"When we discuss job reductions, we are talking about positions, not necessarily people." -- Marc Oken, Bank of America CFO, on the bank's recent elimination of 12,500 slots Early evening on a lonely stretch of highway, and you see a billboard advertising a hearty breakfast special 20 miles ahead. Good message, bad timing. But what if the sign changed at dinnertime to promote pork chops or sushi? That's the plan brewing at Clear Channel (CCU) Outdoor, the billboard unit of San Antonio radio giant Clear Channel, which already operates flashing signs in New York's Times Square. Now it's looking to operate computerized signs in the hinterland, says Michael Hudes, who takes over on Apr. 12 as the company's digital marketing strategist.
The challenge is expense. Large-screen billboards that light up Manhattan and Las Vegas can cost $250,000 apiece. Hudes' task is to produce far cheaper signs for highways within two or three years -- and change the nature of billboards. "We won't sell space anymore, but time," he says.
This is the latest push by the $21 billion outdoor ad business to vie with more nimble radio and print. The challenge for drivers in this new age of lively highway ads? Keeping an eye on the road. Metropolitan Life Insurance Co. doesn't cover property and casualty losses, and it doesn't make or sell asbestos. But on Apr. 19, when the Senate begins debate on a $124 billion corporate-funded trust to take asbestos cases out of court, MetLife execs will be watching from the edge of their seats.
Why the concern? In 1932, a doctor hired by MetLife examined more than 1,000 workers at an asbestos plant in New Jersey and found evidence of lung disease. In recent years, plaintiffs have filed suits against MetLife, charging that the insurer concealed the study. MetLife denies the allegation.
Even though some state courts have dismissed the claims, MetLife has paid out $180 million in the past two years to settle others. So the suits keep coming -- 112,700 at last count. In March, the company upped its asbestos-liability reserves by 50%, to $1.2 billion. "Asbestos litigation is out of control," says MetLife spokeswoman Holly Sheffer.
A trust fund promises relief, but negotiators are still haggling over its size. They also worry that once asbestos claims are cleared up, victims might sue anyway over similar illnesses caused by silica dust. MetLife lawyers are already jousting over that issue in court. Score it Diller 1, Tax Man 0. BusinessWeek has learned that a New York tax examiner ruled on Mar. 17 that Barry Diller's InterActiveCorp (IACI) may keep collecting hotel taxes in New York at a lower rate than officials in several other states have been demanding. The ruling, if adopted elsewhere, could save IAC up to $150 million in back taxes.
The issue arose from the way the Internet has changed hotel sales since 2000. Instead of selling rooms for a 10% commission, IAC's Expedia and Hotels.com sites buy rooms from hotels cheaply and mark them up for resale. Like competitors Travelocity (TSG) and Orbitz (ORBZ), they have collected tax from consumers only on the price the Web sites pay the hotel for rooms, not the price the consumer pays the Web site. The difference: $3 to $4 in tax per room night.
The New York ruling says it's up to hotels, not travel agents, to collect the taxes. IAC declined comment. Rulings in such states as Florida and Pennsylvania are pending. But if they follow New York's lead, a persistent cloud over IAC's shares, and its future, could lift quickly. Dealers are eager for the new Mini convertible to hit U.S and European showrooms this summer. Orders for the follow-up to the wildly successful remake of the '60s classic already total 3,000 in Britain, and market researchers say global sales could hit 25,000 this year. Some 176,000 Minis were sold worldwide in 2003. BMW, which owns the marque, has nurtured Mini mania from the start by keeping supplies of the pint-size car ($17,000 to $25,000) running just short of demand, so it could likely sell more. In fact, more than half of Mini buyers end up waiting three months for delivery. What's next? BMW isn't saying, but analysts expect to see a Mini wagon in 2006 -- followed, perhaps, by a roadster version in 2007. A retirement package for former Anadarko Petroleum (APC) CEO Robert Allison Jr. includes 200 hours a year on the company jet. If the Houston company grounds its fleet, Allison is entitled to rentals on Anadarko's dime. Researcher Paul Hodgson of the Corporate Library says this may be a first. The company calls it a just reward for 17 years of strong leadership.
But jet rentals could get pricey. Going rates extend from $50,000 a year for a Piper Aztec to $1 million a year for a mighty Gulfstream V. Longtime Columbia University economist R. Glenn Hubbard took a break from academia to help push through President George W. Bush's controversial tax cuts. Hubbard stepped down last year as chairman of the President's Council of Economic Advisers, and on July 1, he's taking over as dean of Columbia Business School. His goal: To shake up B-school education.
Hubbard, 45, says he wants to push entrepre- neurial thinking into the core MBA curriculum. He says this means approaching problems with a startup mentality -- even within big companies. Traditionalists at Columbia may resist infusing rigorous finance and management courses with lessons on risk-taking and improvised departures from the business plan. But students could find an extra advantage in Hubbard's approach. Facing a competitive job market, entrepreneurial-minded grads might launch startups of their own. Where do Korean companies go for innovation? Increasingly, to Russia. Samsung, LG Electronics, and Daewoo, among others, are relying on Russian engineers. "There's an enormous pool of scientific and engineering talent we can tap," says Song Yong Won, a Russia specialist at the state-run Korea Institute of Science & Technology.
Examples of Russian technical prowess abound. It was a Russian who helped develop the cooling pipes that are crucial for LG air conditioners. Another played a role in the invention of the long-lasting recording heads that helped Daewoo sell 4.2 million VCRs last year. And Russians lent a hand designing the image-processing chips in Samsung's digital TVs.
A Korean company has even found a market for a treatment from the Russian space program to remove toxins from the bloodstream of cosmonauts. Salus Biotech rebranded the serum, called KGB, and has sold 70,000 vials as a fail-safe hangover remedy.
Why are so many Russians working for Koreans? Partly because Korea can no longer depend on its traditional industrial patrons, the Japa-nese. It was Mitsubishi Motors that taught Hyundai Motor to build cars, and Sanyo that introduced TV technology to Samsung. Now these companies are Japan's fiercest competitors, and Tokyo is no longer eager to help.
The Russian connection is likely to become stronger still. The Korean government is helping some 60 Korean startups with $19 million to tap Russian technology. As long as the money continues to flow, the Russian inventors won't be inclined to say nyet to any prospective Korean employers.