AutoNation, the largest U.S auto retailer, said it will eliminate 1,800 jobs and immediately close 23 of its megastores to cut costs. The company said it would combine another six stores with its other businesses. The Fort Lauderdale, Fla.-based company expects to take a fourth-quarter pretax charge of $430 million to $490 million for the move.
3Com's Palm unit, the No. 1 electronic-organizer maker, filed for an initial public offering of stock, giving investors a way to benefit from 3Com's fastest-growing business. Palm, which 3Com expects to spin off six months later to shareholders of the No. 2 maker of computer networking equipment, filed with the Securities and Exchange Commission to sell common stock. Palm registered for the sale of $100 million worth of stock. The filing, though, gave no details about precisely how many shares the company hopes to sell or how much the IPO would raise.
Whittman-Hart, a computer-consulting company, agreed to buy Internet marketing adviser USWeb/CKS for about $5.69 billion in stock to offer companies a broader range of electronic-commerce services. With about 50 offices worldwide, USWeb/CKS, which had revenue of $228 million last year, advises companies such as Apple, Intel and Hard Rock Cafe on Internet marketing and strategy.
Federal bank regulators, in the wake of the recent costly failures of three small banks, have increased oversight of how banks manage and report assets related to retained ownership of mortgages and other loans that have been bundled together and sold to investors in the secondary market. The regulators also will propose rules to limit or even bar banks from carrying on their books as assets any expected future cash payments from these securitized loan pools.
Several big oil companies have agreed to pay a total of $223 million to settle charges that they cheated the federal government out of royalties owed on oil pumped from federal and Indian lands, the companies and lawyers said. The settlement would settle allegations made by whistle-blowers. Under the agreement, Chevron would pay $95 million, Texaco $43 million, BP Amoco $32 million and Conoco $26 million. Sunoco, Pennzoil-Quaker State, Union Pacific Resources, Kerr-McGee and Canadian Occidental Petroleum would also make payments. But other oil companies accused of wrongdoing, including Exxon Mobil, did not settle.
The Clinton administration announced it has delayed the release of its closely watched rules for exporting cryptography until mid-January in response to changes demanded by high-tech companies. Instead, the administration will circulate a new draft this week, said Department of Commerce official William Reinsch. Jeff Connaughton, an attorney for Americans for Computer Privacy, a coalition of companies bucking Clinton encryption policies, said his group applauded the administration for "listening to the industry's concerns" about the proposal originally announced in September.
RCN, which provides telephone and data services along fiber-optic networks, has agreed to acquire 21st Century Telecom Group for $500 million in stock and assumed debt in a deal that will expand its network into the Chicago market. The privately held 21st Century operates 250 miles of fiber-optic, broadband network serving 37,000 residential customers in the Chicago area with high-speed data, phone, Internet and video services.
United Parcel Service agreed to buy a unit of France's Qualis that manages transportation and storage of parts and components. Terms of the purchase of the Finon Sofecome unit were not disclosed. Finon Sofecome, which has 45 locations in France and about 1,000 employees, also manages repair operations and quality inspections.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 5.21 percent from 5.05 percent the previous week. Rates on six-month bills rose to 5.41 percent from 5.29 percent. The actual return to investors is 5.368 percent for three-month bills, with a $10,000 bill selling for $9,868.30, and 5.655 percent for a six-month bill selling for $9,726.50. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, fell to 5.69 percent last week from 5.73 percent the previous week.
TIAA-CREF plans to dramatically expand its fledgling mutual fund operation in April 2000 by rolling out five new funds, including its first index mutual fund. The new funds will nearly double the lineup of low-cost mutual funds that TIAA-CREF started selling to the public in 1997. Expanding its fund business is key to TIAA-CREF's transition from a huge pension system for teachers into a diversified financial services company.
Compaq Computer and CMGI, an Internet venture-fund company, plan to form a joint venture with the Shanghai government's investment arm to offer Internet services in China. The Chinese company, Shanghai Information Investment, holds a controlling interest in Net infrastructure and commerce companies in China, including Shanghai Cable Network, a high-speed Web access network.
Lockheed Martin has received U.S. government approval to manufacture Russian rocket motors in the United States--a move that keeps the Bethesda-based No. 1 defense contractor competitive with No. 2 Boeing in the top U.S. space launch program. A five-year manufacturing licensing agreement was approved two weeks ago after U.S. intelligence concluded there's no evidence the Russian company supplying the engine technology, NPO Energomash, has violated U.S. missile technology export laws, officials said. Congress must approve the license.
The Washington Post Co. said it has accepted the purchase of 666,106 shares of its Class B common stock at $575 per share, for a total of $383 million, concluding a previously announced tender offer. More than 743,300 shares were tendered, well above the initial purchase offer of 500,000, and the company said it will accept approximately 89 percent of the shares tendered by owners. An exception will be made for small amounts offered by odd-lot shareholders; all of the roughly 15,000 odd-lot shares tendered will be purchased, the company said. The final proration percentage will be announced Thursday, the company said.