South-Westerns' Economic News Summaries
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EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary.
PRODUCTION AND COSTS 
Title  Brief Summary 
The Computer Age Doesn't Eliminate Paper, It Just Shrinks the Size of Paper Companies
Full Summary 
The computer age is here, but rather than creating a paperless society, it has created a "less-paper" society. Demand for paper products such as newsprint has flattened since 1990, as has demand for paper bags, white copy paper and other paper products. The only paper product that seems immune to such decreases is tissue.
(Updated April, 2007)
Pharmaceuticals Merge, But No Diseconomies Yet
Full Summary 
Over the last ten years or so, major pharmaceutical companies merged with others in an attempt to achieve greater scale. It was then thought that such mergers were over. Apparently not; it seems that these firms are not quite big enough, as some large firms are beginning to consider acquiring smaller ones.
(Updated April, 2007)
How Much Will the Iraq War Cost the Iraqis?
Full Summary 
U.S. economists have studied the cost of the Iraq war to the U.S. But to this point no one has considered the impact of the war on Iraq itself. The numbers, even as a first pass, don't look good.
(Updated November, 2006)
NYSE Goes Electronic; Substitutes Capital for Labor
Full Summary 
To remain competitive with other trading exchanges, the New York Stock Exchange announced that it will permanently lay off 500 traders, or about 1/6 of its labor force. Such a move will save the exchange about $80 million annually-a hefty contribution towards the $200 million in costs that the Exchange has been trying to eliminate since it merged with Archipelago Holdings in March 2006. After the merger with Archipelago, the NYSE became a publicly traded company.
(Updated November, 2006)
Katrina Packs Her Punch Far North on the Big Muddy
Full Summary 
In the wake of Hurricanes Katrina and Rita, agricultural commodity traders are still struggling to get their grains and soybeans to port to fulfill export contracts. But they can’t place all of the blame on Katrina.
(Updated November 2005)
The Okies in the 30’s, the Mexicans Today
Full Summary 
In John Steinbeck’s classic novel of the depression called The Grapes of Wrath, Oklahoma residents wiped out by the dustbowl (the Okies) moved to California to earn their daily living picking agricultural products; today, it’s the Mexicans. Same story, same conclusion, apparently.
(Updated October, 2005)
Hotels won't change the sheets every night anymore
Full Summary 
Hotel chains are beginning to act environmentally responsible: They're not changing sheets as often. It's also a good business decision, as their costs fall as a result. But some travelers aren't happy with the trend: They want fresh sheets every night.
(Updated September, 2005)
Production efficiency helps those who absolutely, positively, can't wait more than a few seconds for their double-tall-low-skim-non-fat-espresso-mochalattechino
Full Summary 
Starbucks can produce a regular cup of coffee in 20 seconds, a grande vanilla latte in 30 seconds, and a venti 'double-chocolate-chip-frappuchino-blended-crème' in under 90 seconds. Too slow? They're working on ways of improving those production numbers.
(Updated June, 2005)
We'll keep producing the carbon; We'll just bury it when we're done
Full Summary 
British Petroleum (BP) PLC has come up with a plan to help reduce costs associated with global emissions compliance--don't reduce the carbon; just bury it.
(Updated April, 2005)
Just-in-time manufacturing may become just-as-soon-as-I-can manufacturing
Full Summary
As US firms move more and more production abroad in the search for ever-cheaper labor and other inputs, one thing is becoming increasingly expensive: getting the goods back to the US.
(Updated February 2005)
Big Brother? No, just Sam Walton
Full Summary
Wal-Mart has about 3,600 stores in the US currently, serving about 100 million customers each week. As a result of all those customer purchases, Wal-Mart has about 460 terabytes of data on their consumers' buying habits. Perspective: That's more than double the amount of information contained on the Internet and equal to about 460,000 gigabytes of data.
(Updated January 2005)
A Postal Rate Increase? AGAIN???
Full Summary 
The US Postal Service will probably be seeking an increase in its postage rates to cover what it calls "inflationary pressures."
(Updated January, 2005)
Wal-Mart vs. Sears-Mart
Full Summary
Is bigger better in the retail world? Sometime yes--if you're a giant firm like Wal-Mart. Sometimes no--when you're anyone else in the field, and it may be impossible to get large enough no matter how many mergers you form.
(Updated January 2005)
We take carbon monoxide out of the air and put it into rocks!
Full Summary
Arizona-based Global Research Technologies has a grand dream of saving the environment by using wind-powered machines to remove carbon monoxide from the air and storing the carbon in rocks or in the ground-leaving only oxygen to float in the atmosphere.
(Updated December, 2004)
I have two words for you...plastics...and corn.
Full Summary 
The recent increase in oil prices is creating a surge in a different area: producing plastic from corn.
(Updated December, 2004)
We'd like to increase Chinese production, but the (Chinese) government won't let me!
Full Summary
Chinese textile firms have been seeking sites to build larger factories to meet production demands, but are finding that the Chinese government is reluctant to lease land to firms.
(Updated December, 2004)
Have small plane, will travel.
Full Summary
Airlines around the world have notices the advantages of smaller, more efficient jets to prop up slumping revenues and increasing costs. Enter the Embraer 170.
(Updated November, 2004)
With less fuel, airlines will still get you there, but it may require a few trips
Full Summary
In June, 2004, The Federal Aviation Administration (FAA) scaled back their requirements so that airlines must now carry only 5% over the estimated fuel needs on international flights instead of the previous 10% reserve requirement.
(Updated October, 2004)
Rental Cars: They're not just at airports anymore
Full Summary 
The biggest growth in car rental agencies isn't coming at airports; it's coming instead from the suburbs. Lining up next to coffee shops and bank branches in strip malls in suburban landscapes, rental agencies are quick to take space in the suburbs.
(Updated September, 2004)
Global Warming's Sticker Shock: Cars Will Be More Expensive
Full Summary
Investment firm Sustainable Asset Management, together with the Washington-based World Resources Institute, recently issued a report detailing the costs to automakers of complying with the environmental regulations expected within the next decade in the U.S., Europe, and Japan. And the report wasn't good.
(Updated September, 2004)
Furniture Makers are Down, but Not Out, in North Carolina
Full Summary
Furniture Brands International, a North Carolina furniture maker, has been hampered by competition from China. The company has recently shuttered 17 production facilities, but one in Thomasville, NC, has refused to fold.
(Updated May, 2004)
Yeah….Um…. I Want to Return $1.6 Billion in Planes?
Full Summary
As consumers shift away from air delivery of goods to less-expensive ground delivery, UPS is negotiating with Airbus to cancel up to US $1.6 billion in A300-600 aircraft orders.
(Updated April, 2004)
Sometimes, Bigger is Better--Especially for Warehouses
Full Summary
Unilever, a company that makes personal care and other products, needed to increase profit. Unable to raise prices in a highly competitive market, it turned to reducing distribution costs.
(Updated April, 2004)
Pilots save jobs by offering to take less pay
Full Summary
The union representing Delta Airlines' pilots have offered to cut pilots' wages by 9%, as well as forgo a 4.5% pay raise for pilots next year, in an attempt to stem company losses.
(Updated February, 2004)
Now That's a Big Plane!
Full Summary
Airbus has a problem: as it makes its new Airbus 380 airplane - the so-called "eighth wonder of the world" - it has to put the pieces together. And some of the pieces are bigger than any available transportation vehicle to get those pieces to the assembly plant!
(Updated February, 2004)
The Railroads
Are So Busy, They Don't Know if They're Coming or Going
Full Summary
Years of retrenching in the railroad industry is coming back to haunt it. Reductions in demand for railroad freight transportation over the last few years caused reductions in personnel and equipment. This year, as a result of the surge in agriculture and in the economy overall, the industry is struggling to keep up with increased demand for transportation of bulk goods.
(Updated January 4, 2004)
Firms Are Going Green Even When They Don't Have To
Full Summary 
Firms are taking voluntary initiatives over and above government regulations to reduce emissions.
(Updated January, 2004)
"You've Got a PC!!"
Full Summary
America Online (AOL) has lost two million US subscribers in the last year, and is fighting back in the internet service market with a new promotion: commit to one year of service, and they'll throw in a personal computer and color printer for only $299.
(Updated January 4, 2004)
Deeper and Farther to Find the Natural Gas
Full Summary
Firms are investing in technology that will allow them to drill deeper underground to search for the supplies of natural gas needed to meet rising demand
(Updated November, 2003)
Reach out and touch someone over the Internet!
Full Summary
A new form of competition has erupted in the telecommunications industry - using current digital Internet lines to transmit telephone calls, at little cost.
(Updated October 17, 2003)
When it absolutely, positively, has to get there…even FASTER!
Full Summary
In a move to become more competitive in the package-delivery industry, UPS has pledged to reduce ground delivery time by at least one day.
(Updated October 17, 2003)
No more annoying sales people
Full Summary
Federated department stores introduces amenities into its stores and reduces the number of human interactions in its stores.
(Updated September 10, 2003)
AT&T Wireless cuts costs to gain long-run profits
Full Summary
AT&T hopes to become more efficient and more profitable by continuing to shed its workforce and cut costs elsewhere.
(Updated August 27, 2003)
Precision Plowing
Full Summary
Tractors guided by a Global Positioning System enable farmers to place, space, water, and fertilize crops optimally, thereby reducing costs and increasing yields.
(Updated November 1, 2001)
Fliers Fly Less Frequently
Full Summary
The attack on the World Trade Center has resulted in significant costs for airlines and other travel-related businesses.
(Updated October 1, 2001)
Optimizing Operations
Full Summary
Employees who work out of the office are increasingly communicating with headquarters through wireless technologies. This makes employees more efficient, but wireless communication will be limited by cost, worker resistance, and operational concerns.
(Updated August 1, 2001)
We Love To Fly Cheap, and We Hope It Doesn't Show
Full Summary
The major airlines are losing money. They are therefore cutting costs in ways that they hope consumers do not notice. Fees are also being increased.
(Updated June 1, 2001)
Fewer Ads Subtract From Newspaper Profit
Full Summary
Ad sales are declining rapidly. The cost of newsprint is increasing. Newspaper publishers are cutting costs and increasing prices to maintain profit margins.
(Updated May 1, 2001)
Steeling For Recession and Competition
Full Summary
Three European steel makers have agreed to merge. However, it is unclear how much over-capacity will be reduced. Also, the company will still be a small player in the world market.
(Updated April 1, 2001)
Disney's Kingdom Needs Some Magic
Full Summary
On the surface, Disney appears to be performing well, opening a new theme park, and experiencing rising sales and profits. However, its theme park and resort business is performing much better than its other divisions, including ABC, its stores, and its Go.com portal.
(Updated March 1, 2001)
Lights Out. Businesses Out?
Full Summary
Higher energy prices in California are increasing producers' costs, reducing consumer demand, and causing rolling blackouts. Profits are threatened, prices may rise, and firms may shut down or move out of state.
(Updated February 1, 2001)
Search the Web - For Jobs
Full Summary 
Recruiting through the Internet is superseding recruitment through newspaper advertising and hard copy resumes. The benefits are speed, lower costs, and efficiency.
(Updated January 1, 2001)
Royal Ahold Adds to Its Grocery List
Full Summary 
The world grocery retail market is experiencing a takeover war. One reason is that size gives the retailers more leverage with grocery manufacturers, thereby benefiting consumers and investors.
(Updated January 1, 2001)
The Price Is Right for Priceline But Not WebHouse
Full Summary 
Priceline.com, which allows consumers to bid for airline tickets, is nearing profitability. However, Priceline's WebHouse, which permits bids on groceries is closing down.
(Updated November 1, 2000)
Web Woes
Full Summary 
Many people were tempted by lucrative compensation packages to join Internet companies. However, the tumble in Internet stock prices has forced some companies to downsize or close, and to lay people off.
(Updated August 1, 2000)
Sawmills Are All A-Buzz About New Saws
Full Summary 
Sawmills are now using lasers and computers to determine how to cut logs so as to minimize waste and maximize revenue. This is helping the economy prosper. Newer technology promises even more gains for sawmills and the economy.
(Updated June 1, 2000)
Schools Surf to Save
Full Summary 
School districts are starting to order supplies online through companies that act as intermediaries between schools and vendors. The online marketplace reduces administrative costs, permitting schools to save money and hire more teachers.
(Updated May 1, 2000)
Kinder, Gentler, Used Car Selling Found Unprofitable
Full Summary 
AutoNation is closing its used car superstores because of high fixed costs, non-negotiable pricing, and competition from new car sales. The core of its business, new car dealerships, will remain in existence, aided by lower corporate costs.
(Updated February 1, 2000)
Just Say No To Drugs
Full Summary 
Insurance companies are increasingly giving doctors incentives to cut their spending on drugs by limiting the amount of money they receive. If they overspend, their practices may lose money. Doctors are torn between making money and behaving ethically.
(Updated December 1, 1999)
Investors Want to Keep Costs at (e)Bay
Full Summary 
eBay the online auction company is performing better than expected. However, its profit is still very small and may be endangered by computer upgrade spending designed to prevent its website being down for long. The company is less concerned: its growth and market share are impressive.
(Updated December 1, 1999)
Sears Hauled Over By Kohl's
Full Summary 
Kohl's department stores are increasing and are taking market share from rivals such as Sears and J.C. Penney. The reasons are that Kohl's stores have lower costs due to their location, size, and staffing, and this allows them to sell brand-name merchandise at lower prices.
(Updated November 1, 1999)
NBC Kills Off 'Homicide'
Full Summary 
NBC has canceled 'Homicide,' a critically acclaimed police drama, after seven seasons. The economic reason was that it would cost about $200,000 more per episode than a new show, while ratings had slipped and syndication was already assured. Crew members were devastated at the news.
(Updated July 1, 1999)
The Price of Fame
Full Summary 
Although movie stars may make millions of dollars, they incur great costs, both year-round and when they are filming. Some expenses may be covered by studios during film-making, however.
(Updated June 1, 1999)
European Carmakers Try To Turn The Corner
Full Summary 
European carmakers are facing slightly lower sales and prices in 1999. The challenge is to bolster profits. Three strategies are evident: cost-cutting, improving designs, and increasing production of cars for which there is pent-up demand.
(Updated May 1, 1999)
Cost Cutting in Car Construction
Full Summary 
Ford is trying to cut costs by $1 billion in 1999. GM is planning bigger cost reductions to boost its lower return on sales. One development is the establishment of new plants that will assemble modules built by suppliers.
(Updated March 1, 1999)
China Gasses Up
Full Summary 
China is seeking to change its energy mix to rely less on coal and more on natural gas. However, pipelines are operating at less than full capacity because most homes are not hooked up for gas use. There are also concerns about the size of China's gas reserves.
(Updated October 15, 1998)
UAW Undertakes A Walkout; GM Goes Miserly
Full Summary 
The labor dispute between General Motors (GM) and the United Auto Workers is due to GM's refusal to invest in new equipment. GM states that it has not broken any agreement and is simply responding to uncompetitive work practices.
(Updated August 18, 1998)
Fitness Fanatical Firms
Full Summary 
More companies are offering wellness programs involving on-site fitness centers or subsidized health-club memberships. Firms gain through higher productivity and lower costs. The trick to maximizing the benefit for the firm is to convince sedentary employees to exercise.
(Updated August 12, 1998)
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