Business Today

PRODUCTIVITY, FACTORY ORDERS RISE: Companies' productivity grew briskly in summer and orders to factories rose in October for the first time in three months, suggesting the struggling economy will avoid falling into a new recession. Productivity, the output per hour of work, grew at a sizzling annual rate of 5.1 percent in the third quarter, the Labor Department said. The performance was better than the 4 percent growth rate estimated a month ago and was a rebound from 1.7 percent in the second quarter. The Commerce Department said factory orders rose 1.5 percent in October after falling in August and September. Big-ticket goods, like cars and household appliances, posted a 2.4 percent increase and "nondurable" goods, such as clothes and food, rose 0.6 percent.

AEROSONIC NAMES PRESIDENT: Aerosonic Corp. of Clearwater named David Baldini president, replacing J. Mervyn Nabors, who will remain chairman. Aerosonic makes aircraft instruments. Baldini was president of the company's avionics specialties division in Charlottesville, Va.

BIAS POLICY REWORDED: Cracker Barrel directors unanimously voted to add "sexual orientation" to the restaurant chain's anti-discrimination policy. Spokeswoman Julie Davis said the change would have no noticeable effect because the company has a policy prohibiting all discrimination in the workplace. Gay groups began targeting Cracker Barrel in the early 1990s after a memo was leaked indicating employees should "demonstrate normal heterosexual values." Davis says the unauthorized memo was rescinded and the statements repudiated. The company also is battling a $100-million federal lawsuit filed in Rome, Ga., accusing it of widespread racism. Cracker Barrel has 463 restaurants and gift shops in 41 states.

AMERICAN TO CUT MORE JOBS: American Airlines will eliminate 1,100 flight attendant jobs by February as it reduces first-quarter capacity to cope with sliding demand for travel. American will offer voluntary options such as job sharing and leaves of absences to reduce the flight attendant numbers. The reductions come on top of job cuts announced in August, when the world's largest airline said it would lay off 7,000 employees. American is slashing $4-billion in annual costs to become more competitive with low-fare rivals such as Southwest Airlines. Unlike many of its rivals, American has not requested federal loan guarantees.

FORMER EL PASO TRADER INDICTED: Former El Paso Corp. trader Todd Geiger has been indicted on charges he reported dozens of false transactions to a publication widely used to calculate the index price of natural gas. Geiger was accused of reporting 48 fake natural gas trades to the monthly publication Inside FERC Gas Market Report. The fake trades, reported in November 2001, allegedly affected the gas market the next month. The energy company said last month it is getting out of the trading business.

BURGER KING OPERATOR FILES FOR BANKRUPTCY: The second-largest U.S. operator of Burger King restaurants filed for Chapter 11 bankruptcy protection after increased competition from McDonald's and Wendy's led to a shortage of cash to pay off debt from acquisitions. AmeriKing had a $22.9-million loss in the first half of this year on $177-million in sales. The company owns 329 Burger King outlets in 12 states, not including Florida. Executives at Miami-based Burger King said the company will work with AmeriKing to restructure and is confident the franchisee can improve its operations.

REYNOLDS CUTTING JOBS: R.J. Reynolds Tobacco Holdings will cut some 635 jobs, or 8 percent of its work force, and sell two non-tobacco businesses as it attempts to reduce costs and help the company compete better amid growing competition from lower-price cigarette brands. The maker of Winston, Salem and Camel cigarettes also said earnings for 2002 would be at the lower end of its most recent projection for the year and below Wall Street's consensus projection. The company estimates that cutting its work force will save about $50-million next year and $75-million in 2004.

CIGNA SETTLES FRAUD CASE: Cigna Corp. agreed to pay $24.5-million to resolve allegations that it filed fraudulent Medicare reports in the largest settlement to date for one hospital, the Justice Department said. The health insurer said the case involved cost reports from 1988 to 1998 filed by Lovelace Health Systems Inc. for its 225-bed hospital in New Mexico. Prosecutors say Lovelace shifted costs for managed-care patients in its health plan to Medicare, the government health-insurance program for the elderly and disabled, and set aside money in case the practice was discovered. Cigna boosted reserves by $9-million in the third quarter to help cover the expected costs of the settlement. Cigna agreed in July to sell Lovelace to Ardent Health Services.

IBM ADDRESSES PENSION GAP: IBM Corp. will pay $3-billion this year instead of $4.5-billion over three years to fund its pension plan. IBM said in October that the funding gap was $4.5-billion and that it would pay $1.5-billion a year to close it. It said the shortfall has narrowed because of stock market gains since October. IBM said its payment won't reduce 2003 per-share profit.

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