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"We're investing outside California. Its workers' comp system and taxes are a disaster." --Craig R. Barrett, Intel Corp. CEO Move over, Wal-Mart (WMT) The military is rolling in. On Oct. 2, the Defense Dept. told its 43,000 suppliers that by 2005 it will require them to use radio frequency IDs, or "smart tags," which are the successor to bar codes. These tiny chips send out signals that help keep tabs on everything from tank engines to packaged meals. Defense's policy will give a big push to the fledgling wireless technology, which got a boost from Wal-Mart, too. In June, the retailer asked its top 100 suppliers to start using smart tags by 2005.

Why the switch? The technology instantly locates items in the supply chain and helps make certain they are delivered on time. The stamp-size tags can be slapped on most anything.

With megabuyers like Defense and Wal-Mart on board, the volume of smart tags will rise, heading lower their cost from around 30 cents to under 5 cents within two years. While Defense hasn't decided whether to insist on an immediate rollout or allow a more gradual one, it has served notice that it will be a big player in the wireless world. Walt Disney (DIS) is banking on its latest direct-to-DVD movie, George of the Jungle 2, to gross $47 million. But heavy-equipment giant Caterpillar (CAT) says those sales will come at the expense of its reputation, so Cat is hauling Disney into court.

In the movie, which debuted on Oct. 21, George battles evil industrialists intent on destroying the jungle. And the "deadly dozers" are -- you guessed it -- Caterpillars. In its suit, Cat says the equipment is clearly identified by name and logo. It claims the movie infringes on its trademark and harms its image, especially among impressionable children. If so, counters Disney, Cat has only itself to blame. In its response, Disney says it rented six wheel-loaders from a Cat dealer in Australia. Disney says the dealer had seen the script and even provided a driver for some scenes. It also says the dealer was paid -- in beer and wine for the dealership's annual Christmas party.

After hearing Disney's case on Oct. 20, a judge in Cat's home town of Peoria, Ill., declined to block the movie's release but turned the suit over to a magistrate for trial. No date has been set. Maybe Cat shouldn't get its hopes up: On the screen, the mouse always wins. If you've gotten used to bargain airfares, brace yourself for sticker shock this holiday season. During peak travel times, even the cheapest fares might cost 10% to 20% more than a year ago. That's due to strong demand and limited seats.

OAG data, which tracks airline schedules, calculates that U.S. airlines will add slightly more seats each week this holiday season than last, but that's still down 10% to 18% from the pre-September 11 days. Tom Parsons, CEO of, an online travel agency, says finding seats at peak times for flights to Florida, Mexico, and the Caribbean will be especially tough. His advice: Save the warm-weather trips until after the holidays and head to Europe, where there are still bargains. With regulators poised to mandate the expensing of stock options, compensation committees are starting to cut grants to top execs. But they're making up for most of the shortfall with restricted stock, generous long-term incentives, and cash.

Median CEO option grants were down $1.5 million for 69 companies whose fiscal year ended in the first half of 2003, says pay consultant Equilar. But restricted stock grants were up $1 million. Salary and bonuses rose $161,000.

Fairly typical was the 2003 comp for Procter & Gamble (PG) CEO Alan Lafley. The board cut his option grant by 100,000 shares -- nearly $2 million. But it tripled his restricted stock award to $4.5 million. Including option exercises, Lafley's pay package jumped $3.4 million, or 38% -- in a year when P&G shares were up less than 2%. A P&G spokesperson says the stock is up 68% since Lafley took the helm in June, 2000, vs. 15% for its peer group.

Total compensation for CEOs receiving restricted stock and long-term incentives fell some $332,000, or 3.9%. But save your tears for shareholders who saw their returns drop 16%. Twenty tons is a lot: four elephants, or 17 Mazda Miatas, or 5,797 Apple PowerBook computers. It's also how much weight the 7,000 employees at casino operator Park Place Entertainment shed in two years, thanks to an annual weight-loss contest. Park Place has a lot to gain by losing weight. Its average employee was obese, ballooning health-care costs. The company spent $13,300 a year on drugs for each diabetic. And one worker's lung condition ran $100,000 a year. After the contest, 12 diabetics were able to go off medication, as did the worker with lung trouble. Absenteeism is down, productivity is up. And should the pounds creep back, the contest begins anew next spring. Embattled MCI has a new CEO -- chief ethics officer, that is. Nancy Higgins has the unenviable task of righting corporate governance at the former WorldCom, which plunged into bankruptcy after fraud revelations and record-setting earnings restatements.

Higgins, 52, will report to CEO Michael Capellas and will lead MCI's ethics program, including everything from training to enforcing a revamped honor code. The University of Virginia and New York University have been providing ethics education to all 55,000 MCI employees for several months. "We help them understand the line between aggressive business practice and improper activity," says Virginia professor Brandt Allen.

Higgins, who oversaw ethics for Lockheed Martin, plans to appoint regional "ethics advisers" to solve problems quickly. She says she won't write rules for every situation but will "set a tone at the top." That's critical as MCI emerges from financial -- and ethical -- bankruptcy. Traditionally, the U.S. toy industry hasn't been much for globetrotting. G.I. Joe didn't appeal to kids in other countries, and the higher-voltage electrical systems overseas would roast an Easy-Bake Oven. But as Hollywood continues to spread American culture and retailers such as Toys 'R' Us (TOY) go global, toymakers are finding that international markets are no longer a never-never land for their products.

Mattel (MAT) and Hasbro (HAS) are starting to see the results of an overseas sales push. On Oct. 20, Hasbro reported that international sales for its third quarter jumped 22%, to $328 million. Three days earlier, Mattel said its overseas reven-ue for the period was up 16%, to $715 million. International sales of Mattel's Barbie rose 19%. Good thing -- for the first nine months, U.S. sales at Mattel fell 7%, while they rose just 6% at Hasbro.

Now, the two companies are after an even bigger slice of the $30 billion internation-al toy market. "Probably 75% of what we do should be global," says Hasbro Chair-man Alan Hassenfeld. Hasbro is pushing such toys as Trans-formers and Playskool. And Mattel's Fisher-Price unit has relaunched its Little People line. Looks like Santa should stock up on U.S. toys for kids abroad. Spain's love affair with real estate may be too hot. In 2002, ground was broken for more new houses in Spain than in France and Britain combined. Over the past 10 years, the average cost per square meter has jumped 92%, says the Bank of Spain, while salaries there have risen just 41%. "Prices are near-unreachable for the average Spaniard," says University of Granada professor Santiago Carb?. On Oct. 2, the bank warned that prices are beyond a "balanced level."

Why the boom? A robust economy and low interest rates, for starters. And now, Spaniards born in the '70s baby boom are buying houses.

Policymakers and most lenders expect a gradual market correction. But they're taking no chances. Roberto Higuera, CFO of top lender Banco Popular, says his loan officers are "increasingly prudent." And with any luck, prudent enough.

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