TOP 10 STORIES / APRIL 30-MAY 4
Judge Orders Coverage of Women’s Birth Control
A federal judge ruled that a Seattle drugstore chain must include contraceptives for women in its health insurance coverage, an unprecedented decision that is expected to influence employer-provided benefits elsewhere.
Planned Parenthood had sued Bartell Drug Co. on behalf of a pharmacy manager in the first test of whether the U.S. Pregnancy Discrimination and Civil Rights acts could be used to force employers with prescription drug plans to include birth control pills, Norplant, Depo-Provera, intrauterine devices and diaphragms.
The decision is expected to encourage more women to ask their employers to include the coverage and may add fuel to efforts by several states to mandate such coverage. California is one of 14 states that requires employers with state-regulated health insurance plans to include contraceptives.
But business groups said employers may respond by cutting back on prescription benefits for all workers to avoid having to add contraceptives to be fair to women.
Bartell, which operates 50 stores, said it would move quickly to comply with the ruling and also would consider an appeal.
Lisa Girion
GE-Honeywell Merger Hits European Barrier
The proposed merger between General Electric Co. and Honeywell International Inc. is on the verge of becoming the first U.S. merger to be killed by European antitrust authorities after passing muster in the U.S.
GE and Honeywell executives admitted that their $42-billion merger was doomed because their final offer to sell a large part of Honeywell’s aerospace operations did not meet the demands of European antitrust authorities.
The EU’s antitrust commissioner has until July 12 to make a final decision, which also could test the trade and political bonds between the U.S. and Europe.
President Bush expressed concern over the EU’s opposition, and Commerce Secretary Don Evans urged the EU to approve the deal.
United Technologies Corp., which made an offer for Honeywell in October, is seen as a leading candidate to grab the company if the deal with GE dies.
Jube Shiver Jr.
U.S. Factory Activity at Slowest Pace in 18 Years
The nation’s factory activity declined last month to the slowest pace in nearly 18 years, dimming hopes the manufacturing slowdown that has punished much of the country is close to an end.
Operating capacity fell during May to 77.4%, the Federal Reserve said, with capacity in the technology sector falling to its lowest level in 25 years. Industrial production fell a sharper-than-expected 0.8%, the eighth consecutive monthly decline.
The report, along with other economic data during the week, appeared to heighten chances that the Federal Reserve would cut interest rates again this month.
Times Staff Writers
Table Grape Growers’ Complaint Rejected
The U.S. International Trade Commission threw out an anti-dumping petition filed by California table grape growers against Mexican and Chilean farmers, ending a tense and closely watched trade skirmish.
About 20 Coachella Valley farmers had charged that Mexico and Chile sold table grapes at 35% or more below the cost of production during the April-to-June harvest period last year, causing wholesale prices to plunge. The Mexicans and Chileans countered that the low prices were an anomaly caused by surplus Chilean grapes usually destined for the European markets and by unusually early harvests in Mexico and California.
The Californians have steadily lost market share in the $300-million spring grape-selling season, while Mexican production has risen.
The ITC voted 5 to 1 to end the dispute, saying it found no indication that Mexican and Chilean imports were causing material injury or threat.
Chris Kraul
Nortel Warning Is Latest in Telecom Troubles
The latest signal that the once-highflying telecommunications sector has fallen out of the sky came Friday as Nortel Networks Corp. warned of a whopping $19.2-billion loss in the second quarter and unveiled plans to slash an additional 10,000 jobs. “The market is contracting at an alarming rate,” Chief Executive John Roth said. Nortel stock dropped 17% and fed a decline in other telecom shares that started with a warning from Nokia Corp.
Nokia, which has been seen as a bastion of strength in the troubled cell-phone industry, said Tuesday that sales growth would grow less than 10% in the second quarter, down from an earlier forecast of 20%, resulting in lower-than-expected profit.
Times Staff Writers
Boeing, Airlines to Provide Web Access
Boeing Co. said it’s forming a joint venture with three of the nation’s largest airlines to provide in-flight e-mail and Internet access to passengers, kicking off one of the most ambitious efforts yet to wire the skies. The companies declined to say exactly how their venture would be structured, but under the arrangement, the airlines--United, American and Delta--would have a minority stake, with Boeing developing and managing the service. Negotiations over details are continuing.
Boeing said each airline initially would equip 10 airplanes with the system, beginning in the second half of 2002.
The proposed pact is a coup for Boeing and its Irvine-based unit, Connexion, which has struggled to sign up airline customers amid questions over who would pay for installing the equipment and how the revenue from the service would be divided.
Peter Pae
Cartoon Network Chief Moves to New Project
After building one of the most successful channels in cable history, Betty Cohen is resigning as president of the Cartoon Network to oversee a secret project focusing on young adults for Cartoon’s parent company, AOL Time Warner Inc. Cartoon Network will join AOL Time Warner’s other advertising-supported cable channels under the management of Brad Siegel.
Separately, Ted Turner, a vice chairman of the media giant who lost his operating role as a result of the AOL-Time Warner merger, unveiled a company to produce movies and documentaries that would focus on his personal passions, such as nuclear disarmament.
Sallie Hofmeister
AOL Signs Internet Deal With Chinese PC Maker
AOL Time Warner Inc. gained an important foothold in China’s burgeoning Internet market by signing a $200-million deal with Legend Holdings, the largest computer maker in China. Each company will contribute $100 million over time, but Legend will control 51% of the joint venture.
The deal gives AOL an edge against rival media giants in the race to enter the Chinese market. But analysts predict that the venture won’t yield profit for some time because of the tighter government restrictions on Internet providers in China and poorer consumers, who have been reluctant to pay for Web service and content.
Edmund Sanders
BMG Grants FullAudio a License for Net Service
BMG Music Publishing granted the first publishing license for a subscription-based Internet music delivery service, a precedent-setting deal that could speed the arrival of paid alternatives to Napster Inc. Terms weren’t announced. BMG said it granted the license to Chicago start-up FullAudio Inc. because it liked the security of temporary downloads. FullAudio plans to offer encrypted songs that can’t be duplicated or recorded onto compact discs and that expire after a month unless the subscriber decides to renew them electronically.
Having BMG on board isn’t enough for FullAudio to launch its subscription music-downloading service because it has yet to win the licenses it needs from the major record labels.
Jon Healey
EU Investigating Studios’ DVD Prices for Europe
Spurred by a “significant number” of complaints from consumers, the European Commission opened an investigation into whether Hollywood movie studios are charging consumers in Europe artificially high prices for movies sold on digital video discs.
European Union Competition Commissioner Mario Monti announced the probe into DVD pricing practices by Vivendi Universal, News Corp.’s 20th Century Fox Film Corp., AOL Time Warner Inc., Walt Disney Co., Metro-Goldwyn-Mayer Inc., Sony Corp. and Viacom Inc.’s Paramount Pictures Corp.
Five years ago, the studios and DVD-player manufacturers divided the world into six markets, and DVDs sold in Europe are encoded and can be used on DVD players sold only in Europe. Monti charged that this coding system “could be used as a smoke screen to allow [film production companies] to maintain artificially high prices or to deny choice to consumers.”
Meg James
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These and additional stories from last week are available at www. latimes.com/busniess.
See Monday’s Business section for a preview of the week’s events.
