Fortune 500 profits rebound, but jobs still vanishing
NEW YORK -- After losing money in 1992, the Biggest American
industrial companies earned US$62.2 billion in 1993, even
while slashing thousands of workers, Fortune magazine
reports.
The profit figure would be enough to wipe out the 1993
U.S. trade deficit with Japan and is more than double the
federal budget allocation for education spending.
The magazine's annual ranking of the top 500 corporations
attributed the improvement largely to "American industry's
steady, relentless drive to raise productivity, improve
quality and boost competitiveness."
Also helping were a decline in long-term interest rates
that lowered the cost of borrowing, a broad improvement in
the American economy and the expensive Japanese yen, which
made U.S.-built products more affordable compared with the
same goods sold by Japan.
The improvement didn't benefit the U.S. jobs picture.
Total employment among the Fortune 500 fell for the ninth
straight year, to 11.5 million from 11.8 million. The trend
substantiates a pattern of dwindling employment
opportunities as business become more efficient.
Fortune said the earnings improvement was especially
significant because it was achieved despite stagnant growth
in sales. In 1992, by comparison, the 500 lost $196.2
million, the first time the roster as a whole lost money.
Much of the 1992 loss was due to a required accounting
adjustment that changed the way companies report retiree
health benefits. That same adjustment also detracted from
earnings in 1993.
When the effects of the adjustment aren't included for
both years, the Fortune 500 earned $81.7 billion in 1993, 15
per cent more than the comparably adjusted $71 billion in
1992.
The rankings of the 500, based on annual sales, contained
no significant surprises this year but did illustrated the
rising strength of American auto-making and a shrinkage of
the petroleum industry, which has been affected by lower oil
prices.
General Motors easily retained its No. 1 position but For
Motor Co. bumped Exxon Corp. for the No. 2 spot, and
Chrysler Corp. leaped to No. 8 from No. 11, bumping Chevron
Corp., DuPont Co. and Texaco. Inc.
Still, extensive cost-cutting kept the petroleum industry
profitable. Exxon earned $5.3 billion, more than any other
company.
The ranking list also showed the fast expansion of the
computer industry. The company with the biggest sales
increase, No. 222 Dell Computer Corp., first made the
Fortune 500 list two years ago.
The biggest loser was IBM, which lost $8.1 billion, due
to the cost of a profound restructuring.
-- Associated Press
Sid Shniad
