Year’s Business Winners and Losers
It was a great year for some business people with the right product or a good team of lawyers. But for a couple of high-profile executives, the world’s biggest carmaker and an oil cartel, it was a year to forget.
A look at some of the winners and losers in business for 1998: WINNERS VIAGRA
Although sales of Pfizer’s anti-impotence pill have leveled off since its spectacular debut this past spring, Viagra will go down as the most successful new drug launch in history. Viagra also catapulted Pfizer onto the list of the top three drug makers, joining Merck and Glaxo Wellcome. FURBY
The craze over this interactive, electronic Gremlin-looking doll recalled furors over Tickle Me Elmo, Nintendo and the Cabbage Patch Kids. Store shelves were stripped bare of the toy made by Tiger Electronics, a division of Hasbro. It retailed for about $30, but because it was in short supply, Furby went for $200 or more on the Internet. The demand for the doll shows what an innovative design and great marketing will do. THE BEETLE
Appealing to the millions of Baby Boomers who drove the bug-eyed Beetle, Volkswagen introduced a svelter, quieter and air conditioned version of the 1960s classic to North America. In six months, VW sold more than 40,000 of the reintroduced cars. The new Beetle, whose engine is in the front, unlike its predecessor, is helping the auto maker shed its image of building reliable but staid cars. APPLE COMPUTER
Apple continued its comeback from a prolonged slump with the introduction of the iMac, a futuristic-looking computer with a rock bottom price. Apple sold 278,000 iMacs in its first six weeks on the market and ended up with its first profitable fiscal year since 1995. Most significantly, 29 percent of the iMACs were purchased by first-time computer buyers. FEDEX
The overnight delivery service stared down its pilots union, and the 3,500 flyers backed down from their strike threat before Thanksgiving . The move was especially sweet for FedEx, considering that a year earlier, rival United Parcel Service was nearly shut down for two weeks by striking Teamsters. BIG TOBACCO
States unanimously embraced a $206 billion settlement of health claims against the tobacco industry, but the real winners are likely to be the major cigarette manufactures who are now free from claims for reimbursement to the states for the cost of treating sick smokers. The makers of Marlboro, Camel, Lucky Strike and Newport cigarettes have already begun passing on the cost of the settlement to smokers via higher cigarette prices. LOSERS AL DUNLAP
Sunbeam fired Al Dunlap after he failed to boost the appliance maker’s stock price despite the massive job cuts that had earned him the nickname ``Chainsaw Al″ at other big companies. Adding insult to injury, auditors found accounting irregularities from Dunlap’s tenure that hid the fact Sunbeam had actually lost money instead of turning a profit. FRANK BIONDI
Universal Studios chairman and chief executive Frank Biondi Jr. was forced to resign after a year of movie flops, culminating with ``Meet Joe Black.″ Two weeks after he left, his final film, ``Babe: Pig in the City,″ opened and quickly was dubbed another flop. It was the second time in two years Biondi was fired as head of a big movie studio. AMERICAN HOME PRODUCTS
The maker of Robitussin cough syrup, Advil pain reliever and Chap Stick lip balm was left waiting at the altar twice. In February, American Home discussed merging with British drug maker SmithKline Beecham PLC. But SmithKline backed out in favor of talks with Glaxo Wellcome PLC, which were later aborted. In October, American Home and Monsanto called off their merger talks after leadership disagreements. GENERAL MOTORS
Strikes at two parts plants last summer all but shut down the No. 1 automaker’s North American production, leaving many dealer lots empty of GM’s most popular and profitable models into late August. GM profits slid 76 percent in the first nine months of the year. Moreover, GM’s Cadillac is expected to lose the U.S. luxury vehicle sales leadership title to Lincoln, a unit of Ford, for the first time in 48 years. OPEC
The Organization of the Petroleum Exporting Countries found itself the victim of its own bad timing. The oil producers decided last winter to increase production, even as Asia’s economic turmoil increased, and the price of crude dropped sharply. OPEC slashed its daily production quotas in June but it was too little too late _ there was an oil glut on world markets, low demand and overproduction by some members of the organization. At year’s end, prices were at 12-year lows. HMOs
The industry which often gets bashed by consumers and doctors for putting profits over patient care, lost more money than ever. And losses forced a series of mergers, reduced benefits and higher premiums, none of which help the industry’s public image.