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Cisneros goes Hollywood
Henry Cisneros, the outgoing secretary of the U.S. Department of Housing and Urban Development, landed a job last week as president and chief operating officer with Los Angeles-based Univision Communications Inc.
The largest Spanish-language broadcaster in the United States, Univision owns one of L.A.’s top-rated stations West L.A.-based KMEX-TV Channel 34. Cisneros will change bosses from President Bill Clinton to Univision CEO A. Jerrold Perenchio.
“The Hispanic population in America, now at 30 million, is growing at a faster rate than any other segment of our society,” Cisneros said in a prepared statement. “However, a huge gap still exists between the dollars that U.S. advertisers spend with Univision and the audience that the Univision network and stations deliver, and I am confident that, together with other members of the Univision team, we will be able to close that gap.”
Wells earnings dip
Wells Fargo Bank suffered from a slight case of indigestion in the fourth quarter, reporting lower earnings than analysts had expected after swallowing Los Angeles-based First Interstate Bank.
San Francisco-based Wells Fargo, the eighth-biggest bank in the United States following the April 1, 1996 acquisition of First Interstate, reported net income for the fourth quarter ended Dec. 31 of $123 million ($1.12 a share), compared with $306 million ($6.29 a share) for the like period a year ago.
That was considerably worse than the $2.77 a share that analysts in a Los Angeles Times survey said they expected for the bank’s fourth quarter.
Wells officials said the decline was caused by expenses related to adding First Interstate customers to its existing base.
For the full year, Wells reported net income of $1.07 billion ($12.21 a share), compared with $1.03 billion ($20.37 a share) for 1995.
Investors were unfazed by the comparatively poor showing; the day earnings were released last week, Wells Fargo’s stock closed $9 higher than the day before, at $288.75.
Kluge watch
Why would John Kluge, one of the richest men in the country, buy a million shares in Westwood-based Occidental Petroleum Corp. a poorly performing company on whose board he sits as a director?
That’s a question many analysts are asking themselves after Kluge, chairman of Metromedia International Group Inc., plopped down $24 million for the stock in mid-December. The purchase makes him one of Occidental’s largest individual shareholders.
Considering Occidental’s performance in relation to other oil companies, the purchase was considered something of a surprise, although Kluge has a history of taking large stakes in the companies on whose boards he sits.
Occidental’s stock price has risen 35 percent since January 1995, according to the Wall Street Journal, while the average increase for domestic oil companies during that time was 41 percent.
Kluge bought the stock at a time when it was trending downward, following a November meeting between company officials and Wall Street Analysts. Company Chairman Ray Irani had announced the creation of a $3 billion stock ownership plan for employees of its MidCon pipeline unit, which analysts had been expecting the company to sell.
Dock strike
The usually bustling Los Angeles-Long Beach port complex became a virtual ghost town Jan. 20, when longshoremen joined the first-ever, coordinated global work stoppage by dockworkers.
The nine-hour action affected about 50 ships at the two ports. Shipping lines say they lost millions of dollars, as their vessels sat in the dock with no workers to load or unload cargo containers. Truckers, importers and exporters also reported frustrating and costly delays.
The work stoppage was in support of dockworkers in Liverpool, England, who were dismissed from their jobs in 1995 for refusing to cross an illegal picket line.
But shipping executives say it’s impossible to separate this month’s action from the ongoing labor problems at the West Coast ports. Local longshoremen angry about certain provisions in their new contract have engaged in work slowdown and stoppages for the past several months.
“The ILWU has been looking for a day to show management they can shut down the ports,” said Karsten Lemke, president of the Steamship Association of Southern California.
Other West Coast longshoremen, as well as dockworkers in Australia, Germany, Sweden, Japan and other countries, also participated in Monday’s day-long action.
Power partnerships
Commissioners at the L.A. Department of Water and Power directed the agency’s staff to start exploring options for alliances with private companies during the board’s bi-monthly meeting on Jan. 21.
The commissioners took their action after L.A. Mayor Richard Riordan instructed the DWP to begin talks with Southern California Edison Co. and Southern California Gas Co. on alliance opportunities in a Jan. 6 letter.
Retiring DWP general manager William McCarley had ruled out alliances in deregulated areas with the two utilities, saying their size made them too similar to the DWP.
But in a Jan. 6 letter, the mayor asked commissioners to look for partnerships in certain regulated industries, such as power transmission and distribution.
The DWP is already considering three companies Enron Corp. of Houston, PacifiCorp of Portland, Ore. and a joint venture between Duke Power of Charlotte, N.C. and Louis Dreyfus Energy Corp. of Wilton, Conn. for another strategic alliance in its deregulated business of power generation.
The mayor’s Jan. 6 instruction to the DWP comes as Edison and SoCal Gas look for ways to enter the City of L.A. power market after California’s power industry starts becoming deregulated in 1998.
