dispatches from the new world of work

A Useless, But Necessary Rant!

Some things piss me off—a lot of things piss me off, in fact, as members of our Blog Community well know. But some things really piss me off. I was "pissed off" at James Kilts, former Gillette CEO, for getting almost $200 million for selling Gillette to Procter & Gamble for no particular reason. But that's a quibble. (Well, not really.) But I am horrified-outraged-sickened by the barfworthy $100 million plus that Countrywide CEO Angelo Mozilo is scheduled to pocket when the recently announced takeover by the Bank of America closes. Kilts' move was unnecessary in my book. But, in fact, P&G has done a good job with garnering fruits from the merger, and, in fact, a lot of people who more or less deserved it made some bucks from the merger. But Mozilo maliciously screwed customers by the 10s of thousands who didn't deserve to be screwed, no matter how much you may swear by "caveat emptor." (And I do swear by it in 9.642 cases out of 10.)

If no one can talk Mozilo into forgoing his separation check, maybe someone could talk him into at least sharing it with former Enron CEO Jeff Skilling, who surely didn't cause more harm than our friendly Countrywide founder. Some small poetic justice will be served when (not "if") the acquisition gives Bank of America a black eye; CEO Ken Lewis may be one helluva manager, but the odds of effectively melding the "aggressive" C-wide culture with the BofA culture are between slim and none, and thank God for that.

(I'm in Palm Beach, Florida, for a speech. As I left Reagan National Airport yesterday, I found in the DCA souvenirs shop the display of dolls depicted above and below—and I couldn't resist sharing.)

Tom Peters posted this on 01/14/08.

Comments

I'd recommend that everybody read all the articles linked in Tom's post. They tell quite a story. And, possibly, they'll get you ranting along with Tom.

Posted by cathy mosca at January 14, 2008 1:27 PM

This acquisition seems very odd. Did the folks at BofA think "Hey what we need is additional mortgage risk" or "Where can we get a dangerously unsupervised group of super aggressive mortgage salespeople who like to sail too close to the wind."
At the very least it seems that BofA would find better acquisitions at the end of this crises than at the beginning.

Posted by David Barrosse at January 14, 2008 5:31 PM

"CEO Ken Lewis may be one helluva manager"...when I called a local BofA branch recently, I was greeted with a scripted spiel that went something like, "Thank you for calling Bank of America, my name is Kara, how may I provide you with exceptional service today?" When I reached the branch manager, I suggested to her that people really didn't want to hear corporatese like "How may I provide you with exceptional service today?" (which sounds like something the pointy-haired guy in Dilbert would come up with.) She said that she was given no discretion on how the phones should be answered: that the script was a universal corporate edict.

Great managers don't do things like this, and don't permit them to be done. Ken Lewis may be a superb strategist; he may be able to do sensititivity analysis of DCFs in his head...but he is not, in my view, a great manager.

Posted by david foster at January 14, 2008 5:43 PM

'She said that she was given no discretion on how the phones should be answered: that the script was a universal corporate edict.'

Please pass me the bucket Nurse - I feel ill! This sort of rubbish is why we must never give up!

'Great managers don't do things like this'

Fabulous comment david - I am with you 100%

Posted by Trevor Gay at January 14, 2008 6:08 PM

I am going to go way out on a limb here, but the purchase is all about the debt! Debt is king to these guys. It is about getting debt and selling it over and over for profit. Sorry, if I am crushing your child hood dream of big financial institutions that are nice and here to help. They make money off of the people's debt. Then to protect themselves, they are insured. Even if you don't pay your credit card or home mortgage (which screws up your credit) they still get their money or get bailed out by Uncle Sam which is of course our money anyway. If that doesn't happen, they sell the debt to a collection agency, which will sell it to another if they don't collect and so on. In the end, it hurts the people.

So, my rant is that these banks whine about all this debt that is being defaulted on when they have already made their money on the debt. You bet BofA wants Countrywide's debts! it is big money. They get paid rather you pay or not! They did not get this big by making uncalculated decisions. It is not about helping the people it is about, pardon the pun, taking them to the bank. Me, I don't feel sorry for them for one moment.

whew! I feel a little better....

Posted by john smith at January 17, 2008 2:57 PM

I suspect that Lewis may be thinking he'll handle this like the acquisition of MBNA, where the acquired company is pretty much walled off from the rest of the bank.

Posted by Wally Bock at January 19, 2008 2:04 PM