Marketplace: News Archives

Friday, September 7, 2001
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It's Friday, September 7, 2001. I'm David Brancaccio

4.9 percent unemployment may not seem so bad in historical terms, but the four tenths of one percent jump in that statistic reported today is striking and means that a lot of American manufacturing jobs were lost as the summer came to a close. The rate for August is a four year high for unemployment. That's the survey of households. A parallel survey of payrolls found 113-thousand fewer names in August compared to July.

Today, President Bush called the figures. Marketplace Business Editor Cheryl Glaser has more:

Glaser: "It seems like hardly a day goes by that some company, somewhere doesn’t announce layoffs. And those pink slips are starting to add up.

John Challenger is head of the outplacement firm Challenger, Gray, and Christmas in downtown Chicago. His company tallies corporate layoff announcements each month, and he ticked off the names of some of the firms that have been trimming their payrolls recently:"

Challenger: "Transportation: Ford Motor--five thousand; Daimler Chrysler-- two thousand recently and much more throughout this year. In the consumer goods manufacturing area: In retail: The Gap-over 13 hundred; Ames Department Stores, a big retailer-two thousand plus. In the tech area: Lucent-over 24 thousand recently, and there’s been much more during the year; Motorola-over 25 thousand this year."

Glaser: "And John Challenger’s seeing the effects of those layoffs on his own hometurf. He says there are lots of “for sale” signs going up on real estate all around Chicago.

Economist Ken Mayland works just up the road near Cleveland. He admits that the August employment report makes for sobering reading. But he says unemployment is a lagging economic indicator. In other words, companies wait until they see signs that the economy is slowing-until their orders are down-before they lay off workers. He says that at this point, he actually sees a glimmer of hope:"

Mayland: "When you look at the record of past business cycles what you always find is that the unemployment rate reached its peak level at the dawn of recoveries."

Glaser: "And Mayland says it’s the 95 percent who are employed-not the 4.9 percent who aren’t-who shape the prospects of the economy.

I’m Cheryl Glaser for Marketplace."

Moulinex of France today filed for bankruptcy protection and it's questionable whether the company can stay in business. 20-thousand European jobs are at risk. Moulinex is the third largest maker of appliances in Europe. Talks aimed at restructuring the company collapsed. A year ago, Moulinex merged with rival Brandt in an abortive effort to restructure the first time.

After nearly a year of negotiation, federal regulators in Washington today gave the go-ahead for the formation of the world's fifth largest oil company. The Federal Trade Commission said Chevron can buy Texaco for more than 39 billion dollars, but only after Texas agreed to sell off Texaco's refining and marketing businesses in the U.S. Refining and marketing are joint ventures with other companies making the negotiation a prolonged, complicated businesses. One Bank of America analyst sees this as a sign of evenhandedness in the FTC: "We don't see a demonization of Big Oil" at the agency.

The courts may have to decide whether the White House has the right to keep its energy strategy deliberations private from congressional investigators. The congressional watchdog General Accounting Office warned today it may ask for a court order to require White House disclosure of the business leaders who met with Vice President Dick Cheney earlier this year to draft the White House energy strategy. The Bush administration let yesterday's disclosure deadline pass without answering the GAO request.

Marketplace's John Dimsdale reports the White House is trying to establish a precedent for more privacy in executive branch deliberations.

Dimsdale: "When Vice President Dick Cheney put together a task force to come up with an energy strategy, he did so in private ... adopting accepted corporate practices. But scientists and environmentalists and consumer groups complained they'd been passed over during the energy consultations ... fueling speculation the former oil men in the White House had gotten all their advice from executives in the traditional fossil fuel industries.

Democrats in Congress asked the GAO to investigate. But the White House is refusing to divulge who participated on the task force.

Administration spokesman Ari Fleischer today said the White House has nothing to hide ... but there's a principle involved."

Fleischer: "A good government is a government that is allowed to have a certain level of deliberations in private. They're allowed to have a certain level of meetings that take place so that ideas can develop and thoughts can be given and can be shared."

Dimsdale: "The White House argues that complete disclosure inhibits the free flow of ideas in the executive branch, much like it would in the corporate world. But the Director of the Center for Congressional and Presidential Studies at American University, James Thurber, says there's a difference."

Thurber: "To have everything on the record is chilling in any organization, public or private. But, in a democracy we have the right to have a certain amount of transparency and openness to make judgements about whether people are biased as a result of certain economic interests or other interests."

Dimsdale: "Several constitutional scholars say the White House will have a tough time defending a general right to privacy ... especially given the precedent set when the Clinton White House was ordered to release information about deliberations of its Health Care task force in 1994.

In Washington, I'm John Dimsdale for Marketplace."

Henn: "More than 5,400 students who live on George Washington University’s downtown campus are going to have to find somewhere else to stay come September 27th. The school - acting on a request from the DC police department - has decided to call off classes and close and lock all of its downtown dormitories with no plans to reopen until October 2nd. But not every student was upset by the plan..."

Henn to Student: "It’s like fall break..."

Student: "Yeah because classes are cancelled – it gives us a chance to catch up on work...it’s good..."

Henn to Student: "Your not going to be thinking about globalization and the impact of structural adjustment programs on third world countries?"

Student, Laughing: "No probably not."

Henn: "But some students say if their colleagues seem apathetic, it’s the university's fault."

Student: "The university’s encouraging that kind of apathy...yes...and are encouraging people to ignore what’s going on...saying don’t worry about globalization. They are saying go home, don’t think about it, don’t worry aboutit...go home...just go shopping. This is an educational experience and this is an educational institution that should support that."

Henn: "But regardless how they feel about globalization – the IMF or shopping - most of these students will have no option but to clear out. They can try to stay with friends – scratch together enough cash to head home, or spend upwards of $1000 bucks for a downtown hotel.

As one angry student pointed out that’s 2 to 3 times as much money as many factory workers in Indonesia can expect make in an entire year."

Rundown

Fires may be devastating for many but for others it's way to make big bucks, and the bigger the fire the better the profits. Marketplace contributor Erica Rex reports.

Week on Wall Street

Marketplace host David Brancaccio wraps up the week on the world's financial markets with Dallas stock broker David Johnson.

Padres Baseball Junk

They may not be the best team in the USA, but they know how to keep their fans happy. Marketplace contributor Nancy Greenlease reports.

Gay Hip Hop

Marketplace contributor Leticia Mohammed of Youth Radio lends an ear to homo hop - hip hop for gay teens.

Look-Ahead

Coming up on September 10: Coming up on Marketplace, travelling professor Mitchell Stephens visits an island in the South Pacific where the inhabitants still live like they did 12,000 years ago.