In the Region Lockheed and union have pact at 2 plants...

BUSINESS DIGEST

March 09, 2002

In the Region

Lockheed and union have pact at 2 plants, but not in Georgia

Lockheed Martin Corp. reached a tentative contract agreement yesterday with the International Association of Machinists locals representing two of its plants, but the offer was rejected by the union's local branch at Lockheed's Marietta, Ga., aircraft factory.

Bethesda-based Lockheed, the union and federal mediators had met overnight Thursday in three separate talks in an effort to avoid a walkout of 6,000 union workers at plants in Sunnyvale, Calif., Palm- dale, Calif., and Marietta.

The union said Lockheed made significant changes to pay packages, pension and medical benefits from its original offer that was rejected by union members Sunday. Union representatives at the two California plants recommended ratification of the latest offer in voting tomorrow.

But, according to a letter sent yesterday by the site manager to employees at the Marietta plant, leaders of IAM Local 709 indicated they would not recommend approval of the new contract.

Panel backs cash-only for buyer of CareFirst

The Maryland House Economic Matters Committee approved legislation yesterday that would invalidate a key provision of CareFirst BlueCross BlueShield's merger agreement with WellPoint Health Networks by requiring any acquisition to be an all-cash transaction.

The $1.3 billion agreement under which the California for-profit insurer would acquire the nonprofit CareFirst calls for $850 million to be paid in WellPoint stock. The bill, sponsored by Del. Michael E. Busch, D-Anne Arundel, now goes to the House floor.

The committee also approved a sweeping bill sponsored by Busch and House Speaker Casper R. Taylor that would establish a Maryland Health Insurance Plan to provide insurance for people with pre-existing medical conditions.

Elsewhere

AMF Bowling Worldwide emerges from bankruptcy

AMF Bowling Worldwide Inc., the world's largest owner and operator of bowling centers, said it emerged from bankruptcy protection.

The Richmond, Va.-based company, which is no longer affiliated with AMF Bowling Inc., said it also received $350 million in financing from Deutsche Banc Alex. Brown Inc. and its Bankers Trust Co. unit.

Secured lenders, who are owed about $622 million, will receive $150 million in notes and 92.5 percent of the restructured company's new shares and cash. Unsecured creditors, including bondholders owed more than $550 million, will receive a 7.5 percent stake in the new AMF and options to buy up to a 26 percent stake.

Calpers will oppose HP-Compaq merger

The California Public Employees' Retirement System, which owns less than 1 percent of Hewlett-Packard Co. shares, said it will vote against the No. 2 computer maker's proposed $22.3 billion purchase of Compaq Computer Corp.

The pension fund, known as Calpers, cited the high premium being paid for Compaq, the negative financial consequences of the purchase, "significant integration risks" and the cost of losing focus on Hewlett-Packard's main businesses.

"This decision is not a referendum on HP's management team or its CEO, Carly Fiorina," Calpers said. "It is solely based on the merits of this transaction as it related to Calpers' portfolio."

American tightens rules for flying at discount

AMR Corp.'s American Airlines customers will have to buy tickets further in advance to get discounts on some business fares as the airline tries to boost revenue.

Travelers on American will have to buy tickets seven days before flying, rather than three, to receive a lower fare. Fliers who don't plan on a Saturday night stay must buy tickets 14 days in advance, up from 10 days, American said.

The airline made the change as business travel rebounds from a slump prompted by the recession and Sept. 11.

This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.

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