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Chart: MedImmune Stock Price


The job just keeps getting tougher for new Ford Motor Chief Executive William Ford Jr. On the job just a month, he has seen a worsening economy drive up auto-loan defaults at the company's Ford Motor Credit financial subsidiary, while cutthroat competition ratchets up marketing costs.

That led the company on Dec. 5 to warn investors it expects a 50 cents-a-share operating loss in the fourth quarter, instead of the 10 cents Wall Street was anticipating. Earlier in the week, the auto maker announced it will eliminate one shift at its Edison (N.J.) truck plant, reduce retirement and health-care benefits for 45,000 salaried workers, and suspend merit raises for top managers.

Meanwhile, Bill Ford is preparing to unveil a major restructuring in mid-January. "We're reviewing this entire company top to bottom, and bottom to top, to figure out what's critical and what's not," he told reporters recently. "If it's not, let's get rid of it." Unfortunately for investors, that could mean additional one-time charges to those already hard-hit fourth-quarter results. On Dec. 5, a jury found former Sotheby's Chairman A. Alfred Taubman guilty of conspiring with archrival Christie's to fix auction prices. Taubman, 76, insisted that the scheme had been cooked up and executed by former CEO Diana "DeDe" Brooks. She previously pleaded guilty to price-fixing but said she was acting on behalf of her boss. The ex-chief now faces up to three years in prison, while his Christie's counterpart in the secret meetings, Anthony Tennant, is safe in London. At least Taubman, a former shopping-mall developer who remains the auction house's controlling shareholder, can take comfort in one thing: Perhaps relieved that the controversy is now resolved, investors bid up Sotheby shares 13% on the news, to $15.67. Sotheby's has already pleaded guilty to an antitrust charge, which carried a $45 million fine, and has paid millions more to settle customer claims. Ad sales for Fox's Feb. 3 Super Bowl could use a last-minute touchdown. Advertising buyers say Fox hasn't yet sold about 30% of its slots for the pro-football championship, usually the hottest ad buy on network TV. Sacked so far by a lackluster ad market, Fox is asking $1.9 million for a 30-second spot. That's down from the $2 million it had been seeking prior to September 11--and a steep decline from the $2.3 million that CBS got for last season's big game. Longtime sponsors PepsiCo and Anheuser-Busch have already signed on for Super Bowl spots, along with newcomers Levi Strauss and MasterCard.

Corrections and Clarifications

BusinessWeek incorrectly reported that MasterCard International would be a sponsor of Fox's Feb. 3 telecast of the Super Bowl (In Business This Week, Dec. 17). Although an advertiser in previous telecasts, MasterCard is not buying ad time for this year's game.

Troubled CNA Financial is cutting some 1,850 jobs--10% of its workforce--in a long-expected reorganization of its property-casualty and life-insurance operations. The company on Dec. 5 said that it would record a fourth-quarter charge of up to $124 million after taxes as it shrinks from 169 offices to 68 around the country. CNA suffered a $304 million loss in the September 11 World Trade Center attack, which led to a net operating loss of $155 million in the third quarter, but analysts say its restructuring was needed long before then. Companies, beware: those popular "pro forma" financial statements could land you in hot water with the Securities & Exchange Commission. The SEC warned on Dec. 4 that it will launch fraud investigations if pro forma numbers are misleading or omit information that's important to investors. Pro forma results, which deviate from generally accepted accounting principles, have become increasingly popular with companies and analysts, who argue that official numbers don't reveal enough. SEC Chairman Harvey Pitt allows that he sees the flaws in GAAP--but doesn't want companies manipulating numbers to hide poor results. Micron Technology wants a memory boost. The Boise (Idaho) maker of memory chips for PCs is in talks to form an alliance with--or purchase--ailing South Korean competitor Hynix Semiconductor. A deal could give Micron control of more than 50% of the dynamic random-access memory-chip market and help insulate it from the boom-to-bust cycle that has long plagued the chip industry. Although there are incidental signs of a recovery in the PC market, memory chipmakers have been forced to sell supplies well below their cost because of excess capacity. The deal could help resolve that. U.S.-South Korean friction over trade and Hynix' $7 billion debt load, however, mean that an eventual pairing is far from a sure thing. -- Ames Department Stores will close 54 stores to help it emerge from bankruptcy.

-- Delta Air Lines said its November traffic fell 20.1% from the year-ago period.

-- The Nasdaq Stock Market will begin paying brokers for price data on their trades. MedImmune's Dec. 3 announcement that it would buy Aviron, developer of a flu vaccine, sent its stock down 12%, to $38.83, on concerns that the $1.5 billion deal is expensive and won't pay off quickly. But by Dec. 5, the company's share price had rebounded by 17.7%, buoyed by the vaccine's long-term potential.


Toyota's Hydrogen Man
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