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Oil Prices Hovering At Five-Month Lows; Ford Motor Company Hires Outsider To Be New CEO; Economic Aftermath of 9/11; Big Changes In Store For Some Big Retailers; Controversy Over How to Mark September 11

Aired September 10, 2006 - 15:00   ET


ANNOUNCER: From New York City America's financial capital, this is IN THE MONEY.

ANDY SERWER, EDITOR-IN-LARGE, "FORTUNE" MAGAZINE: Welcome to IN THE MONEY, I'm Andy Serwer sitting in for Jack Cafferty. Coming up on today's program, fueling hope. Chevron says it successfully drilled for oil in the Gulf of Mexico. Find out what that means for prices already sinking at the pumps.

Also ahead from two wings to four wheels, the CEO of Ford is stepping down to make room for an airplane guy. Find out if the carmaker has survival lessons to learn from Boeing.

Plus, the big switch, hundreds of U.S. department stores will turn into Macys this weekend. We will look at whether the department store is an idea with the future.

Joining me today is Allen Wastler, Allen good to see you.


SERWER: Let's talk about some news regarding terrorism, the president has transferred 14 al Qaeda operatives to Gitmo and wants to put them on trial, he is going be talking more about terrorism on Monday night to the nation. A lot of people are concerned about civil rights here. What do you think? Is this the right move to make?

WASTLER: Well, he has to make a legal move obviously in the wake of the Supreme Court decisions and various appeal court decisions, so he needs the Congress to get on board with some laws. But I think that there is a lot of hammering over this when there shouldn't be.

I mean we didn't think that we had CIA prisons overseas? I mean, you are going to fight a war on terror but your are going to do it with kid gloves? I mean, this kind of stuff happens. People like to watch it on "24" and oh, yes, Jack good. In real life, they have some qualms about it, but it is reality, this is what happens, deal with it.

SERWER: It is a difficult situation if the CIA and say Pakistani authorities find one of these bad guys in Pakistan, then what do you do with them? Do you let the Pakistanis try him? Maybe he escapes or maybe he doesn't get a fair trial or maybe he gets a trial where he is whitewashed or railroaded on the other hand, do you bring them into the United States and of course, we have terrorism trials here and some of these bad guys are in the big house in Colorado, that maximum security prison.

WASTLER: Super max.

SERWER: Yes, indeed. It would be very interesting though when you start talking about evidence, was some of the evidence coerced out of these guys, what was the means that the CIA used to get the information, that is another kettle of fish, too, right?

WASTLER: Yes and of course, the administration is going to say, we didn't do anything illegal, but the fact of the matter is that it is a nasty, and dirty business and it is a fundamental part of the situation we are in. If you are going to fight a war on terror, you will get your hands dirty and the CIA does that and domestic spying and things on American citizens is sort of a different issue, but this, it is a war. It is a war.

SERWER: Interesting to see what the president says on Monday night.

OK. Good news about oil and gasoline. It is about as hard to find as the stuff itself. But this week was a bit of exception. On Tuesday, Chevron announced it had successfully found a new source of oil off of the coast of Louisiana. On Thursday, BP said that the oil field it had partially shutdown last month due to pipeline leak could be back to full production by the end of October.

Oil prices are hovering at five-month lows and gas prices are already on the slide. Some experts even predict $2/gallon gas by Thanksgiving, sounds too good to be true, right? Well, here to tell us if it is Fadel Gheit oil and analyst with Oppenheimer.

Fadel, welcome to the show.


SERWER: I guess the big question is, this is the $64,000 question, where does gasoline go from here, because that is what Americans are most concerned about? What is your take on that?

GHEIT: Well, gasoline prices will likely reflect the oil prices, which has been coming down as you indicated. The lowest in five months and I think that gasoline prices will continue to go down, but I am not sure about $2/gallon by Thanksgiving though.

WASTLER: Mr. Gheit you mentioned we are at a five-month low for oil prices, but what is going into that? I mean there is a whole, a whole roster of influences on it, right?

GHEIT: Absolutely. There are several factors. One of them is in the global tension. If you recall, oil prices at an all time high four weeks ago, during the Israeli bombing of Lebanon, and that led to some speculators to think that the conflict could actually get involved in the area and that could disrupt oil flow, that has not happened. Israel does not have any oil and Lebanon does not have any oil, so obviously, back to square one. The speculative premium went off of oil prices and drove the prices down by almost 14 percent over the last four weeks.

SERWER: Hey Fadel, I'm reading a book called "Twilight in the Desert" by Matthew Simmons who is one of these peak oil guys where we have reached peak oil production in the world and it is all downhill from now. Does this discovery in the Gulf suggest that is not true at all?

GHEIT: Absolutely. It makes more of a fiction rather than a fact. It is a good headline grabber; it is an interesting discussion at a cocktail party, but doesn't hold water. I worked for Mobile Oil for thirty-five years ago, and the (INAUDIBLE) was live and well. Guess what it is time to be dead by now.

WASTLER: Mr. Gheit more about that oil field that they discovered down in the Gulf. How soon until that starts to really affect the market. I noticed oil prices that day they went down a little bit, but not a whole bunch.

GHEIT: Yes, if we are lucky it is going to take five years, but realistically speaking, I think between probably six or seven years.

SERWER: We heard that Chrysler Corporation executives in Detroit saying, though, that they are planning on making automobiles with the assumption that gasoline prices will be between $3 and $4/gallon for the near and mid-term and maybe long-term future. Do you think that is wise of companies to plan that way?

GHEIT: Well, I think it is better be safe than sorry. It is better to plan that we are going to have higher gasoline prices, and if we have lower gasoline prices, good for consumer, good for the economy, good for everybody, so from planning from some point, it is wise. Oil companies don't plan on $30 oil because they want to see $30 dollar oil, but then when oil prices go down they will be making money. So car companies should make the same assumption on the way up.

WASTLER: Mr. Gheit with the anniversary of 9/11 coming up, terror is on a lot of people's minds, I'm wondering how much is terror still priced into the price of oil, and I noticed that the market seems to fluctuate more when it is weather-related. Can you give me an idea of what the balance is between terror and weather and the pricing now?

GHEIT: They all connected, there is no question in my mind, and there is a speculative premium in the oil prices, because of global tension. If we ease the global tension which is not likely to disappear, because there is always going to be a global tension, but easing global tension will deflate oil prices and will bring them much lower, how much lower? Could be $10 or $15. Do I think we are going to see a $50 any time soon? No, even $40 anytime soon, the answer is no. But will we see $80 oil any time soon? The answer is if we is have rising global tension, if the situation between the Iran and the U.N. gets into a shooting war, I do believe that we are going to have higher oil prices.

SERWER: All right Fadel. Quick last question, what concern you the most out there, is it Iran or Nigeria or is it Chavez in Venezuela, is it hurricanes?

GHEIT: All of the above. They are all factors that will have impact on the oil prices. If we have a hurricane oil prices will move up. If we have more hurricane destruction, the oil prices will go up. If Venezuela for one reason or another kicks out oil companies I truly believe that that will spook the market and could push oil prices up. All of these things, however, are temporary; they are not going to be here for the long haul.

But having said that, every time you take care of one problem, another problem pops up.

SERWER: All right. We are going to have to leave it at that. Fadel Gheit an oil analyst with Oppenheimer. It will be very interesting to see where oil and gas prices go as we head to the November elections.

When we come back changing gears. Ford is making a radical switch by swapping out a family guy for a new CEO. Find out if that enough to save the carmaker? Plus same street different time. Susan Lisovicz takes us to Wall Street for a look at how it is remembering September 11th.

And no sale. Holidays and big bargains go hand in hand in America, find out about a charity that wants to make sure it never happens to September 11th.


SERWER: There have been shakeups at major U.S. automakers before, but Ford Motor Company made big waves this week by hiring an outsider to be it's new CEO. Bill Ford is keeping his title of chairman, but he has brought in former Boeing executive Allan Mulally to take the top spot at the company. Can this work? And what is the decision to go outside of Detroit say about the auto industry now? "Fortune" senior editor Alex Taylor III joins us now with a look.

Alex welcome.


WASTLER: I mean Detroit, when they are picking someday they usually go for the guy with the grease under his fingernails, has been growing up with gasoline in his blood, why go with an outsider right now? What is he thinking here?

TAYLOR: Well, Allan Mulally brings three things to the party that Ford didn't have, that Bill Ford didn't have in particular. One, he is an engineer, so he can make those tough decisions about whether the Mustang should have a solid rear axle or an independent rear suspension.

Number two he has been executive for 37 years, he has been at Boeing that long, so he knows how to make the tough decisions, he knows how to run an industrial company. Ford really needed that.

And number three, he is not Bill Ford so he is not torn by all of the loyalties Bill Ford has to all of the employees of the company and he can really take an impartial look at what is going on at Ford.

SERWER: Alex, we talked a lot over the last weeks and months about G.M.'s problems, what exactly are Ford's problems?

TAYLOR: Ford has all of G.M.'s problems, plus a lot of its own. It has the labors problems with the health care cost and the pension costs, but the biggest problem that Ford has had, they have had revolving door management for the past five to ten years. People keep moving in and moving out. As a consequence, their product plan is in tatters; they have very few new cars coming out for '07 and very few new cars coming out for '08.

On top of that, they are basically a truck company, 25 percent of their sales are pickup trucks, so they are very exposed to higher gasoline prices even though they are coming down a bit, so Ford has a heap of problems right now.

WASTLER: Alex, tell me a little bit about Mulally's track record at Boeing. I mean did he do a lot for the aircraft maker?

TAYLOR: He gets a lot of credit for the success of the 777 which has been on the market for about ten years, which is the two-engine plane that flies around the world and he gets a lot of credit for 787, the dream liner that is a very light and is winning a lot of orders right now.

And Boeing is has had a fabulous turnaround, I mean they were getting killed by Airbus five years ago, but the tables have turned completely and now Airbus is in tatters and Boeing is looking great so Mulally comes out with a pretty good record at this point.

SERWER: What does Mulally need to do, Alex, I mean this is a company that has the f 150 you mentioned also the Taurus going back, the Explorer going back, I mean they have been able to introduce successful vehicles, do they need to make cool cars, small cars, what's the strategy?

TAYLOR: Well, they need to make cars that people want to buy. Right now Ford only really has two cars that people want to buy, the F 150 you mentioned and the Mustang. Autos are a long lead business and Mulally can start today planning new models and they wouldn't be out until 2010 or 2011. So the most important thing he can do is the stabilize the place, pick the next generation of managers and don't make any dumb decisions.

WASTLER: Alex, I noticed that Bill Ford is still remaining chairman and the Ford family still controls like some 40 percent of the stock of the company, could there be a situation where the family is still influencing how the company is run and sort of undercut Mulally?

TAYLOR: Bill Ford and Mulally hopefully will work closely together, but at the end of the day, it is the Ford family's company and they will do things that they want to do them. One interesting test will be the question whether they sell Jaguar or not.

Jaguar is a big favorite of the Ford families they were even involved in buying it 15 years ago, but has been losing billions of dollars and a smart CEO would sell it as soon as he could, so I think that will be a good indication of how much influence the Ford family is having on Mulally's decisions.

SERWER: That whole strategy, Alex of going overseas, going to Europe by both G.M. and Ford and buying those luxury brands, those upscale brands really hasn't panned out at all, has it?

TAYLOR: It has been a disaster; the two most successful auto companies since World War II are Toyota and Honda. They don't buy anything, they grow organically and everybody who has tried to grown by acquisition has really gotten hurt and that includes companies like BMW that tried to buy the Rover company about ten years ago.

WASTLER: Alex we have heard a lot lately about G.M. possibly exploring an alliance with Renault and that maybe Ford might be hovering in the background, maybe jump into it to sort of mess that deal up. What do you think the possibilities are there?

TAYLOR: If I were Allan Mulally, the second thing I would after I turned on the lights would be to get on the phone to Carlos Gomes (ph) at Renault and Nissan and say, forget about G.M. we can do a much better deal together. G.M. doesn't need Renault at this point.

G.M. has huge scale, they have plenty of purchasing power, they have plenty of engineering power and Ford really needs an alliance, they could really use the extra scale right now that this sale would give them, so I would mess up that deal up as soon as I could.

SERWER: What about negotiations with the UAW how is that going and how is that going to end up Alex, what do you think?

TAYLOR: Well, it seems to be going remarkably well. The UAW has always had a reputation for being a very progressive union and that really listens to the auto companies this time, who have been very transparent and very open about their financial problems. G.M. has had remarkable success with its buyouts and I think Ford will equally have success; the real test will be the 2007 contract negotiations.

WASTLER: All right. Alex I'm afraid we have to wrap it up there. But thank you so much for joining us.

TAYLOR: My pleasure Allen.

WASTLER: That was Alex Taylor of "Fortune" Magazine. It you are interested in reading more of what Alex has to say, go to we have his article right there.

Now coming up after the break the day we can't bear to remember or afford to forget. Find out how Wall Street is marking September 11.

Plus, it is a mall world. Macys is transforming hundreds of America's department stores this weekend and see if that anchor store down at your local mall has a bright future.

And board games, leaks and allegations of spying are shaking up the boardroom at Hewlett Packard. We will have the low down on the high jinx.


SERWER: Monday marks the five-year anniversary of the attacks of September 11th; the events of that day changed our country in every way, physically, emotionally and also economically. The New York Stock Exchange shutdown for four days after the attacks the longest close since the Great Depression.

Susan Lisovicz covered the markets the week they reopened. She joins us now from the stock exchange to talk with us about the economic aftermath of 9/11 and the progress we have made since then.

Susan, welcome to the program. Let's start off by asking you what stands out most in your mind.

SUSAN LISOVICZ, CNN CORRESPONDENT: You know, Andy, it was just an overpowering experience to return to Wall Street. Overpowering in the sense manner of the fumes, the visual, the wreckage, the security everywhere, and the disruption in the transit, and then to come inside the New York Stock Exchange and when that opening bell rang.

A historic sell off, the biggest point drop one day point loss in the history of the New York Stock Exchange, so it was just an overpowering experience, but at the end of the day, it really showed the resilience of Americans after this terrible attack.

People came to work. They were grief-stricken, they were angry, they were horrified, but they came to work and they did their jobs, and that is why we can talk about it five years later. Business went on as usual.

WASTLER: Susan, you know, it is dramatic period, you know, it was a dramatic time and now it is five years later, can you give us a little sense of what it is like down there? What is different down there now five years later?

LISOVICZ: Well, you know, in many ways it is really different. Of course, we do now have the World Trade Center area cleaned up, and there is a beautiful shrine to what is going on, and hopefully at some point in the not too distant future, we will have buildings standing there.

But the security is just omnipresent, we already have metal detectors and bomb-sniffing dogs inside of this building, now you will see attack dogs, and now you see road check, and now you see swat teams. The Hercules Unit which was a newly formed unit after 9/11, these are just part of our daily life here on Wall Street and it is just a daily reminder of how life has changed down in lower Manhattan.

SERWER: Yes, Susan, I was here on 9/11 and just about everyone in New York City lost some people that I was close to, fortunately no family members, so I am not at all in the same situation that people who were hardest hit, but, you know, I will never forget it. It is always going to be with me, it never leaves you. Is that how you feel?

LISOVICZ: Absolutely. And of course, coming here, Andy, I mean, it is just, you know, it is a daily reminder. I mean, the World Trade Center that is an actual transit hub. The train and all sorts of other trains are there, and so now you see now is a different kind of tourist. Prior to 9/11 people might come to the New York Stock Exchange for public tours; they are gone of course, because of the security.

Federal hall is right across the street where George Washington took his first oath at the Historic Trinity Church, but now there is a different type of tourist, since the 9/11 tourist and they come in throngs, and I have to say I am glad they are as respectful as they are but it never leaves you the American flags are proudly displayed and business is coming back.

It is slow. We are not seeing the same number of businesses that are here, because remember, the World Trade Centers with dozens of big firms like Fitzgerald supported hundreds of other little businesses, but downtown alliance says that prior to September 11, there way maybe a six or seven percent commercial vacancy rate, but after that it doubled. And now it is back to 10 percent, so it really has not come back fully yet and hopefully with the construction of those towers with some sort of building there, it will get back to normal.

WASTLER: Susan, we only got a few seconds left, but real quickly, what is being planned for Monday?

LISOVICZ: Monday there is going to be a minute of silence at 9:29 and then the opening bell will be rung by members from the downtown hospital of New York which was the closest hospital to ground zero, and it was the hospital where casualties were taken.

Of course, the hospital was hoping that many more people would come there, and of course, that was not be given the magnitude of the attacks, but they will ring the opening bell, and then business will commence as usual, and that is very important on Monday and it was very important five years ago when the markets reopened.

SERWER: CNN's Susan Lisovicz from the floor of the New York Stock Exchange. Susan, I look forward to working with you on Monday that is obviously going to be a very emotional day.

Coming up on IN THE MONEY, times of the signs. Hundreds of U.S. department stores are getting a new identity this weekend and we will look at the future of a retail concept from the past.

Also, ahead, if the words "big September 11 holiday sale" make you cringe, stick around. We will hear from a guy who wants to keep the day from going commercial.

And we want to hear what you have the think about the show. You can send us an e-mail right we are at



WASTLER: Attention all shoppers, big changes are in store for some big retailers near you. More than 400 department stores with names like Marshall Fields and Hecht's all became Macy's this weekend.

It is the result of Federated Department Stores $11 billion acquisition of department stores last year, but with shopping now just a mouse clip away and discount stores popping up to compete what is the future of the department store in America. Here to help us sort it all out is Daniel Skoda a principle of D&R Consulting and former president of Marshall Fields.

Dan, welcome.

DANIEL SKODA, PRINCIPLE OF D&R CONSULTING: Thank you it is good to be back.

WASTLER: All right. So we have a whole bunch more Macy's stores this weekend, I mean is this a good move by Federated yes or no?

SKODA: Absolutely. What they did was to consolidate much of the department store business under one brand and it is clearly an effort of their part to own the department store business, and I think that they have so far succeed. The rollout is going to be the important part and how they market the whole Macy's concept throughout the country.

SERWER: Daniel, you know with all those lists of alternatives that Allen just ticked through, online, specialty shops, etc., etc., etc., why would anyone go to a department store?

SKODA: Well, if you think back throughout the 20th century, that is all there was were department stores. Not until the last quarter of the 20th century that other shopping options have come up. And the department stores owned all of the business, whether it was in clothing or electronics or toys, accessories, etc., and over the last 20-30 years, a lot of other concepts have come up to take the business away from department stores and they let it happen.

I think that with Macy's taking a very aggressive stand in trying to be much more promotional and focus much more on new merchandise that they have an aggressive posture to get back that business.

WASTLER: Dan you mentioned own the department store business, that phrase sort of struck me there, I mean there are some other department store competitors out there, J.C. Pennies and some that are lower and some that are higher scale, but can they really own the business and by owning the business are they going to get the kind of pricing leverage they need to compete with Wal-Mart?

SKODA: Well, what I meant by owning the business is clearly the business that they are in, the mid price department store doesn't, they have a great deal of leverage with their venders, and with the people they do business with, because they have a huge buying power. This is something that didn't exist before Federated bought May Company and really consolidated those huge brands under their name.

SERWER: You know Federated's stocks have done pretty well over the last five years which kind of surprises me. Do you really think this concept has a future, I mean you look at Old Navy on the low end and Tiffany on the high end, Nordstrom is coming at you and selling everything but ice cubes. I mean come on are these things really going to be around 10 years from now, Daniel?

SKODA: Well, there has been a great consolidation of department stores and obviously a lot of them that have gone out of business, but people do enjoy the shopping experience in the department stores, and the ability to buy so many things, even the brands that you talked about have expanded into other fields and tried to get more and more of the business. I think that the department stores clearly have some leverage with loyalty that they have amongst their customers and the ability to bring theater into their environments.

I mean they have really started focusing a lot more on marketing their brands by having personal appearances, cooking demonstrations, lots of things that bring people into the store, and the entire department store business is consolidated so much at this point, that there is an opportunity for it to grow.

WASTLER: Dan, I shop at Macy's, I do it about once a year, when I need new tee shirts and socks and underwear, and go in and out. I have a feeling that I am not their ideal customer, OK. What kind of customer are they going after? What is the typical department store customer? And do they have the where with all to really add to the department stores revenues?

SKODA: The typical department customer is not you, it is a woman. The typical customer is 35-45 years old and probably works and has a very limited time restraint in terms of what she can do for her shopping time. But, clearly, the department stores can benefit a great deal by re-looking at the customer. It is one of the things that I do in my consulting business is work with our clients to make sure they know who the customer is and then focus on that customer.

People come to the stores to buy merchandise and one of the biggest complaints that people have had about department stores is that they have the same thing. Macy's has an opportunity through it's numerous private labeled brands to bring new merchandise into the stores and to differentiate themselves and they really have to focus on service so that they can make that experience for customers that enjoy shopping a real pleasure.

WASTLER: Dan, we have to cut it off there, but thanks so much for joining us.

SKODA: OK. Sure. My pleasure.

WASTLER: That was Dan Skoda he is of D&R Consulting.

Now there is a lot more to come up here on IN THE MONEY. Up next a day of service, and we don't mean customer service. Find out about a project to keep September 11th commerce-free.

Also ahead, $100,000 for a great idea. See how a former big city mayor won recognition in dollars and cents for a project that helps kids.


SERWER: Monday is September 11, and there is a lot of controversy over how to mark this day this year and going forward. In this week's "Brainstorm" we thought we would talk to a man who is trying to prevent the remembrance of that day from becoming just another excuse for stores to hold big sales and for people to take a day off from work.

David Payne joins us now and he is the president and co-founder of Thank you very much for joining us David. Why don't you start off by explaining what you are trying to do with your Web site.

DAVID PAYNE, CO-FOUNDER, MYGOODDEED.ORG: Well, we trying to find a way to remember 9/11 without it being images of burning buildings and death and destruction and we certainly don't it to ultimately become a federal holiday that 30 years from now become an excuse for a three-day white sale.

We ultimately are trying to find a way to honor those who gave so much on September 11th, by individually encouraging people to perform good deeds. Any good deed any act of kindness or any form of charity counts. And just do something good for someone else as a way to remember 9/11.

WASTLER: David, how does it work then? Do I go to the Web site and log in my particulars and volunteer for something that you have listed, do I list my own thing, just give me the nuts and bolts on how it works?

PAYNE: Well, the whole idea really is for you first as an individual to pick a good deed, something that matters to you, something close to your heart, and then if you want to, you can come to Web site and post your pledge to perform the good deed in observance of 9/11 and you don't have to pledge with us, although we have 150,000 pledges on our Web site already.

It is more the idea of perhaps finding a way for people to be able to express their sympathy and to be counted to be part of this movement, but it is really about picking something that really matters to you and to performing that kind of active kindness on 9/11. SERWER: David, wouldn't bit a real positive and I am so surprised that this hasn't been done and no one has done this and I'm talking about the religious leaders looking to use the day to get Americans together, talking about Christians and Muslims and Jews, wouldn't that be a very worthwhile activity at a nonprofit that you'd like to fund?

PAYNE: Well, you know, it was a big surprise to me, truthfully when we first came forward with this idea about three years ago that no one else had started moving down pathway. How it ended up falling into our laps, I am still trying to figure that out. I do think that it is very much about unity and about the country coming together.

Never before, really over the last few years have I felt this longing on the part of the country to try to unify, to come together and I think that the 5th anniversary of 9/11 is tending to crystallize that and it is kind of ironic, because we are also going into what will probably be one of the more divisive political seasons, you know in recent memory.

But yet, you know, we had a press conference in Washington, D.C. just a couple of days ago, and we have Senator Schumer and Congressman King and Congressman Ferguson and so we had Republicans and Democrats who really were taking off their political hat for a moment to really talk about the importance of unifying around this initiative.

WASTLER: David, you mentioned that you had over 150,000 pledges, and I think that even more than that actually visiting the site. Can you give me some examples of the kind of stuff that people are doing from the mundane to really out there. What are some of the neater things that you have heard?

PAYNE: Well, you know there are a lot people that I think are starting with their own lives and people have posted their pledge to try to repair a personal relationship within their family or among friends, taking the day to really repair something like that. Others of course are reaching out to help people in need. There is a gentleman who has organized 500 teenagers to pledge to shovel snow for seniors this coming winter.

And we have a woman in California that is biking 500 miles to raise money for the Arthritis Foundation, and in Staten Island, New York, there were 20 kids that came together and packed up 35 cases of boxes of books that they are sending to students in Brathwait, Louisiana, who lost almost everything during the hurricane.

SERWER: David we just have a few seconds left here. What is your background and were you touched by 9/11 personally?

PAYNE: Well, I was fortunate that I did not personally lose anyone. My brother was right next-door and he got out of there just at the last minute. But I was like a lot of Americans who were devastated by what happened.

There is always this perception that 9/11 is a New York or a Washington or Pennsylvania event, it really wasn't, it was like a tsunami that hit the entire country and like everyone I just felt compelled to do it and I have a public relations firm and I guess that turned out to be the skill for me so that I could take this idea and carry it forward with the my friend Jay Winik (ph) who did lose his brother Glen in the collapse of the south tower.

WASTLER: Well David, it sound like a very worthwhile project, we wish you all the best of luck. Thanks for joining us.

PAYNE: Thank you so much.

WASTLER: That is David Payne, and the Web site is

OK. Coming up next on IN THE MONEY bugging out, we will bring you a tale of corporate secrets, stealthy surveillance, and a leaky boardroom.

And it is time to hear from you as we read some of your e-mails from the past week. You can send us an email right now too; we are at


SERWER: Press leaks, bugging, calls for resignations. No we are not talking about domestic terrorist surveillance, we are talking about but the boardroom at Hewlett Packard. Allen Wastler has that story. And Allen you know this has made headlines all week and it is a lot of fun.

WASTLER: It just keeps getting better. And for you folks at home who have not heard about it, this is the way it goes. Back in the early 2005 when the CEO of Hewlett Packard was on the way out, you might have read a lot of press reports quoting unnamed sources out of the boardroom about this or that and the other. Well, that event all went away, but the board chairman, Patricia Dunn apparently is very offended that somebody was leaking that kind of stuff. So she told the crew, find out who leaked. All right.

So they hired a private investigation firm. And they went and did what private investigators do and they found out and gave a report and it turned out to be George Keyworth (ph). OK, so they found him and they asked him to resign apparently last May. And he said, I ain't resigning, I was put here by the share holders, but Tom Perkins also on the board got very annoyed because he said, now how did you find out it was George?

Oh, well, we got his private phone records. And he said, you did what to a board member? And in fact, we got all of your private phone records? You did what? And so Tom Perkins resigned in a huff and now it is boiling over and it is public knowledge now and the California attorney general is saying, well, how did you get those private phone records?

Well, it turn out that the private investigators were "pretexting" that is where lets say I pretend I am Andy Serwer, I call up the phone company and say I need a little bit of personal information about me, can you give it to me? And they give it to me under false pretexts, which is pretexting which is against the California law, which is why the California attorney general is going in.

They are going to sort it out, because H.P. is saying, no, no, and brings a few things that obviously H.P. has a broken board and if I were an investigator, I would be worried, would you be worried? If I were the new CEO Mark Hurd I would be worried, because if everyone if focusing on H.P. this is a real computer company selling computers, privacy is a big issue today in the computer industry these days, so I would be worried right there. Also I would be worried if I were a telecom customer or a telecom provider, it brings up that whole nasty issue of privacy in your records and what to do about it.

And also, there is a telecom guy on H.P.'s board so it just keeps getting more, and more and finally, all of this is going on and Patricia Dunn, the chairman of the board, she really looks like she is in a bad position there has already been calls in the press for her to resign. And you know why the press is interested in that because it turns out that here is the added bonus, they were looking at reporter's private records too and pretexting them and it goes on and on and on and H.P. and I know you have down feelings about the stock right now, because of this.

SERWER: Well, I agree your point that this is going to be a huge distraction and the other question I have Allen is when was it ever the case that a company hired a private investigator and it turned out to the be a good thing? I mean, any time you resort to this kind of skull and cross bones skull drudgery and dungeons and dragon-type stuff, you are asking for trouble because you are basically telling these people get the information under any means, by any means necessary and so they do it, they go out and invariably they break the law and nine times out of 10 it is going to come back to hit you in the face.

WASTLER: And it is what we were talking about earlier if you have a CIA, they are going to being doing stuff like that. If you are going to have a private investigator, they will do stuff like that.

SERWER: But only in this case, the California state a.g. you mentioned said laws have been broken, and he is just trying to figure out who broke them before charges are files, so stay tuned on that one.

Allen Wastler, thank you very much.

As a former mayor of the countries fifth largest city, Philadelphia W. Wilson Goode Sr. knows all about challenges. He now retired from politics, but has a new mission, raising funds and awareness for a special group of children who are trying to beat the odds. Valerie Morris has his story in this week's "Life after Work."


VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Wilson Goode Sr. served two terms of mayor of Philadelphia. In retirement the 68-year- old is now serving children of incarcerated parents and hoping to change the direction of their lives.

WILSON GOODE, DIRECTOR, AMACHI: When I learned about 70 percent of those children will end up in jail, themselves, I knew that I had to do something.

MORRIS: In 2000, Goode earned his doctorate of administrate and became director of Amachi a faith faced organization that is paired more than 30,000 children with mentors.

GOODE: Christian, Muslim, Jewish or whatever the case is.

MORRIS: The cause is to close to Goode's heart. At age 14, his father went to jail and a local church came to his rescue.

GOODE: My pastor and his wife became in essence my big brother and my big sisters, and when my high school counselor said, you are not college material. They said you can be whatever you want to be.

MORRIS: Goode is on the job about six days a week, meeting with inmates, congregations and public officials and one of his goals is to secure a state funding in all 50 states.

GOODE: I am about the highest point of my life. I wake up, and I look forward to what the day will bring to me.

MORRIS: Valerie Morris, CNN.


SERWER: Just this week, Goode was selected as one of the five winners of the Civics Ventures Purpose Prize, Goode was awarded $100,000. The organization recognizes people over age 60 who are giving back to society and Goode says he will use the money to continue his work on behalf of the Amachi children.

IN THE MONEY will be right back.


SERWER: Now, it is time to read your answers to our question about whether you would join a union if your job allowed you to.

Jim in Louisiana wrote, "Yes, I would. Before the formation of unions in this country, we had no middle-class. Now that unions are disappearing, the middle-class is disappearing, too. Now both mom and dad have to work all day, just like when this was a nation of sharecroppers."

Paul in Tennessee, "No way. I grew up in a steel town and I have seen the catastrophic effects unions have had on American business. Back when 13-year-olds were working 15 hours a day, unions were necessary. But now, unions stop companies from adapting rapidly and they go out of business."

And Dave in Michigan wrote, "I didn't think I would join a union until I got curious and asked to see my file in human resources. I was shocked to see that it was huge. My boss was just making up stuff about me and putting it in the file. Most people would want to join a union if they got a look at what is going on in behind the scenes at H.R."

And now for next week's e-mail question of the week, "Are there any items that you would still prefer to buy only at department stores?" Send your answers to And you should also visit our show page at

Thanks for joining us for this edition of IN THE MONEY. Thanks to managing editor Allen Wastler. We will see you back here next week Saturday at 1:00, Sunday at 3:00. See you then.



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