Top 10 Stories / Nov. 6-10

1. Silent’ Tire Recall Claimed: For more than four years, Goodyear Tire & Rubber Co. has quietly replaced thousands of failed tires fitted on vans, light trucks and sport-utility vehicles and wrote checks to customers, but only for those who complained, The Times reported. Critics say the Akron, Ohio, tire maker is engaged in a controversial practice known as a “silent recall” and placing thousands of drivers and passengers at risk by not declaring a full public recall on Load Range D and Load Range E tires. Goodyear denied that it was conducting a silent recall, saying it was simply providing “customer satisfaction” replacements on a case-by-case basis. The National Highway Transportation Safety Administration said it was stepping up an inquiry into at least 15 deaths and 120 injuries linked to Goodyear’s 16-inch Load Range E light-truck tires.

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2. Setbacks for Cigarette Makers: Big Tobacco got a double dose of bad news Monday, when a Florida judge affirmed a record-shattering $144.8-billion punitive-damage award for sick smokers, and the European Union filed suit against three leading manufacturers, accusing them of abetting cigarette-smuggling operations that have cheated member nations of taxes and import duties. In the Florida case, the major cigarette makers will now seek review by a state court of appeals. The EU case was filed in federal court in New York against Philip Morris Inc., R.J. Reynolds Tobacco Co. and Japan Tobacco, which last year acquired Reynolds’ international operations.

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3. Bertelsmann Follows Shake-Up With Move on EMI: Making its third dramatic move in less than two weeks, Bertelsmann approached British music giant EMI Group with an offer to combine the two conglomerates. Both corporations confirmed the merger proposal, but indicated that no detailed discussions had yet taken place. The proposal came just four days after Bertelsmann Chairman Thomas Middelhoff announced a decision to replace his top two music executives and overhaul Bertelsmann’s entire record division. And news of the management shake-up came less than a week after Middelhoff stunned the music industry by announcing his plan to join forces with the controversial Napster file-sharing service.

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4. Ad Skittishness, Sagging ‘Millionaire’ Hurt Disney: Walt Disney Co. shares fell nearly 16% on Thursday after the company warned of flat profit for its fiscal first quarter, signaling Wall Street’s growing concern about a softening TV advertising market and slipping ratings for ABC’s “Who Wants to Be a Millionaire.” Investors pushed the stock down $5.75 to $31.13 despite Disney’s report of a stellar turnaround for the latest quarter and full fiscal year. Disney lowered its expectations for the first quarter because of concerns about the advertising environment and its ailing consumer-products unit. The ratings for “Millionaire” are off about 30%, but Disney noted they are still strong and said special events are planned to boost the show. Disney stock closed the week at $31.69, up 56 cents, on the Big Board.

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5. Chip Maker Shines in IPO: Ignoring the recent malaise among semiconductor makers, investors jumped on the initial public offering of stock for Transmeta Corp., a chip firm that competes with Intel Corp. in the portable-computing and information-

appliance markets. Transmeta shares surged on the company’s first day of Nasdaq trading Tuesday to close at $45.25, up $24.25 from the IPO price of $21. The strong showing represents one of the most successful tech IPOs this year. Investors seem to buy company claims that its processors will be important in the nascent market for wireless Internet appliances. Transmeta closed the week at $40.94 down $3.38 amid Friday’s steep drop on Nasdaq.

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6. Broadcom Rides a Rough Week: It was a roller-coaster week for Broadcom Corp. The Irvine-based communications chip maker on Monday announced its most expensive acquisition ever. But the $2.04-billion stock deal to buy Santa Clara, Calif.-based SiByte Inc. rapidly withered in value, as Broadcom’s stock price fell by about 30% in the next two days on concerns that customer Cisco Systems Inc. would be cutting its inventory. Broadcom Chief Executive Henry Nicholas III sought to stop the bleeding Thursday, telling investors that he was confident Broadcom would meet analysts’ earnings expectations for the quarter. The stock rebounded a bit by week’s end to close at $166.25, up $3.81, on Friday on Nasdaq.

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7. Californians Vent on Electricity Crisis: Southern California’s largest utility raised the specter of layoffs, and Gov. Gray Davis accused federal regulators of worsening the state’s precarious electricity situation in sometimes contentious testimony in Washington. Davis slammed commissioners for failing to give immediate relief from the sky-high electricity prices and complained that proposals to fix the state’s power crisis could instead hamper its ability to mend itself. An executive for Southern California Edison told the Federal Energy Regulatory Commission that the company is “bleeding profusely” from rising wholesale electricity costs.

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8. Pets.com Is Latest ‘Dot-Com’ Road Kill: Struggling Pets.com joined the list of online retailers to call it quits and will be the first publicly traded “dot-com” to die completely. The company, known for its TV commercials featuring an obnoxious sock-puppet dog, said it will close down after an unsuccessful effort to attract cash or a buyer among 50 companies it contacted.

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9. Consumer Group Challenges PacBell’s Service: The quality of Pacific Bell’s residential telephone service has dipped markedly and customer dissatisfaction has more than doubled in the years since California’s dominant phone company was taken over by SBC Communications Inc. according to a complaint filed by a state consumer advocacy group. The state Office of Ratepayer Advocates, an independent arm of the California Public Utilities Commission, says the service declines violate the state agency’s 1997 stipulation that service levels be maintained or improved in the five years after SBC’s takeover of PacBell.

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10. PacifiCare Limits Medicare HMO Memberships: Santa Ana-based PacifiCare Health Systems Inc. posted a 98% drop in third-quarter operating earnings to $1.4 million, or 4 cents a share, and as a result froze membership in its Secure Horizons Medicare HMO in 41 counties, including Riverside and San Bernardino and several others in California. PacifiCare President Howard Phanstiel said the firm would also raise premiums from 10% to 25% for its 3 million non-Medicare members. For the fourth quarter, PacifiCare expects profit to exceed analyst forecasts. That announcement after the markets closed Thursday helped boost shares $3.31, or 31%, to close at $14 on Nasdaq on Friday.

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These and additional stories from the last week are available at https://www.latimes.com/business, divided by category. Click on “Money & Investing,” “Entertainment Business” or other topics.

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Please see Monday’s Business section for a preview of this week’s events.

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Stocks: Slammed Again

The deadlocked presidential election brought the Dow Jones industrial average’s fledgling autumn rally to a stop last week. It also poured gasoline on the fire that has been consuming Nasdaq stocks since the end of August. Nasdaq, which fell more than 5% Friday and closed at its lowest level in more than a year, has also been slammed by a string of profit warnings from bellwether tech companies, the latest being Dell Computer.

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Dow Jones industrial average

Weekly closes and latest

Friday: 10,602.95

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Nasdaq composite

Weekly closes and latest

Friday: 3,028.99

Source: Bloomberg News