Up Front
Edited by Sheridan Prasso
Talk Show
"The only stopping place that I see is zero, and if going to zero is constructive, then we ought to do it." -- Federal Reserve Bank of St. Louis President William Poole discusses the possibility of lower interest rates
AFTER 9/11
A War the Drug Smugglers Hate
Expect to add drug smuggling to the casualty list in the war on terrorism. The U.S. Customs Service reports that drug seizures for the just-ended fiscal year were 16% higher than last year and almost twice the amount seized four years ago. Heroin seizures were up 40% from last year, the biggest jump in any of the drug categories.
Stepped up efforts pre-September 11 are mostly the reason. Now, with even more strict security at the nation's 301 entry points, seizures are likely to accelerate.
That's a good thing, since the ban on growing opium poppies in Afghanistan, once the source of much of the world's heroin, isn't being enforced as strictly as in previous years now that the Taliban is heading for the caves. The Taliban's stance on drugs may indeed have made a difference in the past: U.S. customs seizures of hashish, also a Central Asian staple whose cultivation was banned by the Taliban, fell to 777 pounds last year, down from 24,096 pounds in 1999.
By Paul Magnusson
PENSION PITFALL
Polaroid Brass: "Me First"
How safe are company pensions? With layoffs and corporate bankruptcies mounting, consider the roller-coaster case of Polaroid (PRDCQ
).
In the week before Polaroid declared bankruptcy on Oct. 3, more than a dozen senior execs--including a handful of company officers--quit. Their fear, company insiders say, was that the government would end up taking over Polaroid's pension plan and cap annual pensions at $40,700. By leaving early, the execs took away their pensions in lump sums, totaling millions of dollars. That compounded another problem, that many of the 3,365 employees who had been laid off prior to bankruptcy had also opted to take their pensions in lump sums. The result: Polaroid's pension plan was underfunded by $100 million, or 10%, as of Oct 1. The government Pension Benefit Guaranty Corp. stood ready to step in.
At the same time, Polaroid abruptly cut health-insurance subsidies for its 5,000 retirees. That left some retirees facing expensive medical bills without coverage. Many could soon pay as much as $5,000 a year out of pocket.
Recently, however, the stock market rise has put Polaroid's pensions back in the black--at least for now. Polaroid won't comment on the pension fund except to say it's continuing to operate as normal. Polaroid is hoping a buyer will take over its assets, as well as its pensions. If that happens, the Pension Benefit Guaranty Corp. won't be needed. But if it doesn't, many loyal Polaroid employees who went down with the ship may end up poorer than the bosses who bailed out.
By Geoffrey Smith
AIRPORT BLUES
Soothing the Savage Traveler
Holiday travelers passing through Chicago's O'Hare International Airport in December will get the blues--literally. To make standing in long lines more palatable, the airport will bring in local bands to entertain passengers in the evenings of Dec. 6-24 while they wait to check luggage or wind their way through security. The tunes: pop, reggae, jazz, and, of course, Chicago blues.
The concerts are just one of the many ways airports across the country hope to inject a little Christmas spirit into flying. Air traffic picked up substantially over Thanksgiving after a two-month hiatus. But the increase, combined with tightened security screening, meant for big crowds, long waits, and cranky passengers. So airports from San Jose to Dallas/Fort Worth to Fort Lauderdale sent in the clowns--and jugglers, musicians, and face painters.
Baltimore/Washington International Airport, which amused Thanksgiving travelers with Madonna and Austin Powers impersonators and jugglers dressed as turkeys and pilgrims, plans a second revue from Dec. 5-24, this time with a high school song-and-dance group, a Girl Scout chorus, cheerleaders, and, of course, Santa Claus.
Says a BWI exec: "We're trying to relax our passengers during this hectic time." Well, if you call that relaxation.
By Michael Arndt
THE LIST
What's with the Letter "A"?
Consultants say "A" names are more popular than others when companies change identities. Why? They then can come first in alphabetical listings.
NEW NAME OLD NAME
Altria Philip Morris Derived from the Latin altus,
meaning "high"
accenture Andersen Company says name puts "accent
Consulting or emphasis on future"
Avaya Lucent Made-up name of no particular
spin-off origin
Aventis Hoechst, Rhône- Was the name of a Hoechst research
Poulenc merger group
Agilent Hewlett-Packard Made-up name derived from "agile"
spin-off
Data: BusinessWeek
AFTER 9/11
The Subway Is Gonna Get Noisier
With all the scares these days, people want to be in constant communication--even on the subway. In Boston, Chicago, and San Francisco, transit officials have long had plans to install cell-phone transmitters underground, but September 11 compelled them to make haste.
San Francisco's BART (Bay Area Rapid Transit) found in a survey that riders who previously protested cell phones underground now want them--by a margin of 2 to 1. BART will take the recommendation to its board for approval in December. "After the events of September 11, the argument that it was a matter of safety, not of business, gained a lot of ground with people," says a BART spokesman. Andrew Corp. (ANDW
), which won a preliminary agreement to build BART's network, is installing similar systems for Chicago's El trains and Boston's T, at a cost of about $15 million each. "Their ridership is pressuring them to speed up the process," says Andrew's Group President for Wireless Products Charles Jacobs.
Metropolitan Atlanta Rapid Transit Authority (MARTA) will ask its board to take wireless bids later this month. And Los Angeles, after neglecting cellular access when it built the final leg of its subway last year, will call for bids in 2002.
Yet, the city that may feel the need for access most acutely may never get it. The New York City Metropolitan Transit Authority said in early 2001 that it was in discussions to install a cell-phone network. But with damage to the subway from the World Trade Center collapse expected to cost $1.7 billion, repairs will have to come first. "Cell phones did not become a priority after September 11," says an MTA spokesman.
For the rest of the country, construction is expected to take 12 to 18 months. Until then, relish the ringless commute.
By Julia Cosgrove
SPORTS BIZ
It Really Will Be a Sold-Out Game Now
Finally, a market solution to an old problem. Because of no-show season ticket holders, 300-odd seats to see the sold-out Colorado Avalanche sat empty each game. Frustrated fans couldn't get tickets but saw all the empty seats on TV.
Such seats are now being filled as a slew of startups build online ticket exchanges. They let season ticket holders sell tickets they otherwise wouldn't use. "If you're a sponsor or an advertiser, you want to see those seats full," says David Carter of L.A.-based consultants Sports Business Group.
Season Ticket Solutions runs the Avalanche's new exchange. LiquidSeats has deals with teams including the Arizona Diamondbacks and the Seattle SuperSonics. Smartix recently finished a pilot with the San Diego Padres. The San Francisco Giants began one of the earliest exchanges, in 2000, with Tickets.com (TIXX
), which will add other teams next season.
Fans shouldn't expect bargains: Most teams set minimum ticket prices. And service charges, split by the team and the vendor, can add 20%. But it beats watching empty seats on TV.
By Kimberly Weisul
As the Downturn Turns
Economic gloom has its advantages--if you're a recruiter at the Church of Scientology. A red-and-white "Now Hiring" sign sits outside its Washington (D.C.) headquarters, with a poster of prominent members John Travolta and wife Kelly Preston. Personnel director Trudy Lamb won't say how many jobs are on offer or what they pay, only that there are "more jobs than you can imagine," including accountants and receptionists. Since the signs went up in late September, 15 people have applied and four have signed five-year contracts.
Converting "is not absolutely mandatory," says Church President Susan Taylor. "But we do ask that they take courses. This is a church, after all." And, in these hard times, it's a job.
By Brian Grow
THE BIG PICTURE
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Copyright 2001, by The McGraw-Hill Companies Inc. All rights reserved.
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