Lockheed Edges Out Boeing for Contract
The vote is in. Lockheed Martin Corp. won the coveted right to build the nation’s next-generation fighter aircraft, beating out Boeing Co. for what could be the biggest military contract ever.
Culminating a five-year battle between two of the world’s largest defense contractors, Pentagon officials picked Lockheed Martin to begin development of the Joint Strike Fighter, with plans to purchase 3,000 of the planes at a cost of more than $200 billion.
With the potential for foreign sales topping another $200 billion, the contract is considered the most lucrative in U.S. history. “This really is the contract of the millennium,” said Christopher Hellman, analyst with the Center for Defense Information. “Nothing has or will come close. “
Peter Pae
Ford Settles Lawsuit Over Faulty Part
In the largest automotive class-action settlement in history, Ford Motor Co. will reimburse customers who paid hundreds of millions of dollars to replace a faulty part that caused their vehicles to stall.
It was uncertain how many consumers would qualify for reimbursements in the range of $160 apiece.
The settlement caps six years of litigation. Plaintiffs’ lawyers said the cost to Ford would be as high as $2.7 billion.
Myron Levin
AMR Posts Record Loss in Quarter
Even though more Americans are flying again, the airline industry continues to reel and its problems are expected to worsen this holiday season.
AMR Corp., the parent of American Airlines, the world’s largest airline, posted a record loss for the third quarter, even after getting $508 million in federal financial aid.
Although the number of passengers has kept growing each week since the Sept. 11 attacks, about 20% fewer people are flying.
Less than a month before the busy Thanksgiving weekend, American Airlines says advance bookings for November are down 6% from a year earlier.
Meanwhile, the airlines are now reporting a little-noticed aspect of the government rescue package: They have to pay federal taxes on the cash grants.
James F. Peltz
ITC Says Imports Hurt Steel Industry
The International Trade Commission ruled that foreign imports pose a serious threat to the domestic steel industry, paving the way for punitive sanctions that are likely to raise steel prices and intensify trade tensions with Europe and Asia.
The independent U.S. agency has until mid-December to provide the White House with a list of proposed remedies, which could include import quotas or hefty tariffs on foreign steel.
Beleaguered U.S. steelmakers applauded the decision.
President Bush, who instigated the ITC investigation, is expected to approve the protective measures, though critics warn they could harm a weakened domestic economy and complicate efforts to launch a new round of global trade talks.
Evelyn Iritani
Shares of Enron Plummet Amid Losses
Enron Corp.’s stock was pummeled by investors following disclosures of losses and shrinking shareholders’ equity related to failed investments and a complicated hierarchy of limited partnerships used to shelter some Enron assets.
The stock slide was compounded by disclosure of a Securities and Exchange Commission inquiry into two of the partnership arrangements and by Wall Street worries about future cash flow and credit problems that might be caused by the investment vehicles.
Two conference calls with analysts and investors failed to calm nerves, and several analysts lowered their recommendations on Enron.
Enron has reiterated that its finances are strong. And although analysts note that Enron’s core businesses remain sound, some analysts doubt that the usually taciturn company has revealed all of its problems.
To mollify investors, Enron replaced its chief financial officer, who until recently headed the two partnerships the SEC is eyeing.
Nancy Rivera Brooks
Pentagon OKs Northrop Bid for Newport News
Northrop Grumman Corp. was all but assured of winning the bid to acquire Newport News Shipbuilding Inc. as the Pentagon endorsed the deal and the Justice Department, citing antitrust concerns, blocked a rival bid by General Dynamics Corp.
It marked a stunning turn of events for Northrop, which got the nod to acquire the Virginia builder of nuclear submarines and aircraft carriers despite having been the underdog.
The Los Angeles-based defense contractor made an unsolicited offer for Newport News after the shipbuilder had inked a $2.1-billion deal with General Dynamics.
Separately, Northrop said third-quarter earnings fell 22% because of a large drop in pension fund investments.
Peter Pae
Hollywood Production Jobs Fall to 4-Year Low
Skittishness following the Sept. 11 terrorist attacks has exacerbated an already slow season in Hollywood, pushing employment in the movie, television and film industry to a four-year low in September, state statistics show.
Cutbacks and delayed projects by the major studios has trickled down through the industry, leading to a spate of layoffs at small companies that provide equipment and services for the industry.
Meg James
Grammy Officials Urge Greene Settlement
High-ranking officials at the Grammy organization recommended a settlement of more than half a million dollars to resolve sexual assault and battery allegations against the nonprofit group’s chief executive, C. Michael Greene, Grammy sources said.
The proposed settlement, subject to approval by the group’s board of directors, has ignited an internal revolt, with at least a dozen of the 41 trustees privately calling for Greene’s firing, the sources said.
Greene declined to comment. Attorneys for the Grammy nonprofit group previously denied that Greene assaulted or had any sexual contact with Jill Geimer, the Grammy executive who has threatened to sue over Greene’s alleged misconduct.
Chuck Philips
EMI Ousts Record Label Executive Nancy Berry
British music conglomerate EMI Group sacked Nancy Berry, the vice chairwoman of its worldwide Virgin Records division.
Berry’s exit came a week after the London-based record company ousted its global record chief, Ken Berry, who is Nancy Berry’s former husband.
The shake-up follows a dispiriting period for EMI, including a disastrous sales debut from pop icon Mariah Carey, who suffered a nervous breakdown months after signing an $80-million contract with the company this year. Nancy Berry spearheaded the elaborate marketing campaign for Carey’s album, “Glitter,” which has sold fewer than 400,000 copies since its Sept. 11 debut.
Jeff Leeds
Management Buyout of G&L; Realty Approved
Stockholders of G&L; Realty Corp. approved a management-led buyout of the real estate investment trust despite a higher offer by a rival group and concerns that the deal unfairly favors top executives.
The company’s co-chairmen, Daniel Gottlieb and Steven Lebowitz, plan to take the small Beverly Hills-based company private after a majority of shareholders backed their $12-a-share offer.
The management-led offer triggered a shareholder lawsuit this year that claimed G&L;’s board breached its fiduciary duty
Jesus Sanchez
Internet Archive Turns Back Web Pages of Time
The nonprofit Internet Archive launched its so-called Wayback Machine, allowing Web surfers to check out most Internet sites that have vanished and older versions of sites that are still around.
The San Francisco effort is the brainchild of Brewster Kahle, a millionaire technologist who wants to preserve the Internet’s ephemera for generations to come.
Like many Internet pioneers, however, Kahle faces unfamiliar risks along with the opportunities: the archive might be the most massive violation of copyright law since ownership rights over words came into being.
More than 10 billion pages are available at https://web.archive.org.
Joseph Menn
Job Cuts, Make-Over in Store for Sears
Sears, Roebuck & Co. is getting a new look, borrowing from competitors that have been biting into Sears bottom line.
In a bid the company says will increase operating income by $1 billion during the next three years, Sears will look more like a mass merchant, with more self-serve areas and centralized checkouts.
As part of its financial realignment, Sears will cut 4,900 jobs in the next 18 months.
The company’s challenge, analysts say, is to offer something unique within its niche of serving middle-income consumers--an ever difficult proposition against innovative rivals such as Kohl’s and Target.
Abigail Goldman
