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In Business This Week: Headliner
Rod Eddington: Course Correction?
Rod Eddington may be just the right ticket for troubled British Airways. The new CEO is credited with piloting regional airline Ansett Australia, where he took the helm three years ago, out of the red. In BA, he inherits quite a challenge. The British flagship is expected to lose about $400 million for the year ending in March.
BA figures that Australian-born Eddington, 50, has the people skills to spark up service and lead a turnaround. Staff morale at BA is said to have plummeted under Robert Ayling, the aloof chief executive dumped in March. Ayling may also have alienated regulators, who have blocked BA's proposed alliance with American Airlines.
BA also looks to be a smart move for Eddington. Ayling had already tackled some of the tougher jobs--battling for lower labor costs and starting a switch to smaller, more efficient aircraft. BA is swapping many of its older Boeing 747s for smaller 777s. The shift is controversial, but, if it works, Eddington will be able to claim credit.By Stanley Reed in London; Edited by Anne NewmanReturn to top
A Dispatch to Reuters?
Reuters is in talks to acquire the telecommunications consultancy Yankee Group Research from financial information publisher Primark, Business Week has learned. The deal, expected to be signed sometime next week, would be a further step into research and consulting for the London-based news and finance giant. Last fall, Reuters bought French online publisher ORT and Tower Group, a Boston technology consultant.
Primark acquired Yankee in 1996 for $34 million and had been planning on spinning off 40% of the company in an initial public offering this year. Although neither side would comment, independent sources confirm that they are close to signing a deal. "The champagne is in the refrigerator," says one Yankee Group insider.Edited by Anne NewmanReturn to top
A Rescue Mission to Saturn
For 10 years, Saturn begged its parent General Motors for new models. Last fall, it launched the new L-series midsize car--and it flopped. Now, GM is redoubling its efforts to revive the flagging division with a $1.5 billion investment: $1 billion to add production to Saturn's Spring Hill (Tenn.) plant to build a small sport-utility vehicle and a redesigned small car for the 2002 model year; and $500 million to build GM's new global, four-cylinder engines for Saturn cars. It's welcome news for Saturn: Since launching the L-series from its Wilmington (Del). plant last fall, GM has had to cancel shifts and cut back production because of poor sales.Edited by Anne NewmanReturn to top
The Paper Company Chase
International Paper Wants to take some of its paper profits to buy a smaller rival, Champion International. The world's biggest paper company, International is offering cash and stock worth $6.2 billion for Champion, which earlier had agreed to be taken over by Finland's UPM-Kymmene in a stock deal now valued at about $5.4 billion. Rising demand and prices for paper products have put other paper companies in a buying mood, too. Smurfit-Stone Container--the product of a 1998 merger--plans to close on its $2 billion takeover of St. Laurent Paperboard of Canada in May, while Wisconsin's Consolidated Papers has agreed to a $4.8 billion purchase by Stora Enso Oyj of Helsinki.Edited by Anne NewmanReturn to top