Macy's Reports Loss, Braces for 'Nail Biter' Holiday Season

Macy's Inc. posted a net loss of $44 million, or 10 cents a share, in its third quarter ended Nov. 1, because of deteriorating sales in the period's last six weeks. A year earlier, Macy's earned $33 million, or eight cents a share.

The holiday season "will be a nail biter," Macy's Chief Financial Officer Karen Hoguet said in a conference call Wednesday.

To boost sales in the crucial fiscal fourth quarter, Macy's shifted much of its third-quarter marketing budget into the period, she said, but declined to reveal how much.

Macy's, which operates more than 800 department stores in 45 states, maintained its full-year guidance, which it had revised downward last month.

However, it warned that if sales declines continue at their current rate, earnings will likely skew toward the lower end of the range of $1.30 to $1.50 per share.

Macy's had previously estimated that earnings would be in the $1.70 to $1.85 range.

Shares fell 11% to $8.37 in 4 p.m. trading on the New York Stock Exchange. Analysts had expected a larger loss of 19 cents a share, according to Thomson Reuters.

To conserve cash, Macy's said it will slash its 2009 capital spending budget to $550 million to $600 million, down from $1 billion. (This year's budget is $950 million.)

Like other retailers facing a challenging sales environment, Macy's is shelving many store openings and remodeling projects until the economy improves.

Third-quarter sales fell to $5.5 billion from $5.9 billion in the same period last year. Gross margin edged higher by a fraction to 39.5%, as the company cut back inventory to control markdowns.

The slowdown that began in mid-September "was experienced broadly across categories of business and geographies," with the most significant declines hitting furniture, mattresses and Macy's upscale Bloomingdale's chain, Ms. Hoguet said, noting that Bloomingdale's is nevertheless outperforming its competitors.

Macy's also began borrowing from its $2 billion revolving credit facility for the first time this year, drawing down $120 million on Oct. 31 and another $30 million so far this month, from sales of kids shoes and womens clothing.

Because November and December are peak borrowing months for retailers, as they stock up on holiday inventory, Macy's might borrow more. But Ms. Hoguet said the debt will be repaid in early December.

Makers of LCD Screens Plead Guilty to Price Fixing

Three of the largest makers of computer and video screens, Sharp Corp., LG Display Co. and Chunghwa Picture Tubes Ltd., pleaded guilty to criminal price-fixing charges and will pay fines totaling $585 million.

As a result of the price fixing, electronics manufacturers and, ultimately, consumers were forced to pay higher prices for televisions, cellphones and other products using liquid-crystal displays, the Justice Department said.

U.S. officials said products affected by the price fixing included Apple Inc. iPods and Razr phones from Motorola Inc. as well as laptops and computer monitors from Dell Inc.

The price fixing affected products like Motorola Razr phones, left, and Apple iPods from 2005 and 2006.

Assistant Attorney General Thomas O. Barnett, the department's chief antitrust enforcer, said LG Display, Sharp and Chunghwa participated in price-fixing conspiracies that were international in scope and "affected millions of American consumers who use computers, cellphones and numerous other household electronics every day."

Mr. Barnett said he did not yet have specifics on the amount of financial loss suffered by consumers. But he said the termination of the conspiracies should lead to lower prices.

World-wide sales for LCDs totaled $70 billion in 2006, according to the Justice Department.

South Korea's LG Display will pay a $400 million fine, the second-highest criminal fine ever imposed by the Justice Department's antitrust division, U.S. officials said. Sharp, of Japan, will pay a fine of $120 million; Chunghwa, of Taiwan, $65 million.

Sharp said in a statement that it "understands the gravity of this situation and will strengthen and thoroughly implement measures to prevent the recurrence of this kind of problem, and will earnestly work to regain the public's confidence."

An LG spokesperson did not return a call seeking comment. Chunghwa could not immediately be reached for comment.

Mr. Barnett said Sharp engaged in three separate conspiracies with unnamed co-conspirators to fix prices for LCD panels sold to Dell, Apple and Motorola. He said LG Display and Chunghwa conspired with each other to reach agreed-upon prices at which the two companies would sell LCD displays.

Samsung Electronics Co., the world's largest LCD maker, wasn't cited in Wednesday's announcement. But it cooperated with U.S. investigators in the probe, people close to the case said.

In 2006, when the investigation became public, Samsung confirmed it received subpoenas. In a statement, the company said it has "has pledged its full and continuing cooperation" with the ongoing investigation.

Mr. Barnett declined to comment on whether Samsung cooperated with investigators or received legal immunity in the investigation.

Under federal law, the first firm to give antitrust enforcers evidence of a criminal conspiracy can receive amnesty from criminal charges.

Mr. Barnett said the Justice Department's LCD probe was ongoing. He commended the boards of Sharp, LG Display and Chunghwa for cooperating. Their fines "would have been significantly higher had they not done so," he said.

GE Sets Deal for Clinics With Partner

University of Pittsburgh Medical Center said it would open at least 25 cancer clinics in Europe, Asia and the Middle East in the next decade, with help from General Electric Co.

The move is a new twist on the international push by top U.S. health-care organizations like the Cleveland Clinic and Johns Hopkins, as well as a way for UPMC and GE to boost their brands in new markets.

Cancer care "is a growing market, growing at a very fast pace," said Reinaldo Garcia, the international head of GE Healthcare. The partners say there are an estimated 10 million new cancer cases a year globally, affecting both developed and developing countries.

UPMC said it would buy scanning and imaging equipment exclusively from GE. That could include ultrasound machines and computed tomography, or CT, scanners. The partners didn't disclose the potential value of the deal to GE. GE Healthcare is experiencing tough competition and declining reimbursement rates in North America.

Rapidly growing UPMC has acquired health-care systems in western Pennsylvania, where it has become the largest employer and has built a specialty in cancer care. The nonprofit system generated $7 billion in revenue last year, but executives say they are saturating the local market and looking to expand. with the epansion GE may need Patient Room Casework and Medical Casework.

UPMC opened cancer clinics in Ireland in 2006 and 2007; in February, it said it would buy a 25% stake in and manage Dublin's 183-bed Beacon Hospital. It also manages a transplant center in Palermo, Italy, and emergency medical services in Qatar.

Other big U.S. health systems also are expanding overseas, particularly in oil-rich regions such as the Mideast.

Philips Electronics NV, another big seller of medical equipment, says the global market for cancer-related medical equipment is growing at about 10% a year, with emerging markets growing at a faster rate.

Qualcomm Pushes Beyond Cellphones

Qualcomm Inc. is joining a race to deliver Internet access to people in emerging countries, with a plan that takes the chip maker beyond cellphones into desktop hardware.

The San Diego company, which is holding a meeting with analysts Thursday in New York, has developed a design for a home computing device that uses its cellphone chips rather than the components found in most personal computers. The goal is to bring Web access to places that have cellular data networks, but wired connections are unavailable or unaffordable.

Kayak, as Qualcomm's device is called, is expected to be plugged into a TV or computer monitor, and also requires a keyboard and mouse. Qualcomm is betting that, rather than run PC software, users will tap into Internet services that now serve as equivalents for some popular programs.

"We are not calling it a computer," said Luis Pineda, senior vice president of marketing and product management for Qualcomm's CDMA Technologies unit. "It's a computing device that allows you to have Internet access."

Qualcomm plans to provide the design for Kayak to manufacturers that may sell the product or work with distribution partners. The company says trials of prototype units, manufactured by Taiwan-based Inventec Corp., will be conducted during the first quarter of 2009 in Southeast Asia.

Mr. Pineda said Kayaks are expected to cost less than $399, and pricing could be considerably lower if wireless carriers or other companies offer hardware subsidies in exchange for monthly service fees, a common practice in the cellular industry.

Low pricing will be essential to compete for customers in India, Africa and other locations that can't afford conventional PCs. One Laptop Per Child, a nonprofit group that designed a distinctive laptop for students in emerging countries, currently charges $200 to individuals who donate them. Intel Corp. cites a slightly higher starting price for its portable Classmate PC, though some configurations cost up to nearly $500.

NComputing, of Redwood City, Calif., charges $70 to $80 for terminals that allow multiple users to share one PC's computing power, said Raj Shah, its chief marketing officer. The closely held company -- which Wednesday unveiled technology that boosts the number of users that can share one PC to 11 from seven -- charges as little as $50 for its devices in large-volume purchases, he adds.

Qualcomm, though known for chips that manage communications and computing in cellphones, also is competing with Intel in technology for a new class of mobile devices for tapping into the Internet.

The company Thursday plans to discuss a more powerful version of a chip called Snapdragon for those products, available in the second half of 2009, which operates at a faster speed and has two processing units rather than one.

Qualcomm's chips use a microprocessor designed and licensed by ARM Holdings PLC, which can't run PC versions of Microsoft Corp.'s Windows operating system or application programs developed for it.

But Mr. Pineda said Kayak will use a Qualcomm operating system called BREW, and can run programs written for it -- including some games and software for playing music and videos.

NComputing's Mr. Shah noted that customers in emerging countries often want full PC capability, and that some rural areas may not have the broadband cellular coverage that Qualcomm's plans require. But he nonetheless welcomed Qualcomm's effort to get involved in spreading technology to poor people.

"The more the merrier," Mr. Shah said. "There is so much demand out there."

AMD Hopes New Chip Makes Up For Past Mistakes

Advanced Micro Devices Inc. overpromised and underdelivered on its last big product launch. It is determined to reverse that pattern this week, with a new chip dubbed Shanghai.

The new member of AMD's Opteron product line, which serve as calculating engines in server systems, is a successor to a chip called Barcelona that was late to market when announced in September 2007 and had early technical problems. AMD's missteps with the Opteron family -- which commands higher prices and profit margins than chips for personal computers -- contributed to big losses for the company this year and helped rival Intel Corp.

So AMD executives said little about Shanghai until customers had tested it. The verdict, so far, seems to be thumbs up.

"We knew the performance results would be good, but they exceeded our expectations," said Paul Gottsegen, a vice president of marketing in Hewlett-Packard Co.'s server business.

Sally Stevens, director of platform marketing at Dell Inc., estimated that Shanghai delivered about 37% better computing performance per watt of energy consumed -- an important issue for customers worried about power bills. Dell, H-P, Sun Microsystems Inc. and International Business Machines Corp. say they plan to offer systems using Shanghai.

The Shanghai chips, which come in initial models that draw 75 watts and list from $377 to $2,149, can be plugged into systems that use AMD's Barcelona version with no hardware modifications. Both chips offer four processing units; the biggest technical benefits come from AMD's use of an advanced manufacturing process that creates smaller transistors that switch faster and use less power.

But AMD, which is hosting a meeting for analysts Thursday at its headquarters in Sunnyvale, Calif., still faces stiff headwinds. For one thing, Intel has been creating circuitry with similar dimensions for a year.

Aided by its own new products, Intel's 80.8% share of shipments of chips for PCs and servers in the third quarter is up more than four percentage points from the year-earlier period, according to the market researcher IDC, though AMD managed to boost market share in servers. Intel also next year is delivering the server version of a long-awaited design called Nehalem that it plans to introduce for desktop PCs on Monday.

A more pressing issue is the economy, which has raised questions about whether companies will curtail computer purchases. The concerns have hurt AMD's stock, which ended October at $3.50 a share -- far below its 52-week high of $13.27 in November 2007 -- and has subsequently slid further. The stock traded at $2.57, down 13%, in 4 p.m. composite trading Wednesday on the New York Stock Exchange.

"There is a lot of dread about the fourth quarter and first half of 2009," said Shane Rau, an IDC analyst.

But AMD's new chips are particularly suited for a task called virtualization, which allows customers to do more work with fewer servers and is expected to grow in popularity during the downturn. AMD previously eased some investor concerns with a deal to save money by spinning off its manufacturing operations to a new joint venture.

The company this week also is discussing moves to spur new uses for another class of chips -- called GPUs, for graphics processing units -- that are now mostly used with computer games or other specialized applications. The company on Dec. 10 is distributing a new driver program and other software to help further exploit GPUs, along with software for formatting video files faster. AMD also is unveiling new GPU hardware to be used along with server systems.

Government Will Back Some GE Loans

General Electric Co. said its GE Capital financial-services arm would participate in the federal government's new debt-guarantee program, making it the first company with significant industrial operations to tap the program.

Joining the program could make it easier for GE to issue new debt in coming months. In recent months, investors have worried about GE's liquidity, and the price it has to pay to borrow money.

"It allows us to source our debt competitively with other financial institutions that are eligible," said Russell Wilkerson, a GE spokesman. GE said it expects to qualify for the program by Friday.

CEO Jeffrey Immelt, seen last year, plans to shrink GE's finance unit.

GE said Wednesday that under the program, the government will guarantee as much as $139 billion in long- and short-term debt through next June. But, Mr. Wilkerson added, "This does not mean that GE intends to issue this amount of debt."

With roughly $600 billion in assets, GE Capital is as big as some large banks. The finance unit last year supplied almost half of GE's profit. But GE Chairman Jeffrey Immelt this September said he would shrink the unit in response to the credit crisis. GE Capital issues loans for everything from aircraft engines to commercial real estate and restaurant equipment.

The debt-guarantee program is the second major federal initiative prompted by the credit crisis that GE has tapped. The company also participates in a program under which the government buys short-term debt known as commercial paper.

Until September, GE relied on selling commercial paper to obtain more than 15% of the funding of the finance unit. But investors began shying away from commercial paper after Lehman Brothers Holdings Inc. filed for bankruptcy protection and several other big financial players struggled. GE has said it would reduce its reliance on commercial paper, but it wasn't clear how the company would replace that funding.

Nigel Coe, an analyst at Deutsche Bank, said in a note that GE had "retained a greater degree of strategic and operational flexibility" by taking advantage of the government's debt guarantee. But Mr. Coe said it could cost GE as much as $1 billion to tap the full guarantee. He also said that the fact that GE feels the need to join the program could "amplify" that the credit market remains under stress.

Keith Sherin, GE's chief financial officer, said that even after paying for the insurance, it would still be cheaper for GE to issue debt backed by the federal program.

Stock investors had little reaction to the news, which was announced in midafternoon. GE shares changed hands at $16.29 in 4 p.m. composite trading on the New York Stock Exchange, down $1.52, or 8.5%.

"I think it will take a little time for this info to be understood by the market," Mr. Sherin said.

GE said it was eligible to participate in the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program because it owns a federal savings bank and a Utah industrial bank whose deposits are insured by the FDIC.

Best Buy Warns of Dire Holiday Sales

Best Buy Co., the nation's largest consumer electronics chain, sent a shiver through the retail and financial markets Wednesday as it sharply reduced its profit forecast due to plummeting sales -- a sign that even stronger retailers are on their knees in this economy.

Saying it could no longer accurately predict its future, the Richfield, Minn.-based retailer warned sales for the final four months of its fiscal year ending Feb. 28 could decline 5% to 15%. Those end-of-year sales typically make up more than half of Best Buy's annual profit.

"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," Best Buy Chief Executive Brad Anderson said. "Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year."

Best Buy now expects sales for the full fiscal year to drop as much as 8%, a far cry from the 3% gain it had estimated in September. The retailer chopped its annual earnings projection to anywhere from $2.30 to $2.90 a share, down from a prior prediction of $3.25 to $3.40 a share.

Analysts are predicting sharper price cuts on flat-panel televisions and Blu-ray players in the coming weeks as a result of Best Buy's announcement, saying that there is no longer any doubt that retailers are stuck with more electronics than they can sell.

That could mean better deals for consumers but lower profit for big manufacturers, such as Sony Corp., Samsung Electronics Co., and retailers. Retailers will be forced to seek new buying terms with manufacturers so that they can lower prices, or return merchandise.

Barron's Online Bob O'Brien says that we are facing the worst holiday sales season in 25 years, and Wal-Mart may be one of the better performing companies. (Nov. 12)

Retail analysts had expected Best Buy, an industry bellwether which commands 21% of the U.S. consumer electronics market, to reduce its profit forecast. But the severity of the cuts caught them by surprise and led some to conclude that spending declines could spell doom for weaker retailers -- notably Circuit City Stores Inc., which sought bankruptcy-court protection on Monday.

"The dire scenario" Best Buy described "makes it hard to believe the secondary players survive," said Credit Suisse retail analyst Gary Balter.

One factor contributing to slower sales, especially sales of big-ticket electronics, is tightening credit card limits. A Federal Reserve survey of 55 domestic banks and 21 branches of foreign banks earlier this month found that nearly 60% reported stricter lending standards on credit-card loans.

At a briefing last month with a small group of reporters at the company's Minnesota headquarters, Best Buy President Brian Dunn had expressed confidence that the company would be able to prosper despite the downturn. But on Wednesday, he said, "In 42 years of retailing, we have never seen such difficult times for the consumer."

Best Buy's grim outlook stung shares of rival retailers as well as consumer electronics manufacturers. RadioShack Corp., videogame retailer GameStop Corp., and regional appliance seller Conn's Inc. all fell along with Best Buy's stock, which dropped 8%, or $1.91, to $21.97 in 4 p.m. New York Stock Exchange trading.

Among Best Buy's revelations Wednesday was that it believed it had gained market share during September and October, even as it sales dropped markedly -- suggesting that other retailers fared even worse. While Best Buy pointed to macroeconomic trends, critics noted that the company had embarked on an ambitious growth strategy that included expansion into Europe and China, and new mall-based Best Buy Mobile stores in the U.S., even as the economy was softening. Best Buy overreached, they said, and may now be forced to retrench. The company said it is reviewing its options.

"We are making adjustments to planned levels of discretionary spending and inventory for the remainder of the year," said Jim Muehlbauer, Best Buy's chief financial officer.

That's bad news for a variety of suppliers, which are seeing their own sales contract. Of course, not every electronics manufacturer is feeling the pinch. Bob Perry, a senior vice president at Panasonic Corp., said TV sales are still expected to show an increase this year. No retailers have begun to return TVs, he said.

"In terms of their TV business, we are not suffering the great depression," Mr. Perry said. Best Buy, which last quarter said inventory levels had increased by 9%, said stocks continue to be high, but are below a year ago. Spokeswoman Susan Busch said the retailer won't detail the steps it is taking to reduce inventory until it reports third-quarter earnings on Dec. 16.

Best Buy also said it secured a new $150 million line of credit after its access to capital was hurt by the bankruptcy of Lehman Brothers Holdings Inc.

Intel Slashes Sales Outlook As Demand Slows for PCs

Intel Corp. slashed its financial forecast for the current quarter, the latest sign of how rapidly computer sales have turned sour because of the slumping economy.

The chip giant set a fourth-quarter revenue range that points to a sales decline of around 12% from the third quarter. In mid-October, Intel had projected sales would rise 3% over the same period.

Intel also said its closely watched gross profit margin would be considerably lower than its prior prediction.

Intel's shares dropped 7% in after-hours action, after ending the regular session at $13.52 on the Nasdaq Stock Market.

The company said "revenue is being affected by significantly weaker than expected demand in all geographies and market segments." The company added that companies that buy and distribute chips are "aggressively reducing component inventories."

An Intel spokesman said the company has experienced "a pretty rapid decline" in its business. He said Intel is ordering a hiring freeze and cutting other discretionary spending, but has no plans to reduce its work force.

Intel's projection portends a grim environment in what is traditionally the biggest quarter for electronic sales. The comments mirror those of players such as Qualcomm Inc., the biggest supplier of chips for cellphones.

Intel, of Santa Clara, Calif., had seen little effect from the slump through the third quarter, when its net income rose 12%. Since then, however, demand for computers has been hit hard -- both among corporate customers and consumers.

Gartner, a market research firm, last week sharply cut its estimate for semiconductor-industry growth in 2009 to 1% from nearly 8%, citing the impact of the economic crisis.

Intel is in better shape than many other chip makers, with bigger profit margins, a strong product line and a network of factories that have adopted advanced manufacturing recipes. But Intel's plants could become a liability if demand falls quickly and its production lines are no longer full, said Roger Kay, a market researcher at Endpoint Technologies Associates.

Intel said it now expects fourth-quarter revenue to be $9 billion, plus or minus $300 million, lower than its previous prediction of between $10.1 billion and $10.9 billion.

The company put its gross profit margin at 55%, plus or minus a couple of points, off from its prior prediction of 59%.

This Election Has Not 'Realigned' the Country

With Barack Obama's victory and Democratic gains in Congress, more than a few commentators are talking about that "r" word so important in presidential politics -- "realignment." Was 2008 a realigning election? I don't think so.

The academic discussion of realignment began with V.O. Key's seminal 1955 essay "A Theory of Critical Elections." Key wrote that critical or realigning elections exhibit high voter interest and realigning voter turnout, as well as a shift in the dominant political ideology. Most often cited is FDR's victory over Hoover in 1932, which started a decades-long period of Democratic dominance. Americans tended to support government intervention in their lives to a greater degree than before the Great Depression. Hence, there had been a fundamental ideological shift.

Today, our elections are more candidate- than policy-centered, and detecting a seismic policy shift has become more difficult.

Still, many analysts compare 2008 to the 1980 election -- and it is true they have some similarities. Both Barack Obama and Ronald Reagan are seen as transformational figures. Both are thought of as Washington outsiders who would bring needed change in a time of domestic crisis. Both energized their party bases and attracted new voters.

But there's another similarity that disqualifies both contests from constituting a realigning election: The elections turned on their predecessors. Reagan's sound bite "Are you better off now than you were four years ago?" encapsulated what his campaign was about. The election was a referendum on Jimmy Carter's performance, and voters rejected it.

And 2008? George W. Bush's failures hung over the campaign. John McCain tried to distance himself from the president, but an October PSRA/Newsweek poll showed that 48% of those surveyed believed that if elected, he would continue to "carry out the policies of George W. Bush."

Mr. Obama ran on "change," repeatedly associating Mr. McCain with Mr. Bush. In an Oct. 27 speech, for example, Mr. Obama said, "the biggest gamble we can take is to embrace the same old Bush-McCain policies that have failed us for the last eight years."

Even more to the point, the congressional election results also cast doubt on the thesis that this year's election, or that of 1980, signals a political realignment. Republicans picked up 33 seats in the House and control of the Senate in 1980. But two years later, Democrats picked up 26 seats in the House and regained control of the Senate in 1986.

In 2008, Democrats picked up 19 House seats (with a few races still too close to call), but this represented the continuation of a trend from 2006, a year in which Democrats picked up a more impressive 31 seats. It is too early to conclude that 2008 marked the start of an enduring period of one-party domination or the continuation of short-term voter dissatisfaction with the GOP.

The 2008 election was an important election. But it can hardly be considered realigning.

Mr. Obama won by portraying the Bush presidency as a series of mistakes that need to be avoided in the future -- essentially encouraging voters to think about the short-term past, not the long-term future.

Put another way, Mr. Obama got about 40,000 fewer votes in Ohio than John Kerry got four years ago. Mr. Obama carried the state when Mr. Kerry did not because Republicans stayed home. Nationally, the anticipated record turnout didn't materialize. About the same percentage of registered voters came out this year as in 2004. And was that a realignment year?

In the same way that 1980 did not yield a generation-long period of Republican dominance, those on the right can take heart that 2008 does not represent the beginning of an era of Democratic supremacy.

Ms. Marsico is a research assistant at the American Enterprise Institute and a researcher/writer for the AEI-Brookings Election Reform Project.

Not at All At Your Service

The Customer is Always Wrong in Retail

Michael Beaumier once took a job in the home section of a department store, selling "melon-ball fork sharpeners," eight-piece copper-pot collections and other kitchenware. He soon discovered, though, that he wasn't so much selling the goods as playing handmaiden to the way they were arranged and lighted. "These things practically sell themselves," he was told by Adam, the store's wizard of product presentation. Mr. Beaumier marveled that Adam "could set up a display of toothpicks and used Kleenex in the morning, and we'd have been sold out by midafternoon." No other part of the store -- not luggage, not clothing -- offered goods that could be made to seem quite so voluptuous by the application of his talents, Adam said, although "shoes comes closest."

Now, it might have been interesting to find out more about the retailing alchemy that turns humble cooking tools into irresistible treasures for the home, but Mr. Beaumier is recounting his experience in "The Customer Is Always Wrong," a collection of essays by writers who have toiled in the store aisles and behind the cash registers of the service economy and generally considered the work an ordeal. And so Mr. Beaumier, a frequent contributor to National Public Radio's "This American Life" and the author of a book about working at an alternative weekly newspaper, must turn the spotlight on himself, particularly on his feelings. How did he feel? Diminished by the knowledge that when a knife collection is arranged just so, his efforts as a salesman are superfluous. Diminished by a lecture from Adam that "it's not about you. It's about the merchandise."

Oh, but it was about him. Mr. Beaumier became "progressively more depressed after that. A man is supposed to have value and substance, isn't he? A man is not supposed to compare himself to a bunch of steamers and Crock-Pots and waffle irons and come up short, or be invisible compared to sterling silver corkscrews." He began to "act out," he says, and launched a guerrilla campaign, pointing lights away from displays, unscrewing bulbs, smudging glasses and dishes, driving a customer off by warning that an espresso maker was dangerous. "I loved it," Mr. Beaumier says. "They fired me."

His departure is hardly the only non-résumé-building job departure recounted in "The Customer Is Always Wrong," which, as the title suggests, shows up for work with a chip on its shoulder. Editor Jeff Martin sets the tone in the introduction. Life in the retail business, he says, means dealing with annoying people at every level, from customers to bosses. But he doesn't explain why they're annoying; he just refers to them with a crude and all too common term that vaguely rhymes with gasohol. Throughout the book, obscenities substitute for wit -- some of the obscenities larger than others, as when Mr. Martin trots out that old reliable thigh-slapper, the Holocaust joke: The book's essayists are "retail survivors," he says, and "the Employee Identification Number tattooed on their forearms is a painful reminder of the past and a source of motivation for the future."

Still, despite the overall tone of mirthless sneering in "The Customer Is Always Wrong," the book does offer a few engaging pieces. One is Gary Mex Glazner's "Tulip Thief." It is ostensibly about the time he chased down and tackled a fleeing shoplifter, but its real subject is Mr. Glazner's longing, after 18 years in the flower business, to find a more masculine line of work. In "The Popsicle Shop," Jane Borden effectively evokes the suffocating atmosphere of a children's clothing store in the wealthy North Carolina neighborhood of her youth. Kids were rarely seen in this "fantasyland" for mothers, Ms. Borden reports. She goes to work there as a teenager and soon realizes that, under the honeyed tutelage of the Popsicle Shop's owner, she is being "groomed" to become one of those mothers. She eventually escapes to college and then to New York City but is wise enough to note that "a miniature pillow with eyelet-trim" from the Popsicle Shop that she still keeps on her bed is just one reminder that she has not entirely left behind her pampered Southern past.

That sort of close observation and introspection is rare in the "The Customer Is Always Wrong." More common among the 21 contributors -- whose number includes two comedians, a musician and a poet -- is a thoroughgoing sense of resentment at having had to lower themselves to take a day job.

"I had a master's degree and clips at national magazines and newspapers and my manager still thought I was an idiot," writes Kevin Smokler in "Another Day at the Video Store." In "The Final Facial," Stewart Lewis wants us to know that, even though he was working at a day spa in New York for a mere $12 an hour, he was "a masters-degreed graduate from a top writing school." Becky Poole takes a job at a wine shop, she says, because "I was sick of what I had known as the only way to make money for a B.F.A. drama graduate student in N.Y.C.: working freelance for Viacom."

It turns out that Ms. Poole is the only one of the essayists who actually enjoyed her stint in retail. Then again, the wine shop was in the hipster-magnet Williamsburg section of Brooklyn, and the store wasn't so much a commercial enterprise as "a social club for wayward youths . . . a place for the interesting or eccentric, the harmless ne'er-do-wells and riffraff, to swap naughty stories, share thoughts, poems and songs." Presumably the shop's doors were not darkened by any of the suburbanite, overweight, well-to-do or elderly customers who come in for scorn elsewhere in the book.

Retailers might take one look at "The Customer Is Always Wrong" and vow never again to hire anyone with an artistic bent, but that would be a shame. No doubt plenty of writers and performers who aren't yet successful enough to be recruited for publishing projects like Mr. Martin's are glad to find a job, welcome the chance to learn a few workplace skills, take an interest in the array of people they deal with every day and figure that, as so often happens in life, occasional irritations come with the territory.

Detroit's Unstable Business Model

You have in GM's Volt a perfect car of the Age of Obama -- or at least the Honeymoon of Obama, before the reality principle kicks in.

Even as GM teeters toward bankruptcy and wheedles for billions in public aid, its forthcoming plug-in hybrid continues to absorb a big chunk of the company's product development budget. This is a car that, by GM's own admission, won't make money. It's a car that can't possibly provide a buyer with value commensurate with the resources and labor needed to build it. It's a car that will be unsalable without multiple handouts from government.

The first subsidy has already been written into law, with a $7,500 tax handout for every buyer. Another subsidy is in the works, in the form of a mileage rating of 100 mpg -- allowing GM to make and sell that many more low-mileage SUVs under the cockamamie "fleet average" mileage rules.

Even so, the Volt will still lose money for GM, which expects to price the car at up to $40,000.

We're talking about a headache of a car that will have to be recharged for six hours to give 40 miles of gasoline-free driving. What if you park on the street or in a public garage? Tough luck. The Volt also will have a small gas engine onboard to recharge the battery for trips of more than 40 miles. Don't believe press blather that it will get 50 mpg in this mode. Submarines and locomotives have operated on the same principle for a century. If it were so efficient in cars, they'd clog the roads by now. (That GM allows the 50 mpg myth to persist in the press, and even abets it, only testifies to the company's desperation.) Many GM trucks require a Tonneau, Truck Tonneau or Truck Bed Covers.
Hardly mentioned is the fact that gasoline goes bad after a few months. If the Volt is used as intended, for daily trips of 40 miles or less, the car's tank will have to be drained periodically and the gas disposed of.

The media have been terrible in explaining how the homegrown car companies landed in their present fix, when other U.S. manufacturers (Boeing, GE, Caterpillar) manage to survive and thrive in global competition. Critics beat up Detroit for building SUVs and pickups (which earn profits) and scrimping on fuel-sippers (which don't). They call for management's head (fine -- but irrelevant).

These pre-mortems miss the point. Critics might more justifiably flay the Big Three for failing long ago to seek a showdown with the UAW to break its labor monopoly. In truth, though, politicians have repeatedly intervened to prevent the crisis that would finally settle matters.

The Carter administration rushed in with loan guarantees to keep Chrysler out of bankruptcy. The Reagan administration imposed quotas on Japanese imports to prop up GM. Both parties colluded in the fuel-economy loophole that allowed the passenger "truck" boom that kept Detroit's head above water during the '90s.

Barack Obama and Nancy Pelosi now want to bail out Detroit once more, while mandating that the Big Three build "green" cars. If consumers really wanted green cars, no mandate would be necessary. Washington here is just marching Detroit deeper into an unsustainable business model, requiring ever more interventions in the future.

The Detroit Three will not bounce back until they're free to buy labor in a competitive marketplace as their rivals do. In the meantime, private money, even in bankruptcy, almost certainly will not be available to refloat GM and colleagues. Nationalization, with or without a Chapter 11 filing, is probably inevitable -- but still won't make them competitive.

History seldom affords such perfect analogies: In 1968, the Penn Central merger (a proxy for GM-Chrysler) was touted as a fix for a sagging rail business. In two years, the company was in bankruptcy. When a judge couldn't find new lenders, Washington absorbed them into government-owned Conrail, but the death spiral continued. Finally, Congress passed the deregulatory Staggers Act, which overnight gave the rail industry back its future. Conrail was triumphantly reprivatized in 1987.

We're about to replay this ordeal with the auto industry. Let's at least give ourselves a chance to be successful on the first try.

The simplest step forward would be to get rid of the "two fleet rule," devised by Congress's fuel-mileage managers to keep Detroit making small econoboxes in high-cost UAW factories. Dumping the rule would force the UAW to compete directly inside each company for jobs against cheaper workers abroad.

Even better would be to dump CAFE altogether. If Congress really thinks consumers must be encouraged to use less gas, replace it with an intellectually honest gas tax. Mr. Obama promised to transcend the old stalemates -- let him begin with the 30-year-old fraud that our fuel-economy rules represent.

He ran a brilliant campaign, but his programmatic prescriptions amounted to handwaving designed to capture the presidency rather than tell voters what really to expect. This may have been a virtue in campaigning but it becomes a handicap in governing. The public now has no idea what to expect -- except miracles, reconciling all opposites, turning all hard choices into gauzy win-wins. Thanks to Detroit, his honeymoon is about to end before it begins.

Economic Crises Will Take Precedence Over Near-Term Immigration Overhaul

The next administration's preoccupation with economic crises will likely prevent immigration advocates from capitalizing on steep losses suffered by their foes in last week's election, delaying any attempt to ease entry for people in the U.S. illegally.

Of the 13 House Republicans who lost their seats on Nov. 4, nine were members of the Immigration Reform Caucus, which has opposed a path to citizenship for the country's estimated 12 million illegal immigrants. A 10th member, Virginia's Virgil Goode, is trailing in a race still too close to call.

In addition, caucus founder Rep. Tom Tancredo of Colorado is retiring, as is Rep. Duncan Hunter of California, another voice for increased border security and crackdowns on illegal immigration.

The camps break down roughly along these lines: Business and immigrant groups argue for a three-pronged approach that includes legalizing immigrants who overstayed visas or entered the U.S. illegally; enhancing border security; and admitting more workers as the economy needs them. Social conservatives and law-and-order Republicans have argued that the border should be secured before there is any plan to expand immigration.

Many Republican candidates' strong stand against illegal immigrants was read by voters as anti-Latino, and likely hurt incumbents in Florida, Virginia and Colorado. More than 100,000 newly naturalized citizens registered to vote in Florida, where Reps. Tom Feeney and Ric Keller, both members of the immigration-reform caucus, lost their seats.

Immigration wasn't the only issue in any of those races. But in a study to be released Wednesday, the pro-immigration group America's Voice found that of 20 races in which candidates drew sharp distinctions on immigration, hard-line "enforcement only" advocates lost in 18.

Republican Sen. Elizabeth Dole of North Carolina counted on support from law-and-order voters when she ran ads on her work linking local sheriffs to a federal program targeting illegal immigrants. The move backfired after Johnston County Sheriff Steve Bizzell, who was campaigning with Sen. Dole, was quoted in a Charlotte newspaper characterizing Mexican immigrants as "trashy."

Sen. Dole's contest was one of five Senate races in which anti-immigrant candidates lost, America's Voice concluded.

Roy Beck, of the group Numbers USA, disagrees. "Voters didn't punish anybody for taking strong enforcement stands," Mr. Beck wrote. "In most cases, our allies were replaced by challengers who worked hard to convince voters that they were just as tough -- or tougher -- on illegal immigration as the incumbents."

But the defeat of so many caucus members has left immigrant groups optimistic that the Obama administration will reward Hispanic voters for their support with some sort of legalization program.

That doesn't mean a comprehensive immigration overhaul will be a legislative priority, or that its chances of passing are significantly better in Congress, though -- and the president-elect didn't make any promises during the campaign. Mr. Obama will be focused on the economy and tax policy and isn't likely to expend political capital on such a divisive issue, many immigration experts say.

There is also no leader to take up the immigration cause in place of Sen. Edward Kennedy, the Massachusetts Democrat who is fighting cancer. Sen. John McCain was the lead Republican advocate of revamping immigration laws, but he took intense heat from primary voters for his stand and largely dropped the issue during his presidential campaign.

"Conventional wisdom that amnesty is a done deal is incorrect," says Mark Krikorian, director of the Center for Immigration Studies, a Washington group opposed to increased immigration.

Immigrant groups have long feared that any stand-alone bill seeking legalization for millions of undocumented residents would fail, and have insisted on legalization being part of a broader immigration bill. "Illegals are so divisive [as a political issue] that the groups know there have to be sweeteners to get an overhaul passed," said on the Information Technology Industry Council.

But various groups have their own reasons to avoid lumping every immigration issue into an omnibus bill.

High-tech employers may argue for a separate bill that would provide more temporary visas and permanent green cards to engineers, mathematicians and scientists whom they believe would help spur the economy, she added. Agriculture may make the same case, arguing that it needs field workers to prevent production from moving to Mexico.

That could fracture the business-union-immigrant coalition behind bills that failed in 2005 and 2007. Trade unions will likely oppose a temporary-worker plan that was part of both earlier bills -- and a must-have for employers -- because it would affect jobs during a recession.

A hint of Congress's and the administration's intentions could come in March when the E-Verify program, which lets employers electronically verify the status of new workers, expires. The program is a cornerstone of the Bush administration's enforcement policies, but has detractors among civil-libertarian and immigrant groups. The next administration could seek a five-year renewal, a brief extension or let it expire.

Another key will be whether the Obama administration continues workplace raids, which have resulted in the arrest of thousands of illegal workers and criminal prosecution of at least some managers. The Bush administration, after pushing Congress for a legalization program, stepped up the raids after legislation failed.