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© St. Petersburg Times, published February 21, 2002
CPI EDGES UP: Higher prices for gasoline, medical care and some food items helped bump up consumer inflation in January. But prices for clothing, cars, lodging and computers fell, giving shoppers some bargains. The Consumer Price Index, a closely watched gauge of inflation, rose 0.2 percent last month after dipping 0.1 percent in December, the Labor Department said. Excluding energy and food prices, which can swing widely from month to month, the "core" rate of inflation increased 0.2 percent in January, up slightly from a 0.1 percent advance the month before. "Inflation remains completely under control," said Bill Cheney, chief economist at John Hancock Financial Services.
GE TO DETAIL FINANCES: Responding to concern that its accounting lacks transparency, General Electric plans to release more detailed financial reports. GE will list sales and operating profit for 26 businesses in the industrial and the finance units, spokesman David Frail said. It will include a breakdown of business at the GE Capital financing unit, which usually provides about 40 percent of GE's revenue and earnings. The information will be in GE's annual report to be released March 8. Investors are questioning accounting practices more since the collapse of Enron, spurring companies such as IBM and Tyco International to provide more information.
DAIMLERCHRYSLER REPORTS LOSS: DaimlerChrysler reported a $34-million loss in its fourth quarter and a $1.9-billion operating loss in 2001 for its Chrysler division, but said a turnaround plan prevented even bigger losses. The automaker said it would return to profitability this year. Mercedes-Benz, the company's mainstay, recorded 2001 operating profits of $2.6-billion, up 3 percent from 2000. DaimlerChrysler has been battered by the fallout of the Sept. 11 terror attacks and by brutal price-cutting in the crucial U.S. auto market. It also has incurred heavy charges to restructure Chrysler and its Freightliner truck division.
KELLSTROM FILES FOR BANKRUPTCY: Kellstrom Industries of Miramar, which overhauls and sells aircraft engines and engine parts, filed for bankruptcy and agreed to be bought by KIAC Inc., a company controlled by Inverness Management of Greenwich, Conn. Under the proposed sale, KIAC will pay $50-million, funded by Inverness Management and a loan from GE Capital Corp. Another $46-million will be paid over five years as Kellstrom's inventory is sold. The transaction is subject to bankruptcy court approval.
CMGI CHIEF TO STEP DOWN: David S. Wetherell, chairman and chief executive of CMGI Inc. who oversaw the dazzling climb and collapse of the Internet conglomerate's stock, will step down as CEO next month. George McMillan, CMGI's chief financial officer and treasurer, will replace Wetherell as CEO on March 1, the company said. Wetherell will remain chairman. CMGI, which runs such Internet firms as AltaVista Co., lost $5.45-billion in fiscal year 2001, which ended in July. It has undergone a comprehensive corporate restructuring, which included shedding thousands of jobs through layoffs and divestitures.
AT&T SUED OVER CONNECTIVITY FEE: AT&T Corp. has been accused of pocketing almost half the money it collects for a federally mandated residential long-distance service charge. A lawsuit filed in California claims AT&T bills residential customers 11.5 percent of their long-distance charges for the Universal Connectivity Charge, even though the Federal Communications Commission requires phone companies to contribute only 6.8 percent of long-distance revenue to the fund. AT&T said the claims are without merit. The complaint, which seeks class-action status on behalf of AT&T's 60-million residential customers, wants the company to be barred from charging more than what it contributes to the federal fund. The suit also seeks to reimburse millions of dollars in overcharges.
NORTHWEST SETTLES CASE ON DISABLED: Northwest Airlines agreed to pay $700,000 to settle a government complaint that the carrier failed to adequately assist disabled passengers. The airline can avoid as much as $550,000 of the civil penalty if it spends that amount on staffing, adding bars that help disabled travelers use bathrooms on Airbus SAS A330 planes and other steps to help such passengers, according to the order by a Department of Transportation administrative law judge. The $700,000 still is the largest penalty ever in a DOT disability case. Northwest doesn't admit or deny the alleged violations.
TREASURY AUCTION: The interest rate on the Treasury's four-week bills was unchanged at the government's weekly auction. The Treasury sold $23-billion of the bills at a discount rate of 1.72 percent, the same as the previous auction. The government received bids for the bills equal to 2.51 times the amount sold, down from 2.56 at the last auction.