Category: Big Business

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Leavin’ on a jet plane

There’s neat article in BusinessWeek this morning about the design of airports, accompanied by a gorgeous slideshow.

[Ron Steinert, principal at aviation architectural design specialist, Gensler, said,] “There has been a real sea-change towards this. In the old days, the airlines thought of airports as a service industry that provided space to them and their passengers. Now, airports see airlines as providing a service to their customers. It’s a total change in the way airports are looking at themselves. They’re realizing that they have to run themselves as businesses, to make money and provide a high level of service, or passengers will go elsewhere. Take the East Coast of the U.S.: There’s an airport virtually every 10 miles. If you don’t like one, you’ll go to another.”

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300 Pimps

I’ve never been a car aficionado. My brother seemed to inherit Dad’s Corvette-gene. Not that he would go off and spend big cash on a sports-car or anything, but he did go for a Mustang back when he was single. Me? I’ve owned three cars: a Hyundai Excel, a Saturn SL1, and a Honda Element. I’m not exactly stylin’ and profilin’.

That said, I admit that I once had a certain fondness for the Chrysler Crossfire. I think it’s largely because it looks like a coupe that a Micronaut would drive.

In the last year, I’ve become enamored of the Chrysler 300. I think it’s largely because it looks like something Batman would drive.

At first, I thought the 300 was a car for oldies, but then I noticed younger drivers in them, and started seeing tricked-out (sorry: pimped) models. Personally, the “black rims” thing always struck me as silly-looking, but it was a good indicator that the big-barrel sedan had crossed over. I found that I really liked the car’s lines, and wondered if it might be time to retire the Element of Style.
I was able to talk myself out of buying one because of Chrysler’s corporate ownership. Mercedes-Benz, which acquired (“merged as equals with”) Chrysler in 1998, employed Jewish slave labor during WWII. Around the time of the merger, economist Steve Landsburg wrote a neat article about the implications of “punishing the child for the sins of the father” when it comes to corporations:

Corporations can be punished for misdeeds in at least two ways. One is a consumer boycott and another is a (voluntary or involuntary) fine. Both kinds of punishment have been visited on Daimler-Benz (though arguably at levels that are small compared with the underlying offenses). In the 1980s, the corporation paid about $11 million to the descendants of its slave laborers.

Who exactly suffers from those punishments? You might think the $11 million came from the pockets of those who owned Daimler-Benz stock in the 1980s, but that’s not necessarily the case. Suppose, for the sake of argument, that in 1950 it becomes foreseeable that Daimler-Benz will eventually make reparations. Then every share of Daimler-Benz stock sold between 1950 and 1980 sells at a discount reflecting that expectation. Without the discount, nobody would buy the stock. So given sufficient foresight, the prospect of a 1980 punishment hurts the 1950 owners, even if they sell in the interim. And those who buy stocks after 1950 are not punished at all, because the discount compensates them for the fine.

He makes some interesting arguments in that piece. Lately, I’ve been rethinking my aversion to buying a sorta German car, and not because I wanna zoom around in that 300. It’s more a question of globalization, and the moral lines we draw in the sand. I mean, because I drive a car, I can’t help but prop up Arab dictatorships. That said, I can elect not to do publicity for a country that has a strict anti-Israel policy. But I don’t know how viable it is to protest so selectively.

For instance, my wife drives a Mini Cooper. The parent company is BMW, which makes it problematic for me. My knee-jerk reaction is not to support a German car company.

That said, the car is assembled entirely in the UK, and it seems to me that the British could hold an awful lot of resentment toward Germany. So, does the fact that commerce helps both nations serve to ameliorate some of the ill-feelings from from those nations’ past behavior?

I don’t think I’d ever buy a German-brand car (M-B, BMW, VW), but I can imagine that people whose family served in the Pacific theater consider me a traitor for buying a Honda. Any of you guys have issues about this sorta stuff? Are there nations/nationalities you wouldn’t buy from?

Anyway, all of that is a very roundabout way of posting links to a couple of BusinessWeek articles. The first is about how DaimlerChrysler’s CEO is under siege because of the company’s poor performance (and its avoidance of reality). The other is about Freeman Thomas, the guy who designed the 300. Both stories come with neat slideshows, including shots of two of Thomas’ new vehicles for Ford.

Thomas’ description of the philosophy behind The Interceptor (no comment) probably skewers my exact reason for liking the 300: “This is a car that is at once for the mature car buyer, but for someone who likes to stroke his bad boy side. He wants a grown-up car, but wants to feel fun.”

For the record, I would not ‘stroke my bad boy side’ with a German car.

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Mars, bitches!

Gregg Easterbrook writes about the incredibly misguided lunar base initiative:

In deadpan style, the New York Times story on the NASA announcement declared, “The lunar base is part of a larger effort to develop an international exploration strategy, one that explains why and how humans are returning to the moon and what they plan to do when they get there.” Oh — so we’ll build the moon base first, and then try to figure out why we built it.

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Pfailed

What a difference two days make. On Nov. 30, Pfizer gave an “R&D open house” event where it discussed its drug pipeline. The biggest drug in that pipeline is torcetrapib, a compound that raises “good” cholesterol. For years, Pfizer’s been developing it as a combo-drug with Lipitor (atorvastatin), which reduces “bad” cholesterol.

Prior to the meeting, Pfizer issued a press statement that included this passage about torcetrapib:

Commenting on torcetrapib/atorvastatin (T/A), Dr. LaMattina said, “We are first-in-class and we intend to remain best-in-class in a category that has the potential to change the face of cardiovascular medicine. T/A raises HDL and lowers LDL. We believe that the net benefits of the drug — characterized by significant HDL elevation and LDL lowering vs. the small elevation in blood pressure — will greatly benefit patients with CV risk.

“The development of T/A has required tremendous innovation on our part from the earliest stages of discovery through one of the most cutting-edge development programs ever carried out anywhere. At the end of this comprehensive program, we expect to have a medicine with unparalleled efficacy in raising HDL, lowering LDL and with an anti-atherosclerosis indication.

“We will learn of the top-line results of the three pivotal imaging trials during the first quarter of 2007. During this same period, we will also receive the results of some additional Phase III lipid studies. To obtain a reliable picture of the overall safety and efficacy profile of T/A, the results of all these studies will need to be analyzed and reviewed together, and this will happen in the context of the American College of Cardiology Meeting in March, 2007.”

Yesterday, Pfizer announced that its independent Drug Safety Monitoring Board discovered a significantly higher mortality rate in the torcetrapib wing of late-stage clinical trials. The results must have been overwhelming, because Pfizer said that it’s stopping the trials, canceling all development of the drug, and accelerating its restructuring plans. A few days earlier, the company announced that it would lay off 2,400 sales reps, as part of its reorganization. Torcetrapib’s failure means large numbers of people will be getting fired in the next few weeks.

If you follow the pharma industry, you already understand what a cataclysmic event this is for Pfizer. I don’t think it’s on the scale of a Vioxx, because there’s likely no legal liability issues, but the lost sales will be in the tens of billions. Beyond that, there’s the opportunity cost of the R&D that was performed on the product, as well as nearly $800 million in actual development costs.

I’m not trying to convey a “poor little Pfizer” impression here; I disagree with a bunch of the company’s practices (particularly its growth-by-acquisition model from the first half of this decade). What I’m trying to get across is that developing new drugs is a mighty risky proposition. I’m not sure that people who complain, “Drugs are too expensive; pharma companies are evil,” have much idea about the risks and the costs these companies incur.