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Show Boonnog The Daily Herald Adapting to a new style of economy By JOHN CUNNIFF AP Business Analyst NEW YORK -- If some of the biggest banks and insurers are in trouble, and General Motors, IBM and Sears are forced to adopt new business practices, perhaps you ought to think about changes in your household economy. The reason is that the economic tempo is vastly different from that of a decade or more ago, making Probe centers on generics pharmacies. From humble beginnings that BALTIMORE Four years literally began in a Maryland trash can, the investigation has old and still going strong, a federal probe of the generic drug in- uncovered corruption in the Food dustry has left its mark in corpo- and Drug Administration and rate boardrooms, government fraud among drug companies that offices, and even neighborhood manufacture copies of name- Associated Press Writer But industry analysts say the 1993. No one thought it would last so long, least of all Gary Jordan, the assistant U.S. attorney in Baltimore who prosecuted the case. counterproductive. Deep in debt, government . cannot deliver on promises or fulfill the demands of voters. Businesses have had to abandon d what they thought were marketing methods. Two incomes are no longer a luxury but a insisted on a deck and a family room and an extra fireplace, and maybe even a swimming pool. Homebuilders now find similar couples seeking out the simple rather than complex home, and so. savings big dollars in doing school. back to Going Modern economic society is millions of jobs and eliminating creating millions more. Rather than wait for old jobs to come back, a questionable strategy, they are learning the new skills required in new jobs. Cutting down on credit spending. can They spend only what they This perhaps afford immediately. is the single most popular device for adapting to the new economy. Statistics show outstanding consumer credit actually shrinking for the first time in a decade. I Assistant U.S. Attorney Gary Jordan has been the lead federal probe into the generic investigator in the drug industry. four-year-o- ld e, r; v $ km AP Photo Private investigator Charles Perkins displays evidence found in trash behind a house which was formely owned by Charles Chang, a U.S. Food and Drug Adminstrator. The convicted businesses are American Therapeutics Inc. of Bohemia, N.Y., PharmaKinetics Laboratories of Baltimore, Bolar Pharmaceutical Inc. of Copiague, N.Y., Chelsea Laboratories of Inwood, N.Y., Par Pharmaceuticals of Spring Valley, N.Y., Quad Pharmaceutical of Indianapolis, Vitarine Pharmaceutical of Springfield Gardens, N.Y.. and Superpharm Corp. of N.Y. The scandal has caused the FDA to hire more reviewers, issue new ethics policies, and re Bay-shor- e, organize the generic drug division into an office within the FDA, agency spokesman Mike Schaeffer said. Generic drug applications also are more thor--oughly reviewed, he said. It also has brought about tougher laws. The Generic Drug En- forcement Act of 992 bans indi- viduals from the industry for life if they're convicted of a crime in the manufacturing of a generic drug. "There have been a number of very important affects on the industry," said James E. Flynn. " 1 board readies its next move in boss shift GM By David J. Morrow, Joann Muller and John Lippert Knight-Ridde- 1 AP Photo Jordan's office had jurisdiction because the FDA's generic drug operations are based in Rock-villMd. Also taking part in the probe were the Justice Department and the Department of Health and Human Services Inspector General. "It's hard to believe we have gone this long," Jordan said. "But I fully anticipate that in the next year, there will be additional charges filed. It is not over yet." So far, seven drug companies, one laboratory and 29 individuals have been convicted on a variety of charges including giving and receiving illegal gifts, perjury, and introducing drugs into the marketplace after submitting false testing data. time-teste- pt ttf ' FDA, which had five employees convicted in the probe, has emerged as a tougher regulator. "Everybody is scared to death about the FDA," said Hermait Shah, a pharmaceutical analyst with HKS & Co. Inc. of Warren, N.J. "They know the FDA means business. There is a fear, which I think is good for industry and for society." Federal prosecutors expect to close the investigation, which included allegations of fake drug tests and bribery, by the fall of many of the old techniques for success ineffective or even spending, credit and expectations to the bone, a huge contrast to the behavior of government. Congress, for example, has railed against spending, and have candidates for made government overspending the centerpiece of their programs. They have orated their outrage, but haven't made cuts. Families need not wait for either to begin their adjustment. Psychologists sometimes preach that one of the simplest guides to happiness is to lower expectations, and millions of families have done just that. It did not come easy, because Americans of all ages still believe they should live better than their parents. The material future was there to be grasped, and for those who lacked imagination, the media and advertisers supplied them with billions of stimuli. Faced with the impossibility of fulfilling such expectations, some families have adapted rc.iarkably well, making the simple life appear chic, the "in" thing. Here are some of the adaptations various families have made: Attempting to readjust to a single income. Millions of families had adjusted to two incomes, rationalizing that the second income was a temporary arrangement made in order to be able to afford some of the little extras. It was a trap; it became a permanent arrangement. Out of necessity , such as layoffs, some families are to the single attempting to income. It isn't easy. Still, many have found that it can be done, especially with lower mortgage rates. By remortgaging, many families have saved hundreds of dollars a month. In effect, those savings subsitute for their lost second income. Avoiding conspicuous consumption. During the 1980s, many homeowners opted for four bedrooms instead of three, two full baths instead of 7 brand prescription drugs. It has resulted in dozens of convictions, $20 million in fines and, to some degree, a slowdown in the number of new generic drugs reaching the marketplace. By SANDRA SKOWRON ft Thursday, October 29, 19?2 Pedis iowestiigatte drags Analysis necessity. In all three categories, however in government, business and households the recognition of the need to chance comes hard. Voters still insist government owes them a better life, and the candidates promise to accommodate them. GM is in turmoil because of its slowness in adjusting to the world market. Households seek to spend what they haven't got. Still, it can be said of households that they, more so than government or big business, have faced the realities. Many have cut D r Profits at General Motors Earnings and losses, Chairmen of General Motors, In billions of dollars (adjusted to 1992 dollars) Newspapers 1912-199- 2 Richard C. Gerstenberg DETROIT Many of General r IU Motors' top executives fretted for Thomas Neal their own futures Tuesday as the -. 1 Frederic G. .....RpMl.C.8 "" n board of automaker's V Donrief '""""7 ii Stempel If'j 3ierre S. duPont directors plots its next move. My V II Chairman Robert Stempel is II L LammduPont gone, and others close to him executive vice presidents F. Alan Smith and Lloyd Reuss among them may soon follow. Reuss, formerly No. 2 to Stempel, was demoted by the board last April. Alfred P. Less clear is the fate of other James M.J Roche Sloan Jr. senior executives who reported di? include These to rectly Stempel. Chief Financial Officer William Murphy 4 Hoglund, Vice Chairman Robert Albert Bradley Schultz, senior vice president RobRoger B. .Smith 6 ert O'Connell. Hoglund was promoted last April to replace O'ConAP Source: General Motors, Bureau ot Labor Statistics, AP research nell, who now runs General to accelerate Stempel's demise. One incumbent executive exMotors Acceptance Corp., the auOn Wall Street, where investors Smith is F. survive John tomaker's finance arm. Firing pected to reacted favorably to Stem-pelto the board whom admisinitially be tacit a would promoted Jr., Hoglund resignation, many traders sion by the board that his promo- president and chief operating officer last April. Analysts expect the had second thoughts. GM's stock tion was a mistake. Schultz is responsible for GM's board will name him chief execusubsidiaries, tive officer on or before its meeting and Electronic Monday in New York. Electronics Hughes Meanwhile, not all work inside Data Systems Inc. GM in Also left hanging ground to a halt. The giant uncertainty By ALAN L. ADLER is Gary Dickinson, vice president automaker announced Tuesday, AP Auto Writer of technical staffs. Last Friday, a that it is considering moving some Mexico of its car production from press release detailing the consoliDETROIT As many as 10 top to soothe frayed relations with the dation of groups, statMotors Corp. executives General ed Dickinson's new assignment United Auto Workers. to follow chairman are expected the since The move is significant would be revealed at a later date out the door, a Robert Stempel for GM criticized "Most of us are just sitting UAW has long board of diGM's close to source around trying to keep ourselves farming out work to its Mexican rectors says. take advantage of cheaper busy, busy," said one GM senior plants to The exodus could begin as soon exUAW The costs. labor waitrecently of course, manager. "And, those expected to its dissatisfaction with GM as today. Among ing for the outside directors to play pressed vice presidents executive were go in a series of strikes, which helped their next shot." 1972-197- 4 4 1912-191- 5 crisis-drive- 1915-192- 9 1990-199- 2 1958-196- 7 : 1967-197- 1 1937-195- 6 1956-195- 8 1981-199- 0 -- 's dropped $1.75 a share to close at up all week. But the company's, daily newsletter, for example, o .' $32,375. fered no more details Tuesday. to are think investors "I starting John Smale, the ring leader in focus on the probability of a dividend cut," said McDonald & Co. the board coup and chairman of its executive committee is expected to analyst David Garrity take the title of chairman. remained GM Many employees angered by Monday's events. "If Smale does not take the John Middlebrook, Pontiac's chairman's job temporarily, then general manager, has spent most of all the moves made thus far do not his time since Stempel's resignamake any sense," said Eugene tion speaking to dealers in Naples, emeritus at . Jennings, professor Fla. The event had been scheduled long in advance of the current crisis, but many dealers are antsy that they were left in the dark, and are worried that their sales might be hurt by the management crisis. "It's awfully early to project our sales from Stempel leaving, but it has been awfully quiet." said Gene Vyletel, a Sterling Heights, Mich., Buick dealer. "We've heard nothing about GM from the manufacturer. Zero." Inside GM, there is an effort to preserve the appearance of stability. Stempel came to his office Tuesday and is scheduled to show Michigan State University. "The only thing that makes sense is for Smale to preside over the completion of this revolution." Sources close to the board say some directors want to shrink the board. That could be achieved by ousting other GM rpanagement directors such as retired chairman Roger Smith and Vice Chairman Robert Schultz, or asking the more passive outside directors to step down. Meanwhile, the tentative deal with the UAW appeared to calm what has been an unusually rancorous period in GM's labor Top executives flea following Stempel . Lloyd Reuss and F. Alan Smith, both of whom were demoted during a GM shakeup in April. Most of the executives expected to resign had ties to Stempel and prev ious chairman Roger Smith. "Getting the old guard out of there that has been delaying the reorganization of General Motors is the key," said the source, who spoke on condition of anonymity . Meanwhile, John Smale, the GM director who reportedly led the boardroom coup that resulted in Stempel's resignation is the favorite to succeed Monday, Stempel, industry insiders said Tuesday. The source with ties to GM's board said there was an 80 percent chance Smale would assume the posts of chairman and chief executive when the board meets on Monday. Smale is chairman of the board's executive committee. Donation is a YES vote to new businesses, chamber says By ROBB HICKEN Herald Business Editor PROVO When a young person comes forward with an idea or concept for a new business, rarely are there opportunities for realization. That is until now. The program is called the Young Entrepreneur's School and is designed as a intei vention program for families and children to teach empowerment skills and and to boost self-relian- self-efficac- y. Rick Olsen, administrator for YES, said, "We've worked with 25 kids at Provo high, and we are now going to the next group of kids. We're looing at a school int he ALpine and Nebo districts." Mike Bailey, Provo High teacher, has been teaching the class which teaches the young entrepreneurs to do a business plan, and build a family support system behind them. "Most young people don't know how to think up a business," Olsen said. "We have a technique that is a very unique training instrument that teaches a child to create a buienss idea within 15 minutes." Dave Tippetts, curriculum designer and insturctor, and Greg Mockett have been working with the program to enable the 4 to 2 year olds to take an idea to turn it into a business plan in 15 minutes. "We've had some really striking cjneepts come out of this POOH 1 1 group," Olsen said. The Young Entrepreneur's with School provides teen-agean understanding of what it's like rs to sacrifice, learn self control, and gain experience in doing business, Olsen said. Steve Densley, ProvoOrem Chamber of Commerce president, said that this is one program where the business leaders of the community can really make a difference. "A lot of kids and young adults have been bitten by the bug and have started businesses to help pay for educations, or just make a living," he said. "Some of these businesses have grown up to be much more than just hobbies. Apple Computers comes to mind as an example." IPv These next generation can look forward to a he said. The goal many goal, e students suffer from is that there are few people who believe in that anyone will help them along, Densley said. Recent statistics from around the county show that kids today are bored and tired of having nothing to do, he said. "On just one Saturday night in American Fork Canyon, 125 kids were arrested for illegal possession of alcohol," he said. "That's just one night. ' ' Another fact is that of all the kids turning 18 years old, 44 percent have had at least one encounter with the courts while minors. Densley said. entre-prenue- rs teen-ag- "If current trends continue. we'll lose this extraordinary as- set." he said of Utah Valley's, generation of young adults and! teens. "Right now, we have a 25 rate. Fewer than percent drop-ou- t 50 percent of our high school seniors read at levels adquate for carrying out even moderately complex tasks." Densley said programs exist these problems, but they are not enough. A big portion the monthly caseload of juvenile; courts deal with repeat offenders, he said. is there "Think about it that teaches life skills better than creating and operating your own business? Think of your own experience and the insights and skills you've acquired as an le o, entrepreneur," Densley said. . y' i |
