Business today

UNITED SLASHES SOME FARES: United Airlines cut some fares sharply for flights involving its two biggest hub markets in hopes of attracting more business travelers. United said it cut coach fares with no advance purchase for direct flights to and from Chicago and Denver, as well as markets reached through connecting service, by as much as 40 percent. Fares on tickets purchased seven days in advance for the same flights are being cut as much as 70 percent. Analysts say American and Continental largely matched the lower business fares.

STATES SETTLE WITH PFIZER: Pfizer Inc. reached a $6-million settlement with Florida and 18 other states that requires the drugmaker to change how it promotes its best-selling antibiotic Zithromax. The states had accused Pfizer of misrepresenting the performance of the drug, which is used primarily to treat ear infections in children and respiratory ailments in adults. Pfizer admitted no guilt in the settlement. The company will pay $2-million toward public service announcements through March 2005 and also provide $4-million to cover the cost of the states' investigations.

ISG BIDS FOR BETHLEHEM STEEL: International Steel Group offered to buy Bethlehem Steel's steel mills and related assets and bring the once-mighty industrial giant out of bankruptcy. ISG valued the deal at $1.5-billion and said it expects negotiations for the purchase to be completed within 10 days. The offer would then have to be accepted by the Bethlehem Steel board, and must be approved by U.S. Bankruptcy Court.

GATEWAY PLANS CHANGES: Gateway Inc. will hire more executives and may close stores as it tries to return to profit after losses in seven of the past eight quarters. Gateway is adding executives to help operations chief Joseph Formichelli and chief financial officer Roderick Sherwood III reduce costs, spokesman Brad Shaw said. He declined to identify the new executives.

JOB-CUT ANNOUNCEMENTS DROP IN DECEMBER: The number of job cuts announced by U.S. corporations in December dropped 41 percent from November, according to a report by Chicago outplacement firm Challenger, Gray & Christmas. Announced job cuts totaled 92,917, compared with 157,508 in November. The telecommunications sector continued to have the highest number of job-cut announcements, followed by transportation, government and nonprofit. For the year, job-cut announcements totaled 1,466,823, down 25 percent from 2001.

TENET ADOPTS NEW MEDICARE PAYMENT GUIDELINES: Tenet Healthcare Corp., facing a federal inquiry into its Medicare billing practices, said it will voluntarily adopt new guidelines for determining supplemental Medicare payments. The new procedures are expected to reduce Tenet's reliance on the so-called "outlier" payments to $8-million per month from $65-million per month, the company said. Outlier payments are supplemental Medicare reimbursements for the sickest patients. Tenet is being audited by federal authorities over its aggressive pricing, which has led to above-average outlier payments.

SCRUSHY BACK AS HEALTHSOUTH CEO: HealthSouth Corp. unveiled a second management shake-up in less than four months, with founder Richard Scrushy returning to the CEO position he held before a collapse in stock prices. Bill Owens, who replaced Scrushy as chief executive, will return to his old job as chief financial officer. CFO Tad McVay will work as treasurer. The realignment will give HealthSouth "stronger and more effective leadership in the finance area in response to today's demanding environment," Scrushy said. Scrushy said more announcements would be made soon about new corporate governance plans.

USA INTERACTIVE SHARES DROP: Shares of USA Interactive, the Internet-commerce company controlled by Barry Diller, dropped as much as 14 percent after unit Hotels.com said its fourth-quarter sales and profit missed estimates. Shares slid $1.99 to close at $22.23 after dropping as low as $20.93. They had fallen 10 percent in the past year. Seeking to reassure investors, USA Interactive said its 2002 financial results were "generally in line" with a company estimate. USA Interactive includes St. Petersburg's Home Shopping Network.

JUDGE PUSHES FOR COOPERATION IN IMCLONE CASE: Frustrated by their inaction, a federal judge threatened to force ImClone founder Samuel Waksal to go to trial unless he and his lawyers provide personal information necessary to sentence him on his securities fraud plea. Manhattan U.S. District Judge William H. Pauley said he would schedule a trial on other charges to which Waksal did not enter a plea if he doesn't see speedy progress toward a sentencing that he set for March 17. Waksal pleaded guilty in October to securities fraud, bank fraud, conspiracy to obstruct justice, obstruction of justice and perjury in an insider trading scandal.

GOODBYE MARTHA, HELLO CELINE: Chrysler won't extend a one-year advertising agreement with Martha Stewart Living Omnimedia Inc. and will switch to a campaign with singer Celine Dion. Jim Schroer, Chrylser executive vice president for marketing, said the contract with Martha Stewart concludes at the end of March and the automaker will exit it "as fast as possible." He said the deal with the media company "was not consistent with where we wanted to take the Chrysler brand," but said the decision to let the contract run out wasn't related to the investigation of its chief executive Martha Stewart over her sale of ImClone Systems stock.

TREASURY AUCTION: Interest rates on short-term Treasury securities were mixed in Monday's auction. The Treasury Department sold $15-billion in three-month bills at a discount rate of 1.185 percent, unchanged from last week. An additional $15-billion was sold in six-month bills at a rate of 1.240 percent, up from 1.220 percent. The new discount rates understate the actual return to investors -- 1.207 percent for three-month bills and 1.265 percent for six-month bills. In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills dipped to 1.38 percent last week from 1.41 percent the previous week.

INTERNATIONAL PLAZA REFINANCED: Taubman Centers Inc. has secured permanent financing for International Plaza, the upscale mall it operates in Tampa. Taubman, which owns 29 percent of the Tampa center, paid off the $188-million balance on a construction loan with a $192-million fixed-rate term loan at a lower interest rate. Taubman's portion of the construction loan was $67.5-million.

HSN LAYS OFF 35: Home Shopping Network has laid off about 35 employees in a cost-cutting measure that affected workers across several departments. The St. Petersburg TV shopping network also said it will close its outlet store at 8521 W. Hillsborough Ave. in Tampa. HSN said more efficient procurement is helping reduce its use of outlet stores to dispose of unsold merchandise.

TAMPA HYATT CHANGES NAME: After a $10-million renovation, the Hyatt Regency Westshore is changing its name to the Grand Hyatt Tampa Bay. The Tampa property becomes the 17th of the 202 Hyatts worldwide to be called a Grand Hyatt. Hyatt uses the "grand" name for its hotels that offer higher levels of service, a different guest room design and added business services. Rated with four diamonds by AAA, the hotel recently lost its fourth star in the Mobil Travel Guide.

WALTER NAMES UNIT PRESIDENT: Walter Industries Inc. of Tampa named Brad Kitterman president of its U.S. Pipe & Foundry unit, which makes pipe for use by municipal water systems. Kitterman, 43, previously headed the North American utilities division at Schlumberger Ltd., a publicly traded New York company that provides services to the petroleum industry. He replaces interim president Tony Hines.

CRYO-CELL MAKES BOARD CHANGES: Cryo-Cell International Inc. said Ronald B. Richard has resigned as a director of the Clearwater stem cell storage company. Richard remains chief executive and director of a Cryo-Cell subsidiary, Stem Cell Preservation Technologies Inc. His father, Dan Richard, is founder and board member of Cryo-Cell. Also, Mercedes Walton, chairwoman of Cryo-Cell's board, has resigned from the Stem Cell Technologies board.

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