In Business This Week
Edited by Monica Roman
HEADLINER
Evan Greenberg: It's Better in Bermuda
When Evan Greenberg abruptly resigned 14 months ago as president of American International Group (AIG
), the $46 billion-a-year insurer run by his dad Maurice "Hank" Greenberg, some thought the heir apparent would abandon insurance altogether. But now he has landed as vice-chairman and head of reinsurance operations at ACE Ltd. (ACE
), a small insurer based in Bermuda. "Now he has an opportunity to prove himself outside of Hank's shadow," says Brandon Rees, of the AFL-CIO staff retirement plan, an AIG investor that fought for a more democratic succession process.
While Greenberg, 46, boasts great connections and two decades of working at AIG, it's no easy task to price and sell insurance to insurers these days. And ACE itself is hurting as the September 11 attacks forced it to post a $390 million loss for the third quarter. Greenberg's family can empathize: Brother Jeff is head of insurance broker Marsh & McLennan, which lost 292 employees at the World Trade Center, while AIG lost about $500 million as a result of the attacks.
By Diane Brady
Davos Decamps for Manhattan
Finally, some good news for New York. The World Economic Forum announced on Nov. 7 that it will hold its annual meeting at the Big Apple's Waldorf Astoria Hotel from Jan. 31 to Feb. 4. For the past 30 years, the prestigious event has been held in the chic ski resort of Davos, Switzerland. The WEF made the move amid growing fears that the Swiss authorities would not be able to guarantee the security of the politicians, business execs, and academics who attend the conference. The change, which will be for one year only, is designed to show solidarity with New York in the wake of the September 11 attacks. WEF President Klaus Schwab says the new location will inspire attendees to find solutions to world problems, including the global economic slowdown and terrorism. "There could be no better place than New York City to confront these issues," he says.
Philip Morris Execs Hop the Pond
With subpoenas still swirling and earnings under pressure, word is that Philip Morris International will soon close its headquarters just outside New York City, in Rye Brook, N.Y., and shift management of all non-U.S. tobacco businesses to Lausanne, Switzerland. The company has long run its Europe, Middle East, and Africa tobacco operations from several office complexes along the shores of Lake Geneva. Now, senior executives from the company's international headquarters will move across the Atlantic. An estimated 300 other U.S.-based employees of Philip Morris International are expected to lose their jobs in what insiders say is a cost-cutting measure.
A Merger Ahead for Enron?
With its stock falling to new lows and its credit rating battered, energy giant Enron (ENE
) is desperately searching for new capital. Sources close to the Houston company say it's considering deals with other energy-trading companies, private-equity firms, and blue-chip saviors such as GE Capital. The Wall Street Journal and CNBC (GE
) reported that Dynegy (DYN
) is in merger talks with Enron. The company's financial crisis was sparked by disclosures about some of its off-balance-sheet partnership deals negotiated by former Chief Financial Officer Andrew Fastow. A Securities & Exchange Commission investigation and the threat of liabilities from shareholder lawsuits could make it tough for Enron to land a new investor.
Now Playing at Disney: Twofers
Mickey must be getting lonely in California. Walt Disney (DIS
), battling falling attendance at its flagship Disneyland Resort complex in Anaheim, Calif., is slashing prices to lure local visitors to Disneyland and its nearly year-old sibling, Disney's California Adventure park. Earlier this year, Disney reduced prices to help California Adventure's weak attendance. From now until just before Christmas, Southern California residents can buy a two-day pass to both theme parks for $49, compared to the usual $48 one-day adult admission price for just one park.
Baxter Takes the Blame
When a dozen kidney-dialysis patients inexplicably died in August in Spain, Baxter International said its blood-cleaning filters were blameless. On Nov. 5, the medical-products company changed its mind and conceded that its filters likely "played a role" in the deaths of about 50 people worldwide. Baxter said a recently acquired factory in Sweden contaminated the filters by using a chemical to test them for leaks. The company will take a charge of $100 million to $150 million to cover liabilities from the deaths and the end of dialyzer production at the Swedish facility.
Et Cetera...
-- Bridgestone/Firestone will pay states $42 million to avoid lawsuits over its tire recall.
-- A court cut ExxonMobil's $5 billion bill for punitive damages for the Valdez oil spill.
-- Nortel won a $1.1 billion contract to upgrade Sprint's local phone network.
CLOSING BELL
Pep Pill
Bristol-Myers Squibb (BMY
) got a shot in the arm on Nov. 6 after an appeals court said the Food & Drug Administration should not have approved a cheap, competing version of Bristol's cancer drug Taxol. The news sent Bristol's stock up 4.7% to $55.76, since the generic version of Taxol could be pulled from the market.
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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