Cameron Johnson's Blog

Breaking Up Is Hard to Do

The break-up of Brad and Jen a few years back was one thing. When Reese and Ryan split, that was just plain sad. But there’s no Hollywood divorce that can come close in real-world pain to that biggest-ticket break-up we’ve seen in years—Daimler-Benz and Chrysler are officially over. And before you could say, “Wanna buy a used car company?”, that great American automotive icon that first started producing cars as the Maxwell-Briscoe Company of Tarrytown, New York in 1904 was snapped up by a capital management firm named after the three-headed hell hound of Greek mythology. (Mythic irony: Cerberus is also deeply involved in GM and Ford—hell hound or not, it does indeed appear to have become Big Three-headed.)

Here’s the shocking thing about this: Daimler-Benz spent $36 billion to buy Chrysler in ’98. And Cerberus’ total outlay, not even a decade later? Less than $8 billion.

I wish Cameron were here to comment—I sure don’t know the automotive industry like he does. But as far as I can see, Chrysler’s major ills boil down to one word: legacy. The company’s pension and health-care commitments for employees and retirees now weigh in at over $19 billion—more than half what Daimler-Benz paid. And Ford and GM are saddled with similarly gargantuan pension/health-care costs. With 78 million Baby Boomers barreling straight down the highway headed toward retirement, this arrangement simply won’t work any more.

We’ve got legacy retirement plans, legacy health care plans, legacy manufacturing plants and legacy models. (Does anyone really think SUVs are the car of the future?) America is a young country, but we’re thinking old. Twentieth-century models of thought and business worked in the twentieth century. They won’t work in this one.

If anyone sees this differently, comment, please! — J.D.M.

Rebuttal

I want to take issue with a post on this blog. In “Telling the Truth, Part 3” (posted 4-30), I think the writer missed the real point here.

Okay, disclaimer: the writer was me. And it’s not that I exactly disagree with what I said. It’s just that when I wrote the post, I altogether missed a different —and I have to admit, a more important — point.

I wrote about Marilee Jones, M.I.T.’s popular dean of admissions, who was recently “outed” as having faked her academic credentials more than twenty-five years ago when she first applied for her entry-level job at M.I.T. I didn’t come right out and say it, but the point I seemed to be aiming at was an Aesop’s moral perhaps something like this: “It’s better to tell the truth in the first place.”

Maybe so. But there was a deeper point nagging at my brain here, and I didn’t realize what it was until I read Michael Kinsley’s perceptive editorial in this week’s Time magazine. “Instead of dumping her,” writes Kinsley, “M.I.T. might want to consider giving Jones an honorary degree,” and he makes a good case for the virtues of a meritocracy as opposed to a bureaucracy — where genuine, demonstrated value is held as more important than academic degree.

The “telling the truth” issue is a real one, but perhaps more vital here is the issue of the tyranny of the degree. In You Call the Shots, Cameron makes a compelling case for his own decision not to continue his college education, not by denigrating the value of college but by weighing it against the value of the real-world education he was getting pursuing the development and funding of his business (at the time, it was CertificateSwap.com). My own experience seconds that emotion. I’ve been editor in chief of two national business journals and have authored three books issued by major publishers—and have not even an undergraduate degree. I was too busy pursuing a career to go to college.

That’s not all: years earlier, when I was seventeen, some friends and I left our conventional schools and started our own high school—and although we had no accreditation of any kind, we ended up placing graduates from our school into places like Yale, Harvard and various state colleges. It’s not just Kinsley and me who question the tyranny of degrees: it was—in that case, back in the seventies—the schools themselves.

Kinsley’s point is not that we overvalue the experience of a good college education, and neither Cameron nor I make that point either. It is rather that the merits of an academic degree need to be weighed in context. And in the balance, genuine life experience often counts for more. — J.D.M.

Writing for a Billionaire

In Seth Godin's blog, the maverick NY “permission marketing” maven quotes Rupert Murdoch, talking about the reasoning behind his megabid for The Wall Street Journal, and what might change if the paper changes hands. “I’m sometimes frustrated by the long stories,” the media magnate confesses.

Godin posts just the quote, along with this headline: “How to write for a billionaire.”

I guess that‘s my cue to sign off here. — J.D.M.