European Stars And Stripes (Newspaper) - February 19, 1986, Darmstadt, Hesse                                Digest takes a new Reading on profit making i by Edwin Mcdowell new York times very morning 16 chartered buses pull up to the White columned red Brick Headquarters of the Reader s digest on a campy slake setting in new York s Westchester county and unload employees from Connecticut n.j., and other Distant Points. It has been that Way for decades at the digest whose workers have Long been among the Best paid and the most pampered in America. But with costs rising management has decided to end the subsidized bus service on june 30. The decision was hardly a major one except perhaps for the 350 employees affected. Yet it Speaks volumes about the determination of the digest s new management to apply business principles even in Small matters to one of America s most paternalistic institutions. For the first time in its 64-year history the digest is starting to act like a corporation whose chief goal is profits a Radical departure from the tone set during the tenure of Dewitt Wallace and Llla Acheson Wallace which ended with mrs. Wallace s death 20 months ago. The wallaces who owned almost All of the digest s voting Stock created the Magazine and turned it into a National institution serving up a skillful blend of Middle american social values human interest stories and conservative political positions. In Many ways the digest is still As close to being a family As a corporation is Likely to get. At its bucolic Headquarters in Chappaqua n.y., the 2,100 employees Are offered Garden plots Low Cost meals in a modern cafeteria four weeks vacation in the second year of employment four four Day weekends a year and a Holiday each Friday in May. Halls offices and lounges Are adorned with original paintings by Matisse Molg Llano and Renoir. All of that is not Likely to change unless profit margins deteriorate which has not happened. The wallaces of course made Money with the digest even though they never seemed to pay much attention to Money making. But the management team that took Over on the Day of mrs. Wallace s death after a Palace coup that shattered the digest image has brought to a screeching halt any suggestion that the company was somehow exempt from the vagaries and pressures of the marketplace. We concluded that if this is in fact a profit making organization we d bettor Start putting profits no. 1 on the Agenda said Richard f. Mcloughlin vice chairman of the Reader s digest association the Parent organization and a member of the new team. The new team has done that with a dramatic array of Cost cutting measures and earnings Are rising according to Mcloughlin. He said profits doubled in the fiscal year ended last june compared with the previous fiscal year and in fiscal 1986 they will be up another so  advertising for the March Issue which has already closed is up 23 percent from March 1985, and helped produce the strongest advertising showing for the january March Quarter in five years the company said. But Mcloughlin says the digest can do better although he does not go into specific figures. Determined to stay private and controlled by trusts established by the wallaces the digest has always been unwilling to disclose profits. But outsiders have estimated net income at Between $75 million and $110 million annually before taxes. For Many companies that would be a quite respectable return on revenues that the digest says Are $1.4 billion annually. Under the new chairman and chief executive George v. Grune a Burly 56-year-old sex Marine who routinely puts in 16 to 18-hour Days the management team has been poring Over every item on the balance sheets amputating falling businesses and bringing what one fascinated a gear watcher described As the Iron Laws of the business schools to the wallaces magic  it is a kingdom with 10,000 employees worldwide the highest Magazine readership in the world a major Book publishing operation and a unit that Sells More phonograph records and tapes than anyone else. Grune Hall in motion a dizzying round of changes. In the company s foreign operations the Money losing japanese language edition nearly 40 years old and another in Spain were closed. Editions in Norway Sweden and Denmark were consolidated. The 80 percent interest in Asi week an English language Magazine published in Hong Kong was sold and so too was the Bartholomew map co. In Scotland. Grune and his management team closed the original print , a new York company that sold framed prints by mall and sold the i Juc atonal division which a digest executive said was Selling educational software that nobody wanted to  nearly 300 employees in Chappaqua were offered Early retirement. One of the most dramatic changes however was the announcement that the digest was cutting the Magazine s 1986 circulation rate base by 8.4 percent or from More than 17 million a month to 16.15 million to get rid of subscribers considered too expensive to recruit. America answering machine lifestyle Sybil Plohmann United press International a Merica is fast becoming a nation of citizens who do not talk to each  Telephone answering machines to voice mall services to computerize contraptions that ring our phones off their Hooks with recorded messages we re spending a great Deal of time talking to and cursing at machines one of the dimensions of modern life that All of this technology represents is the emphasis on staying in Contact As opposed to communicating says or. Brian Gould a san Francisco psychiatrist. It often is not so important any longer to actually talk with somebody and find out what they re thinking As it is to relay Quick messages it s part of the Pace of modern life that we can reduce our communications to the kinds of things that machines can  the most fall liar of these devices is the Telephone answering machine which in less than a decade has become a Staple of american life. An estimated 3.5 million answering machines were sold in 1985, up 670 percent from 1980. Total Industry sales have hit More than $400 million annually according to research by phone mate inc. A California company that is a leading manufacturer of answering machines. Even so less than 10 percent of americans own answering machines. Vision Smith. Phone mate s director of marketing likens the growth of answering machines to microwave ovens and predicts a 40 percent Market penetration within the next decade. People have found the lifestyle of