tv Nightly Business Report PBS December 10, 2013 6:30pm-7:01pm PST
. this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com. up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr. changing of the guard, general motors names a female chief executive. it could be the first ever to lead a global auto maker. who is marry barra and what will she mean for the company and stock? >> new rules. the new rule that goes to the heart of risk taking on wall street. it ushers in a new era of oversight. >> and ready or not, here it
comes, the fed now seem set to slow the stimulus program beginning next week. why now? and what should you do, if anything? all that and more tonight on "nightly business report" for tuesday, december 10th. good evening everyone. history being made in detroit today. general motors announced a new ceo and she's female. it's the first time in g m's 100-year history a woman is picked to run the auto maker and it's the first female to head a major auto company. her name is mary barra. she'll take the top job in january. phil lebeau has more on who she is and why she was asked to take the wheel. >> reporter: mary barra is a gm lifer and soon her life will revolve around running the global auto giant. >> i've worked at general motor for 33 years. i've known it's a great company.
the men and women are so dedicated and i truly believe we have the best team on the field. it's an honor to lead the team. >> reporter: she's well-known and well-respected in gm. she rose through the ranks on the operation side. barra earned high marks for streamlining operations and pushing gm to pick up the game. she bluntly told gm designers, no more crappy cars. >> i think if you look what she's done for the company, she's respected and highly regarded and made decisions with the product and enga near. >> reporter: she will replace dan ackerson stepping down to spend more time with his wife who has advanced stage cancer. he's been vocal about gm thinking and acting differently. putting a woman in charge of a company known as an old boys club will certainly change things but ackerson said barra
wasn't picked because of her gender. >> we've mixed and matched from long-term gm professionals, and i've said this probably before, mary is one of the most gifted executives i've met in my career. she was picked for her talent, not for her gender or political correctness. >> reporter: while she's taking over a general motors, leaner more profitable than ever before and no longer owned by the u.s. government, it's still an auto company with a fair number of challenges, including the fact the market share in the u.s. drop to a low 17.9% and needs to finish the restructuring operation in europe and make money on that continent, just two challenges facing mary barra as she takes over general motors. joining us to talk more about g m's ceo is bill george,
the former ceo and professor of management at harvard business school where mary barra took part. good to see you. what is mary barra like and what kind of leader is she likely to be? >> she's a genuine authentic leader. she's going to be a team builder. i spent time with her last sum near a course and her colleague dan was there. they will make a great team, tyler, very enthusiasmed and give dan ackerson and the board credit for bidding the team. dan came in and turned the company around, but now you have the inside team coming in like sam and jenny did in following lu gersner. i think you'll see great cars coming out of gm. mary is an engineer and she's
looking for a world car to cover china and the u.s. >> okay. >> i think you'll see that share growing in the years to come. >> as dan ackerson said, he said she was picked for talent, not her gender, but she's going to be watched very carefully because she is a woman at an auto company. as a leadership expert, what advice can you give her, dos and don'ts. >> make sure you have the right people on the bus. i was glad to see mark royce, a gm vet, stepping into her old job. if you don't have the products, you are not going to be successful. so get the right team around you, diverse team, which they are already doing and i'm very pleased, then keep the vision very clear ahead we have to have the best cars in the world. we want to have cars that are good at the low end, high end and like a cadillac and all the trucks where there is a lot of money there. have the full range of cars to ensure that.
beyond that, i think she has to have the long-term view and stay the course to compete with any car in the world, japanese, germans, koreans on cost, quality and design and i think that's the new general motors. in the old days, they were letting that market share slip. so it's got to be a long-term fixture and one advice i'd say is don't get thrown off track by a lot of people pulling you into short-term decisions. >> you know, you've just finished, i'm told, a case study on the comeback of the auto business, including most notably perhaps general motors, so you know this business and the challenges that gm faces inside and out. the saying is that a ceo is never stronger than in his or her first 100 days. what would you tell her to concentrate on in those first 100 days, specificry? >> get the vision and strategy right, get the team right and make sure you got the right product plan, tyler. my great fear for mary is -- they are having a great year.
plus double digits, 14% in november. things are up and away now. they got to make long-term investments. we had a different class last week and they got to make big investments in china. that will be a huge market. they got to get the european thing right and maybe the right leaders in those areas. and -- but don't get pulled off course. say there is a recession and say the number of cars sold goes down. it will happen. it's happened for decades. stay the course, make the investments. in the past gm pulled back during those difficult times. >> bill, thank you very much. former ceo of medtronic and professor at harvard business school. a small fraction of fortune 500 ceos are women. why is that? and are companies better off with for males in the boardroom? >> a day of profit taking. getting anxious about the
federal reserve's pending decision on tapering the stimulus plan. a decision could come as soon as next week's policy meeting and we'll have more in a moment. the dow was down 52 points today and the nasdaq fell eight and s&p lost five. the top regulatory agencies voted to approve the so-call vulcer rule today putting the firm and taxpayers at risk if the bet fails. some clarity on the rules, shares of some of the nation's biggest investment banks ended higher today as you see there. eamon javers in washington with more. >> today washington moved to ban what regular htors see as a risy part. banks trading in its accounts known as propry terry trading. it was an under stated launch for the rule in public meetings at the federal reserve.
>> all in favor say i. >> i. >> reporter: and at the fdic. >> all in favor please say i. >> i. >> thank you very much. >> reporter: other regulators across the city joined in banning propry terry trading but it included five major examples. banks can conduct under writing as long as positions doesn't exceed certain limits and can engage in market making but inventory may not breach certain levels. they can hedge certain positions but have to document what the hedge is for. they will be allowed to trade in government debt like treasuries and some foreign entities will be allowed to trade so long as those risks stay overseas. all and all, regulators said they are pleased with how the long fought over rules turned out. >> it stops the wild flier bets that are just for the house. it will allow legitimate hedging activity for legitimate business
risk. >> reporter: but susie, the rules build in subjective judgment that regulators have to make and that means a lot will depend how the regulators decide to enforce what they have written. back to you guys. >> all right. thanks a lot. eamon javers reporting from washington. cutting the growth forecast for the u.s. by half a percent for 2014. the agency sees gdp coming in at 2.6% next year. s&p says it sees the federal reserve gradually pulling back on the bond buying program, and as we said, wall street is starting to believe the fed will start the pull back next week at the final policy meeting this year. steve liesman has more and what it could mean for the markets and the economy. >> reporter: a taper by the federal reserve at the meeting next week looking more likely than not. the economic data the market's reaction point to a possibility the fed could move next week to reduced and the amount of stimulus in the economy that it provides to bond purchases or quantitative easing.
the fed offered three tests for tapering or reducing that qe and those tests look to have been met. one was confidence in the outlook, average job growth risen to 19 3,000, up 43,000 when the fed said tapering was a close call. the unemployment rate is 7% isdown 2/10ths. the end of fiscal uncertainty is another factor. they wouldn't taper ahead of the government shutdown back in september but now a budget deal looks to be in the works that could put off the debate of deficits for two years. interest rates are well-behaved. short-term rates have remained low. that's a sign to the fed that the markets believe that even if the fed tapers, the fed will keep the fed funds rate low predicting, the news has been tough of late. they didn't taper in september when the market thought it would and they announced a schedule to
taper in june when the market didn't expect it. what the fed is trying to do, is to pivot from using quantitative easing as the main tool to guide or stimulate the economy to forward guidance and back to the old way they used to do it through the fed funds rate. next week could be the beginning of that process. for "nightly business report", i'm steve liesman. well, good news in the job market, the labor department says that advertised job openings in october rose to a five-year high with nearly 4 million positions looking to be filled. also, the number of people quitting their jobs in october and presumably moving on to a better one reached a five-year high. still ahead, a stunning management shakeup at lulu lemon but will the changes put the retailer back on top?
shares of athletic wear maker lulu lemon fell 7% this year as the company endured missteps. first the too sheer yoga parnts and backlash of the bodies of potential customers from lululemon's founder. a new chief executive is promising to focus and may be what they need to turn things around. courtney regan has more. >> reporter: finally, lululemon name answer new ceo. it's been six months since chris tine day said she would retire her post as ceo once a successor was found and just in time for christmas, the retailer announces tom as president and
will step into the top spot at lulu. >> i'm incredibly lucky to be involved and lululemon is on it's way. >> reporter: it's not just the ceo seat rotating. the controversial founder chip wilson is resigning his post as chairman but will remain on the board. he made comments suggesting women's bodies may be the issue behind the pants problem that led to a recall of the 72 plus dollar yoga pants. the shoppers appear to have forgiven the retailer but questions remain about lulu's management. he was with snow board company burton for 15 years, both are privately held. he's not well-known by wall street and as a result, the hiring announcement is getting mixed reviews. >> christine day had a great retail sensibility and i think did a fabulous job doing that, but didn't have the background from an operation l perspective.
in the case of the new ceo, he has a great operational background but may not have the retail perspective. so, i really think the jury is still out. >> reporter: wall street will get a clear picture of the company he will be taking over once the earnings are reported thursday. it's a big job with competence intensifying. under armor, nike and more are aiming for a piece of lululemon's market share. mastercard will launch a 10-1 stock flip and up the dividend. the world's number two credit and debit card company will bump up by 83% and buy back 3.5 billion shares of common stock. the stock took off in after hours trading. shares ended the day a fraction higher to $763.61. toll brothers out with a big earnings beat. the home builder reported an
increase in home deliveries and prices, but it's results were not as strong as a year ago, partly because of rising rates. >> as the builters have been talking about, our business has been flat since the summer. flat is okay for 2013 considering where we were in '10 and '11. we're anxiously awaiting for the spring saling season that begins in february. >> taking a look at the shares of toll brothers, they fell to $33.34. higher demand for repairs helped auto zone post quarterly earnings stronger than expected. the cold weather and increased ware and tear drove more customers. auto zone has been focussing the sales on the commercial repair business to off set weakness in the do it yourself market. shares revved higher up 3% to $471.86. mark announced it will move experimental alzheimer's drug into a trial with patients to
mild and moderate disease. they gave the drug maker the okay to go ahead with the testing of 2,000 patients. the progress didn't seem to impress investors, though, today. shares fell a fraction to $49.43. shares of rambus are on a tear after they signed an agreement with micron technology they settled a 13-year legal dispute. they agreed to pay $280 million over seven years to license patents they will use in selected products. rambus up and shares of micron up to $23.14. shares of burlington stores caught a chill. third quarter widened. perhaps more troubling, burlington predicts slower growth in same store sales for the holiday season. the stock plunged 8% to $25.92. back to the top story, the new ceo at general motors despite the breakthrough news
about mary barra, our next guest says not much has changed. according to a new survey by catalyst that monitors the status of women in business, there has not been a significant increase in the number of female ceos, senior executives and board members in u.s. companies. she's the chief operating officer. so debra, tell us why we're not seeing progress, even though there have been some really smart women in -- being promoted into the ceo jobs and i'm thinking of ellen coleman and not in the corporate world, janet yellen. what is going on? aren't we seeing more on this stuff going on in corporate ameri america? >> you just identified very remarkable women leaders. what is important when we talk about this is to focus on a leadership of women.
unfortunately, the cat list census shows boards at 16.9% and when we look at women executive officers, again, four consecutive years of no significant growth, women hold 14.6% of those seats. so, clearly, women are facing barriers to their advancement and a big part of what this includes is the fact that the companies that they are working for are not paying the right amount of attention to the fact that this is a talented group of leaders that need to be supported and advanced through the pipeline. >> you say that the facts show that companies that have women represented on their boards and in the executive ranks do better in terms of performance than those that don't x. plain that and why doesn't that get through the thick heads of some people and say hey, we can do better if we have more women there and finally, why do you think that is? >> well, catalyst research does show that on average, fortrain
500 companies that have the highest representation of women and leadership as compared to those with the lowest representation of women do better financially. why is that? for a variety of reasons. those companies are topping into the full range of talent that's available in the marketplace. they are also tapping into the knowledge of women who understand the preferences of the marketplace. so essentially, we would say to serve the market, you need to look like the market, tap into the talent available and into the insights that those leaders would have for your company. >> all right. so make a case about -- you have a company now put as woman or couple women on their board. how does that change things? how does the conversation at those board meetings change? >> i think any conversation changes when you have different perspectives around a decision-making table. different points of view are being raised, different ways of
looking at a problem. again, what's really important there are diverse perspectives. that's where we see the opportunity for invasion to happen in organizations. i think it's no surprise in the earlier story that you were talking about when you look at mary barra's appointment of gm, she was leading the product development function prior to this appointment. one of the things that catalyst sees in the research is that women are less likely than men to have the opportunity to lead those mission critical functions that put them in the pipeline for the senior leadership roles. >> interesting conversation. thank you so much. debra gillis chief operating officer at kath list. the major money some drug makers are putting into the fight against super bugs.
new developments out of washington tonight, a budget deal has been reached. senate chair patty murray of washington and paul ryan of wisconsin are announcing the agreement on capitol hill tonight. >> prince stton university bega vaccinating against meningitis b. it's not in the u.s. but the fda and cdc allowed it for the outbreak at the school. eight students contracted the fatal bacteria since march. nearly 2,000 students received the vaccination on monday, the first day available. >> the outbreak at princeton is making awareness of super bugs,
drug resistant bacteria. one pharmaceutical company is making a bet on what it will take to combat them. >> reporter: researchers are in a race against time to develop antibiotics that fight infections becoming increasingly deadly because they don't respond to drugs. >> you're going after things that evolve and changes ability to respond to the drug. not just that you're going after a target. you're going after a moving target. >> reporter: the centers for disease control warned antibiotic resistant bacteria are becoming a serious health threat with super bugs, a bacteria that affects hospital patients bowls and mersa intreatable with antibiotics. >> the antibiotics that we relied on for generationings won't treat them. >> reporter: the infrexs drug
resistant have been growing. the pine line for antibiotics aren't. any new drugs they develop will likely be left in reserve, as a treatment of last resort. the challenges are the reason you don't see, you know, the hordes of companies going after these opportunities that you see, let's say in oncology where there is green field. >> reporter: last year congress passed legislation to extend patent exclusivity. the fda is offering an expedited pass for approval. cuba has two small firming working on antibiotics to combat and with a pipeline of five drugs, is hoping the new regulations will help them bring the drugs to markets sooner. >> we think we figured out a model fund mentally different from the large models that allows us to be a serial developer, if you will, of antibiotics for these resistant
bacterial infections. >> reporter: the need for new drugs is clear. >> if we move to the post an antibiotic era, the advantages of modern medicine could be reversed. >> reporter: the hope is to get ahead of that threat. bertha coombs "nightly business report." a company called career bliss is out with the annual survey of the companies with the happiest employees, based on worker reviews like work life balance, relationships with bosses and growth opportunities. here we go, third place, computer chip maker texas instruments, second place, the nation's largest non-profit health care provider kizer and for the second year in a row, third place, pfizer with a lot of employees siting positive relationships with senior management and opportunities to move up the ladder and i thought it was just the free prozac. kidding, kidding. >> interesting health care
companies. >> and no disney there. how about that? they call it the happiest place on earth. >> that's "nightly business report" for tonight. we're pretty happy over here, tyler and i. >> indeed. thanks for watching, everybody, i'm tyler mathisen. stay warm. we'll see you tomorrow. "nightly business report" has been brought to you in part by. >> thestreet.com, up to the minute stock market news and in depth analysis, our quant rating service provides objective enden we dent ratings daily on over 4300 stocks. learn more at the street.com/nbr.
this is going to be controversial no matter what the title was. maybe this guy invented the computer. people who tour these galleries often say wow, i had no idea. many think computing is about engineers and mathematicians. but if you have ever shopped online or texted a friend, you know computing is about you. so why don't we know the answer to this simple question. who invented the computer? it's a simple question with a complicated answer. in this