TOP STORIES -- Jan. 18-23
Toyota Overtakes Ford in Worldwide Sales
Toyota Motor Corp. sped past corporate icon Ford Motor Co. last year to become the world’s second-biggest car company, according to sales figures.
The ascension marks a major milestone for Toyota. Its preliminary figures show that the Japanese automaker’s worldwide retail sales climbed about 10% to 6.78 million in 2003, ousting Ford from the No. 2 spot it held for decades.
Ford said its worldwide wholesale sales fell to 6.72 million cars and pickup trucks, a 3.5% decline from 6.97 million in 2002. Ford has not yet released its final retail sales figures, but the company estimates the total for last year at about 6.4 million units.
General Motors Corp., with global sales of more than 8 million cars and pickup trucks worldwide, remains firmly in the No. 1 spot it has held for 75 years.
In the U.S. market, Toyota ranks fourth in passenger vehicle sales and is close to overtaking DaimlerChrysler’s Chrysler Group for the third spot. Last year Toyota captured a company record of 11.2% of the U.S. auto market.
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Stewart Maintains Innocence as Trial Starts
Lifestyles tycoon Martha Stewart, facing years in prison, proclaimed her innocence again as her fraud and obstruction-of-justice trial began in a federal courtroom in lower Manhattan.
Stewart and Peter Bacanovic, her former stockbroker and codefendant, repeated “not guilty” to each of the felony charges in a nine-count indictment filed this month.
The final phase of jury selection is expected Monday. U.S. District Judge Miriam Goldman Cedarbaum said witnesses probably would begin to be called this week.
The government contends that Stewart, 62, and Bacanovic, 41, lied to investigators and obstructed their probe of her Dec. 27, 2001, sale of 3,928 shares of ImClone Systems Inc., a biotech firm founded by her friend Samuel Waksal. The sale came a day before the stock tumbled on an adverse Food and Drug Administration ruling against the firm’s key cancer drug.
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Low-Pay Industries Dominate Job Growth
California is being hard hit by a recent nationwide shift of jobs from high-paying industries to lower-paying sectors such as retail sales and tourism, according to a report by the Washington-based Economic Policy Institute.
The report paints a picture of a state and national economy in which employment growth is being driven largely by low-skilled service jobs. Statewide, since the national recession officially ended in November 2001, the jobs that have been created are in industries that pay an average of 40% less than do those where jobs have disappeared, the Economic Policy Institute said.
California lost 127,000 manufacturing jobs and 55,000 jobs in the information sector from November 2001 to November 2003. The leisure and hospitality sector gained 48,000 jobs, retail trade grew by 32,000, and health and education, which include day-care teachers and low-wage hospital crews, grew by 65,000.
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Money Manager on the Run Is Arrested in Texas
Fugitive Orange County money manager James P. Lewis Jr., accused of running an $814-million investment fraud, was arrested at a Texas budget motel.
A nationwide dragnet for the founder of Lake Forest-based Financial Advisory Consultants Inc. ended when agents entered a Comfort Inn in Houston and took Lewis into custody, said an FBI spokeswoman.
He was booked on a charge of felony mail fraud contained in a complaint unsealed days earlier.
“He had dozens and dozens of credit cards and several maps, including a map of Mexico,” said spokeswoman Laura Bosley.
Lewis, 57, appeared briefly before U.S. Magistrate Judge Francis H. Stacey in Houston.
The Securities and Exchange Commission had charged Lewis with leading a Ponzi scheme.
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Record Firms Take On Invisible Enemies
Major record companies filed a new round of lawsuits against 532 Internet users who allegedly violated copyrights by sharing songs online. But it may be weeks before the labels know exactly who they are suing.
That’s because a Washington appeals court last month outlawed a shortcut that the labels’ trade group, the Recording Industry Assn. of America, had used to identify alleged pirates, many of whom were then sued.
The ruling, which the RIAA may appeal, forced the labels to file “John Doe” lawsuits before trying to obtain the names and addresses of alleged infringers from their Internet service providers. The record companies filed three such suits in New York and one in Washington, naming a total of 532 “John Doe” defendants. The labels’ next step will be to seek a court order permitting them to gather the defendants’ names and addresses from their Internet providers.
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Wet Seal to Settle Claim by Garment Workers
Retailer Wet Seal Inc. has agreed to pay $90,000 to four garment workers who said they were underpaid by one of its contractors.
The settlement would be the first time a retailer has agreed to pay workers under a state law that broadens the ability of garment industry employees to file claims for alleged violations of wage and hour laws.
Foothill Ranch-based Wet Seal maintained it was not legally liable for the wages. But it decided that paying the workers was “the right thing to do,” said Chief Executive Peter Whitford.
The Wet Seal case has been closely watched by California’s apparel industry as a test of the state law known as AB 633.
The law allows California garment workers who weren’t paid minimum wage or overtime to file claims against their employer, as well as against manufacturers or retailers that hired their employer.
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City Rejects Sale of Potential Wal-Mart Site
The West Covina City Council has fended off a Wal-Mart Stores Inc. foray into the San Gabriel Valley city, citing the giant retailer’s potentially negative effects on local businesses and workers. In a 3-2 vote, the council rejected selling 48 acres of the former BKK landfill site for $12.8 million to Eclipse Development Group.
The president of Eclipse had said he was in final talks with Wal-Mart and Home Depot Inc. to erect stores on the 200-acre site, where West Covina officials also hope to build an 18-hole golf course and sports complex.
A Wal-Mart spokesman said that although the company has had talks with Eclipse, no deal had been reached.
Councilman Roger Hernandez, who sponsored the motion to reject the sale, said he heard from many residents who worried that Wal-Mart would drive local retailers out of business and replace high-wage jobs with ones that pay less.
West Covina Mayor Steve Herfert voted in favor of selling the site.
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Man Accused of Movie Piracy Is Arrested
The FBI arrested an Illinois man on criminal charges in connection with bootlegged copies of “The Last Samurai” and other Oscar candidates that have turned up on the Internet.
Agents took Russell W. Sprague Sr. into custody in the Chicago suburb of Homewood on a federal complaint that charges him with copyright infringement. Sprague, 51, was scheduled to appear before a federal judge in Chicago Friday.
According to the complaint, he obtained marked videocassettes of the Oscar candidates from Carmine Caridi, a friend and a member of the Academy of Motion Picture Arts and Sciences.
The 69-year-old Caridi “was embarrassed to learn that his name was associated with the film that was being improperly distributed,” said his attorney, Richard Millard. Millard said Caridi never suspected Sprague would do anything illegal with the screeners.
The academy declined to issue a statement on the arrest.
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Another Former Disney Executive Joins Gap Inc.
Cynthia Harriss, who worked under Paul Pressler as head of the Disneyland Resort, is following her old boss to Gap Inc. to take charge of the retailer’s outlet division.
Harriss is the latest in a string of former Walt Disney Co. employees to join the nation’s largest specialty apparel company since Gap hired Pressler as chief executive in September 2002 to keep its turnaround on track.
The appointment of Harriss, who resigned in October from the Disney division that runs Disneyland and California Adventure, appears to round out Pressler’s executive team as he pushes forward with stabilizing the parent company of 4,200 Gap, Old Navy and Banana Republic stores.
Harriss, 51, succeeds Neal Goldberg, who resigned in November. She assumes her post Feb. 9.
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For a preview of this week’s business news, please see Monday’s Business section.
