THE CEO's Blog

Lucky me is at jury duty for the next couple of days. So I thought this would be a good time to poll my readers on their thoughts about GM’s survival.

According to everything we have read and heard, GM can do one of three things:

1. Continue as is and shut down.

2. Continue as is and file bankruptcy.

3. Receive a bail-out loan from the government anywhere from $25-$100 Billion.

Without any of my comments on the subject, let us know your thoughts. I can then send to Mr. Levin and perhaps this will put the issue to rest in Washington. Who knows?

Happy Wednesday and Thursday!

I had the pleasure of spending a couple days in Florida last week. The weather was 86 and sunny since I know you were wondering that very thing. How come when it comes to places like Florida the first thing we want to know is the weather and if rain is in the forecast?

After visiting our Pavilion showroom, I checked into the Hilton Suites and quickly found the pool. After two minutes in the sun, I pounced to the vending machine for SPF30. After 15 minutes back in the sun, the sweat was dripping from all directions and when it landed in my eyes, it was time for the pool. I will say that if Florida has anything on us, it’s that their pools are open all year long (OK, so are their golf courses).

It was then back to the A/C hotel room. The door wall was sweating too. The A/C was cranked but I was still sweating. The best came the next morning. At 7:15AM, I went for my 6 mile run. It was 76 degrees, the sun was out and there was a wind. I’ve run in Vegas, Mexico and other places, but this was one of my tougher runs. People were shaking their heads as I passed them by thinking "poor soul."

After the run was another plunge into the pool. Steam came out and I am not joking! Then a cold shower and none of it helped. My hair was a mess and would not dry. Oh well.

My brother took me for lunch on the ocean at this place called Johnny G’s. They are famous for fish and chips and the 70-80 year olds were chowing away like it was their last meal. Of course I didn’t eat that but the broiled fish sandwich was great. We did have to move our chairs however several times for walkers, canes, wheel chairs and whatever else Florida is famous for.

Here’s the thing about Florida. It’s hot, humid and filled with old people that can’t drive. You risk your life every time you get in the car. The traffic lights are 4 minutes long. And everyone lives in A/C and never opens a window.

As my plane made it’s way into Metro Airport, the sky was gray, it was raining and looked cold. Why? Because it was cold. But you know what? It’s nice to have the four seasons and be cold–it keeps you conscious.

The next day I ran at 7:15AM and it was a wonderful 34 degrees. It was a delight and one thing was certain: I didn’t have to worry about heat exhaustion.

Happy Tuesday!

Who says you have to be in Florida or LA to have a great beach party? Not the folks at CTS!

Saturday was the annual Beach Party at our World Headquarters. Over 250 tanning salon attendees came to celebrate the start of the 2009 season. They all had high expectations and think consumers will turn to tanning to help reduce stress, anxiety and give them needed time to relax.

The CTS talent were busy all day long making sure the event was perfect. Kory, Kristi, Elisa, Laura, and Suzanne wore their CTS shirts and took care of business.

Rick Mahorn, director of ATI, was on hand conducting the certification segment. CTS has partnered with ATI and will be conducting certification programs throughout the USA first quarter of 2009.

The lovely folks from ETS showed off their new products from Australian Gold, California Tan and Designer Skin. Yet another $100 product looks like to be a best-seller!

The group feasted on Steve’s Deli for lunch. It seems that everyone is eating turkey and no one is eating corned beef or roast beef. That’s the good news. The bad news is that there wasn’t a chocolate chip cookie to be had.

With the demise of the ITA annual show and the fragile state of the indoor tanning industry, it is proof positive once again that leadership does make a difference and regardless how bad things are, rays of sunshine are always out there.

Happy Monday! (And yes, the Lions are 0-10).

We wake up in the morning and what is one of the first things we do? Turn on the TV or radio. We want to instantly know what we missed overnight, the current weather and what gossip we can talk about during the day.

We need to be updated 24/7. The media loves that we need to be updated 24/7. The Internet is 24/7. Heck, if you are reading this blog, you are connected and read this because you don’t want to miss anything and you love to read the comments.

But what if you woke up and the only thing you could turn on was the coffee maker? No TV. No radio. No Internet. No computers. In fact, no newspapers outside your door either (most don’t read them anyway).

Now think about this for a week straight. Now think about this for a month straight. What would the effects be?

The media makes us crazy. For one, we wouldn’t be crazy.

The media loves to focus on the negative. No one wants to read or listen about the person who won the lottery. We want to learn about the person who won the lottery and then lost it all.

We are all in a funk mostly in part because of the media. Most of us still get up in the morning, go to work, come home, do our thing and repeat the process the next day. That’s what we need to think about.

GM, Ford and such are huge media hits right now. Neither you or I are going to do anything about it. Let’s go to work, focus on what we do best and blast the media out of our minds. What an idea.

Happy Thursday (and Friday since I am off to Florida)!

The news isn’t getting any better and now it looks like we will be in this turbulent period of time at least until August 2009. So what should we do?

Indulge in comfort. The other day I mentioned "cocooning" and many agreed they love to wrap up in a soft blanket in front of a roaring fire and read a book. With daylight savings time over, I’m going to bed earlier and sleeping longer. The bed always comfortable is even more so.

For humans, there still remains nothing more comforting than food. Comfort foods include meatloaf, mashed potatoes, hot homemade Angie’s pizza bread, pasta and dessert.

Ah, the thrill of dessert. For me, it’s strictly weekends and even then, the desserts are monitored. Except of course on special occasions. And my most favorite of those is coming up shortly: Thanksgiving.

I used to love a box of chocolates. Remember Fannie May? Whitman’s Sampler? Sydney Bogg? Sanders? Now it’s Godiva which I think is OK at best. Regardless, I hate the cream centers and love the nut/caramel ones. 

Pie is my favorite and it’s a toss up between real pumpkin or warm apple with crumb topping and vanilla ice cream on the side. Yes, I also love banana and coconut creme, and peanut butter with chocolate topping is pretty good too.

But for Thanksgiving, one must be a traditionalist. The problem lies in portion control. Is it half a piece of each to start? Then sneak up and eat the other half of each? And then take the knife and cut a secret piece and eat that over the sink? You see, that’s why I only eat pie once a year. I can’t stop.

What do you prefer: A box of chocolate or piece of pie? And which is your favorite?

If you can’t talk about the news, comfort food is always a good option.

Happy Wednesday!

Contrary to popular belief, I love pizza. If I was cast onto a deserted island and I only had one choice of food to select from, it would be pizza.

There is no such thing as "bad" pizza. Even frozen pizza is good. However, there is a huge difference between good, great and the best.

I have always searched out the best. At one time, deep dish Chicago pizza from Giordano’s was it. But too much cheese and crust and I hate only being able to eat one piece.

New York has fabulous pies but getting to NY when one is hungry is not an option. And either is Italy. Which brings me to the Detroit metro area.

Actually we are very lucky to have great pizza here. Buddy’s is always good for semi-thick crust and Tomatoes APIZZA is great for thin crust. But until you’ve had authentic Italian thin crust made just right with the perfect homemade sauce and mozzarella, you haven’t had the best. 

I found the new best and it’s a place so secluded, you would wonder why anyone would open in this location. Supino’s is owned by Dave and is located in the Eastern Market on Russell St. Dave is committed and the only one making the pies. And after working consecutive 18-hour days, he will be committed in more ways than one.

The place is "eclectic" meaning he bought used tables and chairs and put a coat of paint where it needed it. It’s small, cozy and yet to have beer or wine but that’s coming I was told.

What Dave brings to the table is the most incredible pie that is so good, you won’t be satisfied until every piece is gone. OK, I stopped at two, but that’s me (I could have eaten the whole thing).

If you’re hungry for pizza after reading this, do yourself a favor this weekend and head to Supino’s. And if you have a better place, I need to know about it. And fast!

Happy Tuesday!

Futuristic is my #6 Strength according to Gallup Organization. While Focus is my #2 Strength, I love to seek out what the future will look like. It is so much fun to anticipate the future and see it unfold before your very eyes whether the future is minutes or months ahead.

I remember reading The Popcorn Report by Faith Popcorn some years ago. Popcorn wrote about the future as she always does and is the one that invented the word "cocooning." Cocooning is when we decide to stay at home, sit in front the open fire, bake cookies, read books, play games and chill out. It eliminates the need to stress out outside the home.

Like any futurist, our time always comes eventually. In these turbulent times, Popcorn has once again become relevant. In fact, her new word is "ubercocooning." She states that bar sales are down, people can’t even get drunk anymore because when they drink nothing happens and the biggest impact is the lack of trust.

According to her interview in the WWD October 29 issue, Popcorn talks about four new values in the ubercocooning environment:

Goodness; Empathy; Simplicity; and Happiness

People will pay a lot for happiness, joy and laughter. Witness the box office last weekend. The #1 movie Madagascar was another animated hit that did $66 Million. The #2 movie Role Model was a comedy that did $20 Million. No wonder the Lions were blacked out for the second time this season.

Trust will be word of the next decade. Obama won big because people trust Obama. The Big 3 trust Obama to bail them out. The unemployed trust Obama to get them jobs. The people trust Obama to get us out of war.

But trust is a difficult word. It must be earned and it takes time. Patience is not one of Popcorn’s new values but it should be. Then again, if you are a Lions fan, even your patience is wearing thin after 50 plus years.

Happy Monday!

Now that we finally got rid of the TV advertising and bloodied yard signs from the election, now we have to deal with the inundation of discounts, freebies, coupons and special offers from retailers.

With unemployment hitting 6.5% and consumer sentiment at rock bottom, the crucial holiday selling season for retailers is predicted to be the worse since 1991. Experts are looking for a 1.7% increase over last year. I think retailers would be happy being even.

As consumers, what do we value most? It used to be customer service. Other factors included convenience, location, brands offered, return policy, and value/price.

What do you value most?

Discounts are good because they give immediate satisfaction. You know you are not paying list price. The problem is you never know if you are getting the "best" discount.

Freebies are good but then we are getting more "stuff" than we originally shopped for. Buy 1 bag of chips and get another for free is great but you end up eating more chips.

Coupons are good because you get instant savings after doing all the work of clipping, storing and presenting them before expiration. The issue with coupons is that you have to remember to use them.

And we all love special offers. These are time sensitivity based so you have to act quickly to take advantage of them. The most popular of all are the day after Thanksgiving sales (I think Wal-Mart will start at midnight this year). The issue with special offers is that if you are too busy, then you can’t take advantage of them.

I love ELP (everyday low price) best. Wal-Mart and Costco adhere to ELP most of the time. We would love to adhere to ELP if our suppliers would let us so we do discounts and freebies.

So with Christmas shopping right around the corner, besides what you value most, what is on your shopping list? Hint: Gift cards are rated the #1 gift this season and are never discounted or given away. Go figure.

Happy Friday!

A little over 3 months, Americans were complaining bitterly about $4 gas. SUV and pick-up sales sank and the mood was sour. This was before the economic crisis, a new President and the stock market plunge.

I predicted gas to hit in the mid-2’s and the stock market to bottom at 7200-7800. We did hit 7800 and I think the market will find the 7’s  again before the 10’s. But for oil to drop from $143 to under $60 a barrel is unprecedented. Or is it?

Today, gas is $1.99, a level not seen in more than two years. However, no one is celebrating this fact. No one is out rushing buying SUV’s and pick-ups. In fact, no one is rushing out of their homes.

We finally have a new President. Obama makes only the 44th American to reach this lofty goal. His reward? The stock market crated 900 points, retail sales hit the lowest level in "who can remember" days, and GM will make an announcement tomorrow that will be riveting for the USA.

GM’s CEO Rick Wagoner only three months ago told the world that he predicted the price of oil to be in the $130 range in 2009. So many wrong predictions over the years have cost Detroit and now we have 2.4 million jobs in limbo because of it. Wagoner can say a lot of things tomorrow: we already know GM had the worst month in history with sales down 45%.

We also know that he stated that bankruptcy was not an option. At 11AM tomorrow, Wagoner’s speech will be more important than Obama’s Tuesday night in Grant Park. He could say that unless GM gets money from the government now, GM will close down (assets sold to the highest bidder).

He could say that GM is shuttering "x’ number of plants. Or GM is shuttering "x" number of divisions. Or GM is terminating "x’ number of employees. Or he could say a combination of all. GMAC is already down for the count so nothing to say about this once dominant division.

Wagoner won’t talk about $1.99 gas. He also won’t talk about merging with Chrysler–most likely the deal is off the table until GM gets its house in order. Wagoner needs support and he needs it now. Yes, GM and the other two have made huge mistakes the past 30 years and they have now caught up to them. It’s truly Saw VI for the auto companies.

But if the government lets them crash and burn, life will be far worse for all. We don’t even want to look into the future to see what that brings us.

I will close with one final comment: I hope my predictions are 100% BS.

Happy Thursday!

It seems everything in business, politics, even religion is based on what I call the 1-2 Phenomenon.

In business, most industries have two key players. Coke-Pepsi; Caterpillar-Deere; Boeing-Airbus; McDonalds-Burger King; M&M Mars-Hershey; Duracell-Eveready; Costco-Sam’s Club; Kroger-Safeway; CVS-Walgreens; Proctor & Gamble-L’Oreal; Best Buy-Circuit City. And the list goes on.

There really isn’t room for #3. Sure, #3 exists in most markets but usually the top two control at least 80% of the business. Some #3’s that come to mind include Ray-O-Vac, 7UP, Arby’s, Rite-Aid, Dillard’s, and Chrysler.

Which brings me to the Michigan market for beauty supplies. We are #1 and Maly’s is #2. But the public/private equity group SBH which owns both Sally stores and BSG which runs its Cosmoprof stores opened in Michigan more than a year ago. So there are three players of which only two can dominate and survive. Who is going to be the odd-man out?

GM, Ford and Chrysler have the same issue. Only two can survive. Lately, it seems even the 1-2 leaders are having troubles. Circuit City is close to filing bankruptcy and is closing stores to cope. Big changes are coming at L’Oreal as their U.S. sales are plummeting especially in the pro beauty category.

Today it’s about politics and the Republican and Democratic parties. Oh, there are many others, but these two have led the way for as long as we can remember. I think the great thing about voting for judges is that they aren’t affiliated with any party.

And with Christmas around the corner, the focus will shift to religion. One of our top radio stations is already playing Christmas music full time. Starbuck’s red cups are out. Soon tree farms will be sprouting in parking lots. The 1-2 religions love this holiday (as do the malls and shopping centers!).

It’s good to be #1, the view always changes in front of you. Avis will always be #2 and sometimes that’s not too bad either. For Obama and McCain, being #2 after today sucks. And being #3? Forget about it!

Happy Tuesday!