Let me begin my comments today by setting an economic context first and foremost. We at the conference board are optimistic this month marks the third anniversary of the US economic recovery and while some on analysts are questioning the strength of this expansion. We're looking for solid sustainable growth between three and a half maybe as high as four percent of GDP through this year and into and all of 1995, perhaps the overplayed question mark that the media deals with is what will happen to interest rates. Will the FED keep nudging rates up our answer is yes, especially if we have two or three quarters of solid economic growth capacity capacity utilization rates in the mid 80 percent and if inflation pressures grow, so we're forecasting another upward move in the FED funds rate and increase of about half a percentage point the second half of this year. So that's it for the brokers in the audience.Looking internationally the US will continue to be the cyclical leader this year. Not only in North America but among the industrialized World in Europe where the cyclical low point of the recession has passed recovery will begin building slowly Asia, but not Japan will keep racking up growth rates. We think in the four to seven percent range South America will also keep growing faster in the most of the industrial countries, although not as fast as the Asian tigers, Japan of course is an enigma and would be even without the rising frictions over trade. The Japanese recession is stayed longer and hit harder than any recession since the end of World War Two. We're looking for the Japanese economy to begin Reviving late this year or early in 1995, but the political and policy crisis in Japan will make that country the weakest in the industrial World during the next two years now here in the u.s. The conference board's widely watched economic.Gators are I'm afraid signaling some caution our consumer confidence index East back in February after scoring good gains during the previous three months. The index is sitting at about 81 down two points from January, but about 12 points higher than a year ago, and it is uncertainty about the future that stalled the number the consumer is increasingly positive about the present. So why the caution about six months from now simply stated there still is a widespread uneasiness about jobs more than 85 percent of All American families say jobs are either not very plentiful or hard to get this after three years of recovery and only 13% expect more jobs to be created during the next six months against about 17 percent a year ago our help wanted index which you see charted each month on the front page of the Wall Street Journal confirms the anxiety this index analyzes classified job ads in newspapers here in Minneapolis and in 50 other.Markets across the country it fell Four Points in January and at 106. This index is about 13 points from a year ago. But we're yet to see any sustained upward movement in the job markets with continuous restructuring a fact of life for business. We aren't likely to see any major upswings in job creation anytime soon despite decent economic growth competitive pressures are limiting income employment and profit opportunities. Now far more important than the economic numbers are the massive changes that continue to sweep the global economy as we speed toward the 21st century. The business winners will be those that not only understand the importance of playing globally, but can effectively compete in a world of ever more integrated economies and borderless markets the words Global imperative have clearly become a global cliche you hear them as often in Asia South America and Europe is in the US but cliches often carry vital truths and the advantages of being Global have never been more apparent a new conference board study covering twelve hundred and fifty manufacturers in the u.s. Shows that Global presence is no longer a choice consider just one key finding as companies grow those that manufacture products offshore where they sell grow faster both in sales and shareholder return than their domestically sourced peers are study covering. 1987 through 1991 finds that companies with global activities grew faster in every industry and in all size categories than firms that were strictly domestic in fact sales for companies with no foreign activities grew at half the average rate for all the firm survey. Quickly, let me share just three other findings from the study first manufacturers Don't Have To Be Giants to enter the international market companies with annual sales of less than 500 million dollars report a strikingly high percentage of foreign sales and a diverse manufacturing presence overseas second profitability Rises for manufacturers with the broadest Global scope companies with foreign plants in all three major Global regions North America Europe and Asia Pacific outperformed corporations with more concentrated International activities both in return on assets and return on equity and they outperform them by a significant margin and third early entry into Global markets is a major factor in achieving success Peter Drucker who may be as close to a sage as we have in America reports a very close correlation between a nation's economic performance and its participation in the world economy. The two Nations that have had the fastest worldwide growth during the last four decades, Japan and South Korea are also the two countries whose domestic economies have grown fastest the same correlation applies to the to European countries that have done the best in the global economy over the same period West Germany and Sweden now, I hope no one here doubts that there really is a new world economy out. Their National borders are porous business is way ahead of government in recognizing this logical Behavior follows business seeks environments that are the most hospitable to growth regardless of where they are located steadily the American economy and other major economies are becoming integrated into a Global Production investment and financial system the competition confronting producers in terms of industrial capacity technology and available labor is now worldwide. Trade and investment flows narrow Regional wage price and productivity differences today is productivity Rises wage differences among countries are narrowing rapidly particularly in sectors with substantial foreign investment in many cases gaps may be virtually eliminated within a generation more companies are finding that the real leverage for business is its investment in people namely in motivating people to produce high-quality results, even in the face of rapidly changing conditions throughout the workplace. Back in 1990 the conference board signals some of today's far-reaching changes in a report called rethinking employee security. We reported that major companies were beginning to assemble entirely new employment policies. We said that corporate paternalism was fading the new watch words were employee self-sufficiency. We reported that growing numbers of companies were adopting employment-at-will statements. This concept holds the companies can hire and fire at will it's prevailed in the US since the 19th century, but until recently has not been emphasized in Communications with employees. The same study noted that at least half the major companies. We surveyed had adopted Strictly Business Financial relationships with their employees. Even those companies that described their firms as having quote family relationships said they were moving away from this environment. The same study carried a prophetic comment from Jack Welch chairman and CEO of General Electric. No business. He said is a safe haven for employment unless it is winning in the market place. The psychological contract has to change people at all levels have to feel the risk-reward tension loyalty. He noted is an affinity among people who want to Grapple with the outside world and win. That study faced many doubters many said that only the unsuccessful companies would be downsizing others said that once the economy rebounded we would return to our old hiring practices those signals. We reported four years ago now read like handwriting on the wall successful as well as unsuccessful companies have restructured and downsized The Bluest of our blue chips have been compelled to slim down few major companies have been able to maintain the status quo in the face of Relentless World competition, but somehow that notion that we will return to the good old days is still with us. Forbes magazine for its last top 500 directory asked me the same question we heard for years ago. Once the economy starts rolling again won't companies start hiring all over just as they have in the past. My answer was and is no companies have paid too high a price to become lean over the last few years. They can't afford to get fat again. The more mature the company the more likely it will peel off more employment layers to improve competitiveness. This is clear in our latest research that research shows that nearly 90% of the companies surveyed downsize during the last five years nearly two-thirds say downsizing will continue and that's the new finding that includes many that said it was all over a few years ago. The globalization of business is cause what may be a permanent revolution in the demand for jobs the US Labor Department reports that more than three of every four workers who lost their jobs last year were added to the permanent layoff list the highest number ever lsummers the noted conference board Economist who I'm sad to say passed away. Last month said we had better get used to the words structurally unemployed and say goodbye to the old phrase cyclical temporary layoffs. If one doubts this in the US then only look to Europe and our Canadian neighbor to see persistent 10 to 12 percent unemployment in the face of renewing growth. Competitive pressure will keep making unemployment at Democratic institution hitting us hard at management is on the factory floor and more jobs will likely Go Global as companies compete to tap a growing supply of skilled workers efficiency has become a universal business strategy with restructuring a major Force shaping performance in all Global regions, but that's only part of the challenge customer focus is almost become a mantra satisfying customer needs is easier said than done tailoring products and services for demanding new customers is proving to be a much greater challenge that may have been anticipated in the 80s. The first identification of Global Market opportunities really came in the early 80s the broad acceptance of new electronics such as the transistor radio and the Walkman expanded marketing reach and facilitated the introduction of universal appeal products that went. Well beyond the long-standing mass thirst for Coca-Cola. But success is not proven to be a task of simple execution the homogeneous product or service may exist, but the standard-issue consumer has not been found the overriding challenge for the company operating across borders is still to balance the maximizing a production and distribution efficiencies with the optimal targeting of and delivery to differentiated consumer taste. Differentiated maybe too sterile a word call them impatient and demanding customers think about a new level of practical complexity how to serve the Japanese customer residing in doing business in New York City or for that matter in Minneapolis as he was used to being served in Tokyo by the same company this came home to me last September when I chaired a panel at our International Industrial conference in San Francisco. Paul are chairman and CEO of Xerox had a common nerve in our Global CEO audience that day when he discussed the difficulties of serving today's customers. They have become Paul said unreasonable. He did not mean they can't be satisfied, but they want what they want and they want it now. Business Leaders have learned that satisfying unreasonable customers and staying competitive is not a static game things are constantly on the move. Recognition of the speed of change. In fact, the accelerating speed of change is a given four heads of major global companies who stay focused on developing and maintaining competitive Advantage with this demanding customer capital and Technology flow across borders easily skills are everywhere fast, electronic linkages provide real-time access to information and facilitate instant communication that blurs the distinction of day and night let alone location on the globe moreover. They provide a direct connection with the customer often without human intermediaries. What is obvious is that formerly significant components of competitive Advantage such as mass Financial power proprietary technology or brand name reputation and the list can go on can no longer be counted on to assure a company's leadership position in an industry or in a market. Even the most stable and enduring element of competitive Advantage for any leading company is now vulnerable successful Business Leaders take this as a given and they go on from there where they are focusing their attention now is in the capability of their organizations, they must have speed flexibility and open communication. Now organization capability has always been essential to business success, but it may be the fundamental source of competitive advantage today for the global Corporation a company's ability to evaluate opportunity mobilize resources decide on action deliver quality and execute promptly in an Ever shrinking time frame against what is most likely to be a localized moving Target is in the long run going to determine success or failure said succinctly that means capable appropriately organized people. The bright news from the ongoing corporate response to change is that us companies have become ever more competitive in the global Marketplace American firms May well be in the best competitive shape. They've been in for two decades, but again organization capability means appropriately organized people employee attitudes education training and commitment have never been more crucial to competitiveness and that brings us to a very large question with restructuring and downsizing becoming continuous business practices. How can companies attract highly skilled employees and sustained commitment when the traditional employee-employer compact is being strained if not ruptured by constant change. Many of our most successful companies are still struggling to find answers we hear case after case of companies that are communicating New World realities to their employees one major company has put employees on notice that the company's old quote parent-child structure is obsolete. Another leading company has told its employees that performance is the only thing that matters another has removed the word loyalty from all its printed matter and told employees that loyalty by and of itself will not be rewarded and still another major world company has communicated the news that nobody in this company is guaranteed a job next year a recent cover of The Economist featured a telling poster. It shows an executive jabbing his finger at us. Your company needs you he says but in smaller type or two other words for now That cover captures the current corporate quandary employees at all levels have been led to assume that if they did. Well their jobs were reasonably secure unless the company ran into unforced unforeseen difficulties this became a kind of national anthem an Unwritten but widely believed pledge throughout industry. It has made many employees believe their long-term interests were almost eternally linked with the fortunes of their employers. Now company after company is telling employees the old days are over. But few if any say they have found Surefire answers to ensuring commitment and maintaining credibility with their current Workforce has as one CEO put it the other day. The troops have been hit with so many changes that skepticism is rampant and these words from another chief executive somehow we must let our people know that empowerment does not mean abandonment and that there is life after downsizing. Many companies say they are in competition for what has become their most vital resource qualified knowledgeable people and they know they can't survive let alone prosper in these times of restructuring with such old slogans is people are our greatest asset. We're seeing pragmatic corporate attempts to deal with New Breed workers. We're seeing a rich variety of work Family Programs to help employees balance work and family needs including some very effective child and Elder Care programs. We're studying companies that have set up flexible work schedules and job sharing Arrangements. We're watching firms with Innovative retraining programs to give employees more flexibility at work. We also see many companies attempting to improve their competitiveness by equipping their workers with new tools and approaches foremost among these is one that for some has become controversial Total Quality Management. Well, the conference board did not invent the tqm process. We've had a long history in nurturing its development giving it momentum and the business community and helping it attained its potential the conference board recently took a hard look at tqm at the organizations that are using it and what the impact has been we've analyzed 20 different tqm surveys our own and those conducted by others one bottom line finding more companies of all sizes are developing quality improvement initiatives why it's common sense it is responsive to and driven by customers requirements tqm is also spreading to schools the healthcare sector and of course two states. Yes, these folks are recognizing they have customers too. Another Finding tqm is neither a short-term fad nor a waste of money tqm is successful when it reflects a long-term business strategy not just among large firms, but mid-sized and smaller companies. It is a commitment to change significantly the way they operate. Once again, it's just common sense doing things right the first time doing them better and doing them consistently pays off. Since we as a country have been geared to short-term payoffs patience has never been one of our bottom line virtues, but companies that have put tqm to work and are profiting from the positive results. Tell us that patients has been a crucial factor in success. Open communication of reality to employees adapting to New Breed workers adopting tqm. All of these efforts are designed to make companies more productive. Are they the answer to the vexing question how to attract good people and sustained commitment? Well, it's really too early to tell companies of the first to tell you that they are aggressively experimenting to reach new understandings with employees. And our new world economy paradoxes are everywhere even as the companies continue to trim their workforces many are worried that they'll have trouble hiring high quality people nearly one-third of the firm's we surveyed said their biggest fear is not being able to hire and retain quality people and critical slots not hiring and all workers mind you but key players vital to corporate bottom lines. A soon-to-be published conference board study suggests that many companies realize they have a long way to go before feeling confident about getting high performance from their future Workforce has the downsizing response is no sure cure for productivity problems surviving managers in many companies that have experienced White Collar layoffs say they have not seen the desired boost in productivity another survey of nearly 1,500 down sized companies Echoes these findings in 50% of company's productivity remained the same or worsen. Many companies are now convinced the downsizing must be part of a larger strategic business plan and must be balanced by giving people new tools to succeed hence action in the context of a tqm approach. Given the current emphasis on cost-cutting restructuring and re-engineering performance managers must take a hard look at the cost effectiveness of all programs used to improve performance. So far less than fifty percent of surveyed companies are attempting to measure a return on investment for any of their performance Improvement programs, but the study shows the changes are underway over the next five years over 80% will be putting a substantial emphasis on improving Workforce performance and measuring it in the long run investment in human resources is no different from other types of investment and can have dramatic payoffs. My discussions with Business Leaders all over the world confirm the research findings. I've been discussing companies are beginning to move Beyond downsizing Gary Hamel of the London Business School whom we recently heard at a conference board meeting in New York makes this point this continuous downsizing is Corporate anorexia. You can get thin but it's no way to get healthy a lot of CEOs agree while knowing that downsizing is often unavoidable. They know it's not an end in itself. That's why so many companies are searching for ways to inject constant self-improvement throughout their organizations as Peter Drucker puts it every organization will have to learn to innovate and Innovation must be organized as a systematic process unless this is done the knowledge based organization will very soon find itself obsolescent losing performance capacity and with it the ability to attract and hold the skilled knowledgeable people on whom its performance depends. From my own experience one clear truth is that successful business people are pragmatic folk tell them the rules and they will play under them to win. No matter how inhibiting the challenges may be the best of them adjust as changes occur at the conference board. We are seeing companies take continuous restructuring as a given and intensifying their focus on performance productivity and cotton customer-based growth. A Minnesota business leader Bond Mike Bond signori Honeywell CEO speaks for a lot of people when he says the chainsaw days are over. We're shifting to growth and to that. We simply say Amen. Thank you. Thank you very much. Mr. Preston Preston Townley. I'm we're going to start off with a question from Bill hotter who's the chairman of The Donaldson companies and just for the record. I talked him into doing this. I promised I wouldn't do this Pete. There. I am I'll give you an easy one. Would you sort through all the rhetoric in terms of the impact on the export of jobs of NAFTA? Yeah, be glad to Bill. I should know to the audience that I'm on bills board of directors. So this is this is not a setup, but it may be a less than objective interchange. I don't know now the the sorting out of the jobs issue on NAFTA. I'm delighted to delighted to address our organization did a number of studies on NAFTA impact particularly in conjunction with our sister organization the conference Board of Canada and the leading economic analysis independent organization in Mexico that goes under the acronym sess and the data were very clear. I think the first thing to point out as I did in my talk is that skilled workers are available everywhere and sourcing of work is available everywhere. There is there is no issue really of sourcing in Mexico on Strictly on labor cost basis that would solve anybody's problem from a government. Policy standpoint if Mexico, we're not the source location Sri Lanka might be Bangladesh or one of those in the global economy. That's reality. Another part. That was also very clear in the analysis while Mexican labor rates on average are about one-sixth of us labor rates. The present time that has been chopped in half in the last five years and what 113th and the productivity difference between the two countries is pretty darn close to the reciprocal of that ratio. So that that makes it a rather Level Playing Field since the time of the passage of NAFTA and sort of putting to rest these kinds of phony issues. We've conducted a major business meeting for Business Leaders of Canada the US and Mexico in Mexico two weeks ago and we had a lot of interesting discussions and it was interesting there to talk to some of the Mexican Business Leaders. To where they thought their challenges came in their businesses and many of them were bemoaning the fact that labor rates were much lower in other in other countries and that they might they might suffer from that. So they to as I indicated in my remarks are thinking more globally and the idea of just a sourcing flow for Mexico was a was not the appropriate way to look at NAFTA the way to look at NAFTA was growth for all three countries, which will come about and from the selfish side of US based industry. It's the growth of the Mexican market which is incredibly Dynamic its had a soft last year, but we think it'll recovered about a four and a half percent domestic market growth rate this next year and it's going to be a great Market opportunity for us based companies. That's going to make everybody forget about the negatives on the NAFTA debate. Thank you. Mr. Tomley. Our next question is from Robert A Stripper who's the president of the Minnesota Education Association? Thank you. Say we all know education is a critical component to competitiveness. I'm interested in how you think our public schools in Minnesota and across the country are doing and what do we need to do to increase our ability to be competitive internationally and if you could comment on the total quality movement for schools That's a very critical question in competitiveness and it's recognized by Business Leaders all across the country. In fact, it's recognized by Business Leaders throughout the industrialized World many people here may not be aware how much business is taking a more active role in Western Europe for example, in improving their schools. We it just so happens that we just conducted our two-day annual business education conference in New York City Monday and Tuesday of this week. So the subject is right on the top of the top of my head in response to your question about how we doing. The answer is very unevenly and one of the real problems with the efforts of business to enhance education reform which really began to intensify with the 1983 report on Nation at risk. And then with the President Bush's in the governor's 1989 Summit is that there are an awful lot of Businesses out there working with schools on individual reform and Improvement projects were not yet seen a lot of coming together of that and then application of that broadly across school districts across counties States regions everything in the in the industry in the education industry tends to remain terribly localized and and the pressures and the inertia of of Education public education in our country is intensely localized. It's been it's been its success in our history. It's one of our drawbacks now in getting National programs forward and National kinds of resources and leverage. There are numerous examples of excellent reform activity School improvements test scores up kids. Be more capable at the same time. There's still a Out of a lot of evidence that an overall terms not much as has yet been accomplished if we can get to from the individual case of improvement sustain it on an individual basis and then get other parts of the country to see that and adopt that will make a lot of progress on the area. Now one of the sub part of your question, but what can we do? I think from a business standpoint business has to be a great deal more demanding of Education systems Business Leaders tend to come into Cooperative efforts with schools and defer to the Professional Knowledge of the school people which isn't bad but it isn't very forceful and getting change and I think business business leaders have to be more have to be more demanding of performance measurement results and basing resources on performance measurement results, and then Business Leaders are just A crying out for some kind of expansion. I mean the average company they test Market a product and succeed expanded roll it out get resources behind it and enjoy the leverage of their power and some reason and in the education world. We can't seem to convince people in these are just out of the are examples people in Indianapolis that what works in st. Paul. They should try and Indianapolis. There's some of that but not much we've got a long way to go and business also has to be very clear with the education what it needs in terms of graduate capabilities to deal with this environment of which I spoke today, which is a which is a students who are capable of dealing with change. Thank you. Mr. Tomley for our radio audience. We are listening to Preston Townley the president of the conference board in New York. He speaking to the Minnesota meeting from the Radisson Hotel in Downtown Minneapolis. We're going to get a question now from Sandra Hale who's president of Enterprise Management International I peed again with the structural employment being such a permanent aspect now of Our Lives what kind and profound social implications what kind of discussions or recommendations our actions our conference board members taking or are you considering in terms of planning some sort of roll and helping figure out some possible action steps. Well in Sandy individual companies in many instances of invested lots of money in retraining programs to make employees capable of transferring jobs. And in many instances, there's been a good deal of Union cooperation as well in recognition of that this reality has to be has to be followed. I think the u.s. Is clearly ahead on this in recognizing the issue and As a history of Labor mobility and action that gives the u.s. A decided advantage against a little more structurally rigid economies such as Canada and and Europe but even in Europe where I was last month for a number of meetings with business people business, there is really trying to push the issue and get get beyond. The welfare state is mm that that is so strong in Europe. The answer your question on an individual company basis is is retraining but in many cases with the downsizing restructuring, even the retraining is for a selected number of employees in their a lot that go that go out the door as companies and lean down if you will. Thank you. Our next question is from Jim Krause. No precedent in the early remarks you referred to a Japan and the next few years are going to be Troublesome for them in view of the fact that they are still a major player in the world economy. How do you think what do you think about Clinton's recent action of taking a strong position on a trade issue with Japan? Is that going to be counterproductive to us? The long run? Well Jim, let me be careful here. You've known me for a few years and you know that I don't tend to be shy and retiring but we are a non advocacy organization and we don't Lobby and we have Japanese members having said that and put all those qualifiers around it personally. I think a more aggressive stance is is an appropriate stance because the status quo in my view can't be sustained now, there's some academic voices that argue against that the status quo being defined as As extremely distorted and continuing trade imbalance between Japan and the rest of the world not just not just the u.s. From a US economic health standpoint until Japan begins to import more and open up more. I mean that's that's great restraint on economic growth in the in the in the world and we want to see the Japanese economy improve and we want to see their demand be answered better and that their consumers get more opportunity to participate in the advantages of the of the world markets that I've been that I've been describing now whether mr. Clinton's approach is going to contribute to that or some argue going to delay it because he's going to undercut. Mr. Hosokawa. I really don't really have a view on that but I do think the status quo. Is not a sustainable situation. Thank you. Mr. Tomley. We're going to go now to Harlan Cleveland who's the president of the World Academy of Art and Science? Because it isn't about Art and Science. This is about employment. I've been to Europe several times recently and about the third sentence that comes out of everybody's mouth has to do with employment matter what the subject is. so the new economics is we get more competitive we get more productive we downsize and we create a unemployment numbers that are increasingly disturbing increasingly staggering as you say you can't fix it all by training people for the for the fewer jobs. If does this mean a changing definition of work itself, or how do we tackle this as a as a nation and as a world not only as a problem for individual businesses? And that's more than The $64,000 Question. That is I think in essence and quite nicely stated in essence the nature of the G7 conference in Detroit that apparently Larry has gone to to have something to do with in Washington today. This is going to be held in a couple of days with all the comment about structural unemployment concern in the us as your remarks indicate. It's a heck of a lot bigger problem in Europe where they have been addressing unemployment issues for some time with rigid rules about firing people which is over the years LED companies over and over again to resist hiring people. They've done it in your in Germany by reducing work hours. And so a lot of things have been done from a governmental Fiat kind of nature in Europe and the result today is rather hard core 11 12% unemployment figure as you indicate, my view personal view is that the marketplace has got to be allowed to function and people have got to be allowed to operate both from a business employers standpoint and employee choice of employment standpoint more openly and sort out some of the concerns that the government rules particularly in Europe have created in the problem, but we do seem to be even though in our history always with every technological change there has been as well, you know, there have been the naysayers that have said now here comes the disaster and if nobody's employable anymore because the machine will take them away. Well, I don't you know, I don't prescribe to a Luddite solution of go smash the machines. I think we let technology continue to drive it but it does seem that that we're at a point in history where we really do seem to be finding unemployability for people in a class. Definitional sense and we better start thinking about employment options that have to do with more part-time or shared more shared work and other kinds of more flexible options to deal with the issue, but I don't see anybody with any answers yet. I think our European friends are seeing that their government rigidities. I've can have really contributed to the problem and they've got to start they've got to start dealing with it even before we do. Thank you. We have several student groups with us today. Mr. Tomley who are sponsored by Minnesota meeting corporate sponsors HP Fuller northern states power 3mr amongst them here today. We have a group here who are from Marie junior high and I have a student question from Joe Lattimore. How do you feel about outcome-based education do you think all schools should switch to the system? How do I feel about outcome-based education to I think all schools should switch to this. I think it's a it's a very good experiment and I think it needs to let be let run. I personally have not come to a view that there's any one specific solution but in my answer to a question a couple times ago, I did indicate that I think business has got to be more demanding in terms of performance and has got to see result that clearly falls under the heading of outcome-based. So I think there's a strong pressure for that kind of thing. But to there isn't any one single solution or one single titling of solutions that I think is the is the absolute answer. Thank you very much. Mr. Tomley on this side of the room now. For our radio audience again, you're hearing Preston Townley the president of the conference board. He speaking to the Minnesota meeting at the Radisson Hotel in Downtown Minneapolis. We have a graduate student from st. Thomas here. He studying business management. You'll be happy to know and his name is Claudio. Danis. Yes this question in regard of retraining. What are the implications of retraining? Especially our upper management? So they don't become obsolete in this rabbit changing economy versus hiring the younger generation already trained probably a more interest to most people in this room than what I've done what I've been talking about. Well, there's an old saying you can't teach an old dog new tricks. So maybe that's a tough go but to get very serious one of the phenomena that has been observed since really the mid-80s is driven by the cost-push of companies getting a cost down from the Takeover kinds of activities in the mid to late 80s and then heightened by the recession has been delayering and the delayering in particular has had very hard at middle management ranks and I think in more than any other job sector that one is that's a permanent revolution. That's that's a permanent loss of those jobs and we all see a lot of evidence and we sure do at the conference Board of a great many Executives who've been active with us that find themselves down Sighs restructured and out of and out of work and are finding it very difficult to reconnect in what they've been in before and for many of them the retraining In is is a difficult option because at age and stage of career the payoff for the investment for the retraining both from the company standpoint from the individual standpoint is difficult to justify so many have gone into other kinds of activities. They're not a lot of people who have been eliminated in a delayering non-performance base kind of way that have found successful Reemployment at the same salary and income level the same kind of job. They've had to make shifts and I think your question is a student because I'm not a lot of people have thought about retraining for those folks. You our next question is from Howard Dalton. Mr. Tony. Do you expect Congress to bring forth the health care Reform Bill this year? And if so, what do you think it'll look like how might we only have a couple of minutes here? Well when I was in Europe last month and that question was of high interest to the European specially the European business people who have operations in the US. My answer was very firmly High Congress will definitely bring forth such a plan this year. It won't look all that much like probably Mister Clinton's original submission. Now, I'm not so sure I keep being concerned about how complex the issue is and I keep being deeply concerned that a rush on something that is not well spelled out in detail could be very dangerous and I think one of the advantages of the Clinton plan that some of the media poke fun at is that it's spelled out in such detail that it gives little latitude to subsequent bureaucrats to Define it which is what is essentially gotten Medicaid. Medicare into such financial trouble. It's such a tough issue and it's so complex and yet so many politicians have made commitments to get it out this year that I'm still going to bet that we're going to see a bill and I think will see changes from Clinton's but I would be the last person to guess which elements of it will survive and which will go down. Thank you. Mr. Town that we've got time for one more quick question and quick answer and it's going to come from Donald Roche. We speak of the need for downsizing and for efficiency and productivity. Is there any question being raised on the circles you visit with regard to the share of the rewards from this activity being substantially skimmed off by the top Executives and aren't there examples of a few companies who are pushing down not only the responsibility but the rewards and succeeding very well with that policy. And answer to your second part of your question. The answer is yes. There are many companies that are indeed doing that and doing a better job not only responsibility sharing but but returned and reward sharing on the other hand. I do I meet with a lot of CEOs. I try to meet with 50 or 60 a year or an addition to the trustees of my organization or almost all CEOs and not a lot of them raise the subject with me about how overpaid they are doesn't mean they don't think about it, but they don't put that at the top of their priority list. Thank you.