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Corporate Giants Face Fines, Reforms, and Mergers

Strategic Insights

— 2 min read

Tyson Foods Inc., the leading poultry producer, was fined $4 million for giving gifts to former Agriculture Secretary Mike Espy. The company's sentence included a four-year probation and a threat to be barred from doing business with the government if it didn't comply with the terms. Tyson also agreed to pay $2 million to cover the costs of the investigation.

Meanwhile, NationsBank reported a 29% profit growth in the fourth quarter and 30% for the entire year. The banking company earned $818 million, or $1.09 per share, in the last three months of 1997, compared to $632 million, or $1.15 a share, in the same period the previous year.

Federal Reserve Chairman Alan Greenspan warned of an "unprecedented" increase in US credit access, which may lead to further delinquencies. He also cautioned that the growing wave of bank mergers would not cut lending to small businesses.

In other news, Sun Microsystems Inc. plans to revamp its workstation business with machines priced below $3,000. General Motors Corp. will set aside up to $4 billion to cover plant closures and lower asset values. Acclaim Entertainment Inc. reported earnings of $8 million, while Southern Union Co. completed the acquisition of Atlantic Utilities Corp.

Key Takeaways:

  • Tyson Foods Inc. was fined $4 million for giving gifts to former Agriculture Secretary Mike Espy and threatened with a four-year probation.
  • NationsBank reported a 29% profit growth in the fourth quarter and 30% for the entire year, earning $818 million in the last three months of 1997.
  • Federal Reserve Chairman Alan Greenspan warned of an "unprecedented" increase in US credit access, which may lead to further delinquencies.
  • Sun Microsystems Inc. plans to revamp its workstation business with machines priced below $3,000.
  • General Motors Corp. will set aside up to $4 billion to cover plant closures and lower asset values.
  • Acclaim Entertainment Inc. reported earnings of $8 million in its 1998 fiscal first quarter.
  • Southern Union Co. completed the acquisition of Atlantic Utilities Corp., a natural gas and propane distribution company.

Statistics:

  • Tyson Foods Inc. was fined $4 million.
  • NationsBank earned $818 million in the last three months of 1997.
  • Greenspan warned of an "unprecedented" increase in US credit access.
  • General Motors Corp. will set aside up to $4 billion to cover plant closures and lower asset values.
  • Acclaim Entertainment Inc. reported earnings of $8 million.
  • Southern Union Co. now has approximately 997,500 customers, about 16th nationally.

Sources:

  • Tyson Foods Inc. fined $4 million for gifts to Mike Espy (Washington Post, date not specified)
  • NationsBank profit up 29% (Charlotte Observer, January 26, 1998)
  • Greenspan warns of credit rise (Los Angeles Times, January 26, 1998)
  • Sun revamps work stations (San Jose Mercury News, January 26, 1998)
  • General Motors Corp. sets aside $4 billion (Detroit News, January 26, 1998)
  • Acclaim earnings at $8 million (Austin American-Statesman, January 26, 1998)
  • Southern Union buys utility (Dallas Morning News, January 26, 1998)

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