In Business This Week
Edited by Monica Roman
HEADLINER
Brian Dyson: A Runner Takes Another Lap
After a 35-year career at Coca-Cola (KO
)--where he oversaw both the successful launch of Diet Coke and the fiasco known as New Coke--Brian Dyson used his retirement in the mid-1990s to indulge in his two passions: fiction writing and distance running. In 1996, Dyson penned Pepper in the Blood, a novel about a runner's bid for a comeback.
Now the Argentina-born triathlete is making a comeback of his own: On July 23, Coke CEO Douglas Daft asked the 65-year-old Dyson to fill a transitional role by serving as chief operating officer and vice-chairman for two years. By bringing back Dyson, Coke gains a veteran who can oversee day-to-day operations--freeing up Daft to focus on strategy and groom an eventual successor from a bench depleted by a wrenching restructuring.
Coke watchers are hoping that Dyson will provide a stabilizing influence at Coke, which is still reeling from a high-profile racial discrimination suit, a reorganization that slashed the headquarters staff by 20%, and a slowdown in global markets.
By Dean Foust
The Axman Cometh Back to Lucent
Lucent Technologies (LU
) is struggling to keep its head above water. On July 24, the telecom equipment maker reported a loss of $3.25 billion for its third fiscal quarter on sales that dropped 21%, from the year-earlier period, to $5.82 billion. To try to return to profitability sometime during its next fiscal year, which ends in September, 2002, the Murray Hill (N.J.)-based company is making another round of deep job cuts. It plans to eliminate 15,000 to 20,000 jobs under the latest restructuring plan, on top of the 19,000 cuts it has already made this year. After the headcount reductions, Lucent's workforce will total about 60,000. "The name of the game is to create a new, leaner, faster company," says Henry Schacht, chairman and chief executive officer. The company also said it would postpone by six months the spin-off of Agere Systems, its chipmaking unit.
Look Who's Calling on AT&T
In the wake of Comcast's unsolicited bid for AT&T's cable-television business on July 8, AT&T (T
) has opened talks with other potential buyers of the unit, including AOL Time Warner and Walt Disney, according to sources close to the companies. AT&T and AOL (AOL
) declined comment. Disney said on July 25 that it has been approached by "several entities" to buy the business and said it "is evaluating their proposals." All negotiations are preliminary at this point, and it's not clear that an alternative to Comcast's (CMCSK
) $55 billion bid will materialize. AT&T's board rejected Comcast's offer on July 18 because the proposal "did not reflect the full value" of the business.
Putting the Bricks over the Clicks
Wal-Mart (WMT
) and Kmart (KM
) are taking control of their dot-com destinies. The two retailing giants on July 23 both said they're buying up the shares that they don't already own of their respective e-commerce ventures. The moves are tantamount to admitting that you can't integrate a Web-shopping site with bricks-and-mortar stores unless everything's under one roof. And with hopes dashed for an initial public offering for Kmart's BlueLight, there's little reason to keep the dot-com unit separate from the rest of its operations, adds former BlueLight CEO Mark Goldstein. Wal-Mart's buyout is a done deal, but BlueLight's outside shareholders are expected to vote on the Kmart buyout by Aug. 1.
Payroll May Soon Go Plastic
The check's on the Visa card? Visa International and five banks have rolled out a new card that will allow businesses to pay employees by transferring money onto Visa cards. Workers can make purchases, just like they do with a traditional Visa card, or withdraw cash from an ATM. The new card is a bid by banks to capture some of the estimated $8 billion annually that goes to check-cashing outlets from the 12 million households without bank accounts. Although the card will be free, banks will charge ATM and other transaction fees.
The Feds Kick Ford's Tires--Again
Ford's (F
) cure for its Firestone tire woes is giving it more headaches. On July 24, Ford said it would stop replacing Firestones with Continental's General Ameri*550 tires after government regulators questioned the safety performance of the Continental tires. The National Highway Traffic Safety Administration is investigating all 2.7 million General Ameri*550s after finding a high rate of tread failures on the tires. The General Ameri*550's tread failure rate was 124 per million, compared with Firestone's rate of nine per million, NHTSA reported. Continental called the claim misleading and politically motivated.
Et Cetera...
-- Qualcomm axed its plan to spin off its wireless chip unit.
-- Dennis FitzSimons was named president and COO of The Tribune Co.
-- Martha Stewart will launch a Japanese magazine and sell goods in 226 Seiyu stores.
CLOSING BELL
No Sale
Checkpoint Systems' (CKP
) second-quarter earnings of 19 cents a share wasn't enough for Wall Street, which expected 2 cents more. The stock fell 19% to $12.10 on July 24 before rising 4% the next day. The maker of labeling systems blamed South America's woes and weak demand from the apparel industry--and said the second half will be tough.
CLOSING BELL
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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