Business Digest

CITIGROUP OUSTS MANAGER: Under scrutiny for its role in a series of financial scandals, Citigroup has replaced the head of its corporate and investment banking operations. Charles Prince, a former general counsel who has been Citigroup's chief operating officer, replaced Michael Carpenter as chairman and chief executive of the company's global corporate and investment bank. The investment bank, known as Salomon Smith Barney, is under investigation for its role in financing Enron, WorldCom and other troubled companies.

WALTER MINE-RELATED AT $50-MILLION: Losses associated with Walter Industries' fatal coal-mine accident in Brookwood, Ala., last September continue to mount. Through June 30, repair costs and lost revenue totaled about $50.7-million, company officials said. The Tampa company expects its insurer to cover all but $10.8-million of the losses. Walter wrote off those deductibles and other expenses last year. Though again operational, the mine continues to suffer productivity problems. "There's a ramping-up period," senior vice president Joe Troy said. "You don't just flip on a switch and you're automatically mining the same amount as you did before."

JABIL TO ADD QUANTUM WORKERS: Data storage company Quantum Corp. has cut 1,100 workers, or a third of its work force, in an effort to return to profitability. Of those, 900 are at the California company's manufacturing plant in Malaysia. Last week, Quantum announced an outsourcing agreement with Jabil Circuit of St. Petersburg, and Jabil is expected to rehire most of those 900 workers.

JETBLUE TO BUY LIVETV: JetBlue Airways has agreed to acquire joint venture LiveTV LLC, which provides in-flight TV programming, from Harris Corp. for $41-million in cash. LiveTV has supplied satellite TV programming on the low-cost airline's flights since April 2000. LiveTV will become an independent unit of the airline and will be managed by current executives.

UNITED HIRES ADVISER: United Airlines has hired a New York financial consulting company that helped another foundering airline through its bankruptcy filing. The carrier has retained Rothschild Inc. as it considers its options, one of which is bankruptcy. Rothschild advised Trans World Airlines on its Chapter 11 filing last year, which was a precursor to its buyout by American Airlines.

WORLDCOM PRESSED FOR BENEFITS: Laid-off WorldCom employees demand that the bankrupt telecom giant pay tens of millions of dollars in severance and health benefits that were promised. With legal help funded by the AFL-CIO, some 40 ex-WorldCom workers across the nation asked a bankruptcy court to require payments to at least 4,000 employees.

NASDAQ APPROVES Z-TEL MOVE: Z-Tel Technologies Inc. says its shares will be transferred today to the Nasdaq SmallCap Market from the Nasdaq National Market. Nasdaq determined in June that the Tampa telephone company no longer met its trading requirements. But it agreed to move Z-Tel shares to its smallcap market after the company's share price and market capitalization increased to minimum levels. Z-Tel also said board member Mark Feighner has resigned. Feighner, former president of GTE Wireless, had been a Z-Tel director since 2000.

ANNOUNCEMENT GETS STARTLING RESPONSE: Lawyers for Latham & Watkins in New York got an unexpected response to a news release last week saying they hired lawyer Frode Jensen. Pillsbury Winthrop of Stamford, Conn., Jensen's previous firm, released a statement the next day saying his departure "comes on the heels of sexual harassment allegations involving Mr. Jensen and a significant decline in his productivity" and "is probably in the best interests of all concerned." Lawyers and employment law experts were stunned by the Pillsbury statement. Jensen declined to comment.

PC SALES FORECAST REDUCED: Citing growing fears of the effect of a prolonged economic malaise, the market research company International Data Corp. is scaling back its forecast on global personal computer sales for this year and next. Total worldwide PC shipments are expected to be 135.5-million in 2002, an increase of 1.1 percent, and to grow 8.4 percent in 2003. In June, International Data forecast growth of 4.7 percent in 2002 and 11.1 percent in 2003.

AOL OUTLOOK CUT: AOL Time Warner said 2002 advertising sales and profit excluding some costs at its America Online division will miss forecasts because of a persistent Internet ad slump. The unit's ad sales will fall as much as 40 percent to $1.62-billion. AOL Time Warner also said it will meet overall 2002 revenue and profit forecasts. CEO Richard Parsons has cut estimates for the unit twice in two months. The stock has fallen 59 percent in the past year.

TREASURY AUCTION: Interest rates on short-term Treasury securities rose in Monday's auction. The Treasury Department sold $16-billion in three-month bills at a discount rate of 1.645 percent, up from 1.610 percent. Another $13-billion was sold in six-month bills at a rate of 1.635 percent, up from 1.580 percent. The new discount rates understate the actual return to investors -- 1.676 percent for three-month bills and 1.672 percent for six-month bills. The Federal Reserve said the average yield for one-year constant maturity Treasury bills fell to 1.70 percent last week from 1.80 percent.

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