Business & Finance
WorldCom won a federal bankruptcy court's OK to pay $36 million in promised severance to more than 4,000 laid-off workers and to rescind $1.4 million in such payments that had been pledged to 19 former executives. Instead, all are to receive the same layoff package: up to 26 weeks of salary and benefits. Since its record bankruptcy filing in July, the telecommunications giant has announced plans to cut 17,000 jobs. A lawyer for the company said its plan would help restore morale among remaining workers.
Global Crossing's chairman pledged $25 million to employees who lost their retirement savings when the fiber-optic carrier's stock plunged prior to its bankruptcy filing last January. Gary Winnick made the offer while testifying before a House subcommittee. He also testified that he hadn't learned the company was in financial trouble until after he sold $123 million in stock in May 2001.
Electronic Data Systems (EDS) has become the target of an informal inquiry by the Securities and Exchange Commission, it acknowledged Tuesday. Federal regulators are looking into the computer-services company's $225 million purchase of forward contracts related to employee stock options, which led it to issue a third-quarter profit warning Sept. 18. EDS is based in Plano, Texas.
Only General Motors failed to report a jump in new-car and -truck sales among the Big Three automakers last month, despite industry-wide, incentive-laden packages such as rebates and zero-percent financing. But senior GM executives said they expected "some weakening" in September sales after strong performances in July and August. The world's largest automaker said sales fell in September by 12.7 percent, while those of DaimlerChrysler and Ford rose 18 percent and 1.5 percent, respectively, over the same month a year ago.
Hutchison Whampoa Ltd., the conglomerate based in Hong Kong, joined the growing list of high-profile companies calling off major bond issues. A spokesman said no new target date for its $1.5 billion offer would be set "until markets stabilize." Hutchison Whampoa, whose business interests include seaport operations, shipping, telecommunications, manufacturing, food processing and distribution, retailing, and real estate, wanted to use the proceeds of the bond issue to help refinance its debt.