Corporate Disasters What Went Wrong and Why

GALE CENGAGE Learning* Delroit • New York • San Francisco • New Haven, Conn • Waterville, Maine • London Contents

Preface XI Equitable Life Assurance Company 105 Notes on Contributors XIII Exxon Valdez: An Epic Oil Spill 108 F.W. Woolworth Company: Iconic Five and Dime American International Group (AIG): Too Big to Fail... 1 Closes 112 AOL - Time Warner Merger of 2000 5 Fashion Cafe: A Theme Restaurant Fails 117 Apple Fires Steve Jobs 10 Fen-Phen's Release and Recall in the 1990s 121 Apple Newton Released in the 1990s 14 Flooz.com and Virtual Cash 126 : An Accounting Firm Fails 18 Florida Real Estate Craze of the 1920s 130 Asian Economic Meltdown in the 1990s 22 Ford Edsel: The Car Nobody Wanted 134 Atari Inc.: An Early Video Game Pioneer 26 Ford Pinto: Safety Concerns in the 1970s 138 Aventis and Tainted Corn 30 Ford, Firestone Tires, and Rollovers 142 Barings Bank Brought Down by One Man 34 : A Telecom Company with Bernie Madoffs Investment Ponzi Scheme 38 Accounting Issues 146 Bethlehem Steel Corporation 42 Henry Ford Fails to Change the Model T 150 Boo.Com: An Online Clothing Retailer Goes Hollywood Video and Blockbuster: Video Rental ; Bankrupt 45 Bankruptcies 154 Borders Books Closes its Doors 49 Hoover Vacuums and the Free Flight Promotion 158 BP's Deepwater Horizon Disaster . .53 IBM Launches the PCjr in 1984 161 Circuit City Falls to Competition 57 IndyMac: Risky Mortgage Loans in the Late Clairol's Touch of Yogurt Shampoo 60 20th Century 77". ... 165 Commodore Computers: From Calculators to PCs ... .64 JVC's VHS vs. Sony's Betamax 169 Countrywide and the Subprime Mortgage Crisis 68 KB Toys: Its Rise and Demise 173 Daimler and Chrysler: Two Major Multinationals Kodak Film Company Files for Bankruptcy 177 Merge 72 Lehman Brothers: Fall of an Investment Titan 180 Dasani Water Global Expansion Woes 76 Lernaut & Hauspie: A Belgian Tech Company Goes Decca Records Declines the Beatles 80 Bankrupt 184 DeLorean Motor Company: Its Rise and Fall 84 Lincoln Savings and Loan and the 1980's S&L Dot-Corn Bubble Builds and Bursts, 1995-2000 88 Scandal 188 Dow Corning and Silicone Breast Implants Lionel Train in 1959 191 Controversy 92 Mark Twain: Serial Inventor . 194 Dutch Tulip Bulb Market Bubble of the 17th and Merge 198 Century 96 Mattel, Inc.: Toy Recalls Tarnish Image 202 Corporation's Bankruptcy 100 McDonald's French Fries Controversy .206

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Merck & Company's Pain Relief Drug Vioxx 210 Sunbeam Corporation Gets Downsized Into Motorola Iridium Global Satellite Phone System ... .214 Bankruptcy 307 Napster and RIAA Go to Court 218 Swissair AG: The Flying Bank 311 Napster: Revolutionary Music File Sharing Tobacco Industry's Truth About Cigarettes 314 Service Ends 222 Tower Records: A Music Retail Giant Falls 318 Web Browser: Former Market Leader Falls . .226 Toyota Vehicle Recalls 2008 and 2009 322 New Coke: New Formula Meets Resistance 230 Tucker Automobile: A Man's Dream Unrealized 327 News Corp and MySpace Merger 234 Tyco International Ltd's Executive Misdeeds 331 Oil and Corruption in Nigeria 238 U.S. Automaker Bailouts, 2009 335 Operating Systems and Rise of the PC 242 U.S. Housing Bubble and Credit Crisis in the PanAm: The End of an Airline Industry Icon 246 Late-2000s 339 Penn Central Transportation Company 250 U.S. Savings and Loan Crisis of the 1980s 343 Pets.com: Failure of an Internet Start-up 254 U.S. Stock Market Crash of 1929 348 Polaroid Corporation: Displaced by Digital U.S. Stock Market Crash of 1987 352 Photography 257 Union Carbide: Industrial Disaster in Bhopal, India . .356 Quaker Oats and Snapple: Cross-branding Confusion. .261 Universal Pictures' Waterworld (1995) 360 Qwest Communications: Telecom Valujet Airlines: Safety Problems and a Fatal Crash . . .364 Accounting Scandal 265 Vivendi Universal: A French Media Conglomerate . . .368 R.J. Reynolds Smokeless Cigarettes 271 Wachovia Corporation Ventures into Risky Mortgage Ratners Group: The Importance of Brand Awareness. .274 Lending 372 RCA and the Launch of the SelectaVision VideoDisc .278 Wang Laboratories Falters During the Rise of the PC .376 Schlitz Beer: Fall of a Former Industry Leader 282 Washington Mutual Savings & Loan 380 Securities Exchange Company: Charles : Failed Online Grocery Retailer 384 Ponzi's Creation 286 Western Union Passes on the Telephone Patent 388 Segway: A Unique Personal Transportation Device . . .290 WorldCom: Accounting Fraud and Aggressive South Sea Market Bubble of tKe 18th Century 294 Acquisitions 391 Sprint Acquires Nextel 298 Xerox Alto: The First Personal Computer? 395 Steve and Barry's: Collegiate Retailer Goes Bankrupt. .303 Index 399

VI CORPORATE DISASTERS: WHAT WENT WRONG AND WHY