Saturday, June 16, 2001

Business Digest

Nortel drops jobs, dividend

        Nortel Networks is cutting 10,000 more jobs and eliminating its stock dividend to combat an expected second-quarter loss of $19.2 billion brought on by a slowdown in spending on telecommunications.

        The cuts disclosed Friday come in addition to 20,000 jobs Nortel has already slashed since the start of this year. Combined, the cuts amount to nearly a third of Nortel's work force, which numbered 94,500 at the start of this year.

Tyson can't back out

        A Delaware Chancery Court judge on Friday ruled that Tyson Foods Inc. cannot back out of its $4.7 billion acquisition of South Dakota meatpacker IBP Inc.

        Vice Chancellor Leo E. Strine Jr. said he was not persuaded by Tyson's claims that it was kept in the dark about financial problems at an IBP subsidiary. He said Tyson “improperly terminated” its agreement with IBP and must go through with the deal.

Northwest drops bid

        Mesaba Holdings Inc. shares fell 20 percent Friday after Northwest Airlines withdrew a $190 million bid to buy the rest of the commuter carrier as labor costs rise at regional airlines. Mesaba declined $2.10 to $8.50, its lowest close since May 1997.

        The move by Northwest, which owns 28 percent of Mesaba, came hours after pilots at Delta's Comair unit reached a tentative deal to end a walkout. “Comair may have reminded Northwest that there are drawbacks to wholly owning a regional partner,” said UBS Warburg analyst Jamie Baker.

McD's lowers estimate

        McDonald's Corp.'s second-quarter profit will fall more than expected because of declining currencies, including the euro; higher costs, and concern about “mad cow” disease in Europe.

        Earnings will be 34 cents to 35 cents a share, the restaurant chain said Friday. That's less than the 38-cent average estimate of analysts surveyed by First Call/Thomson Financial.

Vlasic bankruptcy plan

        Vlasic Foods International Inc., the biggest U.S. pickle maker, Friday filed a bankruptcy plan that won't fully pay unsecured creditors and provides no payment to shareholders.

        The Cherry Hill, N.J.-based food company's plan would distribute proceeds from the $370 million sale of most of its assets to the buyout firm Hicks, Muse Tate & Furst Inc.

        The sale to Hicks, Muse's Pinnacle Foods unit, completed in May, included Vlasic's pickle business, Open Pit barbecue sauce brands and its North American frozen food business. Swanson, Hungry Man, Great Starts and Funfeast were among other brands included in the sale.

Toyota makes hybrid van

        Toyota Motor Corp. unveiled Friday a minivan for the Japanese market that is powered by a combination gasoline engine and electric motor.

        It has no plans yet to export the hybrid Estima minivan, which gets 42 miles per gallon in tests.


Firstar Center sold to ex-owner
P&G will trim fat substitute
Comair vote to begin Tuesday
Teens can pick and choose among jobs
Find-me software gets nibble
Frog farm seen as gold mine
GE, Honeywell refuse to meet Europe's terms
Kraft brought back good ol' days of IPOs
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