WESTINGHOUSE TO SPLIT MEDIA, INDUSTRIAL EMPIRES.Byline: Claudia Coates and David Bauder Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Westinghouse Electric Corp. is splitting in two - separating its growing broadcast empire from its shrinking industrial base in a move that will eliminate 1,100 jobs. Although the move had been anticipated, the news Wednesday still had the power to electrify e·lec·tri·fy tr.v. e·lec·tri·fied, e·lec·tri·fy·ing, e·lec·tri·fies 1. To produce electric charge on or in (a conductor). 2. a. . Investors quickly began to speculate whether the new broadcast company, which includes CBS (Cell Broadcast Service) See cell broadcast. , will be a takeover target Takeover target A company that is the object of a takeover attempt, friendly or hostile. takeover target See target company. when it becomes independent next summer. Robert Kanters, a market analyst for Legg Mason Founded in 1899, Legg Mason, Inc. (NYSE: LM) is a leading Global Asset Management Firm that serves the institutional, mutual fund and wealth management markets. The firm is headquartered in Baltimore, Maryland, and is located on Lombard and Charles Streets in the Legg Mason Masten Inc. in Pittsburgh, said many were asking: ``How much is it worth and who would take it?'' The media company, which is searching for a name, will be based in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The industrial company, to remain in Pittsburgh, will be called Westinghouse Electric Co. The industrial and media businesses are roughly equal in size, but the media side accounts for most of the stock's value. Under former PepsiCo executive Michael Jordan, Westinghouse has grown into a media company with 16 TV stations reaching one-third of the nation and 77 radio stations in 13 markets. The company expects that, as a broadcast business, Westinghouse will be able to increase profits faster than if it held onto its industrial half, which includes nuclear power generators and refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. trucks. While Westinghouse may be remembered as a manufacturer of appliances, it sold its appliance business more than 20 years ago. The industrial business will cut 800 jobs in addition to about 300 abolished through buyouts. The cuts reflect a soft market for power plants and the need to reduce costs. Severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. and related expenses will cost Westinghouse about $125 million. The broadcast business will assume all $5.8 billion in Westinghouse debt, mostly from the purchase of CBS, and claim $1.8 billion in tax breaks from previous losses. The industrial business will assume most of Westinghouse's pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. , but will have a stronger balance sheet because of the elimination of its debt load. No leader has been selected for the industrial company. Jordan will continue as chairman and chief executive officer of the broadcast company. He said there will be research before the broadcast company gets a name. ``This is like naming a new brand of Doritos,'' Jordan said. After the division takes effect, stockholders will be mailed two shares, one in each company, for each share of Westinghouse. ``I think from when I came aboard, the first goal was to do something for the long-suffering Westinghouse shareholders,'' Jordan said. He said the change should accomplish that goal. CORPORATE SPLIT How Westinghouse splits up: BROADCAST: The $4.2 billion company will consist of CBS Inc., the largest television and radio broadcaster; Group W Satellite Communications Co., a leading cable television marketing and distribution company; and Infinity Broadcasting, when that acquisition is completed. ELECTRIC: The $4.6 billion company will focus on electric power generators, including the world's largest nuclear-power business, and Thermo King mobile refrigeration refrigeration, process for drawing heat from substances to lower their temperature, often for purposes of preservation. Refrigeration in its modern, portable form also depends on insulating materials that are thin yet effective. . It plans to sell 20 percent of the stock of Thermo King, leaving that business a subsidiary of Westinghouse Electric. CAPTION(S): Photo, Box Photo: Michael Jordan Led move into media Box: CORPORATE SPLIT (See Text) |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion