In Business This Week: Headliner
Joel Klein: Facing the Music
When Joel Klein stepped down as the U.S. Justice Dept.'s antitrust chief in September, he made one thing clear: He did not want to be thought of merely as a trust-busting lawyer. He got his wish on Jan. 31, when he was named head of the service arm of German media giant Bertelsmann's North American division.
About one-third of Klein's work will draw on his legal background. The rest will involve advising Bertelsmann CEO Thomas Middelhoff on strategic deals such as the merger of Bertelsmann's music group with London's EMI and helping to navigate the company's relationship with online music distributor Napster. "This is the right mix for me," he says.
Klein's move may come as a surprise to many--but not to those who have followed his career zigzags. Before taking on Microsoft at the Justice Dept., Klein was an advocate for the mentally ill, an appellate specialist, and a deputy White House counsel. Most recently, the New Economy has been his focus. At Bertelsmann, he'll see it from the other side.By Dan Carney; Edited by Monica RomanReturn to top
Schwab: Thank God It's Just Friday
Charles Schwab put a new spin on corporate belt-tightening this week when it said it will ask 26,000 employees to take three Fridays off in February to help cut costs. The move is Schwab's latest attempt to spend less, without resorting to handing out hundreds of pink slips like many of its competitors. Ameritrade, Credit Suisse, and J.P. Morgan Chase, among others, have announced they will cut staff. The layoffs have sparked a panic among financial-services employees, say headhunters. Schwab said in December it would temporarily trim staff salaries, starting at the top. Co-CEOs Charles Schwab and David Pottruck have had their paychecks cut in half.Edited by Monica RomanReturn to top
Chrysler Starts Slicing and Dicing
With the decision to slash about 26,000 employees--20% of its workforce--and permanently cut auto production by 15%, DaimlerChrysler's Chrysler Group unveiled the major initiatives in its turnaround plan for the struggling U.S. unit. Suppliers are asked to pare costs by 15% over three years, and Chrysler dealers face $500 million to $600 million in concessions. Insiders say the final plan, to be presented on Feb. 26, will be anticlimactic--other than revealing the cost of the turnaround strategy. Chrysler denies it will scrap its current engineering structure or make other radical structural changes.Edited by Monica RomanReturn to top
Go.com Is a No-Go for Disney
Walt Disney gave up its efforts to take on America Online and Yahoo! in the portal wars, closing down its Go.com site and taking $790 million in write-offs. The company is also converting the lackluster Walt Disney Internet Group stock to Disney shares. It plans to focus on its still-potent Disney.com, ESPN.com, and other content sites. Wall Street analysts expect the company to buy other Internet properties down the road, when newly opened theme parks will help add $1 billion annually to cash flow.Edited by Monica RomanReturn to top
Trent Dilfer's Field of Dreams
How much is a Super Bowl win worth? For Baltimore Ravens quarterback Trent Dilfer, apparently a lot. The QB, whose performance was unspectacular during the regular season, was the point man for the Ravens' 34-7 demolition of the New York Giants on Jan. 28. The game's Most Valuable Player, Ray Lewis, effectively ended his promotional opportunities after being charged with murder and assault last year and settling for a plea bargain. So it was Dilfer who got about $75,000 for taping a brief Disney commercial during the postgame, on-field euphoria. The 28-year-old player also picked up a "Got Milk?" deal and a contract to sell autographed Super Bowl footballs via TV shopping network QVC. Not bad for a QB who started the season on the Ravens bench.Edited by Monica RomanReturn to top