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Issue No. 136 | 17 May 2002 |
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Modern Labour
Interview: Licking the Wounds Industrial: The Accidental Tourist Unions: Stars And Stripes International: The Un-Promised Land History: Mate Against Mate Politics: Reith's Gong Poetry: You've Got a Friend Review: War on Terror: Now Showing Satire: Burmese Regime Makes Genuine Commitment To Pretence Of Change
The Soapbox The Locker Room Bosswatch Postcard Week in Review
 Gangsta RapMore May Day Hate MailWhat Women WantChucking a WobblyIs Caustic Costello the Despot of Despair?East Timor: Independent Or Mendicant?
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Bosswatch The Bottom Line
Now That's a Headline! Rupert Murdoch chose the night when the national's financial attention was focused on the federal budget to announce Australia's largest-ever corporate loss. Hit by the collapse in the value of sporting rights and the dwindling share price of its investment in Gemstar-TV Guide International, News Corp last night racked up an $8.9 billion loss for the first nine months of the financial year. It easily eclipsed the previous record of $2.3 billion held by BHP after the resource group was forced to write off its ill-fated venture into Magma Copper in 1999, which led to a wholesale departure of directors and managers. At News Corp, however, the same is not expected to occur because of the Murdoch family's tight grip on the share register. Mr Murdoch says he's extremely pleased with the company's performance before the abnormal charges. This showed an increase from $995 million to $1.01 billion in profit for the nine months to March 31.And coverage of the announcement in Murdoch's flagship, The Daily Telegraph? A few sober pars on page 45! Job Losses Follow IT Merger Between 400 and 500 Australian jobs will go as a result of the merger of the South Pacific divisions of Hewlett-Packard and Compaq. The loss of between 10 and 15 per cent of staff numbers will occur by attrition and redundancies in rough proportion to the payrolls of the two local computer equipment makers - about one-third from HP and two-thirds from Compaq. HP chief executive Carly Fiorina has said about 15,000 jobs worldwide will need to be shed to cut $US2.5 billion ($A4.6 billion) from operating costs of the global corporation. The deal has been dubbed " the most acrimonious merger in US corporate history". St George in NAB Sights St George Bank is steeling itself against a possible takeover bid later this year from National Australia Bank by delivering an interim net profit of $157million.The bank's new managing director, Gail Kelly, indicated she would act to reduce the bank's costs but promised no ''degradation in the level of frontline services". However, she's appointed head of strategy Peter Claretol head yet to be detailed cost-cutting program titled ''Even Better Bank" - it will include outsourcing and streamlining the head office. No decisions had been made on job cuts. Many investors are still betting on a takeover after its restrictive articles of association on individual shareholdings expire on July 1 this year . It's major suitor NAB, announced a staggering $2.25 billion first half net profit this week - up 11 percent on the same period last year and labelled by consumer groups as "obscene. "It's in line with the findings of a KPMG survey of the Westpac, National, Commonwealth, ANZ and St George banks showed their combined half-yearly profits were $5.7 billion - up more than five per cent on last year. Bank Boss Bags 'Short-Termism' - But Pockets Options ANZ chief executive John McFarlane warned yesterday that the sharemarket's current bout of "short-termism" threatened to change the way companies did business and could affect earnings forecasts. Speaking at a meeting of the Australia-Israel Chamber of Commerce, he says the global problem is linked to the rise of the funds management sector. McFarlane says companies were often pressured into making unrealistic earnings predictions. This generated disappointment when they could not be met. The sentiments haven't stopped McFarlane cashing in on the earnings bonanza Australia's major banks are enjoying. This week he revealed he had pocketed more than $7 million after exercising 1 million options granted in 1998. Rich Fights Amex Debt Jodee Rich, co-founder of the collapsed telco One.Tel, is fighting an attempt by American Express to make him pay debts rung up on a corporate credit card. The action in the District Court, is over $50,000 charged to the card over a three-month period. While few of the charges are said to directly relate to Rich directly, American Express is trying to target the man who walked away with millions in bonuses before the One.Tel collapse. The matter will return to court on May 24. CEO Salaries 'Slump' As low-paid workers are set to receive an $18 a week pay rise, salaries of company chiefs have slumped to a mere average of $700,000 a year, a new report shows. The 2002 Recruitment Solutions Top 500 Report on executive remuneration found CEO salaries had slumped, with the average salary package for the head of a public company falling by 8.2 per. This followed a 21 per cent increase last year. But the report also shows the rich are still getting richer in the big end of town, with the nation's top 50 CEOs getting an average nine per cent pay rise in the last year. And the number of executives earning more than $1 million grew to 19 per cent of the top 500 to 16 per cent. Regulator Details Enron Manipulation More revelations of the seamy side of coporate America with revelations of how Enron manipulated the California electricity market to raise prices. Memos from the failed company discuseds how to profit by "creating then 'relieving' phantom congestion" on California's power grid, a Federal Energy Regulatory Commission official said in a letter to Enron. An Enron memo dated December 6, 2000, said one technique, dubbed "Fat Boy" by traders, "is now being used by other market participants". Claims of manipulation during the 2000-01 energy crisis have generated suits and investigations by FERC, California's attorney-general, and state legislators. The memos were prepared by lawyers for an Enron trading unit for internal use, and were turned over to government officials investigating Americ'a's largest corporate collapse.
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