Week in Review / Oct. 23-27

1. Goodyear Tire Tread Separations Revealed: Goodyear Tire & Rubber Co. acknowledged that at least 15 people have been killed and 125 injured in accidents linked to tread separations on some of its light-truck tires used on vans, pickups and large sport-utility vehicles. The tread separations resemble the failures of some Firestone tires, which have been blamed for more than 150 deaths and more than 500 injuries worldwide. Goodyear has settled several damage suits but has kept those settlements secret, The Times reported. Also sealed from public view are critical documents that Goodyear lawyers have turned over in these suits. The National Highway Traffic Safety Administration said it has received nearly 60 complaints about Goodyear’s light-truck tires and is monitoring the problem. Goodyear says its tires are safe.

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2. SAG Pact Reached: Union actors and the ad industry reached agreement on a new contract to end the actors’ six-month walkout. The contract calls for a big jump in pay rates for actors who appear in commercials on cable TV and also covers commercials made exclusively for the Internet. Members of the Screen Actors Guild and the American Federation of Television and Radio Artists went on strike May 1 against advertisers in what became the longest walkout in Hollywood history. Members are expected to ratify the deal.

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3. Giant AT&T; to Split Up Company: In a dramatic signal that AT&T; Corp.’s three-year effort to remake itself into a one-stop telecommunications marketplace has failed, the company announced its third major restructuring in 16 years. The company, whose shares have lost 54% of their value this year, said it will divide into three separate companies--wireless, cable TV and long-distance and corporate services--and a fourth tracking stock. AT&T; also said third-quarter profit fell more than expected and it has lowered its growth outlook for the fourth quarter, citing the rapid decline in prices for long-distance services. Stock in AT&T;, a venerable component of the Dow Jones industrial average, fell $3.50 to close at $23.38 Wednesday on its announcement of the restructuring and earnings. It closed Friday at $22, down 19 cents.

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4. Microsoft Hit By Hackers: Pieces of some of the most closely guarded secrets in technology--the underlying source code for Microsoft Corp.’s software programs--were stolen over the last three months in attacks that some experts see as a sign of the quickening evolution of hacking from a underground pastime into an instrument of industrial espionage. The software giant said the unknown intruder never gained access to any of its major products. Only the code from an unspecified future product was open to the intruder--and nothing was changed or damaged, it said. But security experts said Microsoft’s computer network is so vast and complex that any assessment of the damage at this point is premature. The FBI is investigating what the company called a “deplorable act of industrial espionage.”

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5. Baja ‘Property Owners’ Evicted: The risks of owning Mexican real estate were exemplified by an eviction order handed down Monday affecting many U.S. homeowners in the Punta Banda area south of Ensenada in Baja California. The Mexican Supreme Court ruled that the 1973 transfer by presidential decree of 250 acres of beachfront property to an ejido, or community land holding group, was illegal and that the land must be returned to the original owners. Caught in the middle are about 200 U.S. residents, many of them from Southern California, who leased land from the ejido and built houses worth up to $1 million. Many of the residents facing eviction are looking at the loss of their only residence and their life savings. The order sparked fears among the estimated 70,000 Americans who live in Baja California about the security of their ownership rights.

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6. StarLink Corn Crisis Spreads to Japan: The U.S. effort to convince the rest of the world that genetically modified foods are safe hit a huge roadblock Wednesday when a Japanese consumer group charged that some altered corn products from the U.S. that are banned for human consumption had found their way onto Japan’s supermarket shelves. Meanwhile, in the U.S., the StarLink corn was found in another brand of taco shells, made by Western Family. U.S. grain industry officials high-tailed it to Japan to try to mollify their customers as Japanese health officials and U.S. Embassy experts huddled in separate meetings to address the problem, which could threaten wheat exports to Japan.

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7. Lucent Ousts Chief: Lauded only two years ago for leading Lucent Technologies Inc. to solid gains, Richard McGinn was fired as chairman and chief executive of the world’s largest telecommunications equipment maker in the face of Lucent’s dreary earnings in recent quarters and its plunging stock price. Lucent’s board named former Chairman Henry Schacht as an interim successor while it searches for a permanent replacement. Much of Lucent’s descent was blamed on McGinn’s missteps, such as dismissing early suggestions that Lucent develop a new, extremely fast transmission system based on fiber-optic networks. The decision gave rival Nortel Networks Corp. a big lead in that burgeoning market.

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8. CalPERS Faces Huge Loss: The California Public Employees’ Retirement System is expected to lose $96 million this year on two of its health plans. As a result, CalPERS is considering increasing premiums, co-payments and deductibles for the plans, which provide insurance for about 220,000 of CalPERS’ 1.1 million members. These plans are the only ones available for members in several parts of the state. Premiums were already set to go up 19% for 2001; now they probably will rise in 2002 as well.

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9. Southland Tech a Mixed Picture: A study comparing the technology industry in Southern California with other leading U.S. high-tech regions concluded that the Southland is home to the most high-tech companies and workers. But the study from Larta, a Southern California technology alliance, found that, taking into account the Southland’s huge population, the region lags behind severely when it comes to raising venture capital, making initial public stock offerings and generating patents. The study suggests that the tech economies of Los Angeles, Orange, Ventura, Riverside and San Bernardino counties are fueled more by old-line firms in fields such as aerospace and information technology services than by start-ups focusing on the Internet and biotechnology. Southern California’s sprawling geography also isolates clusters of high-tech activity, hindering their ability to grow, the study found.

10. African American-owned Banks Merge: Founders National Bank, Los Angeles’ only black-owned commercial bank, announced plans to merge with Boston Bank of Commerce in an effort to build the nation’s first African American-owned banking chain stretching from coast to coast. The new institution would use the Boston Bank of Commerce corporate name, but Los Angeles branches would retain the Founders nameplate. The new bank would have assets of more than $260 million and be the third-largest African American-owned bank in the nation.

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