"Bankruptcy is a real possibility." -- Gerald Grinstein, CEO of Delta Airlines, which announced up to 7,000 jobcuts and a massive restructuring plan
Skype Technologies, one of the upstarts attacking the telecom industry by offering free phone calls via the Internet, has landed a big fish for its board. BusinessWeek has learned that Mike Volpi, a senior vice-president at networking giant Cisco Systems (CSCO), has become the Luxembourg company's first outside director. "[Volpi] shares the same vision for the future as we do, and he has great experience," says Niklas Zennstrom, a co-founder of Skype, which has grown to 10 million users in just a year. Skype hopes that Volpi's industry contacts will help it land deals in Asia.
That's great news for Skype, but it could raise delicate questions for Cisco. In the 1990s, it teamed with a generation of now-defunct Net startups that wanted to attack the phone business. Ever since, Cisco has been working to win back the trust of Baby Bells and other local phone companies. It doesn't help that Skype's founders also created KaZaA, the music file-sharing site that has drawn the ire of the recording industry.
Cisco says Volpi made a personal decision to join Skype, which it O.K.'d. The company says it has no plans to make an investment.
It seems some of J.D. Power & Associates' auto clients have been complaining that the research company's data are too often used to write negative stories. So on Sept. 7, the Westlake Village (Calif.) company -- long the ultimate arbiter of car quality in large part by supplying hard-to-get information to auto industry reporters -- said it's turning down the data spigot.
The company will still grind out surveys and studies ranking brands and models based on consumer complaints. But it will restrict how its Power Information Network, which offers far more detailed data on vehicle purchasing, shares information with the media. While willing to give out general numbers on minivan sales, for instance, it will no longer reveal how many minivan buyers General Motors (GM) lost last year to Korean brands. Nor will it say how many Ford (F) owners defected to Toyota (TM) or even the average age of Buick buyers.
Power spokesman Peter Marlow concedes that clients haven't been happy to see some data in print. "Everything we publish gets pushback from our clients, except from the 10% who score the highest," he says. Power's solution is simple: Shoot the messenger.
Workplace complaints from Hispanics are up 22% since 1999, says the Equal Employment Opportunity Commission. And the allegations include harassment, unfair pay, and "English only" rules at companies such as InterContinental Hotel Group's (IHG) Holiday Inn Express and LVMH Group's Sephora USA. Sephora denies the charges, while Holiday Inn Express settled its case.
In part, the rise in complaints is a by-product of more Hispanics in the workforce. Tensions have grown in industries such as manufacturing and construction. There, some co-workers are angry that Hispanics, many recent immigrants, take less pay, displacing white and black workers and holding down wages. Also, Hispanics are now taking jobs in locales such as Georgia and Iowa, where outside labor competition has been rare.
The EEOC has also made efforts to educate Hispanic workers, including illegal immigrants who don't always know they can file complaints despite their undocumented status. U.S. Hispanics, now topping 42 million, are feeling newly empowered to say basta to workplace discrimination.
Cartoons, that's how Toyota is (TM) courting Gen Y. It asked ad agency Saatchi & Saatchi to create an 18-page comic book for the sporty Celica. Titled Fuel, it tells of Celica GT-S owner Max and his showdown against drag-race champ Slam. Unlike BMW's New Yorker comic insert to push the Mini, Toyota's "target is predominantly males 18 to 25 interested in enhancing their cars," says Steve Rabosky, Saatchi's chief creative officer. The comic nods to the fast-growing aftermarket business with info on features such as alloy rims and racing pedals. If Fuel is a hit, Max may be in for a rematch.
Four companies were outed last week for not insuring employees' domestic partners -- though they did offer to insure pets. The Human Rights Campaign, a gay advocacy group, cited Home Depot (HD), Sprint (FON), Waste Management (WMI), and Ecolab (ECL). Home Depot says it will extend benefits to same-sex partners in October. The others are considering it.
Overall, humans still fare better than animals: 34% of companies now offer same-sex domestic partners benefits, says the Society for Human Resource Management. Just 3% of companies insure pets.
Since founding frog design in 1969, German-born Hartmut Esslinger has injected European style into Silicon Valley's geeky aesthetic. His 170-person, Sunnyvale (Calif.) firm designed Apple Computer (AAPL)'s first Macintosh and updated Dell (DELL)'s e-commerce Web site, while Esslinger fashioned a larger-than-life persona, even appearing on BusinessWeek's cover in motorcycle leathers.
Now 60, he has cashed in. Last month, he and his wife, co-CEO Patricia Roller, sold a majority stake in frog to contract manufacturer Flextronics International (FLEX) for more than $20 million, say sources. Flex can now take a job start-to-finish, designing not only the electronic guts, but also the look and feel of products.
The alliance could lead to "personalized production," says Esslinger. Rather than buy a pre-stocked model, you could cobble together an ideal product -- say, a cellphone with larger keys for Mom. So don't look for Esslinger to ride off into the sunset. When the time comes, "it won't be on a horse," the sports car aficionado says. "A Porsche (PSEPF), maybe."
For astronomy buffs, taking pictures of planets, nebulae, and other deep-sky objects can be expensive. Astronomy cameras start at $1,500 and can reach $5,000. But there's a cheaper way to wish upon a star: tinkering with Webcams. Following instructions freely available on the Internet, enthusiasts have modified common $99 Webcams made by Logitech International (LOGI) and Philips (PHG) to capture surprisingly impressive images of planets and stars.
Here's how it's done. Using Webcams with "charge-coupled device" (CCD) chips, which are especially sensitive to light, stargazers can simply remove the lens to shoot bright subjects such as the moon and nearby planets. More distant nebulae and galaxies require longer exposure times, and more fiddling. Do-it-yourselfers manually solder tiny circuits in the Webcam to block the signal that ends the exposure. Then they clean up the image with special software.
Too much grunt work? Companies such as Melbourne (Fla.)-based SAC Imaging Systems and Portugal's Perseu sell already-modified Webcams to those less eager to do the handiwork themselves. SAC President William Snyder expects sales of his cameras, which sell for around $250 on average, to double this year to $500,000. Perseu reports similar numbers.
Bigger players are catching on, too. Venerable Meade Instruments (MEAD), a maker of high-end astronomy gear, will roll out a $299 CCD-based camera by October. "[It was] an untapped market," says Ken Baun, Meade's vice-president for engineering. Not quite the Hubble Space Telescope, but, at a couple billion dollars cheaper, it's quite a bargain.
If women shut their purses and didn't shop for a day, would the economy suffer? The idea gets tested on Oct. 19 by 85 Broads, a networking group founded in 1999 by Janet Hanson, who worked for Goldman Sachs (GS) -- headquartered at 85 Broad St.
BusinessWeek has learned that 85 Broads is asking its 4,000-plus members in 450 companies, colleges, and B-schools not to spend that day. Hanson says the "buycott" will show the gap between women's purchasing power and their underrepresentation in boardrooms and executive suites. Members plan to spread the word to friends and to women on college campuses. Women control $3.3 trillion in yearly consumer spending, 44% of national spending -- a sum that isn't just symbolic.