Some years ago, a company called Chrysler Corporation was valued at under $4 per share. The highly paid analysts didn’t think much of its future, and common wisdom was that its lineup of aging cars and unpopular trucks would end up slowly disappearing.

At that time, I had a copy of the press book for the LH series, and thought the stock would skyrocket. I didn’t have any money to spend then, but the stock did soar. First, the New York Times had to print a huge feature on the upcoming cars and how they would revolutionize big cars. Then the stock shot up. Those wealthy analysts who were paid to know the depths of the industry apparently had missed the upcoming Intrepid - though I, a humble writer of the odd truck review for Army-Navy Store and Outdoor Merchandiser magazine, knew about it.

Then of course there were the perennial “Apple will declare bankruptcy” articles, culminating in Michael Dell’s comment that Apple would best serve its shareholders by liquidating. Okay, we had some rough times until the Second Coming of Jobs, but here’s a little clip from today’s edition of the excellent on-line publication Macintouch:

[Apple] posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. … International sales accounted for 42 percent of the quarter’s revenue….
Apple shipped 2,496,000 Macintosh computers during the quarter, representing 41 percent unit growth and 43 percent revenue growth over the year-ago quarter. … “We’re proud to report the best June quarter for both revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO.

Oh, and the analysts? Until the iPod set records, most of them were down on Apple, too. Apple was soon to declare bankruptcy for years. The same story was run about Ford, General Motors, and Chrysler, even now that Chrysler is owned by some of the richest men in the world, men who I suspect would not hesitate to bankrupt tens of thousands of people at once, but who I also suspect would prefer not to publicly admit making a huge mistake. Not that they did — I believe they knew what they were getting, and they know there’s huge profits in there somewhere, someday.

Most recently, General Motors was down in the gutter. One analyst dropped expected share prices from $27 to $7 in one day. Do these guys just make things up? The result was GM’s share prices dropping rather quickly. None seem to care that GM is investing in its future across the world, rationalizing its engineering to avoid duplication and bolstering its international presence. GM is working hard to get into emerging markets in India, China, and Russia, and I suspect they’ll succeed. The company is still turning around, perhaps despite its CEO, and probably thanks mainly to Bob Lutz.

And what of Rick Wagoner? Well, the market showed no response when he took his full 2007 compensation, which as I recall was around $24 million. It did, however, shoot the stock up by an amazing $6 a share - going back over the $10 line - when Wagoner announced that he’d slash lots of other people’s salaries and jobs. Oh, the analysts love it when you slash. Their favorite movie must have been Friday the 13th or the Texas Chainsaw Massacre. Slash and burn, they never learn. Back in the 1990s, GM slashed jobs too; while Chrysler invested heavily. You know what their pick was - but you also know who won the huge profits a few years later.

One of the scary news items today was the Federal bailout of Fannie Mae and Freddie Mac. The same people that objected to - and still object to - the government’s loan guarantees to Chrysler, which saved at least 100,000 American jobs and was in some ways the least the government could do after Chrysler saved billions of dollars in World War II, refusing to profit from patriotism - these same people are bidding up the stock market and approving of the bailouts. They still don’t want GM or Ford to be bailed out; they love to predict bankruptcy for what they see as the rusty relics of years past. But given them some paper-pushers who made a bunch of bad bets, and they’re all for spending a few billion taxpayer dollars. After all, it’s not much more than a little slice of Iraq war, right? Now, Obama’s ideas about putting $5 billion towards Detroit automakers to help them survive their own bad decisions… that’s just plain wrong. But $25 billion or so towards a bunch of bankers (or up to $1 trillion, depending on the source), now, that’s a great idea. It might save, um, actually, nobody has told us why we’re doing it, exactly. Apparently we need a cheap source of junk mortgages.

Congress is going ahead, full steam, with rescuing Fannie Mae and Freddie Mac, and the White House loves the plan. But then, Congress is probably relying on the analysts’ advice. Perhaps we need a new Congress and White House that have more perspective - and don’t assume that financial institutions deserve our hard-earned dollars while ordinary Americans (or big automakers that hire ordinary Americans) should be subject to the free market.

We need changes to our system - now. We’ve been ignoring reality too long, in Washingon, Detroit, and New York - and in all those places where people keep their eyes shut to reality and listen to the siren songs of the “experts” and “populists.”

Last week, you may recall my writing of a small ordeal in getting our FiOS phone line fixed. The problem was not so much that the line went out - in a storm, lines break - nor was it the response time of the company. It was the broken process Verizon used, where they demanded entry to the house just in case the problem was indoors, though I had to go away for several days to the Carlisle show; and apparently they needed this entry (a) just in case the problem was indoors, and (b) because as a mere customer, I obviously could not be trusted to see that the green light next to “NETWORK” was off while the green light next to “POWER” was on.

Not long after writing that weblog entry, I got a call from Verizon, a routine “moment of truth” phone survey of the type I used to set up. I answered the questions and was asked if I’d mind getting a followup call from Verizon. Surprisingly, I got such a call two days later, from a supervisor at Verizon. He was interested in what had happened, and readily agreed that the symptoms (complete service outage during a storm, with no power problems) was almost certainly “up at the pole.” He was respectful of my time and intelligence, and I suspect that the repairs process is being rewritten as we speak - or has already been rewritten.

If nothing else, this shows that there is hope for any organization where at least some people care enough to do the right thing - whether by a complex, trendy process (cascading balanced scorecards) or by a simple old standby (customer surveys and process reengineering).

Now, if only they would fix the programming in my router and TV box… but given their freedom from outages until now, and their handling of this one, I’m not in danger of wandering over to Cablevision any time soon.

Some time ago, the wireless part of my Verizon router failed - indeed, it had never actually worked. In addition, the router itself would seize up routinely on file uploads or downloads; it did not like certain programs, and would instantly die if I tried to upload any video to the allpar.powertvonline.com site (it still does that, by the way). 

The Verizon rep on the phone immediately asked me if I had reinstalled Windows. She insisted that until I reinstalled Windows, I could not get a technician or a replacement box. I explained there was no wireless signal from either of my two Macs, which picked up several neighboring wireless signals which indicated THEY were working, and that it’s pointless to reinstall Windows on a machine that doesn’t use Windows. 

She reiterated: I must reinstall Windows. I gave up for a while; then the TV box died (gotta love that Verizon reliability) and the tech came out for that, without an argument. Two men replaced the box, then suggested I call tech support again for the router. I did, and this time, after demanding that I reinstall Windows, they sent a technician over. He put in the new box, which only crashes if I try to upload video and does have a functional wireless radio. 

Fast forward to Thursday, when I’m leaving to go to Carlisle. The phones, TV, and Internet are all dead. Verizon took my repair order and called me on my cell phone, as I’d requested; they wanted to send a tech out, but wouldn’t do it if I wasn’t home. They didn’t want to waste time if the problem was inside the house. I pointed out that I’d rebooted the optical converter, and that the light was on for power and off for network. It was no use; the problem might be in my house. 

On Monday I came back home and at around 9:30 am, so did the Verizon tech. He went downstairs, saw that the power light was on and the network light was out, and called for a truck. Only three hours later, the truck arrived and fixed the problem on the pole. It’s a good thing they stuck to their policy, because otherwise their tech might have had to waste some time. You know, like the three hours or so he spent waiting for the truck to arrive. 

The moral of the story, other than “if you have wired service, don’t switch to FiOS” or “Verizon is trying to make the cable company look good,” is that not everyone is a complete and total idiot. Most customers are quite capable of walking up to a box, finding the light marked “Power,” seeing if it is lit, and then finding the box marked “Network,” and seeing it is not lit. Likewise, if two customer computers can see other wireless signals but not their own, well, maybe there’s a problem that doesn’t require reinstalling Windows - a moderately onerous process that doesn’t really solve many problems on Macs. 

Like every Verizon employee we’ve met, our technicians seemed knowledgeable, competent, and underused by managers who seem to think that nobody but them has any brains whatsoever. We know there are fools and problem customers out there, but I’d like to think that they’re a minority - and that those of us who can read short words and can tell the difference between a brightly lit LED and a completely unlit LED should not be punished by the maybe 1% of the population who cannot reliably be counted upon for such weighty judgements. 

Verizon is, of course, not the only company to think this way. Many companies consider their own employees and customers to be the lowest grade of fool. I would like to think these companies will not exist for long periods of time. Unfortunately, Daimler had the reputation of considering Chrysler employees to be intellectually inferior, and Chrysler customers to be… more so. That has resulted in Cerberus controlling Chrysler - a situation that is not desirable from a long-term point of view, though it’s far better than having Daimler control Chrysler - and in Chrysler’s sales spiraling downwards, year after year. It has, it seems, also resulted in the loss of key personnel, like the man who tuned the Neon, LH, and original cloud cars for their fun, light feel, along with countless other bright, hardworking people who, because they did not always agree with the imported managers, left, one way or the other. 

So the real moral of the story is - it is better to think highly of your fellow traveller and be disappointed now and then, than to think nothing of them and send them to your competitor.

PS> Verizon redeemed itself!

Saudi Arabia appears to be frightened of Americans’ desires to cut back on oil use and to start putting money into alternative forms of energy - so they plan to raise their output considerably next month.

It must be hard to balance one’s profits against one’s desire to keep customers hooked … I wonder if drug dealers feel that way?

It would be ironic if Ford retooled all those factories to build their more-efficient Eurocars only to find that gas was cheap again and Americans were back to big SUVs.

It would also be sad if Americans proved to think so short-term… I can almost understand forgetting the 1970s, but forgetting the Spring of 2008 by the Fall of 2008 would be pushing it.

When one thinks about it, the best thing OPEC can do is vary supply now and then, just often enough to get people to invest in fuel efficiency, then make it an unworthy investment. That would give fuel efficiency a bad name for businessmen, so that if the price did slowly, slowly climb up (like cooking a frog), few would be willing to put their capital into fuel efficiency.

I’m probably assigning more intent into this than is merited. However, as Americans, we are definitely hooked on cheap energy. No children’s party is complete with plastic bags filled with plastic rubbish designed to be thrown away after a day or two. Americans, unlike Europeans, still heavily favor the top-loading washers that use three times the water and quite a bit more energy; and precious few people dry off their towels on clotheslines. Again, not to be redundant, but lots of people and business don’t even use the sleep features of their computers (or the “shut down” feature). People leave their SUVs running while they drop off their kids at school, for ten or fifteen minutes… on nice days as well as days when one can pretend that they need to keep the car warm.

Nobody listens when I say that energy is still cheap — though a lot of people are seeing their net income run into deficits with the change in gas prices. Still, power is so cheap that many people leave their lights on 24/7, along with their computers and air conditioners. It’s so cheap companies leave the lights on in their buildings and air condition massive atriums to 65 degrees. It’s so cheap people are still buying track lighting with halogen bulbs. It’s so cheap people don’t think about power costs when they buy a TV, ignore the energy usage labels on their refrigerators and air conditioners, and leave the a/c on overnight instead of opening windows, even in rooms they’re not using.

Power is expensive enough to complain about (and to really hurt people whose incomes are finely balanced with their expenses), but not so expensive that the large majority of people will use less, even when it won’t cost them anything but a few seconds to shut a light or put on their energy saver or shut their computer or spend $20 on a slightly better a/c unit or $100 more on a refrigerator … though many will gladly spend more than that to get their precious stainless steel refrigerator skin.

In a real energy crisis, we would all find ways to economize, just as Californians during a drought slash their water usage (admittedly a small percentage cheat.) Industry would find ways to save energy, just as automakers are now increasing their wind tunnel time and making stylists live with minor changes for the sake of aerodynamics (or, at Toyota, major changes for the sake of aerodynamics). There’s lots of things we can all do and when the price is really high, we’ll do all those things.

Or, of course, we’ll find people to blame, get all angry, and make ExxonMobil and the leaders of a small number of oil-rich countries very happy and very amused. But I’m hoping the future holds the America of FDR, George Washington, and Thomas Paine, and not the America of Senator McCarthy, Henry Ford, and A. Mitchell Palmer.

Separately, DetNews had an excellent article on the economics of gas. They noted that the key issue for gasoline is refining, not the price of oil. They also pointed out that many oil refineries are currently running at a loss.

Yes, you heard right. Some of the refineries that produce our gasoline are running at a loss. That, better than any lunacy about how environmentalists are in control of the Bush Administration, (which is every bit as likely as Jerry Falwell running the Democratic Party, especially now that he’s dead), explains why there have been no new refineries constructed over the past decade. In fact, some years ago a major gas company closed down some refineries, because they weren’t making their target profits - and at that point, they weren’t even losing money.

One who is either paranoid or has a good memory of oil company shenanigans might think that ExxonMobil is doing its bit to shove some competitors over the edge, and perhaps into its gaping maw. ExxonMobil, you see, is doing very well in this climate, because they do quite a bit of drilling in addition to refining. Companies that mostly refine are probably losing money now; those that mostly drill are probably quite happy.

But what about antitrust law, you may ask? Do you remember a few years back when Microsoft was found guilty of violating such law? Do you remember the penalty? I’ll remind you, if not — they were made to promise not to break the law again. (This wasn’t their first offense, either.) There were a few more penalties, but none so vicious as those you would get for stealing a stick of gum, or parking in a handicapped space.

This article both shows why the price of gas won’t rise in a linear fashion with the price of oil - and why new refineries are unlikely to appear any time soon. It also shows why combining trips, driving with fuel efficiency in mind, and, yes, considering gas mileage when replacing a car, along with such apparently unrelated thoughts such as not buying unnecessary plastic toys, shutting off unused lights, and enabling Energy Star on our computers, are terrific ideas.

Those of you in that select, elite group — Mac users of statistical software - may be interested in our (sister site’s) SPSS 16 for the Macintosh review.