In Business This Week: Headliner
Michael Eisner: Be Our Guest
Walt Disney figures it has another blockbuster with Toy Story 2, which opens on Nov. 24. But Disney Chairman Michael Eisner can't expect his company to get the same reception from Wall Street anytime soon. For much of the last year, stock in the nation's second-largest media giant has sunk faster than the drop on Disney World's Space Mountain.
To diffuse the latest bad news--Disney's 27% drop in third-quarter earnings report and warnings of a tough year ahead--Eisner took the unusual step of staging a daylong meeting with investors and analysts on Nov. 10 on the studio lot. "Give them credit," says Merrill Lynch analyst Jessica Reif Cohen. "The easy thing to do when things are bad is just to hide."
Eisner and his execs told analysts it could take a year to turn things around around. Disney plans to save $500 million annually by slashing studio overhead, scaling back production, and closing some stores. To send investors home happy, Eisner treated the gathering to a Toy Story 2 screening.By Ron Grover in Los Angeles; Edited by Mark FrankelReturn to top
Avis' Barry Rand: No. 1 and Trying Harder
A. Barry Rand has landed his CEO spot. The Xerox vet, who left last year when it became clear G. Richard Thoman would get the top job, is now chairman and CEO of Avis Rent A Car. Rand, 55, says he can't wait to manage Avis' transition from "a great rental company to an outsourcing, vehicle-management, and solutions company." Does that kind of rhetoric sound like Xerox buzzwords? You bet. Rand helped to build the same approach at Xerox, where he became one of the most visible African-American executives in the country as executive vice-president for worldwide operations. Despite a year of intense scrutiny following his decision to walk away from Xerox, Rand has no regrets. "What's core to my character is a willingness to take risks," he says.Edited by Mark FrankelReturn to top
Flying United in Cyberspace
Travelocity and Expedia had better get ready for more competition. Four of the biggest airlines announced on Nov. 9 that they are banding together to form their own one-stop online travel shop. United, Delta, Continental, and Northwest expect to have the new site operating by early next year under independent management. The partners say they will make all of their Internet travel specials available on the new, still-unnamed site, as well as on their individual Web sites.Edited by Mark FrankelReturn to top
Just What the Patients Ordered
In a watershed move, managed-care giant United Health Group on Nov. 8 announced that it will put treatment decisions back into the hands of doctors, instead of giving the final say to the green-eyeshade crowd. Having managers looking over doctors' shoulders was supposed to save money by cutting unnecessary care. But United figures the new move will actually slash tens of millions a year by cutting out staff and paperwork, and streamlining decision-making. The change not only gives United an edge to woo patients, it's also a preemptive strike against patients' rights legislation.Edited by Mark FrankelReturn to top