Dockworkers approve cutting costs to keep cargo coming to...

Business Digest

March 28, 1996

Dockworkers approve cutting costs to keep cargo coming to port

In an unprecedented move, dockworkers at the port of Baltimore voted overwhelmingly last night to cut their labor costs to retain cargo shipments that were otherwise certain to shift to Philadelphia.

The historic meeting at the International Longshoremen's Association hiring hall in Highlandtown was called because William Schonowski, president of ILA Local 333, agreed to reduce the size of work gangs scheduled to unload a major shipment of steel due here next week from Belgium.

Mr. Schonowski, who was authorized to make the initial decision without consulting the ILA membership, sought support last night from the 1,200-member union for cost-cutting deals in the future for general cargo handled at the North Locust Point terminal. The vote -- the union's first concession ever before a contract expired -- came after less than an hour of discussion.

Columbia Gas to move its headquarters

Columbia Gas System Inc. said yesterday that it will move its headquarters from Wilmington, Del., to temporary quarters in Reston, Va., in August while it seeks a permanent site in northern Virginia, and it will shift 150 workers from its pipeline subsidiary in Charleston, W.Va., in 1997.

The moves are part of a reorganization aimed at streamlining operations as Columbia Gas and its pipeline unit, Columbia Gas Transmission Corp., emerge from Chapter 11 bankruptcy protection from creditors.

Columbia Gas Transmission has 1,000 jobs in Charleston and 1,600 statewide in West Virginia.

Travelers Group board OKs common-share buyback

Travelers Group Inc.'s board yesterday approved the repurchase of up to $600 million of its common shares for distribution in employee stock option and benefit plans.

The repurchases reflect the company's "strong capital position and financial flexibility," said Travelers Group Chairman Sanford Weill.

Travelers Group is the parent of Baltimore-based Commercial Credit Corp.

Shareholder group wants Kmart to eye sale or merger

A Kmart Corp. shareholders' group made up of labor union members said yesterday that it wants the struggling discount retailer to explore a sale or merger of the company.

The Kmart Independent Shareholders' Committee, which represents ownership of about 520,000 Kmart shares, made the proposal in a preliminary proxy statement filed with the Securities and Exchange Commission. The group plans to solicit shareholders' votes for its proposals at Kmart's annual meeting May 21.

The group, formed by the Union of Needletrades, Industrial and Textile Employees and the International Brotherhood of Teamsters, also proposed the appointment of Stephen Hester, a Bethesda lawyer and investment banker, to the Kmart board of directors.

Northrop Grumman says it will lay off 2,100 in Calif.

Northrop Grumman Corp. says it will lay off 2,100 people from its military aircraft division in Southern California, most of them by July 1.

The defense contractor, which currently employs about 12,500 people in the region, cited declining work on its two major aircraft programs, the B-2 Stealth bomber and Super Hornet fighters.

The 2,100 layoffs would affect about 850 people at its El Segundo and Hawthorne facilities, 675 in Pico Rivera and 575 in Antelope Valley, all in the Los Angeles area. Since the beginning of the year, 400 people have been laid off.

Apple to post loss of $700 million in quarter

Apple Computer Inc. said yesterday that it will post a loss of about $700 million for its second quarter as the troubled computer maker struggles to remedy inventory problems and ebbing demand.

The loss from operations will be about $200 million. The remaining $500 million covers charges for writing down excess inventory and firing at least 1,300 workers under the strategy by new Chief Executive Gilbert Amelio to get Apple back on its feet. Mr. Amelio called the charges "critical steps" in Apple's comeback.

"I can't say it looks like they're in good shape but at least the bleeding will stop," said analyst Stephen Dube of Wasserstein Perella Securities.

Prudential settlement may be less than estimate

Prudential Insurance Co. of America may pay less than the highest analyst estimates of $500 million to resolve charges it misled customers in at least 28 states.

State regulators said a framework based on a $250 million agreement used by New York Life Insurance Co. is being developed to settle charges that Prudential lured customers into replacing their policies at added cost -- a practice known as churning.

The New York Life settlement, which the company said may eventually reduce its earnings by about $65 million, calls for giving almost 3 million eligible customers low-interest loans, life insurance and annuities. A task force plans to recommend a Prudential settlement by June.

Probe of drug companies examines pricing practices

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