On this day in economic and financial history...
Embattled drugmaker Johnson & Johnson
The country found itself fascinated with the "Tylenol murders." The FBI assigned nearly 30 agents to the case. A letter surfaced shortly after the first recall announcements, demanding $1 million in payment from Johnson & Johnson to stop the cyanide tampering. By this point, Johnson & Johnson had offered full exchanges for all outstanding supplies of Tylenol. Several people were arrested in connection with the cyanide tampering and extortion attempt by the time Johnson & Johnson revealed the recall's costs -- $100 million -- at the end of October. No murderer was ever found.
Johnson & Johnson has come under fire several times since for its response to later quality-control crises. The company battled more than 100 lawsuits in the 90s over deaths and liver damage from Tylenol overdoses. It recalled many over-the-counter drugs in 2009 and 2010 for multiple reasons, including potential bacterial contamination, unpleasant odors, and tiny shards of metal in the medicine. The company's more recent responses to problems wholly under its control have been unfavorably compared to the swift action taken in response to murderous tampering.
The company has seen its revenue flatline since its most recent recall episodes. Net income remains well below levels reached at the start of 2010.
Rebuilding the telecom trust
On Oct. 5, 1983, AT&T's
Just prior to divestiture, monopolist AT&T boasted a market cap of nearly $60 billion. Today, after multiple consolidative moves from both parties, the two largest remnants of Ma Bell are worth a combined $350 billion. To put that in perspective, the Dow Jones Industrial Average
Both telecoms have left the Dow in the dust since Verizon joined AT&T on the index in April 2004. They've each doubled, while the Dow's only gained 30%.
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