Allmerica drops life insurance, cuts jobs

10/29/2003

Allmerica Financial Corp. is getting out of the life insurance business to focus on property and casualty insurance, a move that will result in the elimination of 335 jobs. About half of the layoffs will be at the Worcester headquarters, with the rest coming nationwide. Chief executive Frederick Eppinger told the Worcester Telegram & Gazette he hopes to find new jobs in the company for at least some of the Worcester employees. The disclosure, made in Allmerica's third-quarter earnings report Monday, ends a yearlong effort to sell other companies' life and annuity products. Allmerica stopped selling its own life insurance products last October after a prolonged stock market slide, and converted its sales force into broker-dealers. (AP)

Mass. Electric fined, will offer rebates

Massachusetts Electric Co., the state's biggest power utility, proposed giving consumers one-time credits of about $3 or less in December to cover penalties imposed by state regulators for excessive blackouts. The state Department of Telecommunications and Energy this month said it would impose $6 million in sanctions on Mass. Electric for outages in 2002 that exceeded DTE service quality goals. Mass. Electric said it believes it is on track to meet service quality standards this year because of recent maintenance and system upgrades. (Peter J. Howe)

General Cable to close Taunton plant

General Cable Corp., which makes electrical and telephone cable, said it will close a Taunton plant and is considering shutting other factories in South Hadley and Indiana. The company will record costs of about $7 million in the fourth quarter, including $4 million in cash, to close the Taunton plant, which employs about 77 workers and produces bare copper strand and PVC jacketing compounds for other General Cable manufacturing facilities. General Cable also has plants in Lincoln, R.I., and Willimantic, Conn. (Bloomberg)

Mass. Medical Society links with DrFirst

Massachusetts Medical Society, which represents 18,000 physicians, signed an agreement with DrFirst, a Maryland technology company, to promote DrFirst's electronic prescribing program to its doctors. The society agreed to promote DrFirst's product through its newsletters and e-mails. In return, DrFirst will give society members a 75 percent discount on its electronic prescribing software and service. The society said it is not receiving any payment from DrFirst, but wants to promote the product as a way to reduce medication errors caused by poor handwriting and possible harmful drug combinations. (Liz Kowalczyk)

Verizon Wireless widens cellphone lead

Verizon Wireless widened its lead as the largest US cellphone company, adding a net 1.4 million new subscribers during the third quarter to reach 36 million total subscribers, half again as many as AT&T Wireless or Cingular. Verizon said its new "push to talk" walkie-talkie service, launched this summer to compete with Nextel Communications, has attracted 100,000 customers. About 10 million of its customers use various data services, which generated 2 percent of the unit's $5.9 billion quarterly sales. (Peter J. Howe)

Celtics, Mohegan Sun in sponsorship deal

The Mohegan Sun Casino in Uncasville, Conn., has signed a multiyear sponsorship deal with the Boston Celtics. As an official sponsor of the team, Mohegan Sun will advertise on the basket stanchions and on the seat backs for the Celtics and on visiting team benches for non-nationally televised home games. The casino will be allowed to use Celtics logos and trademarks in marketing and advertising programs. Financial terms of the deal were not disclosed. (AP)

THE NATION

Southwest to take on US Airways in Phila.

Kelleher Southwest Airlines Inc., the largest low-cost US carrier, said it would launch service in Philadelphia in May in a direct challenge to struggling US Airways, which called the move an assault on its main hub. The service will start 14 daily departures operating out of four gates at Philadelphia International Airport. The number six air carrier said it would reveal specific routes and fares in December. Philadelphia marks Southwest's first move into a new market since it started service in Norfolk, Va., in 2001. "Philadelphia historically has been overpriced and underserved," Southwest's cofounder and chairman, Herb Kelleher, said in a conference call with reporters. Philadelphia is US Airways' third-largest hub in terms of daily jet service and commuter flight departures and accounts for about 25 percent of its system revenue. (Reuters)

Rule requiring digital tuners upheld

All but the smallest new televisions will have to be able to receive digital TV signals by July 2007 under a government rule upheld by a federal appeals court. The makers of TVs, VCRs, and DVD players tried to block the Federal Communications Commission rule, saying it would make sets more expensive and was unnecessary because cable and satellite viewers don't need the tuners. A three-judge panel of the US Court of Appeals for the District of Columbia Circuit sided with the FCC. The tuners will be needed to receive over-the-air broadcasts after the nation switches from analog to digital signals. Congress has set a goal of December 2006 for the change. (AP)

Panel says Ullico may have violated laws

Sixteen former directors of a union-owned insurance company may have violated federal labor and pension laws with special stock trades that earned them almost $6 million in profits, a congressional investigation has found. The GOP-controlled House Education and Workforce Committee issued the report, saying it was deeply concerned about stock deals at Ullico Inc. that pushed the company into financial turmoil. The report was critical of the former union chiefs who ran Ullico, saying that federal labor and pension laws may have been violated, and urging regulatory investigators and law enforcement to scrutinize the transactions. Ullico's new board is suing some former officers, alleging that they violated their legal obligations to the corporation. (AP)

Drug makers win ruling on patents

GlaxoSmithKline PLC, the world's second-biggest drug maker, won a US appeals court ruling that will help brand-name drug makers delay the entry of low-cost versions while rivals battle over patents in federal courts. An appeals court in Washington cut off the ability of generic-drug makers to challenge the Food and Drug Administration over the listing of patents on the agency's registry. The listings can trigger patent lawsuits and an automatic halt to the approval of generic drugs for 30 months or until the litigation ends. (Bloomberg)

Shareholders OK spinoff of Palm unit

Shareholders approved Palm Inc.'s spinoff of its software unit and acquisition of Handspring Inc. Under the terms of the stock-swap deal, Handspring's shareholders will receive 0.09 Palm shares -- and no shares of PalmSource Inc. -- for each share of Handspring common stock owned. Palm will issue approximately 13.9 million shares of Palm common stock to Handspring's shareholders on a fully diluted basis. As a result, Handspring's shareholders would own 32.2 percent of the new company, and Palm's would own 67.8 percent. The value of the deal is approximately $378.6 million, based on Palm's closing price yesterday of $27.24, up $1.64, or 6 percent. The stock has about doubled since the proposed merger was disclosed in June. Palm will be renamed palmOne Inc. The spun-off division, which develops the Palm operating system, had already been acting independently as a subsidiary for more than a year and will remain PalmSource. (AP)