Thursday, March 21, 2002

Business Digest




Credit raters blame Enron

        Officials of Wall Street credit-rating agencies told Congress Wednesday that Enron executives misled them about partnerships used to conceal massive debt. Senators criticized the agencies for not more closely questioning Enron's finances.

        Two of the officials said Enron's former chairman, Kenneth Lay, called them when the energy trading company was seeking a higher credit rating. One reported calls to his agency from former Treasury Secretary Robert Rubin, a top executive of Citigroup, one of the banks that lent hundreds of millions of dollars to Enron, and from Richard Grasso, chairman of the New York Stock Exchange.

        Nothing came of the calls from Mr. Rubin and Mr. Grasso, said John Diaz, a managing director of Moody's Investors Service, during testimony before the Senate Governmental Affairs Committee.
       

GE: No to CIT

        General Electric Co. said Wednesday it is not pursuing the acquisition of CIT Group Inc., the commercial lending division of Tyco International Ltd.

        Tyco purchased CIT in June for $9.2 billion, but is trying to sell the unit or spin it off to shareholders.
       

United talks stall

        Contract negotiations in Chicago between United Airlines and its 23,000 ramp and public-contact workers broke off Wednesday and the union asked federal mediators to formally declare an impasse, clearing the way for a possible strike.

        The International Association of Machinists and Aerospace Workers said compensation remains the key sticking point of talks that began 27 months ago.

        United said its latest offer, which was not disclosed, meets its commitment for industry-leading compensation.
       

WorldCom sued

        WorldCom Inc., under investigation for its accounting practices, was sued by two employees who say the company hid the problems and caused the value of their retirement funds to drop. Stephen Vivien and Edward Prince said WorldCom Chief Executive Officer Bernard Ebbers and Chief Financial Officer Scott Sullivan, acting as trustees for their 401(k) plans, continued to invest employee funds in WorldCom stock when they knew about the accounting problems.
       

Music firm scales down

        The British EMI Group Plc will eliminate 1,800 jobs, or almost a fifth of the workforce, and cut its dividend in half as the music company of Robbie Williams and the Beatles tries to return to profit.

        Job cuts, asset writedowns and breaking EMI's contract with singer Mariah Carey will cost 240 million pounds ($341 million) in the year ending March 31, said Alain Levy, head of the recorded music unit, the world's third-biggest.

        Mr. Levy has dropped 400 artists, about a quarter of EMI's total, and cut jobs in a bid to save money.
       

Jet market assessed

        Bombardier Inc. Chief Executive Robert Brown said in Toronto Wednesday that he doesn't expect his company to win jetliner contracts in 2002 as large as the $1.7 billion orders it garnered last year from Northwest Airlines Corp. and Air Wisconsin Airlines Corp. Instead, Mr. Brown told financial analysts that the world's No. 3 airplane maker will try to convince existing clients to exercise options to buy more Bombardier planes.

       



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Argosy pulls in less money for February
Firm works to maintain edge
New-home pace rose last month
Andersen pleads not guilty
Andersen employees stand by their firm
Compaq investors approve HP deal
Kmart can keep on selling Martha and Mickey items
Krispy Kreme's fresh idea: doughnut-mobile
Tristate Summary
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