Dec. 23, 2005
 
Top Business, Industry Stories of 2005
 
By Mary Deibel
Scripps Howard News Service
 

Delta and Northwest Airlines, facing pension debt, were in bankruptcy court. (SHNS file photo)

Energy prices took their toll on consumer pocketbooks as well as the auto and airline industries in 2005. The year also saw the return of the Big Deal, as more and more household brand names had the urge to merge. Even the Chinese got in on the bidding, buying up IBM's personal-computer division. White-collar crime continued to make headlines, including Martha Stewart's prison release and the prison entry of other corporate titans.
 
1. Energy prices skyrocket, partly because Hurricanes Katrina and Rita knock Gulf Coast production offline, fueling higher costs for gasoline, natural gas, home heating oil and a range of petroleum-based products, and fanning inflation. Resulting record oil-company profits of $34 billion so far this year have regulators investigating and lawmakers threatening windfall profits taxes.
 
2. The bankruptcy of auto-parts firm Delphi heralds deep new trouble for U.S. automakers. General Motors announces layoffs of 30,000 and nine U.S. plant closures by 2008 after posting a $4 billion loss the first nine months of 2005. Ford Motor, facing $1.4 billion in losses, will pare 6,750 white-collar jobs with more layoffs likely in 2006.
 

President Bush tapped White House economics chief Ben Bernanke to succeed Alan Greenspan as "The Maestro" readied for the Jan. 31 end of his 18-year reign as Federal Reserve chairman. (SHNS file photo by Bill Clark / Scripps Howard News Service)

3. United Airlines and US Airways got the bankruptcy court's blessing to shift a collective $9.6 billion in pension liability to the Pension Benefit Guaranty Corp., helping push the deficit of the federal agency that insures 44 million pensions to $22.8 billion. Delta and Northwest Airlines, facing similar pension debt, followed into bankruptcy court, although the two haven't dumped their $16.3 billion pension liability on PBGC yet.
 
4. China is buying up the U.S. national debt and more as IBM sold its PC business to China's Lenovo for $1.75 billion after passing U.S. espionage scrutiny. No. 2 U.S. oil firm ChevronTexaco bought Unocal for $16.5 billion after Chinese-owned CNOOC withdrew its $18.4 billion bid because of U.S. political opposition.
 
5. President Bush's top domestic priority fell flat when Congress and the public failed to rally to his complicated plan for private Social Security accounts because its limited investor control angered foes and friends alike, including the investment industry. Bush promises to push the idea, but top lawmakers say a Social Security overhaul is dead until after the 2008 presidential election.
 
6. Bush tapped White House economics chief Ben Bernanke to succeed Alan Greenspan as "The Maestro" readied for the Jan. 31 end of his 18-year reign as Federal Reserve chairman.
 
7. White-collar crime continued to make headlines even though former Enron chairman Kenneth Lay has yet to stand trial on fraud charges four years after Enron's collapse ignited a new wave of corporate scandals. In 2005:
 
* Onetime WorldCom CEO Bernard Ebbers was found guilty of defrauding shareholders.
 
* Tyco International chieftain Dennis Kozlowski was found guilty of fraud, too.
 
* Former Cendant Vice Chair Kirk Shelton was sentenced to 10 years in prison for conspiracy and securities, wire and mail fraud and ordered to pay full restitution for his role in a $3 billion accounting scandal.
 
* Futures broker Refco went bust, prompting the federal indictment of former Refco CEO Philip Bennett on fraud charges that include lining his own pockets by $500 million.
 
* Media mogul Conrad Black (Chicago Sun-Times, Jerusalem Post) was charged with looting Hollinger International.
 
* HealthSouth founder Richard Scrushy was acquitted in a $2.7 billion accounting fraud and blamed it on 15 other executives who pleaded guilty.
 
* Martha Stewart staged a comeback after spending five months in prison in Alderson, WV for lying about a stock sale.
 
8. Seven unions that accounted for 40 percent of the AFL-CIO's 13 million members bolted over organizing priorities in the biggest organized-labor split since the 1930s.
 
9. The Big Deal is back as mergers and acquisitions are expected to top $1 trillion this year, a tally far short of 2000's record $1.7 trillion in deals.
 
* The former Ma Bell: AT&T, broken up by federal trustbusters in 1984, was bought by onetime Baby Bell SBC for $16 billion with SBC taking the AT&T name, and ex-Baby Verizon got the OK for the $8.5 billion purchase of MCI, the renamed WorldCom post-bankruptcy.
 
* Seven private-equity firms paid $11.4 billion for SunGard Data Systems in the largest leveraged buyout since RJR Nabisco in 1989.
 
* Federated Department Stores staged an $11 billion acquisition of longtime rival May, forming a 940-store chain. The purchase caps the 20-year industry consolidation and puts an end to historic names like Marshall Field's, Filene's, Strawbridge's, Kaufmann's and Famous Barr.
 
* Procter & Gamble bought Gillette for $57 billion.
 
* Bank of America bought credit-card giant MBNA for $35 billion.
 
* Whirlpool bought Maytag for $1.7 billion.
 
* Boston Scientific's $25 billion offer for Guidant bested Johnson & Johnson's $22 billion bid.
 
* Koch Industries bought paper-maker Georgia-Pacific for $20 billion, vaulting Koch past Cargill as the nation's largest privately held company, worth an estimated $80 billion with 85,000 employees.
 
* ConocoPhillips bids $30 billion for Burlington Resources.
 
* Paramount buys independent movie studio DreamWorks SKG for $1.6 billion. 10. A pair of Supreme Court cases reshapes property rights:
 
* The justices spark a nationwide brushfire by holding (Kelo v. City of New London) that the Constitution lets government "take" private property for public purposes that include private development.
 
* The court signaled the end of free Internet file-swapping, saying Grokster and other file-sharing services are liable if people use them to steal music and other copyrighted intellectual property. Now Grokster, with the recording industry's blessing, will make file-swappers pay like iPod users do.
 
Honorable mention:
 
Google mania set in: The Internet search engine stock that went public last year for $85 a share hit $400, making it larger than Coca-Cola, Cisco Systems or Time Warner. The stock soared in advance of the launch of Google Base, which vows to turn the search-engine function on its head so users can search want ads, putting newspapers and their classified-ad base at risk.
 
Also, Google beat out Microsoft to buy a 5 percent interest in America Online, which Time Warner put on the block under pressure from financier Carl Icahn.