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Red Hudson: That Queasy Feeling

In Business This Week: HEADLINER


James "Red" Hudson is used to his company's ground beef getting a good grilling. But now the founder and chairman of Rogers (Ark.)-based Hudson Foods is facing heat of his own. On Aug. 18, federal investigators descended on Hudson's Columbus (Neb.) plant days after the company announced the largest-ever recall of U.S. ground beef because of possible contamination with a deadly strain of the E. coli bacterium.

Regulators want to know if Hudson officials hid the extent of the problem, with the amount of burgers involved growing from an estimate of 20,000 to 1.2 million pounds. They are also troubled by the company's past regulatory run-ins.

But Hudson, 73, is crying foul. He says the recall will cost his company, whose customers include Wal-Mart and Burger King, about $1 million in sales. And he says Hudson is not trying to hide anything. "This is the only time that Hudson has been involved in a recall [related to] E. coli. We're not a bad company," he says. Now, to convince the feds.By Stephanie Anderson Forest EDITED BY KELLEY HOLLANDReturn to top


BAUSCH & LOMB IS ONE STEP closer to resolving the controversies surrounding its contact-lens marketing. On Aug. 19, the company agreed to pay $1.7 million to settle charges by 17 states that it misled consumers by charging widely varying prices for identical lenses that were marketed for weekly, monthly, or annual wear. But the legal woes won't end soon. Florida did not sign the settlement and is continuing its probe. And B&L still faces a class action in New York contesting its lens-care-solution marketing practices, a shareholder suit in New York alleging misleading financial disclosures, and an antitrust suit in Florida over its refusal to sell contact lenses through mail-order companies. In addition, the SEC is probing whether B&L falsely inflated revenues in 1993 and 1994.EDITED BY KELLEY HOLLANDReturn to top


FIRST YOU PUT IT TOGETHER. Then you take it apart. That's the strategy at Netscape Communications, which on Aug. 18 announced it would sell a stand-alone Internet browser once more. That move comes just two months after the company began shipping Communicator, a suite of products that includes a browser, E-mail, and collaboration software. Netscape Executive Vice-President Michael Homer says he may eventually split off the E-mail and collaboration products, too. For now, though, the browser war with Microsoft is on again.EDITED BY KELLEY HOLLANDReturn to top


CHECK THE NUMBER AND DIAL again. On Aug. 19, the Federal Communications Commission turned down Ameritech's request to enter Michigan's long-distance market. But it also outlined for the first time detailed criteria for approving such appeals. Under the Telecommunications Act of 1996, the Bells can enter long distance if they've opened up their local-calling markets to rivals. The FCC says the Bells can demonstrate they've done this by charging new entrants reasonable interconnection prices and offering them the same quality services that their own customers enjoy.EDITED BY KELLEY HOLLANDReturn to top

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