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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. |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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The US Postal Service will probably be seeking an increase in its postage rates to cover what it calls "inflationary pressures." (Updated January, 2005) |
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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) |
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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) |
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The recent increase in oil prices is creating a surge in a different area: producing plastic from corn. (Updated December, 2004) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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Are So Busy, They Don't Know if They're Coming or Going |
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) |
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Firms are taking voluntary
initiatives over and above government regulations to reduce emissions. (Updated January, 2004) |
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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) |
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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) |
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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) |
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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) |
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Federated department
stores introduces amenities into its stores and reduces the number of human
interactions in its stores. (Updated September 10, 2003) |
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AT&T hopes to become
more efficient and more profitable by continuing to shed its workforce and
cut costs elsewhere. (Updated August 27, 2003) |
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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) |
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The attack on the World
Trade Center has resulted in significant costs for airlines and other travel-related
businesses. (Updated October 1, 2001) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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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