The Suite Spot
Book Nook: Dynasty, All in the Family
When William Clay Ford Jr. handed over the steering wheel of his great-grandfather's automobile company to Alan Mulally, a former Boeing executive, the CEO switch put a spotlight on the concept of the powerful, family-controlled corporation. Can such a company keep pace in the global economy?
In Dynasties: Fortunes and Misfortunes of the World's Great Family Businesses, David Landes says yes, noting that 60 to 90 percent of businesses in the European Union and one third of the Fortune 500 are said to be family controlled or have the founding family in management. But fluctuating profits and dysfunctional families do make for a volatile mixture.
Landes, a professor emeritus of history and economics at Harvard, summarizes the lineage of 13 fortuitous families in banking, natural resources, and automobiles. In autos, where technological innovation, customer tastes, and corporate profits all need to be balanced, things get tricky. Toyota, started by Sakichi Toyoda and several sons, is benefiting from a broad view of family that includes all employees. But Ford still is struggling to live up to the legend of its founder.
Grabbing a Bite: Michael Ahn
Three years ago, LG Electronics tried to market a high-tech refrigerator with a computer monitor embedded in the door. Consumers, it turned out, weren't ready to pay $8,000 to surf the Web in their kitchens. But the venture helped LG identify another innovation that's been more popular: combo refrigerator-TVs.
In an era of show homes, LG's trendy-and expensive-appliances have found a ready market. While LG isn't as big as Sony or Panasonic, the company's roots in tech-savvy South Korea provide an effective test bed for hot global products. "Korean consumers like beautiful design in home appliances, because homes are very small," explains Michael Ahn, president and CEO of LG's North American operations.
Americans are taking to those stylish appliances, too. Over salad and pasta in northern New Jersey, near LG's U.S. headquarters, Ahn explains how the company has quickly carved out an enviable niche. LG is the No. 2 U.S. cellphone maker, behind Motorola. Its other products-a selective lineup of washers and dryers, refrigerators, ranges, TVs, and other appliances-are all top shelf. "We want to put the LG brand only on high-end products," Ahn says. LG has a healthy 10 percent share of the U.S. plasma TV market but doesn't even sell conventional TVs under its name.
Ahn still has work to do. Among the challenges: A weak dollar makes LG's imports more costly here. And Whirlpool's acquisition of Maytag earlier this year created a "superpower" that's a formidable competitor. Ahn is circumspect about forthcoming products that will provide an edge. But keep an eye out for more gizmos in the refrigerator door.
The Suite Spot: Wish List
Shake, rattle, and recline: The faux-leather Adonis iRocker has a docking station for your iPod, speakers in the headrest, and a subwoofer in the seat. It lists for $699, including an ottoman.
This story appears in the September 25, 2006 print edition of U.S. News & World Report.
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