Business & Finance
Unionized mechanics at US Airways Group rejected proposed wage cuts, while baggage handlers agreed to an 8 percent reduction. The bankrupt carrier is seeking the concessions to cut costs so it can qualify for full approval of a $900 million federal loan guarantee. The nation's sixth-largest airline already has tentative deals with its pilots, flight attendants, and other groups. Talks with the mechanics and communications workers are continuing.
Stockholders were left with next to nothing after telecommunications equipment maker Marconi PLC agreed to hand over control of its operations to creditors in a debt-for-equity swap. The company, once one of Britain's proudest, owes banks and bondholders $6.2 billion. It fell on hard times when its markets collapsed, causing more than 10,000 jobs to be cut, the sale of noncore businesses, and the loss of much of its senior executive staff via resignations. The value of its shares plunged from a high of $18.50 to pennies. Under the restructuring plan, Marconi PLC is to be liquidated and replaced by Marconi Corp., with the creditors owning a 99.5 percent stake.
A two-day boycott of troubled Daewoo Motor Co. by a major supplier of parts appeared likely to spread to other creditors, to whom South Korea's third-largest automaker owes $700 million. Industry analysts speculated that not even the impending relaunch of Daewoo by its new US parent, General Motors, might be enough to satisfy the vendors. They are demanding payment within two weeks of delivery rather than the current four to five weeks. All of Daewoo's assembly plants were closed, pending a proposed compromise that is due to be presented to the suppliers today. Daewoo said the idle plants were costing $12.5 million a day in lost output.