Wednesday, December 10, 2008
ECONOMY
Airlines Need Stimulus, CEO Says
The chief executive of American Airlines says any federal plan to boost the economy should include help for the aviation industry, including more spending on runways and a better air traffic control system, but not necessarily direct aid to the carriers themselves.
"The airline industry should be certainly at the top of the list of industries that are deserving of economic stimulus as it relates to infrastructure because we have let the infrastructure in aviation deteriorate," Gerard Arpey said.
Arpey also said that American, which saw traffic plunge 14.5 percent in November compared with a year earlier, is studying advance booking trends and could quickly react if the global recession appears to worsen.
American cut capacity 8 percent this year and plans another 6 percent reduction for 2009.
MEDIAN.Y. Times in Talks With Lenders
New York Times Co. said it is in talks with lenders about debt payments coming due in the next two years, as the newspaper publisher struggles to weather continued declines in advertising sales.
The company says it will borrow up to $225 million against the value of its Manhattan headquarters to help repay debt due in May, and is evaluating assets for potential sale as it looks to boost liquidity.
"There is no doubt that 2009 will be among the most challenging years we have faced and more steps will be needed," chief executive Janet L. Robinson said.
PHARMACEUTICALMerck Lays Out Restructuring
The drugmaker Merck tried to reassure investors that its latest restructuring strategy will put it back on a growth track as it moves into new markets and opens units aimed at taking advantage of biotechnology.
During its annual business briefing, Merck said it is on track to reach its goal of $2 billion in sales from emerging markets, including China and India. Meanwhile, it is creating Merck BioVentures, a unit aimed at developing biotechnology-based treatments and products. That unit would also focus on generic biotechnology drugs, which could become a key issue during the next session of Congress.
INSURANCEAIG Challenged on Retention Pay
A congressman who has been highly critical of American International Group is questioning retention payments the insurer is making to employees, saying the money looks like bonuses called by another name.
In a letter to AIG chief executive Edward Liddy, Rep. Elijah Cummings (D-Md.) questioned the payments, ranging from $92,500 to $4 million, that AIG said it is making to 168 employees, and whether the money was being paid to executives who, because of the insurer's serious financial problems, have announced they would forgo compensation.
Cummings also asked AIG for more information on how it is spending the bailout money it has received from the government. The New York-based company has received about $150 billion to prevent it from collapsing under the weight of bad credit investments.
LEGALWal-Mart Settles Break-Time Suit
Wal-Mart said it will pay up to $54.25 million to settle a class-action lawsuit alleging that it cut workers' break time and didn't prevent employees from working off the clock in Minnesota.
The class includes about 100,000 current and former hourly workers who were employed at Wal-Mart and Sam's Club stores in Minnesota from Sept. 11, 1998, through Nov. 14, 2008.
Wal-Mart also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws.
Justin Perl, a lead attorney for the plaintiffs, said he was "gratified that these hourly workers will now be paid after seven years of litigation."
Wal-Mart spokesman David Tovar said the company is committed to paying its workers for all time worked and to making sure they get rest and meal breaks. Managers who violate its policies are subject to punishment including firing, he said.
CONTRACTINGMore Armored Vehicles Sought
The Pentagon is fast-tracking a multibillion-dollar competition to outfit ground forces in Afghanistan with new off-road terrain armored vehicles that protect against rocket-propelled grenades and explosive devices.
"This is a high priority accelerated acquisition in support of the global war on terror," according to the Pentagon request, which means manufacturers would have to set aside other projects to meet the military's demand as soon as possible. The first set of vehicles is expected to be delivered next fall.
The Defense Department said it could buy between 2,080 and 10,000 of the so-called MRAP-All Terrain Vehicles for use by the Army and Marines Corps. Among the companies likely to compete for the contract are the U.S. subsidiary of British defense conglomerate BAE Systems, Bethesda-based Lockheed Martin, Humvee maker AM General and Navistar International.
EARNINGSKroger said third-quarter profit fell 6 percent, to $237.7 million from $253.8 million a year earlier, largely because of a $15.9 million after-tax charge related to damage caused by Hurricane Ike. The company said sales for the quarter ended Nov. 8 rose 9 percent, to $17.58 billion. Kroger said sales were strong for its deli, bakery and other store-prepared foods as Americans cut down on restaurant meals, and that its corporate brand sales continue to rise, accounting for more than a fourth of grocery sales.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.
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