TOP 10 STORIES / Oct. 2-6
1 High-Tech Drug Use Rises: Like the waves that swept through Haight-Ashbury in the 1960s and Wall Street in the ‘80s, drug use has found a new, eager home in the centers of technology. As illicit drug activity wanes nationwide, drug use--particularly that of methamphetamine and powder cocaine--is booming among high-tech workers, according to scores of interviews with chemical-dependency experts, computer programmers, technology executives and former drug addicts. But at the same time, many high-tech companies are adopting policies that protect hard-to-replace programmers and executives but require drug tests for blue-collar and out-of-town staff. The practice, which labor experts call legal but biased, is being used by industry leaders such as Amazon.com Inc., Intuit Corp., Kozmo.com and Advanced Micro Devices. (P.J. Huffstutter)
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2 Time Warner-EMI Deal Dies: The proposed $20-billion merger of Time Warner Inc. and EMI Group to form the world’s top music company is dead in the water--and unlikely to be resuscitated. The decision on Thursday by the two entertainment giants to abandon their plan to join forces is a face-saving effort to avoid having the proposal rejected by the European Commission. The deal fell victim to a creeping policy change in the European Commission implemented in the last year. Scuttling the deal, though, should help pave the way for European regulatory clearance of America Online Inc.’s $135-billion purchase of Time Warner, which has raised concerns that it would dominate the distribution of music over the Internet.
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3 Jobless Rate Dips: The economy kept booming in September, adding 252,000 new jobs and cutting the unemployment rate to 3.9%. That matched the lowest level in a generation, according to the Labor Department. U.S. businesses generated more new jobs last month than many analysts had expected. The jobless rate, down from 4.1% during August, has been moving in a narrow range for a year. It had dipped to 3.9% in April, marking the lowest level of unemployment since 1969. On Tuesday, the Federal Reserve kept key U.S. interest rates steady but warned that the nation’s tight job market and rising energy prices risked pushing up inflation.
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4 Auto Sales Accelerate: America’s hunger for automobiles continued to surge in September, with sales rising 5.3% from September 1999. At the current pace, 2000 will be another all-time high, in the neighborhood of 18 million, up from last year’s record 16.9 million. Passenger cars made by industry leader General Motors Corp. rose while truck sales sank. But at rival Ford Motor Co., sales of cars declined while trucks showed an increase--including a 1.1% rise in sales of the embattled Explorer, entangled in the Firestone tire controversy. But auto makers have had to add significant rebates and other incentives to keep sales chugging along. (Terril Yue Jones)
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5 FTC Sues First Alliance: The Federal Trade Commission filed a lawsuit Wednesday against bankrupt lender First Alliance Corp. for allegedly defrauding low-income borrowers. Consumer groups welcomed the move but said it may be too little, too late. The FTC suit seeks to reform First Alliance’s business practices, but the so-called sub-prime lender, based in Irvine, shut down operations six months ago amid a wave of lawsuits and bad press. First Alliance executives denied the FTC charges. The government agency said it wants to send a message to rogue lenders that they cannot escape government enforcement by filing for bankruptcy. (Edmund Sanders)
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6 Keating Cleared: Charles H. Keating Jr., the former head of Lincoln Savings & Loan and a symbol of the S&L; debacle of the 1980s, won a final victory Monday before the U.S. Supreme Court, which refused to reopen the case to reinstate his 1991 state court conviction for swindling elderly investors. The Supreme Court order left Keating without any convictions on charges he duped customers of the Irvine-based S&L; into trading insured deposits for junk bonds. More than 21,000 mostly elderly Southern Californians lost about $285 million, and taxpayers had to cover nearly $3 billion in Lincoln’s losses in the nation’s second-most-costly thrift failure.
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7 Arcade-Game Restrictions: In response to congressional pressure, GameWorks, a company with ties to director Steven Spielberg, announced a policy Thursday restricting youngsters from playing certain games at its arcades. It was the first voluntary action within the arcade industry that mandates an age restriction. The industry has yet to respond collectively to the recent Federal Trade Commission report criticizing the movie, music and video game industries for peddling violent entertainment to children.
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8 Moving the Merchandise: Retailers reported better-than-expected sales for September, but at rates that were still well off last year’s record highs. Financial analysts said the pace--merely fair--could be a harbinger for the holiday season, on which many retailers count for the bulk of their profits. Consumers picked up electronics, reduced-price summer clothes and even full-price fall outfits, while their desire for department-store goods cooled. But also for the first time, big discounters showed a bit of slowness, though on average they still reported the best numbers of the retail industry. (Abigail Goldman)
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9 Electricity Static Continues: The California Municipal Utilities Assn. asked federal regulators to tie California’s wholesale power prices to what it costs each generator to produce the power and proposed that a ratepayer-owned agency be created to own and operate all transmission lines in the state. Community groups urged broad protections for consumers, particularly low-income ratepayers, as Southern California Edison and Pacific Gas & Electric Co. filed emergency petitions with state regulators asking to pass on at least $4 billion in costs that the utilities paid this summer.
(Nancy Rivera Brooks)
10 Napster Carries On: Napster Inc., the controversial music-sharing service, will continue operating after a federal appeals court heard legal arguments Monday but adjourned without making a ruling. While the U.S. 9th Circuit Court of Appeals mulls over a decision, Napster is struggling to end the case out of court. The company has been in talks with numerous music labels and publishers. But the industry has rejected licensing deals proposed by Napster, which has suggested it could start charging a monthly fee to its estimated 32 million users.
(P.J. Huffstutter)
