Marketplace: News Archives

Monday November 29, 2000
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It's Wednesday, November 29. I'm David Brancaccio.

It's an ugly label, Gross Domestic Product, but it's the gold standard when it comes to measuring whether the economy is growing, shrinking, or just standing still. Today the government revised its calculation of GDP from mid-summer to the beginning of fall and it was the worst in four years. Economic output rose at a modest 2 point four percent annual rate, less than half what it was April through June. Ken Kurson, who writes on markets and money for Esquire Magazine, is thinking recession.

Kurson: "The most scary thing in all of personal finance journalism is when you start seeing the phrase 'it's different this time.' The new economy people were very fond of explaining why the old cyclical economy died with GM and the typewriter. Well, it didn't. There are factors...laws of physics...that prevent the cycle from simply dying and going up forever. Luckily, it also doesn't go down forever. It expands and contracts, and if we are in a contraction right now, as I contend we are, people can look forward to expansion again."

You could see this in the bond market, which was a lot less concerned with inflation today. The yield on the 10 year treasury note fell to 5.55 percent. Some companies in the Dow, including Proctor and Gamble, that could do OK in an economic downturn went up today, pushing the index of blue chip companies up 1.2 percent, or 121 points. Some Dow companies that investors believe will do well in a Bush Administration also had a good day including the drug company Merck and the tobacco company Philip Morris. Telecommunications firms were among those still have a miserable time on the Nasdaq with the Composite Index falling 1 percent to 2707. After the market closed, personal computer heavyweight Gateway revised downward its predicted sales for the last part of this year.

The legal tangle for DaimlerChrysler is beginning to look like the Presidential election in Florida, with much gnashing of teeth and many lawyers. Two more shareholders have filed suit against the German automaker. They are similar to a suit filed Monday by billionaire shareholder Kirk Kerkorian, who accuses DaimlerChrysler chairman Juergen Schrempp of lying to investors when Daimler Benz and Chrysler combined. The context here is that Daimler shares are trading at 39 dollars a piece, precisely half their high of the year. From the Marketplace transportation desk at Michigan Radio, Bill Poorman has more.

Poorman: "Schrempp's behavior isn't the ONLY problem American investors have with the company. The Chrysler side of DaimlerChrysler HAS reported huge losses. And the combined company's stock has tanked. But the lawsuits in the U.S. are tinged with patriotism, and include calls to break Chrysler back away from Daimler. Europeans are patriotic, too - but about the combined company. German investors say that Chrysler is dragging the combined company down. One DaimlerChrysler board member has even said that Chrysler's stock would be toilet paper if it hadn't combined with Daimler Benz. John Glenn of the Council for European Studies at Columbia University says DaimlerChrysler represents strength to Europeans..."

Glenn: "For them, DaimlerChrylser represents their hope for what a truly transnational, European company would look like. And for them, they have a tremendous amount invested in DaimlerChrysler suceeding."

Poorman: "Despite the support for DaimlerChrysler, chairman Juergen Schrempp still faces heat in Europe. Some shareholders think he should resign because of the problems at the company. But at least in Europe, he'll get at least one more quarter to try to turn things around. I'm Bill Poorman for Marketplace."

Sydell: "Although they may be new economy workers, the complaints from the 36-person customer service department are as old as unions themselves - low wages, long hours, and that management won't listen to worker problems. The representatives are hired at between 11 and 13 dollars an hour with stock options. Although they were given a raise after discussions with management this summer, workers say it wasn't adequate. Workers turned to the Northern California Media Workers Guild and a majority signed a petition to join in as their union. Erin Tyson Poh, a local representative from the Guild,, says that high tech sector companies are maturing and many employees realize that the gold rush days are over. She says that Etown employees aren't the only high tech workers talking to unions."

Poh: "They may be losing the illusion that they're going to get that pot of gold at the end of the rainbow - the one that they once thought they had in these stok options. But when you change jobs four times and you don't get to exercise your stock options, there's no money in your pocket."

Sydell: "Amazon.com is currently resisting efforts to unionize by its customer service representatives and workers at their distribution centers. Management at Etown.com says that they are very willing to listen to worker complaints, and that the effort to unionize is being led by some disgruntled former employees. The truth of that statement will be known in early January when Etown.com workers are expected to vote on the union. From the technology desk, I'm Laura Sydell for Marketplace."

Chinese people who were forced to work as slave laborers for a Japanese company during World War II have finally won compensation. In an out of court settlement today, Japan's biggest construction company, Kajima, (KAH-jeema) agreed to set up a 4.5 million dollar fund for a thousand workers and their families. Marketplace's Jocelyn Ford has more.

Ford: "In the waning days of World War II, construction company Kajima brought nearly 1,000 chinese laborers to northern Japan to work on a dam. Deprived of food, sleep and clothing, the workers revolted. Those who were captured were tortured - 100 of them to death. More than a half-century later, and ten years after first filing suit, the few survivors have finally won some Compensation. The 4.5 million dollar fund will go to victims and their families, as well as to support cultural exchange and education programs. Lawyer for the plaintiffs, Takashi Niimi, believes Kajima's concern about its international reputation helped prompt the settlement. He predicted that other companies facing similar suits would follow."

Niimi: "They are very afraid if they fail to get a Resolution, they will be criticized in the International world."

Ford: "In contrast to German companies, few Japanese firms have offered compensation to World War II slave laborers. The Japanese government has also shied away from teaching school children about wartime atrocities. Some 40,000 Chinese and tens of thousands of Koreans were conscripted as slave laborers during World War II. Legal experts expect today's settlement will unleash a new wave of lawsuits. In Tokyo, this is Jocelyn Ford for Marketplace."