Timesizing® Associates

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Downsizings Sept. 1-15/2000
[Commentary] ©2000 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080

9/15/2000  2 downsizings reported, totaling 1,645 lost jobs -

1. Burlington Industries is eliminating 1,600 jobs, AP via NYT, C3.
   ...A textiles maker based in Greensboro, NC..\..is closing some of its unprofitable businesses, cutting 950 [jobs] in the South[ern U.S. and] 650...in Mexico..\..as part of a reorganization. The jobcuts amount to nearly 9% of Burlington's total workfoce of 18,300 people.... George W. Henderson III, chairman of Burlington [blamed] the trend toward casual dress and a decline in exports to Europe because of the weak euro....

2. L.A. Times to cut 170 jobs, Reuters via Boston Globe, C9.
   The Los Angeles Times got out of the really local news business yesterday, announcing it will fire 125 journalists and 45 advertising staff as it ends a two-year experiment in covering news block-by-block.
   [We picked up the 125 yesterday, now identified as journalists. Today we need to add the 45 advertising staff. Nice the axemen have finally got around to spindoctoring this as the end of an all-planned-from-the-start two-year experiment instead of yesterday's "The decision undoes one of the last strategic initiatives begun by Mark H. Willes, the former chief executive of Times Mirror, and Kathryn Downing, who succeeded Mr. Willes as publisher of The Times." Also nice they got around to spinning it as an end to silly, microscopic "block-by-block" news instead of an end that would be "difficult in terms of the human consequences and also difficult in terms of community relations" (though involving "hyperlocal coverage," whatever that is). Looks like another move from Tip O'Neill's "all politics is local," to "all politics (and and media and everything else) is money."]

1. [Again, the fatal slide from takeover to downsizing.]
   A day to be nervous as some job cuts seem certain, by Jayson Blair [=‘Times reporter who resigned leaves long trail of deception,’ 5/11/2003 NYT, A1], NYT, C11.
   ...As company officials announced their plan for Chase Manhattan to acquire J. P. Morgan..., some industry analysts speculated that the merged company could shed as many as 10,000 employees. Company executives, who declined to discuss specific numbers...said their target was to save about $500m in employment costs, suggesting that cuts were likely to involve no more than a few thousand people....
   [Well if they're saving $500k per employee, we're talking 500,000,000/500,000= 1000 cuts, which is not "a few" thousand. If they're saving $125k per employee, we're talking (500/125)x1000= 4000 cuts. Sounds about right for all they're willing to admit to right now - "a few thousand."]
   [Oops, newsflash - "Job loss in Chase-Morgan merger put at 3,000," Bloomberg via 9/21/00 NYT, C4.]
   The combined company, to be called J. P. Morgan Chase, would have about 100,000 employees worldwide, with roughly 18,000 based in New York, where both companies have their HQ....
   To increase efficiency, Chase and J.P. Morgan will probably move quickly to cut jobs, the analysts said. Generally the acquired company is the one that loses the most jobs....
   [This means that as we approach perfect efficiency (of this braindamaged type), we will approach the elimination of all our jobs - and CEOs have their heads deep in the sand on where their markets are going to come from then. Smaller businesses are already finding out that increasing efficiency by cutting employees per business instead of workweek per employee also cuts customers per business. The only solution to this dilemma is cutting hours for everyone, not jobs for a few, and a few more, and a few more.... - Timesizing, not downsizing.]
   In 1991, the merger of Chemical Bank and the Manufacturers Hanover Corp. [both] with large commercial bank operations..\..eliminated more than 6,000 jobs. In 1995, Chemical's acquisition of Chase led to the elimination of even more jobs.
   [And 1995-2000, the banking industry as a whole eliminated 95,000 jobs a year.]
   But...this deal involves two banks that...overlap [less]. Chase has been a full-service bank, weakest in investment banking, while J.P.Morgan focused on [that area]....

2. [And again, from takeover to downsizing.]
   Verizon to move Mass. jobs to Dallas, by Peter Howe, Boston Globe, C4.
   Verizon Communications...will move 500-550 of its 1,000 jobs at a Middleton directory publishing business to Dallas over the next nine months. The company, formed from the merger of Bell Atlantic and GTE, said it has no idea yet how many if any people could be laid off. It said anyone not offered a new position in Dallas will be offered extensive job-placement assistance. Only management positions, not union jobs, are involved, Verizon said.
   [We count a move across this distance as a layoff, because of the depressing effect it has on employees and wages. Notice 55% management positions and only 45% non-management. Isn't this what they call "too many chiefs and not enough indians"?]
   ...Many employees were devastated by the news, especially those nearing retirement and pension-collecting age, and unhappy about the prospect of moving to Texas....
   About 400-450 jobs will be kept at Middleton in sales, billing, customer care, and field staff....
   [How can a company care for customers when it can't even care for its own employees?]
   Most job transfers will be completed by next March..\..said Verizon spokesman Jack Hoey.... Hoey characterized the move as part of an expected reshuffling of Verizon sites in the wake of the Bell-GTE merger.... Verizon said that despite shedding 500 jobs in Massachusetts...
   [aha, the veil comes off! and better make that 550 since only 450 of its 1,000 at Middleton, Mass. will be kept]
   ...it will continue to rank as the state's largest employer with more than 19,000, and has added over 1,700 management and union jobs here in the last three years on its landline and wireless phone businesses.
   [It's the old "Love us, we're your biggest job provider" routine that worked so well for Raytheon for so many years while they moved jobs out of state. But of course, any of these 19,000 that they can move to lower-pay Texas, they will, and then they'll start sliding them across the border to even lower-pay Mexico.]

3. Navistar to cut truck production and jobs, Reuters via NYT, C4.
   The Navistar International Corp. [plans] to lay off as many as 500 production employees at its plant in Springfield, Ohio, because of declining truck sales. The company, based in Chicago, said the layoffs, most of which will affect members of United Auto Workers Local 402, will take effect Nov.13.
   [Check this out, ye highschool English teachers! A single sentences that uses both "affect" and "effect."]
   Navistar [intends] to reduce production of its medium and heavy trucks to 287 trucks a day from 334. ...Most of the plant's second-shift workers [will] be laid off until demand increases.
   [Don't hold your breath. The momentum of 15-20 years of downsizing the American workforce is finally nearing critical acceleration in terms of its 'effect' on the American consumer base and its dependent businesses - i.e., everything else.]
   The company attributed slow demand in the new-truck market to rising interest rates, rising diesel fuel prices and a glut in the used-truck market. Navistar said last month [8/16/2000] that it would cut 1,100 salaried and contract jobs.

4. Marathon to close sites and cut jobs in consolidation, AP via NYT, C4.
   [Keep it up boys - there's not much business in a 'consolidated' consumer base!]
   The Marathon Oil Co. [will] consolidate parts of its U.S. oil exploration and production divisions, resulting in the loss of at least 200 jobs and the closing of a research center in Colorado and an office in Tyler, Tex. The company, based in Houston, said research and development activities in Littleton, Colo., would move to Houston.... The exploration and production activities in its Rocky Mtn and central regions would merge into one unit, based in Oklahoma City. And exploration and production activities in its southern and central regions would merge into a single unit, based in Midland, Tex.

5. StarMedia [Network] to cut 125 jobs, NYTimes.com/TheStreet.com via NYT, C6.
   In pursuit of profitability, a New York-based company that aims at Spanish- and Portuguese-speaking audiences around the world, \plans\ to cut...15% of its staff, and take a one-time charge of $2-4m in Q3.... The job cuts [are] expected to save the company $15-20m in 2001, helping [StarMedia] record a profit in 4Q2001, a year earlier than expected....

6. Los Angeles Times closing 14 papers, by Felicity Barringer, NYT, C7.
   ...14 money-losing "Our Times" local newspapers, laying off 125 employees and abandoning the strategy of winning new readers and advertisers with hyperlocal coverage of traffic, schools and community groups. The move by the paper's publisher, John Puerner, and its editor, John S. Carroll, represents the sharpest break from the past since the Tribune Co. announced in March that it was buying the Times Mirror Co., the [LA Times'] parent.
   [Yet another group of bored executives who buy an exciting new toy and once the excitement of the deal is over, rediscover reality and find their lives are still empty.]
   ...Tribune executives \had\ almost immediately...revised The [LA] Times's March circulation figures downward, indicating the original numbers were overstated. Mr. Carroll said that the decision...was "difficult in terms of the human consequences and also difficult in terms of community relations...."
   ["But gee, maybe we'll get off on seeing all the difficult human consequences and community relations!"]
   "...but journalistically [whatever that means] and financially it was an easy decision." Mr. Puerner said that "all of them were losing money, and the financial performance was deteriorating."
   [Yeah, because of your bloated salary!]
   ...The section that served the inland area around Ontario [not Canada] in western San Bernardino County, will continue, as will three other local weekly supplements.... Also surviving are some Times-owned local newspapers that served areas like Newport Beach, Glendale and Huntington Beach and Burbank before being absorbed into Times Community Newspapers.
   The decision undoes one of the last strategic initiatives begun by Mark H. Willes, the former chief executive of Times Mirror, and Kathryn Downing, who succeeded Mr. Willes as publisher of The Times....
   [The builders are being replaced by the destroyers, and it's sooo easy to tear things down.]

1. J. C. Penney shuts stores, fires ["more than"] 2,500, Bloomberg via Boston Globe, D2.
   ...The firings affect less than 1% of the retailer's work force. The company, which has 290,000 employees, disclosed the cuts in a 10-Q filing with the SEC. The store closings, including 45 department stores and 279 [Eckerd] drugstores, were first announced in February [but not in NYT or BG - ed.]. Through the first half of the fiscal year that began on Jan. 30, [Plano, Texas-based] Penney had terminated 1,525 employees at 36 shuttered department stores [while at the drugstores], 560 workers lost their jobs as 270 stores were closed. Another nine [of each] will close \either\ by the end of the year [or] fiscal Q1....
   [So, 1525+560= 2,085 jobs already gone and "more than" 2500-2085= 415 to go. The rounded total announced so far is exactly 2500/290,000= 0.862%, say 0.9%, of the total workforce, assuming the 290,000 was the count before the bloodbath began presumably in February. Why are department stores and drugstores closing in a "booming" economy, we may well ask? And if there's no such thing as a fixed or diminishing "lump" of market-demanded employment to be divided up (= the seldom-admitted but still prevailing, misnamed, "lump of labor" theory), why does this constant dribble of stories about shrinking and bankrupting old retail chains (recall Eatons of Canada earlier this summer) testify that there is only a fixed or diminishing "lump" of retail business to be divvied up? And what are all the kinds of slight of hand and invalid entries within our current, padded GDP that enable our corporate masters to continue to hype our current deterioration as "the longest postwar boom" etc. etc.?]
   [In a later article, "J.C. Penney to close up to 50 stores," Bloomberg via 1/24/2001 Boston Globe, D3, we find, "In the previous round of closings [presumably this 9/13/00 round], more than 1,875 department-store employees and 600 Eckerd drugstore workers were fired, according to a December [2000] regulatory filing.

2. La-Z-Boy to shut a plant in Ohio, laying off 130 workers, Bloomberg via NYT, D2.
   ...A leading maker of reclining chairs [plans] to close a plant in Swanton, Ohio [belonging] to La-Z-Boy's Pilliod Furniture subsidiary..\..and lay off 130 people as it scales back production of inexpensive furniture.... Furniture imported from Asia cut into sales of Pilliod furniture, which is made from wood with a plastic veneer, said La-Z-Boy's treasurer, Mark Stegeman. Higher interest rates discouraged people from buying furniture on credit, he said. La-Z-Boy, which is based in Monroe, Mich., has about 22,000 employees....
   [So 130/22000= 0.59%, say 0.6% of the total workforce. How lazy or unimaginative do top executives have to get to be cutting 0.6% of their own company rather than just 0.6% of their company workweek for everyone (less than 15 minutes a week) and keeping all their people together working and earning?]

• Homestake Mining to close South Dakota gold mine, Reuters via NYT, C4.
  The Homestake Mining Co...which is based in Walnut Creek, Calif \will\ wind down operations and close its flagship Homestake gold mine in Lead, S.D. The closing will be completed over the next 16 months, during which time the company will continue to extract and process...ore at an average cost of $237 per ounce of gold.... Homestake's chief executive, Jack Thompson, said...that falling gold prices had offset efforts to improve efficiency at the 124-year-old mine.

• Entertainment Web sites facing failures and cuts, by Rick Lyman, NYT, C17.
  The announcement last week [not carried by the NYT -ed.] that Shockwave.com, one of the most frequently visited entertainment sites on the World Wide Web, was laying off 15% of its staff and shifting its emphasis toward more interactive diversions, was bad enough. But coming just days after Pop.com, the dot-com brainchild of some of Hollywood's most famous names, announced it was shutting down before it ever opened for business, many...are wondering if the party is over before it has really had a chance to begin.... "In my view, the Web is not about repurposing content that works in other media," said Lawrence Levy, Shockwave's chairman. "It's about leveraging the [interactive] powers of this media, and that's what we're focusing on now...." The company, a unit of Macromedia, will lay off 20 people at its offices in San Francisco and Los Angeles....

• Russia, in austerity move, to cut 350,000 from military, by Daniel Williams, Washington Post via Boston Globe, A2.
  [Phil, over sausage & wheatfree-but-peachfilled pancake breakfast on 2d floor of their tiny 2-family at the end of a crowded deadend street in workingclass Somerville, northern neighbor of brahmin Cambridge, northern neighbor of historic Boston - "Good Lord, Kate! When all these boys 'come home' they'll flood the job market and wipe out wages. Any centrifuging of wealth will be history. Circulation will slow to a stop. It'll be the death knell of the Russian economy!"
  [Kate - "No it won't. Most of these guys already have part-time jobs because the military is way behind in pay. They've been getting money any way they can, even selling their bodies, so it won't be such a jolt to civilian wages - which are in the tank anyway - or to the Russian 'economy,' such as it is.]
  MOSCOW - Russia will reduce military troop strength by nearly 30% within the next three years as part of a far-reaching effort to hoard resources in the country's decaying armed forces, Defense Minister Igor Sergeyev said yesterday.
  By 2003, about 350,000 soldiers will be cut from the 1.2m-member armed forces, including 180,000 infantry and tank troops, 50,000 sailors and 40,000 members of the air force. Another 20,000 will be released from the Interior Ministry's armed police units, and further reductions will be made in missile and logistical groupings, border soldiers, and railroad guards.
  The downsizing measures were worked out a month ago by President...Putin and senior defense officials...to fashion a 15-year military development plan.... Putin decided to shift money away from maintaining Russia's nuclear arsenal and into ground forces. ...It is clear that the conventional forces are being pinched as well. ...Putin decided to let Russia's nuclear arsenal shrink to 1,500 warheads, less than half the number permitted under the START II nuclear arms reduction treaty signed in January 1993 with the U.S. The deep slashes in...forces have left the impression...that Putin, for all his touting of Russia as a great power, is transforming the country into a regional [power]. The armed forces of the Soviet Union once numbered about 5m soldiers, and equipping them consumed 70% of the country's economic production; ...a decade ago, 2.5m soldiers were stationed in the territory that is not Russia.
  [Hey, they implemented the great U.S. Republican-style makework campaign (= "funnel it through the military") to the Nth degree!]
  ...Putin is a strong rhetorical booster of armed strength, but he has also made it clear that Russia ought to live within its means.... "The country..simply cannot afford a military of 1.2m," said Alexander Golts, a defense analyst for Itogi magazine..\.. The country's [hey, can't we call it a NATION any more?!] annual defense budget stands at $7B - 40 times smaller than US expenditures. ...Putin [wants] to supply Russia with "compact" but modern armed forces, to finance [which,] he is asking for an increase in spending, which could come from the revenue increase Russia has experienced from the booming price of oil, its main export....
  The poverty of Russia's armed forces is in plain view. On city streets, soldiers beg for cigarettes and prostitute themselves in public parks. In Chechnya...soldiers warmed themselves during winter months by burning ammunition boxes...and Russian forces have looted homes....
  [If any place needed timesizing, it's Russia today. They need to maximize their economic dynamism by optimizing their income and wealth distribution. And not by arbitrary government "redistribution," but by reinvesting in overtime-targeted training and hiring - "overtime" being defined by a personal workweek that gradually comes down as long as unemployment and underemployment stays up. The less concentration of wealth, the more circulation. Not only is Russia contending, like every country in this Dark Age of economic theory, with "the Great Leak Upward" of unlimited concentration, but it also has the huge problem that once concentrated in few hands, billions and billions of rubles every month get converted to other currencies, shipped out of the country, and rendered unavailable for the uplifting of Russian living standards. So their "Great Leak Upward" translates into a "Great Leak Outward," thanks to their nouveau riche who are often little better than traitorous gangsters.
  [Except in the matter of Chechnya, which should, in the great British tradition of decolonization, be liberated, Putin seems to be heading in the right direction. But this could all be done much less traumatically if the armed forces workweek and payweek were gradually reduced over the next three years by 30% - so the soldiers could make their own decisions about if and when to bail, based on the availability of alternative livelihood. It would be much much less traumatic again if Putin instituted nationwide timesizing, and gradually enforced a 40-hour workweek, implementing and debugging an overtime-to-training&hiring conversion system, and then gradually lowered the national workweek similar to France but gradually and without any preconceived level in mind - just keep it flexibly, gradually lowering until everyone had a job, then a good job with good pay, and the resulting circulation created an economic dynamism that synergized everything upward via the positive multiplier, instead of in today's downward direction via the downward multiplier.]

1. Qwest [Communications] stock dips on news of...layoffs - Unexpected announcements from a fast-growing company, by Simon Romero, NYT, C6.
   ...A fast-growing [don't they mean "fast-shrinking"?] provider of telecommunications services [will] lay off nearly 13,000 employees and increase capital spending in an effort to heighten efficiency after its $44B acquisition of U S West.
   [Triple-header -
   1. "Capital spending" is bizcode for better technology - so here's yet another counter-example against the sacrosanct dogma of our 67-year-old reason for not passing the 30-hour workweek in 1933 - "But technology creates more jobs than it destroys." Ri-i-ight.
   2. And yet another example of the lethal takeover-downsizing connection.
   3. And yet another demonstration that today's CEOs don't understand that you use efficiency to facilitate your workforce, not devastate it. Apply "efficiency" to your workforce by cutting it and you get a more "efficient" distribution of income - less to the millions of ordinary people who actually spend it, and more, much much more to the hundreds of wealthy people who couldn't possibly spend it in a hundred lifetimes. Result - an "efficient" i.e., smaller consumer base. These boys have forgotten what some of their fathers knew - that "mass production is not simply large-scale production. It is large-scale production based upon a clear understanding that increased production demands increased buying" but with more and more concentration of income and wealth (= the "great leak upward"), we get less and less circulation and eventually depression.]
   The company, which is based in Denver, will cut 11,000 staff employees, more than 15% of its work force, and 1,800 contractors, although it was not clear which geographic regions would be hardest hit.... The cuts will mainly affect nonunion and middle-management positions....
   [So, 11,000+1,800= 12,800 layoffs to be exact. Employees, watch and learn - union jobs were spared in this bloodbath. And note the stock market displayed some intelligence this time and punished the downsizer.]

2. PictureTel cuts staff, Bloomberg via Boston Globe, C7.
   ...A maker of videoconferencing systems [based in Andover, Mass.] has cut 9% of its staff, or about 100 people, over the past two months. About 60% of the cuts were in engineering, said Lewis Jaffe, president and COO. PictureTel has lost money for the past three years....
   [That's nothing, Individual Inc. lost money for over ten years and many of today's dot-coms have never made a cent.]

3. Strouds Inc., NYT, C3.
   ...City of Industry, Calif., a bed and bath retailer, filed for Chap. 11 bankruptcy protection after an internal reorganization failed to stem losses. Strouds officials said they would close nine stores.

1. Coats Viyella to cut jobs, by Alan Cowell, NYT, C4.
   ...Britain's biggest textile maker, with brands that include Van Heusen and Jaeger, [will] sell off clothing and other divisions...cut about 1,900 jobs, dealing a blow to the ailing British textile industry [and] focus on its global threads business..\.. The move follows a decision by Marks & Spencer...the largest British clothing retailer and Coats Viyella's biggest customer, to trim inventories as its business slumps....
   [And now that Coats is throwing nearly 2000 people out of their jobs, Marks & Spencer will see a little more slump to their business. This "strategy" of downsizing is sooo stupid and near-sighted. Let's remind ourselves that not all captains of industry are this suicidally moronic. In 1932, Edward Filene, the heir and manager of the Filene retail empire (yes, the same one that later included the famed Filene's Basement), published a book called -]
   Successful Living in this Machine Age (Simon & Schuster).
   [On page 1, he has what he calls simply "A Definition," which begins -]
   "Mass Production is not simply large-scale production. It is large-scale production based upon a clear understanding that increased production demands increased buying...."
   [Boy, there's a connection our 'modern' business schools and 'coool' top executives have fumbled! Filene goes on -]
   "For selfish business reasons, therefore, genuine mass production industries must make prices lower and lower, and wages higher and higher, while constantly shortening the workday [NOT laying people off! -ed.] and bringing to the masses not only more money but more time in which to use and enjoy the ever-increasing volume of industrial products."

2. Novell to eliminate 16% of work force - A former software powerhouse struggles with the Internet era, by Lawrence Fisher, NYT, C8.
   Novell Inc. said yesterday that it would eliminate 900 jobs or about 16% of its worldwide workforce in an effort to reduce costs....
   [Another executive suite full of morons who haven't figured out how to cut costs without cutting customers and customers' customers.]

3. [And yet another -]
   Corel to cut 139 jobs, $40m in costs, Reuters via AOLNews 6Sep2000 17:29:04 via RadioTony.
   Corel Corp., struggling with slumping software sales and the recent resignation of its founder, said Wednesday it would gut its Irish operation as one part of a sweeping plan to slash $40m from its annual expenses. Corel will axe 139 staff from its Dublin office by the end of November, saving $4-6m, with about 20 employees remaining to run international customer support....

1. General Motors will lay off 200 [+20] workers in Michigan, Bloomberg via NYT, C4.
   GM said yesterday that it would lay off about 200 workers and dismiss another 20 at a Michigan plant in late October as the company halves production of slow-selling Cadillac Eldorado coupes.
   [It's not clear here whether we're talking about laying off 200 workers now and another 20 in late Oct., or whether we're using the anachronistic and specialized meaning of "lay off" meaning "temporarily idle" vs. "dismiss" meaning "permanently idle," or whether we're just observing a linguistic class distinction between waged and salaried workers.]
   GM plans to eliminate one of two shifts at the Lansing...plant, idling more than a third of the 550 production workers, who build about 40 of the luxury cars daily. Those [20?] being dismissed are salaried and contract workers, who will be offered other jobs at the company, a spokeswoman said. GM sold 7576 Eldorados this year through August, down 20% from [Aug/99]....
   [Hmm, 20% fewer sales but 220/550= 40% downsized. Could it be that with all that lovely robotization, GM didn't really need all those people anyway? Well, that many more people who won't even be thinking about buying a Chevvy in the near future, let alone a Caddy.]

2. Pop.com calls it quits before ever opening, AP via NYT, C2.
   ...The much-awaited Internet entertainment site backed by Steven Spielberg and Ron Howard [will have] most of the company's 80 workers, based in Glendale, Calif...laid off by the end of the week. Executives at DreamWorks and Imagine Entertainment, partners in the site, decided over the weekend to close it after they did not find a buyer [although] last week it looked as if Pop.com would be sold to the independent film portal Ifilm, but those talks ended on Friday.... A spokeswoman for DreamWorks...said a small staff would be retained "to support our creative endeavors".... The demise of Pop.com could ripple through an Internet entertainment industry already reeling from layoffs, stock market jitters over dot-com companies and the failure earlier this year of another high-profile contender, the Digital Entertainment Network.
   [An article on Monday 9/11/00 "Entertainment Web sites facing failures and cuts," by Rick Lyman, NYT, C17, is slightly less vague -]
   ...Still, a staff of about a dozen will continue experimenting with Web-based entertainment and supporting a celebrity fan site that Pop.com acquired earlier this year....
   [So let's see, 80-12= 68 layoffs, which means a proportion of 68/80= 85%.]

1. Film and music site makes big layoffs, Bloomberg via NYT, C4.
   Scour, a closely held Web site that allows users to exchange films and music online [has] laid off 52 employees, about 80% of its staff, after the company was unable to raise additional financing.... The company has 12 employees left..\.. Scour said it would rehire the employees if the company received more money from investors....
   [Aren't companies supposed to receive money from customers? But alas, in a hollow 'boom' ahead of a great depression, there are no customers, just investors. Customers requires a lot of good jobs with good wages, but we just have a lot of hearty downsizings that overwork and underpay the survivors and allow the money that isn't 'trickling down' to pour, gush, burgeon UP to the top income brackets, who then become the only people in the economy with any money - the rest just have mounting debt. So where do companies start getting money when there are too few customers? Why from investors, of course, because, as Will Rogers observed in the 30's, "they're the only ones who have any." And as we damage our consumer base more and more seriously, investors get more and more nervous. How they expect to get secure investments out of an insecure workforce is beyond us -]
   Investors decided not to provide more money after the company was sued by the Recording Industry Assoc. of America, the Motion Picture Assoc. of America and the National Music Publishers Assoc. on July 20. The suit says that Scour, based in L.A., aids in the illegal distribution of copyrighted material on the Internet [and] comes as other companies, including Napster and MP3.com, are fighting similar suits.
   [Even without the lawsuits the question is, How to make money by providing a free service. By advertising? Advertising to people with little money, who are just looking to save more by downloading 'for personal use only'? Advertising to people who are burned out by spam? Advertising to kids who have already maxxed out their parents' credit cards? Advertisers will eventually wake up.]

2. Japan builder may seek debt relief, Bloomberg via NYT, C4.
   TOKYO...- A major Japanese construction company, Kumagai Gumi, is expected to ask its creditors to forgive...$4.25B..\..in debt. The company joins a number of debt-burdened businesses, many of them construction companies, that have asked for relief from their creditors.... Kumagai Gumi [is] in talks with its main creditor, Sumitomo Bank. But reports here said that in return for debt relief, Kumagai Gumi had agreed to cut jobs sharply and to reduce bank orders to half their current level....
   [Now there's a trick, - cutting jobs and doing more work than you managed to do with all the original employees! Sounds like politicians - promising to cut taxes and provide more government services.]
   The company...is also seeking a partnership [don't they mean a 'parasiteship'] with the Kajima Corp., one of the largest Japanese general contractors, which would inject fresh capital into [it]. A number of big contractors, including Tobishima, Aoki and Haseko have already reached accords with their lenders, seeking waivers of debt in the hundreds of billions of yen.... The industry employs more than 10% of the Japanese labor force, and construction workers often campaign in support of the governing Liberal Democratic Party..\.. Analysts say that construction companies are too politically connected to...be allowed to go bust..\.. Other companies have not been so lucky. Sogo, a department store chain...asked banks to forgive loans totaling nearly $6B. The bailout fell through when one of the biggest creditors, Shinsei Bank - acquired last year by foreign investors...- balked....

1. [Again, the toxic takeover-downsizing connection -]
   After acquisition, Sallie Mae to cut 1,700, Reuters via NYT, C4.
   ...[A provider of] funds for federally guaranteed student loans [will] cut...about a quarter of its work force...in a move to consolidate operations after a recent acquisition. Last month, Sallie Mae, based in Reston, Va., closed on its acquisition of the USA Group's student loan operations, and Sallie Mae's parent company, SLM Holding, renamed itself USA Education. As part of Sallie Mae's reconfiguration, a loan servicing center in Lawrence, Kan., will be closed, and loan servicing operations in Indianapolis, Killeen TX, Marlton NJ, Panama City FL, Summerlin NV, and Wilkes-Barre PA will be consolidated. A Chandler AZ operation will focus solely on client relations and most information technology functions will move to Indianapolis from Reston.

For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.

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