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Archive for Thursday, June 28, 2001

Business briefcase for Thursday

June 28, 2001

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state training grant

MORE: www.martinlogan.com

A Lawrence manufacturer will get $10,000 to help boost the efficiency of its Lawrence plant.

Martin Logan Ltd., which makes high-end speakers for audio and home-theater systems, has been awarded at $10,000 Kansas Industrial Retraining grant from the Kansas Department of Commerce & Housing, Lt. Gov. Gary Sherrer announced Wednesday.

The company, 2001 Del., will add $13,460 to the grant to finance retraining of 80 company employees in lean manufacturing principles. The retraining is expected to make manufacturing more efficient by requiring less floor space and boosting cash flow through reduced inventories.

Sprint reaches upgrade

deals with Lucent, Nortel

Sprint Corp. has reached deals worth $1 billion each with Lucent Technologies Inc. and Nortel Networks to expand its next-generation wireless network.

Under the three-year agreements, announced Wednesday, Lucent will supply base stations and mobile switching centers and Canada-based Nortel will supply networking and radio base station equipment, the companies said.

The agreement with Nortel, a top producer of fiber-optic and other communications equipment, extends and expands a five-year relationship with Sprint.

Lucent, based in Murray Hill, N.J., has worked with Sprint for several years in the development of the wireless Sprint PCS network. Lucent's third-generation wireless system is intended to help Sprint provide customers faster speeds and enhancements for such activities as downloading data and music to portable wireless devices.

MEAT PROCESSING COMPANY

Tyson Foods to acquire

IBP under original terms

Tyson Foods agreed to acquire IBP Inc. under the original terms of a deal Tyson had tried to abandon, citing problems with IBP's books.

The cash and stock offer values IBP, the nation's largest beef producer, at $2.7 billion. The companies announced the agreement after its approval by a Delaware judge late Wednesday.

"Today's step moves us down the road to our vision, creating the world's leading protein provider," Tyson chairman John Tyson said. "It allows us to better serve our customers in today's consolidating marketplace and will produce value for shareholders."

Dick Bond, IBP's president, said he looked forward to the combination.

The Tyson purchase will create a meat processing company with 28 percent of the beef market, 25 percent of the chicken market and 18 percent of the pork market.

Tyson, the Springdale, Ark.-based poultry giant, said it would pay $30 per share in cash for 50.1 percent of IBP's common shares. The remainder will be converted into Tyson Class A common stock, at a ratio valued at between $17.24 to $21.07 per share, based on Wednesday's closing price.

Black farmers protest

at First Union merger

Black farmers marched in protest of the proposed $14.3 billion bank merger between First Union and Wachovia, saying it would prevent them from getting the credit they deserve.

About 20 protesters with the National Black Farmers Assn. chanted "Stop the merger!" and "We want loans!" as they marched on the sidewalk in front of First Union's headquarters in Charlotte, N.C.

The 60,000-member organization said the banks must commit themselves to opening more lines of credit to black farmers and black-owned businesses before the merger is approved.

RUSSIA

GM joins deal

to produce SUVs

General Motors Corp. signed an agreement Wednesday with Russia's largest automaker Avtovaz and the European Bank for Reconstruction and Development to create a joint venture that will produce 75,000 sport utility vehicles a year.

The $340 million deal is one of the largest foreign investment projects in Russia, and by far the biggest joint venture in Russia's car industry, which is struggling to modernize its aging equipment and develop new products. Until now, Russia has only had several small-scale projects for the local assembly of foreign-made cars.

In contrast, the new vehicle, which will be sold under the trademark Chevy Niva, is a 100 percent Russian product which will be sold at Avtovaz's dealerships in Russia and GM's dealerships abroad.

AVIATION

Boeing's hopes to land

contract after test

Boeing Co. said Wednesday it has completed the most technically challenging part of its Joint Strike Fighter testing, which the company believes gives it an advantage over rival Lockheed Martin as both compete for a $200 billion government contract.

Lead test pilot Dennis O'Donoghue said he was able to land Boeing's X-32B airplane vertically -- setting down like a helicopter or a Harrier -- after taking off horizontally in conventional jet-fighter style.

Boeing considers the ability to transition from cruising mode to vertical landing and hovering mode to be the key to winning the contract, said Frank Statkus, Boeing vice president and JSF general manager.

On Sunday, Lockheed Martin, which is competing with Boeing for the JSF contract, announced that its X-35B had made two vertical takeoffs and landings, with 35-second hovers.

TELECOMMUNICATIONS

Lucent reportedly making

plans to layoff more workers

Lucent Technologies Inc. is making plans for another round of layoffs that could exceed 10,000 workers as the struggling telecommunications giant continues its restructuring, according to a published report. Lucent stock fell 2 percent.

The Murray Hill-based company refused to comment Wednesday on The Wall Street Journal report, citing people familiar with the situation, that it plans to announce its intentions as part of its fiscal third-quarter earnings in late July.

Meanwhile, Lucent announced Wednesday that it has reached a three-year supply deal worth $1 billion to upgrade Sprint's digital wireless network.

POSSIBLE LAYOFFS

JDS Uniphase reviewing

cost restructuring program

JDS Uniphase Corp., a leading maker of optical networking equipment, is considering more job reductions on top of the 8,000 cuts announced earlier this year, a spokeswoman said Wednesday.

The company, based in Ottawa and San Jose, Calif., did not provide specific numbers. An update will be provided when earnings are released July 26, JDS spokeswoman Lori Goulet said.

In April, the company said it was reducing its work force by 5,000 people in addition to the 3,000 announced in February. The company had about 29,000 workers at the start of the year.

When the company warned of lower sales earlier this month, JDS said it was reviewing its cost restructuring program and considering further changes. It did not specifically mention job cuts.

EARNINGS

General Mills reports

strong growth in sales

Strong overall sales growth and a gain from an insurance settlement drove General Mills Inc. earnings up 34 percent in the fourth quarter.

The maker of Wheaties, Cheerios, Chex and Betty Crocker mixes on Wednesday reported earnings of $146.0 million, or 50 cents a share, for the quarter ended May 27, compared with $108.9 million, or 37 cents a share, a year earlier.

The results included an after-tax gain of $24 million, or 8 cents a share, from a May insurance settlement related to a 1994 oats handling incident.

The insurance proceeds were partially offset by costs of the company's pending acquisition of Pillsbury Co. from London-based Diageo PLC and expenses related to exiting the Squeezit beverage business.

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