Here is a look at more of Monday's top business stories:
US Airways pilots approve new pay cuts
CHICAGO, Dec. 16 (UPI) -- Pilots at US Airways approved an agreement that will cut $100 million annually in pilot costs for six years, part of a plan to help the company work its way out of bankruptcy-court protection next year.
The Wall Street Journal reports Monday that the Air Line Pilots Association, which represents 4,000 pilots at the seventh-largest U.S. carrier, previously agreed to annual concessions amounting to $465 million. The latest reductions, the newspaper said, are in the form of additional pay, benefit and pension cuts, and improvements in productivity.
US Airways is seeking another $100 million in cost savings from its other unions, which it says is necessary if it's to win a $900 million federal loan guarantee that would back a $1 billion financing package. It needs the financing arrangements to emerge from Chapter 11 bankruptcy status -- and to draw the final $200 million of the interim, debtor-in-possession financing pledged by its lead financial backer, the Retirement Systems of Alabama.
The Arlington, Va.-based airline has cut about $1.2 billion from annual expenses through labor concessions and renegotiated loan terms. But the industry's poor outlook means it needs more cuts: $200 million a year from labor and $200 million in other areas.
IBM to produce new generation of chips
SAN FRANCISCO, Dec. 16 (UPI) -- IBM is to announce on Monday that it plans to start commercial production in 2003 of a new generation of smaller, faster and cheaper microchips.
The new chips will be up to 80 percent smaller and 70 percent cheaper than the existing alternatives, the Financial Times reports in its Monday editions. They will be designed by and manufactured on behalf of Xilinx, a California-based company. Production will be at a $3 billion facility opened earlier this year in New York state.
The newspaper said that the plan demonstrates that chipmakers are pursuing new manufacturing techniques despite the sharp downturn in the information technology equipment sector. And, it said, the project "suggests that IBM has pulled ahead of rivals, including Intel, the world's largest semiconductor company, in the race to mass-produce chips based on the latest 90-nanometer technology."
The current generation of microchips, which were introduced in 2001, is based on 130-nanometer technology. A nanometer is one-billionth of a meter.
German business sees crisis conditions
BERLIN, Dec. 16 (UPI) -- German business leaders surveyed by the Financial Times newspaper believe that their country faces its worst crisis since after World War II, and they're highly skeptical that the government can solve the country's problems.
The report comes as the government of Chancellor Gerhard Schroeder announces tax changes. This week, the government is to unveil a unitary 25-percent savings tax and an amnesty to encourage the repatriation of undeclared savings abroad, the FT reports. But the business leaders it spoke with said higher taxes and non-wage labor costs introduced by Schroeder since his re-election in September "will stifle already weak growth."
It said the problem was highlighted by chipmaker Infineon, whose chief executive told the newspaper that the company might move its headquarters abroad because Germany's tax rates "often double those paid by competitors, were placing a dangerous burden on the company."
The newspaper surveyed Germany's 100 largest quoted groups.
Bigger U.S. companies seeking bankruptcy
MIAMI, Dec. 16 (UPI) -- Business bankruptcy filings overall are at their highest level in the United States since 1998. But the bottom line doesn't tell the whole story.
The Miami Herald notes that small firms appear to have become less likely to file for bankruptcy. But large-company bankruptcy filings have more than tripled over the past five years.
The Herald, quoting statistics from the American Bankruptcy Institute, said that "the corporate assets under jurisdiction of bankruptcy judges has never been higher." And, it said, some analysts are worried that an "epidemic of Chapter 11 filings, which protect companies from their creditors, is revealing problems more serious than merely high debt loads."
It said that the current bankruptcy system, set up in 1978, isn't well-equipped to address issues of corruption or fraud, which have led so many major companies to bankruptcy in the past few years.
"Some fear that the bankruptcy system may be contributing to the problem ... bankruptcy courts today actually compete for business (and) companies can shop for sympathetic judges. Beneath the surface is a fear that the American system may have become a little too forgiving of those who shirk their debts. The shame level of bankruptcy has been reduced to virtually zero," it said.
One attorney said that "capitalism is supposed to be survival of the fittest," but that the bankruptcy process allows weak players to stay in the game.
Bankruptcy, said the newspaper, "has become such a widely used method of shunting assets from unprotected investors and lenders that some critics fear that it is an overused, and rather abused, management tool."
Debt crisis seen for U.S. power sector in 2003
NEW YORK, Dec. 16 (UPI) -- The U.S. power industry will likely experience a debt crisis in 2003 and perhaps in 2004 as well.
That's according to an analysis by the credit rating agency Fitch Ratings, expected to be released on Tuesday, the Wall Street Journal reports.
It says that the industry has more than $25 billion of debt due next year, amid a difficult lending environment. Nearly 40 percent of the utility-holding companies and half of the merchant generators that Fitch rates face possible ratings downgrades.
Many utility companies began ambitious power-plant building programs in recent years. But as these plants are finished in the next two years, several of the most important markets -- Texas, California and the Northeast -- will have excess generating capacity.
Fitch says the situation is especially difficult for companies with large debts due in the next two years. It specifically cites Reliant Resources Inc., of Houston; Dynegy Inc. also in Houston; Aquila Corp., of Kansas City, Mo.; Mirant Corp. in Atlanta; and Calpine Corp., of San Jose, Calif.; the Journal reports.
