Wednesday, March 10, 1999
The University Daily Kansan
Section A · Page 7
Nation/World
Nabisco sells tobacco unit
The Associated Press
NEW YORK — RJR Nabisco Holdings Corp., the food-and-tobacco conglomerate whose brands include Camels and Winstons, Oreo cookies and Ritz crackers, is getting out of the cigarette business.
RJR said yesterday it would sell its international tobacco business to Japan's biggest tobacco company for $7.8 billion and spin off its domestic tobacco operations as a separate company.
The moves come amid rising legal challenges to cigarettes and falling numbers of U.S. smokers — something tobacco opponents were quick to note.
"The tobacco industry is in deep trouble," said Ahron Leichtman, executive director of Citizens for a Tobacco-Free Society.
RJR said its aim was merely
to help the cigarette and food companies achieve greater success as separate entities.
The $17 billion conglomerate has been pressured for several years by major stockholders to separate its food and tobacco businesses because the tobacco holdings are considered a drag on RJR's stock. Some investors won't put their money in any company that has tobacco holdings, out of either opposition to smoking or fear that lawsuits will hurt profits.
RJR Nabisco was created during the mid-1980s when the R.J. Reynolds tobacco company bought the food company Nabisco Brands.
RJR's international tobacco business is a distant third to Philip Morris Cos. and British-American Tobacco, and its earnings have fallen amid financial turmoil in its key Russian and Asian markets. It will be sold to the Japan Tobacco Co.
"The deal will allow us to secure a base for future growth overseas and establish us as a global player," Japan Tobacco said in a statement.
After the sale, RJR will spin off its domestic tobacco operations to RJR shareholders. The tobacco business will revert to its old name - R.J Reynolds Tobacco Co.- and retain its headquarters in Winston-Salem, N.C.
The resulting RJR Nabisco will be basically a food company, with such products as Chips Ahoy! and Snackwell's cookies, Life Savers candy and Planters nuts.
With the new corporate structure, people will be able to file tobacco lawsuits against either R.J. Reynolds Tobacco Co. or the new RJR Nabisco.
New high-speed train unveiled
The Associated Press
NEW YORK — Amtrak unveiled a new high-speed train yesterday that is designed to whisk passengers at 150 mph between Washington, New York and Boston and revitalize the railroad by competing with airlines on such trips.
Named "Acela" (uh-SELL-ah) to hint at both acceleration and excellence, the new trains will travel between Boston and New York in three hours — an improvement of 90 minutes on the current trip — and from New York to Washington in as little as 21/2 hours, a savings of 30 minutes.
Service is to begin in November or December, and Amtrak officials hope it will be a model for similar trains in the Great Lakes, the Gulf Coast, California and the Pacific Northwest.
"We know we have a product here that will absolutely knock
the socks off the competition," Amtrak President George Warrington said at a gala opening attended by more than 1,000 employees."
Amtrak also promised an unparalleled service. Acela's snub-nosed, silver-and-turquoise trains will have business-class seats with audio and power jacks, special check-in areas and concierge service, plus dining cars with meeting tables, upgraded food and beer on tap.
The schedule has not been set, but Amtrak officials said it probably would maintain most current stops, including Baltimore, Philadelphia, New Haven, Conn., and Providence, R.I. The railroad also will retain its slower Northeast Direct service.
A one-way trip will cost about $130 to $140, an increase from the current $114 fare fare but still less than the $199 walk-up fare charged by US Airways and
High-speed commute
Delta Air Lines. They are the two primary airlines offering shuttle service between Washington, New York and Boston.
Wisconsin Gov. Tommy Thompson, chairman of the Amtrak board of directors, said he hoped the next stop for high-speed rail would be the Midwest. Amtrak already has announced it will spend $25 million to work on a high-speed network linking nine Midwestern states.
Iraq strikes should stop, Persian Gulf ally tells U.S.
AL JABER AIR BASE, Kuwait — A major Persian Gulfally criticized the Clinton administration yesterday for almost daily air strikes against Iraqi anti-aircraft targets
The Associated Press
Despite the criticism, U. S. F-165 loaded with bombs and missiles continued to roar aloft from this desert base on the doorstep of southern Iraq. U. S. pilots said they weren't looking for trouble but were ready to strike if fired on union. And the Iraqis were still firing.
The foreign minister of Qatar, a moderate Arab ally in the Gulf region, told Defense Secretary William Cohen that the standoff with Iraq should end peacefully and that the daily strikes by U. S. warplanes responding to Iraqi challenges should cease.
The statements marked the first open opposition from any U. S. partner in the Persian Gulf during Cohen's week-long swing through the region.
During the news conference in Doha, Qatar's capital, Cohen defended the U. S. strikes as basic self-defense against Iraqi leader Saddam Hussein's stepped-up effort to defy international sanctions and shoot down U.S. warplanes.
Attacks and counterattacks continued in the northern Iraqi no-flight zone. Army Col. Richard Bridges said U. S. F-15 fighters launched 600-pound bombs at three anti-aircraft sites that fired on platoons. U. S. planes based in Kuwait, Saudi Arabia and aboard carriers in the Persian Gulf, cover the larger southern no-flight zone.
In Washington, a Senate critic of the Clinton administration's Iraq policy suggested the United States is squandering an opportunity to move more forcefully to oust Saddam.
Sen. Sam Brownback, R-Kan., chairman of a Senate Foreign Relations subcommittee, complained that the administration had not spent any of some $97 million that Congress earmarked last year to provide military assistance to opposition groups.
Arab critics suggest the United States is looking for a fight, hoping to provoke Iraq into firing to clear the way for punishing retaliatory strikes. Qatar's semi-independent Gulf Times said in an editorial last weekend.
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