Manufacturers
DaimlerChrysler AG (DCX) is preparing a management shakeup as part of a sweeping restructuring, The Financial Times reported on its Web site Tuesday. Chairman Jurgen Schrempp is to take control of a new “executive automotive committee” overseeing the group’s Mercedes-Benz and Chrysler divisions, as well as its commercial vehicle activities and the alliance with Japan’s Mitsubishi Motors, The Financial Times said in an unsourced report. This will replace DaimlerChrysler’s current system of separate automotive, sales and marketing councils, and will further cement Schrempp’s position at the group, The Financial Times said. (DJ 2/20/01)
Enron Corp.’s (ENE) Enron Energy Services unit agreed to provide energy management services to Quaker Oats Co. (OAT). The 10-year, “multi-million dollar” agreement covers 15 U.S. facilities and two Canada plants. Specific financial terms weren’t disclosed. In a press release Wednesday, Enron Energy Services said it will also provide operations and maintenance on energy assets and related energy infrastructure upgrades to increase the plants’ energy efficiency. (DJ 2/21/01)
Ford Motor Co. (F) marketing chief James Schroer is leaving the No. 2 auto maker to take a job as executive vice president for sales and marketing for DaimlerChrysler AG’s (DCX) Chrysler group, officials at both companies said Tuesday. George Murphy, general marketing manager for the Ford division also is leaving Ford to become senior vice president for global brand marketing at Chrysler. Both Schroer and Murphy resigned their jobs at Ford on Monday. They were highly regarded for their marketing skills. Schroer takes a job vacated last year by Theodor Cunningham, while Murphy replaces A.C. “Bud” Liebler, who is retiring. (DJ 2/20/01)
A group of salaried workers at Ford Motor Co. has sued the auto maker, charging that it used an employee-evaluation system to weed out older workers. The complaint by nine workers comes against the backdrop of unease inside Ford about the new review policy, which marks a sharp change from the company’s previous practices and is a highly visible symbol of Chief Executive Jacques Nasser’s crusade to overhaul the 98-year-old company’s culture. The policy, a merit-based review system, was instituted at the beginning of last year. (WSJ 2/15/01)
Entertainment
As the debate over online retailer Amazon.com Inc.’s (AMZN) prospects grows louder, some of its vendors are keeping a close eye on the company’s cash levels, The Washington Post reported Wednesday. In fact, at least one electronics distributor that deals with Amazon is “taking steps to protect itself,” the newspaper said. An executive at this vendor, speaking on condition of anonymity, said the vendor has stopped shipping to Amazon until it pays its current bill, the newspaper added. Other major suppliers to Amazon said they were still being paid on time, but added that they are concerned about the Seattle company’s cash levels, the newspaper said. The Washington Post quoted Jeff Bezos, Amazon’s chief executive, as saying his company hadn’t received indications of nervousness from its suppliers. Bezos also said the company has an “excellent” payment record. (DJ 2/21/01)
Reader’s Digest Association Inc. (RDA) signed a licensing agreement with Amazon.com Inc. (AMZN) under which Reader’s Digest’s The Family Handyman and American Woodworker magazines will share editorial content in exchange for subscription offerings and branding in Amazon.com’s Tools and Hardware store. Financial terms weren’t disclosed. (DJ 2/20/01)
Business at Amazon France, the French arm of online retailer Amazon.com Inc. (AMZN), is going according to its business plan, Amazon France Chief Executive Denis Terrien said Monday. Speaking at a conference, Terrien said France is still a small market for the group. Amazon launched in France in August 2000 after entering the U.K. and Germany in 1998. “The French market (for online retail) is very small,” he said, “which explains the small traffic on the site.” But Amazon France is “absolutely in line with plans,” he added. This comes amid a difficult market environment for business-to-consumer companies, with fellow e-tailers and Web sites having to revise plans down. But Amazon derives its revenue from direct sales to customers and not advertising. Online advertising has been the most hit by the slowdown. (DJ 2/19/01)
Walt Disney Television International Asia Pacific appointed Steve Macallister to vice president and regional head of sales. In this role, Mr. Macallister will be responsible for the distribution activities for all forms of television. His sales team covers territories including Japan, China, Australia, New Zealand, India and Southeast Asia. Mr. Macallister joined Walt Disney Television International seven years ago and worked initially on developing Disney’s distribution business in the emerging markets of Central and Eastern Europe. (DJ 2/19/01)
Sony Corp.’s game unit said it has overcome problems with a key component that have hobbled production of its popular PlayStation 2 game console and it will more than double output of the machine in the year that begins in April. Ken Kutaragi, president of Sony Computer Entertainment Inc., said the Sony unit aims to ship 20 million PlayStation 2 machines world-wide in the coming year, up from nine million this year. The nine million figure fell a million units short of Sony’s initial promises, angering legions of game enthusiasts who were unable to buy the machines during this past Christmas season. Mr. Kutaragi told a news conference that Sony’s game unit has fixed production troubles related to the graphic synthesizer, a Sony-built semiconductor device that is critical to the machine, and that output of the chip has been increasing steadily. (DJ 2/21/01)
Banks
Deutsche Bank AG, Europe’s biggest bank by assets, unveiled its new management team as part of its reorganization into two business units. It also created a new position designed to trim rising costs, a post that will be held by John Ross, formerly the bank’s chief executive for the Americas. Mr. Ross will head a new operating committee that will focus on budget performance, transparency and erasing duplication. The previously announced reorganization, which condenses the bank’s five divisions to two, is part of an effort to increase the cross-selling of products between the two new divisions. (WSJ 2/22/01)
Goldman Sachs Group Inc., in an effort to pare costs, will close a small part of its fixed-income operation that does business exclusively in Canada, people at the firm say. The move will eliminate about 30 jobs in the firm’s Canada operations, located in Montreal, Toronto, Calgary and Vancouver. One person at the firm said the business isn’t expected to meet profit goals in the future. The move is the latest attempt by Goldman to pare its fixed-income business, which has come under pressure in recent years because of declining profit margins. (WSJ 2/16/01)
Retail
Coca-Cola Co. (KO) and Procter & Gamble Co. (PG), arguably the world’s preeminent packaged goods marketers, announced big plans to form a multi-billion-dollar partnership. The companies are bullish about it. Analysts and investors are still trying to make heads or tails of it. Under the terms of the yet-to-be-named joint venture, both companies will pony up equal parts assets, with about $2 billion in sales coming from Coke’s Minute Maid juice unit and another $2 billion from P&G’s Sunny Delight juice and Pringles potato chips brands. The strength of the marriage, Coke’s Chief Financial Officer Gary Fayard said in an interview here late Wednesday, lies in combining Coke’s global marketing and distribution system with P&G’s unrivaled research and development capabilities. More specifically, he said, merging the two allows P&G to piggy-back on Coke’s trucks and sell its chips and juice products in places where they’re currently not available and Coke to take advantage of P&G’s extensive expertise in areas like health and
nutrition. (DJ 2/22/01)
AOL Time Warner Inc.’s (AOL) Warner Bros. Pictures confirmed that they signed an agreement for Coca-Cola Co. (KO) to become sole promoter for the studio’s Harry Potter and the Sorcerer’s Stone film. In a press release Tuesday, the companies said Coca-Cola has been named the sole global marketing partner for both the motion picture, which debuts on Nov. 16, and the subsequent video release. The Wall Street Journal reported Tuesday that people familiar with the deal said Coke will put about $150 million in marketing support behind the movie. (DJ 2/20/01)
High Tech
A Dell Computer Corp. (DELL) spokesman said the company isn’t planning any employee reductions other than the 1,700 it announced Thursday. Spokesman Mike Maher said previous speculation that the firm would cut up to 4,000 employees worldwide, or about 10% of its work force, was inaccurate. “This is the scope of the reductions,” Maher told Dow Jones Newswires. “That’s all there is.” The 1,700 reductions constitute about 4% of the company’s work force. The bulk of the reductions will come in Dell’s central Texas operations, where Dell has its headquarters and employs about 22,000 people. “We’re sizing the business in line with the current economic environment,” Maher said. (DJ 2/15/01)
FairMarket Inc. (FAIM) formed a relationship with eBay Inc. (EBAY) allowing FairMarket merchants, manufacturers and distributors to sell their goods through eBay. Financial terms weren’t immediately available. In a press release Tuesday, FairMarket said the relationship will provide a way for merchants with or without their own site to list items through the FairMarket network or on the eBay site. FairMarket expects the offering to be available early in the second quarter. (DJ 2/20/01)
Intel Corp. (INTC) and First International Computer Inc. (Q.FIC) resolved a pending patent infringement litigation with a settlement and license agreement covering certain patents, the companies said in a press release. A company spokesman wouldn’t comment on the terms of the settlement or license agreement, but he said the patents in question dealt with graphics, power management and the ability to update Bios, a software code used in the biochips of personal computers. As reported, Intel alleged Paipei, Taiwan-based First International Computer imported certain integrated circuit chipsets and products that infringed on patents owned by Intel. (DJ 2/21/01)
Former Whitewater prosecutor Kenneth Starr, now working for Microsoft Corp.’s foes in the company’s antitrust lawsuit, publicly made the case for a breakup of the Redmond, Wash., software giant Wednesday, just five days before an appeal of the case is scheduled. Mr. Starr made his comments during a forum on the antitrust case organized by the Progress & Freedom Foundation, a free-market-oriented think tank here that is partly supported by Microsoft’s competitors. Mr. Starr said a reorganization of Microsoft is needed, and that its past behavior shows it “simply did not care about the requirements of federal antitrust law.” Mr. Starr, who has returned to law practice, earlier this year began working with ProComp, a group funded by Oracle Corp. and other Microsoft rivals that support the Justice Department’s case. (WSJ 2/22/01)
