"Berkshire is selling at a price at which Charlie and I would not consider buying it."--Berkshire Hathaway Chairman Warren Buffett on how he and Vice-Chairman Charles Munger view the ascent of the company's stock, now $33,400 per shareEDITED BY LARRY LIGHT, WITH OLUWABUMNI SHABIReturn to top
POLAROID: READY FOR A RESHOOT
WILL POLAROID DRAMATICALLY curtail its money-losing forays into high-tech imaging? That's what new Polaroid CEO Gary DiCamillo is hinting may be a key part of his plan to rejuvenate the company, whose revenues have barely grown ($1.9 billion in 1988, $2.2 billion in 1995).
To diversify beyond the mature instant-photo market, Polaroid spent hundreds of millions in recent years to develop high-resolution imaging products for the medical and graphic-arts industries, plus digital photographic gear. These ventures lost $190 million last year, a big element in the company's $140 million 1995 net loss.
Even though projected 1996 losses in the three new businesses were slashed by a third in a recent DiCamillo cost-cutting effort, he says that "isn't acceptable. I'm not going to lose $120 million a year in this." DiCamillo is reviewing whether to stay in the medical and graphics fields or seek other options--perhaps joint ventures or licensing its technology. His breakeven deadline for them: 1998.
Meanwhile, he believes there's still growth left in instant photos, mostly in Asia. But to spur U.S. sales, he has doubled ad spending, targeting younger people. The average U.S. Polaroid customer is 53.EDITED BY LARRY LIGHT, WITH OLUWABUMNI SHABI By Mike MaremontReturn to top
MAYBE CLINTON SAW RED OVER A GREEN
PRESIDENT CLINTON IS GOING to veto the product-liability reform bill to hold down the Ralph Nader vote in California this fall. Or so charges the central Big Business lobbying group pushing for this bill, which is aimed at curbing excessive lawsuits alleging defective products.
Another reason, says Victor Schwartz, general counsel of the Product Liability Coordinating Committee, is money. Clinton got hefty campaign gifts from trial lawyers ($500,000 in 1992, and possibly a like amount this election cycle). They oppose the bill, which is expected to be approved on the Hill soon. The business lobbying group represents blue-chips ranging from TRW to Caterpillar.
Consumer-advocate Nader is outspokenly against product-liability reform. As the Green Party's nominee, Nader gets 6% of the vote in a recent Field Poll of Golden State voters. Nader, also on two smaller states' ballots, siphons Clinton's votes in California, the nation's top electoral-vote (54) prize.
Nader says he isn't a factor in the veto. Clinton says he will veto the bill because it would hurt consumers. Business notes Clinton had supported reform, then made a U-turn.EDITED BY LARRY LIGHT, WITH OLUWABUMNI SHABI By Catherine YangReturn to top
YOUR TRUE VOICE: THE INTERNET?
TELEPHONE COMPANIES ARE trying to squelch upstart rivals using the Net to make cheap long-distance calls. Yes, you can talk with a faraway friend via the audio component of your PC--and avoid paying standard phone rates. (Downside: Calls must be prearranged.)
The telephone crowd is complaining to the Federal Communications Commission. "We feel they are giving away our product," gripes Charles Helein, general counsel of the America's Carriers Telecommunications Assn., representing 130 smaller phone companies. They buy capacity from major carriers and resell it to consumers. Since margins are thin, they're sweating. Big carriers such as MCI and Sprint haven't joined the FCC complaint, since they make money carrying Net traffic and have enough call volume so I-phones aren't yet a threat.
To slow them down, if not kill them outright, ACTA is asking the FCC to regulate the I-phone companies, who have 20,000-plus customers. Because they're charging only for software, not actual calls, VocalTech, DigiPhone, and other upstarts argue that regulation makes no sense for them. An FCC decision won't come until late this year, at the earliest.EDITED BY LARRY LIGHT, WITH OLUWABUMNI SHABI By Mark LewynReturn to top