It Seems to Me: Never Mind the Financial Crisis, the Colosseum is Being Restored to its Original Splendor
As I write this column, the whole world seems to be coming apart. Unruly mobs of British youths rampaged through the streets of London, Birmingham, Liverpool and Manchester, looting and torching. A bill everyone agrees is inadequate emerged from a divided U.S. Congress, raising the debt ceiling and calling for spending cuts of $900 billion over the next decade. The U.S. credit rating was lowered a notch by Standard & Poor’s, setting off a global alarm bell. The stock market swooned, then rebounded, then swooned again and rebounded, as if investors were unsure which way to go. Much of the nation suffered under one of the severest droughts on record. Texas received 6.53 inches of rain this year, down from the normal 34 inches. Rivers and streams have dried up. Crop yields have plunged.
The Economist, a sober British weekly, summed up the events in the United States as follows: “The political dysfunctionality of America has been on display as never before, to the nation’s shame. And it can still do plenty of harm to a very sick economy.”
It’s easy, under these circumstances, to join the “doom and gloom” chorus. I obviously don’t know what other disasters will come down between the time I finish this column and the time it is published, but I thought it might be useful to look for some silver linings or unexpected developments. So here goes.
Did you see where Ralph Nader has taken up shareholder activism again? Few people remember Nader’s early and influential shareholder campaigns at General Motors in the early 1970s. He is, of course, best known for his role as a consumer advocate and as a presidential also-ran who siphoned off enough Democratic voters in 2000 to enable George W. Bush’s election. Now Nader has a new target: Cisco Systems.
In an interview with the Wall Street Journal, Nader disclosed that he owns 18,000 shares of Cisco, now worth about $288,000. Nader is a longtime Cisco shareholder. When he was running for President a decade ago, his stake was worth $1 million – and Ralph doesn’t appreciate this performance. In June he shot off a letter to Cisco’s longtime CEO, declaring that it is time for him to do something for the long suffering shareholders. He suggested a special dividend of $1 a share and an increase in the regular dividend from 24 cents a year to 50 cents. “If they can’t give shareholders value, they have to give cash,” said Nader.
Ralph Nader becoming a crusader for shareholders – who would have thunk it? Nader was, of course, one of the first to use the proxy statement to advance social issues – he mounted a campaign against General Motors in 1970 – but this marks the first time he has gone to bat for shareholders who have seen their stock languish for more than a decade. He may have opened up a new career path for himself.
One of my favorite companies is the Seattle-based specialty department store chain, Nordstrom, one of only four companies that have graced every list Robert Levering and I have done since 1984 identifying the “100 Best Companies to Work For” in America. Nordstrom has stores all over the country but it has never found a way into New York City – until now. In August it opened a store in Soho called Treasure & Bond. It’s less than one-tenth the size of a regular Nordstrom and it has a different mix of merchandise – housewares and rugs, for example. The idea is to give the company some experience in the New York market. A Nordstrom store will follow later on.
But here’s the interesting feature of Treasure & Bond: all the profits will go to children’s charities.
I always look forward to the weekend edition of the Financial Times, where the third page of the second section is devoted to an interview over lunch with someone prominent from academia, the arts, politics or business. In August, staff writer Peter Aspden took Diego Dalla Valle to lunch at the celebrated Milanese restaurant, Il Bareto al Baglioni. Dalla Valle runs the luxury goods company, Tod’s, founded by his family in the early years of the twentieth century.
For lunch they both had my favorite Italian dish, veal Milanese washed down with a Montalcino red. They rarely prepare it anymore in Italian restaurants in America. Because of its shape, it’s sometimes called “elephant’s ear.”
Tod’s recently pledged Â20 million to support the restoration of the Roman Colosseum, the most visited tourist destination in Italy. Work starts in September and will take two to three years. When completed, it will look just the way it did centuries ago. Della Valle explained this investment as follows: “We have an obligation to do things for our country. To create a sense of solidarity. Our country is made by proud Italians.”
In the United States corporations put their names on ball parks. Dalla Valle promises that Tod’s will not commercialize its restoration of the Colosseum. We can all subscribe to his idea of what a corporation should be about.