"To me, yes, it's worth the money." -- Gregory Olsen, entrepreneur and scientist, on spending a reported $20 million for a 10-day trip in space
After holding off for more than a year, the Commerce Dept. has quietly released a study of offshoringothe movement of white-collar jobs to low-wage countries. But it's not the even-handed assessment completed by staff analysts in June, 2004, after six months of research. The staff report was largely ditched, say outside experts who heard the staffers' views. Instead, these critics charge, Commerce political appointees put out a 12-page report that portrays offshoring as an unconditional boon to the U.S. economy. After BusinessWeek's print edition went to press on Oct. 5, the Commerce Dept. responded by saying: "In carefully developing the report, we sought to ensure that it was thorough, objective and that the competitive environment was properly assessed and supported by hard data."
Commerce has only released its final report to Rep. Frank Wolf (R-Va.) who ordered it up, but BusinessWeek has obtained a copy, as well as a slide show tied to the original research, presented by staffers at a conference last December.
The staff researchers' presentation gave both the pros and cons, comparing factors that favor U.S. high-tech job growth with those that favor offshoring. The official version dispenses with most of the disadvantages. Instead it points to pro-offshoring studies done by McKinsey Global Institute and uncritically cites data from a lobbying group that represents the U.S. subsidiaries of foreign companies. "No objective analysts, even if they were in favor of outsourcing, would write a report like this," says Ron Hira, a professor at Rochester Institute of Technology, who saw the December presentation. To see the slide show and official report, go to www.businessweek.com/extras Here's the department's full-length "Six-Month Assessment of Workforce Globallization In Certain Knowledge-Based Industries. To read the report, click here. Here's the original presentation prepared by Commerce Dept. researchers, with pros and cons for the U.S. workforce. To view the slide show, click here Battling lawsuits hasn't stopped insurance titan Maurice "Hank" Greenberg from continuing to enjoy the spotlight. Even as American International Group (AIG) fights for control of 290 million shares held by Starr International Co., one of three controversial private entities controlled by Greenberg, the ousted chief is busy trying to carve out a new role as the grand old man of insurance.
In recent weeks, Greenberg, 80, has spoken about terrorism risk at a major conference, remarked on the industry's ability to absorb hurricanes, and publicly donated $1 million to Hurricane Katrina victims through the Starr Foundation he heads. That's in addition to discussing how he plans to invest the $17.7 billion pot that's now under dispute. Next up: a trip to China in the coming weeks to meet with the mayor of Shanghai and other high-ranking officials. Greenberg spokesman Howard Opinsky explains that his boss "remains a leading figure in the business community whose insights and experience are tapped regularly by business and political leaders." Opinsky adds that Greenberg "is actively pursuing new ventures." One venture, of course, will be tackling those legal woes.
States and cities have a new way to raise money: "For Sale" tags on the Interstate Highway system. On Sept. 28, Indiana Governor Mitch Daniels announced plans to put 157 miles of I-90 up for bids. Daniels also wants to invite private outfits to help build and operate a 142-mile extension of I-69 as a toll road. Meantime, governors of New Jersey and Delaware are urging lawmakers to privatize nearly 400 miles of combined tollways, including some stretches of I-95. The first experiment in a privately owned Interstate shows bright promise: At the start of the year, a Spanish-Australian joint venture paid $1.83 billion for the Chicago Skyway, a 7.8-mile stretch of I-90. The deal took a money-losing toll road off the city's hands, filled a budget deficit, and endowed a rainy-day fund. Seems everything has its price.
The energy bill passed in August will extend daylight saving time by four weeks each year. Could that pose Y2K-like problems for business? Hillel Parness, a litigator at Brown Raysman Millstein Felder & Steiner LLP in New York, who has studied daylight saving time history, argues that every self-adjusting computer or other electronic device will be displaying the wrong time beginning on Mar. 11, 2007, unless steps are taken. He talked with Elizabeth Woyke.
Won't some of these glitches be minor?
Time accuracy on the video of your child's birthday party is probably not very important. But what about security cameras that record who enters a building when? Because the financial markets are international and time-sensitive, there could be serious implications. Prices depend on what time the trades come in. There have been recent investigations with mutual funds that looked at late trading and highlighted the importance of time accuracy.
With PCs, aren't manufacturers likely to develop fixes in time?
They will undoubtedly send out patches to fix things, but a patch is only as good as its installer. If users ignore it or don't know how to upgrade their computers, they're not going to get upgraded. There are sophisticated systems that bring down time from a central location, but a lot of companies don't use them.
What can companies do to prepare?
Companies [should] examine their contracts. To limit potential liability, [they can] add specific protection clauses.
Lucent Technologies Bell Labs' new president, Jeong Kim, wants to ensure the vaunted research institute lives up to its reputation for breakthrough technology. He says he's choosing "a selective few bets, so we can make a big impact." That includes using nanotechnology to create speakers and lenses not much thicker than a human hair. Placed on walls and clothes, they could pinpoint a person's location by picking up audio, video, smell, and movement cues. Kim predicts widespread adoption within 5 to 10 years.
Kim, 45, first joined Lucent Technologies in 1998 after the company acquired his communications equipment startup, Yurie Systems. Since his return in April from a teaching gig at the University of Maryland, he has been running the Labs as more of a startup, emphasizing risk-taking, speed, and creativity. Kim believes that his varied experiences will help him promote more new discoveries: "Everything about me is entrepreneurial," he says.
It's quitting time at Miller Brewing, which means it's also hiring time. The brewer is facing an extreme version of the pending baby boom retirement wave. In the next three years, the Milwaukee beermaker says it has to replace a brewery's worth of salaried staff and three breweries' worth of hourly staff (out of its total of seven breweries). That's because in the 1970s booming demand -- including for the new Miller Lite -- led to a hiring surge as the company built a factory and staffed up elsewhere. Now those people are ready to call it a day. The average age of a Miller operations worker is 50.
With so many other companies moving their manufacturing work overseas, the brewer has plenty of well-trained workers to choose from. But Miller execs are scrambling to get them in the door before years of beer-making expertise walk out. So managers are hiring brewery workers, including machine operators, three months before they actually take a spot on the line, in order to serve an apprenticeship. And they're debriefing current staff and putting details on how they work into a database. Many top execs have already hit the exits: Since SAB, based in London, bought the brewer in 2002, Miller has replaced, among others, its CEO, and heads of finance and marketing.
When it comes to financial literacy, U.S. students typically score an F. Now a for-profit drama group is trying to remedy the problem. The National Theatre for Children (NTC) is performing 45-minute shows in New York for middle-school students, using sketch comedy to teach saving, budgeting, and credit.
The Mad About Money program started on Sept. 28 and, with Citibank (C) as an initial sponsor, plans to reach 1,000 schools. The NTC has previously created shows on nutrition, energy conservation, and the environment.
Finance may prove a tougher sell, however. Lewis Mandell, a finance professor at the State University of New York at Buffalo, was hired by the NTC to evaluate the impact of its new presentation. Mandell oversees a biennial survey of financial literacy among high school seniors. In the 2004 survey, 65% failed a personal finance test. By targeting younger kids, Mandell hopes this show won't bomb.