In Business This Week: Headliner
Kenneth Chenault: No Recount Needed Here
The future is arriving four months early at American Express. On Nov. 17, Harvey Golub announced that he will step down as CEO at yearend instead of next April, as originally planned. Golub, 61, says he decided to leave early because his chosen successor, Kenneth Chenault, 49, is ready to take over. The CEO has been methodically shifting his executive responsibilities to Chenault since naming him president and COO in 1997. Golub is expected to transfer the chairman's title to his protege at AmEx' annual meeting in April.
Chenault's ascent is unlikely to bring big changes at the credit-card and travel services giant. The 19-year AmEx vet played the key supporting role in Golub's back-to-basics retooling in the '90s. AmEx looks set to post record earnings in 2000 for the second successive year. Chenault's challenge will be to keep revenue chugging at 15% a year as the economy slows. To do so, he'll have to cook up new ways to chip away at the market share of archrivals Visa USA and MasterCard International.By Anthony Bianco; Edited by Aleta DaviesReturn to top
A Windfall for AT&T Wireless?
John Zeglis, the CEO of AT&T Wireless, may soon get a big boost in the competition for dominance of the U.S. mobile phone market. The wireless company is close to a deal with Japan's NTT DoCoMo for a multibillion-dollar investment and cutting-edge Net technology, according to sources close to the situation. DoCoMo, which has led the world in developing technology to surf the Web from a mobile phone, could invest as much as $10 billion in AT&T Wireless and would license its Net software to the company. The investment would give Zeglis plenty of capital to bid for wireless licenses that the federal government will soon auction off. Earlier this year, AT&T Wireless raised $10 billion in an initial public offering. Its biggest competitor, Verizon Wireless, was planning to raise as much as $15 billion through its own IPO this year, but the rocky stock market forced the company to postpone its offering indefinitely.Edited by Aleta DaviesReturn to top
Flying the Pricier Skies
United Airlines, which infuriated fliers last summer with delays and cancellations caused by labor troubles, is socking business travelers again. On Nov. 17, the world's biggest airline hiked round-trip fares on last-minute bookings by $100 to $200. By Nov. 19, other major carriers had matched United's steeper prices--the sixth industrywide hike this year. United wouldn't explain the rise, but it came only a month after its pilots ratified a four-year contract giving them the industry's highest wages. There may be more trouble ahead: United's mechanics, frustrated in their attempts to negotiate big raises, plan a possible strike after Christmas.Edited by Aleta DaviesReturn to top
To China in a Brown Airplane
In the battle over potentially lucrative new U.S.-China air routes, United Parcel Service is a winner. On Nov. 21, the Transportation Dept. awarded it 6 of the 10 new weekly flights negotiated in a 1999 U.S.-China treaty. UPS will get direct access for the first time, competing with FedEx, which got access in 1995. The remaining four went to incumbents, with United Airlines taking two new routes, and FedEx and Northwest Airlines one each. China also tentatively agreed to a deal that could give American Airlines and Delta Air Lines access through their respective partners, China Eastern Airlines and China Southern Airlines.Edited by Aleta DaviesReturn to top