Bbr Volume 2 Issue 10

VOLUME II ISSUE X WHAT’S INSIDE:

BRUINFINANCE CHECK IT OUT See page 9.

ANDERSON’s 2009 ENTREPRENEURS CONFERENCE Get the inside scoop. See page 10.

WHAT’S GENERAL MOTORS DOING TO AVOID

BANKRUPTCY ?

CURRENT

See page 5.

HAPPENINGS

2008-2009 BBR STAFF Shannon Kung President

Christine Liu VP of Marketing

Jaeman Kim Finance Department

Benjamin Lo Editor-in-Chief

Julie Chen VP of Finance

Grace Chan Finance Department

Maya Lucaci-Vashee Assistant Editor

Erika Solanki VP of Creative Development

Dmitry Shuster Staff Writer

Cristina Carillo Copy Editor

Eric Park Marketing Department

Sunny Wong VP of Operations

Stefanie Ju Marketing Department

ABOUT US Bruin Business Review is a student-run online publication established in 2007 for the purpose of providing the UCLA student body with a convenient source of business news and career information. We publish every two weeks on the Internet and by subscription, allowing our content to be accessible to everyone. Our goal is to enrich our readers’ knowledge of the business world and the career options within it by presenting a wide range of business-related topics in a non-technical style. Our broad range of topics encompasses current business news, resume tips, employer and MBA program profiles, industry insight, and others. For more information about BBR, visit www.bruinbusinessreview.com.

QUESTIONS, COMMENTS, CONCERNS? E-mail: [email protected] Mailing address: Bruin Business Review 118 Kerckhoff Hall 308 Westwood Plaza Los Angeles, CA 90024-1641 2

May 2009

May 1

May 6

Bruin Consulting and iFLY Indoor Skydiving Marketing Plan Competition Location: Applications at www.CalStudent-Fliers.com Description: Submit an innovative marketing plan to win a $5,000 scholarship.

Career Fair Career Roundup Time: 11:00am – 3:00pm Location: Ackerman Grand Ballroom Description: Gather information and internship/job opportunities with companies, including Disney Consumer Products, Northwestern Mutual, and Raytheon Company.

Grant Thornton LLP: Footsteps Program Applications Due Location: Apply through Bruin View Description: FootSteps is a two and a half day program designed to give sophomores the opportunity to learn more about their future profession, experiences from Grant Thornton professionals, and participate in activities to introduce you to public accounting. Undergraduate Business Society Executive Board Applications Due Location: 8283 Bunche Hall, Department of Economics Description: Interested in becoming a part of the executive board for the Undergraduate Business Society? Go to www.ubsbruins.com to download an application. May 2 Bruin Consulting Mentorship Program Applications Due Location: Applications at www.bruinco.com Description: The Bruin Consulting Board is offering one-on-one training to first and second years. The four week program will include resume construction, mock interviews, and networking opportunities. May 5 Bruin Finance Investment Banking Panel Night Time: 7:00 – 9:00 pm Location: Royce 190 Description: Network with a panel of investment banking professionals representing JPMorgan, Barclays Capital, Credit Suisse, and Houlihan Lokey. Also, get advice for successful recruitment as well as resume critiques from real bankers. To get more information or join the list serve, visit www.bruinfinance.com.

May 12 Job Search Jump Start: Marketing Time: 4:00-7:00 pm Location: UCLA Career Center, 3rd Floor Description: Learn the skills necessary to be competitive in a career in marketing. Learn how products are marketed, what career opportunities are available, how professionals got into this field, and what you can do to market yourself for the profession. Register at career.ucla.edu/JumpStart May 15 Bruin Finance Executive Board Application Due Time: By 11:59pm Description: Interested in becoming a part of the executive board for UCLA’s premier finance organization, Bruin Finance? Go to www.bruinfinance.com and download an application. May 19 Student Accounting Society’s 27th Annual Spring Awards Banquet Time: 6:30-9:30 pm Location: Covel Grand Horizon Ballroom Description: The Student Accounting Society a banquet to acknowledge the 100+ firm professionals in attendance (Ernst & Young, PWC, Deloitte, KPMG, etc.) as well as UCLA's own accounting professors. You will have the chance to sit and network with firm professionals throughout the night.

3

TABLE OF

CONTENTS 5

News of the Week: General Motors Tries to Avoid Bankruptcy

6

News Briefs

9

Profile: Bruin Finance

10

Profile: Anderson Conference

4

STRUGGLING GENERAL MOTORS TRIES TO AVOID BANKRUPTCY By Shannon Kung Senior Staff Writer General Motors announced last Monday that it is planning to cut as many as 23,000 U.S. jobs by 2011 in addition to slashing 40 percent of dealer networks and dropping the Pontiac brand. GM hopes that this new proposal will help it avoid the looming threat of bankruptcy, brought on by the failing U.S. automobile industry and the current economic state. Its efforts to reduce costs stem from problems that have bothered the company since 2005. By the end of all the cuts, GM expects to have only 38,000 union workers and 34 factories left in the United States, a far cry from the 395,000 workers and more than 150 plants General Motors had at its peak employment in 1970. The new restructuring plan would entail the Treasury accepting General Motors stock in place of cash for the repayment of General Motor’s $10 billion government loan. This would leave the Treasury, and thus American taxpayers, with a significant stake in GM. The United Auto Workers union holds a large stake in GM and, if bondholders agree to the proposal, 89 percent of GM would be owned by the union and the Treasury. This would leave bondholders with a less than 10 percent stake in GM. General Motors CEO, Fritz Henderson announced that if bondholders do not agree to the swap, bankruptcy may be in GM’s near future. GM needs at least 90 percent of the bondholders to agree to the terms by June 1; otherwise, the auto company may have to file for Chapter 11 bankruptcy. If the company does file for Chapter 11 bankruptcy, General Motors would still be in control of its business operations as a debtor in possession and would be given the chance to reorganize. Furthermore, General Motors is completely eliminating the Pontiac brand. Pontiac, an iconic brand dating back to the late 1950s, is credited with creating the first muscle car. Although it is difficult to fathom now, Pontiac was once marketed as GM’s “excitement division” with cars such as the GTO. Now, however, the Pontiac is set to be shut down by the end of next year. General Motors claimed that Pontiac was given the axe not because of sales, but because of profitability. Instead, GM will focus more on four core brands: Chevrolet, Buick, GMC, and Cadillac. This leaves three other troubled lines: Saturn, Saab, and Hummer all up for deliberation by General Motors.

5

NEWSBRIEFS By Benjamin Lo and Julie Chen Senior & Staff Writer

BITTER BANK OF AMERICA SHAREHOLDERS REMOVE KENNETH LEWIS AS CHAIRMAN After working for Bank of America for 40 years, Kenneth D. Lewis, its current chief executive, was voted out of his chairman position last Wednesday after an annual general meeting for the nation’s largest bank. While Lewis was voted out of his position as chairman, he will retain his position as chief executive officer. A chairman is selected by a corporation to lead its board of directors, while the chief executive officer serves to handle total management of the company. After a 50.34 percent shareholder vote, or 25 million votes, to oust Lewis, Walter E. Massey, the president emeritus of Morehouse College in Atlanta, will take on the position as chairman of Bank of America. A third had voted to remove him from the board altogether. Investors made this decision largely in part to hold him accountable for what they view as management mistakes that led to two government bailouts. Even after receiving billions of taxpayer dollars in government loans, the bank may still need to raise more capital.

THE U.S. BENEFITS AS CHINA TRIES TO SPUR ITS ON ECONOMY U.S. industrial-equipment makers, which work closely with China’s infrastructural development, are seeing increased activity in China’s markets as China’s $585 billion stimulus package increases demand for steel and labor. Many people involved with the industrial sector, including James W. Owens, chief executive of industrial-equipment maker Caterpillar Inc., , said China is boosting its economy much more quickly than the United States has to date. "It's something like nine months [in the U.S.] versus nine weeks" in China, he says in regards to the amount of time needed to start civil works projects such as the construction of a $930 million bridge and expressway project called Xiangshan Island Bridge. As a result, Wall Street Journal analysts believe China may be the first major economy to recover. China's investment in infrastructure projects has soared, rising 102 percent in the first quarter from a year earlier, the National Bureau of Statistics says. In contrast, Washington has distributed $69 billion of its $787 billion in stimulus funds to states and localities, which have spent $14 billion.

PROFIT JUMPS AT DREAMWORKS ANIMATION First quarter net income more than doubled to $62.3 million for DreamWorks Animation, due in large part to strong box-office and DVD sales from “Madagascar: Escape 2 Africa.” Jumping from $26.1 million a year ago, the results far exceeded Wall Street predictions and tops the charts for Hollywood companies. The “Madagascar” sequel generated $595 million in worldwide ticket sales and increased DreamWorks’ sales from last year by 68 percent. The studio’s latest film, “Monsters vs. Aliens,” has grossed about $320 million in ticket sales since its March 27th release. DreamWorks Animation chief executive Jeffrey Katzenberg announced at a conference that this has been their “strongest first quarter ever.” 6

LONDON’S FINANCIAL SECTOR CONTINUES TO FEEL EFFECTS OF THE ECONOMY The financial services industry has been a major source of revenue in London for the past ten years and now analysts are predicting major declines in the city as the current economic crisis continues to affect Britain’s capital. “By 2010, the U.K. will have the largest budget deficit in the developed world,” Richard Snook, a senior economist at the Center for Economic and Business Research in London, said in an interview with the New York Times. “The problem is that the financial services industry has been a huge cash cow for the British government for the last 10 years and now it is going into reverse.” The country’s budget deficit has increased in the past year to 12 percent of gross domestic product and its current public debt burden could soon reach 80 percent of its annual economic output. Analysts expect over 70,000 jobs in the world’s financial industry to disappear in the next two to three years. In the meantime, the British government is trying to prevent further declines in its financial industry, as it has pumped hundreds of billions of pounds into preventing several of its largest banks from filing for bankruptcy.

STARBUCKS REPORTS DECLINE IN REVENUE Starbucks has recently reported its fall quarterly profits have tumbled 77 percent. With this announcement, the company also reported a net profit of $25 million compared to $108.7 million in profits during the same quarter last year – an $83.7 million decrease. Total revenue fell 7.6 percent. The company has also closed 123 U.S. stores in the quarter in efforts to reduce its costs during this economic downtown. Starbucks has previously announced plans to close 960 stores globally during this recession. Since July, the company has shut down 507 locations in the U.S. and 64 locations in other countries. Despite these reports, executive vice president of Starbucks Troy Alstead said in an interview with BBC News, "We are building a healthier and more sustainable business model to support the company into the future and deliver value to our shareholders."

RECESSION HITS MAJOR INTERNATIONAL AUTO INDUSTRIES In past years, many international automakers, such as Toyota, have prospered when U.S. auto companies have seen declines. Now, the economic crisis has halted the good times for Japan’s Motor City, Toyota City. Toyota has idled factories and decreased production during its first annual net loss in 59 years. This has pushed Toyota City into its worst slump in memory, as jobs and tax revenues have declined. “The only places [in Toyota City] that are still busy are those producing for the Prius,” said Masahiro Tanaka, who was recently fired from Toyota, referring to Toyota’s fuel-efficient hybrid sedan. “Everywhere else, jobs are just gone. Completely gone.” He and others said jobs began disappearing after last summer, as collapsing global auto sales led Toyota Motors to lay off 6,000 employees and slow production at its seven factories in Toyota City, where the majority of the its 72,000 Japan-based employees work. Toyota said it expected a $3.5 billion net loss in the last fiscal year, its first loss since 1950. 7

SWINE FLU HITS THE AMERICAN ECONOMY An outbreak of swine flu in Mexico has raised concerns worldwide that the disease could turn into a global pandemic. So far, 168 people are suspected to have died from the strain of swine flu in Mexico. American officials declared a public health emergency on April 26, 2009, after 20 cases of swine flu were confirmed in the United States. Since then, the number has more than doubled, leading countries around the world, including Israel, Bulgaria, and Japan, to tighten their border and immigration controls. The pork industry is beginning to feel the repercussions as people become continually more hesitant of eating pork. Although medical authorities say there is no evidence that people will contract the swine flu by eating cooked pork, Wall Street analysts predict a sharp decline of pork sales in grocery stores. Ten countries, including China, have already banned pork products from the United States.

HOME PRICES ARE DECLINING LESS Prices of single-family homes in 20 U.S. metropolitan areas in February were down 18.6 percent from last year. The slowing rate of decline brings hope for the housing market. The National Association of Realtors said that home prices rose more than normal from February to March, indicating that the market may be stabilizing. Despite this, price drops remain brutal, especially in areas where they rose fast. According to the Case-Shiller index, San Francisco, Las Vegas, and Phoenix were among the hardest-hit cities. The Obama administration recently announced a plan that may reduce payments for up to 1.5 million at-risk homeowners, who continue to struggle financially. Under the plan, the government would tap a $50 billion housing fund to encourage mortgage suppliers to modify second mortgages and cut monthly payments for borrowers.

CZECH REPUBLIC PAYS IMMIGRANTS TO GO HOME During its manufacturing boom earlier this decade, the Czech Republic enticed immigrants with plentiful jobs and comparatively higher wages. Now, the Czech government is paying them about $990 American dollars to go back home, due to a fall in demand for exports and an unemployment rate that has soared to 7.7 percent. The Czech Republic plans to disintegrate the global work force, consisting of 40 percent foreigners that helped the nation grow into a manufacturing hub, in order to open up jobs for the increasing number of jobless Czechs that must now apply for the low-wage work traditionally left for foreigner laborers. The Czech economy is set to contract by 2 percent this year—a major decline from its 7 percent peak in 2006. The Czech Republic continues to increase the budget for its multimillion-dollar program to pay newly jobless migrants to go home. The pay-to-go program is only open to citizens of countries that are not in the European Union. Japan has also begun a similar program.

8

By Sunny Wong Senior Staff Writer

Founded this spring quarter by several undergraduate students, Bruin Finance is the first undergraduate business organization on campus that solely focuses on the financial sector. The organization aims to fill the void of a business major, or more specifically, a finance major, at UCLA. Daniel Kim, one of the co-founders of Bruin Finance, states that USC students have an advantage in the sense that they have finance course offerings, which can be very attractive to area banks. Bruin Finance plans to set up various events, speaker panels, and workshops to aid students going through the recruiting process, the first of which will be on Tuesday, May 5th. Kim said he hopes that UCLA students interested in finance will become better prepared for winter recruitment through being a part of Bruin Finance’s events during the year, which will allow students the chance to receive networking opportunities and resume critiques from investment bankers, to name a few.

“ We want to provide a niche for students in finance.” - Eric Im, CoFounder

Although areas like investment banking and corporate finance appear to be the main focus of this organization, the club also plans to explore other fields within the realm of finance, including private wealth management and investment management. “We want to also cover topics such as microfinance that pertain not only to economic students,” said Eric Im, another one of the organization’s cofounders. Im said he believes that tackling areas of finance other than just investment banking will provide the general student body with a better rounded perspective on the financial sector.

INVESTMENT BANKING PANEL NIGHT Bruin Finance kicks off its first major event with the Investment Banking Panel Night, slated for May 5th from 7-9 PM in Royce 190. Several investment banking professionals from banks such as a Credit Suisse, Houlihan Lokey, JP Morgan, and Barclays Capital will be attending and discussing their profession, as well as providing insight and analysis about the current economic crisis. For sophomores and juniors interested in investment banking, the event should also be a good opportunity to network with the panel speakers, drop of resumes, and receive resume critiques from real bankers. The event will also provide opportunities for students to learn more about Bruin Finance and pick up executive board applications if interested, which are due on May 15th.

OTHER EVENTS Besides the investment banking panel night, Bruin Finance will host UCLA’s first undergraduate Finance Case Competition in the near future. EdgeCorp, a West Coast Wall Street prep company, will be presenting about the financial case process as well as providing a financial modeling workshop. There will also be opportunities to win free prep classes from Edgecorp, valued at $950. 9

www.bruinfinance.com [email protected]

Anderson School of Management’s

2009 ENTREPRENEURS CONFERENCE

By Eric Park Staff Writer “I took the one less traveled by, and that has made all the difference.” Those are the concluding words of Robert Frost’s “The Road not Taken,” which will be the theme for this year’s Entrepreneurs Conference hosted by the Anderson School of Management, titled “The Entrepreneurial Road Less Traveled.” This is an annual, all day event to be held on May 8, 2009. The conference’s focus will be on entrepreneurial opportunities during the current downtrodden economy. The conference’s audience ranges from current and future MBA students, alumni, faculty, entrepreneurs and professionals from a variety of career fields. Prominent individuals scheduled for this event include: Isaac Larian of MGA Entertainment; Claude Ruibal, CEO of Universal Sports; Mary Leslie, president of the Los Angeles Business Council, and many others. This event is designed to promote development in entrepreneurship, business prowess, and opportunities in today’s market.

REASONS FOR SUCCESS The Anderson Entrepreneurs Conference is now in its 24th year and boasted over 400 attendees for its 2008 conference. Philippe Lavertu and Carlo Soracco are two of Anderson’s students who are heavily involved with the planning of this event. Soracco’s MBA focus is in Entrepreneurship and Technology Management, while Lavertu’s is in Entrepreneurship and Finance. When the two graduate students were asked about what has made the event so successful and lasting, Lavertu and Soracco stated, “Attendees come to this event religiously, and the reasons range from the different and great keynote speakers, repeat attendance and support from alumni, and even good food.” 10

Another large part of the event’s annual success is its excellent management, which the two men credit that to “the handoff of transfer”. This is important to maintaining the success and atmosphere of past events as event managers pass on their experience to intern managers who will manage future events.

EVENT SPEAKERS Keynote speakers are critical to the event and this year’s speakers are Richard Rosenblatt, CEO of Demand Media, and Greg Waldorf, CEO of eHarmony. These men possess several vital entrepreneur skills such as innovation, intelligence, and business acumen. “Greg Waldorf was chosen because he created an innovative way to bring people together and he brought his own scientific method to his business application,” said Lavertu and Soracco. Waldorf has been with the company since its inception in 2000 and also had previous experience working with high growth companies in many different aspects ranging from investor to executive. “Richard Rosenblatt was the CEO of Intermix as well and started demand media, which has been the aggregator of social media such as MySpace, Facebook, and Twitter. He helped sell this idea to Myspace, and engineered its sale to Newscorp,” said Lavertu and Soracco. Rosenblatt is deemed by many as an Internet entrepreneur and visionary as he has built, operated, and sold several Internet and media companies. The combined value of these companies exceeds the $1.3 billion threshold. These two men have been incredibly successful in brand development while using the experiences and skills they have learned from the field of business.

REASONS FOR UNDERGRADUATE ATTENDANCE While this event may seem like it is focused on MBA students and individuals with professional experience, this is an excellent opportunity for undergraduate students as well. When asked why undergraduate students unsure of their career plans should attend this event, Lavertu and Soracco gave several intriguing reasons. “This event has professionals from many different fields and gives students instant access to the company they want to work for, exposure to various career fields, mentorship, creation of synergies with attendees from different schools, and even chances to network,” responded Lavertu and Soracco. With the current state of today’s economy and job market, Lavertu and Soracco state that the time immediately after graduation is the best time to pursue entrepreneurship. The two also go on to say, “It forces individuals into their passions, and allows them to brainstorm innovative and new methods to create revenue during these difficult economic times.” They conclude by saying the “current economy still has many opportunities available to aspiring entrepreneurs as many goods have experienced price reductions, and if entrepreneurs can stay afloat during the recession, they will be able to ride the ‘wave of success’ in the future.” Many undergraduate students pursue careers in various fields upon graduation but entrepreneurship is an interesting and different alternate route. The 2009 Anderson School of Business Entrepreneurs Conference provides insight into and encourages the development of business expertise and skills necessary to take the road less traveled.

11