CNN IN THE MONEY
Ford To Cut More Than 12,000 Jobs Worldwide; Interview With "Onion" Editor-in-chief Carol Kolb; Allegations Of Sexual Misconduct Cast Doubt On Schwarzenegger's Chances
Aired October 5, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.
JACK CAFFERTY, HOST: Good afternoon, welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY: This is not the kind of recall Arnold Schwarzenegger was hoping for. Just when it looked like he might be a shoo-in to win the governor's race out in California, suddenly allegations about his past could bring everything crashing down faster than a 500-pound barbell. That's an allusion, you see, to the fact that he use to be a body builder. We'll talk to an Arnold expert about whether he can overcome these latest revelations.
Plus, fake news but real profits: "The Onion" turned funny into money. Find out how the humor magazine keeps the laughs coming.
And, selling the sizzle: We'll grill George Foreman about the -- we're going to grill George Foreman about the George Foreman Grill. Now, there's a little play on words for you. And, how his name helped turn it into a best-seller.
Joining me, as always, on the panel today, CNN correspondent Susan Lisovicz, "Fortune" magazine editor at large Andy Serwer.
Not only is Arnold Schwarzenegger having problems, a recent "New York Times"/CBS News poll, bad news for president Bush as he gets to within a year of the re-election campaign. His ratings for the handling of the economy and for his foreign policy taking stunning drops in the last four or five months. What do you make of it?
SUSAN LISOVICZ, CNN NEWS CORRESPONDENT: Those are two heavyweight issues, let's face it. I mean, starting with foreign policy, no weapons of mass destruction, asking for $87 billion. More no Osama, no Saddam Hussein, continuing casualties. Oh, yes, and a lot of Americans are out of work.
ANDY SERWER, "FORTUNE" MAGAZINE: But, it's early yet. I mean, it's early. It's just year three. You got 13 more months to go here, and I'd like to know -- you know, how many people -- how many incumbent presidents at this point were in what position who won re- election. There's so much stuff to happen. Especially with the economy, Jack, I mean, with foreign policy, as well. So many things need to play out over the next year, and I think that's what really determines... LISOVICZ: Yes, and what democrats. I mean, no one has really grabbed the Americans' attention, yet. So, that's probably his best advantage, right now.
CAFFERTY: All right. Miles to go before we sleep on that issue.
Meantime, the California recall vote is just days away, and while the phrase Governor Schwarzenegger sounded more like a prediction than a joke at the beginning of this past week, things changed dramatically along about Thursday. The man who would be king of California suddenly facing some serious questions about his character, particularly when it comes to women.
Joining us from Los Angeles with the big picture on all this, CNN national correspondent, Bob Franken.
Bob, nice to have you with us. Thanks for joining us.
BOB FRANKEN, CNN CORRESPONDENT: The big picture?
CAFFERTY: Yes. How much trouble's he in, do you think?
FRANKEN: Well, it's hard to tell. You have to factor all of this into the broader context of the people of California actually hate Gray Davis. So, it becomes a question of do they want somebody who's surrounded by questions about his affinity for Adolf Hitler and questions about his treatment of women, do they want that man, or do they want Gray Davis? And, that's a real tough call for some of the people out here.
CAFFERTY: Isn't it tough, too, to figure out whether these polls are accurate? And what I mean by that is, this has never happened before. Nobody knows who's going to show up to the polls to vote on Election Day. So, while you ask these questions ahead of time, we haven't had a recall election out there in California before, and it's an unknown who's going to actually pull the levers, isn't it?
FRANKEN: Well, not only that, but you have 135 candidates on the ballot. You have, I think, 25 more who are in the write-in category. So, it's really kind of hard to come up with a model for a poll. What's fascinating to me, however, is that the polls in the large sense are pretty much in agreement. Their numbers differ, but they all seem to have shown trends. But here's the real fallacy: We don't know what the polls would reflect after all these allegations against Schwarzenegger because all of them have been taken prior to that. That of course came as this year's October surprise. But, you know, so, whatever happens is going to be something we didn't anticipate.
CAFFERTY: You've been around five or ten minutes in the news business, Bob. Ever get an assignment quite like this one?
FRANKEN: No. As a matter of fact, I haven't. A sustained show, this is -- this is California at its best.
CAFFERTY: Or worst. He said with a straight face. Bob Franken in Los Angeles. Thanks for joining us. It's easy to understand why Americans will happily fork over the bucks to watch Arnold Schwarzenegger blow things up in those "Terminator" movies, but for some of us, it's a little tougher to imagine him as a potential governor of the most populous state in the country, especially with the new allegations, now about his past, we were just talking about. To help us connect the dots on this we're joined by cultural anthropologist Louise Krasniewicz from the school of American research in Albuquerque, New Mexico. She has spent 22 years studying Arnold Schwarzenegger. Now, there's an assignment. And why America cannot get enough of him.
Louise, nice to have you with us.
LOUISE KRASNIEWICZ, ANTHROPOLOGIST: Thank you very much for having me.
CAFFERTY: 22 years you've been looking at this phenomenon, and he is that. What's your take on his chances to overcome, what some are just calling political dirty tricks in the closing days of the campaign, others are calling a serious character flaw in the way he deals with women?
KRASNIEWICZ: Well, in the 20 years or so that we've been studying Arnold Schwarzenegger, what we've seen is that he has permeated every aspect of the culture, so that we use him as a reference point for a lot of the things in the culture. And when allegations like this come up, Arnold has ways of getting beyond them. For example, for Arnold there is no past, and he says this in many of his films, but he also has said it in the campaign. He wants to give California back, not its past, but its future. So, that I think he has a lot of interesting ways of getting beyond this. We used to call Ronald Reagan the Teflon president, but Arnold has him beat on that.
SERWER: yes, Louise, it's interesting. A Schwarzenegger scholar, I never thought I'd be talking with -- interesting discipline you've he chosen, here. You know, they used to say that, and they still do say that Washington is Hollywood for ugly people. Not a lot of difference between politicians and actors, I think. I want to ask you, what difference, really, is there between being a politician and being an actor? Seriously.
KRASNIEWICZ: I absolutely agree with you that there is very little difference. What we as anthropologists do is look at a whole culture and see how the different parts are related. And in fact, politics is very much about putting on wonderful dramas to convince people of your point of view and Hollywood is exactly about the same thing, and not only that, Hollywood as -- is as political as the political scene. So, to make a false distinction between them is something we've done for our own comfort, but in fact they're very much related and Arnold is the one who has been able to get into that relationship between the two and play it better than anyone else.
LISOVICZ: So Louise, as a Schwarzenegger scholar, how has "ahnold" handled what would be, for anybody, even a seasoned veteran in the beltway, a time of great duress, you know, charges of groping women, the Hitler, you know, infidelity, all of this stuff, and then in the glare of the spotlight 24/7. Has he been direct? Has he been able to deflect this criticism? Has he been charming?
KRASNIEWICZ: Well, he's been absolutely charming. And for example, with the issue of groping women, Arnold will allow rowdiness, as he calls it, on the movie set, but he won't allow it in the political scene. So, that democracy requires rowdiness, but Arnold is very uncomfortable with that. So, I think we're looking at the wrong things. Yes, it's important that he may have had bad relations with women, but let's look more at the issue of what his ideas about democracy are. And, democracy is all about order and chaos and what side is he on. Is he on the extreme order side or does he allow the chaos that democracy requires?
CAFFERTY: A couple of thoughts on...
A couple of thoughts on the issue, as relating to women. He talked about doing these things on a movie set. Arnold Schwarzenegger's one of the biggest movie stars in the world. Young girls that work on the movie set as gofers and messengers and assistants to this or that are in a position of being able to be, perhaps, taken advantage of by someone of the stature and larger-than- life dimensions of an Arnold Schwarzenegger. If he's the star on the movie and you need the 175 bucks a week you're making working there to pay the rent, you're probably going to tolerate a little more than you if you were his co-star, and there's no evidence he's done those things with his co-star.
On the subject of the issues that face California, he only agreed to one debate where he got the questions in advance, and the criticism has been day after day since he got into this thing he hasn't had any specific answers on how to solve the state's problems. I'd be interested in your reaction on both of those.
KRASNIEWICZ: But that -- not having the specific answers is exactly why Arnold is so powerful because we feed into him our answers. He's been feeding us for 35 years a thing called "Arnold Schwarzenegger" that we liken to a virus, like a mind virus, that he is everywhere. Someone once called him a mold; he kind of gets into everything and you can't get him out.
So, when he...
CAFFERTY: I'll bet those girls he picked on call him something else.
KRASNIEWICZ: I'll bet they do, too. And you know, in terms of the Hitler thing, we used to say that Arnold was unique in this culture, but in fact, there are a couple of other icons that Arnold is obviously very aware of, who are similar. And we list them as, you know, Sigmund Freud, Mickey Mouse, and Arnold Schwarzenegger, and Adolf Hitler. And the fact that three out of four of these come from Austria says something about our culture, and that's what we're interested in. And whether or not he said these things to George Butler about Hitler is something that, as an anthropologist, I don't have the qualifications to look at. But, I can tell you the bigger picture, which is that the issues about order and chaos and democracy and society are something that we are looking at on the national level as well as California, and if we need to take Arnold Schwarzenegger seriously, not just as candidate for governor, but as what his implications are as a statesman in the larger culture.
LISOVICZ: What happens if Arnold Schwarzenegger doesn't win this campaign?
LISOVICZ: Does -- will this actually be good for his -- for his film career?
KRASNIEWICZ: Well, I'm not sure it will be good for his film career. But, we think that he will emerge as a statesman on the larger national scene. He's done this over and over and over again throughout the years. I mean, he's a waning action hero, you can't make too many more of those movies without looking really bizarre. But, he can pop up in so many different places, as he's done over the past 35 years, and he'll do it again. But, this time he'll come out as a statesman that we listen to on national policies. And that's something serious to look at.
LISOVICZ: So he's sort of a Ronald Reagan, using Ronald Reagan as a model, then, perhaps?
KRASNIEWICZ: Well, he used Ronald Reagan as a model on some level, but he has far surpassed Reagan not only in terms of being the great communicator and the Teflon president, but understanding all the issues that are of interest to Americans that he can plug into.
LISOVICZ: Well, we'll leave it at that.
SERWER: Well, he might not have really have surpassed Ronald Reagan. I mean, that's maybe a little much, isn't it? He's surpassed Ronald Reagan?
KRASNIEWICZ: As what? What...
SERWER: Well, in what sense? What did you mean by that? Clarify. I'm sorry.
KRASNIEWICZ: Well, Ronald Reagan never became a reference point in the culture or a prototype for a certain kind of behavior. Arnold is. He's the prototype for power, he's the prototype for influence, he's the prototype for success in the great American dream. And, so when people want to talk about those things, they talk about Arnold Schwarzenegger. And Ronald Reagan never achieved that status. The significance of that is that when you have someone who's a prototype like that they always become the best example. And then they provide models for behavior and for thinking. And Ronald Reagan never quite made it that way.
SERWER: Well, some people might disagree with that, I guess. That's the way I would respond to that.
KRASNIEWICZ: They could. They could.
LISOVICZ: Louise Krasniewicz, we'll leave it there, from the School of American Research, and safe to say a big Arnold Schwarzenegger fan. Thanks for joining us.
Ahead on IN THE MONEY the newspaper that says what other papers only think. We'll look at how "The Onion" blossomed into a national moneymaker.
Plus, the drive to compete: Detroit's "Big 3" are slashing jobs as foreign rivals grab their turf. We'll look at whether we're heading for the "Big 3" minus one.
And, selling the sizzle: Former boxing champ, George Foreman, tells us how putting his name on a grill turned it from a plain old appliance into a contender.
LISOVICZ: "The Onion" is, arguably, the nation's most popular humor publications and it makes a business of mockery, quite literally. With a weekly readership of over 2 million, "The Onion" rakes in healthy advertising profits from its website and print editions. They also publish compilations of their work, the most recent of which called "The Onion Ad Nauseam, Volume 14." It just hit bookstores.
Joining us to talk about how they keep America laughing is Carol Kolb, editor in chief of "The Onion."
CAROL KOLB, EDITOR-IN-CHIEF, "THE ONION": Hi. I'd really like to thank you for having me on. CNN and "The Onion", we both do news, so we're sort of in competition.
CAFFERTY: yes right.
KOLB: So, I want to -- it's very big of you to have me one.
SERWER: A lot of our programs are a lot of like the stuff that you do, actually, but unintentionally.
LISOVICZ: Well, and I think it -- is good humor -- doesn't it have to have some credibility to really be funny? I'm looking at, you know, one of your most recent headlines is Schwarzenegger -- "Schwarzenegger Campaign Running out of Movie-related Campaign Slogans." You know, I mean, there's some truth to it.
KOLB: Yes, there is. We try to -- at ""The Onion"" we try to do the news, and it's fake news, but it's just a little bit fake, it's pretty close to real.
LISOVICZ: And you've actually been printed -- one of Chinese -- China's biggest newspapers...
LISOVICZ: ...actually ran one of your articles.
KOLB: Yes. Yes, that was -- oh we loved that. The biggest newspaper in Beijing reran a story of ours, it was called -- it was about a congressman threatening to leave D.C. unless a new...
KOLB: ...state capital is built with a dome and box seating and, you know, really fancy. And they reran it, and they actually just reran our graphic of what the capitol would be and it was hilarious. We love it when that happens.
CAFFERTY: That's great stuff. Who reads this thing? Surely you've done studies to find out what 2 million out of 300 million of us delve into ""The Onion"" on a weekly basis.
KOLB: Yes, I think it's people at their offices, at work -- you know, every Wednesday, they should be at work, but they're online instead.
CAFFERTY: That's how I read it. I read it at the desk on the computer. It's great.
SERWER: Carol, tell us where "The Onion" comes from. I mean, what's the two-second history? You guys are from Madison, Wisconsin, originally.
KOLB: We're from Madison, Wisconsin. It's been around, even though it's pretty new to a lot of people, we've been around for 14 years, and we have a lot of readers on the web, but we're actually a newspaper in six cities.
LISOVICZ: You have advertising. That's interesting. Because you know...
SERWER: yes. Wouldn't you be scared if you were an advertiser?
LISOVICZ: ...as somebody who, you know, cut their teeth on "Mad" magazine, they never had advertising. They were offensive to everyone. How do you keep that sacred? In other words, can you offend your advertisers?
KOLB: Well, a lot of people are offended and we just simply don't care.
LISOVICZ: You pride yourself on it?
KOLB: yes. yes.
CAFFERTY: That's not a bad thing.
KOLB: We just -- we just -- it's kind of our policy
CAFFERTY: That's part of what you do, right? KOLB: yes.
CAFFERTY: Let's put up some -- you brought some headlines with you. Let's put up some of these. "Bush Seeks U.N. Support for 'U.S. Does Whatever it Wants' Plan." Obviously a takeoff on the president's foreign policy.
CAFFERTY: Do you get -- do you get calls from, like, people in the administration going -- that's not funny?
KOLB: Um. Not so much. We're sort of a one-way conduit. We put it out there, and we don't know what happens.
LISOVICZ: I like the one that says -- because this is in honor of Jack, who was born and bred in Nevada. "Nevada to Phase out Laws Altogether."
CAFFERTY: There you go.
LISOVICZ: ...the Wild West.
SERWER: That's how you've lived your life, Jack, right?
CAFFERTY: No, no, no. But they do have a little more liberal view of the world out there on the -- in the far west. And for example, when I was a kid, this is a true story. There was no speed limit on Nevada highways. The only thing you would get arrested for is driving beyond what they deemed the conditions. And I can remember Bill Harrah, who owned Harrah's Casino, actually before he died, built the Harrah's in Atlantic City. He had a red Ferrari, and I can remember seeing him on those desert highways between Tonopah and Las Vegas, running that red Ferrari at 165 miles an hour, and I mean, it would go that fast, nobody paid any attention. It was fine. You know.
SERWER: Hey. Hey, carol, let me ask you about -- about sort of the culture of this stuff. I mean, you mentioned "Mad" magazine, there's "Doonesbury." Where did you get your -- some of your ideas? I mean, what part of the -- tradition are you out of?
KOLB: Well, we took kind of a group of friends sitting around trying to make each other laugh. You know, we go through the news, and we're always looking for a new target to hit. But basically, it's just -- if we find it funny, we put it on the page.
LISOVICZ: Well, I also like -- I also like your headline on Enron. "Americans Would be Outraged if They Understood Enron Collapse." I mean, that's all about the DOJ, they can't understand it, right? That's why there's no indictments.
KOLB: Right. I wrote that story. I still don't understand it. I don't. (CROSSTALK)
SERWER: Good. Well, I wish I could say that.
CAFFERTY: What's your -- what's your background? Are you -- did you start out to be like a journalism major?
KOLB: Um, no, not at all. I was an English major in college, and then I just happened to meet people who were doing "The Onion" and it was funny and I wanted to do it, too.
CAFFERTY: You just got caught up in it and turned it into a career for yourself.
LISOVICZ: Is there one character or company that you find is so incredibly fruitful for inspiration?
KOLB: Um, the government.
CAFFERTY: Oh, yes, right.
KOLB: You can always go after that.
CAFFERTY: I mean, the Schwarzenegger story, I mean, it's like they gift wrapped this thing and laid it on the front door...
KOLB: I know, it's ridiculous.
CAFFERTY: ...said, you know, this is for you, have a merry Christmas and enjoy the rest of the year.
LISOVICZ: No rewriting necessary, right?
KOLB: I know, yes, it's getting harder to make fun of the things that are so ridiculous. We don't even know what to do with that.
CAFFERTY: You know, in California, right. They have recall election.
All right, Carol, listen, we appreciate having you on the program. Good luck with the future of "The Onion," I look forward to it every week in my computer in my office, I enjoy it very much.
KOLB: Thank you.
CAFFERTY: Carol Kolb, editor-in-chief. Thanks a lot.
SERWER: All right. Coming up, is the U.S. auto industry in danger of losing one of the "Big 3"? We'll talk about that possibility with the author of a new book about Detroit's problems.
And former heavyweight champ, George Foreman, will join us to talk about grilling, boxing, and more.
LISOVICZ: Let's look at the week's top stories in our "Money Minute." Two of the biggest Wall Street scandals are the focus of a pair of trials that began this week. First former Tyco CEO and $6,000 shower curtain owner, Dennis Kozlowski, is facing charges he stole $600 million from his company.
And, the case against former SCFB banker Frank Quattrone, also underway. Prosecutors say Quattrone destroyed evidence that would have highlighted the company's illegal use of hot IPO stocks to reward favored clients. Quattrone is vowing to make the unusual move of taking the stand in his defense.
Consumers don't seem to be very upset about the economy these days. Consumer confidence in September hit its lowest level since the war in Iraq. The news was worse than expected and sent markets falling early in the week.
And, guess whose names you'd find on that nationwide "Do Not Call" list. Some of the top telemarketing executives, that's who. The "Hartford Current" newspaper discovered the name of 11 top executives of the Direct Marketing Association, on the list. That, by the way, is a group now fighting the "Do Not Call" list in court. And, a delicious story, I know, for Jack and Andy.
CAFFERTY: I know, I -- one -- just one note. I was watching the Frank Quattrone video. He looks like a piano player in an old cowboy movie in some saloon. Got that handlebar mustache, got that hair part in the middle.
LISOVICZ: And he looks happy. He's smiling.
CAFFERTY: And, he's grinning on his way into court.
SERWER: Because, he's richer. You now, I understand his parents have been attending the trial. So, quite an eyeful for mom and dad.
CAFFERTY: There he is.
SERWER: But, these telemarketers -- there he is.
You want to talk about these telemarketers for one second, what's interesting to me is that, I just find -- you know, I don't get upset. Hypocrisy is a great American pastime, right?
CAFFERTY: That true.
SERWER: I mean, people are hypocrites, right? Of the first stripe. And you know, that's who they are.
CAFFERTY: I thought you were in favor of the telemarketers.
SERWER: I look the telemarketers.
LISOVICZ: Isn't it hypocritical, though if they say -- but the law allows you...
SERWER: Yes, it is, Susan.
LISOVICZ: The law allows to you call, but they themselves don't want to get the call.
SERWER: That's hypocritical, Susan. Don't you think, Jack?
CAFFERTY: But, it's still...
LISOVICZ: Well, yes. I could lean that way, as well.
CAFFERTY: It's still eventually going to be decided by the courts, is it not?
SERWER: yes, yes, yes, it's definitely going to go through there.
CAFFERTY: Now, we've had 50 million phone numbers registered on the list. We've had the congress of the United States break the world land speed record in passing a law in one hour that says this is a good thing to have this list, and then we have a couple of squirrelly judges going -- well, it might violate the humma, humma, humma. And now, potentially this thing could be tied up in court for a very long time.
SERWER: It's going to cause all those people to lose their jobs, Jack. That's why I'm against it. That's why I'm against it. It's going to cause all the telemarketers to lose their jobs.
LISOVICZ: And you need those telemarketers, because that's how you teach your kids phone etiquette.
SERWER: Phone etiquette, exactly
LISOVICZ: So, say "thank you," and then hang up.
CAFFERTY: What luck the telemarketer is who calls the Serwer house at Tuesday on 6:30.
SERWER: Having a little fun with Mr. Cafferty. All right.
On to our stock of the week. It's been a year since the Hewlett- Packard Compaq merger deal, and the results of the partnership are still in doubt. While CEO Carly Fiorina was recently named, by "Fortune" magazine, -- rah! -- as the most powerful woman in business, her company is facing some real challenges, including some less than stellar third quarter results. A look at HP's stock chart shows shares have risen steadily since the merger, but that's true of the tech market overall in the same period of time. There you go. So is the company really in good shape, and where does it go from here? That's why it's our stock of the week. We want to talk about that.
So what do you guys think?
CAFFERTY: Is there a risk in calling her one of the most powerful women in business and confusing that with the performance of the company she runs? And the way I mean that is, they just announced they're going to fire 4,500 employees. Granted, they went through that big merger with Compaq. At the same time I think they're signing leases on a couple of fancy new corporate jet airplanes.
SERWER: I know, I know.
CAFFERTY: And there's some question about the earnings. So I mean, I wonder if there's a mixed message goes out and if people are likely to get confused seeing her name as the most powerful woman in America, saying, oh, well, maybe I should buy some of that stock, maybe not.
SERWER: Well, you know, they put bad guys as man of the year or person of the year or woman of the year on "Time" magazine. So, you know, it's just someone who has a lot of clout. And it's an awfully big company. I'll tell you, she's a very controversial figure, a lightning rod, and I got to tell you, Jack, I'll be honest with you, some of it has to do with the fact, yes, it's true -- that she's a woman.
SERWER: And HP is an old school company. You know, it's silicon valley, but Stanford founded in 1939 by Messrs. Hewlett and Packard who were both richer than you-know-who.
SERWER: And there was some resentment.
LISOVICZ: Can this woman get in a word edgewise, guys?
SERWER: We'll let you talk about the women CEO, go a head.
LISOVICZ: I don't know that it says that much -- she's the most powerful woman in business. There aren't that many women at the top of "Fortune 500" companies. I'll give her this much. She was bold. She went ahead with that merger, and that was an ugly, ugly takeover battle, I mean when she had the descendants of Hewlett, right?
CAFFERTY: But is the jury in on whether that was a great idea?
SERWER: The jury is out, Jack.
SERWER: I mean, here's what's interesting about that. Just quickly. I mean, a lot of people said that tech companies had to be specialized, that the big full service model like Digital Equipment, you remember them, and all those others was dead. She made the company bigger, and now it looks like some of the other companies that are bigger, OK, like IBM and you see Dell getting into all kinds of stuff. So, maybe her idea is right. But, a lot of people getting laid off and the jury is definitely still out.
CAFFERTY: All right, see what happens. To be continued.
Just ahead on IN THE MONEY we'll talk to one expert who thinks Detroit's "Big 3" could soon become the "Big 2" and maybe not so big, either. We'll have more on the rough road facing the U.S. automobile industry.
Plus delivering a knockout punch on the bottom line: Former boxing great, George Foreman, has become one of the best salesmen ever. He'll be our guest to tell us what -- how he became champion of the merchandising world, selling those little grill deals. Put your chicken on there, cook it right up.
LISOVICZ: Ford this week announced plans to cut more than 12,000 jobs worldwide, as DaimlerChrysler geared up for its own set of layoffs. Most of the Ford cuts will result from plant closures in North America and Belgium. Deals with the United Autoworkers Union have opened the way for Detroit's Big Three to slash as many as 50,000 jobs over the next few years.
CAFFERTY: And that word comes at a moment when the business climate in the American car industry is about as congenial as feeding time in a shark tank. The Big Three automakers in Detroit are attacking each other in a vicious price war. They are losing ground to rivals from Asia and Europe.
And, in fact, our next guest says the conditions are so tough that by the end of this decade we might be talking about Detroit's Big Two. Micheline Maynard is the author of "The End of Detroit: How the Big Three Lost their Grip on the American Car Market." And she's our guest now.
Mickey I understand is your go-to name. It's nice to you have with us. Welcome.
MICHELINE MAYNARD, AUTHOR: Thanks. It's a pleasure to be with you.
CAFFERTY: You know, they've written Detroit's obituary before back in the 1980s. They said, well, there's no way that American cars can compete with the Japanese. And, in fact, at the time they were probably right. The Americans were not building a particularly competitive product.
However, that's changed. They went to work in the engineering rooms and in the production design facilities, and they're putting, arguably, as good a car as is on the market now as are built anywhere in the world. So, is it premature to begin writing off one of the Big Three American carmakers?
MAYNARD: Well, I don't think it is premature, and I'll tell you why. We got a preview of it in August, when Toyota went ahead of Chrysler in American sales for the first time. And I predict in my book that by the end of this decade, we could see one of the Big Three change substantially.
LISOVICZ: You know, Mickey, one of the problems, of course, is the unionized labor, which is so expensive for the Big Three when it competes with its overseas competitors. But another factor really hurting them is these incentives. For September, for instance, I saw GM was giving away $3,039 per vehicle -- it was in September -- versus Honda. Nothing. Giving nothing away except, you know, low-interest loans.
You know, I mean, it just can't help them ultimately, and you see them again and again with, each month, these very aggressive incentives that consumers like but ends up hurting the bottom line.
MAYNARD: Well, as Jack just mentioned, they've made so much progress in engineering, and they've taken a lot of cost out, and yet they're giving it away in these incentives, because the vehicles are apparently not what people are willing to buy without them. Just imagine if they were able to keep in profits the $3,000, $4,000, $5,000 in incentives that they're giving away, I mean, you'd see GM earning the kind of profits that Toyota earns.
SERWER: Well, Mickey, I think part of that is because of overcapacity. I mean, they're making so many cars and they have to get rid of them. They'll do anything to get them going.
I want to ask you a little bit about the car industry and how it relates to other businesses. I mean, aren't we moving to a scenario where the car industry is just like a lot of other American businesses, where things are designed here but made offshore?
MAYNARD: Well, Andy, actually, what's happened is a lot of production by the Japanese, the European and even the Korean companies is moving here. And I would argue that we actually have some of the best automotive factories in the world in the United States, with Americans building cars in America. They just aren't members of the UAW, and they aren't owned by Detroit.
CAFFERTY: When you, at the beginning of the conversation, said one of the Big Three, you didn't say it would disappear. You said it would change substantially.
MAYNARD: Right, I'm really talking...
CAFFERTY: Can I get you to explain that?
MAYNARD: I'm really talking more about another restructuring, another shrinkage. What I think could very well happen is we could even have a Big One. We could end up like Europe, where you have maybe one carmaker with 20 to 25 percent of the market, and then everybody else carves everything up.
You know, Toyota is within 100,000 units worldwide of passing Ford Motor Company, which would put it in second place worldwide behind General Motors, and I see the same scenario here in the United States. I think we could have a big player, and then several -- three or four even sort of mid-sized players, and then everybody else carving everything else up.
LISOVICZ: Is that a bad thing, though, Mickey? I mean, if there are a variety of companies -- say, GM is the last big one -- and then several other companies, is that maybe perhaps more efficient and better for longevity?
MAYNARD: Well, in the short term, it's going to hurt a lot. And, as you mentioned, there are a lot of job cuts coming and probably even more plant closings among the Big Three than have already been announced. But, in the end, if it results in companies that are more profitable, faster to the market, meeting consumer demands, with flexible manufacturing facilities, I don't think it's necessarily a bad thing for customers.
CAFFERTY: It sounds like a given that you think GM will probably survive all of this. Which of the other two might fall victim to the kind of thing you're talking about? Ford or DaimlerChrysler?
MAYNARD: Well, you know, in Europe they're already equating Chrysler to Rover which BMW owned and had to get rid of.
MAYNARD: And I'm pretty...
CAFFERTY: That's not a good thing, is it?
MAYNARD: Yes, I'm pretty concerned about Chrysler. I think Toyota easily could pass them, and then Honda even might go ahead of them. You could see Chrysler -- you know, a few years ago, before the merger, Chrysler had 16 percent of the market. They now have just a little bit over 11, and I think they could get smaller.
CAFFERTY: Wow! Interesting stuff. Mickey, I appreciate you joining us. I also should point out that you cover the automotive industry for "The New York Times." Mickey Maynard, who wrote the book called, "The End of Detroit," thanks for being with us.
Coming up, he knocked out dozens of opponents. Now he is socking away big bucks. George Foreman talks about his success in business, and the fact that he may go back into the boxing ring.
And later, military millions. We'll introduce you to an NCO who was home on leave and hit the lottery big, big, big time. Stick around.
CAFFERTY: Households all over America, George Foreman probably best known as the guy who is making dinner tonight. Foreman's name appears on a popular line of grills with a two-fisted selling point. They're billed as low on fat and high on convenience, and he has sold a bundle of them. He also happens to be a two-time world heavyweight boxing champ. He joins us now from Houston, Texas, for a look at how a famous name can move a product big time.
George, good to see you. Welcome to our program.
GEORGE FOREMAN, BOXER, PITCHMAN: Thank you so much. I'm happy to be with you.
CAFFERTY: We'll talk about these grills in a minute. But, now, you're 55 years old. Tell me it ain't so that you're thinking about climbing back in the ring. What are you, crazy?
FOREMAN: Well, actually, on January the 10th, I'll be 55. And that's when I wanted to get in that demographic of 56 through 65...
FOREMAN: ... getting back into the ring, show everyone. I've closed down 45 and 55. Now I want to show the world that there's not a death sentence to any age.
CAFFERTY: But, I mean, isn't that risky business, George? Come on now.
FOREMAN: Hey, it...
CAFFERTY: You're no spring chicken. You know what I mean?
FOREMAN: It certainly is risky. I deny that not. But you go every year to the doctors, or every half year. You get all of these examinations, and the doctors say you're just fine. And a lot of guys my age, what are you going to do with it? You just go home and wait for the next year? No. I want to dream.
SERWER: Hey, George, this is a news program, so we've got to talk -- I'd like to just talk about some of your fights myself and get some pointers. But I want to ask a little about your business. There are a lot of celebrity pitchmen out there, a lot of famous people, sports figures who have pitched products. I don't think there is anyone who has been as successful as you. So, what do you owe that to? How come you're so good it?
FOREMAN: Well, you know, I love doing what I'm doing. I love people and people love me. I'm that guy you look out of the window, your next door neighbor, you see him pulling up his pants 1,000 times, but they never move. I'm just that guy. He reminds me grandpa. My baby was just born. He doesn’t have any hair, just like him. I'm just that guy next door that you always pull for. A lot of times I'd get in the ring, they were more afraid for me than I was for myself, and that's why they pull for me.
LISOVICZ: Hey, George, no question that the Foreman Grill is a favorite of Americans nationwide, but I have to compliment you on your suit. Very nice savvy dresser. And that is your latest pitch, isn't it?
FOREMAN: Yes. You want to make certain -- I'm visiting with casual male for big and tall clothing. I want all of the big kids -- now, some of these babies are coming into the world six feet tall. And they go -- we take them to the shopping center and we can't find any clothes for them, especially my boys. And I want nice clothes for young people and guys my age. You can walk in. The sleeves won't be too short. Everything will fit you and it will fit you nice. And that's what I'm trying to demonstrate. Athletes should look good all the time. Success, look like it.
CAFFERTY: Any of your boys want to get into the fight game? I mean, I'm surprised we haven't heard from any of them by this time?
FOREMAN: I've tried so hard to get them into the ring, but they keep going to get educated.
CAFFERTY: Yes, there you go.
FOREMAN: As a matter of fact, I give them a sweat suit and they come home, it's just as clean. What are you doing? They said, "Dad, I can't mess up my clothes."
CAFFERTY: There you go.
FOREMAN: They get educated, and that's great. But I had one daughter to try boxing, and she was pretty good at it, Frida (ph).
LISOVICZ: And don't you have a daughter, Georgetta (ph), who is also interested in fighting?
FOREMAN: No, it's Frida (ph) George Foreman.
LISOVICZ: OK, Frida (ph) George, well, that's...
FOREMAN: And Georgetta (ph) I can't get interested. She works in television. She's got my name.
FOREMAN: But evidently that boxing gene, she didn't pick up.
LISOVICZ: Well, that leads me to the next question. You have 10 children, five of them are boys, and they're all named George.
FOREMAN: George Edward Foreman.
LISOVICZ: Don't you think that's a heavy responsibility to bear? You know, an Olympic gold medalist, the heavyweight champion of the world, the most successful athletic pitchman ever? Isn't that a pretty heavy...
FOREMAN: It's a burden, but you think about it. I've been hit on the head by Joe Frazier, Muhammad Ali, Michael Moore, Evander Holyfield. If I'd have named these people the same, I wouldn't remember anything. I was making preparation for memory loss, you know?
SERWER: I think I've had it rough working with Jack and Susan.
CAFFERTY: Hey, hey, easy.
SERWER: Easy. Hey, why don't...
SERWER: Hey, George, have you ever thought about going into politics? I mean, I think you'd be a natural at it.
FOREMAN: I've thought about it, and it's really interesting. But I had enough with people pulling for me. I went to Africa. Hi, Ali, boom-ayes (ph). I think if I ever live again, everyone is going to be pulling for me. No one against you. And once you get into politics, you've got one side and the other. I just couldn't deal with that again.
CAFFERTY: Yes, maybe I'm just a victim of my own generation. When Johnny Cash passed away here a little while ago it got me to thinking about all of the recording artists that I enjoyed as a young man growing up. When I was a kid, I mean, we had -- well, you and I are close to the same age, but, I mean, the fight game was colorful, high-profile hero-type guys -- George Foreman, Muhammad Ali, Joe Frazier. We had -- you know, the fights were huge events. Lennox Lewis is a pretty good talent in the ring, but, I mean, you know, quite frankly next to you guys, he's boring.
Who's going to be the next great heavyweight champion that anybody cares about to any great degree?
FOREMAN: We are looking for a hero now.
FOREMAN: There has been a drought here. Joe Lewis was champion. Then there was a drought. Marciano (ph) was a hero, then a drought. Ali stirred up everything, then a drought. Then that Mike Tyson came on with this other kind of a hero.
FOREMAN: But he's come and gone. We are looking for him. I'm searching for a heavyweight champion that I can get behind and pull for. We don't have anything yet, but there's something coming.
CAFFERTY: All right.
SERWER: All right, George, we're going to have to leave it at that. Thanks very much for coming on our program. George Foreman, the champ as always, and a champion salesman as well.
FOREMAN: Thank you so much.
SERWER: All right. Coming up, a major promotion for an Army sergeant. He went from a working stiff to a mega-millionaire overnight. We'll explain.
And if you want to explain something to us, like why the show rocks and rolls, or why it doesn't, drop us a line. The e-mail address is firstname.lastname@example.org.
CAFFERTY: Welcome back.
You know how the government's always touting the benefits of a military career, you know, Army of one? Well, for one man the Army has really paid off.
While on leave from his unit in South Korea, Army Sergeant Stephen Moore bought himself a lottery ticket down there in Fitzgerald, Georgia, where his family home is. And don't you know, the numbers came up and his ship came in.
Sergeant Moore will get $89 million before taxes; $89 million goes a long way at the PX. But a little advice: You'd better the money in the bank right away before superiors at the Pentagon use it all to buy a couple of hammers and a coffee pot.
CAFFERTY: Isn't that great?
LISOVICZ: Sergeant Moore is the most popular man in Fitzgerald, Georgia right now.
CAFFERTY: Oh, yes.
SERWER: You know, it's $89 million. This is better than working at Enron, right?
CAFFERTY: Yes, it is.
SERWER: I mean, you know what we should do.
SERWER: Let's get some more money for the troops. Let's, say, get $300 million from Dennis Kozlowski and you make him give it back. And then just divide it up for all of the people in uniform, right?
CAFFERTY: Not a bad idea.
SERWER: And there's a patriotic thing.
CAFFERTY: I know.
SERWER: It's the right thing. Come on, Dennis!
LISOVICZ: I just want to know, is Sergeant Moore going to go AWOL after this?
CAFFERTY: I wonder...
LISOVICZ: Is he going to go back to Korea?
SERWER: He's going to tell his C.O. what to do.
CAFFERTY: Yes. Well, can you imagine, though, all of a sudden you've got $89 million in your pocket, and the first thing you look forward to doing is going back to South Korea and peeling spuds when you got KP duty or standing guard duty out there along the DMZ?
SERWER: Yes, that's going to be tough...
CAFFERTY: Yes. I'd have to be exploring an early release, if you know what I'm saying.
SERWER: That's called the brig.
CAFFERTY: Yes. Well, I guess it is.
SERWER: You know?
CAFFERTY: Time now to check your questions about our e-mail question of the week -- not your questions. Your answers, actually. See, we ask the question and then we depend on you for the answers. It's a two-way kind of a system we have there.
And our question was, whether the public schools needed to be fixed? And if so, how? And here are some of the suggestions.
Richard from California wrote this: "For health care, we are led to believe that Americans want more choices. But in education, the government wants one size to fit all. Centralized tests only leave teachers less time to educate. We should separate schools into different categories and allow vouchers to increase competition."
Sharon writes: "The school system needs to resume the responsibilities that used to be met by parents. With both parents working, we need to enroll the kids as 3-year-olds so that they don't start school too far behind."
And Joan in Pennsylvania wrote this. She says: "It's all the parents' fault. Teachers are frustrated, because they have little control over students whose parents don't hold their kids responsible for homework, their actions or common courtesy. Schools and parents need to apply more discipline"
And that brings us to this week's e-mail question of the week, which is this: Do you think President Bush will be re-elected next year? Send us your answers to email@example.com.
Thanks for joining us for this edition of "In The Money." Our thanks also to our regular gang here on the panel, CNN Financial Correspondent Susan Lisovicz and my pal, "Fortune" magazine editor at large Andy Serwer.
Join us next Saturday, 1:00 eastern, Sunday 3:00 eastern. Two new editions of "In The Money." And during the week you can catch Andy and me five mornings week on "American Morning" beginning at 7:00 eastern time. That's 4:00 in the morning on the west coast. Set your damn alarm and get up and watch. It's a fine program. See you next week.
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