TOP 10 STORIES: Nov. 13-17
1 Coke Reaches Largest-Ever Racial-Bias Settlement: Coca-Cola Co. agreed to pay $192.5 million--the largest racial-discrimination settlement in U.S. history--to end a class-action lawsuit filed by about 2,200 African American employees. The workers, who said they were routinely discriminated against in pay, promotions and job evaluations, will receive an average of $40,000, depending on their years of service. The settlement also calls for Coke’s employment and hiring practices to be monitored for the next four years by a seven-member task force selected by management and plaintiff attorneys. Both sides said the settlement benefited both management and workers. “The message it sends is that discrimination should not be tolerated,” said Pam Coukos, an attorney for the workers. (Davan Maharaj)
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2 New Net Addresses Cleared: The Internet Corp. for Assigned Names and Numbers voted to add seven new suffixes to the ubiquitous .com. The Los Angeles-based nonprofit group, which oversees the Net’s critical addressing system, selected .biz, .info, .name, .pro, .museum, .aero and .coop to join .com and its brethren--.net, .org, .edu, .gov and .mil--at its annual meeting in Marina del Rey. Some of the suffixes are more targeted than .com. For instance, .pro is meant to be used by professionals such as doctors and lawyers, and .aero is reserved for those associated with the air transport industry. The companies selected to administer addresses ending in the new suffixes expect to make them available by the spring. (Karen Kaplan)
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3 Fed Maintains Rates and Stance: The Federal Reserve left U.S. borrowing costs unchanged Wednesday, signaling that it thinks too much growth and inflation, rather than too little, is still the biggest economic danger facing the nation. The central bank left the so-called federal funds rate--the rate off which virtually every other interest charge in the country is set--at a comparatively high 6.5%. And policymakers would not suggest when they might change direction and begin lowering rates. The decision disappointed investors, who sent stock prices tumbling from sharp gains earlier in the day. The Dow plunged from its climb of 118 points to close up just 26.54 points at 10,707.60 on Wednesday. The Nasdaq, which had jumped more than 70 points, closed up 27.22 points at 3,165.49. The Dow ended the week at 10,629.87, and Nasdaq closed at 3,027.19. (Peter G. Gosselin)
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4 Chrysler Chief Ousted: On the second anniversary of its first day in business, DaimlerChrysler sacked its U.S. president, James P. Holden, and put to rest any doubts that the once-heralded “merger of equals” has gone awry. Holden’s ouster came just weeks after the once-profitable Chrysler Group posted a $512-million quarterly loss. In his place, the company’s German-based supervisory board installed Daimler-Benz veterans as president and chief operating officer, charged with trying to get the U.S. group back in the black. It won’t be easy. Analysts project another loss, about $50 million, in the fourth quarter. (A Times staff writer)
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5 AT&T; Decides to Spin Off Liberty: Weeks after announcing a major restructuring, AT&T; Corp. said it will spin off its Liberty Media arm--owner of stakes in such cable programmers as USA Networks--that it acquired as part of its purchase of Tele-Communications Inc. last year. The decision would free cable mogul John Malone, who controls Liberty, to pursue acquisitions without worrying about conflicts of interest with AT&T.; The spinoff, which requires IRS approval, also would help AT&T; comply with regulatory conditions imposed on its purchase of cable company Media One Group.
(Sallie Hofmeister)
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6 Power Shortages Threaten Christmas Twinkle: State power officials are concerned that holiday lights could strain the state’s electricity grid, which unexpectedly ran short of electricity several times in the last week. Holiday lights add about 1,000 megawatts of usage, equal to the output of a nuclear power plant, according to the California Independent System Operator, which runs the electricity grid for about 75% of the state. (The L.A. Department of Water and Power is not included in the Cal-ISO grid and has more than enough electricity to meet its customers’ needs.) A combination of cold weather and power plant outages caused Cal-ISO to declare several emergencies last week and to call on all electricity users to conserve energy, with some large users curtailing energy use. If the same events were to occur in December, holiday lighting would be an obvious target for conservation and people could be asked to turn on their lights later in the evening.
(Nancy Rivera Brooks)
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7 Guess Shakes Up Executive Ranks: Fashion jean designer and retailer Guess Inc. made a series of management changes and disclosed that it might fall into violation of its $125-million lending agreement with Chase Manhattan Bank in the fourth quarter. The Los Angeles-based company recruited Footstar Inc. executive Carlos Alberini to the new position of president and chief operating officer. Guess also said that Brian Fleming, its chief financial officer, resigned. Moreover, top executives of the company sold more than 100,000 Guess shares in late August and early September at more than $20 a share-- before its plunge to below $5 Friday, according to InsiderScores.com.
(Jerry Hirsch)
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8 Scooters Crimped But Not Stopped: No. 1 scooter seller Razor USA won a court ruling stopping a dozen scooter makers from shipping new products to stores though Dec. 4, after Cerritos-based Razor accused the competitors of adopting its patented braking system and trying to confuse customers with look-alike or sound-alike products. But because the federal judge’s order put the brakes only on scooter makers--not sellers--toy retailers say everyone who wants a scooter for Christmas should be able to find one.
(Abigail Goldman)
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9 Gizmos Outshine PCs at Comdex: At this year’s Comdex, the computer industry’s biggest trade exhibition of the year, one thing became clear: The PC is no longer a star. After nearly 20 years of development, the typical PC is far more powerful than the average user needs. Trying to combat market saturation, companies are betting on a future in which the desktop PC would be broken down into small, specialized devices. Whether this new category of “Internet appliances” becomes popular remains to be seen. But clearly a hot holiday season trend is devices that distribute digital entertainment--whether MP3 files, Internet radio shows or digital movies pulled off the Net--throughout the home. (P.J. Huffstutter)
10 AOL-Time Warner Deal Expected to Open Access: Experts predict the ongoing government review of the proposed AOL-Time Warner merger could be the first step in requiring cable companies to lease their high-speed lines to rivals. The Federal Trade Commission is threatening to block the merger unless America Online Inc. and Time Warner Inc. agree to open up their cable wires. Cable companies have resisted such efforts, saying the government should not get involved. Though the FTC-imposed conditions would not be legally binding on other cable carriers, the outcome, expected soon, could set the standard for the industry and put other cable companies under pressure to lease their lines under similar terms, analysts say. (Edmund Sanders)
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* These and additional stories from the past week are available at https://www.latimes.com/business, divided by category. Click on “Money & Investing,” “Entertainment Business” and other topics.
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* Please see Monday’s Business section for a preview of the week’s events.
