Philip Whiteley's Blog

January 23, 2010

Blowing down straw men is easy

Filed under: Uncategorized — felipewh @ 9:36 am

One of the many baffling and depressing aspects of the Kraft-Cadbury saga is the supine reaction of the business journalists. I’m rather nervous about criticising my elders and betters (well, betters; not so many of them are elder any more) but the sheer scale of the investigative vacuum makes me gasp. What is it about the word ‘merger’ that causes their normal instincts to wither and die? Why do they allow executives like Irene Rosenfeld of Kraft to get away with promises of ‘savings’ that we know are optimistic projections based on one-dimensional analysis of the accounts? Every merger since the Roman takeover of Ancient Briton has featured integration costs that are impossible to predict, and that usually outweigh any supposed benefits. They fail 70 per cent of the time; the reporters would know why they failed, if they read any of the hundreds of reports on the matter, such as KPMG’s Unlocking Shareholder Value, yet they get swept up in the spin and exhilaration of the deal-making and fail to ask the tough questions.

Instead, journalists like Jeff Randall in the Telegraph (22 January), and the Financial Times leader writer (20 January), assume that opponents base their criticism on patriotism and sentiment. This is a particularly delicate straw man to blow down in the integrated world economy. It lets ego-maniac executives and myopic shareholders, and the army of Medieval bean-counters who serve them, off the hook.

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1 Comment »

  1. Well said on the state of journalism viz a viz the Cadbury merger. There was a time when papers like the FT and others had the expertise and inclination to dispel the myths of uttered corporate statements. Alas, no longer. The institutions that were supposed to be ever vigilant and fearless are now content to simply cover the passing parade. One has to read the right blogs and the right books to get any sense of objective insight into what’s going on. A real shame.

    Comment by John Anderson — January 27, 2010 @ 2:05 pm | Reply


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