Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Headline Article Date: Sun, 22 Nov 92 17:26:45 EST Message-ID: \SE A;MONEY;THE WEEK IN REVIEW \BY FROM WIRE DISPATCHES AND STAFF REPORTS S=NEW STORY Runway 11 cleared for landing The air is getting thinner for Northwest Airlines, trying to stay aloft with a $4 billion debt load and to avoid crashing into what has become a familiar place in the industry: bankruptcy court. The nation's fourth-largest airline, which lost $263.8 million in the first three quarters of 1992, met with bankers last week to try to arrange more financing. Northwest's cash and credit are dwindling fast. The airline dipped recently into the last $107 million of its credit line. A week earlier, Standard & Poor's downgraded some of the airline's debt, which will make it more expensive to borrow. The downgrading "indicates a risk of bankruptcy," said S&P analyst Philip Baggaley. "I think there will be a Northwest Airlines in some form. Whether they avoid Chapter 11 will depend on the financing they are trying to raise." Northwest has said it has no plans to seek bankruptcy protection. But if Northwest were to file, it would be the seventh airline to go that route since 1989, following Continental, TWA, America West and now-defunct Midway, Pan Am and Eastern. Northwest's financial woes have led to 1,440 layoffs over the past few months. An additional 565 jobs, including 350 management positions, were eliminated last week. The airline reportedly is looking to sell slots and gates at Chicago's O'Hare Airport. The news hasn't been all negative: * Unions representing 42,000 Northwest employees agreed last week to three years of concessions worth $900 million. However, they expect secure jobs in return. * KLM, Northwest's Dutch partner, offered Northwest $50 million in cash if other lenders commit an additional $250 million. KLM already owns 49 percent of Northwest. * The Transportation Department gave preliminary approval last week to a previously announced plan to integrate the two carriers. * Polaroid Corp. will reorganize into autonomous business units and begin an early retirement program. S=NEW STORY Meanwhile . . . * Blockbuster Entertainment Corp. and Virgin Retail Ltd. are forming a joint venture to operate entertainment stores in the United States, Europe and Australia. * AT&T and three Japanese electronics makers will jointly make tiny devices that combine a mobile phone and a computer. * General Motors Corp.'s Cadillac division is scrapping the seven-year-old Allante, its $62,000, two-door luxury coupe. S=NEW STORY Down but not out in Beverly Hills The government can't seize a Beverly Hills mansion owned by the former president of failed Columbia Savings, a federal judge ruled last week. Prosecutors wanted to sell the multimillion-dollar home because Thomas Spiegel, under indictment for fraud in the failure of the Beverly Hills savings bank, has failed to pony up his $40,000 monthly mortgage payment for eight months. There's just one problem: He hasn't been convicted of anything yet. If Mr. Spiegel wins his case, he could sue the government for taking his home, U.S. District Judge Consuelo B. Marshall ruled. Ah, but if Mr. Spiegel loses his case, taxpayers will be stuck with a $1,400 bill for every day his mortgage payments were late, prosecutors said. Why can't Mr. Spiegel make his payments? Simple. The government has seized his assets. "It's not as if he can just write a check and pay his mortgage," his lawyer said. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM