|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
AUGUST 14, 2006
Edited by Deborah Stead Talk Show "We aspire to do more than stay out of trouble." -Boeing CEO Jim McNerney, trying to assure the Senate Armed Services Committee that the company's ethical failures have been corrected, as reported by the Seattle Post-Intelligencer REWIND Gross Domestic Progress Government statistics have failed to track America's knowledge-based economy, BusinessWeek argued earlier this year (BW -- Feb. 13), in a cover story that prompted a flurry of reaction inside the Beltway and beyond. Now Washington is taking initial steps to remedy the problem. In September, the Bureau of Economic Analysis, which issues gross domestic product estimates, expects to release a preliminary version of what it calls "satellite" accounts for research and development. The BEA, however, is not yet ready to take the leap of incorporating the new R&D investment figures into the headline GDP number. Meanwhile, the Commerce Dept., which houses the BEA, is about to announce the creation of a panel of academicians and business leaders who will propose metrics for innovation that go beyond R&D. Of particular interest will be measuring innovation in non-high-tech sectors like retailing, where improvements in supply-chain management have helped drive huge productivity gains in recent years. "The more we can understand how innovation affects productivity and economic growth, the better off we will be," Commerce Secretary Carlos M. Gutierrez told BusinessWeek. The committee's interim report is expected early next year, its final report by midyear. By Michael Mandel   STREET SIGNS Inflation: The Rolex Effect Inflation fears have driven long-term interest rates a full percentage point higher over the past year, even though inflation seems to be under control. Why does Wall Street see the specter of rising prices everywhere? Maybe because the well-heeled portfolio managers who set the rates by buying and selling bonds face more inflation than the rest of us do. Yes, sad to say, the cost of being pampered is going up fast, says David A. Rosenberg, chief North American economist of Merrill Lynch (MER ), who has mischievously created a "Wall Street core consumer price index" to measure just how fast those prices are rising. His index shows that gardening and lawn care services are up 7.7% over the past year; private school tuition and airline fares, up 5.9%; watches and jewelry, 4.7%. Overall, his Wall Street core CPI is up 4% through June, vs. 2.6% for the official core CPI. Rosenberg says his home-brewed index is meant to be "totally tongue in cheek." But he believes there's a kernel of truth to the theory that the rising costs of living the good life may be clouding portfolio managers' judgment. When he calls on these clients, he says, "all I hear is that the steak tartare is up blank percent over here, and the martini is up blank percent over there." By Peter Coy THE BIG PICTURE 
GEARING DOWN Is Job One Going To Be An Asset Sale? How much would Ford be worth broken up -- or at least slimmed down? The carmaker, which just restated its second-quarter loss to $254 million from $121 million, may be about to find out. It has just hired former Goldman Sachs M&A banker Kenneth Leet to advise it about possible alliances with other automakers and about the possibility, too, of selling some assets: its Jaguar, Land Rover, Aston Martin, or Volvo brands, or its one-third stake in Mazda or a chunk of Ford Credit. At the close of trading on Wednesday, Ford's market cap stood at about $13 billion, roughly 7% of Toyota's (and half of Starbuck's). Volvo is probably worth at least $7 billion, a smidgen over what Ford paid for it in 1999. And its share of Mazda is worth about $3 billion. The value of those two brands alone, in other words, equals about 75% of Ford's market cap. Then there's Ford Credit. A half-stake in the financing unit could be worth about $6 billion. Critics say the carmaker is spread across too many struggling brands. (Ford says Volvo and its British brands will lose money this year.) It should pare back, they say, ditching Mercury and the British brands, and invest in shoring up Ford, Lincoln, and Volvo. Could Ford get along with only these three? Toyota has just Lexus and Scion in addition to its flagship brand and is leaving Ford in its rear-view mirror. By David Kiley Silk Road Rally A caravan of 84 vintage cars -- from Alfa Romeos to Bentleys to Mercedes, all emblazoned with sponsors' logos -- is snaking through 14 countries as it travels from the Netherlands to China, where it is due to arrive on Aug. 11. The 10,874-mile Amsterdam-Beijing Rally, broadcast daily by China's leading sports channel, CCTV-5, is the brainchild of Jan Vermeer, a retired Dutch entrepreneur in Hong Kong. The idea is to retrace part of the historic Silk Road, which allowed the West to trade with China. The rally's sponsors include the Dutch-owned Chinglish.com, a Web site launching this fall that will offer instant e-mail translations (with audio pronunciation tips) between English and Mandarin. By Aili McConnon TRENDSPOTTING Disaster Masters Demand is up for chief continuity officers, according to executive search firm Christian & Timbers. In the past nine months, C&T has initiated a half-dozen hunts for CCOs, who ensure disaster readiness -- "a sizable increase" from before, says Peter Metzger, head of C&T's Global Security & Risk Man- agement practice. He credits today's use of global supply chains and crises ranging from data theft and hurricanes to war. Financial companies have long had CCOs (also called chief security officers). Now media, energy, and consumer companies are hiring them as the job expands beyond securing IT systems, moving some CCOs into the C-suite. By Elizabeth Woyke ON BROADWAY The Jukebox Musical Plays On As Jersey Boys, the Tony Award-winning play about Frankie Valli, continues its Broadway run and tickets go on sale for Twyla Tharp's Bob Dylan musical, The Times They Are A-Changin', another jukebox show is already in the works: Natural Woman, featuring the songs of Carole King and co-writer Gerry Goffin. It will be the latest in a long string of musicals using songs from publishers' back catalogs -- from box-office hits like Mamma Mia! (based on ABBA songs) to flops like the recent Elvis-based All Shook Up and Lennon. (King's back catalog is owned by EMI.) Why so many pop-classic productions? "As CD sales continue to decline, publishers are actively looking for alternative sources of revenue for their clients," says music industry attorney Mark Levinsohn. Selling song rights to Broadway is a way to squeeze revenue out of backlists. Beyond royalties, the publishers pick up cash from sales of CDs (of original music and of cast recordings of the show). The songbook musicals, says Glenn Peoples, founder of music industry blog Coolfer.com, are part of a "repurposing" strategy that includes licensing songs for compilation CDs sold at Starbucks (SBUX ) and Pottery Barn. By Paula Lehman OFF BALANCE 
By Bruce McCall
| | |
 Copyright 2006, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version