Northwest Talks Stall
Mechanics represented by the Aircraft Mechanics Fraternal Association walked away from talks with Northwest Airlines, accusing the carrier of refusing to bargain. Northwest hasn't budged from its original demand for pay cuts of about 25 percent and the right to hire contractors to do more of the work of its AMFA mechanics, cleaners, and custodians.
The airline wants to lay off roughly 2,000 of AMFA's current 4,500 Northwest workers. In January 2002, Northwest employed 8,390 AMFA members. The mechanics are free to strike after 12:01 a.m. EDT on Aug. 20. Northwest, the nation's fourth-largest airline, has vowed to keep flying.
GM Selling Stake in Mortgage Unit
General Motors' finance arm will sell a 60 percent stake in its commercial mortgage unit to an investor group that includes Kohlberg Kravis Roberts to raise cash after most of GM's debt was cut to junk in May. GM, which had been negotiating the sale since March, said it will maintain a 40 percent interest in the General Motors Acceptance Corp. unit.
GMAC chief executive Eric Feldstein said last week that he plans to use the proceeds from the sale of the unit, which lends money to hospitals, apartment complexes, malls and other businesses, to make more home loans and issue more insurance. The company may also buy back some of its own debt.
Ex-Insurance Execs Plead Guilty
Two former employees of Marsh & McLennan, the world's largest insurance broker, and an ex-underwriter at Zurich Financial Services pleaded guilty to rigging insurance bids as New York state Attorney General Eliot L. Spitzer continued his investigation of possible collusion in the industry.
Regina Hatton and Nicole Michaels, both formerly of Marsh, pleaded guilty in state court to single felony counts of scheming to defraud. Jim Spiegel, who had worked at Zurich, the third-largest commercial insurer in the United States, pleaded guilty to a one felony count of restraining competition and trade.
Fourteen executives from Marsh and three insurers have admitting wrongdoing.
NYSE Seat Sells for Record Price
As the New York Stock Exchange pursues its acquisition of electronic rival Archipelago Holdings, a seat on the Big Board sold for a record $3 million. Raymond Pellecchia, an NYSE spokesman, did not disclose details of the transaction, as is customary for the privately held exchange. The previous record for a seat sale was $2.65 million, set Aug. 23, 1999, during the height of the dot-com boom.
Cox Sworn In as SEC Chairman
Christopher Cox was sworn in as the 28th chairman of the Securities and Exchange Commission in a private ceremony administered by Federal Reserve Board Chairman Alan Greenspan. Cox is a former corporate lawyer, and he represented Orange County, Calif., for nine terms in the U.S. House of Representatives. Cox is to address SEC employees for the first time today.
Honda Recalls Odyssey Minivans
Honda said it will recall 85,154 Odyssey minivans from the 2005 model year because sensors for the frontal air-bag system could make a warning lamp on the instrument panel remain illuminated.
Cigna posted better-than-expected results for the second quarter, citing strong performance in its health care, group disability, life insurance and international businesses. Profit rose 43 percent, to $720 million, from $504 million in the corresponding period a year ago.
Electronic Data Systems, which runs other companies' computer systems, said that its profit fell sharply in the second quarter, to $26 million from $270 million a year earlier. The year-ago earnings were significantly boosted by the divestiture of a subsidiary, UGS PLM Solutions.
CVS, which acquired Eckerd drugstores last July, said that its second-quarter profit rose 18 percent, to $275.9 million, compared with $234.5 million in the corresponding period last year. CVS said it had completed integration of its acquired Eckerd stores, including more than 1,000 in Florida and Texas.
Compiled from staff and news service reports.