© St. Petersburg Times, published October 4, 2002
JOBLESS CLAIMS RISE: More Americans filed new claims for jobless benefits last week, a fresh sign of the difficulties workers and companies are confronting in a wobbly economy. The Labor Department said new applications for unemployment insurance climbed by a seasonally adjusted 5,000 to 417,000 for the workweek ended Sept. 28. The increase was slightly larger than analysts predicted and followed a drop of 18,000 in the prior week. For six weeks straight new claims for unemployment benefits have been above the 400,000 mark, a level associated with a sluggish job market.
FACTORY ORDERS FLAT: Orders to U.S. factories were flat in August as a drop in demand for costly manufactured goods was offset by a rise in orders for "nondurable" items, such as food and clothes, the Commerce Department said. Even though factory orders were unchanged after jumping 4.4 percent in July, August's report was better than the decline analysts had forecast. But a more forward-looking report released earlier this week on manufacturing suggested this sector of the economy is stalling.
CONSECO CEO RESIGNS: Gary Wendt resigned as chief executive of Conseco Inc., but said he would stay as chairman of the insurance and finance company's board as it continues restructuring talks that could lead to a bankruptcy filing. Negotiations with creditors to restructure more than $6-billion in debt will continue under Bill Shea, Conseco's president and chief operating officer, the company said. Analysts and investors expect Conseco to make a Chapter 11 prepackaged bankruptcy filing that could result in an agreement by creditors to forgive debt in exchange for equity in Conseco.
VERITAS CFO RESIGNS IN MBA FLAP: Veritas Software Corp., whose name is Latin for "truth," said Kenneth Lonchar resigned as chief financial officer after admitting he lied about having a master's degree in business administration from Stanford University. It's unclear whether Lonchar attended Stanford at all, or whether he received a degree elsewhere. "I regret this misstatement of my educational background," Lonchar said in a statement sent by the company, a maker of computer data-storage software. Chief executive Gary Bloom said he was confident second-quarter results certified by Lonchar were accurate. Veritas shares fell $2.77 to $11.73. They have fallen 74 percent this year.
DELTA TO FLY BIGGER JETS TO FLORIDA: Delta Air Lines said it's switching to bigger jetliners on winter flights between New York's JFK International Airport and Florida cities including Tampa, giving the carrier more seats on the routes than any of its rivals. Stronger customer demand prompted the change to 183-seat Boeing Co. 757s from 119-seat Boeing 737s, Delta said. The switch will raise available seats by more than 50 percent, Delta said.
JUSTICE ANTITRUST CHIEF LEAVING: Justice Department antitrust chief Charles A. James is stepping down after 14 months, ending a controversial stint and leaving the landmark Microsoft settlement and several other key cases in flux. James will become vice president and general counsel of ChevronTexaco Corp. on Dec. 9. He will leave his government post around Thanksgiving. Attorney General John Ashcroft did not immediately name a replacement for James. James will be best known for his decision late last year to settle the long-running Microsoft case, which was attacked by many antitrust scholars and Microsoft rivals as inadequate.
WORLDCOM PROBLEMS CAUSE INTERNET DELAYS: Some Internet users faced heavy delays reaching Web sites and accessing e-mail Thursday because of widespread technical troubles on WorldCom's long-haul network. The disruptions reached beyond WorldCom customers. Its backbones carry a large portion of Internet traffic in the United States. Also, many smaller service providers use WorldCom as the primary means to connect their customers to the Internet. WorldCom spokeswoman Jennifer Baker said the problems began about 8 a.m. She said service was restored by afternoon.
GUILTY PLEA ENTERED IN IDENTITY THEFTS: A restaurant busboy pleaded guilty to stealing the identities of numerous wealthy American celebrities and executives to loot their bank accounts. But he told the court he acted out of a sick compulsion, not greed. "I wish I could say that this was all about money, then I'd have a reason to explain why I've ruined my life," Abraham Abdallah said in Manhattan federal court. Abdallah was arrested in March 2001 on charges he used the Internet and a copy of Forbes magazine about "The 400 Richest People in America" to compile the Social Security numbers, addresses and birth dates of 217 CEOs, celebrities and tycoons. Prosecutors said he used the information to gain access to credit card accounts and attempted to transfer millions of dollars from such figures as Steven Spielberg, Warren Buffett and Oprah Winfrey. Prosecutors say he attempted to steal more than $22-million, but was largely unsuccessful.
EBAY ACQUIRES PAYPAL: EBay Inc., the world's largest Internet auctioneer, completed its $1.5-billion acquisition of electronics-payments company PayPal Inc. The purchase closed after PayPal shareholders approved the swap of each of their shares for 0.39 share of EBay common stock, EBay said. The acquisition will let EBay collect a greater percentage of sales from its transactions, while PayPal will have more access to the auctioneer's users, EBay said when it announced the acquisition in July. Customers will need to use fewer steps to make a payment on EBay via PayPal, the company said.
FAMILY DOLLAR FOUNDER TO RETIRE: Leon Levine, who built a Charlotte, N.C., store into the 4,615-store discount retailer Family Dollar, will retire as chairman in January. Levine, 65, built the company into one of the most profitable discount retailers, with stores in 41 states. Family Dollar broke into the Fortune 500 list this year. The discounter was No. 443, with nearly $3.7-billion in 2001 sales. Levine will depart with a retirement package worth $1.3-million.
GANNETT BUYS INTO JOB SITE: Gannett Co., owner of the nation's largest newspaper group, has acquired a one-third interest in the online and print job-search company CareerBuilder LLC. Financial terms were not revealed, but Gannett will have an equal share of CareerBuilder with Knight Ridder Inc. and Tribune Co. With Gannett's one-third interest, CareerBuilder will now deliver local help-wanted ads to a combined Sunday circulation of 15-million through about 130 newspapers, according to company officials.
MOTOROLA TO CUT MORE JOBS IN BOYNTON BEACH: After having 900 jobs eliminated since last year, Motorola's Boynton Beach operations will lose more than half of its remaining 800 workers. About 250 administrative and support personnel will be phased out over the next six months, Motorola spokesman Alan Buddendeck said. About 120 workers will be offered transfers to other Motorola facilities in Florida; another 50 will have a chance to relocate to Motorola facilities outside of Florida. The cuts in Boynton Beach, where Motorola designs cellular phones, are among the 7,000 jobs Motorola said in June it would eliminate.
MICROSOFT ISSUES PATCHES: Microsoft Corp. disclosed several security flaws, including "critical" problems in many versions of its Windows operating system. The flaws were detailed in four security bulletins, which urged users to download software patches from Microsoft's Web site. The flaws in most versions of Microsoft Windows occur in the help function and could let attackers gain control of the user's system.
EMC CUTTING MORE JOBS: Data storage giant EMC Corp. said it would lay off another 1,350 employees, or 7 percent of its work force, in its latest response to a technology spending slump that shows few signs of abating. The Hopkinton, Mass., company said its work force would be 17,000 people after the cuts. EMC has shed about 7,000 jobs to date. Its revenue is down 40 percent from its 2000 peak.
SPIRIT CIRCLES BACK ON LOAN REQUEST: Spirit Airlines has asked the federal government to reconsider its loan guarantee request -- the first time a carrier has asked for a second look. Miramar-based Spirit was turned down Aug. 14 for a $54-million guarantee on a $60-million loan, in a 2-to-1 vote. The Air Transportation Stabilization Board, in charge of administering the $10-billion loan guarantee program created after the terrorist attacks, said Spirit did not provide reasonable assurance that it would be able to repay the funds. Ned Homfeld, Spirit's chairman and founder, said the airline has has raised equity from shareholders and other sources since it was rejected.
The hotel operator said earnings for the quarter ended Sept. 6 rose 5 percent as tax breaks for the company's new synthetic fuel business offset a continued slump in hotel room demand. The results beat Wall Street expectations and the company raised its guidance for earnings for the year.