Defense Secretary Donald H. Rumsfeld put on hold, at least through November, a controversial $23.5 billion deal to buy and lease new air-refueling tankers. Rumsfeld ordered the Air Force to reconsider what it needs and how those needs could be met. Boeing, which would use the contract to keep its 767 production line operating, warned it would have to take a charge of about $310 million if no deal is signed. An investigation continues into Boeing's hiring of a top Air Force official who helped negotiate the original deal.
Adding a Bundle
Adding to the already-intense telecommunications competition, Comcast, the nation's largest cable television provider, announced it would offer local and long-distance telephone service to 40 million households by the end of 2006. The new service would carry calls over the Internet rather than through more expensive circuit-switched networks used by traditional phone companies. Like other cable companies, Comcast would bundle phone service with cable programming and broadband Internet access.
Riggs Weighs Options
Riggs National hired Lehman Brothers to seek out potential buyers and consider strategic alternatives. As a result of regulatory enforcement actions that have already cost it $25 million in fines, Riggs had previously announced it would exit the embassy banking business and operations in Europe and Florida. The move to explore a broader sale follows the resignation from the board of controlling shareholder Joe L. Allbritton, who had long resisted a sale despite rapid consolidation in the banking industry.
On the Brink
Delta Air Lines moved closer to a bankruptcy filing as the company and its creditors retained restructuring advisers. The company had previously raised the possibility of a reorganization and asked its unionized pilots to take a 30 percent pay cut to avoid it. But rising fuel costs and increased competition from low-cost airlines have increased the pressures on Delta, whose shares have fallen 48 percent so far this year. In the past three years, Delta has lost $3 billion and shed 16,000 employees.
It has been a busy couple of weeks for Washington's Carlyle Group. On the heels of its purchase of Verizon's phone business in Hawaii for $1.65 billion, the private equity firm said it would sell Horizon Lines for $650 million, more than twice what it paid for the shipping company 15 months ago. Meanwhile, Carlyle partners in Japan are in exclusive talks to purchase a controlling interest in DDI, a wireless data and voice service, for $2.1 billion. And Carlyle was said to be among the final bidders last week for Loews Cineplex.