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Businessweek Archives

Wanted: One Tough Techie

In Business This Week: HEADLINER: UNKNOWN


General Motors is scouting for a new chief information officer. BUSINESS WEEK has learned that headhunters at Russell Reynolds Associates are beating the bushes for a computer honcho who could plot GM's technical strategy and look out for its interests in dealings with its Electronic Data Systems unit. A GM spokeswoman confirms the search, but won't discuss it. Scuttlebutt--denied by GM--is that the new job will pay up to $1 million.

The search signals GM's new get-tough attitude toward EDS, which it plans to spin off this spring. The two companies are hammering out a new contract for how EDS will handle GM's data services after the spin-off, and sources say GM wants to slash costs. That has got to be disturbing for EDS: GM's business, $3.9 billion last year, accounts for 31% of its total revenues. GM can't get too tough because its pension fund owns 31% of EDS's stock. Still, says EDS Senior Vice-President Gary Fernandes: "GM is interested in structural cost savings wherever it can get them."EDITED BY KELLEY HOLLAND BY KATHLEEN KERWIN AND WENDY ZELLNERReturn to top


WINNING A MAJOR ROUND IN A lengthy battle with its rivals, CIGNA got the green light to split its asbestos and environmental obligations from its property-casualty business. With regulatory clearances in eight states, the company on Feb. 12 set up an inactive unit with $4.5 billion in assets to handle asbestos and environmental claims. CIGNA will back it with $800 million in reinsurance, up from $500 million initially, plus an additional $50 million in payments over five years. The hefty collateral was demanded by Pennsylvania regulators under pressure from rivals AIG, St. Paul, and Chubb. Those competitors will keep pressing to dismantle the plan. And Dow Chemical, Pfizer, and other policyholders plan to sue, arguing for some say before their policies get bucked to the new unit. CIGNA says regulators make such decisions, not policyholders.EDITED BY KELLEY HOLLANDReturn to top


SUAVE SHAMPOOS AND DEGREE deodorants attracted a Valentine's Day suitor. A U.S. subsidiary of Unilever PLC agreed on Feb. 14 to buy Helene Curtis Industries for a hefty $70 per share, or $770 million. Helene Curtis had traded as low as $27.50 last year. The announcement came a month after Roy Disney's Shamrock Holdings, which has a 7.6% stake in the company, called for a sale or restructuring. The founding Gidwitz family of Chicago has pledged its 75% voting shares to the deal. CEO Ronald Gidwitz will stay on.EDITED BY KELLEY HOLLANDReturn to top


AFTER UNDERESTIMATING THE demand for toys based on the animated film Toy Story, Disney is taking no chances with the Oct. 30 release of the movie's video. Accompanying the release will be a record $100 million marketing push, including 50 new toys or other merchandise--and Disney will have beefed-up licensing agreements on the stuff. Burger King, General Mills, and Kodak will also stage promotions. Toy Story has so far grossed over $180 million at the box office.EDITED BY KELLEY HOLLANDReturn to top

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