"They put the Mississippi River on Nasdaq as mississippi.com, and it went right down, way down" -- Garrison Keillor, commenting on the flooding on his radio show, A Prairie Home Companion Here's one more casualty of the economic downturn: summer hires. For the past decade, old-line manufacturers, service-sector giants, and denizens of the New Economy have hired roughly 2 million young people--generally students--to fill in for vacationing employees or to do seasonal work every summer.
Not this year. Calls to a number of companies find they're scaling back or eliminating summer jobs altogether. Tens of thousands are likely to be affected nationwide.
Among them: 3M, Intel, Mercer Management, Gannett, R.R. Donnelley & Sons, and Dell. Motorola, which last summer hired 2,000 college students, will take on fewer than 1,000 after reporting its first operating loss since 1985 and announcing layoffs of up to 25,000. Steelcase, a maker of office-furnishings, won't take on its usual 350 college students, either. "I'm not proud of this," says CEO James Hackett, who adds that it's the only way to ensure enough work for current employees.
Memo to young people hunting for summer jobs: You may still get work this year, but it will be much, much harder. When silicon valley was booming, tech companies handed out stock options like breath mints. Now they have a bad taste in their mouths. A new study by benefits consulting firm Watson Wyatt Worldwide finds that the tech companies with the biggest "overhang" of unexercised stock options had the worst stock market performance from February, 2000, through January, 2001. While Watson Wyatt isn't naming names, it's a good bet that losers included options-heavy Microsoft, whose stock fell 38% in that period, and Cisco Systems, which fell 32%.
Investors dislike lots of overhang, which consists of unexercised options plus those that have been authorized but not yet granted. When options are exercised, existing shares are diluted. (Under CEO John Chambers, Cisco's overhang of 1.4 billion options in July, 1999, equalled more than a third of outstanding shares.)
Of the 70 tech companies studied, those with too much overhang fell by 45%. Those with too little--meaning they underused options--fell by 21%. Tech companies in the "sweet spot"-- with an overhang of around 26% of outstanding shares--actually went up 4%. Will Chrysler's PT Cruiser still be as trendy if it becomes as common as a Honda Civic? Executives at DaimlerChrysler apparently think so. After selling out all 175,000 models made since last spring, and then some (there's a months-long waiting list), they've decided to expand production of the retro hot rod by 80,000 units next year. That will bring worldwide manufacturing capacity to 310,000 vehicles per year. Chrysler execs say extra production will make it easier to build spin-offs such as the new convertible, a panel van, and maybe even a pickup--and keep the PT's buzz going.
But analysts question the strategy, wondering whether Chrysler will dilute the car's hard-to-get coolness by putting too many of them on the road. "This is supposed to be a fashion statement. You don't want to flood the market with as many as you can build," says Wes Brown, market researcher for Nextrend. After all, the Volkswagen Beetle, another auto style statement that was once hard to get, too, only managed about 83,400 sales at its 1999 peak.
But for a company struggling with deficits and flagging sales for most of its other products, maybe it's not such a bad idea to go with what works. When Disney acquired ABC in 1996, CEO Michael Eisner envisioned a media,
film, and publishing empire. Now, five years later, comes the clearest
example of that yet in Ice Bound, the story of Dr. Jerri Nielsen, who was
stranded in Antarctica, had to perform her own breast cancer chemotherapy,
and lived to tell her tale. The following Disney companies control:
When the Everywoman's Money Conference began nearly three years ago, it seemed like a great idea. Founders Jody Temple-White, an Oregon financial planner, and author/artist Jan Black figured women were eager for financial advice, but not the boring kind.
So they organized splashy financial seminars around the country featuring high-profile money experts and celebrities such as Debbie Reynolds, Naomi Judd, and Linda Ellerbee. To pay for the 14 events--free to the more than 20,000 women who attended in eight states--the duo raised funds from corporate sponsors and others.
But in the ultimate irony, Everywoman's Money Conference fumbled its own money. It shut down in March, unable to pay its bills. The founders say the business climate became too difficult and that they became mired in credit-card debt. Now, says Temple-White, "we can teach women what not to do."
What happened? "They tried to do too many things at once," says conference speaker Dee Lee, who is still owed fees. In addition to one-day conferences, the group held smaller follow-ups, ran a Web site, and launched a book series. Adds financial planner Avis Pohl: "Their passion was to to help women manage money rather than to make money themselves." Just too bad they didn't heed their own advice. In Mexico, even the time of day can cause a political ruckus. Daylight savings time kicks in on May 6 this year--one month late. The new date is President Vicente Fox's compromise in reaction to howls of protest against summer time, in effect only since 1996.
Its opponents harbor the suspicion that Mexico adopted daylight savings to be more like the U.S. (Since Mexico is the U.S.'s second-largest trading partner, it certainly helps to be in sync.) They complain it throws off their biological clocks, forces kids to go to school in the dark, and doesn't cut electricity bills. Data showing Mexico has saved seven weeks' worth of total household electricity consumption doesn't change their minds.
So Fox shortened the period to five months--two less than the U.S. Even so, Andr?s Manuel L?pez Obrador, Mexico City's firebrand mayor, declared the capital exempt. On Apr. 6, the Supreme Court intervened, forcing Mexico City into compliance in order to avoid "international repercussions." Not to mention mucha confusi?n. Think of local television commercials and you might recall the schlocky old spots featuring used-car salesmen in plaid jackets screaming into a wobbly camera about "Deals! Deals!! Deals!!!"
And with the worst advertising downturn in a decade, TV stations are becoming more aggressive about courting these local advertisers. Their tactics include hiring hundreds of salespeople to convince local companies they'll get the best bang for their buck on TV.
The reason? They need to make up for a shortfall. National spot advertising in the country's 210 TV markets plunged 20% in the first quarter from a year ago as companies cut back on blanketing affiliates with the same ads. In Detroit, for example, last year's mix of TV ad revenues in the first quarter was 45% local, 55% national. This year, that has shifted to 62% local, 38% national. Says Thom Porterfield, general sales manager of Fox affiliate WTIC in Hartford: "With local businesses, you can build a relationship, and trust."
With TV ads expected to be down 10% this year, you can bet station salespeople will be scouring Main Street and the shopping malls of America. Companies that did IPOs of at least $10 million in the first quarter of 2001: 17; in first-quarter 2000: 142