John Markoff of the New York Times wrote a story today that might help to allay some of the fears concerning Steve Jobs’ health that I referred to in a earlier blog.  

David Gow of the U.K.’s Guardian newspaper wrote a clever article discussing the growing influence in Germany of Maria-Elisabeth Schaeffler, a women  who owns, with her lawyer son Georg, the engineering group, the Schaeffler Group. Under Ms. Schaeffler’s direction her private company has made an audacious hostile takeover attempt to acquire German public tire and car components manufacturer Continental Group CON (DAX).  The piece is a worthwhile read and provides an interesting take on Ms Schaeffler financial/business acumen and the growing influence of women business leaders in Europe.  Check it out.

Our special focus this week at TWST is on the communication services space. As we do regularly, we asked the analysts and CEOs we interviewed to give us their own personal picks in this space, anonymously. Here’s what they had to say this week:

Cisco Systems Inc:

“I would say it’s probably a company like Cisco. Everywhere we go, we see Cisco. They must be doing something right to be able to penetrate that many different
markets.”"I’d pick Cisco. They are a fierce competitor and a marketing machine.”

CyberOptics (CYBE):

“It’s not directly in my industry, but there is a company called CyberOptics. I think it’s well positioned, well run, very conservative, and they’re in a very good position right now to be able to apply some of their asset base to move on. Kitty Iverson is a fabulous CEO and has a good history of being able to guard the assets of the shareholders she represents and to plan for them effectively moving forward.”

Focus Media Holdings Ltd. (FMCN):

“In the same industry, I think Focus Media definitely is one of the well managed companies. They are able to attract the industry talent. I mean, most people would like to work for Focus Media. And the other part is that the management has been able to keep the company growing at more than 100%.”

For the full Off The Record report from CEOs and Analysts from this week’s  Communication Services, featuring more exclusive stock picks, click here.   

Yalman Onaran of Bloomberg put together a well researched article that examines Lehman CEO Richard Fuld’s approach to the company’s current problems. The article is a definite read for anyone interested in Lehman’s troubles and what its long term CEO is doing to save himself and the firm. 

Back in June, Steve Jobs’, Apple’s star CEO, health appeared to become a story after he made a major presentation at the Apple Developers Conference.  At the time of the presentation he looked very gaunt.  Back in 2003, Jobs had a form of pancreatic cancer that had been successfully treated.  Since Jobs’ presentation in June, negative rumors began spreading about his health.  Apple finally responded to the rumors by saying Jobs was healthy but at the time of the presentation had been taking antibiotics to treat a bug.  Earlier today the New York Post raised the issue again.  I do not put any credence to the rumors but decide for yourself, read the Post story.

Earlier in the month, I wrote about (view blog) the surprise CEO change at VMware VMW (NYSE) in which Paul Moritz, the former high-level Microsoft executive and at the time, head of Pi a subsidiary of EMC, was appointed to replace Diane Greene as VMware’s CEO.  The change came after VMware’s high flying stock which reached $130 shortly after its IPO back in August 2007 had dropped down into the $30 range.  To apparently appease VMware’s troops and avoid a large brain drain, the company under Moritz has announced a new plan to assist VMware employees with the value of their stock options.  According to a story in InfoWorld,

The company disclosed in an SEC filing that it plans to offer its employees the opportunity to exchange their post-IPO (”underwater”) stock options for an equal number of new options. The exercise price of the new options will be the stock price at the close of trading on the day immediately following the date that the exchange is completed. This option belongs to all U.S. based non-executive employees. Non-U.S. employees will be granted a to-be-determined proportionate number of restricted stock units after the exchange offer for U.S. employees has been completed.Participation in the exchange is completely voluntary. Doing so may get the employee out from under water, but taking the company up on the deal will also restart the employee’s option vesting schedule. Depending on the employees’ goals, they may choose not to participate. 

VMware is gearing up to compete with Microsoft who has produced its own product to compete directly with VMware’s software.  At a minimum, Moritz recognizes the challenges he faces and is taking some concrete steps to address them.  Time will tell.  Stay tuned. 

It’s official and about time, AMD’s CEO, Hector Ruiz, is finally out. We have been expecting this change for a long time (see earlier blogs).AMD’s Board of Directors after the company announced another disappointing quarter elected Dirk Meyer an employee of the firm since 1996 and the company’s president and chief operating officer as Ruiz’s replacement as CEO. Meyer was supposedly being groomed to be Ruiz’s successor but the change took far too long. Ruiz will become executive chairman of AMD and executive chairman of the board. According to a story by Anton Gonsalves for Information Week,

Board member Robert Palmer said in a statement announcing the executive shuffle that Meyer’s election to CEO is “the final phase of a two-year succession plan developed and implemented jointly by AMD’s board of directors and executive team. “Dirk’s extensive experience as a business leader and his notable engineering accomplishments before and during his 12 years at AMD make him ideally suited to build upon the foundation Hector created and lead AMD,” Palmer said.  

Ruiz praised Meyer as a “gifted leaders who possesses the right skills and experience to continue driving AMD and the industry forward. I am placing the company in excellent hands.” 

Meyer has an extremely difficult job ahead of him. AMD continues to fall behind Intel and is struggling to find a strategy to turn itself around. According to the Information Week story Gonsalves writes,

AMD is in the process of trying to reshape its business and differentiate its product line by integrating the graphics technology obtained through the 2006 acquisition of ATI Technologies with AMD’s general-purpose x86 microprocessors. “My immediate priority is to work with the leadership team to accelerate this transformation,” Meyer said.    

Keep a close eye on the firm.For more:CNETSeattlepi.comZDNetTimes UnionGuardian UK

Forbes wrote an insightful synopsis of a recent study conducted by Oxford Analytica on the increasing influence of activist shareholders as the U.S. economy and American corporations face a slow down in demand. The article pays particular attention to executive compensation and corporate governance issues.

As General Motors GM (NYSE) continues to bleed, the company is finally sending out signals it understands the difficulties it faces.  As is so often the case with GM, the drastic measures it is now undertaking may still be too little too late.  Rick Wagoner GM’s CEO continues to insist he is on the right road and understands what he needs to do to right GM.  I remain skeptical as I have in my previous blog posts.  Alex Taylor III has written another fine story for Fortune  outlining the new steps being undertaken by Wagoner and his team to turn GM around.   According to Taylor, Tuesday’s announcement of GM changes illustrate,

… GM is reacting to events instead of anticipating them. Nowhere in Tuesday’s announcement is there any mention of the structural changes that will allow GM to compete with a smaller market share shorn of its high-profit light trucks. No product lines were killed, no brands were euthanized, no big budget items wiped off the books. GM still has too many dealers selling too many individual models - and now it has even less money than before to market them. 

Wagoner likes to say that nobody could have foreseen the spike in oil prices that made GM’s old business model in North America obsolete. But he might have picked up a report titled “In the Tank: How Oil Prices Threaten Automakers’ Profits and Jobs” that was produced by research operations just a few miles from GM’s headquarters, in cooperation with the Natural Resources Defense Council.

It predicted that “sales, profits, and American jobs are at risk if Detroit automakers continue with their current business strategy in the face of higher oil prices.”That report was published in July 2005 - exactly three years ago.

Wagoner may survive his position but at what continued cost.  As GM workers, shareholders and the U.S. economy suffer the U.S.’ largest automobile company should really be planning for the future rather than just reacting to events.For more:BloombergGuardian UKBusinessweek

As the credit/financial crisis continues to fester European Bank executives seem to be finding themselves in a similar position with their counterparts in the United States who have been packing their bags for the last number of months. According to a story by Julia Werdigier for the International Herald Tribune, 

For the most part, chief executives at European banks have been able to hold on to their jobs while reporting billions of dollars of write-downs, even as they watch their U.S. counterparts clearing their desks.But as financial markets sour and investors become increasingly concerned about further write-downs, pressure on at least two executives on the Continent is mounting.

Check out the problems bank execs in Europe seem to be facing.