United Airlines HiresAnother New ChiefUnited Airlines chose...

United Airlines Hires

Another New Chief

United Airlines chose oil industry veteran Glenn Tilton to be its third chairman and chief executive in less than a year.

Tilton, formerly vice chairman of ChevronTexaco Corp., immediately met with leaders of United’s powerful unions to start negotiations on concessions that the airline, a unit of UAL Corp., needs to head off a looming cash shortage.

The unions said they would work with Tilton and are preparing a recovery plan of their own that includes wage cuts. But some analysts said United, the nation’s second-largest carrier behind AMR Corp.’s American Airlines, is running out of time and still could be forced into filing for bankruptcy reorganization. That probably would wipe out the value of UAL’s stock, which is 55%-owned by most of United’s 84,000 employees.

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Stock Market on

Roller-Coaster Ride

Stocks zigzagged last week as economic news, worries about war with Iraq and the upcoming anniversary of the Sept. 11 terrorist attacks weighed on investors.

The market rose two days and fell two days of the holiday-shortened week, but ultimately could not overcome Tuesday’s violent sell-off, which carved more than 4% off the Dow Jones industrial average.

But the week did end on a positive note, when an unexpectedly strong employment report sparked a broad rally Friday and fanned hopes that the U.S. economy may be showing signs of strength.

For the week, the Dow finished off 2.7%, while the Standard & Poor’s 500 index and the technology-laden Nasdaq composite index fell 2.4% and 1.5%, respectively. It was the second losing week in a row for the major indexes.

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August Jobless Rate

Declines to 5.7%

The nation’s unemployment rate unexpectedly fell to 5.7% in August as health-care companies, contractors, temporary help agencies and the government expanded their payrolls.

The decline from July’s 5.9% rate and the hiring of an extra 39,000 workers during the month heartened investors, who had expected a jump in joblessness. But the report suggested anew that the economy is headed for another “jobless” recovery like that of the early 1990s, when it took more than two years after the recession ended for employment to improve.

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Congress Steps Up

Probe of ‘90s IPOs

Congress intensified its investigation of Wall Street’s conduct in the late-’90s bull market and asked two more investment banks for information about their research analysts and new-stock offerings.

The House Financial Services Committee sent letters to Goldman Sachs Group Inc. and Credit Suisse First Boston. The committee is seeking details about the brokerage firms’ business dealings with more than two dozen companies, including information on allocations of initial public stock offerings to company executives.

The committee asked for the data by Sept. 19 and said it may issue subpoenas if the brokerage firms do not fully comply.

The requests grew out of the committee’s investigation of Citigroup Inc.’s Salomon Smith Barney and its allocation of sought-after IPO shares to top management of WorldCom Inc.

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Health-Insurance Costs

for Workers Jump

Workers’ health-insurance costs surged 27% this year for individuals and 16% for families, at the same time many employees saw their benefits reduced, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.

The average premium increase for employers was 13%--the highest since 1990--and marked the second straight year of double-digit inflation, the study said.

The survey and separate interviews indicate no letup in premium increases in the foreseeable future. A sobering 78% of the more than 2,000 small and large businesses that responded to the survey said they probably would increase the amount their workers must pay for health coverage next year.

If trends continue, the study’s authors said, some businesses will stop offering health benefits, and some low-income wage earners will decline coverage because they will no longer be able to afford their share of the costs.

The increase was driven largely by larger insurance claims stemming from higher prices for hospital services and prescription drugs and consumers’ growing demand for health care.

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Dockworkers, Shipping

Lines Continue Talks

West Coast dockworkers and shipping lines continued contract talks after a brief halt in negotiations that had heightened concerns about a possible disruption at the ports.

Bargaining subcommittees devoted to issues such as benefits and safety resumed discussions after a tense Labor Day weekend standoff in which talks broke down and the long-extended labor pact expired.

The International Longshore and Warehouse Union had accused the management group of sabotaging negotiations by trying to make a tentative agreement on health care contingent upon a deal on arbitration--a charge the management group denied.

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Low-Emission Gasoline

Engines Backed by Study

Researchers at UC Riverside have found that new low-emission vehicles with gasoline engines are as clean as gas-electric hybrids and can meet or beat the state’s strictest emissions standards.

The findings were welcomed by auto makers, which have invested billions of dollars in internal-combustion engine development. Environmental groups have been fighting for years for a replacement for the conventional auto engine.

The university’s preliminary findings are based on two years of study of a few low-emission vehicles using California’s cleaner-burning gasoline. The program, funded by a small group of government agencies and auto and fuel industry companies, will wrap up over the next year with a broader study using a variety of cars and light trucks with low-emission, ultra-low-emission and super-ultra-low-emission vehicle ratings.

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Napster to Liquidate

After Sale Is Blocked

Napster Inc., the song-swapping service that became the fastest-growing business in history while alarming the entertainment industry, said it plans to liquidate after a bankruptcy judge blocked the sale of its technology to Bertelsmann.

Judge Peter Walsh agreed with record labels and music publishers that complained that the German publishing giant was too close to its former employee, Napster Chief Executive Konrad Hilbers, when it negotiated the sale.

Napster plans to convert the Chapter 11 bankruptcy reorganization it filed in June to a Chapter 7 liquidation, keeping only its chief financial officer and one or two workers. Dozens were fired last week, including founder Shawn Fanning, and Hilbers resigned.

The Web site that had drawn tens of millions of visitors read only: “Napster was here.”

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Glendale Galleria

Is Put on the Market

The owners of the Glendale Galleria have put the giant shopping mall up for sale, and industry observers say the strong demand for such properties should attract a long line of bidders.

The mall is expected to sell for more than $400 million.

Institutional investors and some of the nation’s largest mall operators, including Santa Monica-based Macerich Co. and Westfield America Inc. of Los Angeles, are among the likely bidders for the 250-store mall, according to real estate brokers and retail specialists.

The 26-year-old mall is owned by a joint venture that includes health insurer Cigna Corp. and the New York State Teachers’ Retirement System.

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Clear Channel Signs

Pacts With Promoters

Radio conglomerate Clear Channel Communications Inc. has notified record labels that it has signed pacts with three independent music promoters and granted them the exclusive right to pitch songs to Clear Channel program directors at its top black music, or “urban,” radio stations.

Those promoters, in turn, have significantly raised the prices they charge record labels for new songs added to a station’s weekly playlist.

The sudden price increases appear to contradict statements by Clear Channel Chief Executive Mark Mays, who has admonished music executives for wasting money on independent promotion.

Clear Channel says it has no control over the prices promoters charge--and receives no percentage of their per-song rates. The broadcast chain earns its money in the form of annual fees by charging music promoters $100,000 or more at each station for the exclusive right to pitch songs at its black music stations.

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Truck Firm Consolidated

to Liquidate Business

Consolidated Freightways Corp., one of the nation’s largest trucking firms, shut down its U.S. operations and moved to liquidate the business.

The 73-year-old company, noting that it could not secure needed financing, said the action would put 15,500 people out of work, 80% of them right away.

Consolidated Freightways filed for Chapter 11 bankruptcy protection, along with filing a quarterly financial statement that it had delayed. Although a Chapter 11 filing is normally used to reorganize debt and continue operating, a company representative said it would allow management to dispose of the business more quickly.

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Warner Production Chief

Resigns Unexpectedly

Two months after getting a major promotion, the top film production executive at Warner Bros. resigned abruptly to become a producer at the studio, a unit of AOL Time Warner Inc.

Lorenzo di Bonaventura periodically had clashed with Warner President Alan Horn over budgets and choosing movies during the three years they worked together. They frequently had icy relations, although Warner executives insisted that the two were able to develop a working relationship.

Di Bonaventura laid the blame on the corporate nature of his job as executive vice president, worldwide motion pictures, the post to which he was promoted in July.