Glenn Tilton has shown dexterity since rising to become chairman and CEO of Texaco in early 2001. After just eight months, he sold the oil giant to Chevron (CVX). Then, last May, while vice-chairman of ChevronTexaco, he took on the post of chairman of Dynegy (DYN). There, he helped salvage the merged company's stake in the energy trader by averting a bankruptcy.
Now, he'll really be testing his skills. On Sept. 2, UAL (UAL) named Tilton chairman and CEO, succeeding John Creighton Jr., a retired Weyerhaeuser chief who was named interim boss last fall. Tilton, 54, has only until Sept. 16 to wrest from unions pay cuts needed to get a $1.8 billion federal loan guarantee. So far, the airline's unions have balked despite warnings of bankruptcy. And Tilton won't have many insiders to help him. UAL's president and chief operating officer both quit along with Creighton.
Although Tilton swears the carrier can be saved, analysts say Chapter 11 is likely. But he has experience there, too: He was a rising star at Texaco when a huge jury verdict forced it into bankruptcy in 1987. Taking a break from cleaning up the latest wave of corporate scandals, the Securities & Exchange Commission dealt with an old malefactor on Sept. 4. Albert "Chainsaw Al" Dunlap settled SEC charges that he had used accounting hocus-pocus to hide from investors the true financial state of Sunbeam from 1996 until early in 1998. Dunlap, Sunbeam's former CEO, and former CFO Russell Kersh neither admitted nor denied the charges, but both accepted a lifetime ban from serving as officers or directors of any public companies. Dunlap paid a fine of $500,000--a record for an individual in an accounting case--and Kersh paid $200,000. The SEC says the fine took into account Dunlap's personal $15 million payment to shareholders in a class action and says neither man profited by selling Sunbeam stock during the alleged fraud. Consumers may be nervous, but you wouldn't know it from the torrid U.S. pace of August auto sales. Chrysler Group (DCX) sales gained 24% over last August; General Motors (GM) rose 18%; and even laggard Ford Motor (F) increased 12%. It wasn't just SUVs and minivans. Big Three car sales jumped, too, helped along by generous incentives. Still, sales at American Honda (HMC), with far fewer incentives, rose 13%. Toyota Motor (TM), also up 13%, and Honda each posted their best sales month ever. Carmakers say strong sales are keeping inventories lean--a good sign for production this fall. But GM isn't taking any chances. The auto giant on Sept. 4 extended 0% financing on most 2003 models through Oct. 31. Ford says it will stick with 0% mainly on the outgoing 2002 models through September. Napster, the pioneering online music upstart, has weathered more storms than nearly any Internet company. From relentless beatings by the recording industry to ever-present management turmoil, Napster has somehow kept alive hopes that it could one day emerge as a player in the online music industry. But hopes faded on Sept. 3, when a bankruptcy judge sided with music publishers and denied the $9 million sale of Napster's assets to Bertelsmann. The unexpected decision almost surely dooms the cash-strapped company, which is expected to liquidate its remaining assets through a Chapter 7 bankruptcy process. General Electric (GE) is expanding its finance business in Europe. GE Commercial Finance is acquiring ABB's structured-finance unit for $2.3 billion in cash and $1.2 billion in assumed debt, a move that will let GE broaden its product and service offerings across Europe. CEO Jeffrey Immelt has good reason for placing this bet: He expects revenue to rise faster on the Continent than in the U.S. For ABB, a manufacturer of power stations and robots, the deal means sharply reduced debt. ABB investors liked the sound of that: Its shares rose 17%. The proposed sale of Hershey Foods (HSY) just hit another roadblock. On Sept. 4, a Pennsylvania judge issued an injunction blocking any deal until he determines whether the sale requires final court approval. Pennsylvania Attorney General Mike Fisher, a candidate for governor, sought the injunction. The Hershey Trust, which controls 77% of the candymaker's voting stock, is exploring a sale of the company as a way to diversify its $5.4 billion portfolio. The trust plans to appeal the decision. For now, Wall Street is betting the trust will prevail. But the legal battle could be pricey. -- No. 3 trucking company Consolidated Freightways filed for bankruptcy Sept. 2.
-- Former WorldCom CFO Scott Sullivan pleaded not guilty to accounting fraud.
-- Beermaker Anheuser-Busch (BUD) raised its 2002 earnings target by 14%. Shares in Eastman Kodak (EK) dropped 4.6% on Sept. 3, to $29.15, after analysts warned that price wars with Japanese rival Fuji Photo Film (FUJIY), weak consumer spending, and increased use of digital cameras will cause problems at the Rochester (N.Y.)-based company for the foreseeable future.