In the Region US Airways CEO visits biggest hub to sell...

BUSINESS DIGEST

May 23, 2002

In the Region

US Airways CEO visits biggest hub to sell painful plan

With the future of US Airways uncertain, Chief Executive Officer David N. Siegel visited the carrier's biggest hub yesterday, hoping to persuade workers to agree to a massive restructuring that includes wage cuts and likely job losses.

"We're not making promises that there won't be any layoffs," he said during a news conference at Charlotte-Douglas International Airport in Charlotte, N.C. "We can't. ... The objective is to save the maximum number of jobs, pay our employees as much as we can and still have a viable business plan."

Siegel said US Airways, currently the nation's seventh-largest carrier, needs to cut $1.3 billion in annual costs to qualify for federal loan guarantees. He said $950 million of that needs to come from labor costs, but declined to be more specific about where the cuts would come.

BB&T to pay $275 million for Fla. bank-holding firm

BB&T Corp. said yesterday it agreed to buy Regional Financial Corp., a closely held Florida bank-holding company, for $275 million in stock, in a move to enter the Florida market. The sale is expected to close this summer.

Regional Financial, based in Tallahassee, is the holding company for First South Bank, which operates 11 retail branches, three limited-service branches, and eight mortgage loan production offices.

BB&T, with annual revenue of $973.6 million last year and total assets of $70.87 billion, has more than 1,100 banking offices in the Carolinas, Georgia, Virginia, Maryland, West Virginia, Kentucky, Tennessee, Alabama, Indiana and Washington, D.C.

Owings Mills agency wins Ocean City PR, ad account

MGH said yesterday that it has been awarded the advertising and public relations account for the town of Ocean City, subject to final approval by the town's mayor and City Council next week.

The Owings Mills-based agency was among seven finalists of 40 competitors. The account is valued at $1.25 million in annual billings.

MGH will be responsible for promoting Ocean City as a resort throughout the East Coast.

Colo. man, equity fund buy label-making unit here

A Colorado businessman working with a private equity fund has purchased the label-making division of Mail-Well Inc., which has a plant in Baltimore that employs about 140 people.

Gregory C. Mosher, founder of a Denver investment consulting firm, and Arsenal Capital Partners LP bought the $220 million label business for about $85 million and will rename the business Renaissance Mark.

A company spokeswoman said no layoffs are planned.

Elsewhere

European Union asks WTO to rule U.S. tariffs illegal

In the latest step in the escalating dispute over increased U.S. tariffs on steel imports, the European Union asked the World Trade Organization yesterday to rule that Washington is acting illegally.

Brussels asked the WTO to appoint a panel of trade experts to rule on the decision by U.S. President George W. Bush to raise tariffs on steel imports by up to 30 percent to give breathing space to the U.S. steel industry. The request was blocked by the United States but will be considered again June 3.

The move to increase tariffs has infuriated more than a dozen nations, who have demanded consultations with the United States. Some have threatened to impose their own trade sanctions in retaliation.

Judge OKs record fine for Schering-Plough

Schering-Plough Corp. must pay a record $500 million fine to settle complaints by federal regulators about production flaws that delayed its new allergy drug, Clarinex. A judge approved the agreement yesterday in U.S. District Court in Newark, N.J.

The consent decree outlines production protocols and management controls at four plants in New Jersey and Puerto Rico where Schering-Plough makes its best-selling drug, the Claritin allergy pill. Under the agreement, consultants hired by Schering-Plough must certify the company's adherence to quality standards at plants that flunked U.S. Food and Drug Administration inspections twice last year.

The failures delayed approval of Clarinex for 10 months and slashed $30 billion from the company's market value.

ImClone CEO quits on eve of shareholders' meeting

Samuel D. Waksal, the beleaguered chief executive of ImClone Systems Inc., resigned unexpectedly yesterday on the eve of the company's annual shareholders' meeting. His resignation followed months of questioning about Waksal's communications with investors and about the clinical trials of his company's cancer drug Erbitux.

His younger brother, Harlan W. Waksal, who has been the company's chief operating officer, will succeed him as president and chief executive, the company said. The brothers started the company, based in New York, 18 years ago.

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