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First Kathie Lee, Now Goofy?


In Business This Week: HEADLINER: CHARLES KERNAGHAN

FIRST KATHIE LEE, NOW GOOFY?

He isn't winning friends among retailers, but Charles Kernaghan is finding support elsewhere for his anti-sweatshop campaign. Having revealed in May that $19 Kathie Lee Gifford pants sold at Wal-Mart Stores were made in a Honduran sweatshop, the executive director of New York's National Labor Committee is now investigating Walt Disney, which licenses the manufacture of trademarked apparel in Haiti. "We're actually changing the culture. More people know about sweatshops than ever before," he exults. Disney says its factories are run responsibly.

Kernaghan got concerned about Central American living conditions at a peace march there in 1985 and has worked on the issue ever since. He joined the NLC in 1988 and became its chief in 1990. "He's had a huge effect. This is the biggest discussion we've had on sweatshops in a decade," says Representative George Miller (D-Calif.).

Kernaghan isn't sympathetic to those who complain about his tactics. "The companies aren't the victims here. The workers are," he says. Not for long, if Kernaghan has his way.EDITED BY KELLEY HOLLAND By Susan ChandlerReturn to top

THIS AIRLINE DEAL ISN'T FLYING YET

CAN THIS DEAL GET DONE? With American Airlines and British Airways having announced a long-expected alliance on June 11, rival airlines, the British government, and even BA partner USAir are expected to play hardball. American and BA intend to link their massive networks worldwide and meld their frequent-flier programs, though they won't exchange ownership stakes. But the deal hinges on liberalized U.S.-Britain aviation agreements. And the British government will likely demand concessions to protect Virgin Atlantic Airways. Meanwhile, the European Commission plans to review the deal. In the U.S., Continental Airlines is already calling for a divestiture of routes and landing slots by BA and American, and USAir is likely to demand a better deal for feeding passengers to BA.EDITED BY KELLEY HOLLANDReturn to top

HAPPY TRAILS, T. BOONE

END OF AN ERA: T. BOONE Pickens, head of Mesa and ex-corporate raider, will step down as CEO from the company he founded 40 years ago. A Mesa spokesman says Richard Rainwater, the Texas financier leading a recapitalization of debt-laden Mesa, asked Pickens "to step aside in due course." Pickens will stay in the top job until a successor is named and will remain on the board. Earlier this year, Rainwater agreed to invest up to $265 million in Mesa in a deal that will give him board control if shareholders approve the change in a June 25 vote. Rainwater was unavailable for comment.EDITED BY KELLEY HOLLANDReturn to top

NET CENSORSHIP GETS SLAPPED DOWN

SCORE ONE FOR FREE CYBERspeech: On June 11, Philadelphia's federal court of appeals unanimously struck down the Communications Decency Act of 1996. The court said the law, which criminalizes online distribution of indecent materials to minors, violates constitutional free-speech protections. It said online communications should have at least the same broad First Amendment rights as print. The government will likely appeal to the U.S. Supreme Court, which will probably hear the case this fall.EDITED BY KELLEY HOLLANDReturn to top


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