Up Front
EDITED BY SHERIDAN PRASSO
Talk Show
"Today's decision is a victory for all creators." -- Hilary Rosen of the Recording Industry Association of America, reacting to federal appeals court ruling against Napster Inc.
And It Comes with Formaldehyde
Ah, that new-car smell that some aficionados like so much they buy it in a spray. Well, it could make you sick. Researchers at a government public health institute in Japan detected abnormally high levels of hazardous chemicals emitted from interior finish materials: the glues, plastics, vinyl, and treated leather used for car dashboards, door panels, and seats. Their test vehicle--the manufacturer's name was kept secret--contained formaldehyde and 113 other potentially harmful volatile organic compounds.
Lest skeptics think eau d'auto is only in Japanese cars, such materials are used by carmakers worldwide. Researchers found that emissions were highest at the time they purchased the test vehicle in July, 1999, and exceed World Health Organization indoor air quality standards by up to 45 times. Formaldehyde can irritate the eyes and nose with low-level, short-term exposure. Long-term exposure at high levels may cause respiratory problems and cancer.
The formaldehyde began to dissipate rapidly 50 days after purchase and was negligible 153 days later. Oddly, emissions levels bottomed out 180 days into the test but then began creeping back up again to worrying levels, albeit slightly lower than when the vehicle was brand new. Researchers blamed the onset of summer, which raised air temperature.
Authorities say no cases of "sick car syndrome" have been reported so far in Japan. And there's no word on whether eau d'auto sprays have similar chemicals. Best advice? Drive with the windows down.
By Chester Dawson
How Tinmen Smelt a Quick Profit
What's more profitable than selling aluminum? Selling the electricity you would normally use to make it--to California. That's what aluminum producers along the Northwest's Columbia River have figured out. They're buying electricity to run their plants from the regional power authority for $22 per kilowatt hour, then shutting down assembly lines, idling workers--and reselling the electricity for $405 per kwh.
The power authority, understandably, wants the companies--Kaiser Aluminum, Columbia Falls Aluminum, and Golden Northwest--to give back a quarter of their windfall--worth up to $1 billion for the next seven months of the current contract. But while the others agree, Kaiser says no and is pocketing the $383 difference. Complains a Bonneville Power Administration spokesman: "They are taking advantage of the power crisis."
But Kaiser defends its actions, saying it's merely exercising contractual rights to resell power. While it shut down two smelters, Kaiser still managed to pay 1,000 idled workers 75% to 100% of their wages. The plants are to remain closed for the contract's duration. Without the windfall, the Houston-based aluminum maker would have lost 19 cents a share in the fourth quarter. But thanks to the deft arbitrage, Kaiser eked out a 14 cents-a-share profit. "It didn't make sense to make aluminum," says a Kaiser spokesman.
With aluminum selling for 70 cents to 75 cents a pound and the power to make a pound of aluminum costing $1.50, he's got a point.
By Stanley Holmes
May the Best Tan Win
U.S. pollster and campaign adviser Stanley Greenberg wrote the book for center-left politicians. He has primed Bill Clinton ('92), Tony Blair ('95), Gerhard Schroder ('98), Ehud Barak ('99, 2001), and Al Gore (2000), using polls to recast images and refine messages.
So what's the spin doctor done for an encore? Gone to Italy to mold premier-wannabe Francesco Rutelli for April elections. The ex-mayor of Rome with movie-star looks is now making a "whistle-stop" tour of Italy, and has gone to London to seek tips from Blair. Greenberg has dubbed him a "candidate of change" with a vision for Italy. Rutelli will need spin to beat his conservative opponent, media billionaire Silvio Berlusconi, a former cruise-ship crooner and former Prime Minister. Cynical Italians have dubbed the campaign the "war of the suntans."
By Gail Edmondson
A Merger of Equals?
J.P. Morgan's Douglas A. Warner III and Chase Manhattan's William B. Harrison Jr. said they intended a merger of equals when they put the two institutions together six months ago. But now, three of Morgan's senior stewards--including one* who helped negotiate the deal--are leaving. That leaves the Chase/JPM ratio of of investment banking execs at 5 to 3.
Outgoing J.P. Morganites and their new pursuits:
CLAYTON ROSE, COO, INVESTMENT BANKING
Considering options
EDWARD KELLY III *, HEAD, FINANCIAL INSTITUTIONS GROUP
President and CEO, Mercantile Bankshares Corp.
JOSEPH WALKER, CO-HEAD OF M&A
Adviser to General Motors, a major JPM client
Data: J.P. Morgan Chase & Co. and BusinessWeek
Trying to Hustle Up a Few Slots
About 10 miles south of Los Angeles in the blue-collar suburb of Gardena, skin-mag king Larry Flynt has quietly opened the Hustler Casino. Its massive crystal chandeliers sparkle. Gold-framed TVs hang on red velvet walls. But despite the porno panache, Flynt's $35 million roll of the dice is eerily sedate. Flynt hasn't been actively promoting the establishment, which opened last June. Another conspicuous absence: noisy slot machines. The Hustler is technically a card club, not a casino, and so bets are limited to blackjack, poker, and Asian card games.
That has Flynt in a bit of a state, according to his diminutive wife, Liz, who works the cash register at Shorty's Place, the gift shop that bears her nickname. Surrounded by sequined Hustler sportswear and a newsstand of Flynt titles such as Barely Legal and An Unseemly Man, Larry Flynt's autobiography, Liz says Larry plans to sue the state of California, which allowed slot machines on 58 Indian reservations last year but not in the state's dozen or so card clubs.
A call to Larry Flynt, whose Bentley with HUSTLR license plates and handicapped sticker is regularly parked at the club, confirmed he plans to file suit within weeks. Flynt calls the state policy "reverse discrimination."
By Christopher Palmeri
No Dream: California Skies Are Bluer
Here's a breath of fresh air: Cleaner fuels and power are paying off. Air quality in big U.S. cities improved steadily throughout the 1990s, concludes a study by two nonprofit, nonpartisan groups, including the Foundation for Clean Air Progress. "Clean- air progress has been phenomenal," says foundation President William Fay.
The change is most evident in southern California. Since 1990, the number of days with high pollution decreased 100%--from more than 30 ozone warning days to zero--in San Diego and Orange County. Los Angeles saw a 95% drop, from 121 ozone days in 1990 to 6 in 1999. Not bad, considering the economic boom of the '90s and the 20% increase in the U.S. population since 1990--meaning more drivers on the road.
And there could be even bluer skies ahead if the Bush Administration doesn't ease up on environmental regulations: Phased-in provisions of the 1990 Clean Air Act will be complete by 2008.
By Nicole St. Pierre
Wash Away Your Sins on the Web
Hinduism's most sacred festival, held every 12 years and ending Feb. 21, drew 20 million pilgrims to India's Ganges River seeking to wash away their sins. Even pop stars Madonna and Paul McCartney came. But for pious Indians overseas, getting there can cost upwards of $2,500 a person. So an Indian entrepreneur has a clever alternative. Would-be dippers can log on to www.webdunia.com and take a free virtual dip. They scan in their pictures and, at the appointed hour, see cutouts of their heads superimposed into a Ganges purification scene.
Site founder Vinay Chhaj-lani says more than 2,000 Indians have taken a virtual dip. And although the site has corporate sponsors, Chhajlani won't make money on it. "It's our social contribution to helping spread Internet use in India," he says. He hopes it will draw advertisers to the portal that hosts it. Since ancient Hindu texts did not foresee the Internet Age, it's questionable whether a virtual dip really counts.
By Manjeet Kripalani
Footnotes
Women as a proportion of law students in 2000: 50%; women ranking as partners in law firms, 15.6%
DATA: CATALYST
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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