The worst biz blunders of 2017
Wall Street rejoiced in 2017 as the stock market rose to record levels, but not all business leaders and companies were able to join in on the fun.
Some of the country’s top C-level executives were toppled this year for gaffes and failures ranging from personal misconduct to PR controversies. The struggles also extended to Washington, where some well-known business leaders faced congressional inquiries or suffered through dubious stints in the White House, even as President Donald Trump slashed regulations and the GOP focused on corporate-friendly tax reform.
Fox Business breaks down the worst business blunders of 2017 below.
Fmr. GE CEO Jeff Immelt’s private plane
Immelt, who spent 16 years at the helm of General Electric Co., resigned as CEO last August and stepped down as chairman of the board last October, months earlier than expected. Within days of his departure, the Wall Street Journal reported that GE had a spare company-owned plane follow Immelt on business trips in case his personal jet experienced mechanical issues, even as the company faced pressure to cut costs amid a stock slump.
New GE CEO John Flannery promptly grounded the company’s fleet of corporate jets and initiated a plan to cut $3.5 billion in costs by the end of 2018, as well as some 12,000 jobs. Immelt told the Wall Street Journal that he was unaware of the spare plane, adding that it “is not a practice I would have allowed.”
GE shares are down 45% since December 2016.
Equifax Hack
The credit reporting company experienced an unprecedented data breach that exposed the private financial information of 145.5 million Americans, or nearly half the country’s population, including Social Security numbers and driver’s license numbers. Equifax did not disclose the hack until Sept. 7, though the breach itself occurred from May to July.
Several Equifax executives, including CEO Richard Smith, have either retired or otherwise left the company in the months since the breach was disclosed. The company also drew near-universal criticism for including a “forced arbitration” clause that required consumers to waive their right to participate in a class-action lawsuit if they accepted an offer for credit monitoring after the hack. Equifax later modified the clause.
Smith apologized for the data breach while testifying before Congress last October and said Equifax had failed to patch a software vulnerability that allowed the hackers to access consumer data. Equifax shares are down about 16% since the hack was disclosed.
"The criminal hack happened on my watch and as CEO I'm ultimately responsible and I take full responsibility,” Smith said.
United Airlines passenger dragged off
United Airlines suffered a major embarrassment last April after Dr. David Dao, a paid passenger, was violently removed from an overbooked flight at Chicago O’Hare Airport. Graphic video footage of the incident showed law enforcement officers carrying a bloodied Dao off the plane in full view of shocked bystanders. Dao’s lawyers said he suffered a concussion, a broken nose and broken teeth during the incident.
The airline issued multiple public apologies for the incident and made changes to its internal practices. United also reached a financial settlement with Dao. United CEO Oscar Munoz called the incident a “humbling learning experience.”
“I also want to apologize to all of our customers. They can and should expect more from us,” Munoz said.
The Mooch's short White House stint
A top advisor to President Donald Trump during his successful presidential run in 2016, Anthony Scaramucci sold his stake in SkyBridge Capital in a bid to snag a role in the Trump administration. After multiple false starts, “The Mooch” finally got his chance on July 21, when Trump appointed him White House communications director. With Sean Spicer’s resignation as press secretary, Scaramucci seemed poised to spearhead Trump’s communications team indefinitely.
However, his tenure encountered immediate difficulty on July 26, after the New Yorker published the contents of a phone call in which Scaramucci ripped then-Chief of Staff Reince Preibus and used colorful language to criticize top Trump advisor Steve Bannon. Trump removed Scaramucci from his post on July 31 amid a media firestorm, purportedly at the recommendation of Gen. John Kelly, who succeeded Preibus as chief of staff.
Scaramucci’s time in the White House officially lasted just six days, as he did not formally take office until July 25. “The Mooch” has the dubious honor of being the shortest-serving White House communications director in U.S. history.
Sexual misconduct allegations topple execs
Sexual assault allegations against disgraced Hollywood producer Harvey Weinstein sparked a public backlash that has toppled several prominent men in positions of power in the latter half of 2017. Since the New Yorker published Ronan Farrow’s expose about Weinstein’s alleged exploits last October, dozens of women have come forward to accuse the one-time cinema kingpin of sexual misconduct ranging from lewd language to groping to rape. Weinstein was forced to step down from his company and faces multiple criminal investigations into his behavior.
Former “Today” host Matt Lauer, celebrity chef Mario Batali, comedian Louis CK, veteran journalists Charlie Rose and Mark Halperin, music mogul Russell Simmons, actors Jeffrey Tambor, Dustin Hoffman and Jeremy Pivan, producer Brett Ratner, Sen. Al Franken (D-Minn.) and former Alabama Senate candidate Roy Moore are just a few prominent public figures accused of sexual misconduct since the Weinstein allegations were first made public, and the list grows by the day.
Ford CEO Mark Fields ousted after stock slump, Trump gaffe
Long considered a rising star at Ford, Mark Fields took over as CEO in 2014 with a mandate to ramp up the company’s tech-based offerings by investing in self-driving technology, electric vehicles and ride-hailing services. Fields’s efforts initially paid off, as Ford reached record profit in 2015.
However, Ford’s stock price has sagged in recent years. Fields drew criticism due to a perceived lack of focus on the company’s core business, even as competitors like GM and Tesla surpassed Ford in the electric vehicle and self-driving marketplace.
Scrutiny increased further after Fields drew the ire of future President Donald Trump during the 2016 presidential campaign by announcing Ford would move production of the Ford Focus to Mexico, even as Trump vowed to penalize companies that outsourced labor overseas. Ultimately, Fields opted to cancel the planned factory in Mexico at the cost of hundreds of millions of dollars.
Fields was allowed to retire last May and was replaced as CEO by Jim Hackett.