Company News: Dell, Lufthansa, Amtrak, T-Mobile, Candymakersby
Dell: Founder’s job is at risk
Blackstone Group and billionaire Carl Icahn want to take Dell private—but neither wants to keep founder Michael Dell on as CEO. Both proposals value the company higher than the $24.4 billion buyout offered by Silver Lake Management and Michael Dell, who started the company three decades ago, putting pressure on the executive to sweeten his terms or switch allegiances. He oversaw the company’s rise to the top of the PC industry, yet failed to prepare for new challenges from mobile technology and high-margin business services. While Blackstone doesn’t want Dell to be CEO, it has invited him to use his 15.6 percent ownership stake in the computer maker to join their buyout as a shareholder.
Deutsche Lufthansa: Mulling an Asian low-cost carrier
Deutsche Lufthansa wants to start a new venture to hold on to market share on routes to Asia. Rival carriers in the Gulf, including regional leader Emirates, are using their home bases as intercontinental transfer hubs for flights to and from dozens of cities across India, China, and other Asian countries such as Thailand and Malaysia. Lufthansa is considering forming an intercontinental low-cost subsidiary or making an alliance with a Middle Eastern or Asian competitor.
Amtrak: Getting its finances on track
Amtrak recorded its smallest annual loss in 38 years and has asked Congress for 16 percent less in operating subsidies for the 2014 fiscal year. The railroad’s loss for fiscal 2012 fell to $361 million, a 73 percent drop from the previous year, and it’s asking for $373 million in operating support, compared with the $443 million it’s getting this year. Amtrak wants new legislation to help pay for replacing and expanding its fleet of Acela trains. It also plans to upgrade the Wi-Fi on trains to faster 4G technology.
T-Mobile USA: Selling iPhones on installments
T-Mobile USA will start selling Apple’s iPhone 5 on April 12 via monthly installment plans, departing from the industry’s typical long-term contracts. Like Verizon Wireless and AT&T, T-Mobile had subsidized smartphones by locking customers into higher-priced two-year contracts. Now, T-Mobile will let qualified buyers get the iPhone for about $580 ($99.99 down and 24 monthly payments of $20) and pay as little as $50 per month for voice and data without a contract. Those with unlocked iPhones can also get the lower month-to-month rate.
Candymakers: A pledge for female farmers
Nestlé and Mars vow to help women cocoa farmers after an Oxfam International report detailed shortcomings among food companies in fostering human rights and sustainability. The two candymakers, which together control 27 percent of the world chocolate market, have assured Oxfam they will within a year assess the well-being of female suppliers in Ivory Coast, the world’s biggest cocoa producer. If the companies find problems, they will work to improve women’s livelihoods and address gender inequality.