Up Front
Edited by Sheridan Prasso
Talk Show
"We are walking off the field exhausted and a bit bloodied, but holding our heads high." -- Webvan Group spokesman Bud Grebey, describing the company's Chapter 11 bankruptcy filing
THE BIG PICTURE
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TAXING MATTERS
Same Paycheck? Blame the Boss
So it's finally tax-cut time. Most rebate checks won't show up in mailboxes till the end of summer, but your first benefits--in the form of lower federal withholding on your paycheck--should kick in this month. A joint filer, with two dependents, making $130,000 a year gets an extra $57.09 per monthly paycheck.
There's just one problem: It's up to your company how soon you get those added dollars. Employers are supposed to have adjusted withholding as of July 1, but there's no real requirement that they do so. The IRS says only that companies "should begin using the [new] withholding tables as soon as possible." There is no timetable--and no penalty for laggards.
Millions of workers in companies whose payrolls are done by vendors will see their money right away. One such vendor, Paychex, says it has already made the change for its 375,000 corporate customers. But businesses that cut their own checks are likely to take more time.
If your boss does not adjust your withholding, or messes it up, you can ask for a Form W-4 to fix it yourself. But remember, it'll be up to you to straighten things out when you file your return next April.
By Howard Gleckman
IMAGE BUILDING
Pretty Rad, for AT&T
Is the end of AT&T nigh? Not if its image makers have anything to do with it. BusinessWeek has learned that the company will now try to make the brand cool by emblazoning AT&T on a slew of high-tech products--not just phones and answering machines. First up this fall: rewriteable CDs that tap into kids' mania for burning their music. Next, a range of products from voice-activated remote controls and hearing aids to flash memory and DVDs.
With its diffuse, humpty-dumpty image, AT&T suffers from lack of focus and a stodgy reputation. By turning to new, techy products, the company will try to associate the brand with "entertainment, nimbleness, innovation," says Vice-President Sara Lipson. CDs and diskettes will be made in a soon-to-be-announced deal with Mitsubishi Chemical's Verbatim. Even AT&T phones are undergoing a makeover, adopting a curvy style dubbed Avanti. AT&T won't release figures on how much money it stands to generate from licensing, but it will get a cut of everything sold--amounting in the millions.
Expect to see the new items in a mass retail push--and for come-ons to pop up in phone bills.
By Gerry Khermouch
CHINA WATCH
Tech Hits the Great Wall
It's hard to imagine, but there's a place hit harder by the tech wreck than Silicon Valley: A year ago, erstwhile stars of the Internet were vying for top place in the world's fastest-growing market. Today, with paltry revenues, poor management, and sour investor sentiment, they're competing just to stay afloat. Netease.com tried to find a buyer, but a deal with a Hong Kong cable operator recently collapsed. SINA.com fired its founder and CEO in June and is fighting him for control of its Chinese unit. And Sohu.com lost high-profile investors like Intel after its stock crashed.
Even the wealthier Hong Kong companies are calling it quits: Chinadotcom on July 1 canceled its deal to offer AOL in Hong Kong. Pacific Century CyberWorks, run by billionaire Li Ka-shing's son Richard, is retreating from its Net strategy and sticking to telecoms. The coming months will be "crucial," says IDC Internet analyst Matthew McGarvey. "It's fish or cut bait."
A big problem is that China's online ad market is tiny--just $40 million. Only those with deep pockets can wait for it to grow. That gives an edge to Beijing-backed companies such as Legend Holdings, the computer maker that linked with AOL in July. In the end, the only Chinese dot-coms to survive may be those owned by dot-commies.
By Bruce Einhorn
THE LIST
Think Gas Is Expensive?
To put the price in perspective, remember these fluid numbers the next time you're at the pump:
SNAPPLE (16 oz., $1.29)
PRICE PER GALLON: $10.32
EVIAN (9 oz., $1.49)
PRICE PER GALLON: $21.19
SCOPE (8.6 oz., $3.19)
PRICE PER GALLON: $47.48
PEPTO-BISMOL (4 oz., $3.85)
PRICE PER GALLON: $123.20
LIQUID PAPER (0.6 oz., $1.99)
PRICE PER GALLON: $424.53
VALUES FUNDS
My Fund Is More Catholic Than Yours
Mutual-fund managers can be tempted by high-octane stocks when their investing style slumps, but it usually doesn't pose a moral dilemma. However, for the $15 million Catholic Values Investment Trust Equity Fund, it did. After the CVIT ranked in the worst 1% of 10,000 funds in 1998, fund executives opted to perk up returns by buying growth stocks. When Microsoft and General Electric came up as prospects, some board members balked: Microsoft offers domestic-partner benefits, while GE-owned NBC airs shows that might offend practitioners of strict Catholic doctrine.
That prompted board member Thomas Monaghan, founder of Domino's Pizza, to walk out with fellow board member Bowie Kuhn, the former baseball commissioner. In May, they started a rival fund, Ave Maria Catholic Values Fund, with money from Monaghan's Ave Maria Foundation, which he founded with some $1 billion in proceeds after selling Domino's in 1998. Among the conservative heavyweights on the new fund's board is "pro-family" advocate Phyllis Schlafly.
While CVIT Executive Director Walter Miller says the fund adheres to church teachings, he allows that Monaghan "may be more conservative than we are." Meanwhile, the CVIT is down 13.7% this year. With big stakes in Intel, Cisco Systems, Adobe, and Sun Microsystems, it hasn't had a prayer.
By Mara Der Hovanesian
IMAGE BOOSTING
A Dakota by Any Other Name?
North Dakota's Chamber of Commerce thinks it has a good marketing idea: Drop the "North" and become just plain old "Dakota." That, they say, will make the state seem less cold and more appealing to tourists and businesses. They'll study the idea and then make a recommendation to the legislature by spring.
But the cost of changing signs, stationery, and government buildings will run into the billions. And North Dakotans aren't buying the idea. Visitors to the Bismarck Tribune Web site oppose it 25 to 1. They cite pride in the state's heritage and a desire to see the government promote the state as is. Admits Governor John Hoeven: "We need to market ourselves more aggressively." Change, though, can be expensive: The state spent $1.8 million switching speed limit signs from 55 mph to 65, says ex-Governor Ed Schafer. Still, he says, just plain "Dakota" would be "a fun idea."
By Kimberly Weisul
PUDGEBALL NATION
Now Work on Your Gut, Smedley
Obesity is swelling to unprecedented levels. Some 60% of U.S. adults are overweight. And that costs companies an estimated $5.5 billion a year in lost productivity due to absenteeism and weight-related chronic disease.
Companies concerned with cost-cutting are starting to recognize that. So thousands of them, from Wall Street to the Rust Belt, are launching or improving programs to help employees lose weight. "Employers are saying [obesity] is a primary issue," says Dr. David Hunnicutt, president of Wellness Councils of America, which saw an overflow crowd of corporate reps at a recent conference. "It's an issue across all sectors."
Last year, Motorola began reimbursing health-club dues. Union Pacific Railroad is considering giving out pedometers to track workers around the office, as well as dispensing weight-loss drugs. Merrill Lynch now offers Weight Watchers meetings and frequent cholesterol and blood-pressure screenings. At Caterpillar, the Healthy Balance Program, says director Dr. Richard Luetkemeyer, seeks "to promote long-term behavioral change." And healthier workers.
By Julia Cosgrove
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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