Business memo 7/29/02

Monday, July 29, 2002

Tyco International gets new chief executive

CONCORD, N.H. -- Investors are banking on Edward D. Breen's take-no-prisoners style to clean house at Tyco International Ltd. and right what for many months has seemed like a sinking ship.

Analysts and large shareholders point to the way Breen cut costs at Motorola Inc. and made the company more efficient, and say Tyco can expect big changes under his leadership.

Breen, 46, replaces Dennis Kozlowski at the helm of the conglomerate that makes products ranging from steel fence posts to undersea fiber-optic cable. He resigned from Motorola on Thursday and takes over at Tyco on Monday.

Tyco, based in Bermuda but run from Exeter, has been dogged since January by questions about its accounting and investigations involving several top officers.

Midway faces liquidation, administrator says

MORRISVILLE, N.C. -- Midway Airlines should be forced into involuntary liquidation because the twice-grounded carrier has failed to file financial information with the bankruptcy court, the administrator overseeing the airline's reorganization said.

Marjorie Lynch, administrator for the U.S. Bankruptcy Court for the Eastern District of North Carolina, accused Midway of filing "incomplete, evolving and conflicting" financial data with the court.

She filed a motion seeking court approval to convert Midway's bankruptcy from Chapter 11 reorganization to Chapter 7 liquidation, a move that would shut down the airline and force the sale of its remaining assets.

Company decides not to resume Norplant sales

TRENTON, N.J. -- Nearly two years after Wyeth pulled its implantable birth control device Norplant from the market amid concerns that some lots might not be effective, the pharmaceutical company has decided not to resume sales.

That's despite Wyeth's announcement Friday that further tests in the laboratory and on women using the five-year implant show the lots in question were working as intended and women no longer needed to use a backup birth control method.

Company spokeswoman Natalie de Vane said it was "a business decision" not to bring Norplant back to the market because of limited supply of some of its ingredients. She would not elaborate.

Kit Kat may give Hershey Foods a break

HARRISBURG, Pa. -- As Hershey Foods Corp. puts itself on the market, the company's Kit Kat bar could give one of its potential suitors a small advantage over rival bidders, analysts say.

Swiss food company Nestle SA, regarded as one of the strongest contenders for the nation's largest candy maker, licenses the Kit Kat brand to Hershey to sell in the United States. If it loses the bidding war, it would in all likelihood insist on retaining the rights to the brand, analysts said.

The Wall Street Journal, citing sources close to the potential bidders, reported Friday that Kit Kat could be worth as much as $1 billion, a prospect that could discourage other buyers unwilling to pay as much without having the rights to the brand.

Reports says June saw a fall in big-ticket orders

WASHINGTON -- Orders to U.S. factories for big-ticket goods, including cars and computers, fell in June by the largest amount in seven months, raising fears that the stock market doldrums may be causing Americans to rein in spending and slow the recovery.

Economists were rattled by a Commerce Department report Thursday showing orders for costly manufactured "durable" goods dropped by 3.8 percent in June from the previous month. Many economists were predicting an increase in bookings. The weakness was widespread.

The decline in orders along with a 1.4 percent drop in shipments -- a good barometer of current demand -- was viewed by economists as an ominous sign that businesses, battered by the sour stock market, may be growing even more uncertain about the economy's recovery.

-- From wire reports

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