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OCTOBER 11, 2004
Edited by Ira Sager Talk Show "Now that was fun." --Michael Melvill, pilot of the first private space flight, after his plane rolled over unexpectedly several times near the top of the flight trajectory UNION DUES Scuffles In The Labor Ranks Is the AFL-CIO headed for a breakup on its 50th anniversary next year? The possibility jumped sharply on Sept. 27, when the 380,000-member International Association of Machinists (IAM) authorized its leaders to yank the union out of the AFL-CIO if they see fit. The resolution comes in response to a campaign by Service Employees union President Andy Stern and other officials to shake up the labor federation by creating fewer, more powerful mega-unions. IAM President Tom Buffenbarger's primary fear, sources say, is all the talk of changing the AFL-CIO constitution next year to allow it to force mergers between member unions. That could revive pressure for an ambitious merger scheme that Buffenbarger's predecessor had signed on to with the auto workers and the steelworkers, which collapsed in 1999. "We need to send a strong message to the AFL-CIO: We should not allow our own dues dollars [to the AFL-CIO] to be used against us," Buffenbarger told delegates. Other unions, especially the 40-odd smaller ones that would be likely merger candidates, could be emboldened to follow IAM's lead. The AFL-CIO declined to comment. Looks as if the federation's anniversary will be a hot one. By Aaron Bernstein   EXECUTIVE SUITE HP Puts Out A Call For Help When Hewlett-Packard (HPQ ) missed its third-quarter earnings expectations by 39%, it blamed the unit that sells gear to corporate customers. Now the company is quietly trying to bring in some new managers, including a senior operations executive, to help CEO Carleton Fiorina fix the business, BusinessWeek has learned. Recruiter Spencer Stuart has been conducting the search for a top-level services executive and a marketing vice-president. Several IBM execs have been approached, according to sources. Potential candidates are being told that, after a transition period, the services chief could take over all enterprise services, hardware, and software operations. HP Executive Vice-President Ann Livermore was recently given those duties; it's not clear what role she would eventually assume. Candidates for the marketing job have been told that it calls for retooling the company's overall marketing and image. HP declined to comment. According to sources, HP also is looking for a seasoned exec to run day-to-day operations across its units that sell to corporations, including enterprise hardware and software, services, and PCs. This new hire would report to Fiorina. By Ben Elgin 
WEB WATCH Censorship: Beijing 1, Google 0 When Google (GOOG ) went public in August, its founders vowed they would hold the customer experience sacrosanct. Yet the company has voluntarily excluded Web sites banned by government censors on a service recently launched in China to search Chinese-language news outlets. In stark contrast, the company refused to alter its searches in 2002, when the Chinese government briefly banned Google. The search kingpin admits to removing eight news sources, apparently deemed subversive, from the Chinese site, which is still in a test version. "In order to create the best possible search experience for our mainland China users, we will not include sites whose content is not accessible," says a Google spokesperson. Aside from the censorship itself, Google offers China users an uncharacteristic lack of disclosure on the removed content. It notifies U.S. users, for in-stance, when copyrighted content has been removed from searches. In China, Google doesn't disclose the modifications. Rival Yahoo! (YHOO ) has long conformed to censors in its own Chinese site. Google says China's imminent position as the world's most populous -- and potentially lucrative -- Internet market had no role in the decision. By Ben Elgin AFTER 9/11 How Do You Stack Up On Security? Are U.S. companies ready for disaster? A Harris Interactive poll of execs at top companies found only 58% felt they were set up for better access to critical data in a catastrophe than they had been on September 11, 2001. That's down from 67% last year. Yet when asked to grade their readiness, the executives gave themselves a B, up from C+ the year before. Jim Simmons, CEO of SunGard Availability Services, which commissioned the survey, says execs gave themselves extra points for knowing their weak spots. That's progress, of a sort. By Diane Brady SHOW BIZ Brain Waves Walt Disney (DIS ) is trying to replace longtime partner Pixar Animation Studios (PIXR ) by ramping up its own computer animation, but its Miramax Film (DIS ) unit has its own plans. BusinessWeek has learned that Dimension Films, a unit of Miramax, has signed a five-film deal with Wild Brain. The San Francisco animation house is best known for Digger, a critter that burrows under toenails in ads for Novartis' (NVS ) foot-fungus remedy. If Disney can't persuade Pixar to re-up -- and talks have gone nowhere -- Miramax founders Harvey and Bob Weinstein, who are also tussling with Disney, might just show up the parent company with their own animation hits. Up first for consideration is a flick based on Opus, the penguin of Bloom County comic strip fame. By Peter Burrows FACE TIME Dawn Lepore: Taking On An Online Drugstore  Dawn Lepore was Charles Schwab's chief information officer from 1993 to 2001, when the brokerage's electronic trading boomed. Later, as vice-chairman, she endured a "couple of tough years," she says. Co-CEO David Pottruck left under pressure in July. Now, Lepore is heading for the door, too. On Oct. 11, she joins drugstore.com in Bellevue, Wash., as chairman and CEO.It won't be any easier at the only online health-products shop to survive the dot.com bust. Not many consumers use the Web to buy toilet paper and shampoo. Prescription volume will grow as boomers gray, but the site has many competitors -- including low-priced Canadian outfits. While revenues in 2004 will rise 44%, to $350 million, the company is still in the red. Yet Lepore, 49 and a mother of two, is banking on the efficiency of online shopping and the company's stock of hard-to-find items. "Those demands will continue to drive growth." Lepore, for one, is al-ready a customer. By Amy Tsao ON THE ROAD A Paved, Well-Lighted Campsite There are no campfires in the Wal-Mart (WMT ) parking lot in Concord, N.H., only security cameras and lights that never shut off. But pass by any evening, and you'll see recreational vehicles dotting the asphalt, taking advantage of what has become America's fastest-growing free RV way station. "You can't always find a campground or a place that will be safe to pull over," explains Tom Fayette, a traveling preacher who was among a dozen camped at the Concord Wal-Mart. RV aficionados have used Wal-Mart Stores lots as impromptu rest stops for years, owing to their safety, ubiquity, and convenience. But the practice has exploded in the past three years, says Chuck Woodbury, editor of online newsletter RV Travel. With more RVers on the road and the recent run-up in gas prices, Wal-Mart lots are a welcome oasis. Wal-Mart doesn't have an official stance on the practice. Local laws prevent about 10% of its 3,200-plus U.S. stores from adopting an RV-friendly policy. "We don't offer sewer hookups or anything like that," says Wal-Mart spokes-woman Sharon Weber. "But we do offer [the open lot] as a convenience when we can." Weber says some stores see up to 100 campers a night. Wal-Mart even sells a special Rand McNally atlas complete with directions to every store, and notes as to which ones have pharmacies, full groceries, or other services. Purists wouldn't call it camping, but on a recent night in Concord, Wal-Mart was a temporary home for Fayette, as well as retirees from Quebec, itinerant laborers from northern New Hampshire, and visiting Texans. All in the shadow of a 24-hour superstore selling everything from live lobsters to porcelain eagle statuettes -- not to mention those road maps guiding you to the next Wal-Mart. By Eric Moskowitz CULTURE CLASH I'm So Mad I Could Just...Work Delta Air Lines' (DAL ) recent announcement of pay and benefit cuts must have rankled workers. But could such anger-inducing moves have a beneficial effect? Maybe so. Research by Jennifer George, a manage-ment professor at Rice University, finds that bad moods can spark creativity. George, working with Jing Zhou of Texas A&M University, studied designers and engineers at a large helicopter manufacturer. Workers with good moods often felt that they had made progress and their efforts had been sufficient. Negativity signaled discontent with the status quo and spurred solutions to problems. George doesn't suggest that companies purposely try to tick off workers. But it's helpful to realize that "sometimes those feelings are functional," she says. So have a nice day! Or don't. By Brian Hindo 
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