Transcripts For KQEH Nightly Business Report 20131211 : comp

KQEH Nightly Business Report December 11, 2013

Comes, the fed now seem set to slow the Stimulus Program beginning next week. Why now . And what should you do, if anything . All that and more tonight on nightly Business Report for tuesday, december 10th. Good evening everyone. History being made in detroit today. General motors announced a new ceo and shes female. Its the first time in g ms 100year history a woman is picked to run the auto maker and its the first female to head a major auto company. Her name is mary barra. Shell take the top job in january. Phil lebeau has more on who she is and why she was asked to take the wheel. Reporter mary barra is a gm lifer and soon her life will revolve around running the global auto giant. Ive worked at general motor for 33 years. Ive known its a great company. The men and women are so dedicated and i truly believe we have the best team on the field. Its an honor to lead the team. Reporter shes wellknown and wellrespected in gm. She rose through the ranks on the operation side. Barra earned high marks for streamlining operations and pushing gm to pick up the game. She bluntly told gm designers, no more crappy cars. I think if you look what shes done for the company, shes respected and highly regarded and made decisions with the product and enga near. Reporter she will replace dan ackerson stepping down to spend more time with his wife who has advanced stage cancer. Hes been vocal about gm thinking and acting differently. Putting a woman in charge of a company known as an Old Boys Club will certainly change things but ackerson said barra wasnt picked because of her gender. Weve mixed and matched from longterm gm professionals, and ive said this probably before, mary is one of the most gifted executives ive met in my career. She was picked for her talent, not for her gender or political correctness. Reporter while shes taking over a General Motors, leaner more profitable than ever before and no longer owned by the u. S. Government, its still an auto company with a fair number of challenges, including the fact the market share in the u. S. Drop to a low 17. 9 and needs to finish the restructuring operation in europe and make money on that continent, just two challenges facing mary barra as she takes over General Motors. Joining us to talk more about g ms ceo is bill george, the former ceo and professor of management at Harvard Business school where mary barra took part. Good to see you. What is mary barra like and what kind of leader is she likely to be . Shes a genuine authentic leader. Shes going to be a team builder. I spent time with her last sum near a course and her colleague dan was there. They will make a great team, tyler, very enthusiasmed and give dan ackerson and the board credit for bidding the team. Dan came in and turned the company around, but now you have the inside team coming in like sam and jenny did in following lu gersner. I think youll see great cars coming out of gm. Mary is an engineer and shes looking for a world car to cover china and the u. S. Okay. I think youll see that share growing in the years to come. As dan ackerson said, he said she was picked for talent, not her gender, but shes going to be watched very carefully because she is a woman at an auto company. As a leadership expert, what advice can you give her, dos and donts. Make sure you have the right people on the bus. I was glad to see mark royce, a gm vet, stepping into her old job. If you dont have the products, you are not going to be successful. So get the right team around you, diverse team, which they are already doing and im very pleased, then keep the vision very clear ahead we have to have the best cars in the world. We want to have cars that are good at the low end, high end and like a cadillac and all the trucks where there is a lot of money there. Have the full range of cars to ensure that. Beyond that, i think she has to have the longterm view and stay the course to compete with any car in the world, japanese, germans, koreans on cost, quality and design and i think thats the new General Motors. In the old days, they were letting that market share slip. So its got to be a longterm fixture and one advice id say is dont get thrown off track by a lot of people pulling you into shortterm decisions. You know, youve just finished, im told, a case study on the comeback of the auto business, including most notably perhaps General Motors, so you know this business and the challenges that gm faces inside and out. The saying is that a ceo is never stronger than in his or her first 100 days. What would you tell her to concentrate on in those first 100 days, specificry . Get the vision and strategy right, get the team right and make sure you got the right product plan, tyler. My great fear for mary is they are having a great year. Plus double digits, 14 in november. Things are up and away now. They got to make longterm investments. We had a different class last week and they got to make Big Investments in china. That will be a huge market. They got to get the european thing right and maybe the right leaders in those areas. And but dont get pulled off course. Say there is a recession and say the number of cars sold goes down. It will happen. Its happened for decades. Stay the course, make the investments. In the past gm pulled back during those difficult times. Bill, thank you very much. Former ceo of medtronic and professor at Harvard Business school. A small fraction of fortune 500 ceos are women. Why is that . And are Companies Better off with for males in the boardroom . A day of profit taking. Getting anxious about the Federal Reserves pending decision on tapering the stimulus plan. A decision could come as soon as next weeks policy meeting and well have more in a moment. The dow was down 52 points today and the nasdaq fell eight and s p lost five. The top regulatory agencies voted to approve the socall vulcer rule today putting the firm and taxpayers at risk if the bet fails. Some clarity on the rules, shares of some of the nations biggest investment banks ended higher today as you see there. Eamon javers in washington with more. Today washington moved to ban what regular htors see as a risy part. Banks trading in its accounts known as propry terry trading. It was an under stated launch for the rule in Public Meetings at the Federal Reserve. All in favor say i. I. Reporter and at the fdic. All in favor please say i. I. Thank you very much. Reporter other regulators across the city joined in banning propry terry trading but it included five major examples. Banks can conduct under writing as long as positions doesnt exceed certain limits and can engage in Market Making but inventory may not breach certain levels. They can hedge certain positions but have to document what the hedge is for. They will be allowed to trade in Government Debt like treasuries and some foreign entities will be allowed to trade so long as those risks stay overseas. All and all, regulators said they are pleased with how the long fought over rules turned out. It stops the wild flier bets that are just for the house. It will allow legitimate hedging activity for legitimate business risk. Reporter but susie, the rules build in subjective judgment that regulators have to make and that means a lot will depend how the regulators decide to enforce what they have written. Back to you guys. All right. Thanks a lot. Eamon javers reporting from washington. Cutting the growth forecast for the u. S. By half a percent for 2014. The agency sees gdp coming in at 2. 6 next year. S p says it sees the Federal Reserve gradually pulling back on the bond buying program, and as we said, wall street is starting to believe the fed will start the pull back next week at the final policy meeting this year. Steve liesman has more and what it could mean for the markets and the economy. Reporter a taper by the Federal Reserve at the meeting next week looking more likely than not. The Economic Data the markets reaction point to a possibility the fed could move next week to reduced and the amount of stimulus in the economy that it provides to bond purchases or quantitative easing. The fed offered three tests for tapering or reducing that qe and those tests look to have been met. One was confidence in the outlook, average job growth risen to 19 3,000, up 43,000 when the fed said tapering was a close call. The Unemployment Rate is 7 isdown 2 10ths. The end of fiscal uncertainty is another factor. They wouldnt taper ahead of the Government Shutdown back in september but now a budget deal looks to be in the works that could put off the debate of deficits for two years. Interest rates are wellbehaved. Shortterm rates have remained low. Thats a sign to the fed that the markets believe that even if the fed tapers, the fed will keep the fed funds rate low predicting, the news has been tough of late. They didnt taper in september when the market thought it would and they announced a schedule to taper in june when the market didnt expect it. What the fed is trying to do, is to pivot from using quantitative easing as the main tool to guide or stimulate the economy to Forward Guidance and back to the old way they used to do it through the fed funds rate. Next week could be the beginning of that process. For nightly Business Report, im steve liesman. Well, good news in the job market, the Labor Department says that advertised job openings in october rose to a fiveyear high with nearly 4 million positions looking to be filled. Also, the number of people quitting their jobs in october and presumably moving on to a better one reached a fiveyear high. Still ahead, a stunning management shakeup at lulu lemon but will the changes put the retailer back on top . Shares of athletic wear maker lulu lemon fell 7 this year as the company endured missteps. First the too sheer yoga parnts and backlash of the bodies of potential customers from lululemons founder. A new chief executive is promising to focus and may be what they need to turn things around. Courtney regan has more. Reporter finally, lululemon name answer new ceo. Its been six months since chris tine day said she would retire her post as ceo once a successor was found and just in time for christmas, the retailer announces tom as president and will step into the top spot at lulu. Im incredibly lucky to be involved and lululemon is on its way. Reporter its not just the ceo seat rotating. The controversial founder chip wilson is resigning his post as chairman but will remain on the board. He made comments suggesting womens bodies may be the issue behind the pants problem that led to a recall of the 72 plus dollar yoga pants. The shoppers appear to have forgiven the retailer but questions remain about lulus management. He was with snow Board Company burton for 15 years, both are privately held. Hes not wellknown by wall street and as a result, the hiring announcement is getting mixed reviews. Christine day had a great retail sensibility and i think did a fabulous job doing that, but didnt have the background from an operation l perspective. In the case of the new ceo, he has a great operational background but may not have the retail perspective. So, i really think the jury is still out. Reporter wall street will get a clear picture of the company he will be taking over once the earnings are reported thursday. Its a big job with competence intensifying. Under armor, nike and more are aiming for a piece of lululemons market share. Mastercard will launch a 101 stock flip and up the dividend. The worlds number two credit and Debit Card Company will bump up by 83 and buy back 3. 5 billion shares of common stock. The stock took off in after hours trading. Shares ended the day a fraction higher to 763. 61. Toll brothers out with a big earnings beat. The home builder reported an increase in Home Deliveries and prices, but its results were not as strong as a year ago, partly because of rising rates. As the builters have been talking about, our business has been flat since the summer. Flat is okay for 2013 considering where we were in 10 and 11. Were anxiously awaiting for the spring saling season that begins in february. Taking a look at the shares of toll brothers, they fell to 33. 34. Higher demand for repairs helped auto zone post Quarterly Earnings stronger than expected. The cold weather and increased ware and tear drove more customers. Auto zone has been focussing the sales on the commercial repair business to off set weakness in the do it yourself market. Shares revved higher up 3 to 471. 86. Mark announced it will move experimental alzheimers drug into a trial with patients to mild and moderate disease. They gave the drug maker the okay to go ahead with the testing of 2,000 patients. The progress didnt seem to impress investors, though, today. Shares fell a fraction to 49. 43. Shares of rambus are on a tear after they signed an agreement with Micron Technology they settled a 13year legal dispute. They agreed to pay 280 million over seven years to license patents they will use in selected products. Rambus up and shares of micron up to 23. 14. Shares of Burlington Stores caught a chill. Third quarter widened. Perhaps more troubling, burlington predicts Slower Growth in same store sales for the holiday season. The Stock Plunged 8 to 25. 92. Back to the top story, the new ceo at General Motors despite the breakthrough news about mary barra, our next guest says not much has changed. According to a new survey by catalyst that monitors the status of women in business, there has not been a significant increase in the number of female ceos, Senior Executives and Board Members in u. S. Companies. Shes the chief operating officer. So debra, tell us why were not seeing progress, even though there have been some really smart women in being promoted into the ceo jobs and im thinking of Ellen Coleman and not in the corporate world, janet yellen. What is going on . Arent we seeing more on this stuff going on in corporate ameri america . You just identified very remarkable women leaders. What is important when we talk about this is to focus on a leadership of women. Unfortunately, the cat list census shows boards at 16. 9 and when we look at women executive officers, again, four consecutive years of no significant growth, women hold 14. 6 of those seats. So, clearly, women are facing barriers to their advancement and a big part of what this includes is the fact that the companies that they are working for are not paying the right amount of attention to the fact that this is a talented group of leaders that need to be supported and advanced through the pipeline. You say that the facts show that companies that have women represented on their boards and in the executive ranks do better in terms of performance than those that dont x. Plain that and why doesnt that get through the thick heads of some people and say hey, we can do better if we have more women there and finally, why do you think that is . Well, Catalyst Research does show that on average, fortrain 500 companies that have the highest representation of women and leadership as compared to those with the lowest representation of women do better financially. Why is that . For a variety of reasons. Those companies are topping into the full range of talent thats available in the marketplace. They are also tapping into the knowledge of women who understand the preferences of the marketplace. So essentially, we would say to serve the market, you need to look like the market, tap into the talent available and into the insights that those leaders would have for your company. All right. So make a case about you have a company now put as woman or couple women on their board. How does that change things . How does the conversation at those board meetings change . I think any conversation changes when you have different perspectives around a decisionmaking table. Different points of view are being raised, different ways of looking at a problem. Again, whats really important there are diverse perspectives. Thats where we see the opportunity for invasion to happen in organizations. I think its no surprise in the earlier story that you were talking about when you look at mary barras appointment of gm, she was leading the Product Development function prior to this appointment. One of the things that catalyst sees in the research is that women are less likely than men to have the opportunity to lead those Mission Critical functions that put them in the pipeline for the Senior Leadership roles. Interesting conversation. Thank you so much. Debra gillis chief operating officer at kath list. The major money some drug makers are putting into the fight against super bugs. New developments out of washington tonight, a budget deal has been reached. Senate chair patty murray of washington and paul ryan of wisconsin are announcing the agreement on capitol hill tonight. Prince stton university bega vaccinating against meningitis b. Its not in the u. S. But the fda and cdc allowed it for the outbreak at the school. Eight students contracted the fatal bacteria since march. Nearly 2,000 students received the vaccination on monday, the first day available. The outbreak at princeton is making awareness of super bugs, drug resistant bacteria. One Pharmaceutical Company is making a bet on what it will take to combat them. Reporter researchers are in a race against time to develop antibiotics that fight infections becoming increasingly deadly because they dont r

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