In Business This Week: HEADLINER: BERNARD FOX
MILLSTONES AROUND HIS NECK
Nuclear power is burning Bernard Fox. After six months as head of New England's largest electric utility--Northeast Utilities, in Berlin, Conn.--Fox, 54, has two Connecticut plants down, two under close watch by the Nuclear Regulatory Commission, and layoffs looming.
Fox says his "new, stronger game plan" will help NU solve "short-term problems." But last November's shutdown of the Millstone I plant is now extended into summer because of safety concerns. Millstone II went down on Feb. 20 because it didn't hew to licensing requirements. And the NRC said on Mar. 8 that by Apr. 7 it may shutter two other plants if they fail to resolve glitches in their emergency safety systems. Meantime, NU may trim its nuke workforce of 3,000 by up to one-third over the next five years.
This is serious in New England, where 35% of electric power is nuclear. Replacement power for the two closed plants costs $13 million a month, and Connecticut regulators may lay the bill on consumers. Fox may be wishing his time at NU's helm were off to a brighter start.EDITED BY KELLEY HOLLAND $by By Resa KingReturn to top
A ROCKY JOURNEY FOR TRAVELERS
IS THIS UNDERWRITER JUMPING the gun? Travelers/Aetna Property Casualty, the company that Travelers Group CEO Sanford Weill hopes to create out of the property-casualty operations of Aetna and Travelers, filed with the Securities & Exchange Commission for an $885 million initial public offering. But that may be easier said than done: The $4 billion Travelers purchase of Aetna is hitting roadblocks. Several unions are fighting it because Connecticut will lose 1,500 jobs, and the state could hold up the sale. But Wall Street thinks Travelers is making a smart move by buying Aetna and spinning off part of it. "It helps [Travelers] establish a value for the entity and gives them access to the market, without diluting Travelers stock," says Gloria Vogel, a Ladenburg, Thalmann analyst.EDITED BY KELLEY HOLLANDReturn to top
KNIGHT-RIDDER MAY RID ITSELF OF CABLE
IT'S BACK TO BASICS AGAIN AT Knight-Ridder, which acknowledged on Mar. 11 that it is in talks to sell its 50% stake in TKR Cable I. The likely buyer: Tele-Communications Inc., Knight-Ridder's partner in TKR since 1981. Knight-Ridder's share of TKR should fetch around $800 million, but its debt load means that Knight-Ridder would see only about half that in cash. Cable "was a success [for Knight-Ridder], considering what they're selling it for," says Wheat First Butcher Singer media analyst Kenneth T. Berents. Success or no, TKR doesn't fit with Knight-Ridder's print-oriented plans.EDITED BY KELLEY HOLLANDReturn to top
GOOD NEWS, BAD NEWS FOR BUFFETT
YOU WIN SOME, YOU LOSE some. Warren E. Buffett's Berkshire Hathaway reported a 1% decline in operating income for 1995. Investors say high insurance claims may have accounted for the decline. Buffett will likely explain the drop in a Mar. 18 letter to shareholders. Meanwhile, Berkshire's net income rose 46%, to $725 million, on higher investment gains and there could be more. Buffett won permission on Mar. 13 to buy up to 17% of American Express.EDITED BY KELLEY HOLLANDReturn to top