In Business This Week: Headliner
Lloyd Ward: Heavier Metal
During his 30-year career, Lloyd Ward has sold clothes dryers, soap, and even Doritos. Now, he can add used cars to the list. Two months after bolting as chairman and chief executive of slumping appliance-maker Maytag, Ward, 51, has become chairman and CEO of iMotors, an Internet car dealer.
For now, the move looks like a huge step down. At Maytag, Ward ran a $4.2 billion corporation with a 25,000-person payroll. Privately held iMotors won't disclose revenue, but the B2C venture has just 700 employees. It has big plans, however. Launched in September, 1999, iMotors sells used cars in 17 states, including California, Illinois, and Pennsylvania, and aims to go national. "This will be a multibillion-dollar company," Ward vows.
Ward, who spent years at PepsiCo and Procter & Gamble, confesses that he's "an Old Economy guy." He's in good company: iMotors recently hired Cummins' chief financial officer, Kiran Patel, as CFO. And if iMotors stalls? Well, Ward knows what it's like to go through the wringer.By Michael Arndt; Edited by Monica RomanReturn to top
General Malaise at General Motors
More bad news from the world's largest auto maker. Though it was its second best year ever, 2000 earnings dropped 14% at General Motors, to $5 billion. Fourth-quarter earnings fell 51%, to $609 million from $1.3 billion. In Europe, GM suffered $676 million in losses. It also incurred losses from Japan-based Isuzu Motors, of which it owns 49%. Despite record revenues of $183 billion, net margins in North America, its most profitable market, slipped to 3.9%, from 4.1% last year. The auto maker took a $520 million charge in the fourth quarter for costs related to shuttering its Oldsmobile division, cutting plant capacity in Europe, and sacking 10% of its salaried workers.Edited by Monica RomanReturn to top
Taking Aim at Cell-Phone Service
Irate about the quality of your cellular phone service? You're in good company. A recent Yankee Group study of nearly 3,000 customers showed that 30% had significant problems with their wireless service. Now, after suffering through his own difficulties, Congressman Anthony D. Weiner (D-N.Y.) wants to do something about it. Weiner plans to introduce legislation in the next few weeks that would require the Federal Communications Commission to compile more detailed information about the quality of wireless service. Specifically, Weiner wants the FCC to publish information twice a year on the number of complaints, the nature of the problems, and the responsible carriers.Edited by Monica RomanReturn to top
A Powerhouse in Pet Food
Known mainly for its Crunch Bars and Nescafe instant coffee, Zurich-based Nestle took a bold bid to become the world's largest pet-food company with a $10.3 billion agreement to buy Ralston Purina. The companies agreed on the $33.50-a-share deal to combine Nestle's Friskies cat food brand with Purina Pet Chow and other Ralston brands. The acquisition would create a powerhouse with $6.3 billion in pet-food revenues and an estimated 35% of the U.S. market. Nestle "has considered pet care a strategic growth area" since buying Friskies in 1985, the company said. Combining the two companies will save $260 million, but could draw scrutiny from antitrust regulators.Edited by Monica RomanReturn to top