January 6, 1992

Education Commissioner John Ellis is laying plans to add a month or more to the school year in New Jersey, a change that would sharply increase the costs of the nation's most expensive school system. "We have to make a commitment to extend the school year and that will drive up the costs," Mr. Ellis said in an interview in which he reflected on an 18-month tenure that he described as "turbulent" and that has been marked by continuing rumors of an imminent resignation -- rumors that both he and Gov. Jim Florio, who appointed him, have denied.

In his first months at Tenneco, Michael H. Walsh has practically run a seminar on how to act swiftly to alter the course of an industrial giant in distress. Even so, it will take a few years before anyone can applaud Mr. Walsh for administering at Tenneco Inc. his successful industrial shock therapy, which he most recently demonstrated at the Union Pacific Railroad.

Leading American economists are advising Russia and the other former Soviet republics to move more swiftly than Eastern Europe has in tackling economic changes, especially as they attempt to sell off 45,000 state-owned factories to private owners. They are also recommending that the United States and international agencies help to finance the changes, at least for a while. "Privatization in Eastern Europe has been a debacle," Jeffrey Sachs, a professor at Harvard University, said at the three-day annual meeting of the American Economics Association here, which concluded today. The topic of economic reform and aid to former Communist nations overshadowed discussions about the sluggish economy in the United States.

Richard A. Smith, the chairman of the General Cinema Corporation, once asked students at the Harvard Business School to estimate how much his company should pay for a motel chain. So the students turned in sophisticated financial analyses. But price was not the real issue. Mr. Smith told the surprised class that General Cinema should not buy the chain. The problem, he said, was that motel chains pick the best locations first. Most new locations would never be as profitable and future growth would be limited.

From autos and real estate to retailing and banking, some leading American industries were battered last year. Now top managers are seeking to repair the damage. To be sure, some areas of the economy, like financial services and the pharmaceutical industry, fared well. But many businesses must deal with a continued crisis in consumer confidence, while contending with too much capacity and corporate management styles more suited to the complacent marketplace of the past than to today's competitive maelstrom.