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In Business This Week
NOW, BOEING IS TALKING LAYOFFS
AFTER STRUGGLING FOR A year to recruit 19,500 new workers and even going so far as to pilfer some from its own suppliers, Boeing says it now expects to cut 12,000 jobs by the second half of 1998. The company went on the hiring binge because it needs to double production, to 43 jets a month, by the second quarter of 1998. Now, it claims it can do that and still lop some workers next year. The Machinists Union, however, says Boeing is still struggling to get planes out the door, and 1998 will be even more intense as annual deliveries jump from 335 to 550 jets. Analyst Peter Jacobs of Ragen MacKenzie says that with the cuts, Boeing is signaling it intends to get its act together.EDITED BY PAT WECHSLERReturn to top
TCI CUTS A DEAL ON CABLE BOXES
TCI CHAIRMAN JOHN MALONE, playing General Instrument off Microsoft and other vendors, got a rock-bottom price from GI to make up to 12 million digital cable-TV converter boxes. As part of the $4.5 billion deal, Tele-Communications will get a 10% stake in GI and warrants to buy a piece of NextLevel Systems, the unit that makes the boxes. Down the road, Malone is also expected to cut a deal with AT&T. The phone giant is considering an investment in two ventures in which TCI now holds a stake: Internet provider @Home and Teleport Communications.EDITED BY PAT WECHSLERReturn to top
SOFTBANK'S HARD SELL TO INVESTORS
CYBERMOGUL MASAYOSHI SON and his troubled multimedia conglomerate, Softbank, have been getting rough treatment from individual investors in Japan's over-the-counter market. So Chief Financial Officer Yoshitaka Kitao says he wants to take Softbank's show on the road to foreign institutional investors. Some analysts consider it the latest sign that Softbank plans to list on the main section of the Tokyo Stock Exchange next year--and more evidence that a separate listing of its U.S. subsidiary, Ziff-Davis Publishing, on a U.S. exchange is under review. Says Kitao: "If we comment, that would be illegal."EDITED BY PAT WECHSLERReturn to top
SPLITSVILLE FOR THE ANDERSENS?
ANDERSEN CONSULTING TOOK a step closer to divorce with parent Andersen Worldwide on Dec. 16 in San Francisco when 90% of the consultant's partners voted to separate from the parent. The consulting group filed a request for arbitration with the International Chamber of Commerce in Paris. In its filing, Andersen Consulting claims its accounting sibling has built a competitive consulting business and parent Andersen Worldwide hasn't fostered a harmonious relationship. Andersen Consulting CEO George Shaheen expects the arbiter to free his unit without penalty, including a potential exit fee of about $11 billion in its company contract.EDITED BY PAT WECHSLERReturn to top
A SATELLITE PLAN FALLS TO EARTH
TRW HAS THROWN IN THE TOWEL. It announced on Dec. 17 that it will merge its $1.3 billion Odyssey satellite system with that of London's ICO Global Communications. As part of the deal, TRW will get 1.5 million shares, or about 7% of ICO stock, worth about $150 million. TRW also will invest about $100 million in ICO in exchange for rights to sell ICO products and services and participation in ICO's satellite network. The move came after TRW failed to attract investors for the $800 million first phase of its 12-satellite system. The TRW merger pares the number of major players in the high-stakes satellite biz to three.EDITED BY PAT WECHSLERReturn to top