Employers Plan to Spend More on Health Care
Los Angeles-area companies expect health-care spending on their employees to jump nearly 15% next year, according to a survey by Mercer Human Resource Consulting. That would come on top of an expected 8.6% bump this year, when employers are spending an average of $5,628 per worker.
Sixty-eight California companies were part of the survey, which polled 2,889 employers across the country.
Nationally, employers expect health-care costs to rise 14.6% in 2003, about the same as this year's 14.7% increase, the steepest in a dozen years and seven times the rate of inflation.
Employers in the Los Angeles area are expecting the rate of increase to double next year because they have been more aggressive in curtailing costs through higher co-payments and deductibles and more restricted formularies, said Praveen Thadhani, a Mercer human resources consultant. Many local employers don't think they can take as hard a line with workers this coming year, he said.
UAL Seeks Chapter 11 Bankruptcy Protection
The parent of United Airlines filed for bankruptcy reorganization, setting in motion a major overhaul of the loss-ridden carrier. The Chapter 11 filing means United will continue operating while it develops a plan to pay back its creditors.
For now, the No. 2 airline behind AMR Corp.'s American Airlines has vowed to continue flying its current schedule and maintain its frequent-flier program.
But in coming months, the carrier and parent UAL Corp. are expected to undergo significant changes that could include shrinking the airline and selling off routes and other assets to raise cash. Those changes, in turn, are likely to trigger major shifts throughout the airline industry and in the choices available to travelers.
United is the biggest airline at the Los Angeles and San Francisco airports, and several of its most heavily traveled routes involve the two cities.
United, the most powerful and profitable airline only a few years ago, is awash in red ink and unable to make payments on its $21 billion of debt. Its Chapter 11 filing culminated a grueling downturn at the company in the last two years that produced record losses, eroded service, alienated many passengers and sapped employees' morale.
Bush Nominates 3 to Economics Team
President Bush announced three appointments to his economics team, which had been shaken up by resignations and dismissals.
Bush said he would nominate the chairman and chief executive of CSX Corp., John W. Snow, as Treasury secretary, putting a corporate leader in charge of the struggling economy. Snow, a veteran of the Ford administration, brings a resume that crosses an academic's economics knowledge with the reality of a quarter of a century in the business world at CSX, a transportation holding company.
Bush also named Stephen Friedman, a former co-chairman of investment firm Goldman, Sachs & Co., to succeed Lawrence B. Lindsey as chairman of the National Economic Council, a White House advisory group.
Lindsey and Treasury Secretary Paul H. O'Neill were dismissed Dec. 6, submitting their resignations as the White House hurried to spur economic growth before entering the early phases of Bush's 2004 reelection campaign.
Bush also nominated William H. Donaldson, a former investment banker, academic and Wall Street official, to head the Securities and Exchange Commission, a move aimed at restoring confidence in the financial integrity of corporate America. Donaldson would replace Harvey L. Pitt, who resigned last month after a series of controversies that raised questions about his ability to be a tough overseer of Wall Street amid this year's torrent of business scandals.
EchoStar Throws in the Towel on DirecTV Deal
EchoStar Communications Corp. finally abandoned its proposed $18-billion acquisition of Hughes Electronics Corp., the owner of satellite TV giant DirecTV. But EchoStar will end up paying its El Segundo-based rival only a fraction of a previously negotiated penalty for backing out of the deal.
Under a settlement with Hughes' parent, General Motors Corp., EchoStar has paid the full $600-million breakup penalty but it will avoid having to spend $2.7 billion, as called for under the original merger agreement, to purchase Hughes' controlling stake in PanAmSat, a commercial satellite service.
The settlement may clear the path for a sale of Hughes to News Corp., the entertainment giant controlled by Rupert Murdoch that lost a bidding war to EchoStar a year ago. Murdoch called Hughes to request a meeting with GM. Murdoch has said he would be interested in purchasing GM's 30% controlling stake in Hughes.
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