SUSIE GHARIB: General Electric scores big in its own world series. It’s paying $45 billion for Honeywell, one of the biggest industrial mergers ever; outbidding United Technologies (UTX). GE chairman, Jack Welch says that the minute he heard late last week that United Technologies was buying Honeywell, he knew he had to get involved; and he did. Welch, who planned to retire next April, will now stay on until the end of next year. Welch and Honeywell’s CEO, Michael Bonsignore, told Scott Gurvey, it was the fastest deal they had ever done.

JACK WELCH, CHAIRMAN & CEO, GENERAL ELECTRIC: Well, we made a call to Mike at 11:30 on Friday; so it was less than 24 hours.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: And what happens to you when you’ve got a deal that you think is just about all sewed up when a man who you certainly want us to take time out to listen to, gives you a call like that?

MICHAEL BONSIGNORE, CHAIRMAN & CEO, HONEYWELL: Well, you have to respond. I think when Jack and I talked on the telephone, he said, I want to make you an offer; I said, OK, you got to make it and make it quickly, and I have to have it in writing. And then 10 minutes later, I had an offer in writing that I took to my board and said, based on this, we should put the board in recess and evaluate the GE offer.

GURVEY: You don’t see, then, much of an antitrust issue?

WELCH: This is a climate today where Microsoft (MSFT), AOL (AOL)-Time Warner (TWX) – everyone’s talking antitrust. So they’ll obviously be scrutiny of a deal of this size; but the facts are there is no product overlap - and it’s just plain rare. I’ve never seen one quite this clean. In fact, the deal that Mike had with UTX and - was not-

BONSIGNORE: Tougher.

WELCH: It was tougher! - because they had, they had direct overlap in a couple of areas.

GURVEY: Does the outcome of the election, do you think, change the way the antitrust may be –

WELCH: No, I don’t think so.

GURVEY: Accretive, almost immediately, or –

WELCH: Immediately.

GURVEY: There’s so much talk, so much press about you know old economy/new economy. This is a big - these are two big industrial companies, making an industrial merger.

WELCH: Well, it’s two real companies, with real earnings, doing real things, and using the e-business tools. This idea of new, new world/old world companies is the biggest bunch of crap that’s ever before been put out there by pundits. This is all about business, the same way it was done in the 16th century: buying and selling, with new technology enhancing the process and making people more competitive.

GURVEY: Does this goof up your retirement plan, a little bit?

WELCH: No. I mean, it’s a few months; and when you’re - and you can’t time, the way the world works. And the world isn’t waiting for GE’s succession plan; it’s a nice little internal GE thing. But it has nothing to do with the way the rest of the world’s thinking. And so it’s it’s you know several months and, and it’s another energized exciting thing for me to do, and my golf game will, will not improve in that moment. That’s about it.

GURVEY: Very good. Thank you, gentlemen.

WELCH: Thanks a lot.

BONSIGNORE: Thank you. Enjoyed it.

WELCH: Nice seeing you, Scott. Good luck.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.



10/23/00: How Cleveland Bounced Back After Bankruptcy

SUSIE GHARIB: Cleveland has risen like the proverbial phoenix out of the ashes of bankruptcy back in 1978. Now the city is trying to cultivate a new image as a new American city. Erika Miller looks at Cleveland’s urban revival.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Whether its by boat, trolley, car or foot, tourists are flocking to Cleveland. More than eight million visitors come to the city every year, almost double the level five years ago. They’re lured by new cultural attractions like the Rock and Roll Hall of Fame and the Great Lakes Science Center, in addition to old favorites like the Art Museum and Severance Hall with its world class symphony. Another draw is the flats. What used to be industrial warehoused are now trendy restaurants and bars. Cleveland also takes pride in two new downtown sports arenas, Browns Stadium, where football is played, and the Gateway Sports Complex, which includes Jacobs Field, home of the Cleveland Indians.

MAYOR MICHAEL WHITE, CLEVELAND: Clearly our large building programs in downtown have been successful. Gateway, the Browns Stadium, seven new hotels without subsidies, more than a four -- 220 percent increase in housing in downtown Cleveland. But for every dollar we’ve put in downtown Cleveland, we’ve invested $3 in the neighborhoods of the City of Cleveland.

MILLER: It’s hard not to notice the construction boom happening in many neighborhoods around town. But some still hold very visible reminders of the 20 year economic decay that started in the 1960s. Aging steel mills and other industries with high labor costs were unable to compete with overseas competition, leading to massive layoffs and plant closings. Economic deterioration turned into social strife and race riots erupted in the 1960s. This is 70th Street and Hough Avenue (ph), where some of the worst riots occurred back in the late 1960s. But as you can see, times are changing and the area has undergone quite a face. The improvements are part of a push by local government and businesses to diversify Cleveland’s economy. Heavy industry, though still important to the regional economy, has moved to the outskirts of town.

RICHARD SHATTEN, PROFESSOR, WETHERHEAD SCHOOL OF MANAGEMENT: It came from one of the worst performing metropolitan economies of the large ones of the country to one of the middle ones now. So we’re at a middle performer among the big 50 metros in the country.

MILLER: Going forward, Cleveland hopes to become a bigger participant in the new economy, but it must also address lingering problems like a decline in manufacturing jobs. Those losses are a major reason the city lags the State of Ohio and the nation in overall job creation. Another problem is a growing income gap between Cleveland’s wealthy suburbs and its inner city. Experts say problems like child poverty hurt education reform and ultimately Cleveland’s growth prospects.

GEORGE ZELLER, COUNCIL FOR ECONOMIC OPPORTUNITIES OF GREATER CLEVELAND: It’s a vicious cycle. Low income students do worse in school, they don’t produce new ideas for the economy, the economy is sluggish, creating more low income students and over the long run it’s been very damaging to our region.

MILLER: Like many old Industrial cities, Cleveland faces challenges in building a new economic base. But it hopes the efforts will not only spur growth now, but also help provide some protection against the next major economic downturn. Erika Miller, NIGHTLY BUSINESS REPORT, Cleveland.

           

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.



10/23/00: One On One With Sen. George Voinovich, (R) Ohio

SUSIE GHARIB: The man credited with Cleveland’s comeback is Senator George Voinovich. Not only was he mayor for 10 years in Cleveland, he served as Governor of Ohio and now Senator. Earlier today I asked the Senator what will drive Cleveland’s growth.

SEN. GEORGE VOINOVICH ®, OHIO: Our manufacturing still is the backbone of our community. We, you know, we were known as the rust belt and now I refer to us as the jobs belt. And we’ve taken high technology, advanced manufacturing and have become the top producer in terms of the world and a lot of your top manufacturers are right here in Cleveland and in northeastern Ohio.

GHARIB: Senator Voinovich, other cities like St. Louis, Detroit, Pittsburgh, would like to copy what Cleveland has done. As the architect of Cleveland’s turnaround, what’s the most important advice that you can give them?

VOINOVICH: Together you can do it. And that is that a leader’s job is to galvanize all of the resources in the community. A leader has to understand that government is just one thread in the fabric of community. What you have to do is to reach out to the private sector and decide that there are lots of things that they can do that the city doesn’t have to do. It’s cooperating. It’s getting everybody to realize that they have a symbiotic relationship whether they live out in the neighborhoods or they’re big business or bankers, everyone working together, including our minority groups that we have in our city. One of the things I’m very proud of is when I was Mayor is that we led the country in minority business.

GHARIB: One of the issues that’s facing Cleveland is its education system, which is still one of the lowest ranked in the country. What does Cleveland have to do to solve that so that it has an educated work force and it can attract new businesses to start up and stay in Cleveland?

VOINOVICH: Well, first of all, I think that while I was Mayor, we received three All America City awards, the only city in America that’s ever received three All America City awards. But I have said over and over again that we’re not an All America city until we have an all America school system. And when I was Governor of the State of Ohio we changed the governance to copy what they do in Chicago. We now have a chief executive officer. We now have an appointed school board. And for the first time in my lifetime, I see some real hope in an improving school system.

GHARIB: Now that you’re in Washington, Senator, how are the problems facing American cities being treated on terms of Congress’ agenda? It doesn’t look like it’s on the agenda.

VOINOVICH: Well, I don’t think it’s on the agenda, but I think that the economy of the country is on the agenda and I think that one of the things that I’m trying to do in Washington is to deal with this tremendous national debt that we have. You know, people are forgetting in this country that we, out of every dollar we spent $0.13 of that dollar goes to pay interest costs. And we spend more on interest than we do on Medicare. $650 million a day goes out for interests costs, $5.7 trillion. And I think that it’s really important to the future of America that we do something and bring that national debt down. And I think that in itself is going to have an enormous impact on—we have to have a growing economy and with that national debt, that will stymie us. And that’s not only going to effect the country, but it’s going to effect places like Cleveland, Ohio.

GHARIB: Senator, the elections are just around corner. Ohio is a very important swing state. What do the presidential candidates have to say to win Ohio voters?

VOINOVICH: Well, I think George Bush is going to win Ohio and what he’s basically saying is that we need is leadership, we need integrity in the White House, we need someone that’s going to reach out to Republicans and Democrats and bring them together to move this country ahead. We’ve had too much partisanship in Washington today. We have very serious problems and we need a leader that people can trust, a leader that understands that in order to get something done he has to work with both Republicans and Democrats and I think that George Bush has done that in Texas.

GHARIB: All right, thank you very much, Senator. We appreciate you talking to NIGHTLY BUSINESS REPORT.


Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.



10/23/00: Cleveland’s Profitable Public/Private Partnership

SUSIE GHARIB: Continuing our coverage of Cleveland, at a time when other large Ohio cities are losing jobs, this city is actually growing them. But as Diane Eastabrook reports those jobs have come with a price.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The arcade on Euclid Avenue was the first indoor mall in the U.S. and was the crown jewel of downtown Cleveland.

THEODORE WELDON, SR. V.P., LR DEVELOPMENT CO.: And what the building consists of is two 10 story office towers connected by an approximately 330 foot long arcade that we’re standing in.

EASTABROOK: Chicago based L.R. Development is giving the 110-year-old building a facelift that will bring retailing back to the arcade and turn its two office towers into a Hyatt hotel. But the $60 million project carries a hefty price tag to Cleveland. The community is kicking in more than $10 million in tax breaks and incentives.

WELDON: We would not have been able to actually do this development without help from the city and pother various organizations.

EASTABROOK: In an effort to lure business back downtown, Cleveland has adopted the credo “to make money you have to spend money.” In the past decade it has set up so called tax increment finance, or TIF districts, to lure attractions like the Rock and Roll Hall of Fame. Through public/private partnerships, Cleveland has also offered businesses millions in grants and low interest loans. The city believes if it can add more jobs downtown it will eventually make a lot more money through wage taxes and those taxes can potentially offset losses from other tax breaks to new businesses. Experts say Cleveland’s plan appears to be paying off.

EDWARD HILL, URBAN STUDIES PROFESSOR, CLEVELAND STATE UNIVERSITY: We’ve seen that from ‘94 to ‘98, somewhere between 2,200 and 2,500 new jobs have been put in downtown Cleveland at a time when if you look across all of Ohio’s big downtowns, the seven big downtowns, together they lost 1,500 jobs. So there’s a story here that’s an important story.

EASTABROOK: For Cleveland, the next challenge is convincing area residents to move downtown. The idea is if more people live here, more businesses will locate downtown, too. A variety of incentives have lured more than 600 apartments downtown in the past decade with more coming.

PATRICK MULLIN, CHAIRMAN, CLEVELAND DOWNTOWN PARTNERSHIP: The next wave will be grocery stores and pharmacies and other types of things that people need on a day in day out basis. So I think you need the whole ticket to have a 24 hour city.

EASTABROOK: Mullin says Cleveland has gotten to a point where it can cut back on incentives and may be close to the time when businesses will come downtown simply because it’s a good place to be. Diane Eastabrook NIGHTLY BUSINESS REPORT, Cleveland.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.




10/23/00: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Early on the 2-point loss in GE offset a 2-point gain in Honeywell. But it wasn’t long before the Dow gathered some nice upward momentum as other components, like American Express (AMEX) and 3M (MMM) moved higher on good earnings news. By 10:30 this morning, the Industrial Average posted a 95-point gain while the NASDAQ Index was up 23 points. After Merck (MRK) jumped several points on upgrades from Salomon Smith Barney and PaineWebber, the Dow moved to nearly a 120- point gain at 11:00 a.m. But that rally was gradually undermined by a flurry of profit-taking in the high-tech sector, following last week’s impressive rally on Thursday and Friday. By 3:00 this afternoon, the Dow was up only 21 points and the tech-laden NASDAQ Index posted a 42-point loss. Selling then eased up considerably in the final hour of trading, enabling the Dow to bounce back with a closing gain of 45.13 putting it at 10,271.72. And the NASDAQ Composite fell 14.45 closing at 3468.69.

Big board volume today down, just above a billion shares, well down from Friday’s pace. And about 16 million more shares of down volume than up volume.

The Dow Transport Index down 32.21.

Utility Index rose 2 1/3 points.

The Closing Tick just slightly bearish at -197.

Standard & Poor’s 500 off 1.15.

The 100 off 3.81.

MidCap 400 edged up .36.

And the Bridge Futures Price Index down .85.

New York Stock Exchange Composite edged up a fraction.

As did the Value Line.

The Russell2000 Small Cap had a good gain of 2 1/2 points.

And the Wilshire 5000 up just over 1 1/2 points.

The bond market received support today from safe haven buying prompted by the continuing tensions in the MidEast, as well as from uncertainty about whether the stock market really has put in a bottom here. There was little else to influence traders, as tax-free and corporate issue posted gains of 1/8 to 3/8s of a point, while the Treasury market had moderate gains across the board.

5-year notes edging up 3/32.

And the 10-year notes up 12/32.

30-year bond up 23/32.

And the Lehman Brothers Long-Term Treasury Bond Index up 9 2/3 points.

A bit of a mixed close on Wall Street today. The blue chips did a little bit better than the NASDAQ, the Dow gaining 45 points and a little bit. For every 13 stocks higher, there were nearly 16 lower and 28 more new lows for the year than new highs.

Topping the active list, as you might expect, was General Electric (GE) on a massive 49.7 million shares, the stock down $2.50. Traded as low as $49 and its stock bid for Honeywell International (HON) priced, you know, at that price today is worth about $52.50 for Honeywell shareholders.

Lucent Technologies (LU) down $0.56. The company out with fourth quarter results, $0.18, a penny above the company’s recently lowered earnings estimates. But Lucent says it’ll just break even in the first quarter of its new fiscal year.

AT&T (T) edged up $0.63. Now the company’s considering breaking into four different parts. Standard & Poor’s has avoided the stock.

Pfizer (PFE) up $2. There’s some speculation it may be a candidate for the Dow Industrial Average, replacing Honeywell.

Nortel Networks (NT) down $1.38.

And Nokia (NOK) edged down $0.13.

Texas Instruments (TXN) was up $1.38. Our market monitor guest on the program last Friday, Elaine Garzarelli, had kind words to say about Texas Instruments.

Merck (MRK) was up $2.88. Salomon Smith Barney upgraded it from “neutral” to “outperform.”

PaineWebber increased its one year price target on the stock from $81 to $90 a share.

Finally, Motorola (MOT) 10th in volume edged up $0.38.

American Express (AXP) down $1.69, although it traded as high as $56.50 this morning after reporting third quarter earnings up 14 percent at $0.54 a share.

Delta Air Lines (DAL) was up $1. The company’s considering the sale of all or part of its 5.3 percent stake in Priceline.com (PCLN). Even so, Priceline’s stock rose $0.20.

Glaxo Wellcome (GLX) rising $1.56. The company received European marketing approval for its HIV drug called Agenerase.

MMM (MMM) up $2.69. Third quarter earnings, $1.25, up from last year’s $1.13, a penny above the Street estimate, and the company expects to meet Wall Street’s earnings estimate for the full year of $4.75.

SBC Communications (SBC) rose $3.38. The company sees fourth quarter earnings a bit below forecast, but the full year results should be in line with estimates.

And finally Xerox (XRX) a $0.75 gain on speculation it’s about to sell its financing unit.

Greenbrier Companies (GBX), which makes rail cars, expects to beat Wall Street earnings estimates of $0.20 by close to double. It says it’s going to earn $0.39.

Lexmark International (LXK) up $5.56. Third quarter earnings $0.50, down from $0.56 a year ago, but that was still $0.03 above the Street estimate.

Rockwell International (ROK) up $5.06. That’s up in sympathy with Honeywell’s takeover by G.E. Some think that United Tech might turn its acquisitive eyes on Rockwell.

Constellation Energy Group (CEG) doing well, up $5.19. It’s going to split into two separate stocks, one an unregulated power producer and the other a conventional utility. Actually, it’ll be the parent of

Baltimore Gas & Electric. But in the process, it’s going to cut its cash dividend by about 70 percent.

Bemis Companies (BMS) down $5.44. Third quarter earnings $0.60. That’s a nickel below the Street estimate and the company sees no improvement in the fourth quarter.

Quest Diagnostics (DGX) off another $13.38 after losing almost $24 Friday on lower than expected sales volume for the third quarter.

NASDAQ trading, a loss of nearly 14 ½ points, but that’s better than it was at one stage today. Volume about 1.7 billion shares, well down from Friday’s pace. Twenty stocks up for every 18 lower.

Microsoft (MSFT) topped the active list, down $3.06.

Followed by Cisco (CSCO), down $1.44, although some are saying Cisco could be a Dow candidate. JDS Uniphase (JDSU) down $1.19.

A $0.06 rise in Sun Microsystems (SUNW).

Intel (INTC) was up $0.25, fifth in volume.

Juniper Networks (JNPR) down $7.13.

A similar loss in SDL (SDLI).

And CIENA (CIEN).

Applied Micro Circuits (AMCC) was up $2.88. The company’s 2 for 1 split stock will start trading next week, incidentally.

And Network Appliance (NTAP) down $8.25. Robertson Stevens downgraded the stock.

Engineering Measurements (EMCO) up $2.50 a share. Advanced Energy Industries (AEIS) decided to buy the company for $30 million cash instead of 900,000 of its shares.

Repeater Technologies (RPTR) up $6.31. The Bank of America downgrad