Thursday, February 27, 2003

Business digest

Compiled from wire reports

Ahold confirms probe of accounts in U.S.

AMSTERDAM, Netherlands - Shares in Ahold, the world's third largest food retailer, tumbled for a third consecutive day Wednesday as the company confirmed the U.S. Securities and Exchange Commission is investigating accounting irregularities at its U.S. subsidiary.

On Monday, Ahold revealed it had overstated earnings by at least $500 million in 2001 and 2002, forcing the resignation of its top two executives.

Ahold said it is cooperating with the SEC and the Amsterdam stock exchange, which said it is looking into reports of insider trading ahead of Monday's announcement.

Union has its own proposal for United

CHICAGO - United Airlines' flight attendants union proposed a new contract on Wednesday. Union leaders said it would lower the company's flight attendant costs by more than $1 billion over six years.

The proposal calls for significantly smaller concessions than those envisioned by United.

The Association of Flight Attendants said the cost cuts would be achieved through wage cuts and changes to work rules and scheduling.

Speculation renewed about bankruptcy

DALLAS - A local official at American Airlines' pilots union said the carrier could be forced into bankruptcy in late May by continuing heavy losses and dwindling cash reserves, touching off renewed debate over the financial health of the world's largest carrier. Jeff Sheets, a board member of the Allied Pilots Association, based his analysis on the company's daily cash burn rate of $5 million and on the assumption that American would not operate with less than $1 billion. At the end of the fourth quarter, the company said it had $1.9 billion in unrestricted cash.

Change is in the air for media ownership rules

WASHINGTON - A government overhaul of rules that limit ownership of newspapers and radio and television stations probably will be completed in May, Michael Powell, chairman of the Federal Communications Commission said Wednesday.

The agency is studying whether decades-old ownership restrictions are suitable for a market altered by satellite broadcasts, cable television and the Internet.

Auto maker generous with top executives

FRANKFURT - DaimlerChrysler AG more than doubled the pay of its 13 top executives last year, according to the auto giant's 2002 annual report filed Wednesday.

Compensation for the 13 management board members totaled 50.8 million euros ($54.7 million), up from 22 million euros in 2001. DaimlerChrysler didn't give a breakdown of individual executives' salaries.

Executive to leave troubled Fleming Cos.

DALLAS - Embattled grocery distributor Fleming Cos. said Wednesday its head of wholesale operations, E. Stephen Davis, 62, will retire. He'll be replaced by William May, senior vice president of operations.

The announcement came one day after Fleming's stock slid 38 percent on news that the company was under a formal investigation by the Securities and Exchange Commission, would cut 1,800 jobs and take a $290 million charge to ends its business with Kmart Corp., its biggest customer.

EU presses `open skies' for airline routes

BRUSSELS, Belgium - The European Union head office laid out its proposal Wednesday for a mandate to negotiate a single "open skies" agreement with the United States that could make it easier for European airlines to merge.

A November ruling by the European Court of Justice outlawed aspects of existing bilateral agreements between the United States and some EU countries, but the EU head office needs a mandate from the 15 EU countries to negotiate an EU-wide deal.

While some airlines are rooting for change, governments have been reluctant so far to surrender their rights in negotiating air deals.

Current deals for travel across the North Atlantic favor national airlines when assigning landing rights.

Closing gender gap, men go for pampering
Group seeks to bank funds for Brent Spence repairs
Shareholder criticizes Chiquita in letter
Internet sales tax looms closer
Ex-Kmart executives indicted
Drop in confidence 'significant'
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