Business & Finance
American Airlines needs to cut costs by $3 billion a year to increase competitiveness, chief executive Donald Carty said in comments published Saturday. Last month, the world's largest carrier announced it was cutting 7,000 jobs, retiring older planes, and rearranging flight schedules to save $1.1 billion annually.
Prospects for a machinists' strike against Boeing grew after negotiations with the giant aircraft builder collapsed. Union leaders were to conduct a second vote on Boeing's final contract offer, with the leadership recommending that members reject it and authorize a strike. Key sticking points were pensions and job security. Boeing has cut 30,000 jobs over the past year while reducing jet production by half.
Datek Online Holdings Corp. shareholders OK'd a merger of the online brokerage with discounter Ameritrade Holding Corp. Friday. The all-stock deal is valued at $1.3 billion and would create a combined company with annual revenues of $800 million. Ameritrade stockholders gave it their thumbs up the day before. Datek is based in Jersey City, N.J.; Ameritrade in Omaha, Neb.
A new assembly plant in the US "will become necessary" as soon as 2004, Toyota Motor Corp.'s president was quoted as saying. The Tokyo newspaper Nihon Keizai said that while no details were divulged, it was likely the new plant would build sport utility vehicles because the company's under-$25,000 Highlander model has sold well in the US. Toyota's current American plants are in California, Kentucky, and Indiana. A plant that builds only engines is scheduled to open next year in Alabama.
A government rescue appeared all but certain after troubled British Energy PLC announced late last week that it has run out of cash and risks insolvency, the Financial Times reported. Trading in the company's shares was suspended immediately, and Moody's and other credit-rating agencies downgraded its bonds to junk status. As recently as Aug. 14, British Energy said it had enough credit to meet all forseeable needs, among them $171.5 million in debt payments due next March. The utility, whose nuclear reactors generate 25 percent of Britain's electricity, is likely to win at least a short-term loan and legislation exempting it from costly emissions standards, the Financial Times said. It said the government would bail out the company, privatized in 1996, because bankruptcy would carry with it a threat to nuclear safety standards and possibly the expense of eventually dismantling seven reactors in England and one in Scotland.