The year began with takeover rumors swirling around Alcoa, and the metals producer's stock surged as a result. By mid-summer, Alcoa's stock was trading at more than $47 as it seemed at once the hunted and the hunter, making a hostile bid for rival aluminum producer Alcan, a company it had attempted to acquire in 2006. In August, after the bid failed and the dust settled, former Siemens AG executive Klaus Kleinfeld was named Alcoa's president, becoming the heavy favorite to eventually replace Alain Belda as the company's CEO.

Once again, beer was a hot topic in the region this year, as a Connecticut investor worked to resurrect Pittsburgh Brewing from a two-year bankruptcy battle, and City Brewing of LaCrosse, Wis., the new owner of the former Latrobe Brewing Co., said it would begin producing Samuel Adams products at the site. After a year filled with struggles, the Iron City Brewing Company, Pittsburgh Brewing's new owner, now faces the challenges of rebuilding the brewer's image, modernizing its plant, and winning the trust of the work force.

As the subprime mortgage market faltered, roiling financial markets throughout the world, the subsequent credit crunch dominated business headlines in the second half of 2007. Struggling lenders, afraid of bankruptcies and defaults, began to change their practices, charge higher interest rates or simply reject all but the safest loans. Borrowers began to default at alarming rates, those who no longer qualified for traditional loans turned to riskier propositions, and banks even became afraid to loan money to each other. As the year drew to a close, the government and the Federal Reserve took measures to ease the pain, but it could be a while before the anxiety over the crisis eases.

The Big Three automakers in Detroit (General Motors, Ford and Chrysler) reached watershed agreements with the United Auto Workers this year that both sides hoped would put the companies in better position to compete with overseas rivals such as Toyota and Honda. Among other provisions, the historic deals shifted billions of dollars in benefit burdens to the union, and are expected to usher in an era of more competitive, daring designs for American cars and trucks. The Big Three and their workers hoped that the changes ultimately would mean better cars, higher sales and more jobs for Americans.

The organized labor movement and its allies spent much of the year pushing for passage of the Employee Free Choice Act, legislation that would allow workers to join a union as soon as a majority of them sign authorization cards and also strengthen penalties against employers who violate labor laws. The bill passed the House in March in a largely partisan vote, but supporters were unable to muster enough votes to break a Republican filibuster in the Senate, while President Bush promised a veto. Still, labor leaders have vowed to make passage of the measure a central issue in the 2008 presidential and congressional campaigns.

Do they work for FedEx Ground or do they work for themselves? That was the question in California, where the state Supreme Court upheld a decision that the company's drivers should be considered employees rather than contractors, a case that ultimately could cost FedEx Ground more than $12 million. The company's problems weren't confined to the Golden State, however: The Moon-based firm also was fined $190,000 in Massachusetts on charges that included misclassifying drivers as independent contractors.

It may not be easy being green, but in 2007, everyone seemed to be doing it anyway. "Sustainable business," the practice of balancing environmental and social concerns with the need for profits, became a hot topic for business leaders. Even the city of Pittsburgh, home to what is considered the world's largest green building, the David L. Lawrence Convention Center, got in on the act, taking up legislation that would require city projects to be environmentally friendly, and would offer incentives to companies that build green buildings here.

Nationally, the cost of health care was one of the hot topics in the presidential primary campaigns. Locally, the health-care industry had its share of struggles, but still kept chugging along. The West Penn Allegheny Health System faced the departure of a series of top executives, including Jerry Fedele, the systemwide chief executive officer, and a subsequent slip in profits. But UPMC, the region's largest hospital network, expanded its reach, with final approval for its purchase of Mercy Hospital, a move to the U.S. Steel Tower, and a record $618 million in profits.

The commercials had been everywhere for weeks, and on June 29, the iPhone, the latest must-have music/phone/photo/Internet/video device from Apple, finally made its debut, to the delight of gadget geeks around the world. After initial sales proved disappointing at the original price tags of $499 for the 4-gigabyte model and $599 for the 8-GB version, Apple chose to cut the cost of the contraptions by about $200 each. The move angered fans who had lined up in June to pay full freight, but delighted cost-conscious customers who chose to wait out the hype.

A few local businessmen were slapped by the hand of justice in 2007, perhaps most notably Mark D. Lay of MDL Capital Management. Mr. Lay, an Aliquippa native, was convicted in October on four counts of fraud and other charges based on the $216 million loss Mr. Lay's Active Duration Fund generated for the Ohio Bureau of Workers' Compensation. Also, after a five-year battle, former Adelphia Communications executives John and Timothy Rigas reported to a federal prison in North Carolina in August after being convicted in 2004 of multiple charges of securities fraud, conspiracy to commit bank fraud and bank fraud.

Fans of the park were not amused, but on Dec. 10, the owners of Kennywood announced that they would sell the park, along with their other holdings (including Idlewild Park, SoakZone and Sandcastle) to Parques Reunidos of Spain. The owners of the West Mifflin institution had considered making such a move before, but worried that changes could mean the end of traditions at the venerable venue. Under this deal, they say, fans will hardly notice a difference.

In January, a former FBI agent was named trustee of Le-Nature's, the bankrupt beverage producer wracked by fraud, and plans were made to sell the idled plant. As the company's creditors made attempts to recover some of the $820 million they were owed, bankruptcy court in September approved a deal that would allow Cadbury Schweppes Bottling Group Inc. to buy the Latrobe bottling plant and sell it to Giant Eagle.

The Mellon-Bank of New York merger left Pittsburgh with a bit of separation anxiety, as some wondered whether the financial behemoth would meet its post-merger promises to the region. The newly formed company said it had plans for 560 local jobs and a $70 million expansion of its data center northeast of Pittsburgh, as well as plans for 150 new jobs in a corporate trust operation Downtown.

Nintendo's popular game console Wii was one of the most popular products of the year, but was just one of several gadgets that had gaming fanatics fawning. Whether it was the Wii, the Playstation 3 or the Xbox 360, the booming video game industry reached yet another new dimension in 2007.

After starting the year hovering in the $60 per barrel range, crude oil prices began a steady climb that ultimately saw them flirting with $100, only to retreat toward the end of the year. Gas prices enjoyed a similar spike, topping $3 a gallon in November. Nationally, the price of a gallon of regular gasoline at year's end is more than 60 cents above what it was a year ago.

As the already-gray Pittsburgh population grows grayer, it becomes a popular location for pharmacies. In 2007, Walgreens stores popped up all across the region, Rite Aid began boosted its local presence with the buyout of Eckerd, and retailers including Giant Eagle and Wal-Mart attempted to lure customers with deep discounts on generic drugs.

A Post-Gazette investigation uncovered questions surrounding West Virginia University's decision to award an MBA degree to Heather Bresch, a politically connected executive at drug giant Mylan Inc. PG reporters found that records originally showed Ms. Bresch had completed only about half the credits that would be needed to earn such a degree. Ms. Bresch, daughter of West Virginia Gov. Joe Manchin, was promoted to chief operating officer at Mylan in October.

Across the country, residential real estate took a deep dive, driven in part by the subprime mortgage crisis. But through it all, Pittsburgh seemed to remain immune to the slide. In fact, a report in November showed that median sales prices for single-family homes in Pittsburgh increased 6.1 percent from 2006, while some cities in Florida and California posted double-digit declines. As Marc Louargand, president of the American Real Estate Society, put it: "Pittsburgh doesn't have a hangover because it wasn't at the party."

The stock market surged early in the year, with the Dow Jones industrial average reaching 14,000 in mid-July for the first time ever, less than three months after cracking the 13,000 mark. Then, problems in the subprime mortgage market gave rise to a host of issues that took Wall Street on a roller coaster ride the rest of the year. The Dow returned to the 14,000 mark in October, only to slide again as the year drew to a close.

Just in time for the holiday shopping season, Chinese toys imported to the United States became a serious safety problem. Lead paint, detachable magnets and other issues made a host of toys a hazard for small children and led to millions of them being pulled from the shelves. The toy recalls followed other problems with Chinese imports, including contaminated seafood, poisonous pet food and tainted toothpaste.

US Airways made a failed bid for rival Delta, but the big news for the once-dominant carrier at Pittsburgh International was its continued effort to slash its service here. The airline announced that its Pittsburgh crew base would be shut down and that 450 jobs and 40 flights will be cut, leaving 1,800 local employees and 68 daily flights, down from 542 flights and 11,995 workers in September 2001. Union officials and politicians berated CEO Doug Parker for the decisions, with U.S. Sen. Arlen Specter publicly scolding Mr. Parker in front of reporters and other legislators.

Verizon launched a battle with Comcast, which continued throughout the year, by offering "bundled" packages of phone, satellite TV, Internet and cell phone services. Verizon used the offers to try to lure television customers away from Comcast, while Comcast used similar offers of "bundled" services to try to snag telephone and Internet customers away from Verizon.

To borrow a phrase: It was the best of times, it was the worst of times for Wheeling-Pittsburgh Corp. A year after a proxy fight that saw steel distribution concern Esmark take control Wheeling-Pitt, the twice-bankrupt company still has to deal with ongoing financial problems that have workers bracing for the possibility of layoffs next year.

Whether you celebrate Christmas, Hanukkah, Kwanzaa , the Solstice or something else altogether, the news that the last Santa suit manufacturer in the country (Halco of Belle Vernon) no longer produced the suits in the United States had to be sad Now, according to Terri Greenberg, president of Halco, apparel for Santa and his associates is made in China, Hong Kong, Thailand and "all over."

The video-sharing site has moved from being only a cool place for teens to being the must-be place for everyone from marketers to presidential hopefuls to the Queen of England.

Italian chemicals company ZaCh System, a subsidiary of Milan-based Zambon Co., bought PPG Industries' fine chemicals business for $65 million. The deal was part of PPG's plan to shed underperforming businesses such as chemicals and glass, as it builds its coatings business. PPG had a busy year: Besides the ZaCh System deal, it reached an agreement for its biggest acquisition ever, a $3 billion purchase of Dutch paints maker SigmaKalon Group; said it would sell the automotive glass division for $500 million to a California investment firm; and continued to build its coatings portfolio internationally.