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"A nation that routinely denigrates its public servants, and makes public service as unpleasant as possible, may soon find itself with the kind of government it has tacitly asked for."

--Alan S. Blinder, resigning as the Fed's vice-chairmanEdited by Ira Sager, with Oluwabunmi ShabiReturn to top


HOW MANY BOX TOPS WILL you have to mail in to get your next Olds? That's what wags are wondering now that General Motors has announced its first outside hires to be brand managers for GM vehicles. Michael Mc-Enaney, 38, who headed Ralcorp Holdings' $350 million cereal and snack business, will go to work on Oldsmobile's Bravada sport utility and Silhouette minivan. In his old job, McEnaney was responsible for such brands as Chex cereal and once oversaw Tender Vittles and Purina Cat Chow. Meanwhile, the GMC truck division has hired Jeff Cohen, 36, from Nabisco, where he moved the cookie maker into Snackwell's breakfast bars. Cohen will manage the Jimmy sport utility.

The auto maker hopes the new managers--four more are to be named shortly--will inject a fresh perspective into GM's stuffy marketing. It's all part of a new strategy to market each GM car or truck individually, instead of positioning them en masse by division, like Olds or Chevy.

McEnaney will have to move fast. He's in charge of Silhouette, which was featured in the movie Get Shorty, where it earned the tongue-in-cheek sobriquet "the Cadillac of minivans." A new model is due this fall. Will it come with a secret decoder ring?Edited by Ira Sager, with Oluwabunmi Shabi By Kathleen KerwinReturn to top


SENATOR HOWELL HEFLIN (D-Ala.) was set to carve out a juicy piece of pork for the rural cable companies in his state, but instead he's encountering static. Heflin tried to slip a provision into the telecom reform legislation to exempt markets where cable operators have fewer than 20,000 subscribers from a rule that would bar local phone companies from buying cable systems. That would have opened the door for local phone companies, big and small, to go on buying sprees and drive up the valuations on small cable systems.

Then a group representing small phone companies got on the line. It liked Heflin's proposal but didn't want to get into a bidding war with the Baby Bells and their ilk to win those cable jewels. So, helped by Representatives Vic Fazio (D-Calif.) and. Charles Norwood Jr. (R-Ga.), rural phone lobbyists altered the wording so that only phone companies with revenues under $100 million could bid. Now, Alabama's dominant phone companies, $20 billion GTE and $17 billion BellSouth, the most likely cable buyers, are frozen out. Heflin's office says he is trying to remove the cap.Edited by Ira Sager, with Oluwabunmi Shabi By Mark LewynReturn to top


DID THE BLIZZARD OF '96 save Kmart from Chapter 11? The Jan. 8 East Coast storm prevented Standard & Poor's from meeting a deadline to downgrade Kmart's credit rating. S&P didn't lower $3.4 million in Kmart debt to junk-bond status until Jan. 12. Just a day earlier, the distressed discounter had cut a deal with creditors who could have forced it to redeem $550 million in bonds if its credit rating fell to junk status. Some on Wall Street believe that S&P deliberately stalled. But "a lot of our reason for waiting was weather-related," insists Gerald Hirschberg, an S&P corporate-ratings director. He adds, "I think they did" dodge a bullet.

Kmart says it doesn't feel grazed. Robert Burton, director of investor relations, says an earlier downgrade wouldn't necessarily have meant bankruptcy. Still, he concedes, the threat of a junk rating hung over the talks.

With Kmart bonds trading at junk levels since fall, Wall Street was anticipating junk status. That's why some on the Street are skeptical. "It was all orchestrated," says Wayne Hood, a Prudential Securities analyst. Bondholders won't comment. But bankruptcy still looms if Kmart doesn't boost its numbers this spring. "They have one more shot," Hood says. This is one that Kmart can't afford to miss.Edited by Ira Sager, with Oluwabunmi Shabi By Keith NaughtonReturn to top

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