"We should have a commissioner in place within 60 days. We have really narrowed the field."
--Jerry McMorris, Colorado Rockies' owner and chairman of Major League Baseball's commissioner search committeeReturn to top
TRUSTBUSTERS GET LOCKHEED ON RADAR
THE PROPOSED $11.6 BILLION merger between Lockheed Martin and Northrup Grumman may be flying into storm clouds at the Justice Dept. BUSINESS WEEK has learned that Justice is focusing its antitrust review on the companies' radar and electronic-warfare systems. To approve the combination, slated to close in early 1998, Justice may require Lockheed Martin to accept restrictions that would benefit its competitors.
Companies such as ITT, Hughes Electronics, and Raytheon could be badly hurt if Justice doesn't act, say industry insiders. Lockheed Martin could use its own radar systems in its military aircraft, locking Raytheon and Hughes out of this $2 billion market. And with its corner on infrared technology, combined with its radio-frequency (RF) knowhow, the company could dominate the $1.2 billion electronic-warfare- equipment market, squeezing out rivals ITT and Raytheon, which make only RF gear.
To preserve competition, Justice may force Lockheed Martin to divest up to $600 million of Northrup Grumman assets, says James McAleese, an industry lawyer. The feds may also require it to seek outside bids for some subsystems. Lockheed Martin CEO Vance Coffman says that while it's not his preference, it won't be a problem--the company always shops for the best buy.EDITED BY LARRY LIGHT & ROBERT McNATT Stan CrockReturn to top
CHECKING OUT A PENNY-STOCK KINGPIN
ANOTHER SHOE HAS DROPPED in the government's campaign against "chop stock" micro-cap stock fraud. According to people close to the inquiry, the FBI and a federal grand jury in Brooklyn are apparently probing allegations by Amr "Tony" Elgindy that a former penny-stock kingpin, Jordan Belfort, briefly owned a hidden interest in Elgindy's Texas-based firm, Key West Securities. Belfort was formerly head of scandal-ridden brokerage Stratton Oakmont, and sources have told BUSINESS WEEK that Belfort has remained active behind the scenes in several Wall Street firms (Special Report, Dec. 15). Belfort has denied the allegations. He could not be reached for further comment.
The grand jury has subpoenaed documents and tapes of phone conversations between Elgindy, Belfort, and Robert LoRusso, who Elgindy maintains was Belfort's "front man" in buying a stake in Key West early in 1997. (LoRusso and Belfort have denied the allegations.) According to the tapes, which were excerpted by BUSINESS WEEK, Belfort speaks of an alleged bribe attempt while he headed Stratton, and asserts that "I made a zillion dollars off my deals." Assistant U.S. Attorney Joel Cohen declined all comment.EDITED BY LARRY LIGHT & ROBERT McNATT Gary WeissReturn to top
GLOBAL WARMING: MOST BOSSES ARE WORRIED, AFTER ALL
ACCORDING TO CONVENTIONAL wisdom, U.S. business is firmly opposed to taking steps to curb global warming. But a new BUSINESS WEEK/Harris poll suggests that the conventional wisdom is wrong. Of 400 top executives polled, 59% considered climate warming to be an "increasing threat"--worrisome enough for governments or business to cut emissions of greenhouse gasses. "The business community is realizing that we have just one spaceship, Earth, and it needs to be fixed," says Ray C. Anderson, CEO of Interface, a commercial carpet maker.
Those in transportation, communications, and utilities, however, were most likely to dismiss worries about climatic changes. Moreover, says Thomas Stallkamp, president-elect of Chrysler, the public isn't asking industry to act. Consumers, he says, are "closer to the global warming of their electric blanket than they are to the emissions in the air."EDITED BY LARRY LIGHT & ROBERT McNATT John CareyReturn to top