Top 10 Stories July 24-28

Ford Motor Co., which has helped popularize gas-guzzling sport-utility vehicles, plans to increase the average fuel economy of its SUV fleet by 25% over the next five years. Ford sells about 800,000 sport-utility vehicles a year, ranging from the four-passenger, 3,000-pound Explorer Sport to the eight-passenger, 3.5-ton Excursion.

(John O’Dell)

1. Napster Controversy: Most experts believe a wide range of copyrighted digital files will be exchanged over the Internet via peer-to-peer computing as more people obtain high-speed connections. That belief was reinforced Friday when an appellate court reversed a federal ruling ordering Napster Inc. to shut down, allowing the San Mateo, Calif., firm to continue its online music trading operations at least until mid-September. The debate over Napster’s future follows a suit filed by a recording industry fearful that its intellectual property was being pirated by thousands of Web-savvy individuals who used Napster to trade recorded music without paying record companies or the artists royalties.

(Associated Press)

2. Bank to Slash Jobs: Bank of America Corp. plans to cut as many as 10,000 jobs across the country over the next year to improve its earnings and efficiency, bank executives said Friday. Cuts from the North Carolina-based bank’s 150,000-person work force will focus on middle and upper management, as well as jobs made unnecessary by improvements in efficiency, the bank said.

(Associated Press)

3. Economic Magic Continues: The remarkable U.S. economy, once again confounding the experts, grew at a robust annual rate of 5.2% in the spring, as a surge in investment by American businesses offset a slowdown in consumer spending. The Commerce Department said Friday that the increase in the gross domestic product--the broadest measure of economic health--in the just-completed April-June quarter surpassed growth in the first quarter, when the economy was growing at a 4.8% annual rate. (Associated Press)

4. HMOs to Drop Seniors: Nearly a million seniors will be dumped from Medicare managed-care plans next year, as the HMO industry continues to withdraw from the federal health-care program. The HMOs’ defections--set to go into effect Jan. 1, 2001--will bring the number of seniors dropped by the industry since 1998 to 1.7 million and raise questions about the viability of the Medicare managed-care program. Managed care remains the only inexpensive and comprehensive care available to people over 65.

(Sharon Bernstein)

5 Deutsche Telekom to Buy VoiceStream: Deutsche Telekom, Europe’s No. 2 phone company, agreed to buy VoiceStream Wireless Corp. for $46 billion to gain one of the last U.S. independent nationwide wireless networks. Deutsche Telekom Chairman Ron Sommer has failed to buy companies in previous attempts, and some wonder if political and regulatory scrutiny will end this agreement. The U.S. Senate recently approved a measure to prevent companies more than 25%-owned by a foreign government from buying a U.S. telecommunications company for the next year.

(Bloomberg News)

6. Truth in Billing: A group of state regulators from around the country is drawing up a consumer-rights blueprint that aims to clarify confusing phone bills and help consumers fight bogus charges. The model “truth-in-billing” guidelines are the work of the National Assn. of Regulatory Utility Commissioners. Their recommendations do not have the power of law, but they are often adopted and made law by individual state utility commissions or legislatures. The NARUC proposal, outlined during a convention in Los Angeles last week, drew enthusiastic support from William Kennard, chairman of the Federal Communications Commission.

(Elizabeth Douglass)

7. Historic Core Ripe For Housing: About 50 structures in downtown Los Angeles’ historic core could be transformed into housing for at least 5,000 residents, according to a survey commissioned by the Los Angeles Conservancy. The survey was released as a new generation of downtown housing opens this summer. Preservationists and downtown boosters hope the report will entice others to build more housing in the mostly vacant buildings along Broadway, Main and Spring streets, which once formed the financial and retail heart of Los Angeles. The effort to attract new residents to the historic core is part of the city’s strategy to revive downtown.

(Jesus Sanchez)

8. Qualcomm Spinoff: The San Diego-based wireless communications firm Qualcomm Inc. announced plans to spin off its wireless phone chip and software systems businesses into a separate, publicly traded company. Company officials say the new unit, temporarily named Spinco, will build phone chips that will work on multiple technologies, including a rival system widely used in Europe. Analysts said separating the chip business from patent-rich Qualcomm could reduce licensing snags for the chip unit, which needs access to competing technologies to produce semiconductors that work on multiple mobile phone systems.

(Elizabeth Douglass)

9. Amazon.com Losses Widen: News that an online retailer is hemorrhaging money is nothing new, even if that e-tailer is industry leader Amazon.com Inc. But when the Seattle-based seller of books, music and other merchandise announced widening quarterly losses last week, Wall Street reacted in a new way: by demanding the company push harder for profit. Though quarterly sales were up 84% compared with the year-earlier period, its revenue of $578 million was essentially flat compared with first-quarter sales of $574 million. Two analysts downgraded Amazon.com stock, sending shares to a new 52-week low. Also last week, Amazon’s President and Chief Operating Officer Joseph Galli resigned after a year on the job to become president and chief executive of VerticalNet Inc.

(Karen Kaplan)

10. Corning Ends Talks to Buy Nortel Unit: Corning Inc. said Thursday it ended talks to buy a unit of Nortel Networks Corp. because the biggest maker of glass for optical networks was concerned that the proposed $100-billion transaction would hurt sales. Earlier in the week, Corning shares fell 12% after reports that the companies discussed a plan to have Nortel sell its business that makes components used in fiber-optic equipment in exchange for a majority stake in Corning.

(Bloomberg News)

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The Biz Quiz

1. The Screen Actors Guild is angry at a major sports star for filming a Buick commercial while the union has an active strike against the advertising industry. Name the star. As a bonus, name where the commercial was filmed.

2. J.C. Penney Co. on Thursday named a new chief executive. Who is he? And where was he previously?

3. Auto painter Earl Scheib Inc. has looked to expand its business as improved paints have reduced the number of cars needing new paint jobs. What’s the new business?

Answers on C6

Answers to The Biz Quiz on C2

1. SAG is angry with golfer Tiger Woods. The Buick spot was shot in Kitchener, a city near Toronto, because he believed that Canada was outside the strike area.

2. J.C. Penney named Allen Questrom as its new chairman and chief executive. He has led both Barneys New York and Federated Department Stores out of bankruptcy.

3. Earl Scheib is expanding into painting trucks.