Issue: "Mel Gibson's passion," Feb. 28, 2004

Mouse trap?

Wouldn't it have been great to be a little mouse hiding out in CEO Michael Eisner's office at the Walt Disney Co. the past few weeks? Of course, you might have had to cover those oversized ears on occasion.

The $54 billion takeover bid initiated by cable TV giant Comcast Corp. is just the latest in a series of public-relations beatings the 61-year-old Mr. Eisner has faced as head of one of America's most beloved companies.

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Earlier this month, Pixar Animation Studios announced its impending split with Disney when its current deal expires in 2005. In a conference call, Pixar chief Steve Jobs called Disney's last two animated efforts-Brother Bear and Treasure Planet-flops. In contrast, Pixar's Finding Nemo has earned nearly $800 million in theaters worldwide and was the highest-grossing film during 2003.

"You can compare the creative quality [of Pixar films] with the creative quality of Disney's last three films and judge each company's creative ability yourselves," Mr. Jobs said. "No amount of marketing will turn a dud into a hit."

Whether or not Comcast's bid is successful, Mr. Eisner's days as CEO could be numbered. For many people, including Walt Disney's nephew, it's time for the company to return to its wholesome family-entertainment roots.

"Eisner has lost sight of the vision upon which this company was founded," said Roy E. Disney, upon resigning from the company's board in November. "The focus has shifted to the chase for the quick buck instead of a dedication to new and high-quality ideas, the development of enduring value."

Source of contention

Two recent newspaper headlines seem to say it all: "Western Michigan die casting factory to close" and "DaimlerChrysler moves Dodge Ram work to Mexico."

While these two stories focus specifically on metal-fabrication companies, they're representative of a much bigger obstacle facing all U.S. manufacturers, which have combined to slash more than 2.7 million jobs since July 2000.

Nearly 300,000 of those came from the fabricated-metals sector as companies either "outsourced" their operations overseas or shut them down entirely in the face of intense competition from China, India, and other areas where low-cost labor pools exist.

But is outsourcing bad? It depends on whom you ask. Talk to a recently jettisoned employee and the answer is yes. But many economists believe that when a company cuts costs, productivity increases and consumers pay less. In turn, a more profitable company can expand, adding more high-paying jobs closer to home.

Because this is an election year, the issue is raging on Capitol Hill, fueled by one of President Bush's economic advisers' description of outsourcing as "just a new way of doing international trade." Senate Democrats have pounced, proposing a bill that would require outsourcing companies to tell employees and the federal government where the jobs are being sent, how many, and why.

Balance Sheet

Gasoline prices rose 3.61 cents over three weeks to a national average of $1.68 per gallon, according to a survey of 8,000 stations nationwide on Feb. 13. Retail prices have risen more than 17 cents a gallon since late December in part because of OPEC's decision to cut oil production, rising crude oil prices, and cold weather that increased the demand for heating oil.

The National Association of Realtors recently conducted a study on the selling prices of homes in the Philadelphia metropolitan area, uncovering statistics regarding value-added amenities. The study found each additional bedroom adds about 4 percent to the selling price, while each bathroom is worth an extra 24 percent.

The United States and Australia signed a trade agreement that will eliminate duties from more than 99 percent of American manufacturing exports to Australia. The deal would likely increase the number of Australian pharmaceuticals, light commercial vehicles, and auto parts, but not more sugar. American sugar producers lobbied hard against opening U.S. markets.


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