AIRLINES

Thursday, July 3, 2008

AIRLINES

American Warns of Job Cuts

American Airlines expects to eliminate about 8 percent of its workforce, or nearly 7,000 jobs, when it reduces capacity in the fourth quarter to cope with soaring fuel costs, the company said in a message to workers.

The Fort Worth airline said it could cut 900 flight attendant jobs and will probably reduce jobs for pilots and mechanics, too, but it hasn't released numbers, yet. In May, American announced it would cut domestic capacity by as much as 12 percent this year, retire some planes and cut an unspecified number of jobs.

In a regulatory filing, American's parent AMR said it will record costs of $1.27 billion to reduce the value of parked aircraft and pay severance to workers who lose their jobs.

AirTran Looks to Cut Workers' Pay

Discount carrier AirTran Airways said it is seeking to cut employee pay by about 10 percent to help offset soaring fuel prices, and it warned that it may cut wages further.

"Our plan is to temporarily reduce pay rates for six months commencing with the start of the August pay period, and we will then review the situation again," chief executive Bob Fornaro told employees in a memo.

REGULATORS

Paulson Makes Case for Reform

Treasury Secretary Henry M. Paulson Jr. said the United States must build a tougher regulatory system that can allow financial institutions to fail without causing wider economic turbulence. In a speech in London, Paulson said the U.S. Federal Reserve needs sweeping new powers that would make it easier to get information on financial institutions -- and to intervene if necessary.

Paulson warned that major global markets must root out the perception that some financial institutions are too big, or too complex, to fail. Markets need to be robust enough to withstand the collapse of a major firm, with government intervention an unusual act, he said.

CONSUMER SAFETY

Kroger Expands Beef Recall

Kroger expanded its voluntary recall of some ground beef products beyond stores in Michigan and parts of Ohio. Meat from one of its suppliers, Nebraska Beef, has been linked to illness caused by E. coli in Michigan and Ohio from May 31 to June 8. Nebraska Beef has recalled nearly 532,000 pounds of ground beef produced on five dates between May 16 and June 24.

LABOR

UnitedHealth to Shed 4,000 Jobs

UnitedHealth Group said it would cut at least 4,000 jobs, or 5 percent of its workforce as it restructures and warned that the weak economy and higher costs will cut into profit.

The company also said it will pay $895 million to settle lawsuits over stock option backdating and will pay $17 million to a fund in an agreement to resolve a suit related to the Employee Retirement Income Security Act.

LEGAL

Lawyer's Son Sentenced

The son of anti-tobacco lawyer Richard "Dickie" Scruggs was sentenced to 14 months in prison for knowing about a judicial bribery scandal and not reporting it to authorities. Zach Scruggs was sentenced by the same federal judge who last week sent his father to prison for five years for conspiring to bribe a Mississippi judge.

INTERNET

Broadband Too Costly, Study Says

A study by the Pew Internet and American Life Project challenges the argument that broadband providers need to more aggressively roll out supply to meet demand. Just 14 percent of dial-up users say they're stuck with the older, slower connection technology because they cannot get broadband in their neighborhoods, Pew reported. Thirty-five percent say they're still on dial-up because broadband prices are too high.

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