Top 10 Stories / Nov. 27-Dec. 1
1. GE Picks John Welch’s Successor: General Electric Co. executive Jeffrey Immelt, 44, was tapped to succeed the legendary John F. Welch Jr. as chairman and chief executive of the thriving conglomerate when Welch retires at the end of 2001. Immelt, who headed GE’s medical systems business, eclipsed two other senior GE executives for the coveted post. But the job is full of peril if Immelt doesn’t at least match Welch’s record. GE is the nation’s most profitable company, its most valuable in terms of stock price, and it has recorded superlative growth under Welch’s 20-year reign. Immelt will get a year of on-the-job training with Welch, and their first order of business will be melding Honeywell International Inc., which GE has agreed to buy for $45 billion, into the GE fold. Longer term, Immelt faces tough decisions about GE’s ailing NBC television network.
(James F. Peltz)
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2. Economy Shows Ominous Signs: There was no denying, based on the latest evidence, that the U.S. economy is slowing--and more suddenly than previously thought. The U.S. economy expanded in the third quarter at the slowest pace in four years, growing at a 2.4% annual rate as businesses reduced inventory buildup, invested less in computers and exported fewer goods. Consumer confidence in November slid unexpectedly to its lowest level in more than a year. Manufacturing activity declined for the fourth month in a row, and the number of workers filing first-time claims for state unemployment benefits rose to the highest level in almost 2 1/2 years. On top of that, Wall Street suffered another major rout Thursday, driving key stock indexes down sharply and raising the question of whether investors’ behavior is foretelling a full-blown recession in 2001.
(A Times Staff Writer)
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3. Slow Start to Holiday Shopping: U.S. retailers reported so-so sales in November, revealing a sluggish start to the important holiday shopping season. Nervous investors sent retail-sector stocks down, worried that some marquee merchants failed to capture consumer attention and others achieved sales mostly with significant promotional activity. Retail watchers have cautioned that this year’s holiday shopping period could come later than usual, since there are two extra days--including a full weekend--before Christmas. But even with that knowledge, financial analysts said retailers are likely to mark down their merchandise as the season goes on rather than risk being stuck with excess inventory.
(Abigail Goldman)
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4. Microsoft Asks for Reversal of Breakup Order: Lawyers for Microsoft Corp. asked a federal appeals court to overturn the breakup order of the software giant, citing repeated errors and bias by the lower-court judge who presided over the landmark antitrust case. In a sharp attack that laid out Microsoft’s position to a conservative, seven-judge U.S. Court of Appeals panel in Washington, the software giant said U.S. District Judge Thomas Penfield Jackson showed “antagonism” toward the company and allegedly violated judicial ethics by speaking out in public on the case. Microsoft asked the appeals court to throw out Jackson’s sweeping antitrust punishment--including an order to break Microsoft into two companies.
(Jube Shiver Jr.)
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5. Stockpile of Unused Phone Numbers Found: New state reports revealed a staggering stash of phone numbers that are not in use in four regions that were slated to get new area codes because of a supposed shortage of numbers. Instead, the reports showed that only about half of the 7.9 million possible phone numbers are in use in each of four area codes studied: the 818 and 909 codes in Southern California and the 415 and 510 codes in the San Francisco area. Though most of the idle numbers are already assigned to phone companies, 850,000 to 1.5 million phone numbers are still available for distribution to carriers that need them. The information helps solidify arguments by California regulators that the telecommunications industry should first free up and redistribute unused numbers before any new area codes are added. Last December, the state Public Utilities Commission halted plans for new area codes pending number usage studies.
(Elizabeth Douglass)
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6. State Begins Qwest Probe: California officials launched an investigation into sales practices at Qwest Communications, a phone company that is the subject of tens of thousands of complaints from Californians who were billed for services they didn’t order or whose long-distance service was switched without their permission--illegal practices known as “cramming” and “slamming,” respectively. The state Public Utilities Commission said it received 40,000 complaints about the Denver-based company in the first three months of this year and believes that the signatures of some customers were forged on consent forms. Qwest has been sued over slamming in eight states and investigated by federal regulators, but a spokesman said the company has enacted strict anti-slamming measures that have reduced complaints in the last year.
(Elizabeth Douglass)
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7. Hotel Employees Join Union: Employees at a Santa Monica hotel joined a union Wednesday, using a fast-track technique that is giving labor an organizing edge across the country. The union victory at Pacific Shores Hotel--the first in Santa Monica in more than 50 years--was a milestone for the national hotel workers union, which launched a costly campaign last year to organize Los Angeles hotels. Hotel operator Elkor Corp. agreed to recognize the union if a majority of employees signed pledge cards. The so-called card check process is an alternative to the lengthy federal election route, which unions say is stacked against them. Unions representing hotel workers, janitors and communications workers have signed up tens of thousands of members through card recognition in recent years.
(Nancy Cleeland)
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8. FCC Opens Door for New Wireless Technology: The Federal Communications Commission ordered satellite TV operators to make way for a competing wireless technology that promises more local TV channels and higher-speed Internet access to customers nationwide. The five-member agency unanimously approved the unusual sharing of airwaves between satellite TV operators and a proposed service that uses microwave towers to beam TV signals and Internet data to small receiving dishes affixed to houses. Satellite operators had bitterly opposed the plan, saying it would cause electronic interference. But the FCC ordered the industry to submit comments about how satellites and the microwave TV service could share the airwaves in the 12.2-to-12.7-gigahertz band.
(Jube Shiver Jr.)
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9. Record Labels Ask U.S. to Settle Web Royalty Dispute: Feeling the pressure to compete against Napster Inc., the five major record labels asked federal copyright officials to settle a royalties feud over innovative Internet music services, such as Web-based jukeboxes that can play an unlimited number of popular songs on demand. The Recording Industry Assn. of America is petitioning to clarify when songwriters need to be paid, and how much, for the right to transmit their works online. In particular, the RIAA wants the copyright office to weigh in on two types of online music services: ones that “stream” music to listeners on demand and ones that download song files temporarily for fans to sample. The RIAA has been in talks with the National Music Publishers Assn., which represents songwriters and publishers, for months.
(P.J. Huffstutter)
10. Web Show Moves to Tube: Internet entertainment company Icebox.com sold one of its cartoon series, “Zombie College,” to Fox television. It marks the first time a show created for the Internet has been purchased by a major TV network. But Icebox, struggling to avoid the “dot-com” cemetery that has claimed many of its rivals, also laid off 50 of its 100 employees.
(Greg Miller)
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These and additional stories from last week are available at https://www.latimes.com/business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.
* Please see Monday’s Business section for a preview of the week’s events.
