TOP 10 STORIES / Jan. 8-12
1 AOL-Time Warner Merger Completed: After a yearlong government review, America Online and Time Warner won final approval for their $99-billion marriage and promptly sealed the deal. It was the biggest merger in U.S. history. The Federal Communications Commission attached a few conditions to its approval, which probably will increase pressure on AOL to allow rivals to connect to its instant-messaging service in the future. The combined company, to be called AOL Time Warner, will be based in New York, overseeing 85,000 employees and a stable of familiar brand names, including CNN, Time magazine, HBO, Compuserve and Netscape. The company is expected to move quickly in the coming weeks to cut costs and integrate operations. (Edmund Sanders)
*
2 Utilities Narrowly Avoid Blackouts: California’s electricity crisis continued to bubble as the state narrowly avoided rolling blackouts Thursday. On other fronts, politicians in Washington and Sacramento planned to labor through the weekend to find a solution to the mess. Electricity generators have tentatively agreed to give Southern California Edison and Pacific Gas & Electric more time to pay their bills--a key development that may keep worried credit-rating agencies from further downgrading the two big utilities’ debts. Investors, meanwhile, continued to pummel the companies, sending their shares to fresh 52-week lows. PG&E; pleaded with Gov. Gray Davis to help the San Francisco utility buy natural gas for its customers because suppliers are refusing to sell without immediate cash payment. (Nancy Rivera Brooks)
*
3 Mexico Boosting Power: Mexican officials said that California’s electricity crisis has prompted several investors to expand their plans for new power-generating plants in Baja California. That should pave the way for exports of 1 million megawatts to California by 2005. That’s not soon enough or large enough to solve the state’s current problems, but it is enough to light a million homes. Baja California currently has to import power to meet its burgeoning demand, and at peak summer hours gets as much as 10% of its needs from California. (A Times Staff Writer)
*
4 State’s Jobless Rate Hits 30-Year Low: Despite an energy crunch and an emerging national slowdown, California’s economy added a surprisingly strong 53,100 jobs in December and cut the unemployment rate to 4.6%. That brought joblessness back to the lowest level of the state’s 7 1/2-year expansion and equals a 30-year low. The jobless rate fell from 4.8% in November. The report was better than expected, but some economists said December could prove to be the last big hurrah before energy troubles, reduced technology spending and other potential hazards start translating into higher unemployment and slower job growth. In one sign of weakness, the manufacturing sector lost 2,200 jobs in the state.
(Stuart Silverstein)
*
5 American Airlines to Buy TWA: A merger wave in the airline industry, predicted by many after United Airlines parent UAL Corp. agreed to buy US Airways Group last year, is now officially underway thanks to American Airlines. AMR Corp., American’s parent, plans to buy ailing Trans World Airlines and a sizable chunk of US Airways for nearly $2 billion. That set off speculation that the three other major carriers--Delta, Northwest and Continental--will seriously look for partners of their own. All of which scares many consumer advocates and lawmakers, who worry that having only three or four U.S. mega-carriers will stifle competition and lead to higher fares and lousier service. (James F. Peltz)
*
6 Tech Profit Outlook Grim: Technology and Internet companies began reporting unpleasant fourth-quarter results, souring investors even more with their gloomy predictions for the coming year. Fast-growing Yahoo, one of the most-visited places on the World Wide Web and one of the few usually profitable Web firms, said its 2001 profit would drop from last year, sending it shares down more than 20%. Gateway posted a 70% drop in fourth-quarter earnings and said it would lay off 2,400 people, or 10% of its work force. More bad news came from Hewlett-Packard, Motorola and Cisco Systems. (Joseph Menn)
*
7 Debt-Ridden Xerox Gets Some Relief: Xerox Corp.--drowning in a sea of debt and lackluster sales growth--insists it isn’t on the verge of bankruptcy, but its problems are a key reason another company hasn’t stepped forward to buy the nation’s largest copier maker, analysts say. Xerox, its stock pummeled in recent years, has a total market value of just $4 billion. But it has more than $17 billion of debt, and that probably scares away many potential suitors, according to observers. The company, meanwhile, received $435 million in new financing from General Electric Co.’s GE Capital unit, which Xerox hopes will give it more breathing room to complete a turnaround.
(James F. Peltz)
*
8 Government Offers Auto Rollover Data: Consumers sensitized to the dangers of rollover crashes by the publicity over Firestone tire failures will now be able to compare the basic stability of vehicles before they buy. The government on Tuesday began rating the rollover resistance of new models and posting the results on the Internet--at https://www.nhtsa.dot.gov. Among the models initially evaluated, the highest five-star rating went to the Honda Accord. General Motors’ Jimmy and Blazer SUVs got the lowest, one star each. A more realistic government test for stability, based on test-track handling, is in the works. (Ricardo Alonso-Zaldivar)
*
9 Windows Pricing Suits Dismissed: Microsoft Corp. was handed a victory by a federal judge who threw out 38 private cases that had accused the software giant of overcharging customers for its flagship Windows operating system. Meanwhile, the Justice Department submitted arguments to the U.S. Court of Appeals presiding over the government’s landmark antitrust case against Microsoft. The government devoted much of its legal brief to defending the handling of the case by U.S. District Judge Thomas Penfield Jackson, who harshly criticized Microsoft in press interviews after ordering that the company be broken up. (Jube Shiver Jr.)
*
10 Nasdaq Trading Overhaul Plan OKd:The Securities and Exchange Commission approved a controversial plan for Nasdaq to overhaul its 30-year-old stock-trading system to potentially make it easier and faster to trade Nasdaq shares. Critics, however, said the so-called SuperMontage system would hurt small investors. Among other complaints, opponents say it would give professional investors certain benefits over individuals and would make it tougher for small investors to execute some types of orders. (Walter Hamilton)
*
* 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.
