Bellsouth Corporation

Bellsouth

BellSouth Corporation was formed in 1983 and employs about 63,000 people. The company has revenue of 20.5 billion, 40% of which came from Cingular Wireless. Their main goals are to provide the best telecommunication services to their customers. Its business strategy had three parts: to provide premium local service in the Southeast, to maintain its substantial wireless communications business across the rest of the country, and to continue to expand into the booming Latin American communications market (BellSouth Corporation, 1999).

Before the AT&T merger, BellSouth has had a major decline in net income which resulted in job cuts for many employees. This decrease of income is a result of competition due to a low demand in residential and small business lines from independent startup telephone companies that was created by the 1996 Telecommunications Act. The competition in the local phone market finally undid some of the regulation that the company had long lobbied to overturn. While the old system had required BellSouth to return a portion of its profits to its customers, and letting the competitors flock into its territory (BellSouth Corporation, 1999).

The communications industry was drastically changing in the late 1990’s, as companies consolidated. Although, BellSouth lost individual accounts, it increased profits by selling wholesale access to its lines to the new competitors. They started offering other services such as providing 24-hour, seven day customer service. BellSouth also gained revenues from some of their other calling features, such as Caller ID, Call Waiting, FastAccess DSL, but they still did make enough to bring them profitability to cover cost (BellSouth Corporation, 1999).

Due to competition BellSouth considered merging with AT&T to increase the profitability of the company. It is expected to cut even more jobs before the merger, and is working out a severance plan due to a better deal that is related to the merger with AT&T. The revised plan involves job cuts, and plans to payout to director level managers and others in management severance pay equal to seven percent of base salary per year of service. A person with 15 years at BellSouth, for example, would get a payment equal to 105% of his or her salary. BellSouth also is raising the maximum payout that individuals can receive to an amount equal to 150% of their base salary, instead of the previous ceiling of 120%. Some workers have already accepted buyout offers under previous terms, but could have their severance packages readjusted. The revised amounts mirror a severance plan that will be used after AT&T buys BellSouth (Leith, 2006).

Ford Motor Company

Ford Motor Company was founded by Henry Ford. The company became the second largest car manufacturer in America. During the mid to late 1990’s. The stock market prices were soaring, and in addition to having low prices for gasoline. However, as time passed on the company faced a crisis due to increase gas prices, and an unstable economy that lead to a decline in market share, and decrease of sales. In fact, the company profits was being generated from consumer financing and car loans.

During the crisis Ford continued to make trucks and SUV’s to increase profits by making changes to how they built the SUV’s which was more similar to minivans in order to cut cost. However, sales continued to decrease dramatically. In addition, Ford plans to cut 30,000 jobs and close 14 plants which is part of their restructing plan due to the loss of sales in North American. Ford is also