United Airlines was preparing to file for Chapter 11 bankruptcy protection, news reports said. The board of parent company UAL Corp. met Saturday, but did not disclose the agenda. The carrier has almost $1 billion in debt payments due this week. The Associated Press, citing unidentified sources, said United was close to securing a $1.5 billion debtor-in-possession loan that would enable it to continue flying during a reorganization. (Story, page 3.)
American Airlines asked all its employees, union and nonunion alike, to forgo pay raises next year. Parent company AMR Corp. said that would save $130 million, as it works to trim $4 billion in annual costs.
IBM said it will pay $2.1 billion for Rational Software of Lexington, Mass., and Cupertino, Calif. The acquisition is IBM's biggest since it paid $3.5 billion in 1995 for Lotus. Analysts said the new move continues a shift toward software and service at the computer-hardware giant.
The US's largest owner of shopping malls, Simon Property Group, upped its unsolicited offer for rival Taubman Centers Inc. to $1.5 billion, plus the assumption of $2.4 billion in debt. Simon also filed a lawsuit challenging the control of the latter company by members of the Taubman family, which has blocked the sale since the hostile takeover effort began Nov. 13. Taubman, based in Bloomfield Hills, Mich., operates 30 malls and online retailer fashionmall.com. Indianapolis-based Simon owns and manages 250 properties, among them the Mall of America in Bloomington, Minn., the nation's largest.
Last-ditch negotiations between industrial conglomerate Fiat and the government of Italy failed to avert the layoffs of 5,600 workers, and the company notified them that their jobs will be terminated today. But the two sides, plus affected labor unions, likely will continue to discuss keeping the furloughs as short as possible and the retraining of laid-off workers in other industrial skills, the Financial Times reported. The layoffs are part of a package of 8,100 job cuts announced by Fiat's struggling automaking division in October.
Humana Inc., the health insurance giant, said it will close service centers in San Antonio, Texas; Madison, Wis.; and Jacksonville, Fla., next year, cutting 2,300 jobs. Humana is based in Louisville, Ky.