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Browne Steps Down


He's an oil-patch legend who built BP (BP) from a weak sister into a supermajor—but that was back in the '90s. On Jan. 12, after a true annus horribilis, CEO John Browne said he'll leave the company early, at the end of July. A source says Browne, 58, was tired of being on the firing line following a lethal refinery explosion in Texas in 2005, oil spills and production slowdowns in Alaska, investigations into trading practices, and other woes.

Browne's successor, production boss Tony Hayward, seems the obvious choice. His chief rival, Robert Dudley, head of BP's key TNK-BP unit in Russia, may have been left in place to deal with Kremlin attempts to seize more control of oil ventures with foreign owners. Among Hayward's first tasks: making good on BP's pledge to boost safety measures at its U.S. refineries in the wake of a critical report released on Jan. 16.

See "BP's Browne Sets Earlier Retirement"

Jeffrey Immelt must have quite a hole in his pocket. Within three days, the General Electric (GE) chairman and CEO dropped $12.9 billion in cash. Expanding GE's health-care domain, Immelt was set to announce on Jan. 18 that GE would take two-thirds of Abbott Laboratories (ABT) diagnostics operations for $8.1 billion. That deal, which came only two weeks after rival Siemens (SI) closed on its $5.3 billion takeover of Bayer's (BAY) diagnostics unit, followed GE's agreement on Jan. 15 to spend $4.8 billion for British aviation-parts maker Smiths Aerospace.

Partly in celebration of swooning crude prices, which closed near $51 on Jan. 16, the Dow set a record of 12,582. Cheaper oil, of course, juices the overall economy—though it makes a rate cut less likely.

See "How Speculators Increase Oil Volatility"

Soon after Apple's (AAPL) Dec. 29 disclosure of repeated options backdating between 1997 and 2003, press accounts reported that the Justice Dept. and the SEC were investigating. But insiders say the new information was not new to the feds, who had gotten biweekly status reports over the past five months. Insiders insist that CEO Steve Jobs is not a target, although he played a role and received some of the backdated grants. What's more, U.S. Attorney Kevin Ryan, whose office is handling the probe of Apple, quit on Jan. 17. Whether his replacement wants to tangle with Jobs remains to be seen. Meanwhile, Apple on Jan. 17 reported record profits and revenue.

At first they didn't succeed, so they tried again. Then they sweetened their offer. But on Jan. 16, New York's Dolan family still got rebuffed by a special committee of Cablevision's (CVC) board in their latest effort to take the cable company private. The committee said $30 a share "does not represent fair value." Now, could Time Warner (TWX) step in as a bidder? After nearly a decade of speculation that the media giant would gobble up Cablevision, whose systems are contiguous with Time Warner's in New York City, this could be the year the Dolans hear an offer they can't refuse.

See "Will Time Warner Go After Cablevision?"

How worried are U.S. companies about soaring health costs? Very. Top business groups are so alarmed that they have joined forces with frequent antagonists to create two coalitions committed to spurring reform. On Jan. 16 the Business Roundtable teamed up with the AARP and the Service Employees International Union to launch a campaign pressuring Congress to find bipartisan solutions to health-care and retirement security issues. The second coalition, set to be unveiled on Jan. 18, includes insurance companies, doctors' groups, the U.S. Chamber of Commerce, and liberal advocacy groups, including Families USA.

The world's biggest semiconductor companies aren't in the chips. The 800-pound gorilla, Intel (INTC), on Jan. 16 reported sharply lower fourth-quarter earnings and warned that this year's profits won't be pretty, either. One reason: a price war with rival Advanced Micro Devices (AMD). AMD also is expected to report weak earnings as the two take off the gloves to win share in everything from business servers to consumer notebook PCs.

See "Intel Fights Back as Chips Are Down"

By failing to merge with Warner Music Group (WMG) last summer or sell itself to a private equity group this fall, and most recently by firing two top executives, EMI may become takeover bait. Alain Levy, the CEO for recorded music, and his No. 2, David Munns, were ousted on Jan. 11 after the world's third-largest music company warned that revenues would fall 6% to 10% in the fiscal year ending Mar. 31. But by putting himself in charge of music for now, EMI Chairman Eric Nicoli, a former chief at United Biscuits, hasn't inspired much confidence. Shares sank about 8% following the shakeup. Will Warner Music perform an encore to its June takeover try?

Turnaround ace Wolfgang Bernhard on Jan. 11 said he'd resign as Volkswagen brand chief in the latest management switch at Europe's largest automaker. Investors are now gripping their seats hoping his two-year-old restructuring drive doesn't careen off track. But those fears may be overblown. The new triumvirate running VWCEO Martin Winterkorn, wily Chairman Ferdinand Piëch, and Porsche Chief Executive Wendelin Wiedeking—is likely to push just as hard to retool and is working to eliminate state influence.

See "

What Bernhard's Departure Means for VW"

Has iffy commerce gotten Commerce Bancorp in trouble? Its shares sank 8.3% on Jan. 16 after the Cherry Hill (N.J.) bank revealed that federal bank regulators had begun an inquiry into real estate deals involving officers, directors, and other employees. Some of the deals apparently involved bank facilities, but neither the company nor regulators would elaborate further, creating confusion in the market over how severe the consequences of the inquiry could become.

As if high-definition DVD makers didn't have enough problems with competing formats, here come the hackers. Several weeks after an HD DVD movie watcher announced he had cracked a supposedly foolproof content-protection scheme that prevents unauthorized copying, a much larger group began distributing online a hacked copy of the HD DVD movie Serenity. The other format, Blu-ray Disc, uses the same anticopying software but adds another layer of protection. Still, it may only be a matter of time before that, too, is cracked. Movie studios can retaliate by trying to disable suspect computers and programs remotely, but that could unleash a public-relations catastrophe and cause a slump in already tepid sales of the rival formats if innocent people got zapped. The good news for both camps is that there's no universal key allowing widespread illegal copying—yet.


American Apparel's Future
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