Business Digest

BUSINESS DIGEST

January 18, 2003

In the Region

Lockheed to keep making satellites for commercial market

Lockheed Martin Corp., the largest U.S. military contractor, said it will continue making commercial satellites and focus on cutting costs at the unit rather than selling it or discontinuing operations.

The No. 2 maker of commercial satellites after Boeing Co. made the decision after a yearlong review in response to overcapacity in the commercial-satellite market, a spokesman said.

There were 62 global satellite launches last year, compared with 60 in 2001, the lowest since 1963, said Marco Caceres, space analyst at the Teal Group, a research firm in Washington. Bethesda-based Lockheed said it would try to win new business for the unit, which builds satellites for customers such as EchoStar Communications Corp. and NTT DoCoMo, Japan's biggest mobile-phone company.

Elsewhere

U.S. agency OKs ticket-sharing pact of 3 major airlines

The U.S. Department of Transportation approved yesterday an alliance between Delta, Northwest and Continental airlines that will allow them to sell seats on each others' flights if they agree to rules aimed at keeping air travel competitive.

Low-fare airlines lobbied against the deal, calling it a virtual merger among the third-, fourth- and fifth-largest U.S. carriers. Eight state attorneys general also opposed the agreement because they said it could stifle competition, raise prices and hurt service.

The proposed rules limit the number of flights the airlines may share and forbid the airlines from agreeing on fares, capacity or changes in routes. They also require the airlines to give up leases on some airport gates which are used less than six times a day.

Dynegy pays ChevronTexaco to unravel, assume contracts

ChevronTexaco Corp. is ending its natural gas marketing contracts with Dynegy Inc. by Feb. 1 as the oil giant takes over the business the energy merchant is exiting, the companies said yesterday.

Dynegy paid ChevronTexaco, the country's second-largest petroleum company, $11 million to unravel the contracts and assume certain third-party deals. ChevronTexaco's new wholesale natural gas marketing unit, ChevronTexaco Natural Gas, is to be fully operational by April.

The move was expected after Dynegy announced last year that it was scrapping its money-losing trading operations. To regain its financial footing, the Houston company, which has struggled to survive amid sharply lower power prices and the fallout from Enron Corp.'s accounting scandal, is focusing on its power generation and natural gas liquids businesses as well as its Illinois utility.

MCA Records president quits after big drop in sales

The president of Vivendi Universal's MCA Records has resigned, becoming the latest casualty of the slumping music industry.

Jay Boberg, 44, told MCA employees Thursday that he was stepping down from the post he has held since 1995. Last year, MCA missed its financial projections as the music industry suffered from lagging sales. Operating profit for Vivendi's music unit dropped 51 percent to $172 million for the nine months that ended Sept. 30.

Christian Dior sales grew 50% in 2002, parent says

Sales at the Christian Dior Couture fashion house grew 50 percent in 2002 to nearly $500 million, Parisian parent LVMH Moet Hennessy Louis Vuitton SA said yesterday.

LVMH, the world's biggest luxury goods company, said Dior was in the black at the operating level for the first time after years of hefty investment in the brand. LVMH said Dior revenue was up 46 percent at 361 million euros ($383.3 million) in the first nine months of 2002.

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

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