Bankruptcy boom, Red-hot steel

NEWS AT A GLANCE

Billion-dollar bankruptcies on the rise

Halfway through 2008, bankruptcy filings among companies worth more than a billion dollars are already at a five-year high, according to BankruptcyData-dot-com. Of seven billion-plus bankruptcies this year, May’s collapse of subprime mortgage lender Fremont General Corp., with $13 billion in assets, tops the list. There were 15 such bankruptcies in 2003, and a recent high of 25 in 2001. With today’s high levels of debt, rising energy and materials costs, and the weak economy, “we seem to be in the midst of a ‘perfect storm’ leading to more bankruptcies,” says BankrupcyData’s George Putnam III. (Reuters) Yesterday, restaurant chains Bennigan’s and Steak & Ale, and clothing retailer Mervyn’s filed for bankruptcy. (The New York Times)

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Steel giant ArcelorMittal’s profit doubles

Luxembourg-based ArcelorMittal, the world’ largest steelmaker, said its second-quarter profit more than doubled, to $5.8 billion, as rising steel prices more than offset higher raw material costs. The results easily beat analysts’ estimates. (MarketWatch) ArcelorMittal also forecast stronger-than-expected earnings for the third quarter. (Reuters) Roughly three times the size of its nearest rival, Nippon Steel, ArcelorMittal has made several acquisitions in Russia, Africa, and the U.S. over the past year. And “we continue to look for opportunities to further enhance our raw material self-sufficiency,” said CEO Lakshmi Mittal. (Bloomberg) U.S. Steel yesterday also said its quarterly profit more than doubled. (AP in The New York Times)

EADS profit rises, but hit by superjumbo delays

European Aeronautic, Defence & Space Co., the parent of Airbus and the world’s No. 1 planemaker, reported a weaker-than-expected 46 percent rise in quarterly profit, to $183 million. (Reuters) Profits took a hit from a $1.1 billion charge related to delays in rolling out its A380 superjumbo jet and by the weak dollar, which cut another $1.1 billion because many of Airbus’ costs are in euros while it sells finished planes in dollars. Airbus raised the number of aircraft orders it expects this year to 850, from 700. (AP in Forbes.com) It also raised its cost-cutting targets, but Airbus has to “find additional savings beyond what’s already planned to help them cope with the weak dollar,” said Klaus Breil at Cominvest Asset Management. (Bloomberg)

The company doctor, increasingly, is in

Normally, when a company tries to save money on health care through some innovation, workers are less than thrilled. But companies like Toyota, Disney, and Harrah’s have found substantial savings by bringing back the tradition of the company doctor, with slight modifications, and many employees are cheering the change. The companies save money because on-site medical clinics avert many costly specialist and emergency room visits, and because workers don’t leave the office or factory to see the doctor. And for the workers? Lower co-payments and longer visits. “I saw the doctor for 20 minutes,” said Louis Aguillon at a Toyota plant in San Antonio. “You’re not just a number there.” (BusinessWeek.com)