Forum Archive Index - July 2002

["DR" <kat47@bigfoot.com>]

More from bill Bonner -a little closer to the Ceonistas

This time re Vivendi CEO (now ex) and a Ceonista refugee

 

 

Jean-Marie Messier arrived at the pearly gates. "This is
heaven?" he asked. "Yes, Mr. Messier, enter," came the
response. Behind the doors, Messier saw flames shooting
up and desolation everywhere. "Wait a minute...I thought
this was heaven," he protested. "Ah, no one told you...
Heaven and Hell have merged."

                     Joke, thought by some to be funny,
                     reported in the Liberation


Poor J2M.

"The ex-master of the world negotiates his surrender,"
reads the headline in today's Liberation. The story
might have concerned Kozlowski or Ebbers or any one of
dozens of business execs under house arrest. Instead, it
introduced an article about France's own wunder-
capitalist, merger-king Jean-Marie Messier, CEO - until
very recently - of Vivendi Universal, the world's second
largest communications company.

On December 5th, 2000, when all things seemed possible,
you could have bought a share in the newly-merged
Vivendi, Seagram, Canal+ group for 70 euros. Two years
later, "J2M", as he is known in the French press,
announced some bad news. Vivendi Universal lost $13
billion in the year 2001 and had accumulated $34 billion
in debt. By April of this year, the stock had lost half
its value. By last week, it was down 2/3rds and
yesterday, according to the Liberation article, J2M
picked up the phone, called his staff in America and
announced his departure...

J2M would be happy to walk away...take a vacation...get
some sun, maybe. Or perhaps write a book. But, there is
a little problem. Like Ebbers, Gilder and so many
others, J2M was a believer. He borrowed $25 million to
buy Vivendi Universal shares back when the stock was
trading at 50 euros (more the twice the current price).
Now, say people close to him, the poor man is close to
bankruptcy.

Every revolution needs its intellectuals, its fools, its
martyrs and its executioners. The revolution of the
Information Age was no different. J2M...welcome to the
guillotine.

Of course, $25 million is barely pocket change to many
American CEOs. Under normal circumstances, passing the
hat at any reasonable social gathering in Boca Raton or
East Hampton ought to bail out the hapless frog. But
now, CEOs of publicly-traded companies are all slinking
off into hiding, fearing for their lives. Every time one
of their breed gets his name in the paper, the others
all breathe a sigh of relief...and look the other way as
the poor man is trundled off to the scaffold. None come
to his aid. Heck, they all claim they never met the man.
And no way did they do what he did...uh uh...

At this point in today's letter, it is probably
appropriate to declare an interest. Your editor has been
the CEO of a communications company for the last 20
years. You wouldn't know it, of course. From his
reckless demeanour, his Land's End wardrobe, and his
low-rent headquarters in Paris's homosexual quarter,
your editor is more likely to be mistaken for a hack
journalist with a drinking problem than a hard-charging
superstar CEO.

Not so J2M; he went to all the best schools, including
France's elite ENA (where your editor is hoping to send
Henry - so French taxpayers can pay the tuition). He
took over one of the country's most important companies
- Generale des Eaux - at age 40. Quick witted and
ambitious, he soon became a media favourite and was
rumoured to be having an affair with Sophie Marceau, a
beautiful actress.

No one suspects your editor of having an affair with a
French film star. Alas. He has the imagination for it:
what he lacks is the opportunity and the ambition.
Whatever his virtues, your editor is too dull for life
in the fast lane.

Still, he can't help but feel a little sympathy and
solidarity with corporate CEOs who were lured into a
life of high-living and low crime in the late '90s and
now find themselves spat upon by every crackpot,
politician and hack in Christendom. What's more, out of
pure contrariness if nothing else, we feel we should
stand up for our class.

We know quite a few CEOs. Whether they run filling
stations or multi-nationals, they are decent fellows who
do the best they can. They get to the office early and
stay late. They know their businesses, and pay attention
to the things they know. Few can afford to waste time
gabbing about the Information Revolution, the WAT, or
the federal deficit; they're too busy lusting after
spiff in the conventional way - by working for it.
Few get their pictures on the magazine covers or gain
the favours of Hollywood starlets. Instead, they make do
with their wives and their businesses...or failing that,
find new ones.

Nor does anyone really care if they misstate their
income or overestimate their earnings. Most - and your
editor is no exception - actually live on what their
businesses make. Business earnings are not some mythical
figures made up by accountants and CFO sorcerers, but
real money that is used to pay the kids' tuition and the
family grocery bill. The CEOs we know don't run the risk
of indictment for getting the numbers wrong; just the
risk of humiliation when their checks bounce. No banks
come banging on their doors to lend them money. No
investors come up to them after church services eager to
buy their shares.

You're not likely to hear these CEOs raving about the
wonders of the New Era...but neither will you be stuck
with their shares at 6 cents on the dollar.

Messier, on the other hand, might have contented himself
with treating waste water at Generale des Eaux. But
would that have given joy to the shareholders...or the
tabloid journalists...or Sophie Marceau, for that
matter? No...Messier had to jump beyond grey water into
really deep doo doo. He bought Seagram for $30 billion
and then USA Network for $10 billion. Then, he launched
an internet portal called Vizzavi, which was - as you
might imagine - a total flop. Finally, with the company
facing debt payments it cannot make...and the stock
trading at only $22 yesterday...J2M had to leave.

We will miss him.

Your editor, never once mistaken for Bernie Ebbers or
Jack Welch,

Bill Bonner


P.S. A friend sends me this news item:

"REMAINING U.S. CEOs MAKE A BREAK FOR IT
Band of Roving Chief Executives Spotted Miles from
Mexican Border  .....

 

 

.... you all know the rest

D.