Continental Cutting Jobs, Flights
Continental Airlines said it is cutting 3,000 jobs and reducing capacity by 11 percent, citing record fuel costs that have pushed the industry into its worst crisis since 2001. It also said its two top executives will forgo pay for the rest of the year.
The job cuts represent about 7 percent of the company's workforce of 45,000. Continental will begin pulling back on flights in September, when departures on its mainline operations will drop about 16 percent below September 2007 levels. Fourth-quarter capacity will fall 11 percent. The company said it plans to offer details on flight and destination reductions and eliminations by the end of next week.
The company also said its chairman and chief executive, Lawrence Kellner, and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.
Fed Clears Countrywide Purchase
The Federal Reserve approved Bank of America's $4 billion purchase of the distressed mortgage lender Countrywide Financial.
The Fed said Bank of America would remain the nation's largest depository institution after the proposed deal's completion, controlling about $773.4 billion in deposits, or 10.9 percent of all insured bank deposits nationwide. Bank of America said it expects the sale to close in the third quarter.
Countrywide lost about $1.6 billion in the last six months of 2007 and faces numerous investigations and lawsuits related to its lending practices. Bank of America has said it will tighten those lending standards.
Scrushy Ordered to Testify
Richard M. Scrushy, convicted in 2006 of bribery conspiracy and incarcerated in Texas, must return to Alabama from federal prison to testify in civil lawsuits over the wide-ranging fraud that nearly bankrupted HealthSouth, the rehabilitation chain he founded.
Scrushy did not testify during either of his two federal criminal trials, one of which ended with his acquittal in the HealthSouth fraud in 2005, the other in his 2006 conviction along with former Alabama governor Don Siegelman (D).
Scrushy, who is serving nearly seven years, is "happy to tell his side of the story," his attorney said, but will fight the order to testify because he doesn't want to leave his fenceless prison for a brief stay in a county lockup near Birmingham.
Broadcom Co-Founder Indicted
Federal officials unsealed indictments alleging drug and securities violations by Henry T. Nicholas III, the billionaire co-founder of chipmaker Broadcom.
One indictment charges that Nicholas spiked the drinks of technology executives and customer representatives with ecstasy and maintained a warehouse for ecstasy, cocaine and methamphetamine. A second indictment accuses him of conspiracy, securities fraud and other violations related to backdating stock options while he was Broadcom's chief executive. That indictment also names Broadcom's former chief financial officer, William J. Ruehle, on conspiracy and securities-fraud charges but no drug violations.
Lawyer Brendan V. Sullivan Jr., who represents Nicholas, declined to comment. Ruehle's lawyer, Richard Marmaro, said in a statement, "Bill Ruehle is innocent of the charges in the indictment, and he looks forward to the opportunity to clear his good name."
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.