enkosh, proctor and gamble puts

his chief execute officer back in the corner office. ageing infrastructure. what needs to keep our roads and bridges safe. beef prices soar. you'll be paying the price for your backyard barbecue. we have that and more tonight on "nightly business report" for friday, may 24th. good evening. an executive shakeup at dow component proctor and gamble had all of wall street and the world of business buzzing today but the new boss is same as the old boss as the old song used to go. after just four years at the helm, bob mcdonald has regned. the man who had the job before him again takes over the company as president, ceo and chairman. investors liked what they heard sending the dow component stock higher by 4% today at $81.88. so we're bringing back the

former chief executive make p and g a better company and a better investment and does the strategy of bringing back the old boss ever work? >> reporter: proctor and gamble the largest consumer brand in the world, the maker of products we know and love like diapers, fabric softener and crest toothpaste replacing bob mcdonald with the former ceo. he ran the company from june of 2000 to june of 2009. he's not just a legend but his career is a material upon which harvard business school are case studies. it led its peers in terms of performance. >> one of the definitions that i use of leadership is the ability to continually transform the mission, the strategy, the organization, whatever needs to

be transformed to keep pace with and stay ahead of the unrelenting change that i believe is the reality in a global and incredibly competitive marketplace. >> under bob mcdonald, however, the company stock price has suffered on a relative basis. p and g has seen 54% but one of the laggards in its peer group. mcdojd's was a hand picked successor but mcdonald faced many challenges leading the consumer products giant through the economic down town mcdonald was criticized by investors for not doing enough to cut costs and improve manufacturing productivity. he was scrutinized last radiator when the company missed expectations on revenue. can p and g problems be blamed entirely on mcdonald. some skeptics argue that loufly

is at part. and the point about former ceo come back to run companies, when the former ceo came back to run xerox the stock fell 50%. former ceos coming back doesn't always guarantee a home run. analysts are generally positive on the change. they couldn't have predicted the timing but do say they weren't totally surprised. the analysts who have the hold on the stock said while the move was second struckive it will take some time to change the fundamentals. for nightly business report. our guest is in the business of advising executives and students about leadership. robert kaplan is an assistant dean professor at harvard business school. kaplan is the author of a new book "what you're really meant to do." i don't know if this p and g

case will become a harvard business sool case study. but you thought it was the right thing to do to bring loufly back. >> he's one of the great ceos this country ever had and he was a great ceo at p and g. he articulates a very clear vision, how they add value, what their competencies are. in particular that vision is always driven by the needs of the customer. so he talked about the need to adapt, to change, to keep moving forward, and i think that takes real decisiveness. what he'll bring to this company, he'll finish the restructuring, the cost-cutting but you'll see him focus very haef heavily on the customer. >> this feels like phil jackson coming back to coach the lakers one more time. i wonder what it says, though, p

and g always had this reputation of being a place that minted the next generation of business leaders. do you agree wh that and number two the fact they went back to the former ceo suggests they had no one on their bench to step up if the board wasn't happy with mr. mcdonald? >> i think given the timing of the decision with mcdonald, i think it was a good decision to go to a. g. they have lots of talent in this company and what you'll see a.g.loufly do is pick the next ceo. they have a real competence of developing people p.. at this moment they felt there was no one up to this job and it made more sense to bring in loufly. >> what kind of changes do you expect. loufly sent a memos to employees

saying the consumer is boss. innovation is our life blood. what kind of changes account we expect at p and g? >> so, under loufly the company went from a house wares doe a beaut jay care company. the u.s. consumer has changed in the last five years and more price sensitive. i think you'll see him look very hard in the united states for starters how to better serve the consumer give end they are more price sensitive. he'll look at their product offering in fast growing markets. it wouldn't surprise me to see them make some more bold decisions about innovating, introducing new products that serve the customer need and if necessary he'll make acquisitions too. >> you know, there's probably no company inhe world that knows more about what women want, that's their business, that's what they say they want. what do women want from that company right now?

>> well, they've got 25 business lines that generate a billion dollars or more and that includes products for women but includes diapers for babies and a whole range of other products in between. tooth brushes, oral-b you name it. so what women want it sound like from all the research i've read at least in the united states, they are a little more price sensitive, household sector has been beaten up in this country over the last number of years. there's a lot of competition. and they are more -- they want more value. >> we can go on for hours with you. rob, thanks so much. this was great. robert kaplan from harvard business school. on wall street today stocks wrapped up a quite volatile week with a wimper, worries when the federal reserve will pull back. they posted their first weekly loss in over a month. that happened despite that jump inhares of proctor and gamble

and some good news about manufacturing. orders for long lasting or durable goods shot up more than 3% in april led by strong demand for new aircraft. after a after an up and down session they closed down. the nation's crumbling infrastructure was a big topic today for americans all across the country. the washington state bridge collapse last nit is a stark remier of the troubling condition of the nation tease roads, bridges and tunnels. so what needs to be done to make them safe again? michelle caruso-cabrera reports. >> reporter: the collapse occurred on interstate 5 in mount vernon, washington. >> when you looked at the carnage of the metal i assumed that was it at that point. there was no hope. that's what i was thinking.

>> reporter: all three people were rescued. washington state police told reporters an oversized truck hit one of the overhead spans. the tractor-trailer made it all the away cross. the driver stead and cooperated with investigators. the bridge was inspected twice last year and received a score of 47 out of a possible 100. >> it's an older bridge that needs a lot of work. >> reporter: more than anything the bridge collapse highlights the ageing state of the nation's roads and bridges. constructed in 1955 this bridge is labelled by the federal highway administration as functionally obsolete. >> no shoulders on the bridge. the width of the lanes are too narrow. there are other aspects of the bridge that you just wouldn't design into a bridge in this day and age. that's why they are considered functionally obsolete. >> this bridge had a clearance of 14 1/2 feet. in washington state 20% of all bridges fall into this category.

across the united states, the number is 13% or 80,000. the american society of civil engineers which assesses the nation's infrastructure every four years gives thenited states grade of d plus. that's an improvement from last time but still lagging. the nation's bridges get a slightly better grade of c plus. >> i think the big picture lesson here is that the nation needs to continue focusing on investing in bridges, improving their condition, and not just bridges but transportation in general. >> figuring out how to pay for it will be the next challenge. for "nightly business report" i'm michelle caruso-cabrera. still ahead lobbyists doing what they can do to influence lawmakers and soft je new financial regulations. you may be surprised just how cozy they are getting. but first, how the international market closed today.

tens of thousands of federal government workers got the day off. it's because of federal budget cuts known as the sequester. 5% of the total government workforce were furloughed, completely shutting down the irs, the environmental protection agency, housing and urban development and office of management. more fur loss will kick in after july 4th. another group of employees in the nation's capital are working harder than ever right now. lobbyists. three years after the dodd-frank law overhauling gulation of the nancial industry lobbyists working for nation's biggest banks are the ones drafting those new financial rules and guess who is benefiting?

john harwood joins us from washington with more. how common is it for lobbyists to play a big role in writing legislation or regulations? >> reporter: pretty common, tyler and the reason is that the industries have a lot of expertise and many industries hire as their lobbyists people who worked on the very committees that are doing the legislation in question. so it'a very cozy relationship. this is why they call it washington's revolving door. it's been going on for quite a long time. it works both ways to the benefit of business which is something especially when republicans are in control of the house, is an aid to business. campaign contributions help with that. organized labor, environmental groups, people who align with the democratic party do the same thing. >> this is news to most americans. how should we respond to this? should we be angry or should we be pleased they are working together? >> reporter: well there is something to be said for the

expert us the that they bring to the table. but i think the important thing is disclosure and transparency so people know what's going on and my colleagues in the "new york times" came out with a report today showing how closely wall street representatives had worked with the house of representatives committee on this and the more people know about it the more they know what sort of laws that they are going get. >> that article was fascinating. it said in one place a big passage in the proposed legislatiowas word for word what citibank had proposed except for two changes. how likely are these changes to the dodd-frank law bill likely to become law? >> reporter: the fact that the drafting of those pieces of legislation is now known is going to help opponents and consumer representatives who want more regulation of those derivative trades pushed back.

when you have a republican house and democratic senate both sides will have their side aired. as much progress they can make in the house, the senate controlled by democrats is going to have its say as well and there will be lobbyists on the other side pushing back. >> john harwood, thank you very much. let's turn now to market focus. we begin with a market moving verdict. a jury ruled that the company was not negligence intelligent after a surgery. investors made intuitive the top gainer in the s&p 500, closg at $500 and change. >>valeant pharmaceutical shares are up 13%. abercrombie & fitch ceo promised things would get better by back

to school season. nevertheless he lowered guidance for the full year today after reporting a 15% drop in comp store sales and a deeper profit declinthan pected. the stock close off its low at $50.02 but down 8% on the day. sears ceo says his company's performance quote has not been acceptable. he was reacting to the loss we told you about last night more than doubled wall street estimates. shares of sears down double digits all day long closing at $50.25 a top of 13.5%. investors who are really long term owners of stocks should not be scared of market volatility. the ief investment officer at barrett yard advisors. good to have you with us. how can i insulate myself against the natural fear of volatility when things go up and down a lot as they have this

past week it starts to feel a little risky. >> well, the thing that people have to realize is that volatility and risk are not the same thing. your shares are worth a certain amount of money on any given day. the key isime horizon. if y have a long term time horizon it just becomes noise. >> you are a big proponent of buying stocks and again putting out warning that not a good idea to be in bonds or anything that's tied to the interest rate world. now a lot of our viewers still think that bonds are a safe place to be. give us your case of not to own bonds. >> investing has so many p paradoxes. investments thought of being safe are not safe.

the congressional bill office, cbo estimates by the year 2019 we'll be back in a normalized interest rate environment. if that's the case then ten year treasury bonds will being yielding 5% and those of us who lived for a while don't think 5% is a high interest rate. if that were to indeed come true then people who currently own long dated assets tied to the cost of money like preferred stocks and long term bonds would see somewhere between a 30% to 40% decline in the principle investment. >> that tells you how much you lose if interest rates go up by that much to your point that what seems safe sometimes can be very risky. let's go to some stocks now, marty. quickly. beginning with one you like that has not been doing much over the past decade. that's cisco. why do you like it now? >> valuations. first of all we like their business. they are entrenched, incumbent

participant in the global i.t. structure which is a very good business. the business has a decent and high return on invested capital. but it's valuations, tyler. cisco right now is trading on a free cash flow yield of 10%, and in addition to that they are very strong financially. they have $5.60 of net cash per share so really the glol economy can throw a lot at them and they will be okay. >> you like dupont, dd on the big board. what do you like. the stock has had a nice move so far this year. >> i don't know i would be chasing dupont at these levels. we're not bullish on the stock market. we're a little bit wary. the great thing about dupont it's a way to participate in two major themes. one is the rise of the global middle class, and the

accompanying boom that that will be for globalgricultural companies. not many people know this but dupont owns the largest seed business on the planet. there are only four major companies who basically control the market. the other way, the other trend one gets exposure toby owning dupont is america's energy independence that's as a result of the shale revolution and the important thing is that companies like duponthich are biconsumers energy for the ameran business will have a competitive cost advantage relative to our trading partners. >> thank you so much. have a great weekend. do you have any disclosures to make on those two stocks you mentioned. >> i own both of them. >>

>> summer sizzle takes on a new meaning as the cost your cookout climbgs. first a check on commodities, treasuries and currci climb.ses. first a check on commodities, treasuries and currencies. millions of americans still owe more on their mortgages and their homes are worth. when those homeowners move out more and more of these underyour borrowers are becoming land lords. not because they want to. but because many of them have to. >> reporter: florida native maria wells never ever wanted to be landlord. >> i would be really happy when i'm not in these situations. >> reporter: she owned two homes, one hers, one for her mother. as the housing recession dragged on her living changed.

maria got married and moved in with her new husband. her mother fell and had to go assisted living. maria was saddled with unwanted real estate. >> wasn't happy about it but i was so upside down, did not want to do a short sale or a foreclure so i decided that i eded to rentthem. >>eporte even home pces slowly improve 13 million homeowners are still under water on their mortgages and another 9 million likely don't have enough equity to move. life circumstances, be it job changes, marriage or divorce force people to move. that has created a new breed of accidental landlords. >> people of some means are able to avail themselves and move out of the house and move into a new one and rent out the old house. >> repter: wle some underwater borrowers choose to walk away from their homes those that want to protect their

scores are staying to face the music. >> one of the tenants certainly surprised me. they decided to change a water filter and left for a holiday weekend and i got the call that 500 gallons of water had gone into my home. and $50,000 later in repairs i had to fix it and then re-rent it again. >> reporter: there are no hard numbers how many accidental landlords are out there realtors say the phenomenon is contributing to the lack of for sale investor because many people are buying without selling. in some of the hardest hit markets it may take years for these homeowners to rise above water and sell their way out of the rental business. finally tonight as we kick off the unofficial start of summer. let's make it official. millions of americans may be planning to grill up steaks or burgers or hot dogs this holiday weekend but before you do brace

yourself for some sticker shock at the butcher shop. jane wells tells us what's cooking. >> reporter: a funny thing happens to your barbecue from here to here. the price sizzles. >> beef prices have gone up e a2r0u7bd%. >> reporter: he knows the market in burbank, california. he said demand for beef always jumps heading into summer. >> there is to be more than demand. >> reporter: all cuts of meat costing more. ground beef prices jumped the most. up 9%. here's something you'll see in california. here at the green acres market they are having to pay 15% to 20% more for beef. passing along about a third of that new cost.

what's going on? it's all supply and demand. exports are up especially to japan affecting demand. the nation's cattle herd is at an all time low. in california where ranchers are just as likely to drive golf carts as ride horses, dry weather has left him with too little range land. he has to buy feed. he cut the size of his herd in half and he may not be done. >> if these cows are not in calf, if they are not pregnant then i'm going to have to cold them and they will go hamburger. i'll save the ones that are bred and feed them a maintain an economic unit. >> high beef prices should encourage ranchers to reballed their herds but that hasn't happened. it's predicted more americans will switch from beef to chicken. that's "nightly business report" for tonight. have a great weekend.

>> you have a great weekend. i'm tyler ma thinkson. thanks for watching. we'll see you back here on monday for a special "nightly business report".