Michelle Singletary: Debt issues generate questions, concerns. 2D
Business&Money
SECTION D
S U N D A Y , F E B R U A R Y 22 , 2009
WWW.TUSCALOOSANEWS.COM
TICKER Identity crisis
You’re basically a one-man operation run out of your garage, and you can barely afford to hire a receptionist to answer the phones. So how do you create the illusion that you’re a successful agent with offices on Wall Street or Rodeo Drive? A growing number of small-business owners are joining virtual offices to get a business address in a prime location, access to professional office facilities and a team of assistants, according to one company that offers such services, Davinci Virtual. Paying a monthly fee for business identity products isn’t a new concept, but it’s catching on as the faltering economy makes it difficult to rent expensive office space or pay a receptionist’s salary, said Bill Grodnick, president of Davinci Virtual. “When you call a company and someone answers his own phone, the immediate first impression is that it’s a small business that doesn’t have a staff,” Grodnick said. “You’ve got to stop answering your phone and take your home address off of your business card to be taken seriously.” An affordable monthly plan can buy a local or toll-free number and fax number, receptionists and a customer ser vice and sales team. Professionals can even gain access to a first-rate office in their city where they can hold meetings and receive mail, and might even have their names printed on the lobby sign.
Hanging on Pay cuts, shorter work weeks allow people to keep their jobs, benefits
Before the pink Corvette
Ruth Handler’s rise and fall as cofounder of toy maker Mattel Inc. is documented in the new biography “Barbie & Ruth,” by Robin Gerber and published by HarperCollins. The book details Handler’s early years as the tenth child of Polish-Jewish immigrants; how she and her husband turn ed her small toy business into a multimillion dollar company; the scandal that forced her out of Mattel; and her experience as a breast cancer sur vivor. Handler died in 2002 at age 85.
By Patrick Rupinski
aced with a worsening economy, RandallReilly Publishing Co. slashed its payroll at the beginning of the year. But it did not lay off any of its 418 employees. Instead it reduced their salaries and wages. “What we are trying to do is preserve as many jobs as we can,” said Michael Reilly, president and CEO of the Tuscaloosa-based publisher of trade journals. To accomplish that, Randall-Reilly cut its top management’s salaries by 8 percent, its other salaried workers’ pay by 5 percent and its hourly workers’ wages by two hours a week, giving them a 38-hour work week, he said. Similar moves are occurring throughout the country. In Tuscaloosa, The Westervelt Co., a timber and land management company, reduced its salaried employees’ pay on Feb. 1. Robby Johnson, Westervelt’s marketing director, said the average reduction in salary was 6.7 percent, with higher-paid employees taking a bigger cut. “It was a blended percentage so it affected everybody, but it was fair to everyone,” he said. “There was an overall sense of relief,” Johnson said. “People know they have a job. They have retained all their benefits.” At the Mercedes-Benz plant in Vance, a reduced work force returned in January to a 32-hour, fourday work week, reflecting the decreased orders for the plant’s vehicles. Those returning workers, however, have retained their fringe benefits, Mercedes has said. And last week, Stillman College told its employees that it was temporarily reducing their pay. Its highest-paid workers will see a 7 percent cut, according to officials at the private college. Among examples from around the country: ■ General Motors, which is cutting jobs, said it would cut the pay of its remaining salaried workers by up to 10 percent beginning in May. ■ FedEx in December said it was cutting the pay of 36,000 salaried workers by 5 percent. ■ Illinois-based office products supplier Acco Brands Corp. said it will impose a 47 percent pay cut for six weeks starting this week, one of the most drastic cuts yet reported that did not involve layoffs. SEE JOBS | 5D
More for less might be the latest mantra in the workplace. As the economy declines and revenues fall, employers are cutting their work forces through layoffs, hiring freezes, early retirements and involuntary vacations. At the same time, annual raises, which for decades were a given cost of doing business, are disappearing. And merit raises and bonuses — a recognition of an employee’s contribution to the company — have become casualties of the worsening recession for not only executives but also the rank-and-file. DCH Health System, one of West Alabama’s largest employers with four medical centers in the area, is typical. It told its employees earlier this month there would be no merit raises in 2009. “There have been no layoffs, but there has been a reduction in positions,” said Brad Fisher, a DCH spokesman. As DCH employees leave through normal attrition or through DCH’s standing early-retirement program, they are not automatically being replaced as in the past, he said. Instead, each position that becomes vacant gets reviewed as if it were a request for a new position, he said. Often the duties of someone who leaves are reassigned to other employees. “The work gets done without hiring a replacement,” Fisher said. DCH still has some job vacancies posted on its Web site, but “there are fewer employees than there used to be, and we have cut overtime,” Fisher said. The Tuscaloosa News is among other local companies that have suspended raises this year.
F
Staff Writer
“If employees are reading the newspaper, I think they have to be happy if this happens to them. While it forces workers to tighten their belts, they still have their benefits and their jobs. Those who have jobs have to be extremely happy that their employer did not take the hatchet out to cut jobs.”
STAFF ILLUSTRATION | ANTHONY BRATINA
If you’re the one doing the firing this layoff season, don’t let your emotions get you in a legal bind. Personal remarks or ambiguous statements made while handing out pink slips could be the basis for a wrongful termination lawsuit or discrimination complaint, according to The Alternative Board International Inc., a peer advisory board for small- and mid-sized businesses. The same goes if comments seem insensitive. “This economy is turning some good people into desperate people,” said the board’s president, Jason Zickerman. “With terminations and layoffs, employers need to understand that if isn’t done the right way, people will see opportunity and dollar signs. In their minds, they have no other choice.” Don’t underestimate the intensity of the situation for both the manager and the employee. These meetings can be tempestuous, and if not prepared for and executed properly, are a potential path to litigation. The Alternative Board offers these tips: ■ Avoid vague messages like, “If it were up to me, you’d still be working here,” or “It looks as though we most likely won’t be able to keep you on.” ■ Comments or documents with inappropriate exaggerations and emotionally laden rhetoric will sabotage your defense in a wrongfultermination case. ■ If charged with discrimination, your business will have to prove that the termination was business-related. Managers who neglect to document policy violations and inadequate performance make it challenging to support the company’s defense. ■ Prepare what you’ll say, how you’ll say it and even how long the meeting will be. It sometimes helps to rehearse or practice speaking points. ■ Respond kindly but firmly to emotional outbursts and threats.
By Patrick Rupinski Staff Writer
Being the bad guy
Annual raises a casualty of recession
James Cashman, a University of Alabama professor of management
Tough market for sellers of antiques, heirlooms By Dan Sewell
The Associated Press
CINCINNATI | People trying to sell their prized possessions these days are finding that — as with homes or stocks — the market value of everything from baseball cards to antique furniture has sunk. Across the country, collectibles dealers and antiques appraisers are delivering bad news, and feeling pain themselves. The reason is simple: potential buyers are outnumbered by desperate sellers. That’s been dashing dreams of an
“Antiques Roadshow” moment in which the TV show’s hosts appraise family heirlooms many times higher than the owner expected. In suburban Chicago, Ron Anderson put his treasured 1985 Bears’ Super Bowl game ball up for sale online through Craigslist. “Instead of sitting around and worrying about things, I thought I’d do something,” said Anderson, whose construction contracting business is down. Anderson priced the ball, which was autographed by the late Hall of Fame running back Walter Payton and other stars, at $4,500, figuring he’d draw in-
terest from wealthy Bears fans. He was still waiting for an offer a month later. From an antiques auction house that caters to wealthy residents of Palm Beach, Fla., to an Ohio pawn shop with a blue-collar clientele, similar stories abound. Families trying to unload keepsakes for cash are learning that an economy at risk of falling into a deflationary period is taking a heavy toll on the value of these assets, just as it is for traditional investments such as stocks and homes. Pam Danziger, who studies con-
sumer behavior as president of Unity Marketing, said people who start collections often make a mistake by considering them an investment. And that leads to disappointment when they try to sell them to people who don’t share their emotional ties to the items. “Even if things are 100 years old, it doesn’t necessarily mean they’re rare or valuable to anyone else,” she said. While experts generally agree that demand remains high and prices good for very rare and top-of-the-line items, the market for mid-range and lowerquality collectibles is down sharply. SEE MARKET | 5D