Comments | talk_politics: Olive Garden as Illustrative Case

prog_expat in talk_politics

Olive Garden as Illustrative Case

Sep 20, 2014 17:47

An article in Salon reveals what's really behind that weird presentation from hedge fund Starboard Value about how to "fix" Olive Garden.
( As is no surprise, considering it's a hedge fund, it's all about the Benjamins. )

business

Comments 6

chron_job September 20 2014, 23:05:56 UTC

> Hell, you don't even need a government at all for this to occur ( ... )

(The comment has been removed)

sandwichwarrior September 21 2014, 12:35:54 UTC

thanks for the link

mikeyxw September 21 2014, 04:37:45 UTC

Looking through the plan that BDJ referred to really shows how off-base Salon is. Most of the changes are about overcooked pasta, endless breadsticks which are being refilled just because the last batch was cold, and a menu for an Italian restaurant that includes tapas and burgers doesn't exactly fit the moving cash from one pile to another. Check out slide 10 for the full list. This seems to be exactly the kind of thing a large investor should be doing and is about as far away from shuffling money from one pile to another as you can get. Take the following quote for example: "According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots." WTF?!? Did Salon miss this? Almost all of this deck, including the parts about recommendations for new board members, are about creating a better guest experience and reducing waste ( ... )

mikeyxw September 21 2014, 04:40:53 UTC

BTW, the line "According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots" referred to the water they use to cook their pasta in. Again, WTF?

sandwichwarrior September 21 2014, 12:35:34 UTC

I see a lot of nonsense in that article. and after reading the (executive summary) of that report and a quick skim of the "suggestions" I'm seriously wondering if the folks at Salon are reading the same document everyone else is.

As Mikeyxw and Chron Job have said, most of it seems to be organizational and procedural stuff focused on minimizing waste and liability. These are the sort of things that you would expect a major shareholder to be involved in.

ETA:
If we assume for the sake off argument that the Salon piece (and by extension your own) are 100% on the level, what's the worse that could happen? Olive Garden gets bought out by another company? Goes out of business? It's hardly the end of the world.

Likewise, as Chron Job noted above, such shenanigans owe their effectiveness to how the market is regulated. Blaming regulatory incentives on Laissez-faire capitalism is a case of putting the cart before the horse.

oportet September 22 2014, 01:44:27 UTC

I'm okay with Government intervention in this case - at the very least, anyone who has a problem with unlimited breadsticks needs to be brought in for questioning