) at the right time. As chief of GE's home-appliance unit, he has been duking it out with Whirlpool (WHR
) and Maytag (MYG
). But sales and profits are slumping as the industry flounders.
Johnston, 52, is leaving that frying pan only to step into another, however. Albertson's (ABS
), the nation's No. 2 supermarket and drugstore chain, named Johnston chairman and CEO on Apr. 24. Ever since it bought American Stores in 1999, Boise (Idaho)-based Albertson's has been losing market share to megachains Kroger (KR
), Safeway (SWY
), and Wal-Mart (WMT
Johnston's hire marks the first time Albertson's has gone outside the company for a CEO. He figures his outsider status gives him an edge. "I don't bring any baggage to this thing, so I can tell you right now there are going to be no sacred cows," he says.
It's about time, analysts say. "Albertson's is a company that needs a breath of fresh air," notes John Murphy of Credit Suisse First Boston. Still, Johnston may be in for his toughest fight yet. General Dynamics (GD
) hasn't given up its efforts to buy Newport News Shipbuilding (NNS
). On Apr. 25, it bid $2.6 billion, nearly double the $1.4 billion it offered in 1999. Newport News thought the price was too low last time. The latest deal, which would create a giant that will build all the U.S. Navy's submarines and aircraft carriers, could pass muster with the Bush Administration. Some senior Pentagon officials believe competition should be defined by mission, not hardware. If satellites, spy planes, and submarines compete for intelligence missions, the U.S. doesn't need two shipyards building subs, the thinking goes. The two Virginia defense companies don't compete anymore, anyway--they split submarine contracts. And the Navy may reap potential savings, given GD's record for slashing costs. Next time Oracle (ORCL
) CEO Larry Ellison looks in his rearview mirror, he might see a blue streak speeding up behind him. IBM on Apr. 24 said it would plunk down $1 billion for the database software unit of Informix. The bid takes aim at the heart of Oracle's business--applications that run on Unix machines. IBM (IBM
) already holds more than 90% of the market for databases that run on mainframe computers. With Informix (IFMX
), IBM will have 22% of the Unix market. That's well shy of Oracle's nearly two-thirds share, but Ellison might want to hit the gas pedal to stay ahead. It's another strange sign of the times. J.P. Morgan Chase (JPM
) is turning to the bond market to raise venture-capital funding. The New York bank plans to sell $600 million to $800 million of AAA-rated bonds to finance more than 100 venture-capital, private equity, and leveraged buyout deals. The bonds will pay 6% interest, plus periodic cash payments based on investment performance. A third of the investment will be in existing partnerships with the bank's private equity unit, says Bloomberg News, which first reported the story. Tobacco friends and foes alike have long assumed the Bush Administration would find the first exit from the $100 billion lawsuit against Big Tobacco it inherited. That exit may come sooner than expected. Before taking a formal position on the suit, Administration officials have found a way to quietly smother it. Bush's first budget provides just $1.8 million of the more than $56 million that prosecutors say they need to continue the case. The idea is not new: Republican congressional leaders tried to slash funding during the Clinton years. A federal judge granted a permanent injunction on Apr. 25 to The McGraw-Hill Companies (MHP
) barring Vanguard Group from issuing exchange-traded mutual funds based on Standard & Poor's indexes. ETFs are index funds that trade mostly on the American Stock Exchange. McGraw-Hill, which owns S&P and BusinessWeek, sued to prevent Malvern (Pa.)-based Vanguard from launching the products, dubbed VIPERs. McGraw-Hill argued that the nation's second largest mutual fund company didn't have the proper licensing agreements to use the S&P name. Judge Alvin Hellerstein agreed. Kenneth Vittor, McGraw-Hill's general counsel, called the decision a "vindication." Vanguard is taking issue with the ruling: "It is our intent to file an appeal at the earliest opportunity," a Vanguard spokesman said. -- Standard & Poor's downgraded California's debt due to the state's energy crisis.
-- Telecom company Verizon (VZ
) cut its annual capital budget by $1 billion, to $17.5 billion.
-- Sun Microsystems (SUNW
) will shut down for a week this summer as a cost-cutting move. Fifteen years after U.S. Steel and Marathon Oil were subsumed into USX, the Pittsburgh company has decided to split the two. Investors cheered the move, which could occur by yearend. Why? As a stand-alone entity, U.S. Steel could attract a takeover bid. USX-U.S. Steel (X
) shares, now traded as a tracking stock, leaped 19% on Apr. 24, to $18.90, before slipping to $18.70 the next day.