Business digest

CHIPMAKERS UNDER SCRUTINY: Antitrust officials are investigating whether semiconductor manufacturers manipulated prices in the $11.9-billion memory-chip market. A 53 percent drop in spot prices of so-called dynamic random-access memory chips, to $2.03 in early May from $4.36 in early March, led some investors to speculate that semiconductormakers may have sold products at below-market prices to try to drive out smaller rivals. Regulators have subpoenaed at least three of the world's largest chipmakers: Micron Technology Inc., Samsung Electronics Co. and Infineon Technologies AG, which control 60 percent of sales.

GOODRICH TO BUY TRW UNIT: Global aerospace partsmaker Goodrich Corp. of Charlotte, N.C., said it will buy TRW Inc.'s aeronautical systems businesses for $1.5-billion in cash. TRW Aeronautical Systems, of Cleveland, Ohio, had 2001 revenue of $1.1-billion and earnings before taxes and special items of $180-million. Goodrich's aerospace sales were $4.2-billion in 2001. The transaction was approved by the boards of directors of both companies and is expected to be permanently financed by a combination of debt and equity-linked securities. The deal is subject to regulatory approval.

FPL NARROWS CHOICES: Florida Power & Light Co. of Juno Beach said it named Florida Power Corp. of St. Petersburg and El Paso Corp. of Houston to a short list of bidders to provide generating capacity to FPL. The short list is part of a rebidding that FPL started after its initial choice in January for its own self-build option angered independent power producers, which have long argued that the evaluation of bids should be performed by an independent third party. Florida Power, which submitted a bid to provide only 50 megawatts of the more than 1,700 megawatts sought by FPL, irked independent power companies this month when it also chose its own self-build option after rejecting outside bids to provide about 500 megawatts of capacity. The Florida Public Service Commission is mulling a possible revision of regulations governing the construction of generating capacity.

KMART CHANGES WEB SITE NAME: Kmart Corp. is changing the name of its unprofitable Web site from BlueLight.com to kmart.com. The site has a slightly different look and highlights the bankrupt retailer's new "Stuff of Life" advertising campaign. It is designed to help add continuity to Kmart's marketing efforts. Analysts say the change is a welcome signal that the unsuccessful BlueLight marketing campaign may be over.

IMCLONE TOLD SEC CONSIDERING ACTION: ImClone Systems Inc. received a formal notice that the Securities and Exchange Commission is considering recommending charges against the company over its handling of a rejection notice from the Food and Drug Administration. The document, called a Wells Notice, gives the company or individual a chance to explain its actions before the SEC makes its final decision. ImClone's former chief executive Samuel Waksal, who was arrested last week on insider trading charges, told investors the FDA's decision stemmed from concerns about lack of documentation. Congressional investigators last week found the deficiencies were more serious, including flawed research. ImClone said in a statement it would cooperate with the investigation.

UNITED PILOTS UNION TO RECOMMEND PAY CUT: United Airlines pilots union leaders have agreed to recommend members take 10 percent pay cuts to help the parent UAL Corp. reduce costs and secure new financing. United's nearly 9,500 pilots now will vote on the proposal. The agreement, which provides stock options to compensate for the temporary wage cuts, would reduce the airline's costs by $560-million over three years, a union spokesman said.

CONCESSIONS ELUDE US AIRWAYS: Labor officials say US Airways and several of its largest unions are not ready to settle on concessions from employees even though they must agree quickly on cuts to boost the carrier's chances of getting a federal loan guarantee. US Airways wants its unions to agree to cuts that would save $950-million a year in labor costs because the government expects to see the airline will successfully restructure if it receives a guarantee. US Airways applied last week for a $900-million guarantee for $1-billion in loans. Federal officials likely will reject the application if US Airways cannot prove it will cut costs. US Airways said it needs the loan guarantee to survive. The airline also is negotiating with competitors on a route-expansion and revenue-sharing partnership that would be critical to its recovery.

BRITAIN OKAYS CRUISE MERGER: A planned merger that would reshape the cruise ship industry is closer to completion. Britain's competition regulators approved the union of Royal Caribbean Cruises and smaller rival P&O Princess Cruises. Britain is the second country after Germany to approve the deal, which was put on hold in February after Carnival Corp.'s hostile bid for Princess caused Princess shareholders to revolt. U.S. regulators and European Union antitrust officials are assessing the competing offers.

CHEVRONTEXACO BOOSTS SAVINGS ESTIMATE: ChevronTexaco Corp. said it expects to save $2.2-billion from the merger of Chevron Corp. and Texaco Inc. by April, up $400-million, or 22 percent, from earlier estimates. The San Francisco oil company expects to meet its previous goal of cutting $1.8-billion in costs by October, six months ahead of schedule. The company was formed in October through the $45.8-billion merger of Chevron and Texaco, then the No. 2 and No. 3 U.S. oil companies.

DYNEGY LOSING CFO, 340 JOBS: Dynegy Inc. chief financial officer Rob Doty has stepped down and the company also said it is cutting 340 jobs. The moves come less than a month after the chief executive resigned as Dynegy's stock price plummeted amid questions surrounding energy trades. Dynegy said the changes will allow it go improve its financial position, strengthen its balance sheet and improve its credit profile. The layoffs also are part of the company's plan to restructure.

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