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Three Spectacular Examples of Corporate Ineptitude


Major pratfalls from Boeing, Apple, and Palm.

Casey Stengel was the first manager of the New York Mets -- a team that began as a Robert Moses public-service effort and remains more or less the same thing today. Stengel's prior managerial stint ended in 1960 when he managed the Yankees to the seventh game of the World Series before losing to the sign-stealing Pittsburgh Pirates. The Yankees weren't the same for the next decade and a half.

And Stengel had it worse. Two years after taking the Yankees to game 7, he helmed the Mets to a record of 40 wins, 120 losses -- a 250 win percentage. For perspective, it's axiomatic that a baseball team will win one-third of their games, lose one-third of them, and decide their fate in the middle third. Winning 108 games means a clean sweep in the swing games -- which is why you seldom see teams win 108 games.

Being the surly legend he was (and most likely wanting to distance his legacy as far from the Mets as possible), Stengel openly violated the cardinal rule of team sports: Don't ridicule the talent or the potential of your own club to outsiders. He disrespected the team to reporters, guys at the bar, other teams, and the players themselves -- constantly. He wasn't motivating the players; he was mocking them.

Stengel unknowingly created the title for Jimmy Breslin's book about the first-year Mets, Can't Anybody Play this Game? -- which must have really fired up the starting 9.

2009 is becoming a year of Stengel-esque ineptitude: No one on the boards or in the corner office can seem to play this "management" game. The rules haven't really changed since the '20s: Appease the analysts, deliver on what you say, and make your earnings.

Earlier this week, Boeing (BA) pulled off the trifecta of ineptitude: It not only missed earnings, it also delayed the release of the 787 Dreamliner due to "additional stress at the point where the wings connect to the sides of the plane." And this only a week before the Dreamliner's scheduled demo flight -- which is 2 years late already. A window allowing the 850 prospective purchasers of the 787 out of their deal may be the greatest material adverse change ever.

"The wings fall off, and the plane is years late. That closes our side of the case, Your Honor."

The insanely bright Karen Finerman and I would argue about Boeing. She, being the analytic yang to my ever-offensive yin, would point out that Boeing makes more than 787s. My 2 responses: The Dreamliner is their showpiece product, and they're failing to produce it in any reasonable way. And if Boeing makes so much other stuff, why can't they put on a secure wing?

Karen is running numbers -- a measure of what stocks can be. These analytics are a great strategy, assuming management is at all capable (or at least rational). Missing delivery of the plane by years is one thing; being unable to duct-tape a Dreamliner together enough to make a token flight is quite another.

My battle with Karen over Boeing isn't entirely over -- but I like my side of the wager.
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No positions in stocks mentioned.

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