IKEA – MY STORY

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Posted on 5th February 2011 by Administrator in Economy |Politics |Social Issues

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When I started this post I was just planning to talk about the article below and my knowledge of IKEA’s tax strategy. But, as I started writing it became my life story at IKEA. The memories came pouring out. When you spend 14 years giving your heart and soul to an organization, there are a lot of fond memories and a bitter ending. I hope you find it interesting. It meanders around because I kept remembering things that I inserted as I went along.

I guess it is cool that the 11th richest man on earth changed the course of my life 7 years ago. Only, it still eats away at me. Let’s get to the whole sordid story.

Another IKEA expose on Swedish television this week. They’ve “discovered” that IKEA tries to avoid taxes. No kidding. Every corporation in the world tries to avoid taxes. The story also notes the fact that the stores are designed to confuse shoppers and keep them trapped in the store. Wow!!! These journalists are sharp. The longer someone stays in a store, the more money they are likely to spend. What do they think the kid’s ball room and the restaurant were there for? The funniest part of the article is the rehashing of Ingvar Kamprad being a Nazi. I was there in 1993 when the info was revealed. The funniest part of Ingvar being a Nazi was that he joined the Swedish Nazi Party in 1945, AFTER EVERYONE KNEW THAT THE NAZIS HAD MURDERED 6 MILLION JEWS. His excuse was that it was a youthful indiscretion. He was 20 years old in 1945 and remained in the Party until the early 1950s.

I know everything there is to know about IKEA’s tax strategy. I was hired by IKEA in 1989, a bright eyed and bushy tailed 25 year old. The company had only been in the US since 1985 and its revenues were less than $80 million. I was hired as Financial Reporting Manager/Tax Manager/Whatever Needed To Be Done Guy. We were a lean organization. There was one copy of Lotus 123 on one computer in the whole office. I was in that role for 4 years and then became Treasurer, still with responsibility for taxes. So, I became quite knowledgeable about IKEA’s tax structure and chipped in with a few creative ideas.

My boss, Mike, was the CFO. I worked under 4 CEO’s in my 14 years at IKEA. The first was Bjorn, Ingvar’s nephew. He was a drunk. But, he was a likeable drunk. The CFO wouldn’t let Bjorn see the financial results. You could find him at lunchtime in the Plymouth Meeting Mall bar having a drink or three. IKEA was the most politically incorrect place you could imagine when I started there. The Swedes were notorious for screwing around. There were affairs happening all over the office. The site for the 1st store was selected because the dude they sent over from Sweden liked the school district near the site for his daughter. It was like the Wild West. My boss was the biggest practical joker of all-time. The Swedes had a cruel sense of humor. When you turned 40, they would be unmerciless. Bjorn lived in Phoenixville. When he turned 40, my boss took out a full page ad in the Phoenixville newspaper announcing a 40th birthday party at Bjorn’s house with free beer and food for anyone who would like to attend. Bjorn’s house was inundated with biker types, as most of Phoenixville was on a lower income scale.

The stories about Ingvar and IKEA being cheap skinflints is absolutely true, in one sense. When Ingvar came to our offices he stayed at the George Washington Motor Lodge across the street from the Plymouth Meeting Mall. This may have been the crappiest motel on earth. The joke in our office was that before entering one of their rooms you should rattle your keys so the cockroaches would scatter. This billionaire would then walk to our offices. It was true that he was cheap, but other stories showed him to be a bit of a fraud. He lived in Switzerland and the Swiss IKEA organization decided to buy him a new Volvo car. He was surprised and delighted at the gift, but one problem. It was too ostentatious for him. It had power windows. He thought that was too much, so he requested that they replace it with one that had roll down windows. It seems Volvo had stopped making cars with roll down windows. No one told Ingvar, but Volvo made him a special car with roll down windows for a substantial added cost to the Swiss IKEA organization. He also owns great works of art, vineyards, ski resorts, yada, yada, yada. He ain’t living a pauper’s life.

We always flew coach. We were told to fly on our own time. We stayed in some of the dumpiest hovels the world has ever seen. The Best Western was an upscale hotel for us. We would work at the grand openings of our stores for one week, but we had to double up in the hotel rooms. For the Pittsburgh opening, I had to share a room with our Internal Audit manager at a Red Roof Inn. He snored like a freight train. It was a long week. IKEA was very much a family in those days. Our spouses were invited to work at the IKEA Elizabeth grand opening. Avalon and I got to work 12 hours a day and then stay at the Holiday Inn Newark at night. Lots of drinking, partying and crazyness. We’ll never forget it.

We’ll also never forget our two week adventure across Europe in 1991. Mike wanted me to visit the corporate offices in Humlabaek, Denmark and the heart of IKEA in Almhult, Sweden. Avalon and I had never ventured much farther than the Jersey Shore in our entire lives. We decided to tack on a 2nd week to my trip and take trains to Amsterdam and Brussels. On a map, they looked pretty close. We booked the flights, hotels, and trains and off we went on our adventure of a lifetime. It was the middle of summer and we left my car in the IKEA office parking lot and got a Shuttle to Newark Airport for our flight to Copenhagen. I had never driven a car with a stick shift in my life, so I requested an automatic when I booked my car for Copenhagen. Little did I know, but 95% of the cars in Denmark are stick. It was well known that everyone at the corporate off ice drove crappy old cars as a badge of honor (their Porsches were in their garages at home). When we arrived in Copenhagen the lady at the car desk handed me the keys and we went outside to find our car. To my horror, there was a beautiful huge shiny Jaguar in my spot. It was the only automatic transmission they had. We spent the weekend in Copenhagen. It is a beautiful place. We loved it. Monday we headed up the coast to the head office. I pulled in to the parking lot and parked as far away from the entrance as possible. No one saw me. After two days, it looked like I would avoid detection. It was now onto Almhult. We needed to drive our car on a ferry to Sweden and then drive to Almhult. It just so happened that Hannu, the worldwide Treasurer, was going to Almhult and offered to let us follow him. My heart went into my throat. He drove a dumpy 10 year old Volvo station wagon. I pulled behind him in my 1 year old Jaguar. We drove onto the ferry and parked. He got out of his car and with a huge smile on his face walked up to my window, looking my car up and down, and said in his Finnish accent, “Yim in a Yag”. Translation – Jim in a Jag. The cat was out of the bag. Phone lines from Denmark to the US were burning up. Practical jokes and abuse were heaped on me for years. Fake memos about my car choice were produced.

Eventually, Avalon and I got to the train portion of our adventure. The train rides were much longer and more uncomfortable than we envisioned. We had a great time in Amsterdam wandering that decadent place. Brussels had the best food we ever tasted. Bruges was a fascinating look into the past. But, being a clueless moron, I had booked our return flight from Copenhagen rather than Brussels. We needed to take a 12 hour train ride from Brussels back to Copenhagen to catch our flight home. That was bad enough, but we didn’t read Flemish very well, so we accidently got on the wrong train headed into the mountains of Belgium. The conductor barely spoke English. We were stuck at train station in the Belgian mountains waiting for another train. The train got to Copenhagen 1 hour before our flight home to Newark. We grabbed a cab and told him to floor it. The people at the airport said we’d have to make a run for it. Our terminal seemed like miles away. We did our best OJ Simpson impressions running through the airport and made it just as they were closing the doors. We had been awake for 15 hours on trains and must have smelled pretty ripe. Now another 8 hours across the Atlantic. Our luggage didn’t make it. Once in Newark we had to take a shuttle back to Plymouth Meeting. This was another 3 hours as they had to drop people off. Eventually, after about 30 hours of travel with virtually no sleep, we got back to the IKEA offices. As we dragged ourselves to my car, lo and behold, Mike my boss had shrink wrapped my entire car in the middle of the summer. The sun and heat had practically melted it solid. He had also accidently broken my side view mirror in the process. I was not a happy camper. But, it makes a good story in retrospect.

Now back to the main story.

Bjorn was replaced by Goran, a douchebag from Volvo. He was a pompous egotistical asshole. After 3 years he was eventually kicked upstairs to Europe and replaced by Jan. He was the best CEO I’ve ever had the privilege to work for.

He didn’t have an ego. He listened. He trusted the opinions of his lieutenants. He was a good person. He had a good sense of humor. And he managed the company to a $100 million profit on $600 million in revenue. When Jan left, the company went into the toilet. The morons in Europe felt they needed a diversity CEO. They promoted Pernille from HR Manager (HR was a joke) to CEO. She was the most clueless shrew to ever hold the title of CEO. She ran the company into the ground, eventually generating nice sized losses before being canned. Not before running me and many others out of the company.

But, back to the point of the story – IKEA’s tax strategy. I learned early on that Ingvar hated taxes. It was well known within the company that the entire structure of the company was to avoid taxes. It was owned by a charitable foundation. We all knew the foundation was a joke. Supposedly, Ingvar lived in Switzerland and had nothing to do with the retail organization. In reality, the European CEO was a figurehead and Ingvar called all the shots. There was a Treasury center in Brussels and other entities in Ireland. There was our own insurance company. All of these entities existed to take advantage of tax loopholes. It was a brilliant strategy.

The beauty of the setup was that the income could be generated in low tax jurisdictions and losses generated in high tax jurisdictions. In the US we had IKEA Retail, IKEA Wholesale, IKEA Property, IKEA Services, and IKEA Trading. As the goods were sourced and sold to the US entities, various “FEES” were paid. A franchise fee of 3%, product development fees of 5.5%, sourcing fees of 2%, interest on intercompany loans, manangement services fees of a couple million per year. In the early 1990′s we were losing $30 million per year and we just happened to be paying about $30 million per year to various foreign IKEA entities.

In my 3rd year we received notice that the IRS was going to audit the US operation. Ingvar’s right hand man, Hans, the architect of the legal structure got myself and my boss on the phone and warned us that we better not lose in the IRS audit. I felt the pressure. The clods from the IRS were in our offices for over a year and I convinced them that every fee, charge, and markup was legitimate. My star rose in Sweden.

As a side note, besides being responsible for our corporate tax returns, I also took care of the personal returns for all the Swedish executives. IKEA paid to have all the tax returns done for the foreign transferees. The funniest incident occurred with our architect Nils, who sometimes makes a comment or two on TBP. Peat Marwick handled our tax returns. After completing the tax returns, they would send a packet to the employee with a copy to keep and a copy to file. One day Nils came to my desk with a notice from the IRS saying he had not filed his tax return. I was confused because I know Peat Marwick had completed the return. I followed Nils to his desk. He pulled out the packet and both returns were still there. I asked him why both returns were still in the packet. He said that he read the words FILING COPY to mean that he should file it in his drawer. The IRS was not amused with our explanation, but they did waive the penalties.

I got creative while I was Treasurer. The US entities were originally incorporated in Pennsylvania. I researched the benefits of Delaware and convinced my boss to set up a Delaware Holding Company and incorporate all the entities in Del. We funneled all the intercompany loans through the Delaware Holding Company eliminating the taxes on interest in the US. We had the Property company charge enough rent to the Retail company so that the Retail company wouldn’t generate a profit. Without breaking any laws we were able to eliminate millions in state taxes. To give this whole sham some substance, we needed to have a real office in Delaware. Wilmington Trust was in the business of leasing out fake offices to all the Fortune 500 companies. For about $20,000 per year, you got a itsy bitsy office on one of their floors, a phone number, and if someone called the number, the one secretary on the floor would answer it as IKEA. The Gap had the office next to ours. To give it more substance, I grabbed Alan & Arn from the office and we trucked down some crappy white furniture from the store and spent a morning building it with our allen wrenches.

There were various other tax deals we did. Our Elizabeth, NJ store was built on a toxic waste dump, so they gave us a sales tax reduction. Whenever something orange would start bubbling up from the site, we’d cover it up and dig someplace else. The light poles vent methane gas. We financed this building with a REMIC that saved us millions in taxes over 10 years.

So yes, IKEA does avoid taxes, just like every corporation in the world.

Now onto the final chapter of how the 11th richest man on earth inadvertantly ended my career with IKEA. My 3rd role at IKEA was Real Estate Controller/Strategic Planning. IKEA decided to launch a massive expansion plan in the US and Canada starting in 1998 with the Schaumburg store in Chicago. My job was to control the billions that were being spent, figure out where to put the  stores, figure out what the sales would be, figure out the profitability and ROI for each project, and sell each project to the head honchos in Europe. I had the time of my life, for awhile.

The camaraderie from 1998 through 2002 was the best I’ve ever seen. We were a well oiled machine. I handled the numbers and my opinion was respected and listened to. We had great team building adventures in Banff Canada where my first time skiing was on the Olympic downhill  at Lake Louise. During this same trip, we went on dog sleds. I watched as our Construction manager knocked Mike off the sled and down a hill. Watching my 260 pound boss chasing a dog sled while making sure his pants didn’t fall down was a priceless sight. It was during this time frame when Ingvar announced that on an upcoming Saturday, the worldwide employees of IKEA would equally share the sales for the entire day. Not profits, but sales. This would benefit the lowest paid employees the most. Everyone in the main office went out to a store. I spent the day in Elizabeth NJ pushing carts for 12 hours. Every employee received a check for $2,300. Morale was at an all-time high.

Then something started to go off course. The CEO in Europe was convinced that a concentration strategy with multiple IKEA stores in each market would be a homerun. It was the Wal-Mart and Home Depot strategy. One problem. Ingvar insisted that every store be larger than 300,000 sq ft. IKEA stores are destination stores and draw from 40 miles away. During this time MikeinAz was my right hand man, handling all the accounting for the $1 billion or so we were spending.

I had worked with a brilliant guy named David Rogers to develop a regression model to predict IKEA store sales based upon population, furniture sales, number of college educated in the population, and a few other criteria. The model was highly accurate. The model would also calculate cannibalism on existing stores, if you put a new store too close. This is where things went downhill. A concentration strategy with very expensive 300,000 square foot stores didn’t work. I couldn’t get the numbers to work. When I modeled various scenarios, profits declined. The ROIs on the proposed projects weren’t high enough. The rocket scientists in Europe wanted 8 stores in NYC, 8 stores in LA, 4 stores in SF, 3 in Phila, 4 in DC, 7 in Toronto, 4 in Chicago, and 4 in Boston. I couldn’t even get 2 stores to work in Phila, let alone 8 in NYC. It just didn’t work.

Enter Pernille Lopez, former HR manager, and now CEO in 2002. Whenever you discussed facts and figures, her eyes glazed over because she was a clueless moron. I was reminded of the Far Side cartoon, replacing Ginger with Pernille, when trying to explain numbers to her.

 

Pernille hated my boss. My boss hated Pernille. Our organization was able to open 9 stores in the space of 8 months, on time and on budget. The sales projections were on target. This didn’t matter to Pernille. She surrounded herself with yes men, toadies, suckups, and diversity lackeys. The only people who told her the truth was the Real Estate group. I spent hours trying to explain that opening huge stores 20 miles apart would not be a profitable strategy for IKEA. She said if the numbers didn’t work, then I should change the assumptions so that the numbers did work. This went against every instinct in my body.

The company plunged ahead with their concentration strategy despite my warnings and misgivings. The strategy was rolled out in Phila, Washington, Toronto, SF, and LA. Eventually my boss decided to hit the road on his own terms. That left me and all the guys he hired hung out to dry. My new boss was a Swedish political animal with 25 years at IKEA under his belt. He acted supportive, but I knew he would throw me under the bus if necessary. There were still some people in the company who wanted the truth. They asked me for an analysis of the concentration strategy, how well our model worked, and the profitability. I produced a scathing 20 page powerpoint that bluntly and factually assessed the concentration strategy. My projections were accurate. The stores cannibalized each other. Profits plunged. There was the semi-annual Board meeting coming up. I gave the presentation to my boss and I sent it to some of the financial guys in Europe. They appreciated my analysis and concluded I was right. My boss decided to not show it to Pernille and the guys in Europe did nothing more with the report. None of the information was presented at the Board Meeting. I filed it in my drawer and tried to keep my head down.

This is where my old friend, Bjorn the lush, came back into my life. Being Ingvar’s nephew was good. After he left IKEA NA, Ingvar gave him his own franchise store in Seattle. Him and his partner Anders did a fabulous job in Seattle getting sales up to $125 million and raking in millions of profits for themselves. Things were getting so good, they were being pushed to open a 2nd store. They asked the CFO if anyone had any data about 2nd stores in markets. Don told them I had done plenty of analysis. Bjorn contacted me and asked if I had anything I could share with them. I still liked Bjorn and sent him my 20 page analysis. Him and Anders were practical guys. They loved the presentation and thanked me for helping them. I was glad to help and didn’t think about it again.

Months went by. Then the shit hit the fan. My boss came up to my desk one day and asked me to come into the conference room. He informed me that at a Worldwide Board meeting while the worldwide CEO was presenting the results of the expansion Ingvar suddenly whipped out my 20 page presentation and confronted the CEO with my conclusions. Evidently it wasn’t a pleasant scene. Anders, the worldwide CEO, called Pernille and yelled at her. Pernille grabbed my boss – Dan, and yelled at him. And as we all know, shit rolls downhill and it was shortly all over me. Dan asked me how Ingvar Kamprad ended up with my 20 page report. I honestly was flabbergasted. At that point I had no clue. I started contacting everyone who had seen the report to figure it out. A day later the culprit was found. My old friend Bjorn had come back into my life. It seems he and Ingvar are very close. They talked every day. Ingvar was complaining to Bjorn that this concentration strategy didn’t seem to be working. Bjorn said that he knew. He mentioned that he had an analysis from the US that came to that conclusion with facts to back it up. Ingvar asked to see it. Bjorn initially refused, but Ingvar promised not to use it for any other purpose. Bjorn relented and faxed it to Ingvar. It seems Ingvar lied to Bjorn. He used the report to pound the shit out of the CEO.

Bjorn sent an email to the CEO and Pernille apologizing and asking them not to blame me. Too late. The cat was out of the bag. I became a pariah. No one looked me in the eye. I was no longer invited to meetings. My roll was scrutinized and reduced. I had given over a decade of my life to IKEA and now my life was becoming a living hell because I tried to do what was best for IKEA. It ate me up inside. I knew that Pernille wanted me gone, but I tend to be somewhat of a prick sometimes. I wrote a scathing six page letter to Ingvar Kamprad detailing the crap that had been going on in the US since Pernille’s reign of error began. I didn’t send it, but I let it be known to some of the back stabbing psychophants that surrounded Pernille that I was ready to use it. Thus began my departure negotiations. People I thought were my friends had turned on me because they wanted to keep their jobs. In an odd turn of events, the HR manager (a diversity hire later fired for doinking his assistant) asked me to write a letter to him with my proposal for a separation amount. Pernille wanted me gone at any cost, but knew that I had done nothing against the company. Let’s just say that my severance was beyond my expectations. I signed the papers, walked out of the building over to Rosenbluth Travel and booked an 8 day vacation in Disney World at the Polynesian Resort without telling Avalon or the kids. We had the best vacation of our lives.

The next few years were unsettled, but ultimately I’ve found relative peace with this portion of my life. It was a wild ride. The 11th richest man on earth ultimately ended my career helping him become the 11th richest man on earth.

TBP members MikeinAz, Skinny and Robmu1 can confirm just about every detail in this sordid story.

Is the secret of Ikea’s thrifty founder out of the box?

The empire set up by Ingvar Kamprad is accused of siphoning billions into a tax haven

 By Tony Paterson
 

Wednesday, 2 February 2011Ikea founder Ingvar Kamprad denies avoiding taxes

Ikea founder Ingvar Kamprad denies avoiding taxesHe is one of the world’s wealthiest men with a fortune estimated at $23bn (£14bn), yet he drives a 15-year-old car, flies economy class and encourages the thousands of staff in his global empire to use both sides of company notepaper when writing letters.

Ingvar Kamprad, the 84-year-old founder of Ikea, has a legendary reputation for thriftiness, despite being the 11th-richest person on the planet. But Swedes have been shocked by recent revelations which suggest that Mr Kamprad may have taken his parsimony a step too far. It is alleged that he has been secretly running his empire via a Liechtenstein foundation, which is alleged to help Ikea avoid millions in tax. It is perfectly legal.

Mr Kamprad, who now lives in Switzerland, has insisted that he and his family no longer have any control over Ikea. But a television documentary by Sweden’s SVT channel alleges that he “secured control and power over Ikea and… created a foundation in one of the world’s tax havens – Liechtenstein”.

SVT claims in its two-part programme that there are two faces to Ikea – one public, the other. It maintains that Inka Holdings, the company that runs Ikea’s 280 stores around the world, is the corporation’s public face. The other, it claims, is a Liechtenstein-based holding called the Intergo Foundation, which was set up 20 years ago.

The documentary claims that Intergo and its Luxembourg-based subsidiary, Inter Ikea Systems, own the royalty rights to every single product the furniture giant sells. “Inter Ikea is the real Ikea,” the SVT programme insisted. It is alleged that 3 per cent of all Ikea sales were siphoned off to the Liechtenstein foundation in royalties which had allowed the concern to amass funds totalling 100bn Swedish kronor (£9.7bn). Mr Kamprad declined to be interviewed for the documentary. However, just before the programme was aired last week, he issued a statement admitting that he still had some control over Ikea via the foundation, whose existence had hitherto been unknown. He insisted that the foundation was run by an independent board. 

“Its mission is to invest in expansion and business deals and to secure the long-term survival of Ikea,” Mr Kamprad said. He flatly denied allegations that the foundation’s aim was to avoid tax and insisted that Ikea paid all required taxes. “However, we have always looked at taxes as a cost, just as any other cost that comes with doing business,” he said. 

Insisting that there was nothing wrong with trying to be tax-efficient, Mr Kamprad concluded in his statement on the Ikea website: “An optimised tax structure gives us the possibility of flexibility in using our assets that have already been taxed in one market. They can be used in new markets for further business development without the additional burden of double taxation.” 

In Sweden, the allegations have dented the image of one of the country’s best-known companies, which had enjoyed a reputation for scrupulous corporate responsibility. Questions are being asked about why Ikea has resorted to using a notorious tax haven like Liechtenstein. 

And it is not the first time that Mr Kamprad has faced embarrassing disclosures about his activities. In 1994, Swedes were shattered to discover that their iconic business entrepreneur had been a member of the country’s wartime pro-fascist New Swedish Movement, which raised funds and recruited members until 1945. The allegations emerged after the publication of letters written by the Swedish fascist Per Engdahl, who died that year. Mr Kamprad remained a friend of Mr Engdahl until the early 1950s. In a letter to Ikea employees in 1994, Mr Kamprad described his membership as “the greatest mistake in my life.” 

He is thought to have acquired his youthful fascist leanings from his widowed German grandmother, who came from the formerly German-speaking Sudetenland region of what is now the Czech Republic. She regarded the Nazi annexation of Sudetenland as a liberation. 

When Mr Kamprad was only a boy, he started selling matches to neighbours from his bicycle. He subsequently sold fish, Christmas tree decorations, pencils and ballpoint pens. When he was 17 his father gave him some money for passing his exams and he used it to set up Ikea, with the family farm as his base. 

The company’s name is made up of the initials of Mr Kamprad’s name, the name of the family farm, Elmtaryd, and the nearby village of Agunnard. But Ikea’s low prices undercut the Swedish cartel of the time and the company was boycotted. Mr Kamprad turned to Polish producers for inexpensive furniture components that could be assembled at home from flat packs. The Ikea as we know it was born. 

With 280 stores and 127,000 employees in 38 countries, Ikea has become a global empire. Company doctrine is enshrined in Mr Kamprad’s The Furniture Dealer’s Testament, which many refer to as the “Ikea Bible”. The tome is peppered with maxims such as “wasting resources is a mortal sin at Ikea” and “only when sleeping does one make no mistakes”. 

A study London University released last week provides a revealing insight into the Ikea doctrine. It found that the vast maze-like interiors of Ikea stores were deliberately designed to confuse customers, who were therefore more likely to make irrational snap purchases of the household items they came across. 

Mr Kamprad moved to Switzerland in 1976 to avoid Sweden’s punitive wealth taxes. He drives a 15-year-old Volvo 240, rarely wears a suit and is known to haggle for bargains in his village near Lausanne . He even admits to popping into Ikea stores to get a “cheap meal”. 

The miserly reputation is, in part, a deliberate attempt to enhance Ikea’s value-for-money image. Less known is the fact that Mr Kamprad owns a large country estate in Sweden and a vineyard in Provence. He also drove a Porsche for several years. 

Company savings policies are what drives his determination to always fly economy class. “How the hell can I ask people who work for me to travel cheaply, if I travel in luxury?” he once asked in an interview. “It’s a question of good leadership.”

145 Comments
  1. Kill Bill says:

    Jims right.

    The marginal corporate tax rate in America is 35% yet most pay less than 25% of their profits, Bio-tech and pharma pay 5-6% because of loopholes.

    Seems rather pointless to have tax loopholes in the tax code causing fake offices and charities. Just lower the tax rate and get rid of the loopholes.

    5th February 2011 at 9:35 am

  2. Punk in Drublic says:

    “There were various other tax deals we did. Our Elizabeth, NJ store was built on a toxic waste dump, so they gave us a sales tax reduction. Whenever something orange would start bubbling up from the site, we’d cover it up and dig someplace else. The light poles vent methane gas.”

    What!?

    5th February 2011 at 9:45 am

  3. Kill Bill says:

    The light poles vent methane gas. -Admin

    Were they called Smokey poles?

    5th February 2011 at 9:48 am

  4. Administrator says:

    Punk

    100% true.

    5th February 2011 at 10:20 am

  5. Kill Bill says:

    Check this out:
    http://news.yahoo.com/s/nm/20110204/bs_nm/us_financial_regulation_sec
    SEC warns budget threats give swindlers upper hand

    Now thats funny!

    5th February 2011 at 10:32 am

  6. Punk in Drublic says:

    That seems a little over the top, as far as saving money goes. What is the rate of chromosome damage among employees at that store, I wonder…

    5th February 2011 at 10:39 am

  7. Administrator says:

    Punk

    That is a small price to pay for cheap flat packed particle board furniture.

    5th February 2011 at 10:49 am

  8. Administrator says:

    Developers Seek Profits in Polluted Land
    By THOMAS J. LUECK,
    Published: September 6, 1994

    ELIZABETH, N.J.— If the 166-acre tract of scraggly, garbage-strewn undergrowth here seems an unlikely place for a new shopping mall, consider what lies beneath its scarred topsoil. For decades, almost all of this city’s trash was buried here.

    In the parlance of environmentalists, the site is a brown field — something less polluted than a toxic waste dump, but still needing more extensive cleanup than the undeveloped greenery of the nation’s suburbs and rural areas.

    That is just what Peter Aagaard, a Danish builder who specializes in the reuse of polluted land, was looking for when he paid $10 million for the property in 1992. Now, as he prepares to clean it up and build a factory outlet mall with 200 stores and 7,300 parking spaces, he has joined a broad effort by planners and government officials to steer development to abandoned, polluted urban land and to loosen government regulations that are defended fervently by environmentalists. Like a Walk in the Park

    “This site really isn’t that complicated,” said Mr. Aagaard (pronounced AAY-gard), who has built large projects on polluted industrial sites in Denmark and Spain but never before in this country. In Europe, where undeveloped land is scarce, builders must remove centuries of garbage and industrial residue. Cleaning up a landfill like this one would be a walk in the park, he said.

    For developers like Mr. Aagaard — and the Ikea company, which four years ago built a store here atop a landfill — the attraction is simple. Because American banks are often unwilling to lend money to develop such land, the prices are relatively cheap.

    Mr. Aagaard, 37, says his total costs of acquisition and cleanup will be just under $200,000 an acre, which he said was about half what developers would expect to pay for a large plot of unpolluted, ready-to-use land next to a busy highway. And in his case, the highway happens to be the New Jersey Turnpike, one of the busiest in the nation.

    “There are lots of good New Jersey locations that could be redeveloped,” said Mr. Aagaard, who is now looking for another polluted site in the state. “Unfortunately, most people won’t take the risk.”

    His project has attracted unusual interest across the region, where developers, fearing the high cost of environmental cleanup, have bypassed places like Elizabeth, and where a long history of industrial expansion and decline has created the nation’s largest concentration of abandoned brown-field sites.

    But the interest is not confined to partly polluted areas like the Elizabeth landfill. New Jersey and several other states have already scaled back some of their regulations for environmental cleanup, and Congress is considering broad changes in the Federal Superfund regulations for the cleanup of the nation’s most severely polluted sites, changes that might make even them more attractive for reuse. Changes in Store for Superfund

    When it was enacted in 1980, the Superfund law required that severely polluted land covered by the legislation be cleaned up to a standard suitable for housing, playgrounds and other uses that would bring people in close contact with the soil. Some officials in Congress and large urban areas have complained that those standards sacrificed potential redevelopment of troubled industrial areas.

    The Superfund rules will expire this year, and, judging from the bills before Congress, the new version of the law is likely to bring big changes. One provision being considered would create different cleanup standards for sites that are not to be used for housing, but rather for commercial developments like warehouses, factories or shopping malls.

    Another provision would reduce the potential liability of banks that agree to finance the development of less polluted sites like the landfill here. Under current law, banks that are forced to foreclose on a developer of a polluted site could end up being held liable for the cleanup.

    “The pendulum has swung too far in the direction of protection from theoretically harmful environmental affects,” said H. Claude Shostal, president of the Regional Plan Association, which studies land-use issues in New York, New Jersey and Connecticut. “We have created enormous barriers to redevelopment that need to be lowered.”

    5th February 2011 at 10:57 am

  9. Thinker says:

    Jim, how does the Intergo Foundation differ from the IKEA Foundation?

    5th February 2011 at 11:08 am

  10. StuckInNJ says:

    Terrific story, Jim.

    Question. Why did Jan leave?

    You said, “… but I tend to be somewhat of a prick sometimes. I wrote a scathing six page letter to Ingvar Kamprad …” Did the letter contain the words; fuckwad, asshole, or pussy?
    .
    .
    I love the Elizabeth store. Well … I loved the cafeteria. A marvelous view of planes taking off and landing at Newark Airport. The orange bubbling crap explains why I was never able to have sex for a week after shopping there.

    I used to live in Palatine, IL and so also enjoyed the Schaumburg location. There was a Maggiano’s restaurant nearby with the best Tiramisu ever.

    5th February 2011 at 11:14 am

  11. Administrator says:

    Thinker

    Ingvar changed the name from the Schicshting Foundation (spelling is probably wrong) to Intergo Foundation. Supposedly all the profits end up there. It hands out a miniscule amount of money to young furniture designers. A huge amount of profits are siphoned off to Inter-IKEA through the franchise fee of 3% of sales. This is owned by Ingvar’s sons. It is a brilliant structure, and perfectly legal.

    5th February 2011 at 11:16 am

  12. Thinker says:

    Just wondered. The guy who runs the IKEA Foundation is a good friend of mine.

    5th February 2011 at 11:22 am

  13. Administrator says:

    Stuck

    Jan’s wife got cancer and they wanted to go back to Sweden to be close to her family. Jan is now responsible for all of the IKEA restaurants in the world. We have kept in touch. He is a good man.

    I’ve got another doozy about the Elizabeth store. Less than a month after 9/11 our security SUV was circling the IKEA parking lot and noticed something unusual in the far end of the lot closest to the Newark Airport. As he got closer, he realized it was two Muslim men with cameras taking pictures of planes taking off and landing. He immediately called the Elizabeth police, but the Muslims spotted him and skeddadled. A surface to air missile fired from that IKEA parking lot would easily bring down an airliner. Those were worrisome days.

    Another good story about Schaumburg. We wanted to build a 2nd store downtown on the Roosevelt Expressway. We had a good site. It was an eyesore. We were going to pay big bucks and generate 300 new jobs. We were going to spend millions on infrastructure improvements to the roads. We just needed the City to change the zoning. Mayor Daley said FU. He told us where we would build our store. He wanted it in a dangerous black neighborhood. We said FU. To spite him, we built it in Bolingbrook, outside the City and Cook County. Because of Daley, we both lost. The store sales suck and Chicago missed out on all that sales tax revenue and jobs.

    5th February 2011 at 11:32 am

  14. Administrator says:

    Thinker

    98% of the people I ever worked with at IKEA were great people. It was that 2% that was a bitch.

    5th February 2011 at 11:35 am

  15. Administrator says:

    IKEA Foundation is World’s Richest “Charity”
    IKEA Owned by Tight-Fisted Nonprofit Worth Billions
    Nov 29, 2009 Andre Tartar

    IKEA Logo – Public Domain – Fair UseThe Bill & Melinda Gates Foundation may be the world’s most generous philanthropist, but the foundation that owns the IKEA Group is technically richer.

    The Ingka Holding company owns and operates most of IKEA’s 301 blue-and-yellow warehouse-style stores and is, in turn, owned by Stichting INGKA Foundation, a Dutch-registered charity. Officially dedicated to promoting “innovations in the field of architectural and interior design,” the foundation has been deemed an “Institution for General Benefit” by the Dutch Tax Service. This means it and all its assets and earnings are largely tax-exempt.

    IKEA’s Corporate Structure
    In 2006 The Economist ran an article detailing IKEA’s unusual organization and Stichting INGKA Foundation assets. Using sales figures for Ingka Holding from 2004, the last year they were made available, The Economist calculated that the company had post-tax profits of around $1.7 billion. IKEA has no real global competitors, so Target was chosen as the closest equal and its price/earnings ratio was used approximate a valuation of the foundation’s assets. The Economist estimated that the IKEA foundation was worth about $36 billion, which made it richer than the $35 billion Bill & Melinda Gates Foundation.

    Why Is IKEA Owned by a Foundation?
    Many have obviously wondered why IKEA, a global company earning billions of dollars, is allowed this situation. It pays almost no taxes and has to disclose virtually nothing about itself, making The Economist’s financial calculations very difficult indeed. Apart from tax reasons, the foundation’s ownership makes it nearly impossible for a takeover of the eponymous home-furnishing chain. This is because the founding Kamprad family has kept firm control of the foundation’s board.

    IKEA Foundation Charitable Giving
    Though officially a nonprofit, Stichting INGKA Foundation and the affiliated Stichting IKEA Foundation do very little philanthropic giving. One of the few grants reported in recent years was a $1.7 million grant in 2004 to the Lund Institute of Technology, a 7,000-student technical school in Sweden. That compares poorly with the billions given away each year by the Bill & Melinda Gates Foundation.

    Even hurting with the recession – Gates acknowledged in a public letter that the foundation has lost one-fifth of its value, or about $7.5 billion – the Bill & Melinda Gates Foundation has earmarked $3.8 billion for 2009. This represents about seven percent of the foundation’s assets.

    IKEA Foundation Might Start Giving More
    Recently, Torbjörn Sköld, a lawyer and member of the five-person executive board of the Stichting INGKA Foundation, told Agence France Presse that founder Ingvar Kamprad “wants to open the foundation to do more.” This is surely a hopeful sign that the IKEA foundation’s billions will be put to better use. However, according to The Economist, the foundation’s articles of association ensure that its mission – “innovations in the field of architectural and interior design” – cannot be amended.

    5th February 2011 at 11:37 am

  16. Thinker says:

    Thanks, Admin. Per is a very good guy; I couldn’t imagine him getting caught up in anything corrupt.

    5th February 2011 at 11:43 am

  17. Administrator says:

    Thinker

    I probably know Per. I met just about everyone at the highest levels of IKEA during my time there.

    5th February 2011 at 11:48 am

  18. Thinker says:

    He’s only been CEO of the Foundation since 2009. He’s based in The Hague.

    Apparently, he’s been Ingvar’s spokesman since this whole thing broke.

    5th February 2011 at 11:52 am

  19. StuckInNJ says:

    Jim — just because a tax structure is legal, doesn’t mean it’s right. Would you agree with that?

    I guess it just sickens me that corporations use tricks to evade taxes … even though everybody knows it’s just an avoidance scheme … when common schmucks like me get shafted.

    5th February 2011 at 12:23 pm

  20. DavosSherman says:

    WOW! I don’t know what was better, the writing or the fascinating story.

    SUPER READ Jim!

    5th February 2011 at 12:29 pm

  21. Administrator says:

    Stuck

    Absolutely. The tax code and thousands of rules and loopholes are a joke. Politicians use it to retain power. Corporations and rich people use it to shield their wealth. We pay the price.

    Can you imagine that there is an entire industry dedicated to setting up fake offices in Wilmington Delaware just to avoid taxes? What a waste of resources and effort. This is a symbol of what our country has become.

    5th February 2011 at 12:44 pm

  22. Matt says:

    Wow, I am almost sorry I bought the Ektorp sofa and Flinkinston t.v. stand that was designed by Lars Kristenster and Johann Svenston. That was the day I got food poisoning from the Swedish meatballs.

    5th February 2011 at 12:45 pm

  23. Administrator says:

    Matt

    Ingvar got a great deal on reindeer meat from Russia after Chernobyl. You don’t think IKEA meatballs have gound beef in them, do you?

    5th February 2011 at 12:49 pm

  24. Skinny says:

    Quinny

    As another victim of IKEA diversity I’ll write the epilogue some day. You thankfully left out the part that the shit hit the fan right about the time I made my return. You know what they say about second acts. I tried to blame it on Nils to no avail. Gotta love the Ingvar as Nazii angle. Talk about a story with legs; 16 years and counting. I always maintained Ingvar was just doing what he always does: buying low.

    5th February 2011 at 1:24 pm

  25. Kill Bill says:

    I guess it just sickens me that corporations use tricks to evade taxes -SiNJ

    I wonder if they realize its just funny money. Guess not else they wouldnt need a billion dollars.

    5th February 2011 at 1:28 pm

  26. Administrator says:

    Skinny

    Your rants on the phone at developers and consultants while trying to get a store built in Sommerville, Mass. were one of the highlights of my life.

    I remember making the wire transfer of $18 million for Sommerville land in 1998. At the next breakfast meeting (remember those) Jan asked me in front of the office whether we would have the store open in 1999 or 2000. I hedged my bets by saying as soon as humanly possible. It is now 13 years later and still no Somerville store. Lucky I hedged.

    5th February 2011 at 1:34 pm

  27. StuckInNJ says:

    Ms Freud and I make a monthly trip to Ikea. We love the coffee, Liggenberry jam, cheeses, fish products, flat bread rye crackers …. and usually buy 3 or 4 packages of Swedish meatballs. I never read the labels, which I usually do. I seriously hope you’re just kidding about the meatballs not having real beef in them ….

    5th February 2011 at 1:53 pm

  28. KaD says:

    Don’t feel bad; you’re far from the only one to get shafted by their company. I worked at a bank for five years, twice won their highest award for customer service, had dozens of gift card awards and numerous letters from customers for my work. We got a black (bitch) manager who had an agenda to get HER people hired. The service level sunk so low even the black clients complained. I was blackballed; the company didn’t even follow their own rules and regulations where I was concerned. When I quit the presidents personal assistant told me they were SO sorry about the way I was treated and they were happy to have me and sorry to see me go. But nobody stood up for me when they had the chance.

    5th February 2011 at 2:21 pm

  29. Administrator says:

    Stuck

    I haven’t set foot in an IKEA store since 2004 and will never enter one again. Avalon’s mother still works in the Conshohocken store. I helped get her the job years ago.

    Meatballs isn’t the right name for those things. God help you.

    5th February 2011 at 2:39 pm

  30. Kill Bill says:

    Your xenophobia is showing smokes

    5th February 2011 at 3:11 pm

  31. MuckAbout says:

    I hope everyone that read this really great piece and good comments noticed that the boss said, “Taxes are just a cost of doing business”.

    Business does not “pay tax”. Business (of any size, shape or organization) pays local and national governments payola for the privilege of working their asses off to try and make living for the owners and a profit for shareholders (if any). This payola is a cost of business and as with any other cost, just added into the debit side of the ledger when calculations are made as to what they sell at what price to allow a net profit and compete with others doing the same thing.

    Lower taxes or avoiding taxes or not paying them at all if possible just lowers the cost of doing business and the consumer benefits because the business can charge less for the product or service it is offering.

    Simple as that. Business does not pay “taxes”. Consumers pay a higher price for what they buy as the cost of “taxes” are just added into the mix as a business expense.

    Politicians get it. Consumers don’t get it. The old rich white men get it and use “taxes” and loop holes therein to make money with less expense. Making business pay “tax” costs business way far and above whatever the “tax rate” is. Doing away with taxes on business likely has a 2:1 benefit in that the cost of paying the “tax” is at least as much as the “tax itself” and in some cases more than that.

    Fix it? Easy.. No income taxes on business or consumer. No taxes on capital or savings. No exemptions, loop holes or tricky tax structures, foundations or non-profit crap. Period. A 20% Fair Tax (i.e. Federal and State/local sales tax) would cover it all and put thousands of CPA’s, Accountants and tax lawyers out of business (sorry Jim!). Don’t let the door hit you on the ass as you leave.

    5th February 2011 at 3:34 pm

  32. KaD says:

    MuckAbout:

    You got that right. My Mother worked for some very wealthy people; one bought a DRY oil well for $30 grand. Why? Because he got a shitload more back by declaring it as a business loss. The more money you have the better you can play the game. The rest of us are just s.o.l.

    5th February 2011 at 4:18 pm

  33. MuckAbout says:

    What sick humor? Or were you talking about Admin? Sure you were… You better duck unless this thread drifts out of sight before he sees what you said.

    He’s going to tell you to Kyss mig i arslet anyhow!

    5th February 2011 at 4:36 pm

  34. Anonymous says:

    MuckAbout says:-Or were you talking about Admin?

    No was talking out unser Führer . dipshit.

    BTW , Jim, great story.
    Does every multi-national corp get a code key decipher to the US tax code
    code OR IS IT s left up to CORPS TO treasure hunt the codex for ther loopholes?
    Hey, beatin’ the man at his own game of thievery is the name of the game , but obviously some are more financially qualified than others to play this tawdry game.
    Kudos to you.

    5th February 2011 at 4:57 pm

  35. Administrator says:

    Muck

    I left the accounting business years ago. I’m with you on taxes buddy. Eliminate the 70,000 pages of rules, regulations and loopholes and you take power away from Congress and the rich and powerful.

    5th February 2011 at 5:28 pm

  36. Punk in Drublic says:

    I like the shrink wrapped car joke.
    One April fools day I went for broke setting up the restaurant I was working at. A fellow dishwasher and I filled the wine closet with balloons, left rubber fingers in the food buckets, put a fake dog shit on a plate in the desert case, left a fake rat on the dining room floor.

    The coffee pots would get filled with soapy water and left to soak over night, they were always stored in a place that was at eye level on a shelf you had to look at to walk through the kitchen. Round clear coffee pots that were about the same size and shape of a small fishbowl, with a handle. So I left a couple of goldfish in one of the pots in the front. This took considerable effort to do, as you have to let the water sit for twenty four hours and then slowly acclimate the fish to its new home, difficult to pull off in a busy restaurant.

    As it turned out, the 1rst was a wine delivery day making the joke all the more delicious. Also, unknown to me at the time, the owner is absolutely fucking terrified of rats and nearly dropped dead the next morning when she walked into the dining room.

    5th February 2011 at 5:37 pm

  37. Administrator says:

    At IKEA we paid the law firm McDermott Will and Emory in Chicago to find tax loopholes. In Phila, we also paid Peat Marwick to come up with creative tax ideas. Generally, I came up with the ideas and they said, “good idea”.

    5th February 2011 at 5:41 pm

  38. Tufftyklub says:

    Jim,THOROUGHLY enjoyable read.Im a manager for a mega UK/World retailer and the points you make about HR fuckers really struck a chord-i HATE them.Try to mention making sales or maximising profits and they look at you with a blank expression.I spend more fucking time on “people issues” than doing my own job.I took over an operation couple years ago and caught an employee stealing,found out she lied on her application and was a heroin addict–result? I had to follow a 40 week course of counselling and re-hab for her to “support”her. I used to think that the UK was fucking nuts–now,reading the likes of this i realise it’s most of the western culture.Diversity my arse!Is it any wonder we are fucked and China is laughing.

    5th February 2011 at 5:45 pm

  39. Administrator says:

    Getting rid of worthless employees at a University is even harder. They practically have to threaten murder to get fired.

    5th February 2011 at 5:52 pm

  40. Viet Vet-70 says:

    Admin:
    Should you ever find your way to CT invited to a certain Ivy League School, let me know, dinner is on me, oh drinks too eh, we could easily swap a few war stories, I really enjoyed the article.

    5th February 2011 at 6:21 pm

  41. DavosSherman says:

    There are some effing douche-bags in this world.

    5th February 2011 at 8:18 pm

  42. llpoh says:

    Admin – it is the way in big business: top managers tell the CEO everything is rosy. Those that know better are forbidden to dispute the everything is rosy sceneario as their boss’s jobs rely on it.

    When I was younger I was given the task of installing an automated material handling system. It was the pet project of my boss’s boss, who reported to the CEO. He of course had promised that the multmillion dollar investment, contracted already signed of course, would work and generate enormous savings. It took me about a day to run the math and determine that it WOULD NOT WORK AT ALL, much less generate any savings. I duly reported this complete with proof. I was of course told to shut the fuck up. Which I did, being a 28 year old manager. The project of course did not work. Millions were wasted. It cost my boss his job, it cost the engineering manager his job, and it got me in the doghouse. It cost everyone save the prick who actually fucked it up. I was of course marked for destruction. They eventually got the HOUR manager (who the fuck else) to trump up that I had released some confidential info (IHadnt of course). The HOUR guy and I were “friends”. Of course they had no proof, as I hadn’t done it, but I could see their intent so I told them to jam their job.

    At that point I determined I would never again be quiet when I knew someone had screwed the pooch. Thereafter I threw any dickhead under the bus that fucked up and tried to sugar coat it. Surprisingly, it paid enormous dividends for me. Many lost their jobs – deservedly so – but I never again got screwed carrying someone else’s fuck up. The downside was I never could get on a CEO career path, as I wouldn’t play the game. CEOs came to love me as I got results.

    Running my own business is much better than working for big corporations making billionaires even richer.

    Trying to do the right thing in a large corporate environment is quite an eye opening experience. Thanks for the story.

    5th February 2011 at 8:33 pm

  43. DavosSherman says:

    You rock Smokey. Some “people” have balls like ovaries.

    5th February 2011 at 8:47 pm

  44. Smokey says:

    Davos,

    Jim told a terrific story of how he took it up the ass from his former employer after giving them 14 years of his life. An interesting story that had several worthwhile lessons for his readers. A story that MANY of his readers can relate to.

    He casually references Dave as a former co-worker who could vouch for the story.

    So Dave rolls Jim under the bus because the chicken-shit is afraid hell will freeze and the wrong person at Ikea will see the blog post.

    What a goddamn paranoid piece of shit.

    If, by some miracle, worse came to worse and Ikea confronted him about the post, all Dave would have to do is say that he didn’t read the story or that he didn’t agree with it. Period.

    But, no. He has to make an ass out of himself.

    Well done, Asshole.

    5th February 2011 at 9:06 pm

  45. Administrator says:

    Viet Vet

    I’d gladly break bread and down a few with you. I’m familiar with the area as I made the financial case for the IKEA New Haven store and Skinny did the ground work with the town. Maybe Skinny can expound on one his most famous lines at IKEA – “We slipped up.”

    5th February 2011 at 9:19 pm

  46. StuckInNJ says:

    HOW do we know that’s REALLY Dave L? Could be me (it’s not) … or Smokey (I doubt it) … or anybody else signing in under a false name. Not that I’ve ever done that. Just sayin’ …

    5th February 2011 at 9:32 pm

  47. Administrator says:

    Smokey

    I was wrong. Dave is a great guy and has a business to run. I understand his feelings and I removed his name from the article. I’ve taken his name out of some of the comments.

    5th February 2011 at 9:39 pm

  48. Smokey says:

    Administrator,

    He may be a great guy to you, but he is an asshole to me.

    He could have handled that with far more discretion.

    5th February 2011 at 9:58 pm

  49. DavosSherman says:

    There are 2 types of people in this world: Those with balls who stand by their guiding principles, and those with ovaries who suck whatever they need to to go with the flow.

    One takeaway from this article: Going against the facts/reality leads to increased pain.

    You can’t eff with math.

    5th February 2011 at 10:11 pm

  50. The Watchdog says:

    @Admin:
    Great freakin’ story. I can relate 100%. I spent 9 years at Fortune 500 company, as a director then VP. The first 7 years were great – plenty of teamwork, positive results, lucrative stock options. CEO retired and the company turned into a political quagmire. Sycophants rose up, those attempting to do the right thing were punished. Reminds me of Hal Holbrook’s line in Wall Street : “Enjoy it while it lasts, ’cause it never does.”

    5th February 2011 at 10:14 pm

  51. SSS says:

    Good story, Admin.

    RE, if you read this, I’d be interested in your recommendation for Warren Buffett’s punishment. He is the pluperfect example of why you rail against capitalism. Try to keep it short.

    IKEA’s CEO, Ingvar Kamprad, born 30 Mar 26, is from the SILENT GENERATION. For all his faults, Kamprad created jobs, including yours, Admin, and wealth. He is Sweden’s version of Sam Walton, pure and simple.

    Now, let’s take a look at another SILENT GENERATION member who managed to materially assist in helping to destroy America’s economy, Warren Buffett, born 30 Aug 30. Buffett is nothing but a fraudulent, paper-pushing stock broker. Uber successful stock broker, true. But that’s it. That’s all this worthless piece of shit has done all his life. And he’s the world’s third wealthiest man on the planet.

    10% holdings in Goldman Sucks preferred stocks. Huge investments in AIG which resulted in Berkshire Hathaway paying a $92 million bribe to the feds in 2010 to avoid further investigation of their involvement in a fraud case. The list goes on. This jerk did nothing, nothing, to create true wealth in his entire putrid existence. He pushed paper.

    Yet this motherfucker is constantly hailed by the New York Times and the Washington Post as the “Oracle of Omaha.” Well, sure. He held a $28,000 a plate fundraiser for Obama in Chicago in 2008, hosted by Penny Pritzker, a billionaire heiress who ran a Chicago bank into the ground in the early 1990s. Right up their political line.

    And I remind you, Admin, this fucking stain on humanity is from the GI GENERATION.

    6th February 2011 at 12:16 am

  52. llpoh says:

    Sorry folks. In my post above I typed H R and my bberry converted it to hour. I
    Anyway, I despise Human Resources personnel as a rule. They are spineless unethical immoral asswipes.

    6th February 2011 at 1:01 am

  53. eugend66 says:

    Nice story, Admin. And 100% right on the HR issue.

    6th February 2011 at 2:44 am

  54. Administrator says:

    SSS

    As a Boomer, you did your usual surface research about Buffet. He built his fortune building businesses. Shoe companies, furniture companies, candy companies, insurance companies, newspapers, furniture retailers, manufacturers. His companies employed thousands. He invested his cash in Coca Cola and other huge American companies.

    It is only in the last 10 years that he sold his soul. I agree he is a piece of shit today, but he created his wealth with real businesses.

    6th February 2011 at 8:59 am

  55. Tufftyklub says:

    llpoh-2 questions.what made u strike out on your own?(i have a plan to do so but am nervous-consequences and that) and as a buisinessman,what do you do for HR?Have no one or have HR but keep them on a (very)tight leash?
    Thanks.

    6th February 2011 at 1:26 pm

  56. Viet Vet-70 says:

    Admin:
    Say when, did you try Wooster Street and the pizza while you were in the neighbourhood?

    6th February 2011 at 2:35 pm

  57. llpoh says:

    Tuffty – I do the HR myself. It allows me to make decisions case by case instead of with a rulebook. I am told I am occassionally inconsistent. I just try to be fair.

    I joined a small established company as partner so I had
    a bit of an advantage. I recommend that path. Get lots of skills first. Good luck. I will try to answer youin more depth later.

    6th February 2011 at 3:43 pm

  58. Robmu1 says:

    Jim – you forgot that IKEA paid Weston $20 million for a $10 million piece of land in Toronto. I was working for Weston at the time and they sacrificed some parking spaces at one of their bakeries since they knew IKEA was overpaying by 100% and couldn’t pass it up. That was about the last smart thing Weston did as Walmart ripped them limb-from-limb for about 5 years after that. Good times.

    6th February 2011 at 4:33 pm

  59. SSS says:

    Admin

    I call bullshit on your comments about Buffett.

    He doesn’t BUILD ANYTHING, he BUYS STUFF that already exists. Let’s take his flagship company Berkshire Hathaway, which traces its roots to 1839 as a textile plant in Rhode Island. The company grew for the next century plus as a huge textile manufacturing conglomerate headquarted in New Bedford, Massachusetts.

    Enter Buffett in 1962 when he started buying BH stock…….and kept on buying it until he had controlling interest. Enough to run off the family that was running the company. The company went completely out of the textile manufacturing business in 1985. WTF is that!!!!

    You mentioned investing cash in Coca Cola. So what? The fucking company has been around since the 19th Century. And he gets his cash from the insurance premiums paid to his insurance companies. The fucker doesn’t have a cash reserve to meet possible claims. He uses the premiums he collects to BUY SHIT.

    At least your former boss Ingvar Kamprad created his own company out of thin air and grew it into a global business. Tens of thousands of brand new jobs created. Just like Carnegie and U.S. Steel. And so on and so forth.

    Buying shit doesn’t count. Buffett’s a total asshole and has been for a long, long time.

    6th February 2011 at 5:05 pm

  60. Mikeinaz says:

    James, great article, remember, we had even bigger AHOLES after you left. The bull dyke and the breeder that tandemly replaced you were equallly priceless and useless. As was the black woman they hired to specifically manage me. Priceless when she screwed over Jill M.
    The polynesian midget that ruined the San Jose store was another one of my favorites, went from walking Pernille’s dog to making 200k a year, not bad.
    Loved the diversity, I was passed over for lesbians, asians, part-time breeders. They only put you in a position when they were desperate. We had to hire a “diverse” candidate to work in the tax dept, because we had shamefully hired a white male accountant. She did less than nothing. Finally my boss goes to that great HR department to complain and they ask her if she realized the girl was chinese? Can’t make that shit up.
    We should still sue for the day we were at the breakfast meeting and Pernille announced that we had to do something about all the white males in management positions. I believe we made a 140 million profit the year before diversity struck. 4 years later – $50 million loss. But they were great at blaming exchange rates and other crap. I found so much money they pissed away there, it was difficult to keep track of.
    Can’t believe you’re picking on the meatballs, after you left marketing screwed up getting the professional eaters out for a meatball eating contest, so they had the employees go at it. I won with 76 of those suckers. Luckily, I was smart enough to take the afternoon off.

    Almost forgot, the day Mike was shelling the couple screwing around in the pickup with snowballs from the top of the giant snowbank was priceless! For a 300+ pound man, he had a cannon of an arm!

    6th February 2011 at 5:13 pm

  61. Pirate Jo says:

    “Jim told a terrific story of how he took it up the ass from his former employer after giving them 14 years of his life.”

    Well he didn’t *give* 14 years of his life. I imagine he got paid, and paid well, for all 14 of those years. He gained incredible experience and walked away from it with a fascinating story.

    I got screwed by a company a while back, and I could really appreciate what Jim was saying about how it makes your life a living hell. Work-related stress has been far worse for me than anything that ever happened to me in my personal life. I don’t seem to be very good at finding good places to work. But when I walk away from these situations, like the one I mentioned, I just look at the pay, skills and experience I got with the job.

    When Jim talks about the skiing/dogsledding stuff, and about being part of a great team, I know about that too, because I have experienced it. Work seems like family then, but you have to be careful. As Jim illustrates, things can change. Still, it’s so wonderful to go to work at a job you love, for a company you feel loyal to, and that you feel is loyal to you. I have little hope of that happening very often, but it is really great when it does happen. I would like to have it happen to me again someday. It’s been more than ten years since it has, though.

    I’m not sure whether lowering my expectations has made me happy. Maybe it will in the future. The doing of it felt discouraging and depressing, like the death of hope. That doesn’t mean it won’t be a benefit to me down the line. For now I just earn money as a hired mercenary (contractor) and save the money I make for time off FROM working.

    6th February 2011 at 5:19 pm

  62. Mikeinaz says:

    I forgot, Hi Pat, good to see you on here.

    6th February 2011 at 5:24 pm

  63. llpoh says:

    SSS – you called Buffett a stockbroker. He started as a stockbroker, but made his money as an INVESTOR. He buys – but as a rule he doesn’t sell anything. I agree with the Admin to a certain extent – he is a builder in that he buys undervalued companies with good management and then assists them in building their companies. He replaces those who fuck up. In my book, that is pretty outstanding management style.

    Some good things about Buffett:

    - he made a lot of middle class Americans rich. A LOT.
    - he has never sold any of his shares for personal gain. NEVER.
    - he wouldn’t bail his sister out of her self-made financial troubles.
    - he doesn’t screw over shareholders with an outrageous salary
    - he is giving his money away – virtually all of it

    He has been an asshole re certain things in recent years, for sure. But in the pantheon of the rich, he did things the old fashioned way – hard work, thrift, and smarts. He didn’t buy and sell his way along. He bought companies and held them, and ensured they grew, and he treated his shareholders to wealth beyond their wildest dreams. If people were incompetent, he fucked them off and got someone better in.

    On the whole, I personally do not believe the guy is as bad as you portray him.

    6th February 2011 at 5:38 pm

  64. SSS says:

    Admin and llpoh

    Ok, I’ll put it in simpler terms. I don’t like Buffett.

    6th February 2011 at 6:29 pm

  65. Administrator says:

    SSS

    Ingvar was the 1st outsourcer. He created manufacturing jobs in Russia, China, India and Poland. Not one item in an IKEA store is produced in the United States. He created thousands of low paying retail jobs in the US. But at least he was on the right side of history by joining the NAZI party after WWII. You have to admire a guy like that.

    6th February 2011 at 7:24 pm

  66. Administrator says:

    Robmu1

    We had a soft spot for Canadians. We gladly overpaid for that piece of real estate.

    6th February 2011 at 7:26 pm

  67. Administrator says:

    Viet Vet

    I never had the pleasure of eating on Wooster Street.

    6th February 2011 at 7:31 pm

  68. Administrator says:

    MikeinAZ

    I’m glad you could add some flavor to the article. I could write an entire article on the exploits and practical jokes involving Mike McD. I bet some of those 76 meatballs are still stuck in your intestines. Pernille putting every incompetent woman in the company into positions of power was a disgrace. Remember she paid that Working Mothers magazine $50,000 to put IKEA on the list of best companies to work for? Classic.

    6th February 2011 at 7:42 pm

  69. Administrator says:

    SSS

    I hate Buffett too. I think it is worse when someone starts out as decent human being and then sells his soul for the almighty buck.

    6th February 2011 at 7:44 pm

  70. Administrator says:

    For the younger readers of the site (all three of you), here is some advice someone gave me a long time ago. If you go to work for a company, create two files. In one file insert information on every good thing you ever do. If you saved the company money, figured out a new efficient method, created a cost saving or revenue enhancing idea, put it into this file.

    Now the interesting advice that most people don’t think of. In the 2nd file insert every questionable, stupid, illegal, or immoral action committed by your bosses and coworkers. Save incriminating emails in this file.

    In the best case, you will have a file of accomplishments that you can use for salary negotiations or to use when updating your resume.

    In the worst case, you can protect yourself from getting canned without extracting a pound of flesh from your employer.

    6th February 2011 at 7:58 pm

  71. Marianne says:

    I miss Ikea, now Mike has nothing to bitch about but politics. . . . :)

    My favorite was the “cost-neutral” health benefits for part-timers that actually cost 22 million a year. As an HR person myself, I was always embarassed by the bad name that group was making for the rest of us.

    6th February 2011 at 8:00 pm

  72. Smokey says:

    “Well, he didn’t *give* 14 years of his life.”

    According to you.

    Jim says he gave 14 years of his heart and soul to the company.

    Cunt.

    6th February 2011 at 8:23 pm

  73. Kill Bill says:

    Smokey your unusually foul today.

    Glad to see your feeling better.

    6th February 2011 at 8:28 pm

  74. Smokey says:

    Pirate Jo,

    “Well, he didn’t *give* 14 years of his life. I imagine he got paid, and paid well, for all fourteen of those years. He gained incredible experience, and walked away from it with a fascinating story.”

    If some crackhead in harlem pays you $25 because you gave him one fine blowjob, does the fact that you received $25 mean that you didn’t *give* him a blowjob?

    After all, you gained incredible experience and walked away from it with a fascinating story.

    6th February 2011 at 8:35 pm

  75. bigargon says:

    i ate some of those IKEA mystery meatballs this week. but what the hell i once take 20 year old coffee when i was in the US Navy.

    6th February 2011 at 8:36 pm

  76. Kill Bill says:

    Looks like alot of people lost money on the Super Bowel game.

    Fudge Packers 21 Pittsbooger 10

    6th February 2011 at 8:39 pm

  77. Kill Bill says:

    Stoolers just scored now 21-17.

    Bwah.

    6th February 2011 at 8:46 pm

  78. Smokey says:

    We don’t need a play by play recap, dumbass. We all have TVs.

    6th February 2011 at 8:49 pm

  79. bluestem says:

    Go to DRUDGE, he has the score right as the headliner. John

    6th February 2011 at 9:04 pm

  80. SSS says:

    Smokey said,

    “We don’t need a play by play recap, dumbass. We all have TVs.” Sweet.

    llpoh

    Response to your comments on “some good things about Buffett” in parens.

    - he made a lot of middle class Americans rich. A LOT. (We all know the story of his wealthy secretary. How many middle class Americans are we talking about? I’ll accept round numbers and a reliable source for the figure.)

    - he has never sold any of his shares for personal gain. NEVER. (So what? He’s worth what, $40-50 billion? Let me in on the relevance of this point.)

    - he wouldn’t bail his sister out of her self-made financial troubles. (Cold-hearted motherfucker, isn’t he?)

    - he doesn’t screw over shareholders with an outrageous salary (Let’s go back to that personal wealth figure again. $40-50 billion. Now let’s move on to that same question. So what? This guy is his own Madison Avenue pitch man for himself. His salary means diddlysquat.)

    - he is giving his money away – virtually all of it (Here’s some math to chew on. Let’s say the guy is worth $50 billion and agrees to give away 98% of it. Would you or would you not agree that a 98% giveaway meets the “virtually all” threshold? I would. Well, that leaves him with ONE FUCKING BILLION DOLLARS. BOO FUCKING HOO.)

    7th February 2011 at 12:07 am

  81. llpoh says:

    SSS – don’t be an asshole.

    He is spending none of his money on himself NONE. He never has. He made the money for one purpose only – to give it away. He lives in the same modest house he bought almost 60 years ago he lives solely on his modestsalary, and always has.
    .
    He is giving away 99 percent, not 98. That leaves a few hundred million for his kids and taxes. Good for them.

    His sister got herself in debt irresponsibly (about 2 million by memeory) assuming he would bail her out. He didn’t. That is fucking great in my book.

    I would have to look it up but I think you can see at the annual meeting the thousands that have been made rich by him. I will see if I can come up with reputable figures.

    You don’t know shit about Buffett. He has done some crappy things of late, I agree. But he has done some good things as well.

    Your arguments about him being a billionaire so boohoo are total horseshit. He lives less well than me.
    .

    7th February 2011 at 12:28 am

  82. llpoh says:

    SSS – I can’t find precise numbers. He gets about 20000 to the AGM. I think you could safely say thousands have become millionaaires via Berkshire Hathaway. Is that a lot? I think so.

    Also, he has secured a number of commitments from other billionaires to donate half their wealth.

    Don’t like the guy – fine. But he has done some very fine things.

    7th February 2011 at 12:55 am

  83. SSS says:

    llpoh

    You seem to be a Buffett expert. No fucking billionaire anywhere in the world lives a normal J6P life, including in this country. How the fuck do you know he “lives less well than you” or that “he made the money for one purpose only – to give it away”? Did he tell you that, or did you read it in some PR book that Buffett paid some fucking ghost writer to pump out?

    Are you fucking telling me that Warren Buffett gets up in the morning and drives himself to work completely unprotected? That he flies coach? That he stays in a Motel 6 and checks himself in? That he drives a Prius when he rents a car? That his home doesn’t have world-class security? That he comes home from a day at the office or a business trip and just enjoys a homemade plate of chili that he fixed himself? Is that the picture of Buffett you’re trying to paint, llpoh?

    You need to back off and look at some of the ridiculous statements you’ve made about this shit stick. Let me tell you something. Warren Buffett is the GENESIS of the individuals who created the weapons of mass financial destruction in this country. Buffett is the god to whom Lloyd Blankfein and Vakrim Pandit prays.

    You don’t see the connection. Nor does Admin. I do.

    7th February 2011 at 1:07 am

  84. llpoh says:

    SSS – bah. Humbug. You have no proof either. You are guessing. I am guessing. I am not guessing about his chsritable donations. I do not think I am guessing about his house. Does he fly economy? Doubtful. Do I? No fucking way. Does he have security system – probably, but they aren’t expensive. A car? I think I read not. Buffett dedicated himself to making money. I don’t think he started out with some nefarious plan. I think he gre pretty powerful and did some dubious things in the last few years. Why I do not know, but I expect that it was related to salvaging his reputation. He doesn’t spend the money he has, so I don’t think it would be entirely money related.

    I am no huge fan of Buffett these days. But I cannot fault what he is doing with his riches, or that he has avoided many of the pitfalls of extravagence.

    He has overstepped himself. But I measure the good with the bad. He is no Bernanke and Berkshire is no Enron or Goldman.

    7th February 2011 at 1:21 am

  85. Administrator says:

    SSS & llpoh

    At least Buffett isn’t a Nazi. He’s got that going for him.

    7th February 2011 at 8:57 am

  86. SSS says:

    Admin

    You finally played the Nazi card, the last refuge of a scoundrel who’s losing a debate.

    Since you headed in that direction, what’s your take on Henry Ford?

    7th February 2011 at 6:26 pm

  87. llpoh says:

    SSS – the Admin shut me up with that last bit.

    7th February 2011 at 6:31 pm

  88. tbone says:

    Obviously there was no non-disclosure clause in your seperation agreement, not to bright on their part.
    Or was there?

    7th February 2011 at 6:39 pm

  89. Timeisrunningout says:

    Great story Jim.
    I drove past that Schaumburg IKEA store everyday going to Mot across Int. 90
    It really is not about doing the right thing anymore, but whose ass you kiss and who has the best powerpoint story.

    7th February 2011 at 6:43 pm

  90. mikeinaz says:

    Jim, Not to bring up old memories, but look how far you’ve come with the computer since I put your ID picture on your wallpaper and you couldn’t get it off. You yelled and screamed, and I laughed and laughed. Then you put some lousy Flyers picture up there or something so I rigged your PC to have your picture to come up every time you logged on or off. Good times….

    7th February 2011 at 6:45 pm

  91. mikeinaz says:

    Jan was a great CEO, sorry to get back on topic. I remember he would spend a few minutes in the kitchen every day talking to all the employees. Sheer management genius. The idiot Pernille had that giant red door and the birdhouses on the curved wall when her regime took over. Sheer imbecility. Comparing Jan to Pernille is like comparing Ryan Howard to a teeballer.

    7th February 2011 at 6:48 pm

  92. Administrator says:

    SSS

    Did you read the article? Ingvar was a Swedish Nazi.

    7th February 2011 at 7:37 pm

  93. Administrator says:

    tbone

    I had a 2 year agreement where I couldn’t work for a competitor. No company secrets in this article. Just examples of hubris, stupidity, back stabbing and the joy of diversity.

    7th February 2011 at 7:54 pm

  94. Administrator says:

    MikeinAz

    I had forgotten about that story. Thanks for reminding me. But, I did remember another classic moment while I was driving in this morning.

    We were in a Canadian Property Board Meeting. Luc was the CEO of Canada. He was a bully, prick, jerkoff, blowhard and fuckwad. If he didn’t get what he wanted, he yelled and screamed and intimidated underlings. In the Board Meeting was Pernille, Luc, Mike, Doug (Canada real estate guy), me and the worldwide Property Manager John. We already had 3 stores in Toronto. Luc wanted 6 stores in Toronto. He had a site for the 4th store in Vaughn. I ran the sales projection, cannibalization of the other 3 stores, and P&L for the Toronto market. No matter how hard I tried, the 4th store didn’t work. It would lead to much lower profits in the market.

    I presented the facts at the Board meeting. Luc accused me of stabbing him in the back. He said my facts were bullshit. He yelled that the 4th store would sell for $100 million. My numbers were $55 million, while cannibalizing the shit out of the other stores. After being abused and yelled at, I may have responded in an inappropriate manner. The meeting was adjourned. When I was leaving the office for the night, there was Luc smoking a cigarette outside the front door. He said, “Jim you didn’t take that personal, did you?” I said no problem Luc, while thinking what a fucking douchebag he was.

    My analysis was ignored. Vaughn was built. It was a disaster, with sales below even my $55 million level. Its nickname was Vaughntana, referring to the worst store in US history in Fontana, California that was closed because of horrific sales.

    There was a happy ending. Luc was later fired for doinking multiple underlings and promoting them.

    7th February 2011 at 8:17 pm

  95. SSS says:

    Admin

    I read the article, and I didn’t miss the part about Ingvar’s involvement in the Swedish equivalent of the Nazi party. Nonetheless, my comments about him stand, despite your “outsourcing” criticism of him. He created ten of thousands of jobs. I could give a shit where. In the words of Larry the Cable Guy, “Git ‘er done.” He did, and you benefitted decades later. I have ZERO problems with that.

    YOU posted the presumably flip Nazi comment, not me. If you want to be flippant, fine. I can attack on any front you choose. You chose the extreme political views angle. Fine, once again, what’s your take on Henry Ford?

    mikeinaz

    Re your “sorry to get back on topic” comment. Pardon me for getting off topic with the Buffett drill. Just trying to jazz things up a bit. What’s your take on Henry Ford?

    7th February 2011 at 8:20 pm

  96. Administrator says:

    I have no take on Henry Ford. I don’t know much about him. Would you like to enlighten us about Henry Ford.

    7th February 2011 at 8:24 pm

  97. llpoh says:

    I worked for a CEO once that required me to produce a document overnite after having flown back into town at 1 AM. I asked if I had it to him by 9 would it be ok. He threw a major tantrum and said he wanted it by 6 AM. I completed it by about 4 and left it on his desk, got 3 hours sleep and back in the office. The fucking douchebag slept to noon and came in after that. I told him to jam his job and left soon after. He got fired shortly after that. Too fucking bad.

    7th February 2011 at 8:25 pm

  98. Administrator says:

    llpoh

    The world is full of douchebags. How they get to such high levels in corporations is beyond me.

    7th February 2011 at 8:36 pm

  99. Jmarz says:

    Llpoh

    Buffett pays himself a modest salary because he rather pay himself in capital gains. This way he pays a lower tax rate. Don’t be fooled by the modest salary. He wouldn’t be a billionaire if he relied on his modest salary. I’m not a Buffett hater nor am I a Buffett lover. I think he understands investing and found something he enjoyed doing at a young age and has been doing what he loves doing most of his life. I don’t like how he has reacted to this economic crisis nor do I like how he used the American people to bail him out in some positions he had that went south.

    7th February 2011 at 8:41 pm

  100. llpoh says:

    Jmarz – he does NOT rely on capital gains. He has NEVER sold any of his stock. NEVER. He lives solely on his modest income. And whatever company perks flow his way – which I understand are few. He does not collect dividends, either, per my understanding.

    He doesn’t pay much tax as he has almost no fucking incoe – ONLY HIS SALARY.

    He takes no money out of his business. His business pays company tax.

    Why would you assume he is realizing capital gains? That only crystallizes when you sell something, and he doesn’t. EVER, per my understanding. If he does eventually sell, he will still have no tax as I am sure it will be offset by charitable donations.

    Whatever he has done, it has not been for the money, as every indication is that he doesn’t spend any. I suspect it is for his legacy and for his shareholders.

    7th February 2011 at 9:01 pm

  101. llpoh says:

    Jmarz – Buffett had collected a sizable sum by the time he left college. He made some more as a stockbroker. He then raised some capital via partnerships. Then he used cashflow internal to his business. And he raised more money. And then used more cashflow. Ad infinitum. He has drawn a modest salary for his work – way below the going rate. He became a billionaire by leaving his money to multiply within his business.

    7th February 2011 at 9:05 pm

  102. Jmarz says:

    Llpoh

    You know much more about Buffett than myself. You make some interesting points. The power of compounding is pretty incredible. I read somewhere that he has a 22% averaged annual return on his investments. Plug 22% in a financial calculator with an initial investment and annual payments and you can truly see the power of compounding over time.

    7th February 2011 at 9:29 pm

  103. SSS says:

    llpoh said to jmarz

    “Jmarz – he does NOT rely on capital gains. He has NEVER sold any of his stock. NEVER. He lives solely on his modest income. And whatever company perks flow his way – which I understand are few. He does not collect dividends, either, per my understanding.”

    Jesus, where did the $50 billion come from? Does he have a private pass to the Bureau of Engraving and Printing? Is Forbes magazine relying solely on some public information on his holdings of Class A shares of Berkshire Hathaway? WTF are you talking about, llpoh?

    7th February 2011 at 9:33 pm

  104. llpoh says:

    SSS – Buffett is worth 50 billion or whatever. It is the value of his shares. He started out with a few thousand back in the fifties just out of school. I read where in todays terms he had the equivalent of about a hundred grand when he graduated. He worked as a stockbroker and increased that by a fair bit over a few years. He invested that along with some partners. He reinvested the income on his investments and theirs. He raised more capital. He bought more investments. He invested more. Etc etc etc. He never pulled any money out. Never. He lived on his salary alone.
    In the early nineties T I think that is right) after about 40 years of this he became a billionaire. He continues what he always has done. Earnings on investments are re-invested.

    The return on investment has been extraordinary over the last 50 plus years.

    I do not understand your point. His wealth is entirely his shareholding. Entirely. You can look it up and calculate it from Berkshire Hathaway reports. There may still be some sundry companies he still has shares in as 50 years ago he had a number of different investment vehicles.

    He has relied on compounding interest, smart investments, good management and positive cashflow to generate enormous wealth. Buy and hold has been critical to his success. Most people buy, sell, spend. Not him.

    7th February 2011 at 9:59 pm

  105. SSS says:

    Admin and llpoh

    Cliff Notes version of Ford.

    Lots of patents held. Prodigeous inventor. Story as an innovative auto manufacturer and creator of the assembly line well known. Believed in paying workers well (started the $5/day salary) to keep them on the job and preclude costly turnovers…….at the time, Ford was hiring 300 workers per year to keep 100 on the job. Anti-union. Believed it hurt productivity. Anti-war. Opposed WWI and actually joined a peace activist movement. Gave nearly all his wealth to the Ford Foundation, which is still controlled by his heirs.

    You’re probably thinking, so far, so good.

    Flip side. Anti-semitic, which is reasonably well documented, at least from the statements he made. Only American mentioned in Hitler’s Mein Kampf. Pro-Nazi? No substantial proof whatsoever. Hitler and the Germans admired Ford, but no material indication he returned the favor. Hitler MAY have been influenced about Ford’s so-called backing of the Dearborn Independent newspaper, which was bought by his closest aide and private secretary in 1918. The paper was staunchly anti-semitic. Ford shut it down in 1927.

    Note: Anti-semitism was rampant in the U.S. for a long, long time and lasted well into the second half of the 20th Century. Ford was one of the vast majority of Americans who didn’t like Jews.

    Make a call you two. I vote thumbs up on Henry Ford. Warren Buffett bites it big time. Not worthy of being Ford’s shoe shine boy.

    7th February 2011 at 10:05 pm

  106. llpoh says:

    By the way I am one of the buy/sell/spender varieties. I would be worth heaps more but I suck dividends out of my company. I take very expensive holidays. I live in an extremely nice house – worth way more tha Buffets. I drive nice cars. I have nice toys. Etc etc. If I did what he did I would probably have a net worth three times what I do. But I like to live nicely. Buffet is very frugal.

    Did he fuck the goat recently? Absolutely. Is he a model for how to invest and become rich. You better believe it. Almost anyone could do what he has done Tnot billions, but become rich) . Simply invest like mad for 60 years, save a huge proportion of your income, never sell anything so finance a more lavish lifestyle, and do not spend any money, and bingo – you get rich.

    7th February 2011 at 10:06 pm

  107. Smokey says:

    SSS,

    I believe the $50 billion is the amount of equity Buffett has in Berkshire Hathaway stock. I believe the lifestyle Buffett leads probably costs Berkshire at least several million dollars a year in expenses that they write off. Given Buffetts status in corporate America, I believe that his lifestyle is probably essential to operating his companies optimally.

    Buffett bought a private jet through Berkshire about 20 years ago so that he would no longer have to fly commercial. He and Charlie Munger named the jet The Indefensible because Buffett wasn’t sure he could justify the jet financially and viewed it somewhat as an extravagance. Buffett no longer owns that jet, because Berkshire bought Net Jets, a company that leases out private jets. Now Buffett and Gates use Netjets for all their flying.

    Berkshire also owns a minor league baseball team in Omaha because Buffett loves baseball.

    I think that llpoh is probably correct in his statement that Buffett has never sold any Berkshire stock. My understanding is that Buffett never has been one to piss away money for the hell of it, like a Donald Trump or as per Bill Gates $50 million home.

    7th February 2011 at 10:07 pm

  108. llpoh says:

    SSS – you nailed it re Ford. Pretty much as I know it. He was an A-grade douchbag. But his overall contribution to society was enormous.
    Weighing up, on balance, he was an ernormous positive. He was a significant factor in the succes of industrialization and of making a viable middle class.
    He built his company from the ground up. Very impressive.

    Buffett is an investor. He is an entirely different animal and will not have a lasting impact, unless his charitable works really hit the mark.

    7th February 2011 at 10:12 pm

  109. Jmarz says:

    Did you know Henry Ford created King charcoal? Pretty fascinating man.

    7th February 2011 at 10:16 pm

  110. Administrator says:

    HFES

    7th February 2011 at 10:17 pm

  111. SSS says:

    Admin, llpoh, and Smokey

    I’m getting the uneasy feeling that it’s time to circle the wagons here. As the French commander on the front during WWI so famously wired back to his Hqs, “The enemy has destroyed my right flank, rolled back my left flank, and smashed through my center. I shall attack.”

    Any thoughts on Henry Ford, anyone?

    7th February 2011 at 10:17 pm

  112. SSS says:

    Jmarz

    Yes, his brother-in-law was a guy named Kingsford. Hence, Kingsford Charcoal.

    Admin said “HFES.”

    Brilliant retort. One of your most thought provoking ever. BTW, did you know that Buffett attended Wharton School for two years?

    7th February 2011 at 10:25 pm

  113. llpoh says:

    SSS – see above re Ford. BTW, you aren’t entirely wrong re Buffett. He just isn’t a TOTAL D-bag. Too bad he went awry lately.

    7th February 2011 at 10:26 pm

  114. llpoh says:

    Smokey – Buffett buys businesses he understands. Baseball is easy to understand. Also, minor league teams can be profitable. My favorite baseball to watch.

    7th February 2011 at 10:29 pm

  115. Smokey says:

    llpoh—-Wikipedia has some pretty good info on Buffett.

    7th February 2011 at 10:36 pm

  116. Administrator says:

    SSSES

    7th February 2011 at 10:40 pm

  117. Administrator says:

    Friday, September 18, 2009

    Henry Ford: Evil Bigot

    Yes, I’ve read Howard Zinn. Yes, I get that history is written by those with power who in turn construct myths based upon ideals that elevate their own interests and goals. But I am still at a complete loss as to why the name Henry Ford is celebrated and not vilified in American culture.

    A successful captain of industry. A pioneer in transportation who changed the world. Creator of an eponymous brand that survives to this day. An innovator in business efficiency. O.k. But also a scumbag bigot.

    O.k., I know Godwin’s law. Yes, we carelessly and ignorantly throw around Hitler’s name and call people Nazis for the dumbest things. But to say that Henry Ford was like Hitler is literally true. Hitler kept in his office a framed picture of Henry Ford. In all of Mein Kampf, there is only one American named. That American? Wait for it…

    “Every year makes them more and more the controlling masters of the producers in a nation of one hundred and twenty millions only a single great man, Ford, to their fury, still maintains full independence.”
    “Them,” of course, are the Jews. Hitler presented Ford with an award, the Verdienstkreutz des Ordens vom Deutscher Adler, the Grand Service Cross of the Supreme Order of the German Eagle, the highest honor that could be awarded to a non-German. An award Ford proudly received.

    He acquired The Dearborn Independent, a newspaper that would them give him a platform for his overtly anti-Semitic writings. He collected his hateful columns into a single volume, The International Jew. In the preface, Ford writes,

    “We confidently call the reader to witness that the tone of these articles is all that it should be. The International Jew and his satellites, as the conscious enemies of all that Anglo-Saxons mean by civilization, are not spared, nor is that unthinking mass which defends anything that a Jew does, simply because it has been taught to believe that what Jewish leaders do is Jewish. Neither do these articles proceed upon a false emotion of brotherhood and apology, as if this stream of doubtful tendency in the world were only accidentally Jewish.”

    We know that this book was not only translated into German, but that Hitler owned a copy in which he left ample laudatory marginal notes. The Germans were the bad guys and Henry Ford objected to American entry into WWII because he supported Hitler. I know we worship money and those who gain a lot of it, but please explain to me how his name did not suffer the same fate as that of Benedict Arnold. Why do most Americans have a warm fuzzy feeling around the name of this horrible human being?

    7th February 2011 at 10:49 pm

  118. howard in nyc says:

    i know little about ford. but i am currently plowing through richard evan’s three volume history of nazi germany. ford had an assembly plant in germany, and when the nazis took power, ford was treated somewhat favorably compared to other firms that were nationalized. and the ford factory was converted to war material production for the reich.

    while ford motor company maintained an ownership percentage in the nationalized entity, the nazis did not permit corporate profits to leave the country. and after pearl harbor, there was no control or effective communication by us ford with the german plant. i suppose after the war, dearborn just took over whatever was left of the facility (after curtis lemay was done bombing the shit out of it). (so i wonder if robert mcnamara bombed the plant, then as a ford executive rebuilt it? but i digress.)

    the passage i read did not speak to ideological bonds between henry ford and the nazis. the economic arrangements could be ascribed to good business practice/making money as easily as to a shared political belief. which i will admit i was expecting, having no knowledge beyond the caricature of ford as a rabid anti-semite.

    that’s all i got.

    7th February 2011 at 11:12 pm

  119. howard in nyc says:

    oh, a little looking around the interwebs and i found this article on the adl.org website (of all places) that gives ford’s german subsidiary, as run by henry ford, a pass.

    http://www.adl.org/braun/dim_13_2_ford.asp

    7th February 2011 at 11:16 pm

  120. Mikeinaz says:

    The douchebag contest there was a 3 way tie, Glen (I’m a lazy canadian dumbfuck who was fired for banging the marketing chick) Watson, Don (Anybody seen my penis) Ball, and Jill (I’ve got Don’s penis) Matherson.

    8th February 2011 at 12:45 am

  121. Administrator says:

    Mike

    Don’t hold back with your assessment.

    8th February 2011 at 8:50 am

  122. mikeinaz says:

    Too much Jim? I avoided JR (my hands are only in my pockets because they’re cold), that fat Canadian guy in finance who couldn’t do math – Ian, and various middle aged yentas who’ve never worked a day in their lives. Didn’t even touch on that moron who kept screwing up the sales plans that liked to hear himself talk – Mark something, that 400 lb accounting manager that could eat a mcmuffin in 2 bites – swear to God!, or that red haired guy in finance who thought accrual was someone who was mean. Went on vacation once and that clown screwed up my books so bad it took a month to fix them. Oooooh, missed my favorite, that douchebag auditor High Pitch Harry that got us stranded on the Delaware river by booking a duck boat tour with Wilson Street’s brother. He was hired from Arthur Anderson, don’t know how that could miss?

    8th February 2011 at 11:09 am

  123. StuckInNJ says:

    Upon reading all this …. I do believe I must consider boycotting Ikea.

    I am running out of places where I can shop.

    8th February 2011 at 7:20 pm

  124. llpoh says:

    Let’s see, can’t buy a Ford, can’t shop at Ikea, fuck Wal-Mart, K-Mart sucks, etc. etc. etc.

    Yep, we is fucked.

    8th February 2011 at 7:48 pm

  125. SSS says:

    Stucky and llpoh

    Shop wherever you fucking well please. At least the feds haven’t tried to finesse that right. Yet.

    Admin

    The opinion piece you posted on Ford is nothing but inflammatory bullshit. Not biting. Put your own thoughts out there. I did. And HFES doesn’t count.

    In case you missed my point, Henry Ford did as much as anyone to build the industrial base of this country. For all his personal flaws, he was one of the most important men of the 20th Century.

    And on a personal note, Ford Motor Company stole a patent, the intermittent windshild wiper, from an irresponsible but brilliant great-uncle of mine.

    8th February 2011 at 10:07 pm

  126. llpoh says:

    SSS – bad luck for great uncle. That would have been worth a bit. I have heard of a lot of patents being swiped, some big, some little. Their is no honor out there.

    8th February 2011 at 10:14 pm

  127. PeakMaster says:

    Mikeinaz:

    Don’t forget who gave you that piece of Astro-Turf from the old Vet.

    19th April 2011 at 5:41 am

  128. Retail Sails: Retail Spin Was Bee Sss | Davos World Economic Forum – For Bloggers says:

    [...] can read his Ikea article here, it is testament that economic bloggers aren’t anything near Dennis Kneale’s portrayal [...]

    13th December 2011 at 9:27 am

  129. IKENO says:

    Admin – great and interesting story – what do you know about the control that IKEA has over their franchised stores?

    21st February 2013 at 11:14 am

  130. Administrator says:

    IKENO

    The franchised stores are very few and they aren’t 100% franchised. Many go to friends of Ingvar. Bjorn had the Seattle franchise and then sold it back to IKEA when he was rich enough.

    21st February 2013 at 1:05 pm

  131. Eddie says:

    Glad this got bumped up. I’ve been wanting to read this story.

    21st February 2013 at 1:16 pm

  132. IKENO says:

    Interesting! – do you know where I can find more info on the franchise dynamic? I wondering what level of control IKEA parent has over them???

    1st March 2013 at 3:38 pm

  133. Administrator says:

    Total control. Your best bet is to contact Inter-IKEA Systems located in Waterloo Belgium.

    1st March 2013 at 3:50 pm

  134. Mary Malone says:

    @Admin Thanks for reposting this story. It is a gem.

    1st March 2013 at 4:10 pm

  135. IKENO says:

    Admin – lol to contacting IKEA in Belium. Tried that unsuccessfully – they seem pretty concerned with their privacy. They didn’t want to discuss the inner workings of IKEA for my grad school project. Total control, I guess that makes sense. My professor says to try to a copy of a franchise agreement that will detail the perimeters of the agreement. There are a number of independent franchisors all over the world who are big business types…it seems hard to believe they would sign on to something that could be pulled out from under them…especially after investing millions into the opening of a store. So, any information or direction that you can point me in would be great.

    4th March 2013 at 10:35 am

  136. Administrator says:

    IKENO

    Here are some links to artcles about the inner workings of IKEA. Maybe they will point you in the right direction:

    http://www.economist.com/node/6919139

    http://www.thelocal.se/31650/20110126/

    http://www.neatorama.com/2011/04/22/10-things-you-didnt-know-about-ikea/

    http://www.ikeafans.com/articles/1000-ikea-corporate/330-ikea-corporate-structure-.html

    http://inter.ikea.com/en/governance/interogo-foundation/

    4th March 2013 at 10:53 am

  137. IKENO says:

    Admin – thanks for those sources and for all of your insight, especially your above article. Those articles unfortunately don’t get into the detail needed for my project – the in’s and out’s of the franchise agreement…this project may not actually be feasible since it relies on agreements that are usually easy to obtain, but for IKEA, hard!

    4th March 2013 at 11:41 am

  138. Administrator says:

    IKENO

    I had a friend named Magnus Holmquist who is a lawyer for IKEA in Helsingborg. See if you can track down his phone number and tell him I recommended you call him.

    4th March 2013 at 12:08 pm

  139. IKENO says:

    I found Magnus and Susann Holmquist in Plymouth Meeting PA…It looks like he used to work in PA, then moved…but no luck in Helsingborg.

    4th March 2013 at 12:28 pm

  140. Administrator says:

    Maybe it is Helsingor. I think he works at their head office in Sweden.

    4th March 2013 at 12:33 pm

  141. IKENO says:

    I think you were right the first time…while I’m searching for him, if you have time, can you shed some more light on the control IKEA has over their franchisees? Any detail you have will be really useful for me!

    4th March 2013 at 12:59 pm

  142. Administrator says:

    IKENO

    There are no real franchisees like McDonalds or Burger King. The entire franchising concept is only so that the company in Belgium can collect 3% of all sales and funnel it to Ingvar and his sons. We are talking hundreds of millions per year for doing absolutely nothing. It reduces the tax liability in all the operating countries and Belgium has special tax breaks for certain types of companies.

    4th March 2013 at 1:13 pm

  143. IKENO says:

    Yes – but they do have a few franchises like Burger King, right? Just super sized! For example, the Al Futtaim Group;

    http://franchisor.ikea.com/franchising.html

    http://www.thenational.ae/business/retail/al-futtaim-building-towards-regional-ikea-growth

    4th March 2013 at 2:24 pm

  144. Digusted says:

    Wow…I work for Ikea in canada and Im mortified….so much for moral,ethics and code of conduct. Lies lies lies…its alll a cruel lie. I’ve worked for them for 28 yrs and I know who half the people he is talking about. Bjorn has always been a drunk…he worked for our store when I was first hired. Never having had worked for a large company before I had no idea. Up until 15yrs ago the company did seem to have a family feel to it. After that….it did go down hill.And now I know why…OMG WTF??

    21st May 2013 at 7:43 pm

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    9th December 2013 at 3:24 pm

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