Once in the General Electric mold, it's hard to escape it. That was the message on Feb. 19, when Honeywell International (HON) named TRW head David Cote to succeed Lawrence Bossidy, both managers with GE roots.
Bossidy, 66, came out of retirement last year to take the helm again at Honeywell after its merger with GE fell apart. With Cote, Honeywell is getting an executive with the performance-driven style that is the hallmark of GE managers. Cote, 49, who ran GE's appliance business before joining TRW in late 1999, becomes Honeywell's president and CEO immediately, and will add the chairman's title when Bossidy retires in June.
At TRW, Cote cut costs and headcount and sought to boost its aerospace and defense-related businesses, though the fruits of those efforts have yet to be seen. But at Honeywell, most of the cost-cutting has been done. Instead, Cote must either revive or drop its industrial and building-automation businesses, while boosting morale. "The potential for the company's success far outweighs the past," Cote says. Investment bankers, rejoice: The U.S. Court of Appeals' decision that the Federal Communications Commission limits on TV-station ownership are "arbitrary and capricious" is likely to encourage a new wave of broadcast company consolidations. The court's ruling requires the FCC to reconsider its regulation that limits companies to owning TV stations in no more than 35% of the country. Industry insiders are betting that the FCC will raise those limits, allowing companies such as NBC parent General Electric (GE) and Rupert Murdoch's News Corp. (NWS) to continue to buy television stations.
The court also struck down rules limiting broadcasters from owning cable-TV systems, a ruling that could allow AOL Time Warner (AOL) to move further ahead on its long-rumored proposal to merge its cable-TV subsidiary with NBC. United Airlines (UAL) has averted a strike by its 13,000 unionized machinists, clearing the way for the troubled carrier to move ahead. On Feb. 18, leaders of the International Association of Machinists agreed to a tentative pact after United management offered several minor changes to a deal that union members had turned down the week before. The new contract, which is scheduled to go to a vote on Mar. 5, lifts pay by 37%, restoring mechanics' wages to 1994 levels. If it passes, as expected, the company then must negotiate an agreement for the IAM's other 24,000 customer-service and ramp workers. Then, all 80,000 employees at United are to consider wage cuts of up to 10% to help the ailing airline. When patents are about to expire on blockbuster drugs, pharmaceutical companies such as Bristol-Myers Squibb (BMY) try hard to keep generic versions off the market. Too hard, a U.S. District Court judge has ruled. To maintain a monopoly on its anti-anxiety drug BuSpar for a few months longer, Bristol-Myers filed an additional patent with the Food & Drug Administration at the last minute. The delaying tactic was improper, the court decided on Feb. 14. The ruling allows consumer groups, makers of generic drugs, and states to proceed with suits against Bristol. If they win, the company could be liable for millions of dollars in damages. A spokesman says the company is reviewing its options. Linthicum (Md.)-based telecom-equipment maker Ciena (CIEN) is bulking up to capture a lucrative new market. With its $900 million purchase of ONI Systems, announced Feb. 18, Ciena will zip past rival Nortel Networks as the leading provider of optical networks for metropolitan markets. Now, Ciena primarily offers networks crossing long distances. ONI will help boost Ciena's revenues, because telecom carriers are still buying networks for their metro markets. New Revlon (REV) CEO Jack Stahl has his work cut out for him. The 48-year-old Coca-Cola lifer has to stop Revlon's slide in market share, halt its 12 straight quarterly losses, and reverse the stock's 63% decline under his predecessor. Despite the odds, Ron Perelman, who owns 83% of Revlon, says it is "ready to thrive." He has reason to be optimistic. Stahl, who left Coke a year ago after clashing with CEO Douglas Daft, was credited with dramatic increases in sales, market share, and operating income at Coca-Cola North America. Stahl says he plans to focus on Revlon's marketing, new products, and a "renewed commitment to customer needs." -- Cereal maker Kellogg (K) plans to introduce more snacks into its distribution system.
-- The advertising slump cut Martha Stewart Living's (MSO) fourth-quarter profits by 3.3%.
-- Idec Pharmaceuticals' (IDPH) cancer treatment Zevalin was approved earlier than expected. Circuit City (CC) shares fell 23.9%, to $22.11, in the two trading days ended Feb. 19. Investors were spooked by renovation costs at the retailer, which has been redesigning stores to focus on small electronics. But the stock recovered 7.7% on Feb. 20 after Merrill Lynch upgraded its rating.