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Reported by Star-Bulletin staff & wire

Friday, January 3, 2003



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IN HAWAII

United Air issues isle layoff notice

United Airlines, which filed for Chapter 11 bankruptcy last month, has notified state labor officials that "significant layoffs" will occur in the next few months in Hawaii and could begin as early as Jan. 19.

The airline, which operates 20 daily flights to Hawaii and has 1,350 employees statewide, has been searching for ways to quickly cut costs to meet requirements set forth in its reorganization and to allow it to restructure and emerge from bankruptcy as a stronger airline.

The filing with the Department of Labor and Industrial Relations did not specify how many Hawaii employees or which positions would be affected.

"We haven't said what percent or how many people by geography will be laid off," United spokesman Joe Hopkins said. "This is a formal notification in accordance with the law but a decision (about the number of layoffs) has not been made. But it will be made soon."

The filing said employees will be notified as soon as the decisions can be finalized and that transfer, bumping or reassignment rights will be governed by a collective bargaining agreements.

"The difficulty facing the company is that complex and difficult work force and operational determinations must be made that on the one hand will enable costs to be cut, while at the same time permitting the company to maintain its essential services to the public," the filing said.

Hawaii General Manager Mike Navares could not be reached for comment.

Starbucks opens in Macy's store

Starbucks has opened its first coffee shop in a Macy's West store with an outlet at Ala Moana Center.

The new shop, which debuted Dec. 15, takes up approximately 1,000 square feet of previously existing mall-front space and is connected to Macy's via an entrance to the cosmetics department. The shop features the full line of Starbucks coffees, teas and pastries. The shop also features indoor and outdoor cafe-style seating. The Ala Moana shop is managed by Allison Fujita, who most recently was store manager for Starbucks Koko Marina.

The addition of Starbucks now gives Macy's four eating establishments connected with the store. Others are the third-floor Pineapple Room by Chef Alan Wong, the adjacent Coffee and Patisserie Bar, and Hackfeld's Restaurant on the first floor.

ON THE MAINLAND

GM scales back incentives

Detroit >> General Motors Corp. scaled back no-interest loans on most sport-utility vehicles and Cadillac luxury models -- its most profitable autos -- in a bid to wean consumers from incentives that are eroding profits, Bloomberg News reported.

The world's largest automaker will shorten interest-free loans to three years from five years on sport utilities including the Chevrolet TrailBlazer, and begin charging at least 5.9 percent for loans on Cadillacs after offering no-interest loans on some models.

The new incentives end Feb. 28, the company said.

General Motors and rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler have relied on cheap loans and cash rebates to bolster sales since they introduced them after the Sept. 11, 2001, terrorist attacks.

Guidant merger unlikely after tests

INDIANAPOLIS >> Shares in Guidant Corp. fell today after the company announced it was dropping a planned $3 billion purchase of rival medical device maker Cook Group Inc.

Guidant executives said they had decided to abandon the deal with Bloomington-based Cook Group because of disappointing results in preliminary clinical trials of a drug-coated heart stent.

The poor trial results will likely delay Guidant's ability to enter the drug-coated stent market until 2005, said John Capek, president of Guidant's vascular intervention division.

Guidant will pay Cook a $50 million breakup fee to end their deal.

Guidant shares closed down $1.61 to $39.99 on the New York Stock Exchange. Cook is privately-held.

Guidant also lowered its 2003 earnings forecast to $1.85 to $2 a share from its September forecast of $2.15 to $2.21.

Tenet gets subpoena in Medicare case

SANTA BARBARA, Calif. >> Tenet Healthcare Corp. got a subpoena from the U.S. Department of Justice for documents as part of an investigation into Medicare- related payments to the second-largest U.S. hospital chain, Bloomberg News reported.

The U.S. Attorney's Office for the Central District of California is investigating payments made since January 1997 for costly Medicare cases that the government calls "outliers," the Santa Barbara, Calif.-based company said. The subpoena is for documents from Tenet and 19 hospitals located mostly in California.



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