A Vote for Stagnation
Economic reform in Europe suffered another setback as German voters failed to give either of the major parties a governing majority. Chancellor Gerhard Schroeder and challenger Angela Merkel opened talks on a "grand coalition" between the center-left and center-right parties but came to no conclusion. The vote reflected the continued ambivalence of Germans who, at one level, know they need to reduce taxes and regulation to regain competitiveness but are uncomfortable with even the modest reforms already adopted under Schroeder.
Workers Take It on the Chin
Big companies, big layoffs. Sony's new American chief, Howard Stringer, said the company would eliminate 10,000 positions, or 7 percent of its global workforce, and close 11 of its 65 factories worldwide. Industrial giant Siemens will cut 2,400 from its information technology division and an unspecified number from its telecom divisions in Germany. And Delta Air Lines, newly arrived in bankruptcy proceedings, said it would cut 9,000 jobs, or 17 percent of its workforce, even as it slashed pay for those who remain.
Tyco's Tycoons in Irons
A New York state judge sentenced former Tyco International executives L. Dennis Kozlowski and Mark H. Swartz to prison terms of 8 1/3 to 25 years for looting the company of millions of dollars. The pair were immediately taken off in handcuffs as their lawyers vowed to press appeals. Under New York law, they will have to serve nearly seven years, even with time off for good behavior. But at least Kozlowski and Swartz have a shot at parole. WorldCom's Bernard J. Ebbers will serve his full 25-year sentence in the federal system, which has no parole.
Assembling Parts Makers
As auto parts makers Delphi and Visteon negotiate with unions and customers to avoid filing for bankruptcy, the vultures are circling. Wilbur L. Ross Jr., who recently made a big score assembling and restructuring the remains of bankrupt steel companies, will try to do it again with makers of dashboards and drive trains. He's already bought the debt of bankrupt Collins & Aikman, a minority stake in a small French supplier and majority stake in two Asian firms. Like steel, the auto parts sector suffers from fragmentation and over-capacity.
Microsoft announced a streamlined corporate structure designed to boost growth outside its Windows monopoly; reduce the time it takes to get new products to market; and defend its turf more effectively against assaults from Google, Yahoo, Apple Computer and purveyors of free Linux operating software. Seven divisions will be reduced to three, each with its own president and more autonomy. The news, however, did nothing to lift Microsoft shares, which remain stuck in the mid-$20s, where they have been for five years.