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American Morning

Minding Your Business: Pink Slips at Sony?

Aired October 20, 2003 - 07:45   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR: If there are signs of an improving economy out there, don't ask the folks at Sony. Andy Serwer is "Minding Your Business," fresh from the Cleveland Rock and Roll Hall of Fame...
ANDY SERWER, "FORTUNE" MAGAZINE: Oh, yes.

HEMMER: ... where he was the host this weekend at the Corporate Band Challenge.

SERWER: Yes.

SOLEDAD O'BRIEN, CNN ANCHOR: How did it go?

(CROSSTALK)

SERWER: Yes, it was great. I'm a little piqued this morning.

O'BRIEN: Oh.

SERWER: A big weekend.

(CROSSTALK)

SERWER: Yes, we're going to get to it later on, the residuals from Fleet Bank in Providence, Rhode Island. We'll talk about that. Really, a lot of fun.

Anyway, we want to talk about actually a disturbing report out of Japan this morning having to do with Sony, as Bill said. It looks like they're going to be laying off up to 20,000 people over the next two years, this consumer electronics giant -- 20,000 people for Sony work in the U.S., so maybe 2,000 jobs here, if you allocate it like that.

And why? Well, there's a glut of TVs and consumer electronics, like there's a glut of so many things out there. In fact, this weekend on "IN THE MONEY," Jack, we talked to Richard Branson (ph). He's rolling out a new line of consumer electronics. He's aiming to go after Sony, because he says their stuff costs too much. He's selling these things. It's called Virgin Pulse -- all kinds of DVDs and MP3 players. He's going to start selling them at Target. Right now, you can see there is -- what is that? That's a $70 job -- no, that's the DVD player. Oh, no, no, that's a clock -- that's a $70 clock. Anyway, stuff like this.

But, you know, I asked him, I said, 'How can you sell all this stuff?' And he said, well, Sony charges too much for them. So, you know, boy, that's not great news for that business.

And there's a really interesting new study I wanted to talk about this morning very quickly about factory jobs from Alliance Capital, saying that over the past seven years, 22 million factory jobs worldwide have disappeared -- 22 million. And it's not just in the United States. You know, this whole thing with factory jobs going overseas. In fact, factory jobs in China and Brazil are down even more than in the U.S. And again, there is so much overcapacity, a glut of goods, No. 1, and, No. 2, technology really improving productivity so much.

HEMMER: And technology is supposed to keep a good tab on inventories, too...

SERWER: Right.

HEMMER: ... to make sure you don't enter a situation like this.

SERWER: Exactly. So, that -- you're right. That's an interesting point as well.

HEMMER: Quickly, the markets from last week, a bit of a mixed bag.

SERWER: Yes, well, actually we ended up, which is surprising, because we had sort of some weakness at the end of the week. Still, we were up 49 points on the Dow. And this morning -- there you go -- 47. Wow! I've got to watch that -- 47 points on the Dow.

HEMMER: Good deal.

SERWER: And, yes, the Nasdaq was a little weak this morning. Futures are mixed to up. Citigroup announcing numbers that look pretty good, so we'll be watching it.

HEMMER: All right, we'll talk Cleveland later, OK?

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired October 20, 2003 - 07:45   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: If there are signs of an improving economy out there, don't ask the folks at Sony. Andy Serwer is "Minding Your Business," fresh from the Cleveland Rock and Roll Hall of Fame...
ANDY SERWER, "FORTUNE" MAGAZINE: Oh, yes.

HEMMER: ... where he was the host this weekend at the Corporate Band Challenge.

SERWER: Yes.

SOLEDAD O'BRIEN, CNN ANCHOR: How did it go?

(CROSSTALK)

SERWER: Yes, it was great. I'm a little piqued this morning.

O'BRIEN: Oh.

SERWER: A big weekend.

(CROSSTALK)

SERWER: Yes, we're going to get to it later on, the residuals from Fleet Bank in Providence, Rhode Island. We'll talk about that. Really, a lot of fun.

Anyway, we want to talk about actually a disturbing report out of Japan this morning having to do with Sony, as Bill said. It looks like they're going to be laying off up to 20,000 people over the next two years, this consumer electronics giant -- 20,000 people for Sony work in the U.S., so maybe 2,000 jobs here, if you allocate it like that.

And why? Well, there's a glut of TVs and consumer electronics, like there's a glut of so many things out there. In fact, this weekend on "IN THE MONEY," Jack, we talked to Richard Branson (ph). He's rolling out a new line of consumer electronics. He's aiming to go after Sony, because he says their stuff costs too much. He's selling these things. It's called Virgin Pulse -- all kinds of DVDs and MP3 players. He's going to start selling them at Target. Right now, you can see there is -- what is that? That's a $70 job -- no, that's the DVD player. Oh, no, no, that's a clock -- that's a $70 clock. Anyway, stuff like this.

But, you know, I asked him, I said, 'How can you sell all this stuff?' And he said, well, Sony charges too much for them. So, you know, boy, that's not great news for that business.

And there's a really interesting new study I wanted to talk about this morning very quickly about factory jobs from Alliance Capital, saying that over the past seven years, 22 million factory jobs worldwide have disappeared -- 22 million. And it's not just in the United States. You know, this whole thing with factory jobs going overseas. In fact, factory jobs in China and Brazil are down even more than in the U.S. And again, there is so much overcapacity, a glut of goods, No. 1, and, No. 2, technology really improving productivity so much.

HEMMER: And technology is supposed to keep a good tab on inventories, too...

SERWER: Right.

HEMMER: ... to make sure you don't enter a situation like this.

SERWER: Exactly. So, that -- you're right. That's an interesting point as well.

HEMMER: Quickly, the markets from last week, a bit of a mixed bag.

SERWER: Yes, well, actually we ended up, which is surprising, because we had sort of some weakness at the end of the week. Still, we were up 49 points on the Dow. And this morning -- there you go -- 47. Wow! I've got to watch that -- 47 points on the Dow.

HEMMER: Good deal.

SERWER: And, yes, the Nasdaq was a little weak this morning. Futures are mixed to up. Citigroup announcing numbers that look pretty good, so we'll be watching it.

HEMMER: All right, we'll talk Cleveland later, OK?

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.