BUSINESS BRIEFING

Saturday, June 7, 2008

TELECOM

FCC Delays Free Wireless Vote

The Federal Communications Commission postponed next week's vote on whether to auction unused airwaves that would offer free wireless Internet connections.

FCC Chairman Kevin Martin decided to pull his proposal from the June 12 meeting agenda to give the panel more time to review the idea and allow more comments from the public. Wireless carriers such as AT&T Inc. and Verizon Wireless say the plan might interfere with other networks.

Martin's plan calls for the FCC to sell 25 megahertz of airwaves and require the buyer to use some of that spectrum to provide a free broadband service.

CORPORATE GOVERNANCE

NYSE Warns Media General

Media General, a newspaper publisher and broadcaster based in Richmond, was warned by the New York Stock Exchange that it doesn't have enough independent directors on its audit committee.

NYSE Regulation told the company that the audit committee must have three independent members, Media General said in a regulatory filing. One independent director lost reelection in April when shareholders backed candidates nominated by dissident investor Harbinger Capital Partners.

Media General plans to elect an independent director to serve on the audit committee before the end of this month.

CREDIT

Borrowing Rises at Slower Pace

Consumers relied a lot less on their credit cards in April, with debt in that area rising at the slowest pace in nearly three years, the Federal Reserve said. Consumer borrowing increased at an annual rate of 4.2 percent in April, slower than the 6.2 percent increase in March.

The slowdown reflected the fact that borrowing in the category that includes credit cards rose at an annual rate of just 0.4 percent, the weakest performance since borrowing in this area actually declined at a 1.8 percent rate in May 2005.

The slowdown in growth in credit cards and other revolving debt was offset somewhat by a surge in borrowing for auto loans and other types of non-revolving credit, which jumped at an annual rate of 6.5 percent, up from the March rate of increase of 5.5 percent.

AUTOMOTIVE

Canadian Workers May Strike GM

The Canadian Auto Workers may strike or take other action against General Motors because the company won't budge on plans to close an Ontario pickup-truck factory, the union's president said.

Buzz Hargrove said the automaker committed to keeping the Oshawa plant open in a contract agreement on May 15. But earlier this week, GM said it would close the plant in 2009. It employs 2,600 hourly and 300 salaried workers.

After meeting with G. Richard Wagoner Jr., GM's chief executive, Hargrove said the company wouldn't change its latest stance.

GM said it was closing Oshawa and three other pickup-truck and sport-utility-vehicle factories as higher gas prices have caused sales to tumble.

LOCAL

GenVec to Offer Stock, Warrants

GenVec, a pharmaceutical company in Gaithersburg, said it will sell a mix of common stock and warrants to institutional and accredited investors to raise about $17 million.

The company is offering nearly 11.3 million shares and about 2.3 million warrants to buy stock. The offering is structured so that buyers get a unit consisting of one share of stock and a warrant to buy one-fifth of a share for $1.51 apiece.

The warrants have a term of five years and an exercise price of $2.016 per share.

INSURANCE

AIG Faces Probe Over Accounting

Regulators are examining American International Group's accounting after derivatives tied to subprime mortgages led to record losses at the world's largest insurer.

The Securities and Exchange Commission and the Justice Department are investigating the way AIG valued credit-default swaps that wiped out profit for two quarters, the insurer said. The company had downplayed the potential for losses in December, then said Feb. 11 that its auditor found a "material weakness" in its accounting for the financial instruments.

The investigation comes two years after the company agreed to pay $1.64 billion to settle state and federal probes of reinsurance accounting and sales practices. AIG joins a growing list of firms facing government scrutiny over losses tied to subprime mortgages.

RETAIL

Wal-Mart Finds Silver Lining

Wal-Mart Stores is benefiting as rising gasoline, food and medical costs limit the amount U.S. consumers have to spend on everyday needs, chief executive H. Lee Scott Jr. said.

Those expenses are "eating up more and more from our customers' pockets," Scott told shareholders at Wal-Mart's annual meeting in Fayetteville, Ark. "Wal-Mart is uniquely positioned to succeed, not just in this economy, but in these times."

Wal-Mart said Thursday that May sales at stores open at least a year rose 3.9 percent, faster than it predicted, as lower prices on groceries, medicines and laptop computers attracted shoppers. Tax rebates also spurred sales as shoppers grappled with job losses and the worst U.S. housing market in a quarter-century.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.