GE Bids for Northrop Units
General Electric Co.’s British subsidiary has made an offer to buy the defense-electronics businesses of L.A.-based Northrop Grumman Corp. and Bethesda, Md.-based Lockheed Martin Corp., according to a report in a London newspaper.
The proposed merger between Lockheed and Northrop is being opposed by federal regulators, who fear it would damage competition in the defense-electronics arena. The Sunday Times reported that, to allay those concerns, the U.S. government has asked the two companies to sell off their defense-electronics units.
The units GE is seeking to buy are reportedly worth more than $4 billion.
Low Gas Prices Hurt Unocal
El Segundo-based oil giant Unocal Corp. has been hit hard by the plunging prices for oil and natural gas, reporting last week a steep drop in first-quarter earnings.
Unocal’s net income was $18 million (7 cents per diluted share) for the quarter, compared with $144 million (56 cents per diluted share) for the year-earlier period. Its revenues, meanwhile, dropped 17 percent to $1.2 billion.
Oil prices fell to their lowest level in nine years during the first quarter, due to a worldwide oversupply. However, a recent agreement by oil-producing nations to lower output has caused prices to rise from a low of $13 a barrel to $15.50 as of last week.
Supreme Court to Hear Hughes Case
The Supreme Court last week agreed to hear an appeal by L.A.-based Hughes Aircraft Co. in a case that could have a major impact on the freedom of companies to use surplus money in pension funds.
A class-action suit filed on behalf of 10,000 workers who were in Hughes’ pension plan as of 1991 claims they are owed $1.2 billion in surplus assets. The suit claims that Hughes used surplus money in the fund to pay for buyouts and early retirements, and to make up for losses in the General Motors Corp. fund after GM acquired Hughes.
The suit was initially thrown out by a U.S. District judge in Los Angeles, but it was revived by the Ninth U.S. Circuit Court of Appeals. The Supreme Court decision will determine whether companies are entitled to use surplus assets as they see fit. The court is expected to rule on the matter this winter.
L.A. Wins Round in Water Dispute
The city of Los Angeles last week won a major victory in its dispute with the towns around Owens Lake in Inyo County, where residents have been forced to endure the worst air pollution in the country because water from the lake has been diverted to Los Angeles.
L.A. officials had been ordered by the pollution control agency that serves the Owens Lake region to return a large volume of water to the dry lakebed, a plan that would have cost the city millions of dollars a year. Staff members of the state Air Resources Board recommended rescinding that order last week, saying there are technical flaws to the plan and it “cannot be found to be reasonable.”
The Air Resources Board will meet next month to consider the staff’s recommendation.
Tujunga Wash Golf Course Approved
The L.A. City Council reversed itself last week by approving a controversial proposal to build equestrian trails and an 18-hole golf course in the Tujunga Wash area of the northeast San Fernando Valley.
The council voted 10-4 to approve the 400-acre project it had rejected last July on environmental grounds; the area is home to a rare plant community and an endangered flower. But after City Attorney Michael Klekner told the council that the city could be held liable for illegally seizing the property if the project were not approved, the council reversed its previous vote.
An attorney for the developer said construction on the course probably would begin next spring.
Permit Process to Be Simplified
The South Coast Air Quality Management District last week announced the appointment of a task force and ombudsman to streamline the procedure for businesses seeking permits to build or expand their facilities.
The permit-streamlining program will have two parts: the ombudsman will first identify and recommend efficiency improvements, then plans will be developed to streamline permit processing and simplify permit regulations and fee schedules.
The ombudsman, the task force and an outside consultant will come up with recommendations on how to streamline the permit system by early next year. The AQMD will also try to adjust its fee schedule over the next two fiscal years, to ensure that permit-processing fees cover the cost of the services rendered by the district.
Buzz Calls It Quits
The parent of struggling Buzz magazine filed for bankruptcy protection last week, marking the end of an eight-year attempt to win readers and ad revenues in a city that has a long history of not supporting city magazines.
Buzz will stop publication following release of its June issue. Buzz owner Sharon Chada is negotiating with Walt Disney Co., owner of the rival Los Angeles magazine, to buy Buzz’s subscription lists and trademark.
Buzz’s owners have lost millions on the magazine, which has never turned a profit despite building a circulation of more than 135,000 with most of its readers being high-income individuals.
Supermarket Suit
Four supermarket chains were hit with a lawsuit last week filed by state Attorney General Dan Lungren and environmental groups, which claim that people living near the chains’ distribution centers are exposed to a high cancer risk from breathing diesel exhaust fumes.
The suit targets five distribution centers, two of which are in L.A. County a Vons Cos. Inc. center in Santa Fe Springs and a Ralphs Grocery Co. facility in Los Angeles. The others are two Lucky Stores centers in Buena Park and San Leandro and a Stater Bros. facility in Colton.
Officials with the Natural Resources Defense Council, one of the groups filing the suit, said their goal is to convince the chains to use cleaner-burning fuels in their trucking fleets.
Disney Cited Following Electrocution
Walt Disney Co. was cited by state safety inspectors last week for four safety violations after a February accident led to the electrocution of a crew member and the injury of another.
Disney division Spikes Up Productions Inc. did not follow required safety procedures when it set up a camera boom too close to a 115,000-volt power line, according to inspectors. Matthew Gordy, 31, of Woodland Hills, was killed and another camera operator was badly burned Feb. 25 when the metal boom they were handling swung into the power line.
The citations, which carry a total fine of $5,405, also found the Disney division failed to provide proper training for the equipment operators and neglected to post a warning sign at the movie location, which was in a remote area of San Bernardino County known as “Poison Canyon.”
? Compiled by Dan Turner
