Inside Track: Target Corp. is in the cross hairs

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: January 5, 2014 - 7:41 AM
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Vincent Vassallo is looking forward to cheap electric bills for his new Tesla limousine.

Target, the once-nimble discounter, has transformed itself into a sluggish giant that has alienated some of its customers and its own weary troops with the media-forced disclosure in December that 40 million “guest” debit and credit card accounts had been hacked.

That followed news of a poorly executed expansion in Canada.

And inventory problems.

Everybody knows that the Target model is to lure you in to buy a few things, and then hook you on buying the extra flat-screen TV, 20 bags of M&Ms or some other essential impulse buy, preferably financed on a Target ­Redcard. Meanwhile, CEO Gregg Steinhafel can’t keep customer accounts out of the hands of the cyber bad guys.

The credit-hack scandal dinged Target’s stock, and there is chatter among crisis-communications professionals that the Target brass have been less than straightforward or contrite. Steinhafel, who got $23.5 million in cash-and-stock compensation in 2012, has cast Target as a victim along with Target’s customers.

This has turned into a corporate PR nightmare.

“Without being ‘in the room’ to fully understand why they’ve adopted such a closed communications posture, it’s hard to accurately second-guess their decisions,” said Jon Austin, one of the Twin Cities’ top crisis consultants. “That said, it does seem clear that Target is looking to say as little as possible about the whole situation. That approach is 180 degrees off base. In general, I think companies should begin with the proposition that, particularly in a crisis, they’re going to get everything out that they can and only hold something back if they have a specific reason to do so. That kind of ‘flip-the-script’ mind-set needs to start at the top of the organization.”

Vincent Limousine loves the new Tesla

Vinny Vassallo, a corporate refugee who started his own limousine service a decade ago, reports that his Vincent’s Limousine Service took delivery of its first Tesla electric vehicle in December.

And the customers love the battery-powered luxury automobile so much that several already have ordered their own for personal use.

Vassallo, tooling around in subzero weather last week in a vehicle that has plenty of power and lots of heat, believes that Vincent is the first Minnesota limo service with a Tesla.

Vassallo paid “$97,000 with all the add-ons” for the new Tesla, after Ford Motor Co. discontinued “the traditional Lincoln Town Car” — the backbone of Vassallo’s fleet.

Vassallo crunched the numbers quite a few times and figures his break-even point on fuel savings of at least $9,000 annually means he’ll have paid for the difference in the cost of a Lincoln within five years. He estimates the electricity to charge the Tesla will cost $800 a year to drive about 40,000 miles.

“I own five vehicles and I’ve only been driving the Tesla since Dec. 20,” Vassallo said. “The customers love it. So far as I can tell, the battery is doing just fine. Time will tell. I plan on using the Tesla as much as possible. I hate my fuel bills.”

SHORT TAKES

• Minneapolis-based Castle Building & Remodeling is the latest company to say it’s unilaterally raising its minimum wage to $12.50 an hour. CEO Loren Schirber concedes that the company, which is opening a third showroom, pays most of its employees more than that. But it’s also a statement that it even wants the best interns, he said. And employers have to pay up as construction — and the economy — heat up.

Schirber said Castle pays laborers $14 to $24 an hour, plus benefits that include a beefed-up health insurance plan and a retirement ­contribution. Castle, started in 1977 by the Schirber family, expects to add a dozen workers this year and projects employment of 55 and revenue of $7.5 million in 2014.

• New York City’s new mayor, Bill de Blasio, has named lawyer Zachary Carter as the city’s chief counsel. Carter, 63, a partner in the New York office of Dorsey & Whitney, was the U.S. attorney in Brooklyn. He oversaw the 1997 Abner Louima case, in which several police officers were charged in connection with a brutal assault on a Haitian immigrant. In selecting Carter as top counsel, De Blasio signals a legal posture markedly different from that of former Mayor Michael Bloomberg, who supported the Police Department’s controversial stop-and-frisk practices.

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  • The first fleet-owned, electric-powered Tesla limousine in Minnesota is operated by Vincent’s Limousine Service.

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