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CNN IN THE MONEY
Who's to Blame for Rising Gas Prices?; Marketing "United 93"; Interview with Vice President of General Motors
Aired April 29, 2006 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: And here are the top stories.
At least two people were hurt when a major storm hit northern Texas. There were reports of winds blowing at up to 100 miles an hour and hail the size of baseballs. There was extensive damage across the city of Gainesville including the airport, where planes were pushed into each other.
A spokesman says Italian Prime Minister Silvio Berlusconi will hand in his resignation on Tuesday. He lost a close election this month to political rival Romano Prodi. But for weeks he refused to concede. Berlusconi was the longest serving Italian prime minister since World War II.
Anti war demonstrators are converging on New York City today the call for the immediate withdrawal of U.S. troops from Iraq. The demonstration comes one day after the military announced that April was the deadliest month for American forces in Iraq this year.
More of today's top stories in 30 minutes; IN THE MONEY begins right now.
ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.
JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to our program. I'm Jack Cafferty.
Coming up on today's edition of IN THE MONEY, paying the price. Washington's throwing a blame fest over the rising cost of gasoline. We'll look at whether the pump will add some spin to the midterm elections.
Plus, hard on the eyes. Americans are debating whether the new film "United 93" is too much right now. See how you market a movie where everybody knows an ending and nobody likes it.
And think tank. General Motors has an idea that could help you save gas, a lot of it. We'll show you how they're doing it.
Joining me today, a couple of IN THE MONEY veterans, "Fortune" Magazine's editor at large Andy Serwer and Money.com's managing editor Allen Wastler.
President Bush's poll numbers continue to go south, they are now at the lowest level they have been in the entire five years he is in office. There are a lot of reasons that the condescending would offer for that. We also have gasoline prices that are all the rage in Washington, D.C.; all the politicians now are a twitter about what to do with rising gas prices. Cause and effect maybe?
ANDY SERWER, MANAGING EDITOR AT LARGE, "FORTUNE" MAGAZINE: Well Jack, we have a chart that I want to get to here that shows the relationship between the president's approval rating and gasoline prices. Let's take a look here.
Take a minute to look at this thing. On the left axis is his approval rating, which is that the line -- the yellow line. And then you can see on the right axis is gasoline prices in cents so it's $3, you can see there at the top. So you start off in the big spike in the approval rating is 9/11. OK.
CAFFERTY: OK, that makes sense.
SERWER: And you go along here Allen, you can see the second spike is the Iraq war. So people were happy about that. Gas prices are low.
ALLEN WASTLER, MANAGING EDITOR, MONEY.COM: You see it go down and where it gets muddled here, where it starts mixing with the other line, you can say that's gas prices or you can say that is when insurgency over in Iraq became very apparent and people started making Vietnam references and are we bogged down, that kind of loss of confidence.
CAFFERTY: What's the last spike on the right?
SERWER: The last spike there was Hurricane Katrina at the top. That's where his approval rating went down and gas prices went up. That's that real sharp spike. Gasoline prices came down over the winter. Now they're back up. You can see the president's approval rating continue to decline. So it's what they call an inverse relationship.
CAFFERTY: There you go.
SERWER: They move in the opposite directions.
CAFFERTY: We've got a little more on this subject right now. Larry Sabato is going to help us sort all this out now, see how the issue of gas prices is likely to play at the polls in November. Of course the price could come down between now and then too.
He's the director of the University of Virginia Center for Politics in Charlottesville. Larry nice to have you back with us. Where do the gas prices rank on the list of issues, and we have a bunch of them out there that are likely to drive these midterm elections.
LARRY SABATO, UNIVERSITY OF VIRGINIA: Jack I think gas prices are in the top four. Although you just said something very important, gas prices could come down. American voters don't have a long memory. Two weeks ago, it was going to be immigration that would be the big issue that would blot out the sun and nothing else would matter for the midterm elections. The midterm elections are six months away.
So the Iraq war is bound to be central. President Bush's popularity is bound to be central. Probably the reaction to hurricane Katrina -- and let's not forget, we're headed into another hurricane season. Suppose there's another devastating hurricane and the government response is poor again. That will tend to be more important than gas prices. But I think gas prices will play a role.
SERWER: Larry, why do I have the feeling that Democrats just can't make hay out of any of this?
SABATO: They're having problems because there's certain hypocrisy on both sides. The Republicans are now attacking their allies in business. And somehow it doesn't sell. Democrats are now ignoring their allies, the environmentalists, and it doesn't sell. And I think most people know that the politicians are just trying to make the best of a very bad situation. They're looking for partisan advantage, which is what they do full time.
WASTLER: Larry what are your thoughts about this $100 rebate check that some GOP senators were floating out this week? Will they get any traction out of that? Or is this just a shiny thing that they can wave in the short term?
SABATO: I'll be shocked if it passes. It's certainly something they can talk about on the campaign trail. That's really what is going on. Both the house and senate, the Democrats and the Republicans in both houses, they're maneuvering to get talking points for the election season. Because the dirty little secret is that everybody knows nothing can be done for the short term about high gas prices.
CAFFERTY: You know, the electorate, based on the e-mails that I read, I get thousands them every day on "THE SITUATION ROOM" on CNN, the public's had a belly full of the status quo in Washington, D.C. There's a school of thought, that suggest that Democrats don't have to do anything, which is probably good because there's a question of about how capable they are of coming up with anything meaningful in a way of strategy.
But they don't have to do anything except sit there and allow events to take their course. That the anti-incumbent, anti-status quo feeling is so strong that they may take over not just the house but the senate as well. Talk about that a little bit.
SABATO: It's possible. I think it's still unlikely. Although I will tell you this, this is the sixth year election of the Bush administration. Traditionally, the sixth year election of two-term presidential administrations is a disaster. Either a big disaster or a minor disaster for the incumbent administration. That tells me that Democrats are going to gain house seats. They're going to gain Senate seats. They're going to gain governor's chairs. But we don't know how many seats since it's six months away.
My guess is, right now, that Democrats will not gain enough to take over the Senate. They'd be very lucky, though it's possible they can take over the house. And, you know, the other problem with what you suggested, Jack, is that while people say Congress is a bunch of bums and we're totally angry at them and we need to throw them out on their ear, they follow that up very quickly by saying, I really like my Congressman if only they were all like my Congressman. And what they don't realize is, they are all like their Congressman.
SERWER: That's an interesting point, Larry. Why doesn't the president in the Republican Party also talk about the economy? It's just right there in front of them. The economy is doing pretty darn well. There's job growth, GDP growth. Yet they just don't seem to be able to get a handle on that.
SABOTA: Bush has been utterly unable to do what Ronald Reagan and Bill Clinton did when their economies improved. Those presidents went out every day into the rose garden, gave speeches, did whatever they had to do to focus the American public on an improving economy. Sooner or later, the public gets it. This president gives a speech once a month about the economy and he thinks that's enough. It's not enough. The other problem is that right now people are so convinced by more than 2 to 1 that the country is off on the wrong track, they're so depressed about Iraq and other things, that they tend to see every single glass as being half empty instead of being half full and that applies to the economy, too.
CAFFERTY: Going to have to leave it there. Larry Sabato though is the director of University of Virginia Center for Politics.
When we come back on IN THE MONEY, how to sell a movie when some people can't even get through the trailer. This is tough stuff to look at. We'll hear about the tough job of marketing a film called "United 93."
Plus a Togo party in the executive suite. See why CEOs like Steve Jobs and Bill Gates might have been right at home in ancient Rome.
Fuel for thought, see what General Motors has in the mix to save us all some money. Stay with us.
CAFFERTY: Tough enough in Hollywood to market a movie that people might actually enjoys watching. So imagine the challenge when the film disturbs people. So much that you can't even get through the trailer in some cases. We're talking about a film called "United 93." It is a new feature about one of the September 11 hijackings, the plane that crashed in Pennsylvania that was headed for the nation's capital.
For a look at how the studio handles this kind of tricky marketing job, we're joined now by Dave Hayes the senior editor of "Entertainment Weekly" co-author of the book "Open Wide: How Hollywood Box Office Became a National Obsession."
Dave welcome to the program.
DAVE HAYES, "ENTERTAINMENT WEEKLY:" Happy to be here. CAFFERTY: Get inside the mind of the studio's for us a little bit. They didn't set out; they knew they weren't making "Mission Impossible" here. What's the thinking with this picture?
HAYES: Well there is a couple of factors at work, the director and co-writer Paul Greengrass, he is also a producer on the film, is very important to Universal Pictures, the studio behind this movie. He was the director of the sequel to "Bourne Identity" called "Bourne Supremacy" which extended that very profitable action franchise with Matt Damon a couple years ago. He is set to direct the third installment that is going to be out in 2007.
So this is a director who is very important to the fold, to the studio infrastructure. And I'm not suggesting it was a cynical ploy to trade him this very serious film for a much more commercial, you know, action/adventure franchise. But I think it played a role. And they wanted to make sure that they were keeping an important member of the family happy.
SERWER: Yes, but Dave do you think people are going to go see this movie? And do you think it's the right thing to make? You know, I'm not going to go see it; it is just too painful for me. I saw a little bit of that one that was on A&E, which apparently did gangbusters ratings. My daughter walked in and we looked at each other and I just went click, I can't watch it.
HAYES: Yes, your not alone. I think there are a lot of people out there; the tracking is very modest on this film. They're getting an indication that women in particular are less likely to go. Interestingly, men under 25 are really robust audience, at least according to the forecast. They cut a trailer that sort of appeals to them that has a lot of action elements.
But honestly, I think if it has a successful future, this film is going to find it on DVD. It's kind of title that people will need to and want to experience in their own homes. And notwithstanding that click off factor that you mentioned, I think it's the kind of thing people maybe want to experience privately rather than paying their $10 and experiencing in a public environment.
WASTLER: Dave I understand the studio's donating a portion of its profits to a 9/11 memorial. Should we be cynical about that? Or should we be encouraging about that?
HAYES: I would say it's not a cynical move. In the sense that I think there's a scrupulous attention to the way they're mounting this campaign that they have allowed themselves with the families. They're trying to in every way do the right thing. You won't see a lot of happy meal tie-ins or those kind of more vulgar marketing moves that you see routinely on the big blockbuster spectacles.
But I would also say that the opening weekend is not going to be of the amount that we've been seeing recently with the "Scary Movie 4" or an "Ice Age" where it's $40, $50, $60 million. It's going to be less than that so they're not exactly forking over a great deal of cash here. CAFFERTY: If it's not going to make the big bucks, what's the attraction? Oliver Stone's got one coming out that has to do with the World Trade Center. If these things are not expected to have the mass audience appeal that you talk about, why is a guy like Oliver Stone drawn to doing a film about this kind of event?
HAYES: Well, it's interesting. That Oliver Stone project is clearly something that people are handling a little bit with kid gloves. His name is nowhere -- that visible on the poster. He's been drawn to this kind of material obviously over his career. Hollywood in general has often tried its best to reflect what's gone on in society. Certainly World War II movies where a staple for many, many decades.
Vietnam was a little more problematic. The Gulf War a little more problematic. I think as we get into this kind of 21st century landscape where it's a little more ambiguous, a little bit less clear- cut. It's harder to make these stories. But you'll notice that the Stone movie and "United 93" are a kind of good versus evil struggles and they're taking that slice of 9/11.
SERWER: Ain't it the way it always is? Let me ask you about this trailer though, if they put that trailer in a theater for a movie I'm going to see, I'm going to get ticked off. I don't want -- I'm serious, I don't want to see it and I feel like they're forcing it down my throat. Are they going to really just run this trailer all weekend all around?
HAYES: Well, they're sort of -- trial and error with that actually. They found that in certain areas, particularly in New York City and in other cities, they had some real pushback from audiences. Because you're right, there's no election to see that trailer. It's not like you're voting to say, give me that trailer. You're just sitting in a theater and boom there it comes. They're also experimenting with a very unorthodox piece of marketing in the theaters which is more of a sort of how we made the movie type of feature that where the director and some of the family members are explaining why this is an important film.
So that's less of a hard sell, you know, rock 'em sock 'em, forgive me for saying it, but the action sell. And that's much more of a sensitive type of piece so they're trying that in theaters.
CAFFERTY: All right. Certainly interesting to see how this thing does as it opens up. Dave Hayes, senior editor "Entertainment Weekly" thanks for joining us. Appreciate it.
HAYES: Thanks very much.
CAFFERTY: All right. Time now for this week's look ahead. Monday, kicks off cover the uninsured week, sponsored by the Robert Wood Johnson Foundation, 46 million Americans have no health insurance in this country. It is a disgrace. Events are scheduled across the country to raise awareness.
Slew of economic reports coming next week as well. Auto sales, truck sales, out on Tuesday. We'll see what impact rising gas prices might be having on sales of new vehicles. On Friday, we get the all- important employment report. Payroll numbers and the unemployment rate for the month of April. Wall Street watches that one like a hawk.
Coming up on IN THE MONEY, after the break oil change, as the price of crude goes up enough, oil company profits go right along with it. See what that means for stock in Conoco Phillips.
And you do the driving, the car does the math. We'll tell you about the technical break through that reads what's in your gas tank automatically and allows your car to burn up to 85 percent ethanol if you're driving the right vehicle.
SERWER: It's no secret that while gas prices are raising, big oil companies are raking in record profits. The nation's third largest oil and gas producer came out with its first quarter earnings this week. And they did not disappoint the street. It's quarterly profit was up 13 percent from a year ago, $3 billion, shares of Conoco Phillips have held strong over the last couple months. That makes Conoco Phillips our "Stock of the Week."
Conoco Phillips or COP, that's the ticker, is the number three- oil company in the United States after Exxon Mobil and Chevron. Interestingly, they are actually a cheaper stock. As you look at it from a price earnings or P/E ratio, whatever you want to do, because they're in some riskier businesses. Basically if you're an oil company right now these are good times.
CAFFERTY: What's risky about being in the oil business?
SERWER: You just sit there and drill it and you mark it up and you sell it to Americans. Then they kick and scream a little bit, but they got to deal with it. Right?
WASTLER: You make money right off it. One thing does concern me a little bit. If you look at relative price increase, the price of oil has increased more than the profit margin of most of the oil companies, which leads me to believe that maybe there is something to the argument that speculation is really driving up the price of oil. And that oil companies themselves haven't done much to their operations to squeeze out a bigger margin.
CAFFERTY: What is the risk of Wall Street with this company that keeps the P/E about 30 percent below the others?
SERWER: Well there are a couple of risks. But I actually think there's upside. One is kind of bad, one is kind of good. The bad is they do a lot of business in Venezuela and Russia. Venezuela, you could get everything taken away from you there. Russia, obviously same kind of situation, a very risky place to do business.
The other thing is they have a big stake in the natural gas business. They bought Burlington Resources, which makes them a big play. And price of natural gas has been way, way, way up. So people think that could crash. However, I happen to think -- I'm a big believer in natural gas. Because of all the energy sources, petroleum- based energy sources out there, it's the best one. You know, because it's the cleanest, it can be used for different things.
WASTLER: It is also a big industrial.
SERWER: We got a lot of it.
WASTLER: A lot of companies use natural gas, too. So it's tied more into the economic cycle, less the consumer cycles.
SERWER: I think the bottom line with this company is as a stock, investment; it's high risk/high return, relative to the other ones. But I say, looking ahead, this is just good times for these business, right?
CAFFERTY: If you were late getting into the energy stocks when this all started to run up, maybe this is a good one to do a little catch-up with.
SERWER: It sure could be. We'll check it out.
Coming up on IN THE MONEY, ads that speak your language. Getting a global brand to think locally can be tough. We'll hear from an ad boss whose agency knows how to do it.
Plus, find out why one author sees a parallel between the Google guys and the barbarians who sacked ancient Rome.
And one way of life from two points of view. See how far apart a man and a woman can be on our "Fun Site of the Week."
CAFFERTY: There's no limit.
SERWER: No limit to that, huh-uh.
WHITFIELD: Hello, I'm Fredricka Whitfield at the CNN Center in Atlanta. IN THE MONEY continues in a moment. But first these top stories.
Severe storms are slowly heading out of north Texas. But they've left their mark. High winds tossed planes around at the airport in Gainesville. Dozens of houses are damaged. And two injuries were reported.
The U.S. death toll in Iraq is nearing 2,400. The U.S. military says a roadside bomb killed a U.S. soldier southwest of Baghdad today, 2,397 American troops and military civilians have died in Iraq since the war began in 2003.
Italy's prime minister apparently is stepping down. Government press officials say Silvio Berlusconi will resign his post on Tuesday. He was defeated by challenger Romano Prodi in elections earlier this month. Berlusconi will remain a member of Italy's parliament and head of his party. Coming up at the top of the hour, our legal experts weigh in on the Rush Limbaugh plea deal with Florida prosecutors.
Now back to more of IN THE MONEY.
SERWER: Whether they know it or not, countries aren't just places, they're brands and each one conjures up its own powerful associations. Still, most countries don't have an ad agency to deal with brand management. France is considering it. And talking to a company called Publicis about the job.
We met up with the agency's CEO Maurice Levy in the Swiss Alps. He spoke with us about growing a business while keeping it personal.
SERWER (voice-over): Maurice Levy knows the advertising industry inside and out. He began as an information technology expert with Publicis in 1971, recognized as a rising star, was named managing director shortly after. Today, stands as only one of two CEOs Publicis has ever had.
MAURICE LEVY, CHAIRMAN & CEO, PUBLICIS GROUPE: I'm trained to lead by example. I'm working very hard.
SERWER: Clients such as Aflac and Coca-Cola pay Publicis good money to direct customers their way. His hard work has caught the eye of the French government. It wants Levee to investigate the idea of branding the country.
LEVY: We had, last year, the best track record of the industry in terms of new business and we think that, as we go, we should grow much faster than our competitors.
SERWER: In addition to winning new business Publicis has gone on buying binge. It's purchased more than 100 companies over the past decade, including the famed ad agency Leo Bernet which creates spots for McDonald's and made this one for Chef Boyardee.
And while Publicis is growing fast, the world's fourth largest ad agency still has ground to make up on the big three, Omnicom, WPP and Inter Public. Publicis raked in more than $4 billion in sales last year, while market leader Omnicom cleared $10 billion. Don't think Levy is intimidated.
LEVY: We have teams. Who have a hunger for success and the commitment to their client, which is quite unique?
SERWER: Levy's intensity carries over to an invaluable intangible asset, interpersonal business relationships. And his attention to detail in this arena is perhaps the biggest key in understanding his company's success.
LEVY: And to all the many crews that we will create together. We believe that in our business we need to be much more close to people, help the people, to grow, to bloom, to be happy. And happiness in the business is something, which is a known value in some industries, but in our industry, it's very important. And in Publicis, it's something, which is probably the most simple.
SERWER: Publicis continues to bulk up under Levy. This week, the company announced it is acquiring Belgium's largest independent ad agency Duval Guillaume.
CAFFERTY: Marketing France. There's a two-handed assignment right there.
Still to come on IN THE MONEY as we move forward, bankruptus maximus. Find out why Enron's Ken Lay and Jeff Skilling might have brought a little of ancient Rome to modern Houston.
And think of it as an ethanol martini. We are going to tell you about General Motor's technology that reads the mix in your car's tank automatically and tells the engine how to use it.
CAFFERTY: A mom and pop outfit grows into an empire made famous by ambitious CEOs and aggressive takeovers, mergers and acquisitions. Then comes the downfall. Sounds like Enron, doesn't it? But it's not. It could be the story of any modern-day mega corporation. Our next guest is talking about it in his new book called "Rome."
Joining us now is Stanley Bing; he's the author of "Rome Inc." The rise and fall of the first multinational corporation. Stanley welcome. Nice to have you with us.
STANLEY BING, AUTHOR, "ROME INC:" It is nice to be here.
SERWER: Why Rome, how did you get the idea to write this one?
BING: Well it just the comparisons between Rome and Multinational Corporation just occurred to me and were too huge to ignore. It began, as small mom and pop operation, like a garment business where these two brothers didn't like each other much. Then one of them kills the other one and they go on from there.
CAFFERTY: That sound sounds like Seventh Avenue.
BING: It really does.
SERWER: Hey, Sir Bing, Andy Serwer here. Nice to see you.
BING HI Andy, nice to see you.
SERWER: Is this just for fun or is there anything serious we can take away from your book?
BING: Well, I think it's both. I mean it is fun to make comparisons between guys in togas and guys at Togo parties. But there's a serious undercurrent to whole thing. We ourselves, if you want to look at the big view, are a large empire that has extending itself around the world. What are the implications when you look at Rome? They were acquisition minded. That was their major business, was acquiring other companies and also producing moguls. So they're not that different from us and the lessons that we can learn from them, I think, are many. While at the same time, not getting too crusty about it.
WASTLER: OK, Stanley, give us some examples, famous Romans and their modern day equivalents.
BING: Well you know I always like to -- every Roman mogul had his anti-mogul. So if you looked at Romulus and Remus they were brothers and founded Rome. And if you look at Jobs and Gates, they kind of had the twin pillars of the digital revolution and they kind of complement each other.
Now, they haven't really killed each other were yet but I don't think they like each other much. And their operating systems were different. I think that's one thing. I like to think of the Google guys sometimes as kind of modern day equivalent to these kind of feisty little barbarians that come sweeping down out of the hills and take the lunch away from the big guys.
They're busy having a huge feast at Rome and all of a sudden in comes some guy in a hair shirt that smells of relaxed hallow and they don't take them seriously at first but pretty soon it's pretty uncomfortable and they start eating their lunch so --
CAFFERTY: You mentioned Togo party. I got immediate visions of Kozlowski and the birthday party that he threw for his wife. He's in the joint now making little rocks out of big rocks, which is probably good place for him.
BING: Well you know what it is sometimes it ends badly when you do those things.
CAFFERTY: Who are some other villains, folks that you can look back to ancient Rome --
BING: Well I particularly like the kind of perverted weird dudes that pop up after Caesar and Augustus. Those are two really big successful CEOs. And they do really well. But they don't have good succession plans. Especially Augustus leaves Tiberius Caesar after him. The stories about Tiberius really can't be repeated even on this network.
CAFFERTY: No, we got a family show.
BING: It's a family show and I don't want to be nasty. But I do recommend those who want serious nighttime reading to look at some of the tales of where Tiberius was. And then you have these miscreants who kind of expanded far beyond their capability to manage anything. And you are right, I mean look at Lay and Skilling and they're all stabbing each other in the little leather skirts right now to try to decide who's going to be --
CAFFERTY: Yes, they are.
BING: Who's going to be heaved over into the Mediterranean first?
SERWER: Stanley, I'm sorry, jumping in. I think you were talking about Kozlowski. Didn't you sort of have him as the equivalent of Caligula?
BING: Yes, because you know there's some things obviously -- Kozlowski didn't make his horse into a senator or anything like that. But, you know, the having a life-sized statue that pees vodka, I mean, that's a pretty big thing. The size of these Roman nut bags was really pretty impressive. And they were sort of very broad-minded guys. They were writers and thinkers. But when it came to sort of bad behavior, they still lead the pack in a way.
WASTLER: Stanley, real quick, any politicians make it into your book?
BING: Well, I don't really want to get myself into trouble, but sure. I mean, the -- the Senators and the CEOs that run our empire really aren't that different in one way or another than the moguls that ran Rome. And how to manage a far-flung enterprise that might have acquired more than it could manage is certainly something that our Condoleezza Rice's are thinking about.
WASTLER: OK, well, it sounds like a really wonderful book. I look forward to reading it. Stanley Bing, author of "Rome Inc" thank you so much for joining us.
BING: It's great to be here, thanks.
WASTLER: Thank you. In this week's "Life after Work" segment staying in the game. New Jersey resident Harold Rosenthal still makes the calls, but he no longer does it from the executive suite. These days, the 63 year old retiree is making important, split-second decisions from behind home plate.
JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: Imagine waking up one day and finding out you're not the vice president of a wholesale baking company anymore. Instead, you're out calling balls and strikes on baseball diamonds and thinking "this is exactly where I want to be."
HAROLD ROSENTHAL, RETIREE: Play. After I retired, I think in four weeks, I was attending my first class.
WESTHOVEN: That was back in 1998. And now, every spring, Harold Rosenthal stands behind home plate, calling high school baseball games.
ROSENTHAL: Well now I empire pretty much six-day a week from the middle of March until the end of July.
Home run, home run.
WESTHOVEN: His love for America's favorite pastime runs deep.
ROSENTHAL: I always loved baseball. As a kid, I was a big fan. When I came out here 35 years ago, I got involved in the local baseball programs, coaching, recreational baseball, and little league, Babe Ruth. And I just love being on a baseball field.
WESTHOVEN: And at 63, he says he's got plenty of years and enthusiasm for the game.
ROSENTHAL: I did a game, the first or second year I was umpire, and the other umpire on the field was 82 years old. I said, walking off the field, I says if you can tell me that I'd still be umpiring baseball and I'm 82, on my 83rd birthday you can take me, and I'll have no complaints.
WESTHOVEN: Jennifer Westhoven, CNN.
WASTLER: On the next "Life After Work" we'll talk to an aerospace retiree who is spending his golden years digging in the dirt. We'll have his story next weekend.
Coming up, a little bit of Saudi Arabia and a whole lot of Iowa. We'll hear about a breakthrough that lets you mix up ethanol and gasoline without worrying about the consequences.
And if you want to vent about gas prices or anything else in the news, drop us a line. The address is INTHEMONEY@CNN.com.
CAFFERTY: If you listen to some hot air blowing around Washington, D.C. this week, you think the future of the oil crisis falls squarely on the shoulders of an ear of corn. It just might. This ethanol or e-85 fuel we're hearing so much about, is produced mainly from corn. It's cleaner to burn. It could stimulate agriculture. It is renewable. It has potential to alter our dependency on Middle East oil. The technology to do all this is already here.
General Motors has been putting it in some of their cars since their 2000 models rolled out. That's five years ago. Beth Lowery General Motors vice president of Environment and Energy is here now to talk more about what could be, unless I'm reading all this wrong, the key to escaping from the dominance and dependence on Middle East oil. Tell us how this work. Welcome to the program, by the way. I'm very excited about your story.
BETH LOWERY, VP, GENERAL MOTORS: Thanks so much, Jack. It's a great opportunity for us to showcase our vehicles. We have 1.5 million vehicles on the road today that are flex fuel vehicles. That means they can run on 85 ethanol or gasoline, 85 ethanol is 15 percent gasoline and 85 percent ethanol. You're right, here in the United States, it's made primarily from corn. It really is a win-win-win for everybody.
CAFFERTY: The cars can read this automatically? There's a sensor, which tells the computer to tell the engine what's coming through the carburetor or through the fuel injection system? The motorist really doesn't have to do anything, right?
LOWERY: Absolutely. It's transparent to the motorist. What we want to do is make sure that our customers know that our vehicles are capable of doing this and to really build the infrastructure so that you have 85 as a choice in your local gasoline station. If the choice is 85 ethanol for your flex fuel vehicle or gasoline and our vehicle is smart enough to know what's in the fuel tank.
SERWER: Beth I have a two-part question for you. First of all, how important is this to the overall strategy to GM? That's number one. And number two this the primary focus of your alternative efforts, this, rather than hybrids or, say, diesels?
LOWERY: Actually, it's a part of our overall strategy. General Motors had an advanced technology strategy for years. We're executing that plan. Part of it is improving today's internal combustion engines. Also, the future is hydrogen and fuel cells. This is a piece of our strategy. Right now we think it's very important however, to get out and really tell people in the marketplace in the United States, especially, about the capability of flex fuel vehicles.
SERWER: How important overall though is this -- how big could it be in your company?
LOWERY: I think it's very big. I think it's a very big opportunity for our company, but I also think it's a very good opportunity for this country, as well as the world, because it's global demand for oil increases, we think it's important to have a choice and to have our customers have a choice.
WASTLER: Beth, let me get a little bit into the consumer perspective here. What I've heard about ethanol is that it gets less gas mileage as opposed to a gallon of pure gas. And some of the numbers I've seen have put it around anywhere from 25 percent to 30 percent less gas mileage. It would seem a gallon of ethanol, then, would have to be priced at least that much lower than a gallon of gas to be of benefit to the consumer. Am I reading that right?
LOWERY: Absolutely, it has to have the right economics. Our customers are very smart. It is about a 25 percent difference because of the energy density of ethanol so it has to be priced competitively. Chicago market just yesterday we checked and it was about 30 cents cheaper. So it's very important it be priced appropriately.
CAFFERTY: Why around we hearing more about this from General Motors? I found out about this technology talking to my gasoline guy who owns a little station in Cedar Grove, New Jersey who happened to go to the New York auto Show and was talking to one of the GM people and got into a casual conversation and he was extremely excited, as I was when I heard about it. Why aren't you guys shouting this from the rooftops? LOWERY: Well, actually, we are. We're going on shows like this. We also started a campaign called "Live Green, Go Yellow." It was on pre-imposed Super Bowl ads, the Olympics, and we have been doing things at auto shows. I'm pleased you heard about New York Auto Show. We also had some activities in Chicago, Minnesota. You'll continue to hear lots more from General Motors with respect to our campaign to really build awareness of our vehicles that are on the road and the need for ethanol in the market place.
SERWER: Yes but Beth, aren't you getting tremendous pushback, not only from within your organization, because of the entire buildup infrastructure to produce traditional cars and traditional models and traditional marketing, but also from the oil companies? Don't they put pressure on you guys?
LOWERY: Actually, we have been spending a lot of time this week in Washington with Renewable Fuels Association, the World Environment Center, everybody is talking about bio fuels. And I think there is a collective will building with respect to how important it is. With respect to the pressure in the company, we're all united thinking this is very important for us as a company to show leadership and the 85 ethanol in our flex fuel vehicles because it's important in the marketplace and, also, with respect to the oil companies, ethanol is now being used as a blend and all of our vehicles are certified and warranted for e-10, which is 10 percent ethanol. I think working together we can make this a success in this nation.
WASTLER: Beth, just really quickly, how available is ethanol. What needs to happen to make it more available?
LOWERY: We'd like to see a lot more ethanol in the marketplace. We have about 600 stations now, mostly in the Midwest, because that's where the ethanol is produced from corn. But we're starting to have partnerships around the country. We've had projects in California, Minnesota, Illinois, and we're constantly putting together partnerships to get more pumps. Recently announced with Meyers in Michigan to put 20 more pumps. And you'll hear more going on across from the west coast to the east coast to build that infrastructure.
CAFFERTY: one other quick thing and there's no time so you have to be real brief with this. The cars that you've built on the road right now -- I mean, I might be driving a car that can burn ethanol and not even be aware of it. How do I find out?
LOWERY: Well actually the vin number will tell you. We're also making sure that we're building awareness and telling people in your dealership where you'll see some marketing coming if you're an owner of our flex fuel vehicles. We have yellow fuel caps so people will know their vehicle is flex fuel.
CAFFERTY: This is great stuff. We'll have you back; talk more about this as the program moves forward. Is that all right with you?
LOWERY: That is great.
CAFFERTY: Thanks for being with us. Beth Lowery, vice president of Environment and Energy for General Motors.
Coming up next on IN THE MONEY, upright citizens. Allen Wastler has some thoughts on using the standing room only approach to air travel, especially on a flight say from New York to Sydney, Australia. It will take the edge off gas prices on the highway. I'm just kidding.
And we'll be reading some of your e-mails from the last week. You can send us an e-mail right now if you'd like to we are t INTHEMONE@CNN.com. Back after this.
CAFFERTY: "The New York Times" reported this week that Airbus is thinking of adding a standing room only option to some of its airplanes. Think about that for a minute. The company denies it. The concept gave our Allen Wastler an idea that he claims could solve America's gas price problem. I can't wait to hear this.
WASTLER: Well you see because I started thinking about it. What if you actually had to stand all the way on New York to San Francisco, New York to Houston, all those, just standing with a little tray table? And I was thinking be your feet would ache, you'd be, I can't sleep, can't do it. I thought, all this stuff we have going on with gas prices and everything? What if people had to stand in their cars? If you were actually driving around, you had to stand up, your feet ache, instead of the cushy bucket seat with the stereo.
CAFFERTY: Who do you think is going to buy that idea?
WASTLER: I don't know, but you know what I thought it was a great idea because the big problem with this country is that we use too much gas and we're too chicken to use a gas tax that would move people off their gas consumption. So if they stand up, they're uncomfortable, they whine and complain like Americans tend to do and then we cut down our gas consumption that way. There's a solution for you.
SERWER: So the cars are too comfortable?
CAFFERTY: What are they serving over at the lunchroom at the Website this week? What's the "Fun Site of the Week?"
WASTLER: We got a little Italian site for you on the differences between the male and female. The square's the male; the circle's the female. First, coming home from work.
CAFFERTY: Here comes the old man.
SERWER: Here's the boy.
WASTLER: Oh, yeah.
SERWER: Hey, that's not necessarily true.
CAFFERTY: Some stereotypes.
WASTLER: A few in there. Let's take a look at the difference in shopping.
CAFFERTY: All right.
WASTLER: There's the object you want, right? There's the man. Go. See, find it --
CAFFERTY: Give me the red thing; I'm out of here.
WASTLER: Here comes the lady of the house. Here comes Mrs. Cafferty.
CAFFERTY: And that's why I don't go with her because this makes me crazy. I can't do this.
WASTLER: So true.
CAFFERTY: Right? Look at everything in the store.
WASTLER: And then finally, the ideal partner.
CAFFERTY: What is it, a robot? All right.
Time now to read some of your answers to our question of the week from last week about whether you're taking on any more debt in order to pay these high gas prices.
T.D. in Riverside, California, wrote this, "I'm not taking on more debt because I'm doing more walking and driving less. I also take the bus when I don't have to carry a lot of bags."
Shirley in Michigan wrote, "I just had to ask for food stamps. My credit card bills are about the same, but they have raised the minimum payments. I called to ask why, but got no answer."
Keith in California wrote, " Go ahead and keep harping on the rising cost of gas and the pain it's causing American drivers, 300 million American consumers don't stand a chance against the oil lobbyists who not only have influence on our government, the are our government."
Here is next weekends email question of the week, "Do you think it's too soon for movies about the events surrounding 9/11?" Send your answers to INTHEMONEY@CNN.com; you should also visit our show page at CNN.com/inthemoney which is where you will find the address of our "Fun Site of the Week."
Thank you for joining us for this edition of IN THE MONEY. My thanks to "Fortune" Magazine editor at large Andy Serwer, Money.com managing editor Allen Wastler. We hope to see you back here next week. Saturday at 1:00, Sunday at 3:00 until the next time, enjoy the rest of your weekend.
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