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Show The Salt Lake Tribune CONSUMER CORNER D6 BUSINESS PAG E D-5 The recentdeclines in the TUESDAY stock market have prompted manyinvestors to seek a safe Stocks Zig, Zag, Fall Again wait NASDAQ 1128285 SAP 500 CLOSE: Investors mercurial “Emotions are running high right now, and a quick move to the downsidecaneasily be replaced by a moveto the upside andvice after streak of sharp declines, analysts say Victo1 cent, at 7,784.58, in billions* +h its thirdstraight triple-digit more selling Monday, extending Friday’s Jones industrials drop more than 300 points, rebound andthen close down morethan 230. Analysts said the sharp swings reflected investors’ uncertainty after nine weeks of including Friday’s 390-point plunge in the Dow. Mixed earnings reports affected specific stocks, butfailed to give the declines, Broaderstock indicators also retreated. s Com The last time the S&P closed lower $1240 May7, 1997, whenit reached 815.62. filed for Chapter 11 bankruptcy See INVESTORS,Page D-6 marketa lift. Bell South: The phone company earned $293 million, or 16 cents a share, down from $880 million, or 47 cents, a yearearlier. $5.78 lower on May1, 1997, when it stood at .50 yearearlier. | Standard& Poor's 500 index slipped 27.91, or 3.3 percent,to 819.85. The Nasdaqlast closed Thevolatility came a day after World. irlion, oF 51 cents a share, up from $178 million, or 13 cents, a $5.7 The Nasdaq composite index dropped 36.50, or 2.8 percent, at 1,282.65, and the broader vas American Express Co.: The credit card issuer eamed $683 +18% 624.91 pointsin the past twosessions. sell-off ina volatile session that saw the Dow Earnings reports for the second quarter. Hasbro Inc.: The toymaker lost $25.9 million, or 15 cents @ share. It had lost $18.3 million, or 11 cents, a year earlier, 90.546 finish andits lowest close since it reached Oct. 8, 1998. The Dowhas lost BYLISA SINGHANIA NEW YORK Wall Street succumbed to CLOSE: 819.85 Utah’s Top Performers Revenue BSFCapital Management. “People are shooting first and asking questionslater.” The Dowclosed down 234.68, or 2.9 per- THE ASSOCIAT! =D PRESS ae Quarterly Snapshots versa,” said Charles Crane, strategist for 3M Co: The maker of Post-it Notes earned $466 million, or $1.18 a share, up trom $202 milion, oF 50 cents, a year earlier $4.16 * Percentage changescompared fo year-agoquarter. Mike Miller The Salt Lake Tritune CLOSE: p>ubliclyheld 168.80 companies. Omniserve Boss Outlines _ AIR SHOW ARRIVAL LaborFiles Complaint Against Two SLC Firms _ Chapter 11 The U. S. Department of Labor has filed a complaint against two Salt LakeCity security firms, alleging they violated federal overtime and record-keeping standards. Thefederal suit, filed in U.S.District Court for Utah,alleges Silver Star EventServices Inc. and Confidential Background Investigations Inc. repeatedly violated the fed- - Survival Plan BY STEVEN OBERBECK THE SALT LAKETRIBUNE, Omniserve Cellular, a Kay: ville-based chain ofretail wirel eral Fair Labor Standards Act by failing to pay overtime to employees. The complaintalso alleges the two companies, whichoperate jointly under common control, failed to keep adequate employmentrecords. The suit asks the court to prohibit the telephone stores, will try to re structureits bank debtas part ofits plan to emerge from Chapter 11 bankruptcy. The company, which sold cellu- lartelephoneservices for a number companiesfrom further overtime of different carriers, in mid-June filed with the U.S. Bankruptcy Court for Utah to reorganize its and record-keeping violations. Attempts to reach both companies were unsuccessful Monday. Dean Campbell, the Labor Department’s wage and hourdirectorin Salt Lake City, said the companies have debts under Chapter 11 been fined $24,000 for “the repeat and willful natureoftheviolations.” The most recent Labor Depart- telecommunications downturn such as the current one As a result, Omniserve was locked into a numberofleases for Omniserve President Michael Nebeker said the company didn’t sufficiently prepare to weather a mentinvestigationresulted in the companies paying 48 employees unprofitablestore locations. Under a Chapter11 reorganiza- $13,000 in back pay. tion, a companyis given court protection from creditor lawsuits while Geneva Gets Extension it works out a plan to repayits debts andrestructure its operations. That restructuring can includea rejec- GenevaSteel said Mondayit re- ceived anotherextension fromits lenders thatwill allow it to continue to use thecashit raises fromthe sale of inventory andcollections ofac- countsreceivable to fund its operations. The Utah Countysteel company, which is operating under Chapter 11 of the U.S. Bankruptcy code,indicated the agreement will terminate on Aug.15 if a loan application is not submitted to the federal Emergency Steel Loan Guarantee Program,or 15 days after the guarantee board provides written notice ofits decision to guarantee a loan for the Vineyard, Utah, mill Genevais seeking a new$250mil. lion Joan to repayits existing bank debt of $108 million and to restructure its production by purchasing an electric arc furnaceso it can operate a “minimil].” Minimills produce steel by melt Dave Caulkin/The Associated Press tion of unprofitable store leases, The world’s longest passengeraircraft, a Virgin Airways Airbus A240-600, arrives Monday at Farnborough Airfield in Farnborough, England, where aninternational air show will open Saturday. Airbus and Boeing report a decline in sales. They predictthat the slumpwill last until 2004. See the story on Page D-6. Nebekersaid. “We've hand-selected our 17 Food Chains Pay a Price for Discount Cards BY SHERRI C.GOODMAN THE SALT LA survey was conducted in 2001, so it was named in survey, said Valen. TRIBU! tin. Albertsons, whichhas46 stores in Grocery discount cards probably do more harm than good when it comes to customer satisfaction, a Weber State University studyfound. WSUbusiness students surveyed 953 Ogden-area residents on super market customer loyalty cards and found that customers felt they were entitled to loyalty-card discounts ing scrap rather than making the meta) fromscratch using coal and ironore. with or without the card, WSU marketing and management professor EX. Valentinsaid. Voluntary Beef Recall and WSU associate marketing profes Wal-Mart and Sam’s Club an. nounced a voluntaryrecall of some of their groundbeef products in con nection with E. coli concernstied to a Greeley, Colo., ConAgra meatprocessing plant Last week, the plantinitiated the second-largest beef recall in U.S. his- tory Thestudy, co-authored by Valentin sor AnthonyAllred, is scheduled to be published in the spring in the Journal ofApplied Business Research It divided the customers into three segments: high, medium and lowpa. tronage. Participants could not be students and had to be the primary grocery buyer for the household Only Smith's Food & Drug Cen ters, which operates 43stores in Utah, had a loyalty card program whenthe Utah, launchedits Preferred Savings card programabout a month ago. The high patronage segment customers who bought 50 percent or moreoftheir groceries from a Smith's during a 30-day period were the most tolerant of the Fresh Values card program. However, “noneof the “Ourcard allows us to really thank loyal customers bygiving themaddi. tional savings,” Smith’s spokes: womanMarsha Gilfordsaid. Albertsons spokeswoman Jean nette Duwesaid the Boise, Idahobased chain did a “considerable amountof research” before introduc ingits card to ensure it would bring most profitable locations tinue to operate for rs to come.” When the company ran into trouble, it was forced to choose between paying its bank debt or its other creditors, said Mona Thur. man, a Salt Lake City attorney who is representing the company. “They choseto pay the bank.” In its bankruptcy petition, the company reported it owes more than $1.8 million to its 20 largest u itors while its debts million. Omniserve ued its assets at $3.5 million. Last month, four cellular phone value to customers. Albertsons al: ties phone numbers to loyalty ca companies three patronage groups favored the Smith's Fresh Values programm,” Val customers don't have to cardsto receive discounts. carriers entin said “The support we have witnessed since rolling out the card has been truly overwhelming,” Duwe said However, the survey results ring The survey also found most cus tomers believe the discount price is actually the real price and the socalled regular priceis inflated “So when they get the discounted hey get whatth , there was noextremejoy,” he said When theyaredenied the discount price because they don't havea card or aren't carrying their card, they feel discriminated against, hesaid Smith's and Albertsons defended their card programs, saying they bring valueto their customers truewith Kaysvilleresident C. Gerald Parker. Parker carries cards for Albert sons and Smith’s, but he avoids shop- ping at both stores because of what he calls the “deceptionof discount cards “The whole concept is bothersome to me. If they're going to have why can't anyone who comes in t stores get the same price?”Parker said sgoodmanésitrib.com 14 in Utah and three in Washington,” Nebeker said. “We're goingto con: that resold cellular phone services from the wireless that Omniserve repre. sented filed a 2nd District Court alleging they have not re. ceived commissions payments due them and other Nebeker contended those compa nies also owe Omniserve moneyfor advances made to buy inventory With Omniserve's Chapter 11, those companies G & MWireless Inc., Evendawn Enterprises, WireEssentials and Chambo Corp now mustfile their claims with Bankruptcy Court, said eeve, the attorney who is representing the four companies. steveasitrib.com Wal-Mart has already pulled from its sales floors 3-pound bags of Great Valuefrozen beef patties with the case codedates 2002 106 A1Pand 2002 106 BLP. Ground beef in 5-pound rolls, bulk and patties that customers may have already purchased may also be affect ed. Thecodes for these products are: @ Establishment number 2446. Case-ready ground beef. Sell-bydates of May 1, May 3, May 15 and July 8, 2002. @ Establishment number 492 Case-ready ground beef. Sell-by dates of June1.5, 27, 28 and 29, 2002. @ Establishment number492. 5. poundroll of ground beef. Se dates of June 7-11, July 44. WorldCom Seeks to Keep Its Key Assets Despite Bankruptcy BY BRUCE MEYERSON ArthurGonzalez, that will enable the cash-strapped Operating THE ASSOCIATED PRESS NEW YORK The crash of the telecommunications market, though hardly good for business, may buy WorldComsometimeto workits way out of bankruptcy without being forced to sell key units such as the MCI long distance operation. There was noclear signal in the opening bankruptcy hearing, held Monday a federal court in New Sam's Club is also recalling twc York, as to whether WorldCom's ma- are 90 percent fresh ground beef ax jor lenders and bondholders favored a restructuring of the $41 billion debt groundbeef products. The product 90percent fresh ground beef pat purchased withsell-by dates af May 17, 2002 to July 19, 2002 Customers can return these prod ucts to Wal-Mart or Sam's Clubfor a full refundor replacement they are owed rather thanthesale of major assets Mostof the hearing was dominated by procedural matters such as a billion interim financing agreement approved by U.S. Bankruptcy Judge $2 company to keep The $107 billion in assets WorldCom reported in Sunday bankruptcy filing, the biggest in U.S. history, might not fetch even 20 cents on thedollar in the current climate. according to num industry estimates “Oneof the interesting dilemmas in this situation, where you have ar entire industry in trouble, is that some of the most likely buyers of nglike MCI might not be in to buy,” said David Skee of corporate and bank w at the University of asylvania a result, creditors hopingto get See WORLDCOM, Page D4 WorldCom CEO John more on Monday sai d his company hopes to keep major assets despite filing Sunday for Cr ter 11 bankrupicy |
