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Sears 'Legacy' Cuts Could Signal Shift

Jim Cramer
Jim Cramer
The Street.com
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High legacy costs that have plagued the airline and steel industries will infect retail and auto as well.

We might have to start valuing these old-line companies a lot differently than either you or I thought possible when it comes to legacy costs. This morning's announcement that Sears is unilaterally changing the benefit package for retirees under 65 tells me that we might be able to stop thinking about a world in which there are inalienable benefits offered by companies.

When I look at a Kodak or a Lucent or a Sears, I always think that they can't compete with a Fuji or a Chinese telecom equipment player or a Wal-Mart because they have such huge legacy costs.

But what if those legacy costs just got obliterated by new management? What if...

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