The Wall Street Journal has a nice story about how slow-going it’s been slimming down Citigroup. But what struck me was two businesses mentioned here that were the predatory foundation of the company, as Dean Starkman pointed out in October. He said then:
That’s Citi’s DNA, not that you’d know it from the mainstream media.
And you still wouldn’t know it from this Journal story.
CitiFinancial, a consumer lender, has a business model that is similar to CIT Group Inc., which suffered as wholesale funding dried up and sought bankruptcy-court protection last year, exiting in December.
CitiFinancial used to be known as Commercial Credit Corp. and was the cornerstone of the empire Sanford Weill built into Travelers Group before merging with Citicorp in 1998 to form Citigroup…
Last month’s deal to sell a 23% stake in insurer Primerica Inc. to investment firm Warburg Pincus LLC shows the intricate choreography being used by Citigroup to shed unwanted assets while keeping some of their earnings.
Why do companies with pasts like these get a pass? Would you refer to Michael Milken or Bernie Ebbers without noting their criminal pasts? Corporations are people, after all.
—Speaking of Apple Corporation and journalism, the company has the potential to be very good for the publishing industry while being very bad for the publishing industry. Here Valleywag’s Ryan Tate runs down the issues and how publishers might respond:
If the tablet device and Apple’s associated online shops become popular enough, the company could have a chokehold over publishing technology and content itself. It could become as central to the future of print media as it has become to the future of music, where Apple’s iTunes Store dominates online sales. And it could use that position to promote its preferred technologies over those of rivals, most notably Adobe’s Flash animation software, now ubiquitous on websites.
But Apple is but one player in this game; old media are making moves of their own. Apple’s refusal to work with Adobe, whose software is central to most art departments, makes publishers uneasy. And the old media are none too comfortable with Apple reviewing their content and applications for approval, or with the prospect of one company potentially controlling the future of print. So they’re taking steps to preserve their independence.
It’s worth reading the whole thing.
— Reuters moved the Toyota story forward some yesterday, reporting that the beleagured car company gave “stark” warnings to dealers and regulators about potential problems. Consumers got soft-pedaled, so to speak:
“If the floormat is NOT properly placed and secured, it could slip and interfere with the movement of the pedals during driving and may cause an accident,” Toyota said. “NEVER install more than one floor mat at a time in the driver’s seating position.”
The only problem: almost no one in the American driving public saw the warning, which was issued in September 2007 — two full years before Toyota announced the first in a string of recalls taking aim at the problem of unintended acceleration. That is because it was sent as a so-called “technical service bulletin” to about 1,500 Toyota and Lexus dealers.
And this is great context:
As Toyota struggles to bounce back from a safety crisis that has tarnished its reputation and as regulators probe what went wrong, a key questions is how an industry-wide practice of sending technical notices to auto dealers was allowed to morph into what critics describe as a channel for conducting recalls in all but name, extending warranties and sending safety notices outside the glare of public scrutiny.
The issue is not unique to Toyota. Safety advocates starting with Ralph Nader have argued that dealer service bulletins can become a way for automakers to conduct “silent recalls” or to keep problems from the public view even as they work to correct them.
This is good stuff, but Reuters should have mentioned that investigators are looking at possible electronic problems with Toyotas.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.