In Business This Week: Headliner
John Lampe: A Mr. Fixit for Firestone?
If you asked John Lampe six months ago if he wanted the CEO job at tiremaker Bridgestone/Firestone Inc., he would have jumped at it. But when the company's Japanese management offered it last week, he paused. "There are challenges," Lampe admits.
That's quite the understatement. Since early August the company has been defending the integrity of its management and products following its forced recall of 6.5 million tires on Ford Explorer sport-utility vehicles. Government analysis blames failure of the tires, in part, for 101 highway deaths. Lampe's predecessor, Masatoshi Ono, resigned earlier this week in the wake of the debacle.
A 27-year Firestone veteran, Lampe says he'll quickly make several management changes to "break down the castle walls" between departments that may have kept important information about tire failures from becoming apparent sooner. But even as the company struggles to figure out what actually caused Firestone's tires to separate, his biggest task lies ahead: persuading wary consumers and auto manufacturers not to abandon the tarnished brand.By David Welch; Edited by John ProtosReturn to top
Will Continental Play the Spoiler?
Can Continental Airlines land some attractive Washington (D.C.) assets that US Airways Group wants to sell as part of its deal to be acquired by United Airlines? On Oct. 2, Continental offered $215 million for takeoff and landing slots, gate leases, and other assets at Reagan National Airport. That's more than 50% higher than what DC Air, a new entity formed by US Air director Robert Johnson, had agreed to pay for the assets. US Air shareholders are expected to approve the United offer on Oct. 12, and the company's management says its deal with Johnson prohibits it from considering other offers. But with merger approval still up in the air, Continental figures it can play the spoiler.Edited by John ProtosReturn to top
GE's Earnings Beat Expectations
Amid carnage everywhere on Wall Street, Jack Welch managed to do it again. Not only did General Electric deliver another quarter of on-the-nose earnings; its 19% increase in earnings per share, to 32 cents, has analysts upping the ante for the Fairfield (Conn.) conglomerate. Analysts now expect GE to post an 18% increase in 2000 earnings by yearend, above earlier predictions of 15%. What's going on here? GE's old industrial and New Economy businesses are both growing like crazy: Power systems' revenues were up 43% and NBC's revenues rose 76%. Analysts expect fourth-quarter earnings of 36 cents.Edited by John ProtosReturn to top
Motorola Takes the Street's Heat
Motorola can't shake Wall Street's wrath. Despite reporting third-quarter earnings Oct. 10 that soared 66%, to $598 million, or 26 cents, the stock tumbled 18% the next day, to $21.44. The Schaumburg (Ill.) tech giant forecast weaker sales in coming months.
Indeed, fourth-quarter earnings will likely fall a dime below analysts' expectations of 37 cents a share. Worse, Motorola said margins for its wireless phone business would reach only 6.5% next quarter, far less than the earlier claim of 10%. The phone maker didn't anticipate the weaker euro or slumping demand in Asia and Europe.Edited by John ProtosReturn to top