Across the Spectrum
Ending a fierce, two-year legal and lobbying battle, Verizon dropped its opposition to a deal that would give rival Nextel access to a valuable new swath of the radio spectrum. Under a swap previously approved by the FCC, Nextel would give up existing spectrum, where it had been interfering with radios used by public safety agencies. Meanwhile, Verizon, which also needs new spectrum to accommodate its fast-growing wireless business, will pay $3 billion to acquire much-litigated spectrum from NextWave.
Same Jobs, Same Wage
Volkswagen agreed to guarantee jobs for 100,000 German workers in exchange for a 28-month wage freeze and reductions in overtime bonuses designed to shave $1.2 billion a year in operating costs. The pact averts a prolonged strike at VW and is the latest in a series of agreements involving German manufacturing firms meant to stem the shift of production to plants in Eastern Europe. Talks continued, meanwhile, between unions and General Motors, which has threatened to cut 12,000 jobs in Europe.
Fewer Jobs, Lower Wage
United asked employees to accept another $725 million in annual pay and benefit cuts as part of a bankruptcy reorganization plan to save an additional $2 billion a year. United also reiterated its intention to terminate its underfunded pension plan, dumping $6.4 billion in liabilities onto the government's pension insurance program. Delta announced it would eliminate about 6,800 maintenance, customer service and management positions over the next 18 months. Northwest pilots ratified a 15 percent pay cut.
Jury Didn't Buy Sale
A federal jury convicted an ex-Enron executive and four former bankers from Merrill Lynch for their role in a barge deal meant to mislead shareholders about Enron's profit and indebtedness. The case is seen as a first test of some of the evidence that will also be presented in later trials of Enron's top executives. According to testimony, Merrill paid $7 million for a stake in three energy-producing barges as part of a secret deal in which Enron promised to buy back the stake at a higher price, effectively disguising a loan.
Medical Tax Shelters
The IRS cited a now-bankrupt California firm for running illegal tax shelters that allowed 4,000 doctors and dentists to avoid more than $400 million in taxes. The IRS charged that the company told doctors they could make tuition payments for their children tax-deductible by routing them through a company foundation, and sold supplemental insurance it wrongly claimed was also deductible. The courts, however, recently handed the IRS setbacks in three other cases involving alleged corporate tax shelters.