For the second time in just seven months, McDonald's (MCD) has hastily elevated an heir apparent to chief executive. Vice-Chairman James Skinner, effectively the fast-food giant's chief operating officer, was promoted to CEO on Nov. 22. He replaces Charles Bell, who resigned to focus on his battle with colon cancer. Bell, 44, became CEO in April, when predecessor James Cantalupo died after only 16 months at the helm.
Skinner's challenges are twofold: He must maintain momentum at Big Mac, which has logged 19 months in a row of sales gains, thanks to an improved menu and better service. And he must buck up the morale of McDonald's stunned employees and franchisees.
He should be able to pull it off. Skinner, 60, who started with McDonald's in 1971 as a restaurant manager trainee, had been running the company from behind the scenes this fall as Bell's health deteriorated. He will also get a hand from heir apparent Michael Roberts, whom McDonald's promoted to COO from U.S. president.
American International Group (AIG) on Nov. 23 said it has agreed in principle to settle Securities & Exchange Commission and Justice Dept. charges that it helped PNC Financial Services (PNC) and telecom supplier Brightpoint (CELL) mislead investors. Without admitting or denying guilt, the insurer agreed to pay more than $100 million in penalties, according to a source close to the probe. AIG also said it will allow an outside monitor to review its contracts to see if it sold policies to help other companies hide debt or smooth earnings. AIG previously paid $10 million to settle SEC charges of selling allegedly fake insurance policies to hide losses at Brightpoint. The PNC and Brightpoint deals triggered a criminal probe by Justice, but it will probably be dropped unless further evidence of alleged wrongdoing emerges.
Krispy Kreme Doughnuts (KKD) is coming down from its sugar high. The Winston-Salem (N.C.)-based doughnut chain lost $3 million in the quarter ended on Oct. 31, vs. a $14.5 million gain in the same period in 2003. The news sent its stock down 16% on Nov. 22, to $9.64, 91% below its all-time high in 2000. While Krispy Kreme CEO Scott Livengood blamed the loss on the low-carb craze, rival Dunkin' Donuts hasn't seen a similar fall. Instead, analysts believe Krispy Kreme overexpanded in some key markets, cannibalizing older stores. Krispy Kreme executives believe they can get back in the black by rolling out sugar-free doughnuts and focusing on smaller stores that cost less to build and staff.
It seems Apple Computer's (AAPL) iPod music player may be doing what years of marketing have been unable to do: persuade PC owners to jump to the Mac. On Nov. 22, Piper Jaffray (PJC) put out a report suggesting that 700,000 or so iPod lovers either have or plan to buy a Mac in the next year, and that 1.2 million more will do so in 2006. The report, which set a target price of $100, sent Apple shares up 11%, to $61.35 -- a four-year-high. But don't look for Apple to make a serious run at Microsoft's PC market share. Even with new buyers, Apple will still have less than 3% of the PC market, says Piper Jaffray.
Phil Knight, the 66-year-old co-founder of Nike (NIKE), raised eyebrows on Nov. 18 when he named William Perez, CEO of S.C. Johnson & Son, to succeed him as president and CEO of the athletic shoe empire. At first blush, Perez seems like an odd fit. But his experience developing new international markets as well as managing a portfolio of consumer brands such as Windex and Raid bug spray will help Nike. At household-products maker Johnson, Perez succeeded founder Sam Johnson. Understanding the concerns of an entrepreneur should help him get along with Knight, who remains chairman.
-- Cingular Wireless will cut about 10% of 68,000 jobs as it combines with AT&T Wireless.
-- GE Commercial Finance is paying $4.4 billion for Citigroup's (C) Transportation Financial Services Group.
-- Fox will broadcast the Fiesta, Orange, and Sugar Bowls when ABC's (DIS) contract runs out in 2006.
Shares of SIRIUS Satellite Radio (SIRI) have been heading skyward. They rose 12.4% on Nov. 23, to $6.71, after the company's subscriber count hit 800,000. The stock has climbed 42% since former Viacom (VIAB) President Mel Karmazin was named CEO on Nov. 18.