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JUNE 26, 2006
Edited by Deborah Stead Talk Show "Skeptics who say this is the 'twilight of the UAW' -- that we're `toast' -- don't know who we are and where we came from." -- President Ron Gettelfinger, at the union's 34th Constitutional Convention FLIGHT Eat Your Heart Out, Icarus Humans have come a feather closer to soaring like birds. Aided by a set of 6-foot-wide carbon-fiber wings, paratroopers can now jump out of planes at 33,000 feet and glide as far as 120 miles before popping their chutes and floating to earth. Recently designed for Germany's special operations forces, the Gryphon wing-and-chute system is made by a joint venture between ESG Elektroniksystem-und-Logistik and Dräger. The Gryphon's compact size and stealthy materials make it both silent and nearly invisible to radar. In battle, winged soldiers carrying up to 200 pounds of gear could jump from planes far from a danger zone and glide in undetected. With production slated for late 2006, the wings' designers next hope to add compact turbo jets. The extra thrust would help parachutists travel even farther -- or let them jump from lower altitudes. No word yet on whether the U.S. military is interested. By Adam Aston   EARNINGS Bracing For Storm Season If serious hurricanes hit the U.S. this fall, as predicted, they could batter the stock market. That's because insurance company stocks are expected to supply an outsize portion of the earnings growth predicted for S&P 500 companies this year. The stocks of property-and-casualty and multi-line insurers make up just 3% of the index' value. But given insurers' low earnings a year ago, they may supply nearly one-fourth of the 15% earnings growth analysts expect for the index in the third quarter, according to Thomson Financial (TOC ). That growth could be blown away by a round of nasty storms. "There could be a big impact on earnings if we have a bad year," says Thomson research director Michael Thompson. If insurers' profits are hit the way they were by Katrina and Rita, he says, the predicted S&P 500 growth would be only 11%. It's not clear how much insurance stocks could fall. Some analysts say shares already have been discounted to reflect heavy-weather predictions, even as earnings estimates are sunny. Since insurance earnings accounting uses as many variables as weather forecasting does, Thompson advises investors simply to keep an eye on storm damage. By David Henry THE BIG PICTURE 
Iraqabilia Apparently the customer targeting power of eBay (EBAY ) knows no bounds. Search the blog-tracking site Technorati for posts about the death of Iraqi al Qaeda leader Abu Musab al-Zarqawi, and along with the results you'll get an eBay ad hawking Zarqawi collectibles. Go to the site and you'll find propaganda leaflets bearing Zarqawi's photo (nine bidders at last check, with prices hovering at about $23), wanted posters, and other items, many of them gruesomely incorporating images of his death. In all, about 20 items are for sale. The most expensive: a box of 50 matchbooks issued by the U.S. military advertising a $25 million reward for al-Zarqawi's death or capture ($42). By Stephen Baker and Louis Lavelle SCREEN SHOTS Trophy TVs: Thin, But Not Quite So Rich Televisions get more affordable. The reason? Prices for a key component, the LCD panel itself, are falling. Taiwan's AU Optronics, the No. 3 panel producer, has announced that its average price would fall 10% in the second quarter, twice the drop it estimated, because of demand expectations that fizzled when consumers failed to buy a lot of LCD TVs ahead of the World Cup. Other panel makers are suffering, too. On June 13, Korea's LG Philips Displays reported disappointing second-quarter sales. Also driving down prices: a 60% rise in capacity among big panel makers in Asia, where manufacturers spent billions on new plants. Typically, panel prices fall by about 20% a year, but they've already tumbled 25% this year. It will take months for all this to work its way through the industry's complicated supply chain. "I would expect prices to come down noticeably by Christmas," says David Barnes, vice-president for strategic analysis in Hong Kong for DisplaySearch, an Austin (Tex.) research firm. Barnes forecasts an average price of $1,176 for the benchmark 32-inch LCD TV by the fourth quarter, down from almost $1,500 a year earlier. Discount stores, he says, may sell brands from China for half that. By Bruce Einhorn 
HIGHER ED Come To Cahl-I-Faw-Nia Academic research talent isn't easy to come by, so California has called in The Recruitinator. Yes, in coming weeks top professors across the nation will get a phone call from Governor Arnold Schwarzenegger. The governor will contact scientists at Harvard, Johns Hopkins, MIT, and other leading schools to offer them a chance to work for the University of California. (Duane Roth, a biotechnology exec who sits on the California Commission for Jobs & Economic Growth, is compiling a short list.) California business leaders looking to bolster the university system's star power solicited Schwarzenegger's help. The more top talent, they figure, the more innovations and products for local high-tech industries. Spokesperson Katherine McLane says Schwarzenegger often works the phones, urging CEOs to relocate their companies to California. "Anything the governor can do to attract top talent," she adds, "he's more than willing to do." By Louis Lavelle EUROPE A Hint Of Oak And Berries At The Pump Fill 'er up with Bordeaux? Biofuel made from wine will be coming soon to Europe's gas stations. On June 7 the European Commission's Wine Management Committee agreed to buy as many as 250 million liters of French wine, plus smaller quantities of Italian and Spanish wine, to distill them into ethanol for use as a gasoline additive. The plan is a bailout -- the biggest in recent years -- for European winemakers, which are awash in surplus wine. Rising competition from high-quality, less expensive New World wines has dampened sales of European offerings. And the weak dollar isn't helping since it makes European wines more expensive for U.S. consumers. All told, France, the world's No. 1 winemaker, has seen its exports decline almost 12% over the past five years. The EC will pay wine producers from top regions such as Bordeaux and Côtes du Rhône about 4 cents per liter for their surplus. Producers from the less prestigious table-wine regions, such as Languedoc-Roussillon, will get about 3 cents per liter. Alas, wine aficionados won't know what vintage is being served at the pump. "The distillers make the same fuel -- ethanol -- out of wine as they do from beets or grains, and it all gets mixed together," says Eric Bontemps, head of research at France's Cooperative Wine Institute. "There won't be a separate line of biofuel made from wine." For now, the wine-based ethanol will probably be sold only in Europe. But if the trend spreads, U.S. cars could eventually get a sip, too. By Steve Jacobs Q&A Now That's A Business Lunch Blogger and Slate.com business columnist Dan Gross did more than bet his lunch money. Riffing on who the next Secretary of the Treasury would not be, Gross promised: "If it's an A-list Wall Street CEO, I'll buy a copy of Dow 36,000 and eat the first chapter." Following the May 30 nomination of Goldman Sachs (GS ) CEO Henry Paulson, Gross sat down to some lightly tossed acid-free on a bed of lettuce. ("The question is whether Gross will at last be able to digest the book's wisdom," said James Glassman, co-author, with Kevin Hassett, of the book.) BusinessWeek's Romy Drucker asked Gross, by e-mail, what it's like to eat somebody else's words. Why Dow 36,000? The book brilliantly encapsulates the intellectual flabbiness and unrealism surrounding the 1990s culture of investing, and its authors have embraced the mix of ideology and bad ideas that have typified the Bush Administration's approach to fiscal and public policy -- an approach that, in my mind, made it highly unlikely that a reality-based big shot Wall Street CEO like Paulson would take the job. Did the book leave a bad taste in your mouth? I thought it was tough to swallow when I read it! A good balsamic vinaigrette can pretty much mask the taste of anything. If you could go back in time, would you choose a different book to eat? Maybe one of my own -- at least I'd get a royalty. Will you ever make a promise like this again? Sure. What would your stunt be? If the Dow ends the year above 10,000, I'll go to Alain Ducasse and eat the whole tasting menu.
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