In the four decades since he founded the mechanics union now on strike at Northwest Airlines (NWAC), O.V. Delle-Femine has built the union's membership on a core principle: Make no wage concessions. For years that hard-line position worked, allowing the Aircraft Mechanics Fraternal Assn. to raid existing unions at other airlines to swell its ranks.
Now, with the Aug. 20 walkout showing virtually no sign of success, the strike seems likely to spell the end of labor militancy in the troubled airline industry -- and dramatically weaken AMFA itself. Delle-Femine, 72, clearly underestimated Northwest's ability to hire replacements for the union's 4,300 mechanics. The narrow group of workers he represents also gave him little leverage in hurting the Eagan (Minn.)-based carrier.
Labor experts say the strike's failure will undermine confidence in Delle-Femine's leadership among the other 12,000 members at seven other airlines. But the mechanics union's Northwest workers will be first to pay the price.
MasterCard International is taking a big swipe at rivals American Express (AXP) and Visa International. The Purchase (N.Y.) company said on Aug. 31 that it plans to go public in early 2006. With at least $650 million in proceeds it plans to retain from the IPO, MasterCard hopes to gain an edge in the brutal credit-card market. Current investors, about 1,400 banks and financial institutions, will own 41% through nonvoting shares. Public stockholders would own about 49% in Class A shares; a new MasterCard charitable foundation will own the rest. With fees under pressure from consumers and regulators, MasterCard says the fresh capital will also go in part to "defend our interests in the legal and regulatory arena." Second-quarter revenues rose 19%, to $772 million, and profits jumped 82%, to $120 million.
Would financier Carl Icahn and his hedge-fund partners actually pony up $6 billion more to boost their 2.6% stake in Time Warner (TWX) to 10%? It seems unlikely, since the Icahn group and Time Warner CEO Richard Parsons seem to agree on a strategy for the media giant: spin off the cable business and buy back stock. But as reports suggested on Aug. 30, Icahn is clearly not retreating from trying to push Parsons to take larger measures more quickly. Time Warner's shares rose 42 cents, to about $18, after news of the 10% threat leaked. Icahn could not be reached for comment.
Just one e-mailed invitation on Aug. 29 was enough to get the Apple Computer (AAPL) hype machine cranked up. After Apple invited media to a Sept. 7 event, analysts began buzzing about the expected unveiling of a phone, made by Motorola (MOT), that can play songs stored in Apple's iTunes music software. Analysts say Cingular Wireless will offer the phones to its cellular customers. Still, it remains to be seen whether such a product would have the pizzazz that helped Apple dominate the MP3 music player market with its iPod. And speaking of iPods, rival Creative Labs said on Aug. 30 that it had won a patent on music player interface design. One option for Creative: to seek royalties from Apple.
Microsoft (MSFT) upped the ante in its ongoing battle with Google (GOOG) and Yahoo! (YHOO) for Internet users, acquiring a small San Francisco startup that has developed technology for handling phone calls made over the Net. Microsoft bought Teleo on Aug. 30 for an undisclosed sum, though Goldman Sachs (GS) analyst Rick Sherlund speculates the small, two-year-old, privately held outfit cost "well below $100 million." The deal gives Microsoft technology that lets customers make calls over the Web to conventional phones as well as Net-connected ones. Microsoft plans initially to integrate the Teleo technology into its MSN online service to better compete with Google and Yahoo, which are beefing up their instant-messaging services.
-- A U.S. District judge dismissed a lawsuit accusing nine drugmakers of colluding to block imports from Canada.
-- McDonald's (MCD) named Quaker Foods (PEP) President Mary Dillon as chief global marketing officer.
-- MedImmune (MEDI) will market its respiratory drug, Synagis, without Abbott Laboratories (ABT).
Tiffany (TIF) shares are sparkling. Second-quarter earnings soared 53%, and the luxury retailer raised its full-year profit forecast by 8% as well-heeled consumers snap up pricier baubles and a long-awaited turnaround in Japan kicks in. Shares rose 12.3%, to $37.42, on Aug. 31.