Troubled Motorola took a new hit in its drive to return to profitability as its credit rating was lowered to two notches above junk status by Standard & Poor's. In announcing the move Friday from BBB+ to BBB, S&P also revised its outlook for the electronics giant from "stable" to "negative," the Financial Times reported. Motorola has reported five straight losses and expects a sixth in the current quarter but has said it will show a profit again by year's end. As part of a severe restructuring plan, the company has announced 50,000 layoffs and is expected to have closed or downsized 21 assembly plants by Dec. 31.
Without revealing terms, United Airlines pilots said they reached a tentative agreement that would involve making concessions to help the carrier return to financial health. The proposal is to be presented to the executive council of the Air Line Pilots Association as soon as today before being subjected to a ratification vote by rank-and-file members. The pilots pledged in late April to work with United on developing a recovery plan that would include reducing labor costs. Representatives of the carrier's flight attendants and mechanics unions, however, have balked at such concessions.
Bankrupt Kmart Corp. reported a $1.45 billion loss for the year's first quarter, factoring in the closing of 283 stores and 22,000 layoffs. But despite its second straight 10-figure quarterly deficit, industry analysts said the posting was typical of a company at this stage of a reorganization and that July-September results would be a truer indication of whether the discounter is making progress in its struggle to catch up with rivals Wal-Mart and Target Corp.