United Airlines will file for bankruptcy this fall as "the only way" to ensure its future unless operating costs can be cut "dramatically," chairman Jack Creighton said. The US's second-largest carrier must repay $875 million in loans by then from cash reserves of $2.7 billion. Meanwhile, however, it is losing more than $1 million a day on top of the $851 million in red ink reported for the first half of 2002 and a record $2.1 billion loss last year. United is seeking a guaranteed federal loan of $1.8 billion. But first it must show success in slashing costs through pay reductions, deals with its business partners, and other measures. To date, only the members of its pilots union have agreed to a tentative 10 percent pay cut.
AOL Time Warner disclosed $49 million in faulty accounting and widened an internal inquiry into its troubled America Online unit. The revelation came on Wednesday's deadline set by the Securities and Exchange Commission (SEC) for companies to certify the accuracy of their financial reports. Other highlights:
Insurer Conseco Inc. posted a $1.3 billion loss in the second quarter, said the SEC is investigating its accounting for early 2000, and warned it may file for bankruptcy.
Household International Inc., the US's second-largest consumer-finance company, said it overstated profits by $386 million over nine years.
Bristol-Myers Squibb said it may need to restate sales and earnings and revealed the SEC is intensifying a probe into its dealings with pharmaceutical wholesalers.
Gemstar-TV Guide International Inc. delayed release of second-quarter results, said it would reverse $20 million in 2001 sales, and hinted at a management shakeup.
WorldCom, Qwest Communications International, CMS Energy Corp., and Adelphia Communications all said they couldn't vouch for financial data until extensive internal reviews are complete. Enron executives said they could only certify results issued since the energy trader's December bankruptcy filing.
Agere Systems announced it will cut 4,000 jobs by year's end and sell its optical electronics division. A Lucent Technologies spinoff, Agere specializes in supplying integrated circuits for telecommunications systems, desktop computers, and other applications. It is based in Allentown, Pa.
Another 2,100 jobs will be cut by Fujitsu, the Japanese electronics group said. The layoffs, all to come in Japan, will be on top of 16,000 announced last year.