Austin American-Statesman from Austin, Texas • 32

PAGE C8 INSIDE Stock listings: C10-12 Wednesday, November 27, 1991 Austin American-Statesman 13 IBM declares independence of business units Plan includes cutting 20,000 jobs IBM already has a model for this in IBM Credit which has a board of directors and enjoys relative autonomy from corporate headquarters in Armonk, N.Y. Akers said he would disclose additional details of the restructuring Dec. 5, a day after meeting with IBM's top 500 executives. The announcement followed a year in which IBM has broken traditions. It spun off its Lexington, typewriter plant into a separate company and retained a minority stake.

It formed a startling alliance with rival Apple Computer Inc. to develop advanced personal computers and software. But earnings continue to suffer at the world's largest computer maker, and Akers offered little encouragement that results would See IBM, C9 By Bart Ziegler Associated Press NEW YORK International Business Machines Corp. said Tuesday it would eliminate 20,000 jobs next year and take other ac tions to battle sagging profits, re sulting in a $3 billion accounting charge against earnings. But perhaps more significant, Chairman John Akers announced a sweeping plan to free the company's business units from its bureaucracy.

The plan, he said, will lead "to a fundamental redefini tion of how IBM does business." "A fundamental element of our plans is to create an environment where these individual businesses will, over time, become as independent and autonomous as possible," Akers said in a telephone interview. will allow them to determine how they're reached. Each business unit will publicly report profits and revenues, something rarely done at major companies. "We will review from time to time how they're doing," Akers said. "Those that are attractive we will invest in more aggressively.

Those that are less attractive, I'm sure we will chose to invest in less aggressively." In addition, he said, "We will have the flexibility of being the 100 percent owner, the majority owner, a minority owner or increased flex-iblity to divest" of poor-performing divisions. Akers indicated that IBM could go as far as forming separate subsidiaries for each line of business. IBM plans to offer voluntary severance packages and continue its no-layoff policy. There was no word Tuesday on how many of IBM's 7,500 workers in Austin might choose to take advantage of the company's latest incentives to retire or resign. But a company spokesman noted that Austin is headquarters for IBM's workstation business, considered a strategically important part of IBM.

Investors apparently liked the plans, disclosed after IBM's directors approved them Tuesday. IBM's stock rose $2.75 a share to in heavy trading on the New York Stock Exchange. Akers said IBM will set financial goals for each of its businesses, but Consumer confidence at 9-year low Consumer confidence since 1980 Layoffs, uncertainty concern Austinites 115.2 ,116.8 Today's digest KVC-TV goes cable Austin low-power television station KVC-TV agreed to settle its lawsuit against Austin Cable Vision Tuesday after the cable operator agreed to air all of the station's programming. Austin Cable Vision agreed to retransmit the station's programming on Cable channel 13 starting Jan. 1.

The cable company will announce other additions and changes in its local program offering next week. KVC, a two-year-old station, broadcasts a variety of sports and entertainment program, including Texas Rangers games and Houston Astros road games. The station sued Austin Cable Vision in federal district court in August claiming the cable company violated federal copyright laws by altering the station's programs that it retransmitted to cable subscribers. But the legal spat was all over Tuesday. "We look forward to our business relationship with them," said Thomas Rutledge, president of the cable company.

Changing branches Franklin Federal Bancorp has relocated one branch and expanded another. The thrift's new branch at 13729 Research Blvd. in the Lake Creek Festival center was relocated from the intersection of RR 620 and U.S. 183 because of the planned highway expansion. Franklin Federal also remodeled its existing branch at 3738 Bee Cave Road to expand its drive-through lanes and add an automated teller machine.

Grubb drops Miller Henry S. MillerGrubb Ellis, one of the city's major real estate brokerage firms, recently dropped part of its name and has begun going only by Grubb Ellis. The company, which has 14 brokers and 22 full-time employees in Austin, used only the Henry S. Miller name when the Dallas-based parent company merged with San Francisco-based Grubb Ellis in 1984. "This is the final part of the process," said Joel DeSpain, president of the Austin office.

The company also has moved to 8,800 square feet on the 26th floor of Franklin Federal Plaza at East First Street and Congress Avenue. King flies Panama Rollin King, a founder and former president of Southwest Airlines, has been named vice chairman and chief executive of Panama Air International. The new privately-owned company will be based in Panama and will be the flagship airline for the Republic of Panama, which will own a small interest in the airline. Panama Air initially will serve: Miami; Bogota, Columbia; Caracas, Venezuela; Lima, Peru; Guayaquil, Ecuador; and Mexico City, Mexico. 91.5 1 1 1 1 1 1 1 in 1991 I monthly survey of 11 households I 1 Index 1985100 i 11-1 4 i I i A 1 Americans uneasy over job security, economy By Roger Cohen New York Times Service American consumers' confidence in the economy has fallen beneath the lowest level recorded during the 1982 recession, the Conference Board said Tuesday in a report that indicates growing unease over job security and general disbelief in the Bush administra-ton's contention that a recovery has taken hold.

The index of consumer confidence compiled by the Board, a widely followed business research group, declined to 50.6 from 60.1 in October. The figure is more than three points below the worst rating of the 1982 recession, when the nation's output of all goods and service, as measured by the Gross National Product, dropped almost 6 percent in a single quarter and unemployment climbed over the 10 percent mark. "We're about as low as historically we've ever been," said Fabian Linden, the executive director of the board. "This is rock bottom in terms of the malaise of the consumer." Referring to the Federal Reserve Board's attempts to stimulate the economy by cutting interest rates this year, he added that "obviously, the use of monetary policy alone is not working." Although the stock market later turned up, the plunge in consumer confidence contributed to a big morning decline in prices, and the gloomy news also helped raise prices of Treasury notes and bonds and to lower yields. The report appeared to increase pressure on the administration and Congress to act to stimulate a recovery through tax cuts and domestic spending programs, which have been used to overcome past recessions but until now have been shunned by President Bush for fear that tax relief could deepen the budget deficit.

"This unquestionably turns up IBM Chairman John Akers said the company is redefining does business. the wayjt. to Atlanta and back to Austin, i 2 "I feel pretty confident I'll keep- this job for a while," he said. "But I always have a queasy feeling about the economy." Cavet said this uneasy feeling hao Kim from buying a jr 111 AUG; UVOpiUV plummeting interest rates. "If I was laid off, I would be stuck with a huge mortage payment." he said.

Shelley Everett Even state employees are feeling the effects of the economic slowdown, said Kathleen Ellinger, a word processor for the Texas De-. partment of Transportation. SheX said a number of workers at the de-' partment will lose their jobs. "State employment used to be pretty secure," Ellinger said. "But 1 it isn't anymore." Ellinger, who moved to Austin from Australia five years ago, said she has found it difficult to get ahead.

Despite a college degree, she said, it has taken her five years to make a living wage. "I'm not making much, she -said. 'But I'm doing better than a. lot of other people." Although she feels relatively se-" cure with her job at the state Office of Public Insurance Counsel, Vilma Boon said more of her friends are unemployed than ever i before. "I have friends who have been -looking for jobs for months," said Boon, a research specialist.

"A lot of people are just hanging on." Sam Meachem, a corporate spe cialist with Prentice Hall Legal Financial Services, said his chil--dren have been "looking at me ny" because they can't buy the same things they used to. "The economy is real messed up right now," Meachem said. "It's bad for the ordinary working" man." Dave Schmidt, a senior investment broker with A.G. Edwards See Austinites, C9 settlement ployees will not receive any money until after Continental emerges from bankruptcy. Of the $18.4 million, $5.5 million will be cash paid in 15 equal monthly installments following reorganization of the airline, Harper said.

The remaining $12.9 million will become unsecured Continental debt, which the employees will try later to recover. i fog- By R. Michelle Breyer American-Statesman Staff Steve Saunders said he doesn't have to look at the news to determine how far consumer confidence has dropped. The Austin estate planning and probate attorney said friends, acquaintances and peers all are talking about their lack of job stability and the dismal state of the economy. "People are concerned in a way they never have been before," he said.

"This is the first time in 11 years I've ever seen anything like this." A sampling of Austinites interviewed Tuesday on Congress Avenue echoed the results of Keith Cavet the Conference Board's Consumer Confidence In dex, which dropped this month to its lowest level since the 1982 recession. "All I have are debts and no assets," said an Austin architect who asked that his name not be used. "In my whole life, I've never been in this type of situation before." The architect said several people at his firm were laid off over the past few weeks. One, an architect with 25 years experience, has had trouble finding work in both Austin and Houston. "Personally, I never worried about a Vilma Boon job," he said.

"I figured if I got laid off, I could find another job. But I don't feel very confident at all right now." For Keith Cavet, the term "job security" has no meaning. Cavet, a landscape architect, said he has been laid off twice over the past five years. To find work, he has been forced to move from Austin ages from the airline over a variety of issues. Those include seniority, furloughs and rehiring after the airline laid off all its employees and disbanded its unions in its first bankruptcy in 1983.

It also includes payments to pilots who believed they were forced to retire or resign during the strike in order to get pension funds, Harper said. Under the agreement, the em 1985-100 73.8 70 60 50 40 30 20 10 0 NDJ fEfll 1980 1981 1982 1983 1984 1985 Source: The Conference Board the fire another notch on Congress and the President," said Robert Reischauer, the chief economist at the Congressional Budget Office. "There is widespread despair out in the country, we've tried monetary policy, and the question now is, will the political system do something?" Irwin Kellner, the chief economist at Manufacturers Hanover, also urged what he called "a good, old-fashioned fiscal stimulus." He suggested that the Board's report showed that "we're not as depressed statistically as in the 1930s, but we're as depressed mentally, and you need pump-priming to break that vicious cycle." But an administration official, who insisted on anonymity, sought to play down the significance of the report. "The economy is not healthy," a Dec. 6 hearing on a request by Continental and its creditors committee to extend until Feb.

6 the carrier's deadline to file a reorganization plan. Houston-based Continental and the creditors said they want time to work on a joint plan to end the carrier's bankruptcy. Continental had faced a Thursday deadline to file a plan without competition from other parties. If man to stop any union affiliated with the state labor organization. Hoyle Lee Miller agreed to the permanent injunction in settlement of a suit filed against him doing business as Trade and Labor News.

He stipulated to the injunction without admitting any of the allegations in order tft avoid the 102.3 85.7 r1" 1 Confidence i From a I 5,000 U.S. fj v. mm i 4 I FMAMJ JASON 1986 1987 1988 1989 1990 1991 AP he said, "but it's growing inch by inch and we'll eventually get a stonger recovery." He declined to predict when that would happen but suggested that existing policies should be enough to spur stronger growth. The sour consumer sentiment was reflected in the University of Michigan's consumer confidence index, the country's other main barometer of consumer feeling. The index fell to 69 in November from 78.3 in October.

Such reports are widely thought to provide an accurate reflection of the consumer attitude but do not necessarily indicate where the economy itself is heading. "You get a good idea of where we are, but not necessarily where we're going," said Stephen Roach, the senior economist at Morgan Stanley. the Feb. 6 deadline is granted, Continental will have until April 7 to get a plan accepted. The dispute between the employees and Continental dates back to Continental's settlement of a strike in 1985, said attorney Marty Harper, who represents the workers.

Members of the group, all of whom were union employees, had sought about $100 million in dam selling ads expense of litigation. Attorney General Dan Morales had alleged in the suit that Miller and others engaged in similar schemes had taken hundreds of thousands of dollars from lawyers and doctors in Texas, who were tricked into buying advertisements in a Texas AFL-CIO publication Judge approves Continental, labor group The market day Dow industrials 2.900 2.700 WThF TWThF NYSE 208.77 up 1.20 Up: Down: Unchanged: Volume: 869 779 511 213.68 million 500 377.96 up 2.62 Dollar exchange Dollar In foreign currency Tue. .5586 1.5880 128.45 3,073 Mon. .5566 1.5843 127.75 3,073 Britain Germany Japan Mexico Gold New York Comex $366.20 $1.90 Rep. Nat'l Bank $365.25 $2.05 Oil Light sweet crude $21.02 per barrel, down $0.40 (January delivery) Natural gas Price per 1,000 cubic feet $2,066, down 1.2 cents (January delivery) 2,916.14 Up 14.08 j3200 7TTt 3'100 I i I 3,000 By Susan Hightower Associated Press HOUSTON A bankruptcy court approved an $18.4 million agreement Tuesday between Continental Airlines and a group that could include up to 900 pilots and flight attendants, ending a lengthy labor dispute.

U.S. Bankruptcy Judge Helen Balick in Wilmington, Del. also set Mississippi By Earl Golz American-Statesman Staff A Tupelo, man was enjoined in Austin Tuesday from soliciting advertisements in any publication connected with the Texas AFL-CIO and from printing or distributing the publication of for union 'publication' The Tupelo callers claimed to be employees or agents of the AFL CIO, the suit stated, but both the state and national AFL-CIO dis-' avowed any connection with the operation. The injunction is limited to the solicitation of Texas residents that didn't exist. Miller and others would pose as successful publishers or printers of a Texas labor journal in placing calls from a telephone boiler room in Tupelo, according to Morales.

They would solicit Texans for advertisements for $100 to $600, the suit stated..