A.M. Executive Briefing - July 30

Jury Awards $3.67 Million in Fatal Wreck

Attorneys for the plaintiffs said Dunn fell asleep while driving after ignoring hours-of-service regulations by spending more than 21 hours on the road without taking a break.

The company received a citation in 1991 for violations, including noncompliance with hours-of-service rules.

Defense attorneys blamed the accident on Pierce crossing the center line, pointing to a state trooper's report that was based on truck driver Dunn’s statements.

But one of the plaintiffs’ attorneys said there was truck oil in Pierce's lane, evidence that Dunn had crossed the line. Raleigh (N.C.) News and Observer Online (07/30/99)

Waste Management Disavows Executive, Dismisses Financial Chief, Top Counsel

An unnamed source says the acting chairman, Ralph V. Whitworth, is angry that the July 6 disclosure was misleading to shareholders. Waste Management Executive Vice President Earl E. DeFrates was demoted due to this latest disclosure. The company also dismissed Gregory T. Sangalis, its senior vice president and general counsel.

A second unnamed source said that DeFrates offered to resign after the July 6 estimates, but was turned down.

DeFrates, who doubles as the company's chief financial officer, denies this. He adds that he was unaware that the misleading portion of the July 6 estimate was as high as 6 cents a share, nor did he know about the deposit-recovery projection.

Analysts had expected per-share earnings of 78 cents for the second quarter, but the July 6 estimate was between 67 cents and 70 cents. Thursday estimates put it between 58 cents and 60 cents.

The company is now considering the sale of some assets, including a portion of its core waste-handling operations.

Waste Management has set an Aug. 3 date for its final second-quarter earnings report. Wall Street Journal (07/30/99) P. A3; Bailey, Jeff

[A] European Partner for UPS?

One possibility is the Netherlands private post office TNT Post Group, which has been publicly traded since last year and is hoping to provide UPS-style delivery and logistics service across the continent.

TNT Chairman Ad Scheepbouwer predicts an entry into Europe by both UPS and FedEx, adding that his company might partner with either firm.

Investor Colin Ferenbach of New York’s Haven Capital notes a 20% annual growth in express parcel service in Europe, which he says is lagging behind the United States in that area by a good decade. Ferenbach sees potential 1999 TNT per-share earnings of $1.30, a price-to-earnings ratio of 18, and figures that a TNT partnership with either U.S. firm could clean up in Europe.

TNT’s recent stock performance, however, has not been so hot. Barron's (07/26/99) Vol. 79, No. 30, P. MW6; Norton, Leslie P.

Chafee's Challenge

Some people think the tax is a long shot since Chafee has no co-sponsors and because tax changes are supposed to start in the House. The tax would take the place of current federal truck taxes, take into account the truck’s number of axles, and bring the diesel tax down to the level of the gasoline tax.

The senator argues that the government’s revenue from truck taxes will not change, since the number of carriers paying higher taxes will be offset by the companies whose taxes are lowered due to the repeal of current taxes.

Carriers, however, worry that the current taxes may not stay repealed forever and that certain companies might be singled out for enforcement attention.

In addition, the bill would tax carriers for their heaviest weight, even if they usually run at lower weights. Fleet Owner (07/99) Vol. 94, No. 7, P. 40; Simonson, Ken

Transportation Products: Vehicle Routinge

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