Digest/turner/28″/mark2nd
Rail Troubles Resolved
Union Pacific Railroad, whose 1996 acquisition of Southern Pacific Rail Corp. was followed by massive rail-traffic tie-ups at the ports of Los Angeles and Long Beach, says its cargo-capacity problems are at an end.
UP said it is “no longer suffering from congestion in California,” in a filing with the U.S. Surface Transportation Board. Officials at the two ports, where the busiest season of the year is getting underway, agree that the traffic problems seem to have been resolved.
Union Pacific’s troubles digesting Southern Pacific resulted in a crisis during the 1997 holiday season, when cargo containers were stranded for as long as two weeks waiting for available railcars. The problems continued through this spring.
Arco Management Shake-Up
The president of Atlantic Richfield Co. has resigned as the Los Angeles oil company begins a round of cutbacks expected to include layoffs.
William E. Wade, 56, announced his retirement after just eight months in the No. 2 spot under Chief Executive Mike Bowlin. Executive Vice President Anthony Fernandes, 53, also announced his retirement.
Wade will be replaced by Michael E. Wiley, a former executive vice president who will take on the title of chief operating officer. Fernandes is being replaced by Donald R. Voelte, senior vice president of corporate planning.
Meanwhile, Arco announced plans to link up with Mobil Corp. rumored to be a potential acquirer of Arco to cut costs by combining gas operations in the North Sea. Arco will jointly manage with Mobil more than 15 fields that produce about 800 million cubic feet of gas a day, a move expected to save the two companies a combined $8 million a year. The plan would get underway by next September.
Arco is widely believed to be an acquisition target, although company officials have vowed to remain independent.
Low Earnings for Unocal
Unocal Corp.’s third-quarter earnings will be sharply lower than projected because of the low price of oil and natural gas, company officials announced last week.
The consensus estimate from analysts was 19 cents per share in third-quarter earnings for Unocal, according to First Call Corporate Monitor. Unocal officials said the number would actually fall below 10 cents per share.
They blamed storm disruptions and high exploration costs, in addition to low gas prices, for the downturn. In third-quarter 1997, Unocal reported earnings of 71 cents per share.
New Buses Approved
The board of the Metropolitan Transportation Authority has approved a plan to buy 2,095 buses over the next six years, although a proposal to make half of the new vehicles diesel-powered was withdrawn.
MTA Chief Executive Julian Burke took back his earlier recommendation to buy diesel buses after an outcry from environmentalists. Burke said he wasn’t aware that the MTA had previously committed to work with environmental groups before changing its policy of buying only buses powered by clean-burning fuels.
The new buses are expected to cost the agency between $700 million and $750 million. The board has yet to come up with a plan for funding the purchase.
Disney Dividends
In an effort to save on administrative costs, Walt Disney Co. has decided to begin paying dividends on an annual, rather than quarterly, basis starting next year.
Disney is the largest company to adopt the annual dividends practice, although two other Fortune 500 firms, United Healthcare Corp. and Publix Supermarkets, have already made the switch.
Disney has 1.7 million shareholders, many of them individuals who own only a handful of shares. For some of these small investors, the quarterly dividend is worth less than the cost of postage needed to mail them their checks.
Internet IPO
Ticketmaster Online-CitySearch Inc. have filed for an initial public offering worth an estimated $92 million.
The company, formed after USA Networks Inc. bought both Mid-Wilshire-based Ticketmaster and Pasadena-based Internet firm CitySearch, offers information, tickets, retail sales and other services tailored to various cities on the Internet. Proceeds from the offering will be used to repay a $50.4 million loan to the company from USA Networks and to fund growth and improvements.
Erly Files for Bankruptcy
Erly Industries Inc. filed for Chapter 11 bankruptcy protection to prevent foreclosure on the stock of subsidiary American Rice Inc.
At the same time, Chairman Gerald D. Murphy resigned from the company, and his son Douglas Murphy resigned as president of American Rice.
In 1995, Erly issued $100 million in mortgage notes, which were secured by American Rice stock. Creditors called the bankruptcy filing a tactic to prevent them from seizing the stock and taking control of American Rice, which processes and markets rice and olives.
Bank of Los Angeles to Disappear
The shareholders of Bank of Los Angeles have approved the company’s acquisition by Western Bancorp, parent of Santa Monica Bank.
Under the agreement, which has been approved by both state and federal regulators, Western Bancorp will issue 0.4224 shares of its common stock for each outstanding share of Bank of Los Angeles common stock.
Western Bancorp is a bank holding company that also owns and operates Southern California Bank and is acquiring Peninsula Bank of San Diego. The combined banks, including Peninsula, will give Western Bancorp banking assets in excess of $2.7 billion.
Bank of Los Angeles will be merged into Santa Monica Bank.
Paramount Protest
Protests are escalating over a new television sitcom scheduled to debut this week that demonstrators claim makes light of black slavery.
About 300 protestors last week marched in front of the Melrose Avenue studio owned by Paramount Pictures, where the series “The Secret Diary of Desmond Pfeiffer” is filmed. Organizers vowed to intensify the protest on Oct. 5, when the show is scheduled to air on the UPN network, which is co-owned by Paramount.
The sitcom focuses on an African-American butler working in the White House during the presidency of Abraham Lincoln.
MWD Chief Leaving Post
John R. Wodraska, who guided the Metropolitan Water District through five conflict-filled years, is leaving for a new job in the private sector.
Wodraska will be managing director of North American operations at Azurix, a water-projects subsidiary of Houston-based power company Enron. Wodraska said he will stay at the MWD, which serves 16 million people in six Southern California counties, for long enough to assist in the process of finding a successor.
Compiled by Dan Turner
