Slugging It Out for Survival Power, Christopher; Dunkin, Amy; Jereski, Laura
Bloomberg Businessweek,
01/1990
3140
Magazine Article
Retail store analysts predict a turbulent decade as retailers face a central problem: There are too many stores in too many malls, and too many catalogs going after the retail dollar.
Frank Lorenzo, chairman of Texas Air Corp, parent of Continental Airlines, has signed an extensive co-marketing agreement with Jan Carlzon, president of Scandinavian Airlines System.
Texas Air Corp. head Frank Lorenzo intended to cut labor costs by more than $250 million annually when he bought Eastern Airlines Inc. in 1986. Attempts to break Eastern's unions by precipitating a ...strike, selling assets, and moving jobs to Continental Airlines Inc. were thwarted by the courts and the National Mediation Board. Now, Lorenzo has reduced the demands on labor, and Eastern is close to a wage and job security agreement with the Air Line Pilots Association. No settlement is likely in the near future, however, with the International Association of Machinists that represents both mechanics and baggage handlers. Losses for the first quarter of 1988 amounted to $31 million for Eastern and $81 million for Continental. If Eastern signs a deal with the pilots, loss-plagued Continental could be exposed to unionization. Rather than risk that, Lorenzo may decide to shrink Eastern by selling 100 of its 260 airplanes.
Changes in accounting principles, which would require airlines to "defer" revenues by the "estimated revenue value of free travel awards to be used in the future," may cause frequent-flier programs ...to be scaled back.
Although most innovative new companies are started by relatively young individuals, older people can do it too, as 3 case studies illustrate. Robert H. Winnerman, a successful New Jersey homebuilder, ...has come out of retirement at age 66 and is seeking acquisitions and investors for his fledgling International American Homes Inc. He hopes to avoid a replay of the power struggle that preceded his exit from his last company, US Home Corp. At age 63, Louis Fernandez, retired chairman of Monsanto Co., has become chief executive at Celgene Corp., a new biotechnology company that will manipulate microorganisms to produce desired specialty chemicals for industrial use. Juan E. Metzger, who is 68, is chairman of tofu manufacturer Tomsun Foods International Inc. He is one of the founders of Dannon Yogurt. He hopes to repeat this success at Tomsun.
Sony's Challenge Armstrong, Larry; Power, Christopher; Wallace, G David
Bloomberg Businessweek,
06/1987
3001
Magazine Article
Sony Corp. long has been synonymous with the success of postwar Japan and is characterized by innovation, shrewd marketing, and quality. Sony also has demonstrated the international orientation among ...so many highly successful Japanese companies. However, the dramatic rise of the yen has hampered the company's ability to compete in export markets. Protectionist sentiment is growing in the US and in Europe, and competition is becoming more intense. In the fiscal year that ended in October 1986, Sony's worldwide sales had fallen 7%, to $8.2 billion, and earnings from operations declined 75%. The firm has established a goal of reducing dependence on consumer electronics by obtaining 50% of sales from nonconsumer products by 1990, compared to 15% in 1982. In addition, executives at Sony factories are working to cut manufacturing costs. The firm also is sharing its technology with other companies in an effort to create industry standards.
Unilever PLC (London) the world's largest consumer products company, has agreed to purchase the US company Chesebrough-Pond's Inc. for $3.1 billion. Chesebrough is the owner of franchises in such ...brands as Ragu spaghetti sauces, Prince Matchabelli fragrances, and Pond's face creams. Although Unilever had been interested in Chesebrough, it did not wish to make another hostile takeover after losing its bid for Richardson-Vicks Inc. last year. However, when American Brands Inc. made a play for Chesebrough, Unilever rushed in to make a counteroffer. Unilever's debt will rise to about 90% of equity, but the company can restore it to 50% by selling off some of the Chesebrough businesses it will acquire, such as the Bass shoe division. The skin care and food businesses will fit in with US businesses already owned by Unilever. With the purchase, the US contribution to Unilever's sales will rise from 17% to 20%, and gross profits earned in the US will rise from 11% to close to 20%.
ITT Corp has made overtures to sell its telecommunications business to the French. Chairman Rand V. Araskog hopes to pay off corporate debt as a result of the sale. A profile of the ITT Corp is ...presented.
