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<title>By_Region RSS : Gourt</title>
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<dc:rights>Copyright 2007, Gourt.com</dc:rights>
<dc:date>2008-08-29T13:45+12:00
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<title>Under New Management: Life After a Merger: Learning on Both Sides</title>
<link>http://www.nytimes.com/2007/06/24/business/yourmoney/24mgmt.html?ex=1340337600&#x26;en=e86da63e5fb6e486&#x26;ei=5088&#x26;partner=rssnyt&#x26;emc=rss</link>
<description><![CDATA[Managers should act promptly (and creatively) to keep the best people after a deal.]]></description>
</item>

<item rdf:about="http://www.nytimes.com/2007/06/24/business/yourmoney/24homefront.html?ex=1340337600&#x26;en=ab542f64a6269d9a&#x26;ei=5088&#x26;partner=rssnyt&#x26;emc=rss">
<title>Home Front: Training for the Twists of Driving a School Bus</title>
<link>http://www.nytimes.com/2007/06/24/business/yourmoney/24homefront.html?ex=1340337600&#x26;en=ab542f64a6269d9a&#x26;ei=5088&#x26;partner=rssnyt&#x26;emc=rss</link>
<description><![CDATA[A program in Brooklyn helps low-income or unemployed New York City residents become bus or truck drivers.]]></description>
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<item rdf:about="http://www.nytimes.com/2007/06/24/business/yourmoney/24boss.html?ex=1340337600&#x26;en=f8aaf630134f762c&#x26;ei=5088&#x26;partner=rssnyt&#x26;emc=rss">
<title>The Boss: When Focus Leads the Way</title>
<link>http://www.nytimes.com/2007/06/24/business/yourmoney/24boss.html?ex=1340337600&#x26;en=f8aaf630134f762c&#x26;ei=5088&#x26;partner=rssnyt&#x26;emc=rss</link>
<description><![CDATA[“New Orleans defines who I am,” said Arnold Donald, chief executive of the Juvenile Diabetes Research Foundation International.]]></description>
</item>

<item rdf:about="http://www.portfolio.com/careers/features/2008/08/28/Neil-Smith-On-Negotiating?tid=true">
<title>Let&#x27;s Make a Deal</title>
<link>http://www.portfolio.com/careers/features/2008/08/28/Neil-Smith-On-Negotiating?tid=true</link>
<description><![CDATA[As president and general manager of the New York Rangers for over a decade, I had a responsibility to our ownership to negotiate effectively on almost a daily basis, whether with one of our own players or a fellow G.M. concerning a trade. The results of the hundreds of deals I conducted over that time were largely determined by how I conducted myself during the negotiations. Here are the basic principles I developed for successful negotiating.    1. Don't Commit First  If you can get the other side to state their position or proposal first, you may be pleasantly surprised at what they want. At the very least, you'll get valuable insight into what they're thinking before they know what you're thinking.     I once acquired a struggling player by asking the other G.M. how much of the player's salary he'd be willing to eat if we took him. Surprisingly, he was willing to pay two-thirds of the contract, and I got the player to renegotiate his contract down to that figure just for the opportunity to stay in the N.H.L. Result? He played for us all season and the other team paid his entire salary.     Getting the other side to commit to a position first allows you to use their proposal as the &quot;high-water mark.&quot; Then, if it comes to taking a middle ground, you can be closer to what you want than they are to what they want.     2. Put Your Ego Aside  Negotiations are about getting a deal done, so don't try to impress the other side with your intelligence and negotiating abilities. The stronger you look, the bigger the fight you'll have on your hands.    One tactic I use is to get the other side to help me during the process, asking questions that make them feel superior, such as &quot;I'm not really sure, what do you think?&quot; Or I might say, &quot;I don't know the market nearly as well as you do.&quot; Ego-driven negotiators make mistakes like telling the other side that they don't have to check with anyone above them, or they don't need to check with experts before making a decision.     When you put your ego aside, you retain options such as deferring a decision until you can think it through more thoroughly and consider opportunities to get something extra. You can also delay your decision until you've had a chance to check with your owner or board of directors.     3. Keep Your Eye on the Puck   When Wayne Gretzky played for the Edmonton Oilers during their run of four Stanley Cups in five years in the mid-'80s, he was constantly harassed by role players, fans, and coaches, all trying to get him off his game. But No. 99 knew that the only thing that mattered was putting the puck in the net more times than the other team. Just like Gretzky, an effective negotiator needs to focus on the issues and not be distracted by the actions of others. No matter what the outcome of a single meeting or phone call, don't let the other side's moves or reactions take your eye off the puck.  &nbsp;  One of my strategies when negotiating with agents was to make up a ridiculously low offer from my owner to lowball the agent, knowing that they'd be offended or even insulted. No matter what curses or other words came at me, I simply looked at the result, which was often a lowering of their expectations, to judge if I'd advanced toward my deal. If you react and let the other side get you upset or out of control, you'll always lose.    4. Always Make the Other Side Feel Victorious  When the deal is done, always congratulate the other side. You want them to feel like they won. &quot;Thank you, but please let me say that you did a fantastic job negotiating this deal&quot; was a favorite phrase of mine. Even if you think the other side didn't do well, congratulate them and never gloat. The reason for this is simple: You never know when you're going to want to do another deal with that person, and you want them to feel good about you personally when you do. Be humble in a victory and you'll be sure to have more of them in the future.      Neil Smith is the former president and general manager of the N.H.L.'s New York Rangers. He is currently the owner of a minor-league hockey team, the Johnstown Chiefs, serves as a consultant to the Anaheim Ducks and St. Louis Blues, and is an analyst on Versus Network, the NHL Network, SNY, and Hockey Night in Canada.    Related LinksFixing a HoleIdle Chatter:  C(Double)U Later?Tampa Bay Lightning Sale Deadline Looming
  
]]></description>
</item>

<item rdf:about="http://www.portfolio.com/careers/job-of-the-week/2008/08/24/Climbing-Guide-Willie-Benegas?tid=true">
<title>Peak Performer</title>
<link>http://www.portfolio.com/careers/job-of-the-week/2008/08/24/Climbing-Guide-Willie-Benegas?tid=true</link>
<description><![CDATA[                                                                                                                                                                                                Job Title: Ultra-high-altitude climbing guide                           Employers: Mountain expedition companies                     Salary Cap: $45,000                      Number of Jobs: 20 or 30 worldwide          When Guillermo &quot;Willie&quot; Benegas heard about the disastrous climb up K2 earlier this month that killed 11 people when an avalanche struck, he didn't spend any time second-guessing the climbers or their guides, despite having guided several expeditions up Mount Everest and neighboring peaks himself.&nbsp;     &quot;It wasn't anyone's fault. Things can go wrong&mdash;and they went wrong,&quot; he says. More than anyone, Benegas says he understands that the rewards of summiting the world's highest mountains come with substantial risks.     During 10 years as a guide for Mountain Madness, an adventure-travel company based in Seattle, Benegas has climbed Everest eight times and led a dozen other expeditions to peaks over 26,000 feet. In that time he's never had an accident or lost a client.    People he takes to the Himalayas come from all walks of life, from company presidents to bricklayers to retired lieutenant colonels. Benegas has guided his share of C.E.O.'s, but can't name names due to the confidentiality agreements he signed. To prepare, many of those clients go through Mountain Madness' Live Your Dreams program, where they may spend several years climbing progressively higher peaks in preparation for Everest. To climb the world's highest peak, Benegas says clients need perseverance, perspective, and a pack mentality.     Benegas definitely isn't in climbing for the money. Guides earn slightly less than half the $65,000 fee Mountain Madness and other outfitters charge climbers for each trip up Everest.     Since weather conditions limit Himalayan expeditions to spring and fall, Benegas supplements his income by guiding treks in South America, working on ski and avalanche patrol outside his home in  Salt Lake City, and from an endorsement deal with North Face, which has featured him in magazine ads.    For Benegas, though, climbing is less a job and more a way of life. Born in Patagonia in South America, he and his twin brother, Damian, who works as a guide in South America, started climbing in their teens. By the time he was 20, Willie had summited Aconcagua, the highest peak in the Americas. He moved to the U.S. a year later and, through hard work and ability, established himself as an elite guide, leading his first Everest summit in 1999.     EmbeddedVideo  Willie and Damian Benegas climbing Nuptse, a 25,726-foot peak in the Himalayas just southwest of Mount Everest, in 2006.    By now, Benegas has traveled in the Himalayas so often that he considers the handful of local Sherpas he works with extended family, and they, in turn, call him Willie Sherpa. When a 7.6-magnitude earthquake devastated the Kashmir region in 2005, Indian officials let him bring supplies to secluded mountain villages, which are off limits to Westerners for political reasons. It was due to the fact that he'd helped rescue a member of the Indian army during an ill-fated summit attempt two years before that he was permitted.     With his 40th birthday approaching late this month, Benegas admits to slowing down, but not by much. When he tore a wrist ligament that put him in a cast last March, he didn't think twice about leaving a week later to lead a monthlong expedition of 10 climbers up Mount Everest. His idea of a good time is still more extreme than most, like the 100-mile endurance run in Utah's Wasatch Mountains he'll compete in over Labor Day weekend.    Everest has taught Benegas to embrace extremes, a sentiment he tries to instill in his Everest clients. &quot;It's so much more than a guy with no experience who decides to pay $65,000 to climb to the summit,&quot; he says. &quot;Trust me, he'll suffer like he's never suffered in his life. But suffering will make him grow. Then he'll realize it's the most amazing thing he's done in his life.&quot;  Related LinksAttention K Street: Opportunity KnocksFord Drives a Surprise Profit Santiago
      
  ]]></description>
</item>

<item rdf:about="http://www.portfolio.com/careers/job-of-the-week/2008/08/17/Lego-Builder-Nathan-Sawaya?tid=true">
<title>Building a Career</title>
<link>http://www.portfolio.com/careers/job-of-the-week/2008/08/17/Lego-Builder-Nathan-Sawaya?tid=true</link>
<description><![CDATA[                                                                                                                                                                                              Job Title: Lego artist                          Employers: Corporations and individuals                    Openings: Word of mouth                     Salary Cap: Six figures                     Number of Jobs: About 40 Lego master builders       Who doesn't remember growing up playing with Legos&mdash;the small, colorful bricks that can be combined to create anything from airplanes to zebras? Most kids ultimately pack up their Legos and move on. But Nathan Sawaya never did.   The 35-year-old New Yorker makes a six-figure living as a Lego artist, creating large-scale works of art using tens of thousands of the plastic pieces. Among his recent projects are a 10-foot-tall replica of the new Trump Tower being constructed in Dubai for Donald Trump, and a four-foot-tall bumblebee commissioned by Fall Out Boy bass guitarist Pete Wentz as a gift for his new bride, pop star Ashlee Simpson. He says he receives hundreds of commission inquiries every month.   Though he played with Legos like most kids, they were the furthest thing from his mind when he set out in the working world. After graduating with a law degree from New York University in 1998, Sawaya became a Wall Street attorney, earning a comfortable six-figure salary&mdash;and working in a high-stress environment. To relax after long hours at the office, he would work on art projects at night, making sculptures using clay at first, then moving into more whimsical media, like candy.  One of Sawaya's first hobbyist projects with Legos was an eight-foot-tall pencil. Friends would come over to gawk at it, and Sawaya eventually set up a website, brickartist.com, to post photos of his creations. Visitors to the site sent in requests, such as Lego renderings of portraits of their children.   The hobby became the real thing in 2004 after he won a competition sponsored by Lego to find the best builder in the U.S. He quit his job and became one of Lego's &quot;master model builders,&quot; creating sculptures for its theme park in San Diego. They paid him just $13 an hour, but it gave him good training for when he returned to New York to create his own Lego works full-time.   Sawaya now keeps 1.5 million Lego bricks, meticulously organized by shape and color into clear bins (he buys all his Legos in bulk). He sketches his projects first on something called &quot;brick paper&quot;&mdash;essentially, graph paper modified for Lego shapes&mdash;and takes anywhere from a few days to a few months to build them. At any given time, he's working on three or four projects, earning anywhere from a couple thousand dollars up to six figures per work, depending on the complexity of the project and how quickly they need to be built.   For his own personal fulfillment, he also creates more avant-garde works and has two traveling exhibitions of his work (here's a slideshow of some of his work).   Ironically, Sawaya says he now works more hours per week than he ever did as a corporate lawyer, although he also makes more money than he did then. Most important to him, though, is the artistic gratification he gets out of his Lego creations, particularly when he gets feedback from children who are inspired by his projects. &quot;There are 400 million children out there playing with Legos,&quot; he says. &quot;Who am I to say that they aren't artists too?&quot;   Also on Portfolio.com Gas Prices Around the World Making Bucks on the Greenback The Denver Party CircuitRelated LinksRap's Economic IndicatorsDaily Brew: Science Shows What Harvard Students Really Think Of Rednecks360? Maybe Not.
  
]]></description>
</item>

<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Q-and-A-With-Sprint-Nextel-CEO?tid=true">
<title>Wireless Operator</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Q-and-A-With-Sprint-Nextel-CEO?tid=true</link>
<description><![CDATA[Dan Hesse has perhaps the hardest job in the wireless industry right now. In December, he replaced Gary Forsee as president and C.E.O. of Sprint Nextel at one of the lowest points in the company&rsquo;s history. Sprint lost more than a million customers in 2007 and posted a $30 billion loss in the fourth quarter alone.        But Hesse might say that his job offers the most upside: The company is so troubled that he has license to take big chances. When he took over, he promised moves on the scale of &ldquo;nukes&rdquo; that would shake up the wireless business.         None of his ventures so far have been quite that ambitious, but in February he introduced a single-rate plan ($99.99 a month for unlimited calls, text, and data) that may help slow the mass customer defections plaguing Sprint. Hesse also pulled together an alliance with Google, Intel, Comcast, Bright House Networks, and Time Warner Cable to launch a startup called Clearwire, which will deploy WiMax technology, a kind of WiFi on steroids. WiMax is a high-speed data network that covers a larger area than WiFi&mdash;entire cities rather than individual coffee shops. And Sprint is one of only two major carriers so far to support Google&rsquo;s coming Android operating system, which will make it easier for cell phones to download software or use Web-based services from other companies. Most cell phones today are far more restricted.        Hesse, 54, might look familiar from his appearance in Sprint&rsquo;s television ads. (He offers his email address, which customers can use to register gripes.) He talked with Cond&eacute; Nast Portfolio contributing editor Kevin Maney at Sprint&rsquo;s Overland Park, Kansas, headquarters, a sprawling faux college campus that, in more ambitious days, was built for 15,000 employees but currently houses only 10,000. The following is an edited transcript of their conversation.        I&rsquo;m a Sprint customer, and it&rsquo;s no secret that the company has just about the worst customer service on earth. How are you addressing that? Let me put it this way: It&rsquo;s definitely getting better every month. We measure the hell out of it. Every meeting starts with discussing the customer experience. That said, we have a long way to go, and people have long memories. That&rsquo;s part of the urgency. We know it&rsquo;s going to take a while to get customers to actually perceive that service has improved.         As a Sprint client, how will I notice what you&rsquo;re doing? If you went into a Sprint store before and said, &ldquo;I have this problem on my bill,&rdquo; they&rsquo;d tell you to call customer care. Not because they were being jerks&mdash;they didn&rsquo;t have access to the systems to fix a problem like that. Now they do. So even the role of the stores has changed. They sell too, but their No. 1 job is to improve the customer experience.         &nbsp;Maybe that will stop so many people from abandoning Sprint. The company&rsquo;s churn rate of &shy;consumer defections is roughly twice the industry average. Our bonuses&mdash;my bonus and every employee&rsquo;s in the company&mdash;are based on exactly the same metric, and that&rsquo;s reducing churn. We recognized that it was the biggest issue facing the company and that we had to fix it.        How did it get this bad? For years, the wireless industry was growing so fast you didn&rsquo;t need to care about it. You could grow your way out of anything. As results started to decline, Sprint looked to reduce costs, and one of the ways was through big cuts in care and service. It cut the number of reps answering the phone calls, and average wait times went way up.         Can all that be fixed? A big reason people call customer care and tie up the service reps is because they have questions about their bill. The new flat-rate plan, Simply Every&shy;thing, is all about reducing those. It&rsquo;s the same amount every month, and customers know exactly what it&rsquo;s going to be.        In your career, you&rsquo;ve made a habit of creating single-price, all-you-can-eat plans. You did something similar at AT&amp;T Wireless when you worked there in the 1990s. It&rsquo;s very much like Digital One Rate, AT&amp;T&rsquo;s plan from 10 years ago. That was all about saying to customers, &ldquo;Anything the wireless phone can do, just don&rsquo;t worry about it. Just knock yourself out.&rdquo; We found that customers will actually pay a premium for simplicity, and we&rsquo;re finding it also on Simply Everything. It&rsquo;s not about a discount. Customers who were spending less than $99 a month upgraded to the flat-rate plan because they think it&rsquo;s a better deal. It&rsquo;s like walking into Costco. I wasn&rsquo;t going to buy 144 rolls of toilet paper, but God, it&rsquo;s a good deal.        Did you have a clear picture before you took this job of how grim things were at Sprint? The problems were more significant and deeper than I had expected. I came right at the end of the fourth quarter. As soon as we announced our financial results, the stock went down to five dollars and change. It lost more than half of its value within a very short period of time.     How could you not know that was coming? To a certain extent, the board didn&rsquo;t realize how significant the issues were. They didn&rsquo;t dupe me. I don&rsquo;t think they knew either.        Let&rsquo;s talk about WiMax. So far, it&rsquo;s getting mixed reviews about whether it&rsquo;s going to work well or be a good business. One tech executive called it &ldquo;WiMin&rdquo; on his blog. It&rsquo;s going to change the industry completely in terms of the capabilities and the applications possible in the mobile world. And it&rsquo;s not just about phones anymore. It&rsquo;s about embedded chips that can receive WiMax in your car, in your camera, in your video camera, and everything else. You&rsquo;ll be able to download movies into the backseat while you&rsquo;re driving. You can see real-time traffic. We think we have roughly a two-year head start over our competition.        This is through the &shy;Clearwire venture? Yes. Sprint owns 51 percent of that company. The other investors are Intel and Google and the big cable companies. I think we&rsquo;ll have a terrific board of directors.        With all those owners, who&rsquo;s actually going to end up running it? Craig McCaw, the telecom pioneer, will be a non&shy;executive chairman. Ben Wolff, who has worked with McCaw, will be the C.E.O., and Barry West from Sprint will be the president. It won&rsquo;t be a joint venture. It&rsquo;ll be a separate public company once that&rsquo;s approved, probably near the end of the year.         &nbsp;Sprint is one of the first major U.S. carriers to say that it will use Google&rsquo;s Android &shy;operating system, which is currently in the works. What&rsquo;s your relationship like with the company? Actually, we&rsquo;re doing a lot with them. We&rsquo;re working on Android. We&rsquo;re part of the Open Handset Alliance [an industry group that is working to develop applications for Android]. We believe we&rsquo;re by far the most open, if you will, of the wireless carriers. We make it very open for applications developers to write software for Sprint wireless products. The relationship with companies like Google will only help that.         Since Sprint has to do something radical to reverse its fortunes, opening your network entirely could be an interesting move. Will you go all the way to that point? If we can. The more open we can be, the more we&rsquo;re going to attract more applications to our platforms, which means we&rsquo;ll attract more users. It&rsquo;s a way of differentiating.        Does that mean you&rsquo;ll be like the open internet? Users could &shy;download anything? Customize their phones in any way? I think we&rsquo;re going to be ahead of Android.       You are? I&rsquo;m not the expert, but there have been some delays in terms of Android. I don&rsquo;t know when you&rsquo;re really going to see that product released. But in this Sprint environment today you can have a variety of operating systems. You&rsquo;ve got Windows Mobile, Palm, RIM&rsquo;s BlackBerry. Our customers are going to have just about as much openness as they want.        After you bought Nextel, its customers began fleeing. Nextel&rsquo;s phones use a separate push-to-talk network called iDEN, and critics have said that Sprint should sell Nextel or spin it off. What&rsquo;s your current thinking? We&rsquo;re committed to making iDEN very successful, but we&rsquo;re not wed to a particular business model or structure for any of our divisions. We have a bunch of new handsets on our iDEN network. We&rsquo;re reinvigorating the brand, but we&rsquo;re always going to keep all of our options open.        How much time do you think you have to turn things around? I don&rsquo;t know. All I can do is show consistent improvement, and I really can&rsquo;t predict what&rsquo;s going to happen.        Are you committed to keeping Sprint Nextel in Kansas? Yes.        Is that a handicap? Can you get a brilliant engineer out of Stanford University to come here? We&rsquo;ve had absolutely no problem recruiting. Kansas City is the most difficult city in the United States to get people to leave. It&rsquo;s true. You can&rsquo;t get anybody to leave once they&rsquo;re here because of the quality of life and affordability.    &nbsp;    This office is pretty grand. You came from a startup, and your &shy;office was a lot like this, wasn&rsquo;t it? Oh yeah. [Rolls his eyes.] I had an unfinished door, and my desk was a slab of wood on poles. One of the advantages of running a startup is you realize how inexpensively you can do things.        You put yourself in a Sprint &shy;commercial. Do you think you can change people&rsquo;s perceptions of this brand? A lot of people forget that the cur&shy;&shy;rent AT&amp;T brand was created in 1984. It was the Bell System until the break-up, and AT&amp;T had never been associated with any product. So we really created that from scratch. We had to describe every action in terms of either making deposits or withdrawals in the brand bank. And it became a tremendous brand. I believe we can create that at Sprint.        Will we see you in any more commercials? The agency and our marketing team are suggesting I do another, so it&rsquo;s quite possible.    Related LinksMcCaw's Next BetWhat's Wrong With the 3-G in iPhone 3G?Sprint's WiFinale 
  
]]></description>
</item>

<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Peter-Guber-and-Class-AA-Baseball?tid=true">
<title>Switch Hitter</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Peter-Guber-and-Class-AA-Baseball?tid=true</link>
<description><![CDATA[And for tonight&rsquo;s act, Peter Guber pre&shy;sents . . . the sixth season of the Class AA Frisco RoughRiders.     Yes, that Peter Guber, the movie producer behind blockbusters like Batman and Rain Man. The same Peter Guber who was booted from his job as chairman and C.E.O. of Sony Pictures Entertainment in 1994 for incurring the company&rsquo;s biggest write-down ever. Since then, Guber has moved on from Hollywood to small-town America, refashioning himself as a mogul of a different kind: one who buys distressed minor-league baseball franchises and transplants them in second-tier cities looking for an economic boost. As he did at Sony, Guber has hooked up with deep-pocketed patrons, only this time around it&rsquo;s local governments, which will foot the bill for pricey new stadiums. This is a standard yet perennially controversial arrangement, but it hasn&rsquo;t prevented Guber from becoming one of the biggest owners of minor-league franchises today. He owns five teams, operates one, and is in the process of buying another, the Winston-Salem Warthogs.     Owning minor-league teams is not as sexy as moviemaking, he admits. &ldquo;But there&rsquo;s a sizable bottom line if you do things right,&rdquo; he says, showing the same promotional savvy that made him famous a decade and a half ago.   Guber got into the minors almost by accident. After leaving Sony, he formed Mandalay Entertainment, a TV-and-film-production company (its most notable release is I Know What You Did Last Summer), and made a few bids on various major-league sports franchises, including the Oakland A&rsquo;s and the N.B.A.&rsquo;s Miami Heat. When those failed, Guber instead partnered with a father-son team that owned two successful minor-league franchises to form Mandalay Sports Entertainment.      Today, Guber relies on his own scouts to find cities that are in the market for a team. Back in 2002, for example, Frisco, Texas, a fast-growing town north of Dallas, was eager to acquire a club. Tom Hicks, owner of the major-league Texas Rangers, wanted to bring a team to Frisco to anchor a planned real estate development. He contacted Guber, who already had multiple teams in his stable, and they reached an agreement. Frisco would pay for a $22.7 million ballpark, while Hicks and Guber would reel in a team. Their quarry: the struggling Shreveport, Louisiana, Swamp Dragons, which they snapped up for just over $4 million, renamed the RoughRiders, and exported to Texas. Now Mandalay, which bought the bulk of Hicks&rsquo; interest in 2003, pays Frisco to lease the city-owned stadium, Dr. Pepper Ballpark. Attendance at RoughRiders games has increased dramatically as players&rsquo; on-field performance has improved. The team went from last in the league in 2001 to first in 2004.     &nbsp;The Frisco arrangement is similar to a deal Guber struck in 1999 involving the Rockford, Illinois, Cubbies. According to a person close to the club, Guber scooped up the franchise for $4 million, renamed the team the Dragons, and forged an affiliation with the Cincinnati Reds. An intermediary introduced Mandalay to city executives in Dayton, Ohio, who offered to finance a $23 million downtown ballpark in order to entice a team to move there.     As part of that deal, the city of Dayton and Montgomery County issued municipal bonds worth $18 million to pay for most of the stadium&rsquo;s cost. Mandalay put in $4 million. In return, it secured a 20-year operating lease with an option for an additional 10 years. Mandalay is currently working with the city on a multiuse real estate development surrounding the park. If the deal, worth $250 million, goes through, Mandalay will be an equity partner. At the time Mandalay connected with Dayton, &ldquo;baseball people thought we were crazy,&rdquo; Guber says. &ldquo;They said we were too close to the fan base of the Reds, that depopulated Dayton couldn&rsquo;t support a team, that I was just another Hollywood guy with a silly jones for baseball.... Well, sure, I&rsquo;m a fan, but this is not philanthropy for me.&rdquo;     Though Guber is prone to making exaggerated statements, this doesn&rsquo;t appear to be one. Over the past decade, minor-league teams have become the toy of choice among wealthy businesspeople and are known for performing better financially than their major-league parents. The teams are relatively cheap, costing anywhere from $1 million to $25 million, depending on their class affiliation. There is also a built-in financial advantage, in that major-league affiliates pay minor leaguers&rsquo; salaries and injury costs. Minor-league team owners, who don&rsquo;t get involved in scouting, trading players, or hiring and firing coaches, operate like movie-theater owners: Guber makes money through sponsors, ticket sales, and concessions, which can generate profit margins of 15 to 20 percent.     While the rate at which team values were appreciating has recently slowed, the minor leagues retain some advantages. Major-league teams, for example, collect only 6 percent of their minor-league affiliates&rsquo; ticket sales. And minor-league owners are allowed to keep all the revenue from concessions and merchandise sales.     Tonight, though, Guber&rsquo;s attention is on the RoughRiders, who are taking on the Midland RockHounds at Dr. Pepper Ballpark. While the Rough&shy;Riders go through their pregame drills, Guber, who is attending the game with his two 14-year-old sons, looks down at the crowd-pleasing Newlywed Game unfolding atop the visiting team&rsquo;s dugout. The action is broadcast on the stadium&rsquo;s giant outfield screen, bringing roars and howls from the crowd. Guber cheers right along.     &ldquo;I love this team. I love all our teams, because I love this game,&rdquo; he says. Just then, the crack of the bat echoes in the stands. All heads turn&mdash;except Guber&rsquo;s.      He is counting the house.
      
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<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Carlos-Ghosn-Renault-Profile?tid=true">
<title>Speed Kills</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Carlos-Ghosn-Renault-Profile?tid=true</link>
<description><![CDATA[One night in February 2007, a technician at Renault crafted a noose in his two-bedroom apartment in the village of Saint-Cyr-l&rsquo;École, outside Paris, and hanged himself. The technician left behind a wife and young son, who had gone out of town and expected him to meet them the next day. His suicide was unexpected in many ways. He had a loving relationship with his family, and his work should have been equally satisfying. The position at Renault was a dream job&mdash;he had been obsessed with cars as a youth and had worked at the company since 1992, and Renault was putting him through graduate school for engineering. His performance reviews were consistently positive, and he was on track to be promoted to engineer.                     But in the months before he died, the technician, Raymond D., had been sliding into an emotional abyss, largely because of pressures at work. (Under French law, the last names of suicide victims are not disclosed without the approval of family members.) The company was in the midst of a radical turnaround plan implemented by Carlos Ghosn, who had taken over as C.E.O. in 2005. As a result, the workload had steadily increased for all of Renault&rsquo;s employees, particularly those at the design center where Raymond was employed. Workdays became longer and deadlines more intense. Before he killed himself, Raymond left a note on his son&rsquo;s blackboard that said, among other things, &ldquo;Tell Mr. Ghosn I can&rsquo;t handle the pressure anymore.&rdquo; (View a pop-up graphic showing notable groups of business-related suicides.)                   Raymond was not alone. Between October 2006 and February 2008, six employees working at the company&rsquo;s design complex&mdash;a campus called the Technocentre&mdash;and one at its nearby test facility tried to kill themselves; five succeeded, three of them during a period of just four months. Particularly gruesome were the two deaths that occurred at the complex itself. It&rsquo;s possible that this is just a statistical anomaly&mdash;Renault is a huge company, with more than 63,000 employees in France and 12,000 at the Technocentre alone. Peugeot Citro&euml;n, another French car manufacturer, has also experienced a handful of suicides. But some of the Renault employees who killed themselves blamed workplace pressure as the main cause. And one, Raymond, went a step further and blamed Ghosn, the man brought in to save the company.                                                                                                            Renault, the third-largest automaker in Europe, made no immediate public comment on Raymond&rsquo;s death, or on any of the others. No one from management called his widow to offer condolences. But as news of the suicides at Renault became public and experts posited that such a cluster in one facil&shy;ity was unusual, the questions surrounding the deaths became harder for the company to ignore. Job-related suicides are particularly rare in France, where strict worker protections such as 35-hour workweeks are enforced and labor unions have ample input into plant activities. Yet the turnaround plan at Renault was extremely ambitious and involved releasing 26 new or redesigned cars in less than four years, a pace far faster than most auto companies can sustain.&nbsp;                      &ldquo;I am trying to motivate people to want to do more than they thought they could do,&rdquo; says Ghosn, 54, in an interview at his office in Boulogne-Billancourt, the Paris suburb where the company is headquartered. He is short and stocky, dark-eyed, and impeccably dressed in a tailored black suit. &ldquo;That&rsquo;s the most important role of a manager, and that&rsquo;s what I appealed to when I began the transformation at Renault. I was certain that everybody in the company would feel that they were doing something extraordinary by helping Renault achieve what we set out to accomplish.&rdquo; Moments later, though, reflecting on the suicides of Raymond and his colleagues, Ghosn adds, &ldquo;But if you say people&rsquo;s motivation is the greatest wealth and asset of the company, scenes like these cannot be ignored.&rdquo;                     The events at Renault raise larger questions about how far a company is able to push its workers. At a time when the global economy is sagging, most large corporations are trying to increase their productivity. This involves painful initiatives that can backfire, especially in countries with worker-friendly &shy;labor laws. Most restructuring efforts follow a predictable pattern: reduced budgets, layoffs among well-trained workers, and new &shy;operations in cheaper parts of the world. In the process, says Kaj Grichnik, a consultant at Booz &amp; Co., manufacturers are alienating themselves from their most critical asset: their employees. &ldquo;In &shy;exchange for working harder and harder, most manufacturers offer their workers static salaries, decreasing benefits, increasing anonymity, and abuse from middle managers,&rdquo; Grichnik says. &ldquo;And when workers feel that they &shy;are not being treated with respect, the company suffers.&rdquo;                 &nbsp;The French Ministry of Health has classified the first two deaths as workplace accidents, a category that few suicides fall under unless they are indisputably linked to job conditions. The designation ensures that the victims&rsquo; families receive life insurance payments and a pension from the government. Potentially more problematic is the fact that the company could face charges. French labor inspectors recommended to the government prosecutor in Versailles that Renault be investigated for &ldquo;moral and institutional harassment of workers,&rdquo; according to a source in the prosecutor&rsquo;s office. At the time of the suicides, French employees could not work more than 35 hours a week; that policy has since been overturned. The prosecutor has already begun an inquiry, which will include taking depositions from the director of the Technocentre and the immediate supervisors of the suicide victims, and local police are working to determine whether employees were forced to put in longer hours than legally allowed. Authorities plan to decide in the coming months whether or not to file charges.                    When Carlos Ghosn became C.E.O. of Renault in 2005, he took over a company with a superb reputation for innovation but little strategic direction. For decades, its engineers designed cars that were mechanically and aesthetically different from virtually everything else on the road. It was the first car manufacturer to put turbochargers and hatchbacks into widespread production, among other innovations.                     However, under Ghosn&rsquo;s predecessor, Louis Schweitzer, a former high-ranking official in the French government, Renault swung from one new idea to another with little apparent rationale. The company had long specialized in economical cars for the masses, but beginning in 2001, Schweitzer made an embarrassing foray into upmarket autos by introducing the Avantime, an eccentric three-door coupe-minivan, and a staid model called the Vel Satis, a luxury car that retailed for about $50,000. Neither sold well, in large part because Schweitzer had tried to enter a market that was dominated by models from companies like BMW. And during that period, while Schweitzer was distracted by the launches, the quality of Renault&rsquo;s less expensive models dropped significantly. &ldquo;Traditional customers began to question where the brand was going and why the cars they wanted weren&rsquo;t as good as they used to be,&rdquo; says Stephen Norman, Renault&rsquo;s senior vice president of global marketing.                     It was no surprise, then, that Ghosn inherited distressing numbers. Revenue in 2005 had risen only 2 percent compared with the previous year, and Renault&rsquo;s market share in Europe had dipped to less than 10 percent for the first time in years. Ghosn had seen this before, or something like it, anyway. The Brazil-born Lebanese executive had first come to Renault in 1996 as an executive vice president. Before that, Ghosn was North American C.E.O. of Michelin, a title he achieved by his late thirties, when he forged a reputation for relentlessly slashing expenses. Renault was the perfect venue for such skills. Schweitzer had set a target of trimming about $600 from the manufacturing cost of each vehicle, but when Ghosn arrived as V.P., he established a plan that would triple the projected savings. Some of his initiatives provoked strong reactions. After he closed a large Renault factory in Belgium, hundreds of workers staged work stoppages and clashed with police. Workers in France also protested, out of solidarity. Political leaders from both countries demanded that the facility remain open, but Ghosn got his way. The factory was shuttered, and by 1998, Renault&rsquo;s profit margin had recovered to a healthy 5 percent.                     By 1999, Renault had rebounded to such an extent that it was able to rescue a competitor, Nissan, which was then nearly bankrupt. Renault paid $5 billion for 44 percent of Nissan&rsquo;s stock, and Ghosn took over the top spot. He quickly restructured the company by slashing budgets and laying off workers. A year after Ghosn took over, Nissan was profitable, and within three years it was virtually debt-free. With its newly streamlined cost structure, the company pushed its operating margins to 10 percent, comparable to those of industry leaders Toyota and Honda.                     Ghosn had become the auto industry&rsquo;s best-known high-wire act: the C.E.O. who would publicly proclaim an improbable set of goals for a company and somehow manage to achieve them. A Japanese comic-book series about his exploits, The True Story of Carlos Ghosn, became a bestseller, and business school students, without irony, compared Ghosn to famous historical figures in works like &ldquo;The Change Efforts of Douglas MacArthur and Carlos Ghosn in Japan.&rdquo; His press coverage could be hyperbolic; the Detroit News, for example, ran an article with the headline &ldquo;Nissan C.E.O.: The Making of a Superstar.&rdquo; Anytime an auto company had a down quarter or two, Ghosn was rumored to be in line to save it.                     &nbsp;When Schweitzer stepped down as Renault&rsquo;s C.E.O. in 2005, the celebrated Ghosn was the obvious choice to replace him. Renault had lost much of its cost-cutting zeal in Ghosn&rsquo;s six-year absence, but the company was marginally profitable, and there was little sense of urgency about trying to fix it. Ghosn chose to retain his chief-executive posi&shy;tion at Nissan while running Renault&mdash;to this day, he spends half of each month in Japan and the other half in France, and keeps a separate briefcase for each of his jobs&mdash;and most managers and employees expected that Ghosn&rsquo;s arrival wouldn&rsquo;t mean radical upheaval. Schweitzer told the Wall Street Journal that there would be no &ldquo;sudden changes in strategy.&rdquo;                     Yet it took only a year for the perpetually kinetic Ghosn to produce a turnaround plan for Renault that was as radical as anything he had dreamed up before. Presented at a February 2006 news conference, the campaign, called Renault Commitment 2009, would deliver &ldquo;the strongest period of growth in the history of Renault,&rdquo; Ghosn proclaimed. To do this, three benchmarks had to be met in a little less than four years: an operating margin of 6 percent, a redesigned sedan called the Laguna 3 that would be ranked among the top three cars in its category, and annual sales of 3.3 million vehicles (up from 2.5 million in 2005). To increase sales by that amount, the company estimated, it would have to launch 26 new or redesigned cars&mdash;an average of one every two months.                     Soon after the announcement, Ghosn toured the company&rsquo;s facilities, looking to shore up support for his plan, and some of the meetings turned testy. Oliv&shy;ier R&eacute;moleux, director of the Renault factory in Flins-sur-Seine, outside Paris, recalled a plant manager asking whether the company could realistically hope to reach Ghosn&rsquo;s targets, especially with European sales slowing. &ldquo;Wrong question,&rdquo; R&eacute;moleux says. &ldquo;Mr. Ghosn looked at him like he was crazy. &lsquo;It&rsquo;s not a target,&rsquo; he said. &lsquo;It&rsquo;s mandatory.&rsquo; Commitment 2009 was like shock treatment to our workers.&rdquo;                     Ghosn&rsquo;s management style might be considered a Western version of kaizen, the Japanese continuous-improvement method, in which small, incremental changes gradually make an organization more efficient. In a typical kaizen initiative, for example, the bolts required for a particular step on the assembly line are moved closer to the worker who needs them. Over time, thousands of similar moves combine to speed up production significantly. But in Ghosn&rsquo;s version of kaizen, you accelerate the process first and force the workers to do whatever is necessary to keep up.                &ldquo;With kaizen, you are going to be a little bit better, a little bit faster, a little bit less wasteful, but in the end you&rsquo;re just overlaying a little bit of improvement on the things that you&rsquo;ve always done,&rdquo; Ghosn says, in the anteroom of his office overlooking the Seine. &ldquo;That&rsquo;s not transformation. I want to take Renault into unknown territory, which by definition means we will be stretching ourselves to go beyond little improvements into the untapped area where innovation occurs.&rdquo;                   Ghosn counted on the Technocentre to implement this vision. A vast 150-acre complex in the Parisian suburb of Saint-Quentin-en-Yvelines, the $725 million Technocentre is where most of Renault&rsquo;s new models are born. No manufacturing happens there; instead, the facility houses 12,000 designers, engineers, technicians, and manufacturing gurus in a lablike setting designed to encourage the cross-pollination of ideas from one project to another. The campus is dominated by three buildings, all of them a silvery-white color that in sunlight takes on an antiseptic, bluish tinge, like a city in a science-fiction movie. It features gardens, waterways, and tree-lined paths, along with restaurants, retail outlets, a music room in which workers needing a break can play on company-supplied instruments, and a gym complete with a sauna and fitness classes (at noon and 5 p.m. every day). Since 2006, the Technocentre&rsquo;s sole priority has been to design the more than two dozen new models that Ghosn promised as part of Commitment 2009.                      Almost immediately after Ghosn&rsquo;s plan was announced, conditions at the Technocentre started to deteriorate, as managers began to set unrealistic timetables. As one unnamed worker later told researchers in a government-initiated investigation into the suicides, &ldquo;I leave at 6 p.m. to pick up my kids, which is an hourlong drive. I start work again at 9 p.m. and go until 11 or 12. This is every day. I have to work every weekend.&rdquo; Another worker said, &ldquo;Extra hours without getting anything for it is considered a mark of loyalty.&rdquo;                      Some Technocentre employees say they tried to reason with their supervisors, asking for leniency when they couldn&rsquo;t finish tasks on time, but they were either ignored or told to stop complaining. Christophe Delaine, a Renault electrician for 19 years, says that supervisors became increasingly impatient. &ldquo;They push people to do more than they&rsquo;re capable of,&rdquo; he says. &ldquo;There&rsquo;s a culture of blame in the management. It&rsquo;s deliberate.&rdquo;                     &nbsp;The situation came to a head one morning in October 2006, when Antonio B., a 39-year-old engineer, jumped to his death from an elevated walkway in one of the Technocentre buildings. He fell more than 30 feet onto concrete and died instantly. According to a union delegate who was nearby, people initially thought a chunk of the building had broken free. Several employees saw the body hit, as the engineer had chosen a location people routinely passed and a time, 10 a.m., when they were on break. On Antonio&rsquo;s computer screen, according to Technocentre employees, was a description of a bitter argument he had just had with his manager. (Neither Renault nor the local police will confirm the contents of the note.) In that description, he said that he felt unappreciated and that no matter how hard he worked, management was never satisfied. Antonio&rsquo;s death traumatized the Technocentre for weeks. One worker says, &ldquo;Coming to work each day is like going to a crime scene. I can&rsquo;t forget the sound of his falling body.&rdquo; The elevated walkway has since been closed.                     Three months later, the body of Herv&eacute; T., a 44-year-old technician, was found in the artificial pond on the grounds. He had been missing for more than a day; because of the papers on his desk and the fact that his car was still in the parking lot, co-workers assumed he had to be on the campus somewhere. But the property is immense, and by the time his body was finally discovered&mdash;in a remote corner of the pond&mdash;he had been dead for 36 hours.                     Herv&eacute; left behind a diary of a yearlong battle he had waged against depression, including a short hospital stay to treat anxiety. He described the tension at work and the fear that he didn&rsquo;t fit in at Renault anymore. &ldquo;We are always working in a state of emergency,&rdquo; he wrote. &ldquo;This has led to a lot of negative stress. I&rsquo;m afraid to make mistakes in the documentation, and since we generate the engineering data, it can have consequences for purchasing, prototype, logistics, and manufacturing.&rdquo;                    Raymond D.&rsquo;s suicide, less than three weeks later, was perhaps more disturbing, in that people who knew him well had watched him emotionally disintegrate. In October 2006&mdash;soon after joining the team producing the Laguna 3 sedan, one of the three components of Ghosn&rsquo;s turnaround plan&mdash;Raymond&rsquo;s wife says he told her and friends that if he didn&rsquo;t complete the technical specifications for the car&rsquo;s undercarriage, which was his direct area of responsibility, the car would not come out in fall 2007 as Ghosn had promised. Worse, the Sandouville plant in northern France, where the model was being built, would be closed. It&rsquo;s irrational for one technician to assume responsibility for a factory full of workers, but Raymond&rsquo;s wife maintains that he believed he carried the future of that facility on his shoulders and that his supervisors had encouraged him to think that way. He began to put in up to 15 hours a day on the project, breaking only to eat and sleep erratically for as few as three hours a night. &ldquo;There were times,&rdquo; his wife recalls, &ldquo;when he would wake up at 3 in the morning, after going to sleep very late, and check if I was asleep. If I was, he would sneak out of the house and go back to work at the Technocentre.&rdquo;                    Raymond told his brother-in-law, also a Renault worker, that he felt as though he wasn&rsquo;t good enough for the job and that his supervisors didn&rsquo;t think he was capable, belying his positive performance reviews. Raymond said, &ldquo;Next to Carlos Ghosn, I&rsquo;m nothing,&rdquo; according to his brother-in-law. And when his wife suggested that he mention his concerns about the Laguna&rsquo;s falling behind schedule to his supervisors, his face grew ashen. &ldquo;Then I won&rsquo;t get my promotion,&rdquo; he told her. Though Raymond was losing his grip, his family feared that had they forced him to seek help, he would have completely withdrawn from them. So they did little more than gently try to persuade him to seek help at work. (At the time, the company had doctors on staff to counsel employees who needed emotional help, and an enhanced program has since been put in place.)                    His wife still lives with their young son in the home where Raymond hanged himself. She has a letter written by Raymond&rsquo;s doctor saying that he had known Raymond for 15 years and that he&rsquo;d never shown any signs of psychological problems. A tall, well-spoken woman originally from Sarajevo, Raymond&rsquo;s wife is haunted by the stark goodbye note he left on their child&rsquo;s blackboard, and the eerie reference to Ghosn. The family&rsquo;s lawyer says she believes that he left such an explicit signal because he felt that the first two suicides were dismissed by Renault as flukes. &ldquo;Every day I wake up in an empty bed and think about Carlos Ghosn, how he doesn&rsquo;t suffer the same pain that I do,&rdquo; Raymond&rsquo;s wife says. &ldquo;All I want is for Carlos Ghosn to say he did something wrong.&rdquo;                    That hasn&rsquo;t happened. Soon after Raymond&rsquo;s death, Renault issued a statement that there was &ldquo;no correlation between work conditions and the three suicides&rdquo; or between the deaths and management strategy. More recently, a Renault publicist emailed Cond&eacute; Nast Portfolio a response to questions about the suicides that read, &ldquo;We are profoundly shaken by these events, and took prompt action to assess the situation and address specific points on which improvements could be made. This does not mean that there is a direct link between work and the suicides, the causes of which are highly complex.&rdquo; The company&rsquo;s stance is that the multiple deaths were a mere coincidence and, in fact, correlated closely with the annual suicide rate in France, a relatively high 20 per 100,000 people. In the U.S., by comparison, the suicide rate is only about 10 per 100,000 people.                     &nbsp;But suicide experts say such reasoning is flawed. Broad averages can&rsquo;t predict which types of individuals will commit suicide; more specific factors such as age, gender, and occupation must be considered. In France, agricultural workers between the ages of 25 and 49 have the highest suicide rate&mdash;about 61 per 100,000 people&mdash;compared with only about 12 for every 100,000 people in that age group with jobs in corporations. Given these statistics, the recent wave of three suicides in one year at the Technocentre is actually more than double the national average for its category.                    Of course, suicides sometimes happen in groups because of the copycat phenomenon. Yet multiple people taking their lives in the workplace is unusual, and two in the space of three months is &ldquo;exceedingly rare,&rdquo; says suicide expert Sally Spencer, executive director of the Carson J. Spencer Foundation. Most people who commit suicide leave notes saying that they have relationship, family, or money problems, not that they can&rsquo;t stand their bosses. The Technocentre deaths, says psychiatrist Christophe Dejours, professor at France&rsquo;s National Academy of Arts and Trades, &ldquo;indicate that something is happening at Renault in the way the work is organized that is putting people off balance.&rdquo;                    In September 2007, yet another Renault employee killed himself. Few details were reported, other than that the victim was a maintenance technician who worked at the company&rsquo;s D&rsquo;Aubevoye facility, which tests the prototype cars coming out of the Technocentre. (The two operations are managed jointly by the same executives.) He committed suicide while out on sick leave.                    Not long after that, a Renault health-and-safety committee, prodded by the Technocentre unions, brought in the consulting firm Technologia to look into the company&rsquo;s operations at the campus. The report, which was made public, painted a picture of a troubled facility. Technologia found that 31 percent of Technocentre employees&mdash;three times the norm for workers in similar jobs&mdash;were under stress and at risk to develop psychological problems. It also said that the problems at the Technocentre can be linked to &ldquo;the combination of professional passion and ambition and a managerial system that pushes these buttons to meet their increasingly ambitious goals.&rdquo;                     The first-person accounts in the report are more specific. As one engineer in the Technocentre study put it, &ldquo;The workload is such that it is necessary to work every night of the week until about 11 or midnight.&rdquo; Another added that the extra work, performed without compensation, is taken as proof of an employee&rsquo;s &ldquo;devotion to the company.&rdquo; The comments of a third worker went straight to Ghosn&rsquo;s management style: &ldquo;It&rsquo;s a lot easier to give nonrealistic objectives and to see what comes out than it is to give objectives with some cohesion. From a human standpoint, it&rsquo;s a catastrophe.&rdquo;                    Earlier this year, at the midpoint of his four-year plan, Ghosn had a lot to be proud of. Renault&rsquo;s operating margin rose to 3.3 percent in 2007, from 2.6 percent the year before, and revenue was up slightly, to $60 billion (or 40.7 billion euros). Renault has expanded its presence in emerging markets, and non-European customers now account for more than a third of all sales. In addition, Renault launched six new models in 2007, with nine more coming out in 2008.                    But some analysts believe that the company will fall short of its ambitious goals and may have to scale them back in the coming months. In fact, by the most basic measure&mdash;how many cars are sold in a given year&mdash;Renault&rsquo;s sales have remained flat since 2005. The new Laguna family sedan (the car Raymond was working on, released with great hype in September 2007) failed to meet expectations.                     In the wake of the suicides, Renault named Bernard Ollivier, an engineer, to manage the Technocentre and implement new measures to improve morale at the facility. Among these initiatives are weekly meetings to bring supervisors closer to their staffs and the hiring of about 100 new vehicle-development employees to lighten the load of those already there. &ldquo;We took these steps because we&rsquo;re concerned,&rdquo; Ghosn says.                    But the innovations aren&rsquo;t enough for some employees at the facility, who dismiss them as window dressing. The amount of work and pressure, they say, remains relatively the same, and many employees still work extremely long hours. The situation was driven home again in February, a year and a half after the first suicide at the Technocentre. Even as Renault&rsquo;s human resources chief, G&eacute;rard Leclercq, was announcing at a press conference that the company was on a &ldquo;good course&rdquo; toward improving labor conditions at the facility, the automaker separately confirmed what the local newspapers had reported a few days earlier: Another Technocentre worker had been found dead&mdash;the fifth suicide among Renault employees. People close to the victim say that he had worried for some time that his job was in jeopardy because he wasn&rsquo;t proficient enough in English.                    Related LinksCarmakers Post Mixed ProgressThe Minimum Wage and EmploymentAre Minimum Wage Hikes More Effective Than Tax Rebates?
  
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<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Companies-Pay-Tuition-Cost?tid=true">
<title>School Daze</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Companies-Pay-Tuition-Cost?tid=true</link>
<description><![CDATA[                                                                           Morgan Stanley spent $2,094,387 on C.F.O. Colm &shy;Kelleher&rsquo;s&nbsp; London assignment in 2007, including an &shy;unspecified sum on &ldquo;reimbursement for educational costs in the U.K.&rdquo;                                                                             Lehman Brothers paid $13,863 to cover the December&nbsp; 2006 tuition for the dependents of C.F.O.Ian Lowitt in London.                                                                             Aluminum company Novelis agreed in 2004 to pay the private-school tuition for the kids of Martha Finn Brooks, president and C.O.O., from grades one through 12: a perk that cost $48,741 last year.                                                                             Former Thomson Financial president and C.E.O. Sharon Rowlands got $166,158 in 2006 for her kids&rsquo; tuition, including $79,008 for the tax gross-up.                                                                                  Last year, Elizabeth Arden Inc. spent $59,150 on secondary-school bills for the children of Jacobus A.J. Steffens, the Switzerland-based international &shy;division&rsquo;s general manager.                                                                                Atari spent $51,982 on education bills and tax gross-up for the kids of its former chief technology officer Jean-Marcel Nicola&iuml;.                                                                                Software services firm DST Systems spent $99,318 last year on tuition at the American School in London for   the three children of international C.E.O. Thomas Abraham.  Related LinksLondon House Price Datapoint of the DayBringing Back Regulation's Good NameLondon Banks, Falling Down
  
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<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Carolyn-Strauss-Leaving-HBO?tid=true">
<title>Hit Woman</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Carolyn-Strauss-Leaving-HBO?tid=true</link>
<description><![CDATA[How do you feel about leaving? Are you angry? I&rsquo;m not really angry about it. There are moments, flashes of different emotions. What I feel is a sense of loss&mdash;a loss of my colleagues, my staff. But overall, I feel energized and invigorated. I recognize the rightness of what it is.That&rsquo;s very Zen. Well, you can fight it all you want, and you can be angry. Ultimately, I feel that&rsquo;s not a place of strength for me. Anger for me is a damper, not a motivator.For some people, it&rsquo;s the only motivator. Yeah, believe me. Hollywood is full of them.What was your worst day? There were some days during the beginning of Rome that were really hard because it wasn&rsquo;t working. We had made a calculated gamble, which did not pay off, to not do a pilot because it cost so much money. It was cheaper to just order 12 shows for $100 million. That was a huge mistake. Those were dark days. But again, you learn.Increasingly, the industry is run by conglomerates that hate risk. How does that affect the creative product? Fear has always been a pervasive factor in this town. It&rsquo;s partly financial. For HBO, there used to be nothing to lose. It&rsquo;s human nature that once you get invested in a perception, you start second-guessing yourself and you make safer choices.How has your day changed? I find myself driving slower, which is probably good.What decision do you most regret? A bunch of years ago, we had done some shorts with Jack Black and Kyle Gass as Tenacious D, and we had tried to get them to do a series, and the inability to sort of push that over to the next level was always a big disappointment. I think for us it would have been great.Where are the smart people in Hollywood working these days? The stuff that&rsquo;s happening in the gaming world is fascinating. Just the creative leaps games are taking, the narrative, the storytelling that goes into them. Wrapping my head around the way a five-year-old consumes entertainment like that is difficult. So I end up playing a lot of Tony Hawk&rsquo;s Downhill Jam and Spider-Man on Wii.What do you wish your parent company, Time Warner, had done differently? Not merged with AOL.Related LinksGreat SexMultiplex MarketingAcross the Storyverse
  
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<item rdf:about="http://www.portfolio.com/executives/features/2008/08/13/Profile-of-Fundraiser-Haim-Saban?tid=true">
<title>Haim Saban, Power Ranger</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Profile-of-Fundraiser-Haim-Saban?tid=true</link>
<description><![CDATA[Haim Saban still hadn&rsquo;t decided whether or not to help Senator Barack Obama get elected president when he picked up the phone this summer and began planning an imaginary event.           The Hollywood billionaire&mdash;America&rsquo;s top political-campaign contributor&mdash;was still heartbroken over Senator Hillary Clinton&rsquo;s defeat. As one of her national finance chairs, he had single-handedly raised more than $1 million from his friends and associates, and her departure from the race had left him so bereft that he considered backing John McCain. When that idea met with opposition from Saban&rsquo;s wife, Cheryl, and their four children (&ldquo;Are you kidding? We pounced on him,&rdquo; she recalled), the self-described &ldquo;cartoon schlepper&rdquo; (he made his first millions in kiddie TV) was left with two options. (View slideshow.)          &ldquo;Option No. 1 is to vote for Obama, send him a $2,300 check, and sayonara&mdash;hope he wins,&rdquo; Saban said, citing the maximum donation allowed by an individual. &ldquo;Option No. 2 is, Go big. If I&rsquo;m going to go big, I have to go biggest. I have zero interest in being big. Biggest, I have an interest.&rdquo;           Nattily dressed in a blue blazer with gold buttons and a white open-collared shirt, the 63-year-old grandfather was sitting at the head of a gleaming table in the 26th-floor conference room of Saban Capital Group, the firm he founded in 2001 to manage his own $3.4 billion fortune. Running Saban Capital isn&rsquo;t his only job; he also owns several music-publishing companies and serves as chairman of Univision Communications, the largest Spanish-language media company in the United States, which he and a group of private equity partners took over in 2007.           An assistant buzzed on the phone. Saban had asked her to call his friend, the record producer David Foster, who was now holding.           &ldquo;He&rsquo;s going to yell at me,&rdquo; Saban predicted, before picking up and yelling first: &ldquo;Bubbe!&rdquo; Then he got to the point: If he decided to &ldquo;go big&rdquo; for Obama, he wanted Foster to help him plan a fundraiser to eclipse all fundraisers, an event Saban was already calling &ldquo;the concert of the year.&rdquo;           &ldquo;I want to do something huge. I want Lionel Richie. I want Shakira. Of course we&rsquo;ll have Oprah. We&rsquo;ll have all that,&rdquo; he barked into the phone, describing what he imagined as a mid-September, $25,000-a-ticket event to be thrown in his &ldquo;backyard&rdquo;&mdash;the lush grounds, modeled on the gardens of Versailles, of his six-acre Beverly Hills estate. Foster said something that made Saban laugh. &ldquo;No, I&rsquo;m not working too hard. I&rsquo;m enjoying myself!&rdquo; he said, running a hand over his mane of thick black hair, which appeared to be held in place with shellac. &ldquo;Are you in?&rdquo;          Foster was in. But was Saban? &ldquo;It depends first of all that I commit to myself that this is what I want to do,&rdquo; he told me after the call. &ldquo;And I haven&rsquo;t yet.&rdquo;           Rainmakers like Haim Saban have always played a key role in politics. But this summer, when Senator Obama became the first major-party candidate to decline public financing since the system was created in 1976, &uuml;ber-fundraisers became even more essential.           That made Saban&rsquo;s indecision newsworthy. In late June, Obama&mdash;girding himself for a tough battle with McCain&mdash;began wooing Senator Clinton&rsquo;s top fundraisers in earnest. Clinton helped, asking more than 100 of her most persuasive money gatherers to meet Obama at the Mayflower Hotel in Washington. Most agreed to come, but some, including Saban, &ldquo;pointedly rejected the request,&rdquo; reported the British weekly the Observer. &nbsp;          A few days earlier, John B. Emerson, a former White House official under Bill Clinton and a major supporter of Hillary Clinton&rsquo;s presidential campaign, helped organize a $28,500-a-couple event in Los Angeles that raised $5 million for Obama (much of it from those in the entertainment industry). Saban did not attend; soon, Daily Variety had singled him out as a &ldquo;fervent&rdquo; Hillraiser who had yet to endorse a candidate.       &nbsp;   As Mike Medavoy, the former studio chief and mainstay of the Hollywood-Washington nexus, told me in July, &ldquo;I think Haim has deliberately backed off.&rdquo;          Why such focus on a man best known for transforming a Japanese TV series into the &rsquo;90s children&rsquo;s action show Mighty Morphin&rsquo; Power Rangers? Because, in addition to being an unstoppable &ldquo;bundler&rdquo;&mdash;the polite term for those who are willing to wring cash out of their friends and colleagues&mdash;Saban has given more of his own money, nearly $13 million, than any other American to support candidates, political-action committees, and campaign committees since 1999, according to the Federal Election Commission. (The second-largest giver in the same period, Stephen Bing, trails Saban by more than $3 million.)          Moreover, because of Saban&rsquo;s vocal support of Israel, he is seen as something of a bellwether for other influential Jewish Americans. An endorsement from Saban, a self-described &ldquo;right-wing crazy&rdquo; when it comes to national security, would send a loud message to others who question Obama&rsquo;s determination to aggressively protect the Jewish state. &nbsp;          Saban admitted he&rsquo;d been worried about Obama&rsquo;s commitment to Israel. But when the presumptive Democratic nominee ended his June speech to the lobbying group American Israel Public Affairs Committee by noting that Jewish Americans and African Americans had long stood &ldquo;shoulder to shoulder&rdquo; in periods of great social upheaval, Saban was moved.           &ldquo;Him being aware of that, acknowledging that, shows that he may have a visceral commitment, as opposed to a logical or strategic one,&rdquo; Saban said. &ldquo;That visceral affinity was a question mark for a lot of people. Well, it&rsquo;s no longer a question mark for me.&rdquo;          Still, something held Saban back. He blamed &ldquo;logistics,&rdquo; his term for the scheduling problems that had thus far prevented him from sitting down with Obama before fully committing himself. But it was easy to wonder whether Saban&rsquo;s hesitation partly stemmed from the fact that he likes to be first, to be prescient, to see what others do not. He will never be able to say of Obama, as he could of Clinton, that he was there at the beginning. Financially and emotionally, it may be impossible for him to ever be Obama&rsquo;s &ldquo;biggest.&rdquo;           A former Clinton fundraiser remembers coming upon an agitated Saban in February 2007, just weeks before an event to be held at the Beverly Hills home of supermarket magnate Ron Burkle. Saban, who&rsquo;d been working day and night to boost attendance, had corralled Jonathan Mantz, Clinton&rsquo;s national finance director. &ldquo;If I&rsquo;m not No. 1,&rdquo; he said, meaning the evening&rsquo;s top fundraiser, &ldquo;I&rsquo;m going to cut my balls off.&rdquo;          Saban raised $800,000 that night&mdash;more than anyone else.          &ldquo;Son of a bitch! Another three-pointer!&rdquo; Saban is kvetching at his very large flat-screen TV as we sit down for our first interview. Game 2 of the N.B.A. finals is being played on the East Coast, so we&rsquo;re watching the Boston Celtics beat the Los Angeles Lakers from the family room of Saban&rsquo;s 26,000-square-foot home in a gated neighborhood in Beverly Hills. Saban doesn&rsquo;t have season tickets, though when the Lakers play at home, he always wheedles a floor seat.&nbsp; &nbsp;          &ldquo;I call this one, that one&mdash;&lsquo;Hey, you want a date?&rsquo;&rdquo; he says, munching nuts served by a crisply dressed British &ldquo;house manager&rdquo; named Justin. Among Saban&rsquo;s recent conquests: Avi Lerner, the B-movie mogul who, like Saban, grew up in Israel, and Jim Wiatt, C.E.O. of the William Morris Agency&mdash;twice. &ldquo;For the three games that are coming up, I schnorred,&rdquo; Saban boasts. &ldquo;Tickets are $15,000 to $20,000. But I didn&rsquo;t have to buy anything. Think about it: a $60,000 savings!&rdquo;          When I observe that this confirms his reputation as a tough dealmaker, he feigns hurt feelings. &ldquo;Tough? Look at me!&rdquo; he commands. &ldquo;Do you see toughness? I&rsquo;m a huggable little lamb! What are you talking?&rdquo; He smiles a smile more crocodilian than sheepish and reaches for my tape recorder.           &ldquo;You have a man in your life?&rdquo; he asks, pushing the off button.           Saban is relentless. Ask anybody.          &ldquo;Tenacious,&rdquo; says Bob Iger, president and C.E.O. of Disney.          &ldquo;Indefatigable. Overwhelming. Undeterrable,&rdquo; says Steve Rattner, the managing principal of Quadrangle Group, an investment firm.           &nbsp;&ldquo;He&rsquo;s constantly focusing on &lsquo;Where am I going with this? What&rsquo;s the next move?&rsquo;&rdquo; says Peter Chernin, chief operating officer of News Corp., who&rsquo;s been on both sides of the negotiating table with Saban. &ldquo;When he has something he&rsquo;s trying to build, Haim is like a dog with a bone.&rdquo;          A classic Hollywood story involves Gene Simmons of Kiss. In the late &rsquo;90s, as co-owner of the Fox Family Channel, Saban was developing shows for children. Simmons, the fire-breathing, blood-spitting frontman of a rock band in costumes and face paint, pitched Saban an idea for a new Saturday-morning cartoon: Kiss meets X-Men, the Marvel comics superhero team. Saban liked the concept well enough to convene a meeting with Avi Arad, then C.E.O. of Marvel&rsquo;s toy division.           At the appointed time, Saban, Arad, and Simmons sat down. The meeting was going well, and the three began to haggle over numbers. Then Saban turned to Arad and, referring to Simmons, confided in Hebrew, &ldquo;Now we gut him like a fish.&rdquo; Without missing a beat, Simmons&mdash;who, unbeknownst to Saban, was born Chaim Witz in Haifa, Israel&mdash;replied in Hebrew, &ldquo;You ass&shy;hole. I&rsquo;m one of you.&rdquo;          When asked about this story, Simmons laughs and says he &ldquo;vaguely&rdquo; remembers &ldquo;something along those lines.&rdquo;      Saban says he has no memory of the conversation but acknowledges it &ldquo;may have&rdquo; taken place. &ldquo;People I deal with, for the most part, are very smart people,&rdquo; he adds. &ldquo;I mean, sometimes I gut them like a fish, and sometimes they gut me like a fish, you know?&rdquo;           In business as well as in politics, Saban plays the mensch, but his charm fails to hide an all-consuming drive to succeed. He is generous but also ruthless; aggressive yet patient enough to wait for the best moment to strike; poker-faced but at times utterly transparent; analytical and strategic with moments of startling self-contradiction.           Saban&rsquo;s memories of growing up poor in Alexandria, Egypt, have prompted him to make huge gifts to Los Angeles-area educational institutions, hospitals, and free clinics, particularly those that serve children. In that way, indisputably, Saban and his wife are champions of the underprivileged.           Yet when rules designed to protect the public&rsquo;s access to the Pacific Ocean interfered with his privacy at his stucco-and-stone Malibu beach house, he was quick to join his neighbors on so-called Billionaire&rsquo;s Beach to seek&mdash;and win&mdash;an exemption to keep outsiders off that stretch. Philanthropist Eli Broad took the lead, Saban says, in asking the California Coastal Commission to allow them to buy an 80-foot section of beach a mile away and turn it into a public park.           Saban&rsquo;s stance on social issues is liberal. He&rsquo;s pro-choice, pro-nationalized health care, even pro-taxes. &ldquo;Higher taxes for people like me to help others who are less fortunate&mdash;that&rsquo;s okay by me,&rdquo; he&rsquo;ll say. But just last year, he settled with the Internal Revenue Service after admitting to using offshore tax shelters in 2001 to avoid paying at least $300 million on the $1.5 billion he pocketed when Disney bought his share of Fox Family Worldwide. In his testimony, he told Senate investigators that he had received bad advice: &ldquo;You have before you a very disappointed person, who feels misled, lied to, cheated.&rdquo;           Saban&rsquo;s family fled Egypt for Tel Aviv during the Suez Crisis in 1956. He was 12, old enough to understand the shame his father, a toy salesman, endured as he struggled, selling pencils and erasers door-to-door. For years, Saban says, he lived with his grandmother, parents, and younger brother in one room and shared a bathroom with prostitutes and their pimp. At 15 or 16, around the time he started playing bass&mdash;&ldquo;badly,&rdquo; he says&mdash;in a Beatles cover band called the Lions, Saban would lie in bed and imagine being rich.          &ldquo;Before I went to sleep, I&rsquo;d close my eyes and think about it,&rdquo; he recalls, &ldquo;which for me meant I would own a car&mdash;the biggest car! American! I wanted to own a Chevrolet Impala.&rdquo;           He would own that Impala, but not until after the 1973 Yom Kippur War wiped out a business he&rsquo;d started that promoted concerts and managed bands. In 1975, he moved to Paris, where he got the chance to record one of his clients singing the theme song for a cartoon called Goldorak. He was miffed when he had to foot the $2,000 bill for the recording session, but later, he&rsquo;d be grateful. Because he&rsquo;d paid to produce it, he owned the master, so when Goldorak became a huge hit and its theme song started selling, Saban made a gigantic profit. He realized he&rsquo;d found his niche.       He moved to Los Angeles in 1983. Around that time, he discovered that the music accompanying cartoons was the mother lode.       &nbsp;   &ldquo;It&rsquo;s really simple to understand,&rdquo; he explains. &ldquo;If you watch a half-hour sitcom, you hear a little music at the beginning, a little at the end. But cartoons open with music, have music all along and music at the end. I&rsquo;m still making money on those cartoons.&rdquo; He pauses, then whispers, &ldquo;Millions!&rdquo;       He pursued his fortune with typical single-mindedness. According to the performing rights agency BMI, Saban is the composer or co-author of a staggering 3,700 musical themes, song cues, and other works. That achievement came into question in 1998, when several composers alleged that they had written much of the music for which Saban and others took credit. That year, the Hollywood Reporter launched an investigation into Saban&rsquo;s music-publishing empire, stating that composers were paid by the hour to write music that Saban then claimed he had authored.        One of the composers, Ron Wasserman, said that he wrote the original Power Rangers theme as well as hundreds of hours of other music, but for years got no writing credit. It was no secret; the no-credit clause was clearly set forth in his and other writers&rsquo; contracts with Saban, Wasserman tells me. &ldquo;It was paid college, that&rsquo;s really what it was,&rdquo; he says. The system wasn&rsquo;t fair, he adds, &ldquo;but had I not had that, I wouldn&rsquo;t be where I am today. I certainly have no hard feelings.&rdquo; Wasserman has gone on to write (and receive credit for) music for America&rsquo;s Next Top Model, among other shows.           According to Saban, 10 composers threatened to sue him for $1 million each. &ldquo;Yeah,&rdquo; he tells me, &ldquo;and we settled for $10,000 a pop. They knew they had zero case. They were totally wrong.&rdquo;       By the mid-&rsquo;80s, Saban had begun dabbling not just in music but in the cartoons themselves. While in Tokyo on business, he saw a children&rsquo;s TV show called Kyoryu Sentai Zyuranger. He paid $500,000 for the rights to air the program outside Asia and would spend the next eight years trying to persuade an American network to remake it, calling it Mighty Morphin&rsquo; Power Rangers. Later, he bought the TV rights to Teenage Mutant Ninja Turtles from the comic book&rsquo;s creators.           &ldquo;When I first met him, the license plate on his car, a brown Rolls-Royce, was rsktkr1,&rdquo; recalls Cheryl. An author of self-help books, she remains, at 57, one of the greatest-looking women in Los Angeles. She married Saban in 1987, a year after becoming his assistant (though you might say she has married him three times&mdash;they renew their vows every 10 years).           In the summer of 1993, Saban finally persuaded the Fox network to put Mighty Morphin&rsquo; Power Rangers on the air. The campy live-action show, about five spandex-wearing teenagers who defend Earth from evildoers, was no Sesame Street. But it was an overnight success. Within weeks, it was the top-rated kids&rsquo; program.          Saban quickly used his new leverage to forge a joint venture with Fox. By that point, he had bought up 3,500 half-hour episodes of children&rsquo;s TV, while Fox had the distribution channel, reaching 98 million homes. Saban, who ran the venture, called it &ldquo;a natural marriage.&rdquo; Believing (rightly) that 24-hour cable channels aimed at children were going to have the advantage over networks that only showed kiddie fare on weekday afternoons and Saturdays, he helped persuade Fox&rsquo;s corporate parent, News Corp., to buy Pat Robertson&rsquo;s Family Channel. The deal gave Saban a 50 percent stake in the new entity, called Fox Family Channel.          In 2006, once Saban had become a billionaire, the Israeli newspaper Haaretz dubbed him &ldquo;a kind of Great Gatsby. Our Great Gatsby.&rdquo;          But poverty would never be far enough away. Today, Saban keeps 10 percent of his total investment portfolio &ldquo;protected&mdash;it generates the minimum interest that money can generate. It&rsquo;s very secure.&rdquo; Saban jokes that he&rsquo;s created a new asset class known as N.P.A.           &ldquo;What do you think N.P.A. stands for?&rdquo; he asks. &ldquo;Never Poor Again.&rdquo;          A Los Angeles rabbi tells me to ask Saban what he did in the Israeli army. Without fail, the rabbi swears, these job assignments reveal key character traits. Saban is startled.          &ldquo;Nobody&rsquo;s ever asked me that before,&rdquo; he says. He grins as he reveals the answer: trash collector.         &ldquo;But I&rsquo;ll tell you what: I asked for that job. They gave me a desk job. And I thought, I don&rsquo;t think so. I can&rsquo;t sit. Details drive me crazy. Trash, you&rsquo;re doing something. What&rsquo;s dirty now is clean. I like cleaning up mess.&rdquo;          &nbsp;But polishing a tarnished asset is different from building a new one. Which may explain why Saban&rsquo;s overseeing Fox Family Channel was not a big success. After Power Rangers, in fact, Saban never developed another hit, and News Corp.&rsquo;s Chernin would later acknowledge to Forbes that Fox was &ldquo;disappointed&rdquo; by the channel&rsquo;s slow progress.          Still, no one at Fox was disappointed by what happened next. Five years into the partnership, Saban exercised a &ldquo;put&rdquo; option he&rsquo;d written into the original deal that triggered the sale of his half of the channel. News Corp. decided to sell too. The timing couldn&rsquo;t have been better, and Chernin gives Saban credit for it. &ldquo;He was clever enough to see then, at the end of 2000, the beginning of 2001, that there was a great potential leverage position between Nickelodeon and Disney to sell this thing,&rdquo; Chernin said of the events leading up to Disney&rsquo;s purchase of Fox Family for $5.2 billion. &ldquo;He was extremely perceptive about thinking which way the business was going.&rdquo;          Today, everyone agrees that Disney overpaid. The channel, renamed ABC Family Worldwide, &ldquo;struggled initially. We definitely paid what we call full price. It&rsquo;s a euphemism, and we&rsquo;ll leave it at that,&rdquo; said Iger, whose predecessor as Disney C.E.O., Michael Eisner, did the deal.          Flush with $1.5 billion of Disney&rsquo;s cash, Saban set his sights on another prize: the German broadcasting company Pro&shy;Sieben, whose owner, KirchMedia, one of the largest media companies in Europe, was near bankruptcy. It was yet another deal in which Saban&rsquo;s strategic timing and schmoozing abilities would pay off. Saban soothed regulators concerned that a foreigner at ProSieben&rsquo;s helm would use the broadcaster as his personal pulpit. He also pulled some political strings, prevailing on the American ambassador to Germany, among many others.          &ldquo;I had to go see the heads of the media authorities on a state-by-state basis,&rdquo; Saban says. &ldquo;There are 16 states and 16 communications commissions there. They&rsquo;re not all agreeing on the way the media should be handled. Au contraire! I spent a lot of time going from Chancellor Schr&ouml;der, whom I met a few times, to the prime minister of Bavaria and the minister of communications of Bavaria.&rdquo;     When Saban learned that ProSieben would be his, he was on a tour of the concentration camp at Dachau. &ldquo;I was in the crematorium when the phone vibrated in my pocket,&rdquo; he says, recalling how he stepped outside. &ldquo;My whole body was shivering like this.&rdquo; He hugs himself. &ldquo;It was like the closing of a circle. For a Jew to own this property, it really meant to me that the world had significantly changed for the better.&rdquo;         Saban was deeply involved in making ProSieben profitable again, &ldquo;maniacally&rdquo; so, Quadrangle&rsquo;s Rattner says. Saban sent its newscasters to Fox News to study how to be more engaging. He replaced all its managers except its chief financial officer. He revamped its children&rsquo;s programming and insisted that the company do a German version of a Colombian soap opera that would later become a big hit in the U.S. as Ugly Betty.          &ldquo;Through the roof!&rdquo; is Saban&rsquo;s description of the way the German Ugly Betty performed. And last year, Saban sold his 50.5 percent controlling stake in ProSieben to Kohlberg Kravis Roberts and Permira for a total of $4 billion. In three and a half years, he had turned his original $270 million investment into $970 million, including fees.         Right now, that same drive is focused on Univision, which Saban began coveting back in 2005. That was the year he paid a visit to Jerry Perenchio, Univision&rsquo;s founder, at his Bel Air home. Saban thought Perenchio had done a great job of building Univision into a multi&shy;channel force in TV, cable, and radio. But he also knew there was bad blood between Perenchio and Grupo Televisa, the Mexican entertainment giant that produced much of Univision&rsquo;s most popular programming. &ldquo;I thought, There&rsquo;s an opportunity there,&rdquo; Saban says. &ldquo;Let me go finagle.&rdquo;         Perenchio wasn&rsquo;t selling, but suggested Saban keep in touch with a monthly phone call. Saban called every two weeks.&nbsp;          When Perenchio finally did decide to sell, Saban and his partners weren&rsquo;t the only bidders. Televisa, which already owned 11 percent of Univision, joined with Bain Capital and Bill Gates&rsquo; Cascade Investment to offer $12.2 billion. Saban&mdash;along with Providence Equity Partners, Madison Dearborn Partners, TPG, and Thomas H. Lee Partners&mdash;bested the Televisa bid by about 50 cents a share, offering $12.3 billion. Perenchio and his board accepted the offer.         &nbsp;Now, a year in, chairman Saban and his partners have installed a new C.E.O., Joe Uva, who was running the advertising agency OMD. That hire is key, because their investment thesis is predicated not on merely capturing two-thirds or more of the ad dollars spent in Spanish-language media, as Univision has for years, but on enjoying a bigger slice of the total ad pie. Hispanic buying power is growing 50 percent faster than non-Hispanic, and Saban says it will hit $1 trillion in 2010. But Univision, which some nights beats the major English-language networks in prime-time ratings, still reaps just 3 percent of the total ad dollars spent in this country, even though it captures more than 6 percent of total viewing, according to Nielsen ratings provided by Univision.         But perhaps Saban&rsquo;s most important job at Univision is to mend fences with Televisa. Before Saban and his partners bought in, Televisa had filed a lawsuit claiming Univision was cheating them out of more than $100 million in unpaid royalties. Lately, Saban says, he has been working full-time trying to settle the lawsuit.          The stakes are high: Advertising revenue generated by Televisa programming accounted for $538 million of the $2.1 billion Univision took in last year. If the case goes to trial and Televisa prevails, a long-term agreement between the companies could be terminated, and Televisa could go so far as to use its leverage to regain an ownership stake in Univision.          Jonathan Nelson, C.E.O. of Providence Equity, is optimistic. &ldquo;I expect this to be resolved, and that would not happen without Haim,&rdquo; he says. &ldquo;He, with every move, impresses us. You can&rsquo;t help becoming a fan.&rdquo;          It&rsquo;s rare that Saban doesn&rsquo;t get his way. But sometimes his famously outside-the-box thinking is too far out. That was the case in September 2007, when he requested a meeting with Paula Kerger, C.E.O. of the Public Broadcasting Service.          Saban had decided to get back into children&rsquo;s programming. His first project was Hollywood Star Dogs, which featured live-action talking mutts. But in order to compete with Nickelodeon, Cartoon Network, and the Disney Channel, he needed distribution. &ldquo;I offered PBS $250 million to relinquish control to me of their kids&rsquo; business,&rdquo; Saban says, recalling his meeting with Kerger. &ldquo;Very nice lady, but she said, &lsquo;We can&rsquo;t co-develop programs.&rsquo; I said, &lsquo;You don&rsquo;t understand. Forget about the programs. We&rsquo;ll figure out the programs. I need access to the home.&rsquo; It did not go past the first meeting.&rdquo;          Kerger remembers the meeting vividly. &ldquo;I&rsquo;ve spent my whole life raising money,&rdquo; she says. &ldquo;I&rsquo;ve never walked away from $250 million in my life.&rdquo; But Saban&rsquo;s plan, she says, wouldn&rsquo;t work. &ldquo;His original idea was that he was going to give me the money to fully fund some of the programs that were already on the schedule. Then, over time, we would just replace them with his stuff,&rdquo; says Kerger, who has made quality children&rsquo;s programming a priority since she took over in 2006. &ldquo;I said, &lsquo;Yeah, I don&rsquo;t think that&rsquo;s going to work.&rsquo; It&rsquo;s the difference between seeing children as consumers or as citizens in the making. This was a business deal for him. And I&rsquo;m looking at it from the perspective of trying to empower kids. It was just too big a gap.&rdquo;         She adds, &ldquo;He was very insistent. Very.&rdquo;          He still is. Saban told me he considers Kerger&rsquo;s rebuff of his offer &ldquo;a sin! If there was entrepreneurship at PBS, they should have grabbed me and said, &lsquo;Let&rsquo;s talk.&rsquo;&rdquo;         Saban&rsquo;s disdain for second place is not a new development.         Back in 2000, his full-time political adviser, Laura Hartigan&mdash;the former finance director for the 1996 Clinton-Gore campaign&mdash;delivered some bad news: Saban&rsquo;s $250,000 gift to the Democratic Congressional Campaign Committee had been dwarfed by someone who&rsquo;d given $500,000. &ldquo;I said, &lsquo;What the fuck is that about?&rsquo;&rdquo; he says, recalling how he immediately sent a check for another $250,000 and attached a $1 bill to maintain his dominance. &ldquo;No. 2 doesn&rsquo;t fly for me,&rdquo; he says, when asked about it.        In 2002, Saban gave the Democratic National Committee $7 million to help build a new headquarters in Washington. Former Democratic Party Chairman Terry McAuliffe would later remark, &ldquo;Haim Saban saved the Democratic Party.&rdquo;&nbsp;         Saban began donating money to Bill Clinton in the early 1990s, prompted, he says, by concern that support for Israel was softening. He would tell Haaretz that when he first met the president, &ldquo;something started spinning in my gut.&rdquo; Soon, Saban and his family were invited to the White House. He has since donated $7 million and pledged $3 million more to the Clinton Foundation.       &nbsp;Saban is known for persuading other people to give as well. He can cajole not just in English and Hebrew but also in French, Italian, and Spanish. And he doesn&rsquo;t just help Democrats. In 2006, when California Governor Arnold Schwarzenegger was running for reelection, Saban and his wife hosted a fundraiser. Before the 2000 presidential election, Saban, like many in Hollywood, hedged his bets, donating to both Al Gore and John McCain. In 2003, he gave to John Kerry and George W. Bush.       But with Hillary Clinton, it was different. He was ideologically smitten. &ldquo;She is tender and tough,&rdquo; he says fondly.        He likes to say he endorsed Senator Clinton before she endorsed herself. This was in December 2006, when she attended the Saban Forum, an annual conference on U.S.-Israeli relations hosted by the Saban Center for Middle East Policy, a Brookings Institution think tank that Saban founded in 2002 with a $13 million gift. During lunch, he told her, &ldquo;You&rsquo;re running.&rdquo; She demurred, saying she&rsquo;d make up her mind over the holidays.        Saban went home and immediately put together a list of potential donors&mdash;&ldquo;every person in my Rolodex that I could call.&rdquo; In January 2007, &ldquo;when she said, &lsquo;I&rsquo;m in to win,&rsquo; I made the first phone call.&rdquo; It would be the first of thousands.        &ldquo;It would go like this,&rdquo; he says, with a mix of pride and weariness. &ldquo;They&rsquo;d say, &lsquo;No, no, no, I&rsquo;m completely Obama.&rsquo; I&rsquo;d say, &lsquo;I&rsquo;m not asking you not to be Obama. I&rsquo;m just asking you to send me a check from you and your wife, maximizing to Hillary.&rsquo; They&rsquo;d say, &lsquo;I&rsquo;m Obama! I&rsquo;m holding an event for him!&rsquo; I&rsquo;d say, &lsquo;I understand. Just write me the check.&rsquo; They&rsquo;d say, &lsquo;Okay, will you write me a check for Obama?&rsquo;I&rsquo;d say, &lsquo;No, I won&rsquo;t. Because I&rsquo;m different for Hillary than you are for Obama.&rsquo; &rdquo;       Wiatt, the William Morris C.E.O. (and one of Hollywood&rsquo;s earliest Obama supporters), couldn&rsquo;t resist Saban&rsquo;s pitch: He and his wife gave $4,600 to Clinton. &ldquo;He&rsquo;s that person you can&rsquo;t say no to,&rdquo; Wiatt says. &ldquo;At least I can&rsquo;t.&rdquo; Terry Semel, the former chairman of both Yahoo and Warner Bros., is a huge supporter of Republican candidates. Saban convinced him, too, to max out to Clinton.         Saban&rsquo;s no-stone-unturned approach caused rifts within families. &ldquo;Haim called my son, David, who runs the TVG channel for Fox,&rdquo; says Marc Nathanson, a cable executive who was also drumming up support for Clinton. &ldquo;I didn&rsquo;t think of calling my own children until we were hosting a fundraiser for Hillary at our house. David said, &lsquo;Dad, Haim already called me.&rsquo; I said, &lsquo;David you&rsquo;re my son!&rsquo;&rdquo;        &ldquo;Homewrecker is what Marc called me,&rdquo; Saban says, pleased. &ldquo;I thought Hillary could be the greatest president ever, and when you believe in something, you have to give it your whole.&rdquo;         He may have made one call too many. In May, the Huffington Post reported that Saban telephoned David Hardt, the president of the Young Democrats of America, and offered to donate $1 million (equivalent to one-third of the group&rsquo;s 2008 budget) if he would commit Y.D.A.&rsquo;s two superdelegates to Senator Clinton. The website, which cited four anonymous sources, noted that technically speaking, at least, such an offer was not necessarily out of bounds. But Saban delivered a terse denial. &ldquo;It&rsquo;s simply not true,&rdquo; he said.         To me, he offers what he calls the first full accounting of what happened (which he refused to give to the &ldquo;shmegegge from the Huffington Post,&rdquo; as he puts it, because the reporter surprised him on his cell phone while he was at the pharmacy). &ldquo;I had a list of people to call who were superdelegates, and like everybody else in the Clinton camp, I made those calls,&rdquo; he says. When he got Hardt on the phone, &ldquo;he said to me, &lsquo;I am 100 percent a Hillary person. I am afraid to come out officially for Hillary because the Obama people told us that they would cut their support of us.&rsquo; And I said, &lsquo;What does that mean, cut the support?&rsquo; He said, &lsquo;Well, they&rsquo;re going to stop funding us.&rsquo; And I said, &lsquo;Well, how much money is involved?&rsquo; And he said, &lsquo;A half a million dollars.&rsquo; I said, &lsquo;Well, if that problem      was taken care of, would you then consider doing the right thing and declaring what you believe to be the best thing for the country?&rsquo;&rdquo;        Saban says he had a similar conversation with the other uncommitted Y.D.A. delegate. In both cases, he said, the Y.D.A. members thanked him for his generous offer and said they wanted to consult their colleagues about it. He never spoke to them again.         &nbsp;&ldquo;A million dollars was never offered,&rdquo; he says. &ldquo;They mentioned a half a million dollars&mdash;each of them did. Had they said yes, I would have gone back and checked the legality of it, to see if I can raise the money. I was asking a theoretical question.&rdquo; A spokesman for the Y.D.A. said Hardt and the organization had no comment.         What did Saban get in return for all his political efforts? What he wanted, he says, was the chance to be heard by people with the power to make policy. Sure, his association with the Clintons has helped in business. In 2004, when he still had a stake in ProSieben, the New York Times reported that he had invited Germany&rsquo;s most prominent advertising executives to dinner at his home. The guest of honor: former President Clinton.        But most of all, it seems, the Clintons made him feel like he belonged. Those who saw him with Senator Clinton up close would remark on the affection he bestowed upon her. On June 3, the night Clinton made her wait-and-see speech&mdash;the prelude to her official concession a few days later&mdash;Saban was there, and he looked positively shattered, says a fellow Clinton fundraiser who saw him.        &ldquo;He was milling about, not really talking to anyone,&rdquo; the fundraiser recalls. &ldquo;He wasn&rsquo;t the schmoozy Haim, or the aggressive Haim.&rdquo; Instead, he was the Haim who can&rsquo;t bear to lose&mdash;at a complete loss.&nbsp;           &ldquo;Who do you think introduced Barack Obama to me? Hillary! Interesting irony,&rdquo; Saban says one day, recalling how, back when Obama was first running for the U.S. Senate, Clinton persuaded him to host a fundraiser.&nbsp;         More recently, while Clinton was still trouncing Obama in the polls, Saban ran into Obama again on the tarmac of a Washington airport. It was late at night, and when Saban landed his jet and saw a Gulfstream surrounded by Secret Service agents, he just assumed Clinton was aboard.         &ldquo;I went up and said, &lsquo;I&rsquo;d like to speak to the senator. She&rsquo;s a friend of mine.&rsquo; I turn around and see Obama walking down the stairs,&rdquo; he recalls. &ldquo;So I called him. &lsquo;Barack! Barack!&rsquo; I said, &lsquo;It&rsquo;s Haim!&rsquo; This was when he was really struggling in the numbers. I said to him, &lsquo;Look, campaigns are campaigns, and no one knows how things evolve. If you get the nomination, I&rsquo;ll be there with bells and whistles.&rsquo; And he said, &lsquo;If she gets the nomination, I&rsquo;ll be there with bells and whistles.&rsquo; &rdquo;       Saban pauses. &ldquo;So that was then,&rdquo; he says.         And now? Saban laughs when he says that he alienated many of his neighbors in his gated community (who include Denzel Washington and Sylvester Stallone) by pushing them so hard to support Clinton. &ldquo;I would say things to them like, &lsquo;Why, why would you not want to join me and the winner?&rsquo;&rdquo; Now, when he drives past them on the manicured roads that connect their estates, he says their faces and body language scream: &ldquo;We told you!&rdquo;         &ldquo;They&rsquo;re all Obama,&rdquo; he says, with a shrug. &ldquo;They don&rsquo;t like me.&rdquo; He is only half joking.        Since Clinton&rsquo;s concession, Saban reports, he has spoken on the phone with Obama twice. They agreed to sit down with 50 or so other Clinton donors the next time Obama is in Los Angeles. Saban missed his first opportunity, though, on a day when Obama was available but, Saban says, he had to chair a board-of-directors meeting. When I suggest that his relationship with Obama could never compare with his 14-year friendship with the Clintons, Saban says, &ldquo;Well, you never know. I have to state very clearly that we had a great chemistry on the few times that we met.&rdquo; As of late July, though, no meeting was on the books.        Twenty-six floors up, in the Saban Capital conference room, Saban stands suddenly and walks to a north-facing window with a panoramic view.         &ldquo;See that country club down there?&rdquo; he asks, waving an arm in the direction of a vast, verdant golf course. &ldquo;The Los Angeles Country Club.&rdquo; Saban remarks that, as far as he knows, the club admits no Jews, blacks, or Hispanics. (The club declined to comment.) He smooths his hair as if to comfort himself. &ldquo;I am very happy,&rdquo; he says, &ldquo;that I can look at them from way up here.&rdquo;       Related LinksLakers' Coach Jackson Signs Extension for Two Years, $24 MillionLos AngelesGolden State Warriors Enjoy Season-Ticket Sales Surge
  
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<title>Citi Under Siege</title>
<link>http://www.portfolio.com/executives/features/2008/08/13/Challenges-Facing-Citigroups-Pandit?tid=true</link>
<description><![CDATA[When Vikram Pandit became C.E.O. of Citigroup in December, he could have turned his office into a miniature version of the Guggenheim Museum if he had wanted to. Citi&rsquo;s low-rise executive offices are strewn with objets d&rsquo;art, the bounty from the companies around the world that Citigroup has conquered.             But there are no lavish decorations in Pandit&rsquo;s office&mdash;no Andrew Wyeth watercolors, no Andy Warhol screen prints. Instead, there is a large sheet of graph paper, reverently framed. On it is a blizzard of numbers, words, and lines, bizarre and seemingly random, but with a kind of maniacal Rube Goldberg logic. It&rsquo;s a fitting decoration, this being Citigroup&mdash;that staggering, lurching, insanely complex Rubik&rsquo;s Cube of a financial-services company. And for Pandit, a kid from the sticks in provincial India who trained as an engineer and earned a Ph.D. in finance, the diagram is as resonant as a Norman Rockwell painting: It depicts the very first automatic-teller-machine system, inaugurated at Citibank in the early 1970s by his revered predecessor and current adviser John Reed. (View a slideshow of some of the executives who have shaped Citigroup.)             But while Pandit, with his master&rsquo;s degree in electrical engineering, wins praise for understanding the guts of Citigroup&rsquo;s myriad businesses, it&rsquo;s not the scut work that is Citi&rsquo;s problem at the moment. The bank&rsquo;s issues now are more M.B.A. than Ph.D.: Has the company grown too big to make any sense? What&rsquo;s the logic holding it together? What is the future of banking? Should Citigroup even survive intact?              And that, in turn, raises a much bigger question for Vikram Pandit: If dealmaker Sandy Weill was the C.E.O. for Citi&rsquo;s era of empire building, and lawyer Chuck Prince helped dig the company out of a legal and regulatory mess, is Pandit, a shy academic who built a reputation on managing risk, the right person to reimagine the nation&rsquo;s biggest financial-services company? Although Pandit&rsquo;s understanding of the nuts and bolts of finance was key to his getting Citi&rsquo;s top job&mdash;like every other bank in the world, Citi was terrified of its subprime exposure&mdash;the demands of the company have morphed and grown. Citi&rsquo;s challenge is now more structural than operational, a management nightmare ill suited to a C.E.O. running his first-ever public company. &ldquo;I don&rsquo;t know who his godfather is,&rdquo; says one former Citi banker. &ldquo;He has the background to run a hedge fund, not a bank.&rdquo;             The stock market has its doubts as well. Citi shares have declined consistently during Pandit&rsquo;s tenure. While much of that slump can be blamed on dismal business in the financial sector in general, the company seems particularly vexed: Even a smaller-than-expected loss in the first quarter couldn&rsquo;t boost the stock. Citi shares are down 42 percent on Pandit&rsquo;s watch.             Citi&rsquo;s quarterly loss, its third in a row, reflects a widely held view that the company remains uniquely exposed to an economy that is darkening, both in the U.S. and abroad. For instance, worsening consumer credit will hit Citigroup&rsquo;s enormous credit-card business hard; its most recent quarterly results include a $2.5 billion charge to bulk up against coming credit losses.             Pandit and other senior Citi execs&mdash;including a handful who followed Pandit to the company from his previous post at Morgan Stanley&mdash;insist that they&rsquo;re on course. Since almost 50 percent of Citi&rsquo;s business is outside the U.S. and close to 35 percent is in emerging markets, Pandit says he is focusing on those areas for the company&rsquo;s future growth. In fact, he talks more about growing in the future than winding his way out of Citi&rsquo;s past, reciting his strategy in well-rehearsed cadences, reflecting a Pandit-era culture that favors neologisms like globality and clientcentricity.             &ldquo;When you look at growth patterns, as the world goes from 6 billion to 9 billion people, the overwhelming majority of them are going to be in emerging markets,&rdquo; Pandit says. &ldquo;As Wayne Gretzky said, you need to &lsquo;skate to where the puck is going to be, not to where it&rsquo;s been.&rsquo;&rdquo;        &nbsp;     Citigroup, of course, isn&rsquo;t just a bank; it&rsquo;s a multinational colossus, with 200 million customers in more than 100 countries. Its fingers are in every &shy;financial-services pie&mdash;banks, credit cards, brokerages, investment banking, and hedge funds. It is less a company than a collection of city-states. The glass-half-full way of looking at Citi is to see it as &ldquo;a company that could not be created today at any price that would be rational,&rdquo; as Michael Klein, Citi&rsquo;s outgoing chairman of institutional clients, describes it.             The glass-half-empty view&mdash;the prevailing one on Wall Street&mdash;is that Citi is unmanageable in its current form. And it is this mess that Pandit must somehow unravel.              Managing Citi at a time like this requires many qualities, but optimism must surely count among them. In person, Pandit is cordial, supremely confident, and transparent up to a point, though he reverts to hostile-witness mode when asked about his private life, acting more like the hedge fund manager he recently was than the head of an immense publicly held company. One longtime associate tells me that he has known Pandit for many years but has never had dinner with him or been to his home, where Pandit lives with his wife and two adolescent children. Pandit recently bought a sprawling apartment on Central Park West that once belonged to the late actor Tony Randall.            Pandit is one of the most prominent Asians in corporate America, an emblematic Indian American success story. His hometown is not the cosmopolitan coastal city of Mumbai, as is commonly and incorrectly reported in the Western media, but Nagpur, a community farther east. It is a kind of Indian Middletown, located near the geographic center of the subcontinent. His father, now retired, was a pharmaceutical executive. His family name is of Hindu Kashmiri extraction&mdash;derived from the Hindi word for pundit. Nagpur is hardly the Paris of the subcontinent. It&rsquo;s a market town of about 2.5 million people and an overnight train ride from Mumbai. During the British Raj, Nagpur became a center of the noncooperation movement against British rule. More recently, it has become a major manufacturing center.            Just like a provincial American city, Nagpur had little to offer its ambitious youth. A European diplomat based in New Delhi tells me that even when such towns grow richer, they often remain culturally stagnant. &ldquo;There is no orchestra, no theater, no rock bands. Boredom is the chief trouble of India.&rdquo;            But, he adds, Pandit didn&rsquo;t stay long enough to experience much of that. &ldquo;He got to America when he was 16 and stayed.&rdquo;            That was 1973, when Pandit was admitted to Columbia University to study engineering&mdash;a typical, if precocious, career path for upwardly mobile young Indians at the time. He charged through college in three years. Pandit downplays his youthful brainpower, perhaps anxious to avoid being labeled a geek. He says, for instance, that he cracked the books during the summer because it was hard for foreign students to get summer jobs.            For Pandit, Columbia&rsquo;s academic fare was far more palatable than a traditional Indian education. He gravitated toward economics and found the numbers-meets-strategy approach that would come to frame his career. &ldquo;I found economics was an interesting juncture,&rdquo; he says, &ldquo;somewhere between the philosophical ways of looking at the world versus the precise engineering perspective. It was a way to blend both views, which I found fascinating.&rdquo;            He received a master&rsquo;s degree in engineering and then began studying finance. In 1982, he accepted a teaching position at Indiana University, in Bloomington, while completing his doctoral dissertation, &ldquo;Asset Prices in a Heterogeneous Consumer Economy.&rdquo; According to the abstract, his paper &ldquo;examines the properties of asset prices in a multi-consumer, dynamic economy under uncertainty.&rdquo; It sounds difficult, and it is, even by doctoral-dissertation standards. But it would define the playing field for Pandit once he arrived on Wall Street.            The Indiana campus was a far cry from the urban landscape of New York. &ldquo;He was an excellent teacher, but being from India and New York City, he felt that maybe Bloomington was a little too small,&rdquo; recalls Robert Klemkowski, who headed the business school&rsquo;s finance department and hired Pandit.             While at Indiana, Pandit worked on a project for Morgan Stanley, and he was soon offered a job at the investment bank. Morgan Stanley was a partnership then and hired just 20 new M.B.A.&rsquo;s each year. Its total head count, a mere 2,500, was a fraction of what it is today. Pandit began at the bottom of the ladder and moved steadily up the rungs, achieving a reputation as a cheerful, diligent, and uncomplaining worker bee. By the late 1980s, he was already performing impressively in Morgan Stanley&rsquo;s capital markets division. It was a training ground for future leaders at the investment bank&mdash;former chairman Dick Fisher followed that career path as well&mdash;and Pandit was a steady, if not conspicuous, performer.       &nbsp;     One former colleague remembers Pandit as &ldquo;a thoughtful, conscientious, understated guy.&rdquo; He was &ldquo;easy to work with, and there was no standout thing about him,&rdquo; the colleague says. &ldquo;It&rsquo;s kind of interesting that he&rsquo;s gotten to this position because usually people who &shy;do that are much more self-promoting and political.&rdquo;            But Pandit&rsquo;s ascendance&mdash;he pitched himself as a numbers guy who could handle the M.B.A.-speak&mdash;was perfectly timed. Wall Street was in the process of becoming increasingly recondite and concept-driven. Pandit was instrumental in creating the first options on the Nikkei stock index in Japan and the XMI index, which tracked the Dow Jones industrial average. It was an &shy;innovative instrument, because at the time, investors couldn&rsquo;t buy options outside the exchange.            Then, in the mid-to-late-&rsquo;80s, new and sometimes esoteric hedging strategies became all the rage, some using Pandit&rsquo;s three-year options and others using portfolio insurance, which would soon become notorious. The strategy employed computerized trading to sell stocks swiftly in market declines, a tactic later widely blamed for contributing to the market crash of October 1987.            Pandit sees parallels between the 1980s portfolio-insurance craze and the recent excesses involving mortgage securities. &ldquo;People felt protected because they had portfolio insurance and the program trading behind it,&rdquo; he says. &ldquo;They felt they could take on more risk, and if the markets started going down, they could hedge out. But a lot of people took that same approach, and when the market started going down, everybody converged and the system was overloaded.&rdquo; So, ironically, &ldquo;what was right for an individual investor or company created a systemic issue for the entire market,&rdquo; he says.            Similarly, Pandit notes, the big banks hedged the risk of their subprime loans by securitizing and selling mortgage-backed securities, thereby turning a risk-reduction strategy into a problem.               For helping flag portfolio insurance as a problem, Pandit was named a managing director of Morgan Stanley in 1989. A year later, he became head of equity capital markets and occasionally got his name in the trade press by creating new and improved financial instruments. By 2000, he was one of the top-earning executives at the firm, snagging a then-impressive bonus of $8.4 million and, in September, an even more impressive set of titles. He and Stephan Newhouse were named co-presidents and co-chief operating officers of Morgan&rsquo;s institutional-securities group. John Havens, one of Pandit&rsquo;s closest friends, replaced Pandit as head of worldwide institutional equities.           Not long afterward, Morgan Stanley&rsquo;s internal politics boiled over, and Pandit and his prot&eacute;g&eacute;s became involved in a boardroom putsch. They joined a group of top traders and bankers at the firm who sought to oust C.E.O. Philip Purcell, a former Dean Witter executive whom they saw as destroying the Morgan Stanley culture. The Dean Witter and Morgan Stanley sides of the company never jelled, and internally, Purcell was made out to be the reason.           The details of the fight were chronicled in dozens of articles and even a book&mdash;Patricia Beard&rsquo;s Blue Blood and Mutiny. The outcome for Pandit was that his palace coup didn&rsquo;t work, and by March 2005, he was gone. Havens stayed at Pandit&rsquo;s side, quitting Morgan at the same time. A top risk-management official, Brian Leach, quit a few weeks later, and so did two other heavy-hitting bankers, Joseph Perella and Terry Meguid.           As Havens describes it, he and Pandit planned their future as a kind of intellectual exercise: &ldquo;We got together and started thinking about our future, and because we had worked together for 20 years and had a level of respect for each other, we did a lot of this thinking and planning together at that point.&rdquo;           As so often happens when like-minded Wall Streeters engage in intellectual exercises, a hedge fund emerged: &ldquo;We had thought for quite some time that there were great opportunities in building a multi-strategy fund if you could go out and find a group of people who just were excellent at what they did,&rdquo; Havens says. &ldquo;So that&rsquo;s what we ended up doing.&rdquo;           While Purcell, their old boss, was slowly spit-roasted in the media, Pandit and Havens started their hedge fund, Old Lane Partners. From the start, it was overflowing with institutional capital and eventually had $4.5 billion under management.           Old Lane was a comfy perch for the corporate exiles&mdash;and the 20 percent share of profits and 2 percent management fee the fund charged investors certainly helped&mdash;but it was not a successful fund, despite Pandit&rsquo;s reputation as an expert in managing money and sidestepping risk. Multi-strategy funds, by definition, can engage in any kind of investment strategy, and such funds are supposed to outperform less risky investments in good times and bad. Old Lane did not. From its inception in April 2006 to this past April, the fund was flat, according to a Citi official. In 2007, it returned just 2.8 percent after fees, half of what Standard &amp; Poor&rsquo;s 500-stock index returned with dividends reinvested.      &nbsp;     But Old Lane&rsquo;s failure managed not to tarnish Pandit himself; after all, hedge funds were suffering across the board, and Pandit&rsquo;s credibility as a steady hand was not affected. So in early 2007, Citi C.E.O. Chuck Prince decided to buy Old Lane as a way of bringing Pandit and company onboard. Citigroup vice chairman Lewis Kaden, who was involved in the acquisition, says that buying Old Lane &ldquo;was appealing to us because of Vikram&rsquo;s reputation and experience&rdquo; and because it would bring in the &ldquo;half a dozen founding partners,&rdquo; including Havens and Old Lane risk management chief Leach (who would assume the same post at Citi). As Kaden puts it, the purchase of Old Lane was grounded in &ldquo;optionality&rdquo;&mdash;the idea that &ldquo;people with this background could play other roles at Citigroup over time&rdquo; instead of simply running a $4.5 billion hedge fund.           The price Citi paid for Old Lane was never announced publicly, but it is privately confirmed to be $800 million, one-fifth of which went to Pandit. When the transaction closed in July, he received $165.2 million for his share of Old Lane, $100.3 million of which he put back into the fund, according to company records. There it will remain, in either Old Lane or other Citi hedge funds, for another four years. Pandit has the $65.2 million he cashed out, another $2.5 million he was awarded by the board in January, plus restricted stock grants and other goodies that should push his first-year pay well north of $200 million.           After the acquisition, Pandit was promptly named the head of Citi&rsquo;s &shy;alternative-investments unit, which now included Old Lane. Other fund managers from Old Lane were shifted elsewhere, however, which triggered a provision in the fund&rsquo;s partnership agreement that allowed investors to bail out if three or more key people departed. Almost all the investors&mdash;mainly institutions&mdash;decided to pull out their money. When the fund was shut down to outside investors in June, it was almost an anticlimax.           Old Lane certainly served its purpose, though, if its purpose was to function less as an investment vehicle than as an expensive way to bring Pandit and his cohorts to Citigroup. After six months of heading the alternative-investments group, Pandit was named head of the institutional clients group in October. Then in November came Prince&rsquo;s forced departure, and Pandit emerged as C.E.O.            Just as Prince, a lawyer, was the right man for the Citi helm in the wake of its Enron and WorldCom misadventures, Pandit fit the moment. Risk, having been handled so badly across the industry, had become a Wall Street buzzword, and Pandit was viewed as Mr. Risk. It was his brand, so to speak, even if, in reality, that branding was a stretch: Old Lane was clearly a disappointment, and even Pandit&rsquo;s Morgan Stanley experience was more about avoiding risk than dealing with it directly.          Pandit has surrounded himself with an inner circle of trusted advisers, led by Havens and chief administrative officer Don Callahan. And he has researched his plan to fix Citigroup with a focus bordering on obsession. He has consumed every scrap of information about Citi that he can, reading yellowed texts with titles like Marcellus Hartley, A Brief Memoir (Hartley was the first president of the International Banking Corp., which was acquired by the old National City Bank) and carefully preserved annual reports dating back to 1956. All were provided for him by his fellow history buff John Reed, whose name is duly inscribed in each volume. Together, the volumes chronicle the corporate folklore of the tradition-conscious financial superstore that Pandit now runs.          Pandit has traced the company&rsquo;s various permutations back to 1812, when the City Bank of New York was founded as a successor to Alexander Hamilton&rsquo;s ill-fated Bank of the United States. &ldquo;With any organization that&rsquo;s been around for 200 years, it has a history and culture,&rdquo; he says. &ldquo;It develops a unique DNA in many ways. To get a clear sense of that picture has been very important to me.&rdquo;          The unflattering truth about Citigroup today is that the company&rsquo;s defining quality is not innovation&mdash;not A.T.M.&rsquo;s, unsecured personal loans, credit cards, or any of the company&rsquo;s other firsts from its golden days&mdash;but overreaching (as with the subprime mess) and stagnation. No amount of nostalgia can paper over the troubles that face the sprawling company. Of the 25 independent research firms surveyed by BNY Jaywalk, only five rate Citigroup shares a &ldquo;buy,&rdquo; with the rest rating it &ldquo;neutral&rdquo; or &ldquo;sell.&rdquo;          In the first nine months of Pandit&rsquo;s tenure, the company has been hit by staggering losses stemming from the burdens of the recent past. Citi amassed $7.6 billion in red ink since Pandit came onboard, with mortgage-related write-downs (mostly the legacy of his predecessor) exceeding $54 billion, much of that from subprime securities and other mortgage-related financial instruments. Citi, of course, was hardly alone. Prince was eased out the door at almost the same time as Merrill Lynch&rsquo;s Stan O&rsquo;Neal during the same round of subprime-related head choppings.     &nbsp;     Pandit plans to shed $400 billion of Citi&rsquo;s least desirable legacy assets over the next three years. He&rsquo;s already parted with Diners Club (though the impetus for that move predated his arrival), as well as CitiCapital, the company&rsquo;s equipment financing division, and there have been miscellaneous divestitures of other minor units. There have also been cutbacks: Bank branches have been shut, and fewer mortgages have been written. But even if that $400 billion could be removed from the balance sheet tomorrow, it would reduce Citi&rsquo;s $2.2 trillion in total assets only by less than a fifth, which may not be enough. Citi&rsquo;s elephantine structure was being criticized well before Pandit came on the scene, and the pressure to break up the company has intensified since he arrived. It&nbsp;didn&rsquo;t help when Reed told the Financial Times in April that the merger of Citicorp with Salomon Smith Barney was a &ldquo;mistake.&rdquo;          Perhaps most painful of all for Pandit are the suggestions among analysts and the media that he is not the solution to Citi&rsquo;s ills but part of the problem. A widely hyped three-and-a-half-hour dog and pony show for analysts and investors on May 9 received tepid reviews, and an employee forum held five days later played to a corporate auditorium with conspicuously empty seats. He was criticized after the company&rsquo;s annual meeting in April. Some of Pandit&rsquo;s moves&mdash;such as his revival of the &ldquo;Citi Never Sleeps&rdquo; ad slogan from the 1970s and the &ldquo;important&rdquo; email that he spammed to customers in May describing his plans for the company&mdash;have been greeted with something approaching derision.          &ldquo;Much ado about nothing,&rdquo; wrote Oppenheimer &amp; Co. analyst Meredith Whitney after the May 9 program, which she said &ldquo;regurgitated themes outlined over the past several months&rdquo; and was identical to one given by Prince a year and a half before. Citi, she believes, may be &ldquo;past the point of fixing.&rdquo; Critics like Whitney contend that Pandit has not sufficiently addressed the company&rsquo;s pressing problems, such as its antiquated and incompatible technology, which will be expensive and disruptive to fix. Pandit is also faulted for not having a clear enough post-cutback plan. &ldquo;You grow to greatness; you don&rsquo;t shrink to greatness,&rdquo; says Jim Huguet, a longtime Citigroup critic, who runs Great Companies Investment Management in Tampa, Florida.          Even if Citi completes its shrinkage, it&rsquo;s not clear how it will then grow. The firm&rsquo;s top brass, now dominated by longtime Pandit cohorts from Morgan Stanley and Citi who were elevated by Pandit, are putting on a brave front. But much is out of their control. Gary Crittenden, Citi&rsquo;s chief financial officer, says th