Business and Finance
American Airlines warned its future "cannot be assured" without significant cuts in labor costs, and said it was closing reservation centers in Norfolk, Va., and Las Vegas that employ 900 people. The US's largest carrier is seeking $1.8 billion in pay givebacks and other concessions from its unionized workers. American lost a record $3.5 billion last year and analysts say without dramatic action, it may follow other big carriers into bankruptcy.
Vodafone, the world's largest cellphone operator, and US private equity partnership Ripplewood Holdings are discussing the sale of Japan Telecom, The Wall Street Journal and Financial Times reported. The Journal put the likely price at more than $2.5 billion. But the deal, if completed, would cover only Japan Telecom's land-line operations, leaving Vodafone with J-Phone, a fast-growing cellphone subsidiary. Vodafone acquired both, in stages, for a combined $11.5 billion. New York-based Ripplewood already has a portfolio of other investments in Japan, although the telecom deal could be the largest there by a foreign equity fund, the Financial Times said.
El Paso Corp. plans to sell $2.9 billion in non-core assets this year, including the bulk of its petroleum operations, the troubled energy producer and marketer said. The Houston-based company also announced a cut in its annual dividend from 87 cents to 16 cents.
Spiegel Inc., the catalog retailer, acknowledged in a filing with the Securities and Exchange Commission Tuesday that its auditor doubts it can stay in business. Spiegel is late in reporting 2001 financial results, is in default on $1.2 billion in debt, and may have to dissolve credit card subsidiary First Consumer National Bank if it can't find a buyer by April. The company, based in Downers Grove, Ill., sells clothing and home furnishings.
Toyota chose a San Antonio, Texas, site for its sixth assembly plant in North America. The $800 million facility will generate 2,000 jobs and produce 150,000 Tundra pickup trucks by 2006, the company said.