GM Moves to Cut Costs
Sunday, February 12, 2006; Page F02
GM Moves to Cut Costs
Another dramatic week for General Motors, which caved to pressure from dissident shareholder Kirk Kerkorian and cut its dividend in half , slashed executive salaries by up to 50 percent and offered a seat on its board to Jerome B. York, an old industry hand who is advising Kerkorian. The financially troubled automaker will also slash pensions and health benefits for salaried workers enough to save $900 million a year. Meanwhile, negotiations with unions and Delphi, its bankrupt former parts-supply unit, appeared to stall.
Cable a la Carte Advances
The Federal Communications Commission, reversing its previous position, said cable TV bills might fall if consumers could choose which channels to buy rather than being forced to choose among packages. The report said a typical household buying 11 a la carte channels would have its cable bill fall by as much as 13 percent , or rise by as much as 4 percent, depending on what assumptions are made. Although Congress is unlikely to mandate a la carte pricing, the industry warned such a move would reduce the variety of programming.
AIG, Nortel in Settlements
American International Group agreed to pay $1.64 billion to settle New York and federal regulators' charges that it schemed to defraud investors and rig bids while not making required contributions to state workers' compensation funds. The settlement does not resolve civil charges against ousted chief executive Maurice R. "Hank" Greenberg. Separately, Nortel Networks agreed to pay $2.47 billion in cash and shares to settle investor class-action suits alleging the telecom equipment manufacturer manipulated earnings.
Asbestos Bill in Senate
Senate leaders will try to muster 60 votes to overcome procedural objections and keep alive legislation creating a $140 billion trust fund for asbestos victims. Lawsuits have bankrupted dozens of companies and clogged the courts but brought little compensation to workers exposed to the cancer-causing material. Democrats who oppose the bill argue the amount is too small and unfairly cuts out the trial lawyers, big Democratic backers. Republican opponents complain the fund would compensate workers who aren't sick.
WTO Overturns Crop Ban
The World Trade Organization ruled that European rules making it nearly impossible to import genetically engineered crops violate global trade rules -- a symbolic win for farmers in Canada, Argentina and the United States. Because European consumers remain wary of "Frankenfood," as opponents like to call it, and European rules require any genetically engineered food to be labeled, it is not clear how big Europe's market would be for such products. The United States may now consider a challenge to the labeling requirement.