Business today

PRODUCTIVITY ON THE RISE: Worker productivity grew briskly in the fourth quarter, the Labor Department reported. Productivity -- the amount of output per hour of work -- increased at an annual rate of 3.5 percent in the October-December quarter, up from a 1.1 rate in the previous quarter. The improvement came at a price, as businesses responded to slumping sales by sharply cutting their payrolls. That caused the total number of hours worked to drop at a faster pace than output, thus creating a rise in productivity.

ECKERD CLOSE TO SETTLEMENT: Eckerd Corp., the nation's fourth-largest drugstore chain, said it is close to settling for less than $10-million a 1998 civil suit alleging it had overcharged state Medicaid programs for prescriptions. The chain, which is headquartered in Largo, is negotiating with the U.S. Department of Justice and several state attorneys general. The suit alleges Eckerd billed the government for the full amount when it did not have enough pills on hand to fill a prescription entirely. Customers often did not return to pick up the rest of the pills. Eckerd already paid $1.7-million to settle criminal charges that sprang from the civil suit and $200,000 to settle with the state of Tennessee.

AT&T REVEALS FLAT-RATE PLAN: AT&T Corp. has launched a new long-distance calling plan that allows residential customers to call other AT&T subscribers and talk as long as they want for a flat monthly fee of $19.95. The calling plan, titled AT&T Unlimited, levies 7 cents per minute for calls to non-AT&T subscribers. Previously, the company's top long-distance plan charged $3.95 per month and 7 cents a minute for calls, regardless of the carrier. Many analysts called the step toward "all-rate" pricing a move in the right direction, but some said AT&T needs to go further. Drake Johnstone, telecom analyst with Davenport & Company, said AT&T would win a larger market share by removing the plan's "AT&T only" caveat, and extending the offer to all U.S. phone customers, regardless of their carrier.

DAIMLERCHRYSLER WARNING: DaimlerChrysler AG revealed a big cut in its dividend for 2001, and warned that it will fall short of its targets this year as it battles to turn around its ailing Chrysler unit. DaimlerChrysler said it would propose a dividend of 1.00 euro (86 cents) per share, down from 2.35 euros in 2000, to reflect its earnings performance. DaimlerChrysler said its 2002 goal for an adjusted operating profit of 5.5-billion euros to 6.5-billion euros ($4.7-billion to $5.6-billion) would not be met until "slightly later." The automaker also said the cost of reorganizing Chrysler, as well as its Freightliner truck unit, pushed it to a loss of 662-million euros ($589-million) last year, compared with a net profit of 7.89-billion euros in 2000.

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