"I hardly have any time to read the news anymore. Mostly, I just skim the retractions."
--President Clinton, at the annual White House Correspondents' DinnerEDITED BY ROBERT McNATTReturn to top
WILL WORLDCOM HAVE TO SLIM DOWN?
WORLDCOM CEO BERNARD EBBERS is calmly telling shareholders that his pending acquisition of MCI Communications won't be derailed by regulators. But sources close to the company say that the telco is already mulling over compromises, including the possible sale of some operations, if such a deal is necessary to win regulatory approval.
In late April, trustbusters at the European Commission formally said that they were eyeing the potential impact of WorldCom/MCI's share of Internet operations. U.S. regulators also share that concern. Although the WorldCom/MCI deal is ultimately expected to win approval, some policy analysts believe that in a worst-case scenario, WorldCom would be forced to sell its own or MCI's Internet network capability.
Ebbers says such talk is premature. "Typically, [regulators] like to extract a pound of flesh here and there," he says. "It is something we've expected all along." But the company doesn't want to get caught flatfooted, either. WorldCom needs to decide whether to spin off MCI's Internet network or satisfy regulators by keeping the network open to all comers. If it sells off a chunk of its network, rivals such as GTE would be eager to gobble up the castoffs.Catherine YangReturn to top
LOCKHEED'S SHIP MIGHT NOT COME IN
WHEN YOU'RE TRYING TO GET GOVERNMENT APPROVAL for a controversial merger, you don't want a reputation as a monopolist. But Lockheed Martin could wind up with that stigma because of its eagerness to win a federal contract worth up to $25 billion. In December, Lockheed Martin cut a deal that effectively made it the only bidder on a new destroyer. That, say defense sources, has upset the Pentagon just as Lockheed Martin is seeking Justice Dept. approval for its merger with Northrop Grumman.
The "Dream Team," formed to bid on the DD-21 destroyer includes Lockheed Martin, Litton Industries' Ingalls Shipbuilding, and General Dynamics' Bath Iron Works. The agreement barred both shipyards from signing with anyone else, freezing out a bid from Raytheon; no other shipyards now build destroyers.
Lockheed Martin and General Dynamics say that the shipbuilders asked Lockheed Martin to join their team as a systems integrator. However, after Raytheon complained to the Pentagon, the Navy said that it may revamp the bidding process on the warship to attract other bidders. Lockheed Martin has already lost some credibility. If the Navy succeeds, it could lose the DD-21, too.EDITED BY ROBERT McNATTReturn to top
JIM HOFFA: A UNION LEADER THE GOP COULD LOVE
THE MESS AT THE TEAMSTERS could be good news for Republicans. On Apr. 27, a court-appointed official gave James Hoffa the green light to run for Teamsters president. Favored to win, the son of infamous union leader Jimmy Hoffa could become head of the AFL-CIO's largest union in September, just before the fall elections. Hoffa has made it clear that he won't aggressively support Democrats, as did former President Ronald Carey, who was barred from running again after his reelection was nullified. Hoffa will probably start backing GOP candidates again, say Teamsters insiders.
The GOP is also buoyant about the indictment of former Teamsters political director William Hamilton, announced the same day. The Justice Dept. has charged him with giving Teamsters money to Democratic and liberal organizations in return for financially backing Carey's 1996 campaign. That may lead to the indictment of AFL-CIO Secretary-Treasurer Richard Trumka, also allegedly involved in the scheme, as well as some Democratic Party officials. Hamilton and Trumka deny all charges.EDITED BY ROBERT McNATTReturn to top