portion of their promotion expenses for a new picture. The IRS had just then begun cracking down on that taxable income. Robertson’s reaction set in motion a series of consequences that affected thousands of people; mostly financially.

Columbia was a public company, and the bad publicity resulting from news of a serious crime committed by one of its executives was a serious public relations problem. Hirschfield, who was on the board of directors, was told by an attorney that he had a duty to inform the executive committee, corporate counsel and the SEC after an internal investigation had been conducted.

As has been the case since the discovery of journalism/tabloidism, (supposedly said by Mark Twain), “A lie can travel halfway around the world while the truth is putting on its shoes.” Begelman’s friends in the Hollywood community (of which the check forger had many) rushed to his defense, having heard only vague rumors that described his transgressions in euphemisms. They really had no clue that he had actually committed several felonies, it turned out. They didn’t want to know.

The friends planted tabloidy messages in the media making the excuse “Everybody Does It” because they took unethical liberties with their own expense accounts, and made Hirschfield the villain, saying he was a power-hungry, vindictive executive, as he technically did compete for power with Begelman in the company hierarchy. Hollywood’s and the public’s gullibility in automatically believing in Begelman’s innocence and Hirschfield’s treachery is human nature.

At the board meeting that initiated the long, heated discussion that would determine whether Begelman was fired, Begelman acted like a prisoner on death row who had suddenly found religion. He implied he might kill himself if removed from his primary job. But actually, anyone who knows this kind of person knows that he would be too arrogant to kill himself.

A preliminary inquiry into Begelman’s history yielded more than one serious crime during his Columbia tenure, and previous lying and other worse misdeeds. Hirschfield argued for termination, saying Begelman was unlikely to change his spots, as dishonesty was a lifelong habit with him. Over the next few years, the Hollywood community and the public, however, still having heard only distorted soundbites that minimized Begelman’s sins, fooled itself into believing they weren’t that bad, and continued to defend him.

Interesting sidenote: In 1982, in a joking context, Hirschfield exclaimed to a female friend who was high on the corporate ladder, in front of some colleagues: “Female executives suck!” She laughed. Clearly, if that was uttered in 2018, hilarity would NOT ensue.

Read the book to learn of the consequences of the stupid actions taken by most of the main characters of this entertaining saga.

Moore’s Law / Elon Musk

The Books of the Week are “Moore’s Law, The Life of Gordon Moore, Silicon Valley’s Quiet Revolutionary” by Arnold Thackray, David C. Brock and Rachel Jones, published in 2015, and “Elon Musk, Tesla, SpaceX, and the Quest for a Fantastic Future” by Ashlee Vance, published in 2015.

The former biography described not only Gordon Moore’s life, but the histories and cultures of his ancestors, his wife’s family, and the places where he lived.

Born in January 1929 in Pescadero California, Moore was the middle son of three. His father spent most of his working life in law enforcement. He, his father and brothers went fishing and hunting. The family moved to Redwood City in 1938.

At eleven years old, Moore fell in love with chemistry. His “… adolescent hobby of making bombs and explosions” or maybe also the cumulative effect of his noisy hunting excursions were thought to have caused his hearing loss later in life. He wed his college sweetheart and completed a PhD in experimental particle physics at California Institute of Technology.

In 1953, the transistor was starting to replace the vacuum tube in various devices, like TV sets. It also became a handy component in military electronics. In 1956, Moore went to work for William Shockley– a reputable scientist but a psycho boss. Shockley had hubris syndrome and, with his friends from Bell Labs, convinced his company’s major investor to fund the development of a diode rather than the silicon transistor.

In 1957, feeling disgusted and entrepreneurial, Moore and seven of his colleagues left the company and, financed by venture capitalists, eventually formed Fairchild Semiconductor in Mountain View, California. What with the space race, aerospace computing was all the rage. Silicon was a substance that had the right physical properties to advance it.

At Fairchild, Moore formed a research and development group that competed with the manufacturing department. Unfortunately, his temperament was non-confrontational, and his avoidance behavior was bad for business. Fortunately, in 1968, he, Bob Noyce and Andy Grove sported the appropriate diverse set of personalities and skills that maximized profits in a new venture they formed, called Intel. Their strategy was to introduce cutting-edge products to the technology market and be the first to do so.

Intel went public in October 1971, but NOT on a “stock exchange” as the authors wrote. Only on NASDAQ (not an exchange). Moore wanted the company to make computer parts, but not the whole computer, or else it would compete with its customers, such as IBM. By the mid 1970’s, Intel had factories in Malaysia and the Philippines. Moore motivated his initial employees through bribery– stock options and a stock purchase program. He even bribed his own son to finish school.

Intel’s labor- and time-saving devices proliferated in everyday products like calculators, color TV’s, telephone networks, cash registers and watches, not to mention inter-continental ballistic missiles. And spaceships. The authors downplayed the role of video games in the advancement of computer components.

Moore wrote about a concept that played out accurately through the decades that came to be known as Moore’s Law. In 1976, the price of silicon transistors– which are put on memory microchips– was less than a penny. That price got lower and lower as technology got better and faster. Unfortunately, according to the book, this economic growth has run its course in the United States and is predicted to come to an end in the next five years or so.

Read the book to learn how Intel cheated by taking a page from Microsoft’s playbook (and partnered with it)– to become a monopoly– in order to dominate the PC world; what the billionaire Moore did after he was forced to retire (very reluctantly; hint– he engaged in philanthropy from which he required measurability and accountability); and much more about his company, lifestyle and family.

Born into a relatively wealthy family in 1971 in Pretoria, South Africa, Elon Musk is the oldest of three children. A voracious reader, he, like Isaac Asimov, was also an insufferable know-it-all, and thus became a social outcast. At about eight years old, he chose to go live with his psychologically abusive, rabid-apartheidist father when his parents split.

Musk engaged in the usual leisure pursuits of nerdy boys of his generation: Dungeons and Dragons, computer programming, rocketry and chemistry explosions. Being super-smart, he learned that the United States was superior to South Africa in terms  entrepreneurial opportunities. He therefore got Canadian citizenship through his mother’s ancestors, and then moved to the United States as a young man.

Musk attended college and graduate school in Pennsylvania. He studied business, physics and economics. He charged admission for alcohol parties to raise money to pay for his tuition. In 1995, he went into business with his brother. Four years later, their website start-up, Zip2, was sold to Compaq for a tidy sum. He then started and/or worked on other projects, including an internet bank, an electric car, spacecraft and devices that harness solar power.

Certain aspects of Musk’s personality in the workplace are comparable to various other famous people. Musk’s dysfunctional managerial style is a blessing and a curse. He, like the late Steve Jobs, is hard-driving on employees to the point of meanness. But his focus and workaholic business ventures have achieved what many said was impossible. His keen entrepreneurial instincts, similar to those of Bill Gates, have seen him through. Also like Gates, he has delivered on what he promised, but usually way over deadline.

When it comes to space exploration, Musk, like Freeman Dyson, shoots not for colonizing the moon, but for colonizing Mars. Musk, like Richard Stallman, believes in the free exchange of information. He truly wants to improve humanity so much so that, according to the author, he eventually shared with the world (!) the intellectual property of his electric car company, Tesla. In 2005, its first car was completed by a mere eighteen workers.

However, in 2007, Musk was very possessive of Tesla. Contrary the recommendation of an interim CEO, he stubbornly refused to cut the near-bankrupt company’s losses and sell it to an experienced international automaker. He was competing with not only overwhelmingly powerful and politically influential automakers, but also with military contractors and the oil industry.

Read the book to learn of two major automakers who have invested in Tesla; of how the Obama administration helped keep the company afloat; of the myriad benefits the world is deriving from Musk’s  innovations; and of Musk’s personal life.

Grand Delusions – BONUS POST

The Bonus Book of the Week is “Grand Delusions, The Cosmic Career of John DeLorean” by Hillel Levin, published in 1983. This volume described the adventures of a car company engineer and entrepreneur, not to mention swindler.

The book’s first chapter was a summary of his entire career, suspense be damned. The section on his makeover and marriages was disorganized and redundant. One more criticism– the author interviewed only the book’s subject twice, and listed no notes, references or bibliography.

Anyhow, born in January 1925 in Detroit, DeLorean was the oldest of five sons. His father was an alcoholic Romanian; his mother, an Austrian. He kept busy while attending Lawrence Tech in Michigan. He wrote for the school newspaper and was on the student council. He joined a fraternity, danced in night clubs and drove a fast car.

DeLorean held a series of jobs including salesman, trainee in a special program at Chrysler, engineer at Packard, head engineer and then general manager of General Motors’ Pontiac division, and by the late 1960’s, general manager of its Chevrolet division.

After departing from his full-time job under murky circumstances, DeLorean and his sidekick Roy Nesseth posed as entrepreneurs who executed crooked business deals. Victims included an auto-parts patent holder, a farmer/rancher, and a financially struggling Cadillac dealership, among others. By the mid-1970’s, the pair had a bunch of business failures and lawsuits against them.

Journalists were suckered into writing about DeLorean’s past glory as a brilliant engineer. He “… must have learned that if he didn’t say too much, the reporter wouldn’t bother to check any further… They were still looking for dirt on General Motors, and the ex-executive was more than willing to give it to them… The maverick auto engineer was too compelling a character to be deflated with investigative journalism.” DeLorean fooled people just like Bernie Madoff did, although not on as grand a scale.

When he started his own car company, DeLorean let his attorney create a complicated network of sister companies to deliberately obfuscate financial and legal matters. It took the entire second half of the Seventies.

A boatload of fundraising was required to pay lavish executives’ salaries, design their offices, choose a manufacturing site, build the factory, sign up the car dealers, etc. The author erroneously used the term “comptroller” instead of “controller” when discussing the pesky bean-counter who complained about the arrogant, greedy DeLorean’s huge monetary outlays on all things for himself. “As Dewey [DeLorean’s first controller] predicted, the improprieties grew exponentially with the influx of money from the British government.”

DeLorean was the type of man who fancied himself as having some of the traits of James Bond. A man such as this, with a big ego, marries a model or actress at least a decade younger than himself. Like DeLorean, other James-Bond wannabes have assumed prominent leadership roles, and become international celebrities. The list includes but is far from limited to: Charlie Chaplin, Cornelius Vanderbilt IV, John F. Kennedy, Nelson Mandela, Elon Musk and of course, Ian Fleming.

Read the book to learn the details of the combination of honest ineptitude and premeditated, nervy criminality in which DeLorean and his accomplices engaged in the context of how not to become an automaker.

Shoe Dog

The Book of the Week is “Shoe Dog, A Memoir by the Creator of Nike” by Phil Knight, published in 2016.

Born in 1938 in Portland Oregon, Knight showed irrepressible passion and optimism through years and years of financial losses. He got seed money from his father, and moral support from his mother.

By his mid-twenties, Knight possessed a quality education but still needed to find himself. He did some international traveling with a friend. He learned that Japan made running shoes he could import and sell in the U.S. So in 1964, he partnered with his college track coach– a legend in his social circle- to start a business. At that time, “running wasn’t even a sport.”

Even though he was a pioneer in an evolving industry, he returned to school to become a Certified Public Accountant, just in case the sneaker gig didn’t pan out. He was working around the clock at a full-time accounting job, and nurturing his shoe business. He and later, his employees, personally drove to track meets of schools in western states to meet and sell sneakers to scores of people– coaches, runners, fans.

Banks lending money to businesses at the time did not provide revolving credit facilities– they expected to see solvency. Knight believed in reinvesting every penny of profit into the business– thus generating an endless debt cycle.

He would borrow to purchase more sneakers, sell them, then repeat the process. He had to have competitive sales prices for his products; else they wouldn’t sell against Puma and Adidas. But they were selling like hotcakes. Starting in the mid-1960’s, before he rented a warehouse, he stored the shoes, floor to ceiling, in his bachelor pad. The business was initially named Blue Ribbon and the first shoe model was named Tiger.

At the 1972 Olympics in Munich, eleven Israelis were killed in a terrorist attack. The nation was again mourning yet more deaths, in addition to those of previous years– the Kennedys, Martin Luther King Jr., the Kent State University students, and of course, the tens of thousands in Vietnam. “Ours was a difficult, death-drenched age, and at least once every day you were forced to ask yourself: What’s the point?”

By 1976, Knight had changed his business’s name to Nike Inc. and had factories in New England, Puerto Rico and Taiwan. Unsurprisingly, his family life took a backseat to his workaholic lifestyle.

Read the book to learn of Knight’s interactions with his business partners and their personalities, and the million worries he faced every day in running his business, including products, manufacturing, warehousing, distribution, advertising, retailing, and dealing with lenders, employees, counterfeit goods, etc., etc. etc.; plus, what prompted him to take the company public.