COMPANIES & FINANCE INTERNATIONAL - Enron to axe 500 in attempt to boost profits.
Financial Times (U.K. edition), 10/11/01
Houston Chronicle Jim Barlow Column
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas, 10/11/01
India: Greenfield Shipping rejects German bailout offer
Business Line (The Hindu), 10/11/01
CM rejects NCP plea for probe into Enron dispute
The Times of India, 10/11/01

Former Enron Broadband Services Asia CEO Joins Droplets Board
Bloomberg, 10/11/01

AEP Puts Wholesale Operation Behind Growth Targets
Dow Jones Energy Service, 10/10/01




COMPANIES & FINANCE INTERNATIONAL - Enron to axe 500 in attempt to boost profits.
By JULIE EARLE.

10/11/2001
Financial Times (U.K. edition)
(c) 2001 Financial Times Limited . All Rights Reserved

Enron, the US energy group and trader, yesterday confirmed it would cut 500 jobs, or 10 per cent of its European workforce, in an attempt to improve profits. 
Ken Lay, Enron's chairman, is under pressure to restore the company's share price, which has slid more than 60 per cent in the past 12 months.
The cuts, flagged last week, will scale back operations Mr Lay had previously said would be critical to the company's future growth. John Sherriff, Enron Europe's president, said business continued to grow in Europe in terms of traded volumes and numbers of transactions, but the company was "seeking ways to do more with less in order to maintain earnings growth". 
Enron Europe has 5000 employees. Mr Sherriff said the headcount would be cut by between 5 and 10 per cent, and the company hoped to achieve this through voluntary severance. 
Gordon Howald, an energy analyst at Credit Lyonnais Securities in New York, said Enron had been criticised over its strategy to increase cash flows. 
"They are trying to slash their workforce and are selling Portland General Electric. This is good timing. When financials are under pressure, it probably makes good sense," he said, adding there had been rumours of US job cuts, outside of the previously announced Broadband division job cuts in July. 
Enron yesterday denied there were further job cuts planned in the US. 
Last week Enron said it had agreed to sell the electricity utility Portland General Electric to Northwest Natural Gas for $1.8bn, a disposal it had been planning for some time. 
Enron shares closed $1.81, or 5.4 per cent, higher at $35.20 in New York yesterday. 
(c) Copyright Financial Times Ltd. All rights reserved. 
http://www.ft.com.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Houston Chronicle Jim Barlow Column
Jim Barlow

10/11/2001
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)

In college, they call it grading on the curve. In business, it's known as forced ranking. 
In both cases, regardless of performance, someone's going to fail. The practices reward those who perform better than their peers. That's the American way.
But they also can punish those doing good work -- just not as good as others. In college, grading on the curve means failing a course despite learning the material and either being forced to repeat it or flunking out. In business, forced ranking means that every year some arbitrary number -- often 10 percent -- get put on notice that they must improve. Or sometimes they get fired. 
Traditionally, business has used competency-based evaluations of employees. That is, can they do the work? Forced ranking sets up a totem pole. Everyone has a place on that pole, from the top to the bottom. 
And the pole gets chopped off from the bottom. 
About 20 percent of American companies use forced ranking, according to an article on the subject in the Harvard Management Update, a newsletter from the publishing arm of the business school. 
Some companies used forced ranking only for top managers. Others use the system for all managers, or all exempt employees who are not on hourly wages. 
Some of the most admired companies use the process -- General Electric, for example. Here in Houston, Enron uses a five-point scale with 15 percent in the bottom ranking. 
Proponents of forced ranking say it makes managers confront a perennial problem: that of low-performing managers and employees. 
Not only do the low performers cause problems now. If they neither improve nor leave, they block promotion for people who might do a better job. 
Productivity and morale sag. Fewer top people want to join the company. The best performers leave. 
In what seems to be the endless American cycle of hiring and layoffs, forced ranking also gives managers some objective criteria to use when it's once again time to let people go. 
But forced ranking also can raise the usual cries of discrimination that any ranking system brings. At Microsoft, an African-American plaintiff sued, claiming his low ranking came because of his race. At Ford Motor Co., which has dropped forced ranking, the charges of discrimination came from middle-aged white males. 
Forced ranking has provided a much-needed boost at some companies -- ones that have not confronted performance problems of managers over the years. 
Still, after a few cycles of forced ranking, companies must decide what's next. So you've weeded out the slackers. You've helped those who needed help to improve their performance. Overall, the company is doing a much better job of getting the products or services out the door. 
Inevitably, companies will reach a point of diminishing returns. If every manager or exempt employee is at least competent at his or her job, is it really worth it to rate and arbitrarily fire 10 percent or so of them every year? 
Sure, that's going to keep everyone on their toes as they scramble to keep their jobs. But it may not be all that good in encouraging teamwork. 
And, as France's army found in World War I, the practice of decimation -- arbitrarily shooting 10 percent of your own troops to encourage the others to fight harder -- does not tend to raise morale. 
Forced ranking also seems to me to be based on the wrong premise -- that is, that companies need to be filled with high-performance people from top to bottom to succeed. 
That may not necessarily be true. Every organization really needs a mix of people. For example, organizations need a leavening of malcontents. They stir up things, get people thinking, challenge assumptions. Yet an organization composed of nothing but malcontents won't work. 
Sure, every company needs top performers. They are the yeast that causes the organization to rise. But companies also need the steady and the sturdy and people with limited imagination to take care of the millions of details that must be faced every day. 
It's the equivalent of taking out the trash. It's not inspiring work, but unless it gets done, it gets smelly. 
Comments? Telephone 713-220-2000 and touch code 1000. Send e-mail to jim.barlow-chron.com.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

India: Greenfield Shipping rejects German bailout offer

10/11/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

NEW DELHI, Oct. 10 IN a fresh twist to the crisis facing the $220-million LNG shipping deal for Dabhol Power Company, German-based KG Finance Group has made a proposal to the promoters of Greenfield Shipping Company to bail out the project. 
"The promoters of Greenfield Shipping Company, however, rejected the proposal ab initio," sources familiar with the developments told Business Line.
The bailout proposal was made by the German agency during discussions held in London recently between the representatives of the three promoters (Mitsui O.S.K. Lines, SCI and Atlantic Commercial Inc) and the lending consortium led by ANZ Investment Bank. 
As per the offer, the KG Finance Group would facilitate the completion of the 137,000-cubic-metre capacity tanker to be used for transporting LNG from Oman to Enron's power plant at Dabhol. 
The LNG carrier would be converted into a German asset by bringing it under a special purpose vehicle (SPV) registered in Germany. The tanker would be operated by German crew. 
The Greenfield Shipping Company is registered in the Cayman Islands and would fly a Maltese flag. The German entity had also proposed to tie up finances for the entire arrangement through a mix of public and private funding. 
KG Finance Group was of the view that the Greenfield Shipping Company had paid an "unbelievably higher price" for the LNG tanker by contracting it a rate of $220 million. In its reckoning, the vessel building price was at least $15 to 20 million higher than the market price prevailing then. 
Against this backdrop, KG Finance Group had told the representatives of the Greenfield Shipping Company assembled in London that the tanker would fetch not more than $65,000 per day as charter hire rates, the sources said. This was against the charter hire rate of $98,600 per day agreed with Dabhol Power Company. 
The German agency had also said that it would charge a commission of 3 per cent for finalising the deal. 
The proposal was turned down by the promoters of Greenfield Shipping Company on the grounds that transferring the asset from a Maltese flag to a German flag would deprive the tanker of depreciation benefits. 
"Besides, the project will not break even at a charter hire rate of $65,000 per day," the sources said. 
The offer made by KG Finance Group comes in the wake of a crisis facing the promoters of the LNG shipping project after the lenders suspended the last tranche of the project loan of $55 million, citing an event of default. 
The project promoters will not be able to take possession of the LNG carrier if the remaining project cost of $55 million is not paid to the shipbuilding yard. The crisis has been compounded by the fact that Enron is planning to exit from the project by selling its 20 per cent stake in the venture. 
While various permutations and combinations have been discussed between the joint venture partners, nothing has taken a concrete shape so far, dragging the venture into deeper uncertainty. 
While making its offer, the German entity had drawn attention to the not-so-rosy LNG market globally. The LNG vessel prices are now ruling at about $165 million. 
"Besides, about 24 LNG vessels are lying idle world- over. Even two new vessels delivered recently are lying idle without any commitment to charter," the sources said, pointing to the bleak scenario prevailing at the moment which has steeply driven down the charter hire rates for LNG ships. 
P. Manoj

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

CM rejects NCP plea for probe into Enron dispute

10/11/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: Maharashtra chief minister Vilasrao Deshmukh has rejected a demand by the Nationalist Congress party (NCP) for reconsideration of a judicial probe being set up into the Enron controversy. 
Mr Deshmukh told a press conference here on Wednesday, ``As far as we are concerned, the issue of a judicial probe into Enron is over.''
Deputy chief minister Chhagan Bhujbal, sitting adjacent to him, kept mum when Mr Deshmukh's attention was drawn to the demand by the NCP, the principal partner of the ruling Democratic Front. 
NCP president Sharad Pawar had stated at a public meeting last week that his party would not be responsible if the state had to pay arbitration costs to Enron running into hundreds of crores of rupees. Similarly, NCP spokesman Vasant Chavan had alleged that the decision to institute the judicial probe needed to be reconsidered. 
Mr Deshmukh's outright rejection of the demand could be another reason for tension between the Congress and the NCP, sources said. 
Hiking of water supply charges by the DF government is another major issue that has been hanging fire. Maharashtra Pradesh Congress committee president Govindrao Adik and other leaders had attacked the government's decision to the hike. When Mr Deshmukh was asked to state the government's response, he announced that the matter would be referred to the DF coordination committee.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Former Enron Broadband Services Asia CEO Joins Droplets Board
2001-10-11 08:30 (New York)

Former Enron Broadband Services Asia CEO Joins Droplets Advisory
Board

Sanjay Bhatnagar Brings Extensive International And Infrastructure
Experience

NEW YORK, NY -- (INTERNET WIRE) -- 10/11/01 -- Droplets, a leading
Internet software platform and solutions company, today announced the
appointment of Sanjay Bhatnagar to its Board of Advisors.  He joins
current and former technology and management authorities from AT&T
(NYSE: T), Hanseatic Corp., McKinsey & Co. and Philips Consumer
Electronics (NYSE: PHG).

As CEO of Enron Broadband Services (NYSE: ENE) for the Middle East and
Asia, Bhatnagar was responsible for developing Enron's
telecommunication businesses in the region, including bandwidth
trading, optical fiber networks, Internet data centers and the
on-demand video and entertainment businesses.

"IT managers worldwide are looking for ways to reduce costs while
business managers are looking for ways to maintain and enhance
customer relationships and experience," said Sanjay Bhatnagar.
"Technology solutions from companies like Droplets can play a
significant role in helping both revolutionize the business customer
relationship and help customers transact speedily and cost
effectively on the Internet. I am most excited to be part of
Droplets, one of the companies leading the transformation of the
Internet in its second phase."

Bhatnagar gained recognition for his efforts, as Chairman and CEO of
Enron South Asia, when the Government of Maharashtra in India
cancelled a $2.8 billion LNG power plant with Enron.  Bhatnagar
worked with the Government, lenders and other stakeholders to
resuscitate the project and led the $2 billion financing for the
second phase of the Dabhol Power Plant, which eventually became the
topic of a Harvard Business School case study.

"Sanjay has a unique perspective which we think will have a tremendous
impact on Droplets," said Philip Brittan, Droplet, Inc. President and
CEO.  "He has extensive experience with large corporate
infrastructure installations and knows first hand what companies,
particularly in emerging markets, are facing as they create and
extend Internet applications to customers, employees and suppliers."

Prior to Enron, Bhatnagar worked for Schlumberger (NYSE: SLB) as an
engineer and manager in several Southeast Asian countries including
Brunei, Singapore, Thailand, Philippines, Malaysia and Indonesia.
Sanjay received an MBA from Harvard University, a Master's degree in
Petroleum Engineering from Stanford University and a Bachelor's
degree in Mechanical Engineering with distinction from the Indian
Institute of Technology.

Bhatnager will be joining the Droplets business development team at
Forrester's Executive Strategy Forum, "The X Internet: The Next
Voyage," November 7-9 in Boston, Massachusetts.  For more information
on Forrester Research and the X Internet, visit
www.forrester.com/Events/Overview/0,5158,309,00.html

About Droplets

Droplet, Inc. ("Droplets") is a software platform company that enables
software vendors, developers and consulting firms to create
Internet-based applications with full desktop software functionality,
while maintaining central server administration and control. Droplets
feature a more intuitive, responsive user interface, and can be
distributed and accessed through email, from a Web page or desktops.
Enterprises license Droplets solutions, or write Droplets in Java and
C++. For more information, visit www.droplets.com

Contact: Bill Power
Phone: 212-691-0080, x140
Email: bpower@droplets.com



AEP Puts Wholesale Operation Behind Growth Targets
By Jon Kamp
Of DOW JONES NEWSWIRES

10/10/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

COLUMBUS, Ohio -(Dow Jones)- Top officials from American Electric Power Co. (AEP) outlined the utility's growth objectives in a conference with financial analysts Wednesday, emphasizing its plan to lean on wholesale operations for future growth. 
AEP also noted how a planned corporate separation plan, expected to wrap up by the end of 2001 pending regulatory approval, will help by separating and clearly defining the company's unregulated operations.
"That is clearly going to be the major growth driver for AEP," said Henry Fayne, executive vice president at AEP and the newly-named head of the company's regulated operations. Fayne is also the outgoing chief financial officer at AEP. 
AEP officials said the company is targeting 8% earnings per share growth on a year-to-year basis for an undefined period. Because regulated utility operations are typically a slow-growth business, AEP expects wholesale operations to increase their contribution to earnings by at least 10% each year going forward. 
On a shorter term basis, Fayne reiterated AEP's guidance for 2001 earnings in the $3.50 to $3.60 a diluted share range. A poll of 12 analysts by Thomson Financial/First Call, by comparison, shows the company earning $3.59 a diluted share for the year. 
AEP also maintained its 2002 earnings guidance, though it said a planned power plant acquisition announced this week should boost results by at least six cents. The company said Monday that it plans to buy two 2,000 megawatt coal-fired power plants in the U.K. from Edison International's (EIX) Edison Mission Energy unit for $960 million. 
With that deal, 2002 earnings should fall into the $3.80 to $3.90 a diluted share range, Fayne said. A Thomson Financial/First Call poll of 13 analysts puts 2002 earnings at $3.88 a diluted share. 
To achieve its longer term targets, AEP plans to lean heavily on its expanding wholesale trading operations. Currently, the company is the second largest wholesale electricity trader in the U.S. after Enron Corp. (ENE), and it ranks in the top ten in natural gas trading. 
The company expects to become a top-five natural gas trader as early as the fourth quarter this year, and to continue expanding electricity trading as the market evolves. And the company's aggressive growth plans shouldn't be deterred by current weakness in natural gas prices, or by wholesale power prices that are barely above generation costs in key U.S. markets, said Eric van der Walde, executive vice president of marketing and trading at AEP. 
The company continues to move into new markets and to use sophisticated analysis to devise market strategies, and because it isn't simply trying to sell electricity above cost, it isn't held back by sluggish markets, van der Walde said. 
"It's not negative for us to have markets where the prices are declining," he said. 
Fayne also noted that the performance at AEP's fleet continues to improve, which effectively adds more megawatts to its portfolio. Power plants in the company's eastern Midwest base, where it operates nearly 24,000 megawatts of power, ran at 91.8% capacity in 2001, up from 87.6% capacity a year ago. The company expects continued improvement for 2001. 
Aside from the U.K. power plant acquisition plan announced this week, AEP said it remains open to other future power plant purchases. Though the company doesn't believe it needs to always own power plants in areas where it markets power, like the West Coast, owning assets in those areas can still be helpful, said E. Linn Draper, AEP's president and chief executive. 
"We would be open to the idea of trading something here for something somewhere else," Draper said. "Nothing is sacred in terms of the portfolio. Anything is fair game." 
The company does plan in the near term to hold on to its large Cook nuclear plant, a 2,110-megawatt generator in Michigan that regained full operations at the beginning of 2001 after a three-year outage, Draper said. But because there has been so much consolidation in the nuclear power industry, the company is open to considering some method of outside management that might allow it to share resources with other nuclear utilities. 
-By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.