Business & Finance
American Airlines' parent company reported a $3.5 billion loss for its 2002 business year, an industry record. AMR Corp. also lost $529 million in the fourth quarter of last year, which chief executive Don Carty said underscored the need for quick cuts in labor costs. Low-fare rival Southwest Airlines, meanwhile, posted a fourth-quarter profit, the only US carrier to do so. Still, its $42.4 million net income was down 33 percent from the previous year.
Troubled forest products giant Georgia-Pacific Corp. doubled a planned issue of so-called junk bonds to $1 billion, in the largest such sale by a US company since May, the financial reporting service Bloomberg.com said. Citing costly asbestos litigation, Georgia-Pacific posted a larger-than-expected fourth-quarter loss of $234 million Tuesday, prompting Moody's Investor Service to announce a deeper cut in the company's already low debt rating.
Roche Holding, a leading maker of pharmaceuticals, said it learned Tuesday that larger Swiss rival Novartis now owns just under one-third of its stock - through $2.1 billion in purchases of shares over the past year. The 11.4 percent increase in investment was revealed in Novartis's 2002 earnings report. Bloomberg.com said the move positions Novartis for an eventual merger with Roche, although the latter's founding family has indicated it wishes to keep the company independent. A Novartis-Roche merger would create the industry's second-largest drugmaker behind Pfizer of the US. Under Swiss law, a company must offer merger terms once its crosses the 33.3 threshold of ownership in a rival.
Without hinting where, Mitsubishi Motors said it is considering building a second assembly plant "in North America" to help facilitate increased production. The company already has a plant in Normal, Ill., but exports from Japan most of the cars it sells in the US, Canada, and Mexico. Mitsubishi, Japan's fourth-largest automaker, has set a sales goal of 400,000 vehicles in North America this year - an 11 percent increase over 2002.
Due to shareholder complaints of excessive compensation - and a related lawsuit - Siebel Systems founder and chief executive Tom Siebel gave up four years' worth of stock- option awards, the San Mateo, Calif., software company said. In a filing with the Securities and Exchange Commission, the firm said he relinquished options valued at $56.1 million to avoid further undermining company shares, which fell by 74 percent last year.