Burying globalization in articles

Who reads an article to the very last paragraph? In this article that is where a significantly critical part of the story resides, but it seems to be deliberately buried there. Half the layoffs are in this 'educational publishing unit', which admittedly had a good year , but needs to respond to 'technology changes'. Is this a new euphemism for a 'need to offshore replacements' ?? :

Ms. Diedrich said that the layoffs at the educational publishing unit, which has performed strongly this year, may be more a response to technology changes in its field. McGraw-Hill said in its announcement that it would consolidate some sales, editorial, marketing and administrative functions, primarily abroad, and shift investments toward digital and custom products.

Interesting that the article starts out , and spends most of it's time and verbiage, in blaming the layoffs on the S+P Division which is implicated in the sub-prime lending crisis as an overseer of ratings , yet half the layoffs have NOTHING to do with this and involve a strong performing division of their business.

So is this a result of the financial sub-prime crisis or of the offshoring of jobs due to globalization? Well, it's obvious how the NYTimes prefers to spins it .

January 9, 2008

Job Cuts at McGraw-Hill Will Eliminate 3% of Staff

By GERALDINE FABRIKANT

The McGraw-Hill Companies said Tuesday that it was cutting 611 jobs, or 3 percent of its staff, and taking an after-tax charge of $27.3 million, or 8 cents a share, in the fourth quarter.

Although the job cuts are spread across the company’s business lines, McGraw-Hill tied its problems largely to the turmoil in the subprime mortgage market, which will reduce demand for credit ratings. The company owns the ratings agency Standard & Poor’s, as well as BusinessWeek magazine, an educational publishing business and other assets.

The greatest number of job cuts are at McGraw-Hill Education, whose products include course work materials. The unit is eliminating 304 jobs and will take a pretax restructuring charge of $16.3 million.

Standard & Poor’s is losing 172 jobs, or slightly less than 2 percent of its work force. The announcement came a day after the Moody’s Corporation, a top competitor, said it would cut 275 jobs and take pretax charges of $47 million to $52 million in the fourth quarter, citing similar external circumstances.

McGraw-Hill also said on Tuesday that it would trim 114 jobs in information and media and about 21 general corporate positions.

McGraw-Hill’s stock has tumbled in the past 52 weeks from a high of $72.50 to a close of $40.52 on Tuesday. That decline has come largely over concerns about Standard & Poor’s; in the wake of turmoil in the markets, analysts expect less ratings work ahead.

The company will not announce full-year earnings for 2007 for another two weeks. While it expects its fourth-quarter profit to come in below last year’s, it still expects the full-year figure to come in significantly higher than it did in 2006.

Robin M. Diedrich, an analyst who follows the company for Edward Jones, said that Standard & Poor’s reputation had been damaged by the subprime ratings debacle and pointed out that the Securities and Exchange Commission had allowed applications for new organizations to become ratings agencies.

“That has opened the door for more competition at a time when the reputations of existing agencies has been tarnished,” she noted.

Ms. Diedrich said that the layoffs at the educational publishing unit, which has performed strongly this year, may be more a response to technology changes in its field. McGraw-Hill said in its announcement that it would consolidate some sales, editorial, marketing and administrative functions, primarily abroad, and shift investments toward digital and custom products.

Worker value-add?

Layoff the long-time, experienced salespeople and sales seem to mysteriously decrease tremendously.... wow, who would've figured this would happen !??

The article, and by inference the CEO, seemed to blame low consumer demand and perhaps the general state of the economy for the poor sales. Then they mention, seemingly out of nowhere, that they would:

Schoonover said the company will pay attention to giving sales associates the "necessary knowledge and tools needed to improve both sales and margin." The company had laid off 3,400 high-paid workers and replaced them with lower-paid new hires in March

Seems like a lesson that modern execs do NOT get, i.e. that experienced technical people that are actually doing work on the ground, have significant value-add for a corporation and may be responsible for a significant contribution to company profits. Individual people's skills are important. But in an era where execs are trying to commoditize jobs and lower pay for the affected workers, by hiring cheaper workers here or via globalization, overseas, there occasionally are instances that prove the lie to this new accepted economic assertion.

This economic fad will prove disastrous in many cases and , like 'new math' , will cause suffering for those adversely affected by it until it's adherents quietly accept the failure of it's theory.

They now indirectly acknowledge that firing all that 'experience' was wrong and now seek to fix this by trying to stuff experience quickly into the new hires!? Some things take learning but also smarts gained from actual experience.

Obviously they layed off the wrong group of people for a Circuit City turnaround.

Circuit City same-store sales fall 11%

December sales down for electronics retailer, reaffirms fourth quarter guidance.

January 7 2008: 6:59 PM EST

RICHMOND, Va. (AP) -- Electronics retailer Circuit City Stores on Monday said same-store sales fell 11.4 percent in December, as strength in the final two weeks of the month failed to offset declining sales of tube televisions, camcorders and other devices earlier in December.

Based on its sales results, the company continued to back its forecast of a "modest loss" before taxes for the fourth quarter, despite America's traditional holiday hunger for televisions and other high-tech gadgets.

"Our sales performance, while disappointing, was in line with our expectations," Chief Executive Philip J. Schoonover said in a news release.

Schoonover said the company will pay attention to giving sales associates the "necessary knowledge and tools needed to improve both sales and margin." The company had laid off 3,400 high-paid workers and replaced them with lower-paid new hires in March.

Attention also will be paid to expanding sales of Firedog, the company's PC services and home-installation business, Schoonover said.

The company said comparable domestic sales decreased for televisions, camcorders, DVD hardware and digital imaging products. It saw the most strength in video games and navigation devices.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than from newly opened ones.

Shares were unchanged at $4.21 in after-hours trading.

For the month, the company said significant sales decreases in tube and projection televisions more than offset high single-digit sales growth in flat-screen televisions. Sales of camcorders and DVD hardware fell by double digits.

Revenue from Firedog increased 15 percent, Circuit City said. Sales of extended warranties were $36.1 million, compared with $52 million in the same period last year.

Domestically, Internet and call center sales grew 17 percent in December, the company said.

Last month, Circuit City reported a wider-than-expected loss for the third quarter, driven by lower extended warranty sales and restructuring costs. Circuit City had also said it has received a commitment to more than double its $500 million credit line to $1.3 billion.

Analyst Chris Horvers of Bear Stearns said the results fell short of expectations, partly due to the softening in flat-panel TV and notebook computer categories.

"Circuit (City) is a show me story right now and I think the management team has to show that their plan is going to work," Horvers said.

Unless there's some improvement in the first half of next year, Horvers said, investors will look at the stock skeptically, including seeing risks of it going out of business.

For the three months ended Nov. 30, Circuit City's losses ballooned to $207.3 million, or $1.26 per share, from $20.4 million, or 12 cents per share, a year earlier. Excluding tax-related accounting items, losses totaled 64 cents per share in the latest period.

Sales slipped 3 percent to $2.96 billion from $3.06 billion a year earlier, with sales at stores open at least a year falling 5.6 percent.

"Our efforts to turn around the business have led to greater disruption than we anticipated, but we continue to believe that we are on the right path to return to sustainable, profitable growth and increasing shareholder value," Schoonover said in Monday's news release.

Circuit City (CC, Fortune 500) announced last month that it approved millions in cash incentives to retain its top talent following the departure of several key executives over the past year. Executive vice presidents could claim retention awards of $1 million each and senior vice presidents could get $600,000, provided they stay with the company until 2011, according to a filing with the U.S. Securities and Exchange Commission.

Rival Best Buy (BBY, Fortune 500) is scheduled to release its December sales figures on Friday.h

Attention also will be paid to expanding sales of Firedog, the company's PC services and home-installation business, Schoonover said.

The company said comparable domestic sales decreased for televisions, camcorders, DVD hardware and digital imaging products. It saw the most strength in video games and navigation devices.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than from newly opened ones.

Shares were unchanged at $4.21 in after-hours trading.

For the month, the company said significant sales decreases in tube and projection televisions more than offset high single-digit sales growth in flat-screen televisions. Sales of camcorders and DVD hardware fell by double digits.

Revenue from Firedog increased 15 percent, Circuit City said. Sales of extended warranties were $36.1 million, compared with $52 million in the same period last year.

Domestically, Internet and call center sales grew 17 percent in December, the company said.

Last month, Circuit City reported a wider-than-expected loss for the third quarter, driven by lower extended warranty sales and restructuring costs. Circuit City had also said it has received a commitment to more than double its $500 million credit line to $1.3 billion.

Analyst Chris Horvers of Bear Stearns said the results fell short of expectations, partly due to the softening in flat-panel TV and notebook computer categories.

"Circuit (City) is a show me story right now and I think the management team has to show that their plan is going to work," Horvers said.

Unless there's some improvement in the first half of next year, Horvers said, investors will look at the stock skeptically, including seeing risks of it going out of business.

For the three months ended Nov. 30, Circuit City's losses ballooned to $207.3 million, or $1.26 per share, from $20.4 million, or 12 cents per share, a year earlier. Excluding tax-related accounting items, losses totaled 64 cents per share in the latest period.

Sales slipped 3 percent to $2.96 billion from $3.06 billion a year earlier, with sales at stores open at least a year falling 5.6 percent.

"Our efforts to turn around the business have led to greater disruption than we anticipated, but we continue to believe that we are on the right path to return to sustainable, profitable growth and increasing shareholder value," Schoonover said in Monday's news release.

Circuit City (CC, Fortune 500) announced last month that it approved millions in cash incentives to retain its top talent following the departure of several key executives over the past year. Executive vice presidents could claim retention awards of $1 million each and senior vice presidents could get $600,000, provided they stay with the company until 2011, according to a filing with the U.S. Securities and Exchange Commission.

Rival Best Buy (BBY, Fortune 500) is scheduled to release its December sales figures on Friday.

Pay for results... different for corporate executives

'Nice work if you can get it ...' George Gershwin (?? or did Cole Porter pen this one ??)

The kicker is buried in the VERY LAST paragraph ... he is responsible for a $279 million loss and walks away with lottery winnings .... I guess I should be getting a significant bonus this year for overdrawing on my checking account !

According to a regulatory filing, he is entitled to severance and benefits valued at about $14.1 million. He also agreed not to work for a competitor for 18 months, but may establish a hedge fund after six months or join an independent hedge fund after 12 months, the filing said.

Again this shows the lie in the reasoning for extremely large executive compensation ... i.e. Large compensation is justified because the execs have led the company to significant stock and shareholder gains .... but when they the lead the firm to losses the execs almost never take the same hit as shares (and stockholders) do .


January 3, 2008
State Street Takes Big Charge, Replaces A Top Exec
By REUTERS
Filed at 7:30 a.m. ET
NEW YORK (Reuters) - State Street Corp said on Thursday it will take a $279 million fourth-quarter charge after making bad bets on subprime mortgages and other debt, and said it replaced its investment management chief.
William Hunt, who had led the State Street Global Advisors unit, resigned Wednesday after nearly three years in the job, the money manager said.
James Phalen, 57, head of international operations for investment servicing and investment research and trading, was named the unit's interim president and chief executive. He reports to Ronald Logue, State Street's chief executive.
The 71-cent-per-share charge addresses legal and other costs related to exposure to and illiquidity in subprime mortgages, State Street said.
It also addresses "customer concerns as to whether the execution of these strategies was consistent with the customers' investment intent," the company said.
State Street joins a growing list of financial services companies to record losses tied to deteriorating global credit markets.
The Boston-based company is the world's largest money manager for institutions, with about $2 trillion of assets under management as of September 30. It is also one of the world's largest providers of custody services for institutional investors, overseeing $15.1 trillion of assets.
State Street expects 2007 profit of $3.42 to $3.45 per share. Excluding the charge, merger costs, and tax adjustments, it expects operating profit of $4.54 to $4.57 per share.
Analysts on average expected profit of $4.20 per share, according to Reuters Estimates. It wasn't immediately clear on what basis this amount was calculated.
Hunt took over State Street Global Advisors at the end of January 2005, when he was 42. He joined the company in 1994.
According to a regulatory filing, he is entitled to severance and benefits valued at about $14.1 million. He also agreed not to work for a competitor for 18 months, but may establish a hedge fund after six months or join an independent hedge fund after 12 months, the filing said.

Free Trade? When Pigs fly in China !

Seems like there is a major shortage of pork the staple meat of China .

Free-traders would say that China could (and should) import more pork under these market circumstances. You'll need to read a bit into the article to see that China will respond with protectionism . And how come they never call it protectionism unless the U.S. does it ? For developing countries, they are doing it to 'protect peasants and reduce poverty' .

The government said Thursday it would double subsidies for pig farmers to boost production of pork, the country's staple meat.

Isn't this anti-Free Trade AND anti-Globalization ?

China to hike interest rates

Central bank to raise benchmark interest rates for sixth time this year in bid to cool inflation.

December 20 2007: 7:10 AM EST

BEIJING (AP) -- China said Thursday it will raise interest rates for a sixth time this year as it tries to cool a price surge that has pushed inflation to its highest level in a decade.

On top of repeated rate hikes, Beijing has imposed investment curbs to slow spending on new factories, office buildings and other assets. It worries that a glut of unneeded projects could lead to defaults on bank loans, causing a debt crisis.

The interest charged on a one-year loan will rise by 0.18 percentage points to 7.47 percent, effective Friday, the central bank said on its Web site. It said rates on bank deposits will rise by 0.27 percentage points to 4.14 percent.

Analysts had expected a rate hike, and pressure built after consumer prices jumped by 6.9 percent in November over the same month last year. It was the highest inflation rate since 1996 and was driven by an 18.2 percent jump in politically sensitive food costs.

Economists blame the latest inflation spike largely on shortages of pork and other food items and said they expected it to ease once a new grain crop was harvested. But inflation has stayed stubbornly high despite official measures to increase food supplies.

"The apparent recent acceleration of non-pig food inflation and higher producer prices might have unnerved the authorities," Standard Chartered economist Stephen Green said in a report to clients.

"Sentiment in Beijing is changing" and the government is likely to get more aggressive in early 2008 about controlling inflation, Green said.

"The problem, though, is that food inflation may be with us for a while yet, and most of it will be fairly immune to tightening moves, at least over the next six months," he said.

The government said Thursday it would double subsidies for pig farmers to boost production of pork, the country's staple meat.

Chinese leaders want to maintain fast growth to reduce poverty, and the economy is expected to expand by more than 11 percent this year. But they have steadily nudged up interest rates to keep surging growth from setting off runaway inflation.

Driven by booming exports, the economy has powered ahead despite the repeated rate hikes, investment curbs and measures to shrink credit, as well as worries about the U.S. economy.

The government is struggling to contain pressure for prices to rise as a flood of cash from China's yawning trade surplus courses through the economy. The central bank drains billions of dollars a month from the economy through bond sales.

U.S. officials cite inflation fears as a key reason for Beijing to ease controls that they say keep its currency, the yuan, undervalued and give Chinese exporters an unfair price advantage, adding to its trade surpluses.

Treasury Secretary Henry Paulson and others argue that if China let its yuan rise faster against the dollar, its trade gap with the United States would narrow and inflation pressure would ease.

In other moves to contain price increases, the Cabinet agreed Wednesday to pay farmers a subsidy of $13 for each fertile sow next year, double this year's rate, the official Xinhua News Agency said.

The move is meant to "ensure adequate market supply and stabilize food prices," Xinhua said.

The Cabinet also promised to spend $300 million next year to help breeders build "standardized, large-scale" pig farms, the report said.

China's pork production fell sharply this summer due to high feed costs and an outbreak of blue-ear disease that prompted the government to destroy thousands of animals.

Beijing earlier promised pig farmers free vaccinations and other aid, and ordered banks to extend them credit.

On Wednesday, the government said it would end rebates of export taxes on wheat, corn and other grains. The step appeared to be intended to push producers to sell more grain at home, reducing pressure on prices.

The government plans to release part of its corn reserves onto the market to curb rising prices, Xinhua said.

It Labor Shortage, or just low wages ?

You have to make it almost to the end of the article to realize that there really is no 'IT skills shortage' in Germany .... but rather a 'brain drain' problem caused by uncompetitive wages and high taxes ....

Many highly trained Germans seek employment abroad for lower tax rates, higher pay or better opportunities, while non-European Union citizens seeking work in Germany generally must command a salary more than double the national average to be allowed in.

So people gravitate to larger take-home compensation (surprise!!) ... seems to me that the easiest way to fix this is to offer their home-grown people more money so that they don't go abroad ....

But they'll wind up loosening immigration to keep wages low, which is their real purpose , just like in the US ...

The other interesting unasked question --> What countries are these skilled German IT workers going to, that pay more and have lower taxes ? Obviously these higher-paying countries are not seeking lower-paid IT workers from less developed countries .... why not ?

Inquiring minds want to know !


German IT skills shortage seen worst since 2001
347 words
19 December 2007
11:26 am GMT
Reuters News
English
(c) 2007 Reuters Limited
FRANKFURT, Dec 19 (Reuters) - Two-thirds of German high-tech companies say their business operations are being hampered by a lack of IT experts, the worst perceived skills shortage in six years, according to a survey by industry association Bitkom.
In a statement published on Wednesday, Bitkom said the 64 percent of firms saying they were affected was the highest score since it began its survey of business confidence in the sector in 2001.
"The themes of education and immigration will accompany us in 2008," Bitkom President August-Wilhelm Scheer said.
Bitkom added it had received positive signals for an adjustment of Germany's immigration rules from an IT summit hosted by German Chancellor Angela Merkel earlier this month.
Merkel said during the summit the government would try to persuade more people in Germany to take up jobs in the IT industry before easing regulation for foreigners.
Bitkom -- whose more than 1,000 members include Deutsche Telekom , Microsoft Germany and SAP -- says the German IT and telecoms sector has 43,000 vacancies for skilled workers.
Many highly trained Germans seek employment abroad for lower tax rates, higher pay or better opportunities, while non-European Union citizens seeking work in Germany generally must command a salary more than double the national average to be allowed in.
Germany agreed in August to relax immigration rules for engineers from eastern Europe but has rejected a European Union plan to encourage migration of skilled workers into Europe to ease labour shortages caused by a declining, ageing population.
Bitkom added that 70 percent of the companies it surveyed expected Christmas holiday sales this month to be on the same high level as last year's, helped by demand for flat-screen TVs, multimedia phones and digital cameras.
Seventy-eight percent of companies in the survey expected higher sales in 2008, 16 percent expected stable revenues and 6 percent foresaw a drop, Bitkom said.

What is a 'US' firm , part 2

The newest market and fastest growing opportunities have been deemed to be overseas for the last ten years, continuing into the future.

The the best, hardest working, talented and least expensive employees were deemed to be found overseas .

Now the best, hardest-working (but not least expensive!) executives are deemed to be found only overseas.

So we have this critical quote, with the REAL big question :

“Even though they’re based in the United States, companies are less and less thinking of themselves as American companies,” said Michael Useem, a management professor at the Wharton School at the University of Pennsylvania.

At what point does a 'US' firm morph and become some sort of pan-national economic and political entity?

That comes when companies start to incorporate in countries overseas due to tax issues . If a corporation has a minority of employees in the US, a minority of it's revenues from the US and these prospects are on a downward trend , why pay the taxes and costs of doing business in the US (or Europe for that matter).

Stanley toolworks tried this a few short years ago, they tried changing their Connecticut base and US corporation status to 'move' to a base in a Caribbean island. Political and public outcry prevented it then, but will not in the future .

So the next grand idea/trend in corporate America :

The the best, hardest working, talented, cooperative and least tax-expensive corporate headquarters/bases will be deemed to be found overseas .

December 12, 2007

Seeking Leaders, U.S. Companies Think Globally

By LOUISE STORY

The corner offices of corporate America are increasingly being filled from every corner of the world.

Citigroup, the world’s largest bank, named Vikram S. Pandit, a native of Nagpur, India, as its chief executive on Tuesday. Mr. Pandit joins 14 other foreign-born chiefs who are running Fortune 100 companies.

The head of the Altria Group was born in Egypt, for example. PepsiCo’s is from India, the Liberty Mutual Group’s is a native of Ireland and Alcoa’s was born in Morocco.

Their numbers have jumped from roughly a decade ago; there were nine foreign-born chief executives on Fortune’s list of the 100 largest companies in 1996. But the size of the new group does not reflect a noteworthy change — they come from more far-flung countries now than then, when they were more likely to hail from Canada or Europe.

The shift reflects, in part, the focus that companies place on foreign markets for growth. For the first time, for example, the companies in the Standard & Poor’s 500-stock index are expected to achieve more than half their sales from abroad next year, on average.

By contrast, six years ago, large American companies that disclosed their foreign earnings earned about a third of their revenue from foreign sales, according to Standard & Poor’s.

Many of these foreign-born chief executives were recruited by companies like General Electric and Procter & Gamble in the 1970s and 1980s for their overseas operations. Now they hold top positions at companies that also include Chiquita Brands International, the Eastman Kodak Company and the Kellogg Company. Chief executives at Dow Chemical, Altria and Alcoa started in foreign units of their companies.

“Even though they’re based in the United States, companies are less and less thinking of themselves as American companies,” said Michael Useem, a management professor at the Wharton School at the University of Pennsylvania.

The ranks of top executives will probably become more international, as many business schools now fill their classes with 40 percent or more foreign students, and more companies recruit worldwide.

“It’s just a numbers game,” said S. P. Kothari, deputy dean of the Sloan School of Management at the Massachusetts Institute of Technology. “It’s absolutely nothing wrong with the United States, but our population here is only 300 million. Imagine two billion people from the outside start getting a decent education and going through the pipeline. Well, we are going to encounter more of them who rise to the top.”

Mr. Kothari, who grew up in India and attended business school there, has seen the trend firsthand. Some of his M.B.A. classmates from the early 1980s were recruited by Citigroup, Goldman Sachs and Nike, he said, and now they are in line for top positions.

Marijn E. Dekkers, 50, the Dutch chief executive of Thermo Fisher Scientific, based in Waltham, Mass., came to the United States in 1985 through a General Electric program that required new hires to work their first stint in a continent far from their own.

“You’re not intimidated doing business with people who are different than you,” Mr. Dekkers said. “I’m more open to exploring Asian alliances and comfortable doing business in Asia, even though I’m from Europe.”

Executive recruiters at firms like Korn/Ferry International say that corporate boards are asking more for leaders with experience outside the United States. And American-born executives increasingly are spending part of their careers in different countries.

“As you move through the company and you’re looked at for a promotion, one of the things we’re going to look at is, do you have international experience?” said Susan Bishop, a spokeswoman for General Electric.

Some companies have long track records of appointing chief executives with foreign roots. Coca-Cola last week named Muhtar Kent, the company’s president and chief operating officer, to succeed E. Neville Isdell as chief executive. Mr. Isdell was born in Northern Ireland but moved to Zambia as a child. Mr. Kent was born in the United States but grew up in Turkey. (Previous chief executives included Roberto C. Goizueta and Douglas N. Daft, who were also born abroad.)

M. Farooq Kathwari, chief executive at Ethan Allen Interiors, said he had been shaped by his experience moving on his own at age 21 from the Kashmir region of India to the United States.

“A foreign-born person is by nature an entrepreneur,” Mr. Kathwari said. “When you leave your home, leave your family and come to a different country, you have had the instincts of an entrepreneur.”

Mr. Kathwari said his childhood in Kashmir, hiking up mountains, taught him the importance of pacing himself. The political conflict there, he said, taught him the importance of fairness. “Justice” is now a leadership principle at Ethan Allen.

Some chief executives, like Mr. Pandit at Citigroup, moved to the United States for their education. Indra K. Nooyi, the chief executive of PepsiCo, attended the Yale School of Management, and Sidney Taurel, the chief of Eli Lilly who was born in Morocco, attended Columbia Business School. Mr. Pandit earned undergraduate, master’s and doctorate degrees at Columbia.

Howard M. Anderson, a professor of entrepreneurship at the Sloan School at M.I.T., said change in the executive suite has come more slowly than companies’ sales growth abroad. He said that some corporate boards may still not be comfortable with foreign-born chief executives because they feel they have more in common with another American.

“It’s prejudice, but remember, when you’re picking a C.E.O., it’s not an equal opportunity job,” Mr. Anderson said.

But Ramani Ayer, the chief executive of the Hartford Financial Services Group, said he thought that because boards were accountable to shareholders who care about returns above all else, they would pick the best candidate, regardless of race or country of origin.

Mr. Ayer grew up in India, but moved to the United States to attend graduate school at Drexel University. He credits his bosses at the Hartford with helping guide him in his rise to the top, but he also said he had acquired a strong work ethic in India.

“I’ve benefited from my Indian background,” Mr. Ayer said. “Growing up in a very simple family with a real passion for hard work. In other words, you never stopped working. You just worked. Work was liberating and work was part of what defined who you were.”

The Common Construct

The Common Construct within the current, corporate-driven, usage of all working people was summed up succintly :

“I think if they could do this business without us, they would, and so making our task as mechanical and simple and low-paying and unartistic as possible,” Mr. Verrone said.

This is exactly what is happening in all spheres of employment and is being particularly noticed by many because all the forces that allow and encourage globalization now have jobs moving not just to your smarter/faster/cheaper neighbor across the street or in a different state, but around the world.

It's interesting to note that in the entertainment industry there was a boom in demand for graphics and cartooning people several years back with an explosion of Disney blockbusters. Then CGI-animation caught up (and surpassed?) hand-drawn animation. Along with this , the large entertainment companies outsourced hand-animation overseas so that most animation is no longer done here, e.g The Simpsons is done in Korea . Disney itself cut most of it's animation staff a couple years back and now relies on CGI graphics (which can be done anywhere in the world) and lower-cost hand-drawn animation overseas .

The real question is 'what job CANNOT be done , and done cheaper, outside the U.S.? ' .

December 10, 2007

News Analysis

Screenwriters Dig In for an Extended Brawl

By MICHAEL CIEPLY

LOS ANGELES, Dec. 9 — Eight months ago, in a contemplative moment, Patric M. Verrone, president of the Writers Guild of America West, sketched out what could have been a script for the collision that wrecked talks between Hollywood’s producers and striking writers on Friday.

During an interview in his office here, Mr. Verrone described the looming negotiations with employers as a confrontation much grander than a simple fight over pay formulas. This battle would be about respect.

Writers, he said, were looking to restore a sense of leverage and status that had been lost as ever-larger corporations took control of the entertainment business. He described Hollywood as teetering on the brink of a dark age, as far as creative types were concerned. “I think if they could do this business without us, they would, and so making our task as mechanical and simple and low-paying and unartistic as possible,” Mr. Verrone said.

The solution, he added, was to squeeze the corporations that own the studios, in an effort to represent the legion of writers on reality and animated shows that the guild had not organized through sign-up drives.

“There are things we can ask for in bargaining that will allow you to reach up to the mother ship and then back down into the nonunion company,” he said.

On Friday night, five weeks into a strike that now promises to drag on well into the new year, seriously complicating plans for this television season and the next, and opening the door to a tube filled with reality shows and other substitutes, it suddenly became clear to all involved that Mr. Verrone and the other guild leaders were serious about their writers’ revolution.

After days of haggling over complicated formulas for Internet pay, the latest round of talks blew up over the deeper issues that had been buried inside the writers’ contract proposals.

Accusing guild leaders of pursuing “an ideological mission far removed from the interests of their members,” representatives of the Alliance of Motion Picture and Television Producers expressed outrage over continuing demands of the writers that were not strictly related to pay.

These include requests for jurisdiction over those who write for reality TV shows and animated movies; for oversight of the fair-market value of intracompany transactions that might affect writer pay; and the elimination of a no-strike clause that prevents guild members from honoring the picket lines of other unions once a contract is reached.

The tone of shock in the producers’ statement seemed a bit artificial, as Mr. Verrone has for months laid out his plan to elevate the writers’ industry status. Yet their anger is genuine. Executives know that to concede the writers’ noneconomic demands would lead to a radical shift in industry power. Only a death wish, for instance, would prod companies to let one union walk out in support of another, particularly on the eve of negotiations with both the Directors Guild of America and the Screen Actors Guild, whose contracts expire in June. “It’s kind of like saying ‘Oh, while we’re in the middle of this knife fight, I demand the right to have a gun next time,’ a comment on a screenwriters’ blog, The Artful Writer, said.

Similarly, company negotiators know that to grant jurisdiction over workers not currently represented by the guild would bring up against legal questions — can they impose union membership on a unit whose members have not signed up? And it would lead to a collision with other unions.

That matter provoked a blast on Friday night. Thomas C. Short, president of the International Alliance of Theatrical Stage Employees, which already represents some reality and animation writers, compared the writers’ guild leadership to “a huge clown car that’s only missing the hats and horns.”

As the strike drags on, it appears increasingly likely that the television business, which is more sensitive than the movie industry to short-term dislocations, may be in for some deep changes. One possibility is that networks will use the walkout as an opportunity to end their costly practice of presenting new programs to prospective advertisers in an elaborate spring road show known as the upfronts. Instead, they might opt for simple visits to the main advertising agencies.

Networks could also use the strike to end a television development cycle that has them all chasing the same stars at the same time for fall programs that make their debuts en masse. Instead, they might develop new offerings throughout the year.

More narrowly, Friday night’s breakdown marked the failure of an effort by the companies to reboot the talks as a more tightly focused negotiation, despite earlier bad blood. The companies’ strategy, more or less, had tried to close a gap on issues related to electronic delivery of movies and television shows, holding back a sweetened offer for Internet downloads as a closer that would be added at the last minute, giving Mr. Verrone something on which to claim victory.

For that to work, however, Mr. Verrone and his colleagues would have had to abandon the quest for not just a bigger share, but a bigger place in the business.

In a Sunday interview, Mr. Verrone said nothing was nonnegotiable. Union leaders, he said, were thinking “we were in a negotiation, where they would talk about these things.”

And anyone who thought that they would simply surrender just was not listening.