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Wednesday, December 5,2001 Headlines---- Financial Federal Reports Record Earnings---- Great Leasing Christmas Gift Recommendation Capital Stream Ranked 15 out of 25 Technology Companies ADP Credit Corporation Selects LENDX Citigroup Signs Mantas to Manage Money Transfers Dominic Janney: New Head for S=E Division, Marlin Leasing Jack Welch Visits Silicon Valley Cisco CEO says orders in November on target AT&T restores Internet connections U.S. Economy to Emerge From Recession by Third Quarter of 2002 According to Fleet Capital's Annual Survey of Middle-Market Manufacturer CFOs ### denotes press release ________________________________________________________________ Colonial Pacific/GE The manager of their Leasing Solutions Division in the same building as Colonial Pacific that OTFS would be the new company and would consider accepting new broker business late in the first quarter of next year once the consolidation is complete Name With Held ( Leasing News is trying to tie-up some lose ends to our history of Colonial Pacific Leasing. When complete, we will print it. editor ) -------------------------------------------------------------------------------------------------------------------- Hi or How are You? If you get this in a text, delete it immediately. It is the latest virus making the leasing company rounds: How are you ? When I saw this screen saver, I immediately thought about you I am in a hurry, I promise you will love it! If you receive a message with subject "HI" and an attached screensaver named gone.scr, PLEASE DELETE IT. DO NOT OPEN OR INSTALL. It is a worm virus. And, if you did receive it from me, please accept my apologies. If you made the mistake I made and installed it on your hard disk, pleas be aware that it will re-propagate to everyone on your Outlook address list every time you restart your system. The Norton website has more information, at http://securityresponse.symantec.com/avcenter/venc/data/w32.goner.a@mm.html Andrew Andrew Lea McCue Systems, Inc. 111 Anza Boulevard, Suite 310 Burlingame, CA 94010-1932 (650)348-0650 Ext. 1171 Fax: 888-730-2527 www.mccue.com andrewl@mccue.com ------------------------------------------------------------------------------------------------------------ ##### ################################### ################ U.S. Economy to Emerge From Recession by Third Quarter of 2002 According to Fleet Capital's Annual Survey of Middle-Market Manufacturer CFOs
GLASTONBURY, Conn Overall rating for the U.S. economy drops 28% from a year ago While the CFOs of 300 middle-market manufacturers are part of a growing chorus of observers who believe the U.S. economy is in recession, they are confident that the economy will recover by the third quarter of 2002, according to Fleet Capital Corporation's annual Middle-Market Survey results released today. Barring another terrorist attack on the United States, an overwhelming majority (92%) of respondents believe that the U.S. economy will emerge from recession by the end of 2002, with 40% expecting the emergence to occur in the second quarter, and 29% in the third quarter. Eleven percent of CFOs believe the national economy is going to emerge from recession in the first quarter, while 12% say it will happen in the fourth quarter of 2002. These findings closely mirror respondents' beliefs about recovery for the long-beleaguered manufacturing sector as well. When asked how they perceive the current condition of the U.S. economy, not surprisingly, CFOs rated it as only "fair", giving it an average score of "58" on an economic scale ranging from 0 (extremely weak) to 100 (extremely strong). In comparison, the health of the U.S. economy in November 2000 was given an average score of "81," according to last year's survey. "Economic and labor market conditions have clearly deteriorated - and are likely to deteriorate a bit further in the months ahead," said Wayne M. Ayers, chief economist at FleetBoston Financial. "Yet, we expect that the aggressive easing of monetary policy by Alan Greenspan, together with the eventual passage of a fiscal stimulus package by the Congress, will keep the current downturn shallow and short-lived." The confidence of respondents in an economic turnaround is bolstered by recent monetary policy, as 83% indicated that the Federal Reserve's recent interest rate cuts have benefited the national economy. Slightly more than half (51%) of CFOs expect their revenues to grow in 2002 (compared to 73% in 2001 and 82% in 2000). A third (32%) say their revenues are likely to stay the same, while 14% expect their revenues to contract. Last year, only 3% of CFOs expected a revenue contraction in 2001. The respondents also indicated a degree of confidence in the global economy. Ninety-two percent of the companies surveyed sell to foreign markets. Nearly half (47%) of those companies expect an increase in foreign sales in 2002, while 42% expect exports to stay the same, and only 8% anticipate a decrease in sales to foreign markets. However, 49% percent of respondents indicate that another large-scale terrorist attack similar in magnitude to the September 11 tragedy, which many economists believe pushed the U.S. economy into recession, would have a significant impact on the national economy. Thirty-five percent say it would have a major or catastrophic impact, while only 15% say such an attack would have either a minor impact, or no impact at all. "While the cautious tone of these CFOs has been reflected in their business practices, the survey results show that they believe there is light at the end of the tunnel." said James G. Connolly, president and CEO of Fleet Capital. "The CFOs optimistic outlook is consistent with the demand we're seeing for financing acquisitions and other growth activities." Other key findings include: Financing -- Sixty-two percent of middle-market manufacturers expect their financing needs to stay the same or decrease in 2002. Thirty-two percent anticipate that their needs will increase. -- Forty-five percent say they expect their financing costs to stay the same. Seventeen percent believe the cost of financing capital will decrease in 2002 as compared to 2001 (up from 4% citing "decrease" a year ago). Twenty-eight percent expect their cost of financing capital to increase in 2002. -- A majority of CFOs expect that their companies will use bank financing to help fund their growth (56%). Internal sources are quoted by more than four in ten CFOs (45%). -- About a quarter of CFOs plan on using private equity (24%) in 2002, down from 30% in 2001. Eighteen percent cite leasing (up from 14% in 2001), and 16% senior debt (up from 9% in 2001). Six percent will use high yield (junk bonds) (same as in 2001). Three percent report using an Initial Public Offering (down from 5% in 2001), and Leveraged Buyout (4% in 2001) respectively. Labor Costs and Product Pricing -- Forty-seven percent of CFOs anticipate that their labor costs per unit will increase in 2002 (down slightly from 49% last year). Over a third (36%) say their labor costs will stay the same, while 15% anticipate a decrease in labor costs (up from 10% citing "decrease" last year). -- Fewer CFOs expect their product pricing to increase (32% vs. 55% in 2001). Forty-five percent expect their product pricing to stay the same (up from 33% in 2001), while 16% forecast a price drop (compared to only 5% last year). Mergers and Acquisitions -- Eighteen percent of the companies surveyed expect to participate in a merger or acquisition in 2002 (compared to 10% last year). Of these companies, 60% anticipate that they will acquire another company. -- Nearly two-thirds of CFOs believe that next year's purchase price for companies in their industry -- as a multiple of EBITDA -- will either stay the same as last year (32%) or decrease (33%). This is a drastically different outlook than in 2001 when only 8% of CFOs expected the price to decrease, and four in ten (41%) expected the price to stay the same as the year before. Less than one in five (17%) of the middle-market manufacturer CFOs think multiples will increase (compared to 39% in 2001). -- Thirty percent of publicly held companies expect to participate in mergers and/or acquisitions in 2002 vs. 11% of private companies. -- One fifth (21%) of the largest companies (those with sales between $200 million and $500 million) anticipate that they will be involved in a merger or acquisition next year compared to 17% of the smallest middle-market manufacturers (with sales between $25 million and $75 million). International Outlook -- The markets most expected to generate increases in foreign sales are Europe (57%), Asia (47%), and Mexico/Central America (38%). About one third cite Canada (33%), while 29% expect increases to come from South America. About the Survey Conducted from October 23 through November 9, 2001, the Fleet Capital Middle-Market Survey questioned the chief financial officers of 300 middle-market manufacturing companies throughout the U.S. The margin of error for this 300-interview survey is +/- 5.7% at the 95% level of confidence. To obtain a complete copy of survey results, call 1-800-77FLEET. About Fleet Capital Corporation Fleet Capital Corporation, which has 25 offices located throughout the United States and approximately $16 billion in committed lines of credit, provides secured financing and other financial services to domestic middle-market companies and their foreign subsidiaries. Fleet Capital is part of FleetBoston Financial Corporation, the nation's seventh largest diversified financial holding company with more than $200 billion in assets. FleetBoston Financial offers a comprehensive array of innovative financial solutions to 20 million customers in some 20 countries. FleetBoston Financial is headquartered in Boston and listed on the New York Stock Exchange (NYSE: FBF) and the Boston Stock Exchange (BSE: FBF). CONTACT: Fleet Capital Philip Margolis 860-657-7697 philip-margolis@fleetcapital.com #### ################################ ############################### Leasing News. Excuse the delays in Leasing News. @home is not working “at home” where I do research, writing, and put things together. The virus hit us, too, at the office, plus there are many complaints researching, now back on track. editor RATINGS FLASH: MONDAY: 'GOOD MORNING AMERICA' [5.0] MATCHES 'TODAY' [5.1]
WITH SCOOTER INVENTION EXCLUSIVE, (
people change their dial) CBS 'EARLY'
DRAGS [2.0]...Bryan Gumbel still doesn’t have the draw he had on the Today Show. BROKAW [8.9] OVER JENNINGS [8.6] OVER RATHER [6.4]... LENO [5.1] AHEAD OF
LETTERMAN [4.4]... ( normally they are “neck and neck.” . ___________________________________________________________________________ #### ############################## ############################### Financial Federal Corporation Announces Record Earnings for the First Fiscal Quarter Ended October 31, 2001
NEW YORK--(BUSINESS WIRE--Financial Federal Corporation ("FIF" - NYSE), a nationwide, independent financial services company specializing in equipment financing and leasing for middle market businesses, announced record net earnings for the quarter ended October 31, 2001 of $8.8 million, a 21% increase over the $7.3 million reported for the quarter ended October 31, 2000. Diluted earnings per share increased by 17% to $0.48 for the first quarter of fiscal 2001 from $0.41 for the comparable quarter last year. The increase in diluted earnings per share was lower than the increase in net earnings, due primarily to the effect that the Company's convertible subordinated notes have on the diluted earnings per share calculation. New business originated during the quarter amounted to $182 million. Finance receivables outstanding increased by 13% to $1.337 billion at October 31, 2001 from $1.188 billion at October 31, 2000. Paul R. Sinsheimer, Chairman, commented: "Despite the economic uncertainty resulting from the terrorist attacks of September 11th, Financial Federal continued its record of increases in both net receivables outstanding and profitability for the 50th consecutive quarter. Understandably, the Company's growth rate slowed while the country paused to reflect and assess the impact of September 11th. We remain confident in our ability to grow, but our rate of growth is affected in large part by the overall health of the U.S. economy. We remain guardedly optimistic about the economy's near-term prospects." "The continued weakening of the general economy is reflected throughout the financial services industry in higher levels of credit losses, delinquencies and non-performing accounts. Financial Federal's asset quality statistics, however, remain among the best in the industry," remarked Steve F. Groth, Chief Financial Officer. "Net credit losses of $728,000 for the quarter were an annualized 0.22% of average finance receivables compared to 0.20% in the immediately preceding quarter and 0.12% in the first quarter last year, substantially below industry averages. Receivables past due more than 60 days aggregated 2.6% of total finance receivables as of October 31, 2001 versus 1.9% at July 31, 2001 and 1.7% at October 31, 2000. Non- performing assets were 3.1% of total finance receivables outstanding at October 31, 2001 compared to 2.6% at July 31, 2001 and 1.9% at October 31, 2000." Financial Federal Corporation specializes in financing industrial and commercial equipment through installment sales and leasing programs for manufacturers, dealers and end users nationwide. In addition to its New York office, the Company has six full-service operations centers in Texas, Illinois, New Jersey, North Carolina, Georgia and California, and numerous additional marketing locations throughout the country. For additional information, please visit the Company's website at www.financialfederal.com. CONTACT: Financial Federal Corporation Jeanne McDonald, 212/599-8000 ### ############################ ############################# @home AT&T is calling users to re-boot and log onto their “browser” and follow the instructions. Information about mail during this down period is not none. You will receive a new e-mail address. I hope to try at @home tonight. Note: Latest news and full story at end of newsletter Great Christmas Gift---( Yes, this is a plug!!!! But it is also educational. editor ) Looking for a Christmas Present for a Colleague or Someone Who Refers You Business---or your spouse asks you what you want for Christmas----- James Johnson and Barry S. Marks have completed work on a companion book to Power Tools for Successful Leasing . The new book (273 pages) addresses with technology leasing from the lessee's perspective and includes a mock negotiation, as well as legal, tax, accounting and structuring advice. It is a "must" for lessees of computers and other high-tech equipment and a good read for lessors who want to see their business from a different perspective and maintain a competitive edge. The book will be available at, http://www.leasingpress.com/ . For more info, contact Barry or James (at phdleasing@hotmail.com). * * * * * Barry S. Marks * * * * * BERKOWITZ, LEFKOVITS, ISOM & KUSHNER 420 N 20th St., 1600 SouthTrust Tower Birmingham, AL 35203-5202 bsm@blik.com - www.leaselawyer.com 205.250.8333 - fax:322.8007 You might asks them about the original book,Power Tools for Successful Leasing. Power Tools for Successful Leasing by James M. Johnson, PH.d Barry S. Marks Leasing Power tools Press 43W690 Willow Creek Court Elburn, Illinois 60119 Phone: 630.365.9004 Fax: 630-365.5602 E-mail: phdleasing@hotmail.com or bsm@blik.com ___________________________________________________________ ### ############################### ########################## CapitalStream Ranked 15th in Top 25 Technology
Deals of 2001
According
to FutureBanker’s Top 25 Technology Deals of 2001, CapitalStream’s
Commercial Financing Solution Earns Company Top Honors in the Banking
Arena Seattle, WA— CapitalStream (www.CapitalStream.com), a Seattle-based provider of commercial finance automation technology for banks, financial institutions and manufacturers, today announced it has been ranked by FutureBanker Magazine as having one of the Top 25 Technology Deals for 2001. CapitalStream was ranked 15th by the prestigious banking publication for its multi-year agreement with Bank of America for instant online commercial financing approval for their small business clients. The annual list ranks U.S. technology companies like CapitalStream based on their ability to help customers reduce expenses and increase revenue. CapitalStream allows financial institutions to realize the cost-saving advantages of online commercial financing, giving the Seattle-based company important recognition within the banking community. "We’re very proud to have earned this significant ranking on a list that recognizes the banking industry’s most innovative and successful technology companies,” said Stephen Campbell, CapitalStream’s president and CEO. "Our success comes from providing the commercial finance industry with pioneering technology solutions that automate all aspects of business credit transaction processing. In addition to this latest honor, CapitalStream was recently ranked the 39th fastest growing technology company in Washington State by the Deloitte & Touche Fast 50 Program. Other milestones achieved this year include acquiring several major financial services customers and securing $20 million in funding despite falling market conditions. For over six years, CapitalStream has enabled commercial finance customers to reduce costs, increase efficiencies,
better manage operations, and enhance customer service. CapitalStream’s
FinanceCenter solution automates business credit transaction processing
across multiple business lines, multiple products and multiple sales
channels, lowering costs and enabling companies to take advantage of
new business opportunities by automating manual processes for leases,
loans, lines of credit and credit cards.
About CapitalStream Seattle-based CapitalStream automates and streamlines commercial finance
processes for banks, finance companies, and manufacturers. CapitalStream – FinanceCenterÔ, a patent pending technology, reduces processing
time, lowers costs, and enables companies to cost effectively take advantage of new business opportunities
by automating manual processes for leases, loans, lines of credit, and
credit cards. CapitalStream, an established industry leader for more
than six years with deep knowledge about the inner workings of the financing
world, has helped hundreds of financial organizations increase their
competitiveness, customer service and profitability. For additional information about CapitalStream visit its web site at www.CapitalStream.com. #### ############################### ############################ ADP
Credit Corporation Selects LENDX to Streamline Equipment Financing Processes
Leading Data Processing Company Will Automate Leasing Activity and Management San
Francisco, CA –– ADP Credit Corporation (ADPCC), in its capacity
of executing equipment financing for ADP Inc., has selected LENDX, the
leading provider of management applications and commerce services for
equipment financing, to streamline the equipment financing processes
via the LENDX Lifecycle Suite of web-based applications. “We
are continually analyzing internal processes and implementing solutions
to save time and costs, and we believe that LENDX will be a great help
in improving data management and automation,” said Tony Pacchiano,
Senior Director, ADPCC. “As a provider of computerized transaction
processing and information services, you can imagine our standards for
a solution were extremely high. LENDX’s powerful tools will streamline
our equipment finance processes significantly, reducing time to market
and automating data flow.” “LENDX
is focused on creating leading edge web-based applications to automate
equipment finance processes, and we are very excited to add ADPCC to
the growing number of companies implementing LENDX’s equipment
finance solutions,” said Lou Vigliotti, CEO, LENDX. “With
its large financing portfolio and a focus on process automation, ADPCC
will reap immediate benefits with the implementation of LENDX applications.”
About
ADP Credit Corp.
About
LENDX
( courtesy of ELA online ) #### ##################################### ################# ---------------------------------------------------------------------------------------------------- Viruses Hitting the Leasing Community Symantec Security Response - W32.Goner.A@mmWarning... we received a Virus outlined below here at Pacifica today and it has possibly been distributed to people on our outside email list... I'm so sorry if it was sent to you... please DO NOT OPEN... Bette Kerhoulas, CLP Managing Director 800-800-8081, 949-727-3711 Ext. 227, 949-727-3722 Fax bettek@pacifica-capital.com Please visit our web site at www.pacifica-capital.com Please be Careful. High Alert ( WORM_GONE.A )
Aliases: Description: It finds certain
files in memory and then terminates the processes of these found files.
Thereafter, it executes a destructive payload of deleting files. Solution: 1. Reboot the computer. 2. Before the startup logo appears, press F8. 3. Choose the “Command prompt only” option. 4. Go to the %System% directory. %Sys tem% is variable. It is usually located at C:\Windows\System. 5. At
the command prompt, type the following command then hit the Enter key: 6. Type
the following command and then hit the Enter key to delete the Worm
file: 7. Restart the computer. 8. Double
click the following: 9. Look
for the following registry entry and then delete it: Manual Cleaning On Windows NT/2000 Systems: 1. Boot from a Windows 2000 CD and select the "repair install console." 2. Go to the %System% directory. %System% is variable. It is usually located at C:\Windows\System. 3. At
the command prompt, type the following and then hit the Enter key: 4. Type
the following command and then hit the Enter key to delete the Worm
file: 5. Restart the computer. 6. Double
click the following: Look
for the following entry and delete it: _______________________________________________________________ Setting the Record Straight / Da Bears and Da 49ers "1950, Los Angeles Ram Tom Fears set the NFL record for the most receptions in a game when caught 18 passes vs. Green Bay." This may not be accurate anymore as I think Terrell Owens of the 49ers torched the Bears last season for 19 or 20 receptions, which I thought was a new NFL record. I believe it was during Jerry Rice's farewell game at S.F. Go Bears. We could see Bears vs. 49ers rematch later this year. Gary Trebels GTREBELS@IFCCREDIT.COM My source is obviously out of date. You are correct!!! To make matters worse, I wasat Candelestick December 17th ( season ticket holder ) and should have remembered this. To double-check this, I also confirmed it on the 49ers website: Terrell Owens: Produced most prolific receiving game in NFL history in 2000 with NFL RECORD 20 receptions against Chicago (12-17 ) for CAREER-HIGH 283 yards and one touchdown vs. Chicago (12-17)...)...20 receptions broke 50-year old record set by Tom Fears of the Rams... Now this weekend the 49ers play the Rams, and we almost beat them the last time. Go Niners!!! editor ) Citigroup Signs Mantas to Manage Money Transfers Internetnew.com Business
intelligence solution provider Mantas,
Inc. has signed a multi-year enterprise license, installation and
maintenance agreement with Citigroup (NYSE:C)
in the financial services company's efforts to detect money laundering.
Mantas' software incorporates both detection and discovery algorithms
that enable detection of relevant transactions. Financial terms of the
deal were not disclosed. The
Fairfax, Va.-based Mantas' technology will identify previously unknown
patterns of interest based on discovery algorithms which use machine-learning
techniques. Mantas solutions also provide the workflow capabilities
to allow firms to manage the process of effectively monitoring millions
of transactions and accounts on a daily basis. Mantas further augments
the technology through in-house industry experts who stay abreast of
the latest developments in money laundering. "We're pleased to join Citigroup in the war against money laundering," said Richard Spires, president and chief operating officer of Mantas. "In recent weeks, awareness has been heightened regarding the importance of tracking criminal activity through detecting money laundering." ### ########################### ############################ Dominic Janney: New Head for S=E Division, Marline Leasing
MOUNT LAUREL, NJ – Marlin Leasing Corp., the area’s fastest growing small ticket leasing company, announces the promotion of Dominic Janney to Director of Retail Sales, Southeastern Division. Janney, who brings over
14 years of sales experience to his new position, will spearhead Marlin’s
regional growth in the Southeast. Already an accomplished manager for
Marlin’s New Jersey Headquarters, Janney is enthused about the
opportunities that the Southeastern Division provides. “I am looking
forward to managing Marlin’s Southeast Division and to working
with an experienced and dedicated sales team in a region offering many
opportunities for growth.” Gary Shivers, President
of Marlin Leasing Corp., has worked with Janney for many years and is
confident in Janney’s ability. “Dominic is professional, enthusiastic
and very knowledgeable in the industry. I am confident that under his
leadership our Southeastern Division will exceed its goals." Marlin
Leasing provides creative funding programs to vendors, brokers and end-users
nationwide. Today they employ over 150 individuals in three locations:
Mount Laurel, NJ, Denver, CO and Atlanta, GA. For more information, call Marlin Leasing’s
corporate headquarters at 1-888-479-9111, or visit their web site at
www.marlinleasing.com. ( courtesy of ELAonline ) ###
##################### ########################### ------------------------------------------------------------------------------------ Jack
Welch Analyzes Silicon Valley to East Coast Valley
BY TRACY SEIPEL
If Jack Welch gained
anything from studying Silicon Valley from afar during his 41 years
at General Electric -- 20 of them as chairman and chief executive --
it was the understanding that operating a company here was tougher than
on the East Coast. Valley CEOs, Welch believes,
``have a hard time running companies because of the constant churn''
of talent. The never-ending battle to steal away top performers was
going on when he traveled to the valley decades ago for GE, just as
it goes on today, he said. So while the former CEO,
who stepped away from the helm of GE in September, admires the valley's
renowned innovation process, its speed and its venture capital community,
he's also cognizant of the downside of doing things the valley way.
Welch sees the valley's technology industry as an opportunistic culture
governed by compensation structures that are fundamentally at odds with
the loyal, star-system culture Welch and his leadership team spent years
re-creating at GE. This was among the reasons
GE did not acquire valley technology firms in the 1990s during his tenure
at the helm. ``I didn't want to pollute
GE with cultures that were developing in the valley,'' said Welch, who's
currently on the road promoting his new autobiography ``Jack: Straight
From the Gut.'' In an interview with
the Mercury News, Welch, 65, who will be in the Bay Area on Thursday
plugging his book on talk radio, weighed in on everything from strategies
for riding out the downturn and his thoughts on the HP-Compaq saga to
the benefits and drawbacks of doing business the Silicon Valley way.
When he was running GE,
competition rarely, if ever, fazed Welch. He just wouldn't appreciate
it cropping up in his own backyard, as he witnessed in the valley. ``Somebody
leases a box building, and puts one up near somebody else,'' said Welch.
``In one parking lot, you turn left -- or you could go right to the
other one'' if that employer had a better idea, or the employee got
a better job offer. ``That's what I didn't like dealing with,'' said
Welch. ``It makes a CEO's job harder, and why go looking for trouble?''
As Welch candidly admits
in his book, the only way as CEO he was going to achieve consistent
earnings growth for shareholders was through great people. ``This whole game is
no different than a sports game,'' said Welch. ``The team that fields
the best players wins. It's not about a widget. An idea can last for
a while, but in the end, you've gotta have great people,'' said Welch.
And over the long haul,
a company should have a process that builds lots of leaders. ``You can't
run a company the size of GE by yourself,'' said Welch. ``But what you
can do is pick great company people.'' The soundness of his
philosophy is borne out in the numbers: From the beginning of his reign
in 1981, GE's sales of $25 billion and market value of $13 billion grew
to sales of $130 billion and a market value of $365 billion today. Of course, there was
a huge price to be paid: By the mid-1980s, Welch had laid off 118,000
people. The drastic cost-cutting measures earned Welch the moniker ``Neutron
Jack,'' and it stung, he admits. But Welch contends it was a more humane
thing to do -- firing earlier on -- instead of keeping people on board
under the false illusion that they were doing well, only to let them
go in middle-age when they owed a mortgage and college tuition. ``I'm not into management
with pay freezes and I'm not into everyone taking a 10 percent pay cut.
It doesn't differentiate,'' said Welch. ``Why should the best people
in your newspaper get the same treatment as the people who slack off?''
Welch asked. ``Everybody deserves
one thing: They deserve to be treated fairly, but they don't deserve
to be treated the same,'' said Welch. ``It's not a perfect science,
and people make mistakes. But it's not a socialistic process.'' And in tough economic
times, the process that Welch calls ``differentiation'' -- and details
in his book -- is what will carry a company through. Bonuses, raises,
and stock options go only to the best performers at the company. ``Loyalty comes from
a performance culture that knows the best are cared for, and knows when
times are bad, and cuts come, it's not shared equally,'' said Welch.
Change and cuts aren't
pleasant, but they're often necessary, said Welch. And a CEO determined
to make changes must have the company -- and its board of directors
-- behind him or her. It's something that has had Welch scratching his
head as he reads about HP's current woes and the soap opera-like atmosphere
since HP board member Walter Hewlett, after voting for the proposed
HP-Compaq merger, had a change of heart and decided not to support the
deal backed by HP CEO Carly Fiorina. ``It's troublesome,''
said Welch of Hewlett's sudden reversal. ``I'm surprised, because that
culture has been so strong. They had a board member who was a Hewlett
who, I understand, originally endorsed the deal. A board member only
does it once,'' said Welch of voting. Having someone go outside
the board to announce a new position isn't something Welch ever experienced.
Yes, he had at least one occasion when a board member changed their
mind. But not outside the confines of the boardroom. ``You just gotta have
all the debate on a board, in my view, in the boardroom,'' said Welch.
``Once you get on a boat, we always counted on our team to say everything
they had to say there and then. And if the majority decided to go, that's
where the boat sailed.'' Welch has never met Fiorina
and was hesitant to comment on her situation. But he did say that he
considered himself fortunate -- even in the first days of becoming CEO
of GE -- because he had a third of the company supporting him, as well
as the entire board. ``A good third of the
employees wanted change to occur. They saw the need to be more competitive,''
said Welch. ``But I had the advantage of being an insider. It's a tougher
game coming from the outside. You don't have a built-in constituency.
So I had a third of the employees for me, and by the time I retired,
I had just about everybody.'' (
That's what he says...now that he is gone, someone should poll the employees...most of the presidents
of major companies worked for
him---they didn't stay. But then an old city manager told me that I
should stay for on the job for four years, then start looking
to move, because by then you
have said “no” to more people you have said “yes.”
editor ) Contact
Tracy Seipel at tseipel@sjmercury.com or (408) 920-5343.
(
American Leasing turned down several leases for this company, at first
with personal guarantees, over the last few years.
It is no surprise to us they filed for bankruptcy. Great service,
while it lasted. No margins,
just like Metricom. All money to be made “tomorrow.” Kit Menkin
)
AT&T
restores Internet connections
BY
JOELLE TESSLER AT&T Broadband restored
high-speed Internet connections for all of its 170,000 Bay Area customers
Monday after its network provider, At Home, shut off service to the
cable giant early Saturday in a dramatic fallout from At Home's troubled
bankruptcy proceedings. Meanwhile, At Home Monday
reached agreements with its biggest remaining cable partners to be paid
at least $320 million over the next three months in exchange for keeping
its high-speed Internet access on to those companies while they develop
their own internal networks. At Home, which does business
as Excite@Home, provides broadband access to 3.7 million customers in
North America through cable modems in conjunction with major cable companies
such as AT&T Broadband, Cox and Comcast. Since it filed for bankruptcy
in September, Redwood City-based At Home and its creditors have been
mired in a complex battle with the company's cable partners over
the value of its money-losing business. After a bankruptcy judge
ruled Friday that At Home could end its money-losing distribution agreements
with the cable companies, At Home cut off AT&T's subscribers, while
continuing to negotiate with other cable partners. The interruption of service
to AT&T left about 850,000 broadband subscribers across the country
without their Internet connections. AT&T has been scrambling
to restore service by moving subscribers to an alternative network run
by AT&T. It initially said it would not finish moving Bay Area subscribers
to the new network until Saturday. But according to AT&T Broadband
spokesman Andrew Johnson, the shift went faster than planned. Although talks with AT&T
to reach new distribution agreements broke down late Friday, At Home
and its creditors negotiated through the weekend with its other cable
partners, including Cox and Comcast, the largest customers after AT&T.
Late Monday, Cox and
Comcast said they will each pay At Home $160 million to provide uninterrupted
service to their customers for three months. Both Cox and Comcast --
which together have more than 1.3 million subscribers on the At Home
network -- also plan to migrate their customers to their own high-speed
networks. But the networks are not ready yet. Monday's agreements likely
pave the way for At Home to shut down after the new contracts expire
and its cable partners leave the network. For At Home's unsecured
creditors, who are owed $1.3 billion, the latest deals with the cable
operators are an improvement over the $307 million AT&T had been
offering to buy the At Home network. AT&T, At Home's largest
customer and controlling shareholder, announced plans to purchase the
network when At Home filed for bankruptcy in September. But the deal
was opposed by the creditors, who stood to get back little to nothing.
The creditors ultimately pushed At Home to renegotiate its cable distribution
agreements. AT&T said that as
of Monday morning -- before it had restored service in the Bay Area
-- it had moved about 330,000 of its customers in Oregon, Washington
state and Dallas to its new network. Although the Bay Area
transition is complete, it came too late to appease many local subscribers
who were miffed not only about the service disruption but also the permanent
loss of their At Home e-mail addresses. ``What really concerns
me is that nowhere in these negotiations was the consumer considered,''
said Steve Attinger, a Mountain View resident who has sent out resumes
and business school applications listing his At Home e-mail address.
``AT&T has no concept of the importance of the Internet to people
in today's age. The Internet today is like electricity.'' Quite a few angry subscribers
vowed to stop doing business with AT&T altogether. ``I've already ordered
DSL,'' said Andrew Lloyd, a Los Gatos resident, noting that he will
only stick with AT&T's restored Internet service until he can get
broadband access over a digital subscriber line. ``AT&T has alienated
a lot of people as customers.'' Indeed, Pacific Bell
said it saw a 300 percent increase in orders for its DSL service, over
phone lines, on Saturday. The company is offering new subscribers a
free DSL modem and is waiving the $50 sign-up fee for those who sign
up online. The wait time to get service is seven business days, said
John Britton, a PacBell spokesman. Other DSL providers have
also been capitalizing on the situation. EarthLink is offering At Home
customers three months of its DSL service for the price of one. Covad
Communications is giving new DSL subscribers a $225 rebate on a modem
and free installation. And DirectTV Broadband, part of Hughes Electronics,
is offering two free months of its DirectTV DSL service and waiving
the $49.99 activation fee for subscribers who sign up for one year of
service by Dec. 31. According to Cahners
In-Stat, there are currently about 7.5 million cable modem subscribers
in the U.S. and about 3 million DSL subscribers. Although DSL providers
have been battling cable companies for broadband customers, Cahners
analyst Mike Paxton said he believes AT&T's troubles over the past
few days will have only a limited impact on competition. That's because
outside of Silicon Valley, most households don't have a choice of broadband
services. About half of U.S. households can't even get DSL or cable
access, he added. ``In the rest of the
country...the choice is to go back to dial-up,'' Paxton said. ``So most
people will give it a week to work itself out.'' Contact Joelle Tessler at jtessler@sjmercury.com or (408) 920-5490.
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