"Criminal charges may be too good for the people who brought about this mess." -- U.S. Securities & Exchange Commission Chairman Harvey Pitt, on the WorldCom fiasco After years of giving computer companies top marks, consumers now say hardware and software makers are falling down on the job. Only 60% of 1,026 Americans polled by Harris Interactive in May said software companies served customers well, down from 80% last year; just 59% said hardware companies did so, down from 78%. Harris now ranks them fifth and sixth in consumer satisfaction--behind banks, hospitals, auto makers, and even airlines.
The industry has only itself to blame. As sales have fallen, PC companies have cut tech-support staff. The result is tedious waits on help lines and unhelpful advice when people do get through. Software, meanwhile, is more complex. Other irksome issues: long repair delays, botched shipments, and rebates that never arrive, says Pete Blackshaw, co-chairman of customer rating Web site PlanetFeedback.
For an industry desperate for a rebound, this is troubling. Dell Computer (DELL) has seen its PlanetFeedback grade fall to C- from B-. Gateway (GTW) gets a C, Intuit (INTU) and Symantec (SYMC) a D+. Firms say they're trying to improve customer service, but it's no easy task. "Dissatisfaction is highly viral," says Blackshaw. Sounds as if tech's Next Big Thing should be getting back in buyers' good graces. Terrorists may have targeted New York and Washington, but now, almost 10 months after September 11, folks thousands of miles away are feeling the blow. Scared off by the possibility of another attack, the number of foreigners taking summer vacations in the U.S. has dropped precipitously. New York, Orlando, Las Vegas, and even Memphis are hurting.
Yet nowhere does the drop seem steeper than in America's big national parks. At the Grand Canyon, for instance, National Park Service officials estimate that at least 40% of the 5 million people who visit each year come from Japan, Germany, and other countries. Not this summer. Visits by buses--a good way to gauge foreign tour groups--are running 35% below 2001 levels. Walk-ins to the visitors' center in Flagstaff, Ariz., have fallen to pre-1990 levels, and more than two dozen local shops and eateries have closed. "We're still feeling the impact of September 11," says Mary Bostwick, owner of the Arizona Mountain Inn in Flagstaff.
The Commerce Dept. reports that international travel to the U.S. plunged 11% in 2001, to 45.5 million visitors, and doesn't foresee a return to the record levels of 2000 until 2004. Then again, if the U.S. dollar keeps getting cheaper for foreigners, who knows? When it comes to unethical behavior in Corporate America, does a CEO's religion matter?
The Wall Street Journal thought so--then apparently changed its mind. On June 28, early editions of the paper ran a large table on 13 corporate leaders currently in hot water and included religious affiliations for eight. But later editions dropped any mention of religion.
Editors decided there were too many missing affiliations and that the information "didn't tell enough of a story to keep it in," says Melinda Beck, editor of the Marketplace section where the table appeared. There was no debate about whether religion plays a role in ethical behavior, she says, and the paper received no complaints.
Interestingly, five of the eight affiliations were Roman Catholic --a religion whose leaders have had their own share of controversy this year. When Geoffrey Bible retires from cigarette-and-food giant Philip Morris (MO) on Aug. 31, he will end a 15-year run at the top of one of the largest companies in the world. Although Bible will no longer be calling the shots, he'll still be free to call up the corporate jet. According to his exit agreement, filed with the Securities & Exchange Commission, Philip Morris will provide its onetime leader with the following benefits, in exchange for occasionally being available as a consultant, for as long as he lives:
-- an office near his home, including a secretary
-- an unlimited phone-calling card
-- two cell phones and two fax machines, plus the cost of maintenance
-- security at his home and at his vacation home
-- access to the corporate plane, dining room, and gym
-- a company car and driver or a car allowance of up to $100,000 a year
-- up to $15,000 a year for financial-advisory services.
While it seems amazing that a man who earned $50 million in salary, bonus, and other compensation in 2001 could need all this, executive-pay experts say this isn't unheard of.
Such exit packages started cropping up in the mid-1990s, says Judy Fischer, managing director of Executive Compensation Advisory Services, though Bible's appears extremely generous. "If I were a shareholder, I would raise my eyebrow at this continuing outlay of corporate expenses that are really quite pricey just to take care of someone in retirement," she says.
A Philip Morris spokeswoman says Bible's package is comparable to other executives and that the company did thorough research before settling on the details. Such perks, she says, are "standard operating procedure." Score one for the Greens. A July 27 deadline is drawing near for a Senate vote on setting up a repository for 45,000 tons of nuclear waste at Yucca Mountain in Nevada. So the grassroots Environmental Working Group has found a way to show how the risks hit home.
Its Web site maps how close people's houses are to expected nuclear-waste transportation routes, which will go from the nation's 103 nuclear power plants to Yucca Mountain (www.MapScience.org). Mapping the Chicago Mercantile Exchange, for example, shows a nuclear route just 1.4 miles away. The nonprofit says it has had requests to generate maps every five seconds since its June 11 launch. The hope is that concerned citizens will urge their senators to vote down the plan.
Naturally, industry is crying foul. The Nuclear Energy Institute says the maps are misleading because transportation routes aren't final. The NEI also says the U.S. has safely shipped nuclear waste 3,000 times since 1964. Capitol Hill sources say Yucca is likely to be approved anyway, but the lesson is clear: Politics is indeed local. Just added to the Fall curriculum and already oversubscribed: "The Enron Case," a five-week course at the University of California at Irvine's Graduate School of Management. A maximum capacity of 55 MBA students (15 more than the classroom normally holds) will study the biggest corporate bankruptcy in U.S. history from its start to its tragic end.
They'll listen to guest speakers, including accountants, a federal prosecutor, a newspaper reporter, and an economist. Enron whistle-blower Sherron Watkins is lined up to speak, too.
Professor Richard McKenzie says he wants students to "set aside what they've heard and read and look at the financials and statements and issues from the beginning." One question: Is there extra credit for not cheating on the homework?