Northwest, Mechanics Talk

Northwest Airlines and its striking mechanics met for talks, with the airline demanding even steeper cuts than those that prompted its 4,400 mechanics, cleaners and custodians to walk out Aug. 20. Northwest said rising fuel prices have forced it to ask for even more labor savings. The airline also has told the union that it would begin hiring permanent replacements by Sept. 13 if they did not make a deal.


AdvancePCS Settlement Approved

Caremark Rx, the nation's second-largest pharmacy benefits manager, said a federal court approved an agreement to settle claims that its AdvancePCS unit violated anti-kickback laws. Under the settlement, Caremark will pay $137.5 million to the federal government and have AdvancePCS adhere to business practices that will increase transparency.

Caremark, which acquired AdvancePCS in March 2004, said the unit did not admit wrongdoing. A whistle-blower complaint filed in 2002 by a former executive alleged that AdvancePCS solicited and received kickbacks from drug companies for favorable placement onto government drug programs. The settlement does not resolve 10 state lawsuits filed against the unit.

Request in Enron Case Rejected

A federal judge rejected a request by former Enron executives Kenneth L. Lay and Jeffrey K. Skilling to force prosecutors to arrange meetings between defense lawyers and three dozen witnesses.

Instead, U.S. District Judge Simeon T. Lake III in Houston agreed to send letters to the witnesses, who are primarily former Enron employees, informing them of their right to speak to defense lawyers without fear of retaliation by prosecutors.

Lawyers for Lay, Enron's former chairman, and Skilling, the company's former chief executive, claim some witnesses won't meet with them for fear prosecutors will retaliate.

Shareholders Appeal Ovitz Ruling

Walt Disney Co. investors who sought to hold the company's directors liable for the $140 million severance paid to former president Michael S. Ovitz asked an appeals court to overturn a judge's ruling in the directors' favor. Chancery Court Judge William B. Chandler III, in an opinion released Aug. 9, said Disney directors properly oversaw Ovitz's ouster and don't have to reimburse the company for his severance.


GM Ending Discount Program

General Motors will stop offering employee discounts to all buyers Sept. 30 and begin relying on lower list prices to sell 2006 models. The company used the employee discounts to post U.S. sales gains in June and July before a 13 percent decline last month. GM said Aug. 1 it would cut prices or add features at no extra cost on more than 50 of its 2006 models. DaimlerChrysler's Chrysler division and Ford, which copied GM's tactic in July, August and again this month, have both said their discount programs would end Oct. 3.

UAW 'Optimistic' on GM Costs

The United Auto Workers union is optimistic it can help General Motors reduce health care costs, as long as changes are made within the restrictions of its members' existing contracts, UAW President Ron Gettelfinger said. "We are willing to continue to work with GM within the framework of our national agreement to reduce costs in health care and other areas," Gettelfinger said in a speech to the Economic Club of Detroit.


Reform Bill Clears Senate Panel

A Senate committee passed legislation that would strengthen funding requirements for company retirement plans and add safeguards for the federal agency that pays pensions to the employees of bankrupt firms.

By a vote of 18 to 2, the Senate Health, Education, Labor and Pensions Committee approved the bill, which will now be merged with legislation approved by the Finance Committee on July 26.


Gillette CEO Defends Sale to P&G

Gillette's chief executive said that political and media criticism of his company's acquisition by Procter & Gamble is unjustified and symptomatic of a growing and destructive anti-business climate in the United States. James M. Kilts told the Greater Boston Chamber of Commerce that the $57 billion deal is a growth opportunity for both companies and "is not about slash-and-burn cost-cutting." He also defended the payout he is due to receive from the merger, which media estimates have put as high as $185 million.

Compiled from staff and news service reports.

Striking Northwest Airlines mechanic Skip Anderson attended the talks as an observer.