Wachovia to Buy Car Loan Firm
Wachovia said it will expand its automobile financing group into a nationwide business with its $3.42 billion acquisition of Westcorp. The Charlotte commercial bank holding company also agreed to pay $490 million more for the 16 percent stake that Westcorp doesn't already own in WFS Financial, boosting the transactions' value to $3.9 billion. The deals would more than double the size of Wachovia's dealer finance business, making it the nation's ninth-biggest auto loan originator. It expects to close the deals early in 2006.
Former Westar Officials Convicted
Former Westar Energy executives David C. Wittig, left, and Douglas T. Lake were found guilty of stealing $37 million in compensation and benefits in their second trial on fraud and other charges. A Kansas City, Kan., jury convicted Wittig, the former president and chief executive of the Kansas electric utility holding company, of all 39 charges against him, including conspiracy, wire fraud, money laundering and circumvention of internal controls. Lake, Westar's former executive vice president of corporate strategy, was convicted on 30 of 39 counts and acquitted of the other charges.
Prosecutors want Wittig and Lake to forfeit all assets obtained from their alleged crimes, which the government said was "every penny" they received while at Westar. The jury will return today to consider the request.
Enron Broadband Retrial Set
Five former executives from Enron's defunct broadband unit whose trial ended with jurors unable to reach verdicts on most charges will be retried in three separate cases next year.
Nearly two months ago a jury returned acquittals on some charges after a three-month trial but was deadlocked on dozens more. U.S. District Judge Vanessa Gilmore declared a mistrial on those charges and set retrial dates. At least one of the trials, may overlap with the conspiracy and fraud trial of Enron founder Kenneth L. Lay and former chief executive Jeffrey K. Skilling, set to begin in January in a courtroom next door to Gilmore's.
Northwest Warns Strikers
Northwest Airlines, the fourth-largest U.S. carrier, reiterated to its striking mechanics union that it will begin replacing the workers today, 25 days after the walkout.
Northwest and the union, the Aircraft Mechanics Fraternal Association, both said contract negotiations over the weekend broke down partly because of a dispute over severance pay for workers losing their jobs. The union also said Northwest increased its request to $203 million in annual concessions, from $176 million before the strike, as part of a new $1.4 billion in targeted labor savings.
U.S. Losses Lead Industry
The global airline industry will post a 2005 loss of $7.4 billion, 23 percent more than expected, as fuel costs hurt U.S. carriers. The International Air Transport Association said U.S. airline losses will top $8 billion this year. Asia Pacific carriers will make a profit of about $1 billion, and European airlines will break even.
Raw Sugar Futures Surge
Raw sugar futures in New York advanced to their highest level since January 2001 on speculation that high oil prices and hurricane damage to U.S. refineries will increase demand for Brazilian ethanol, made from sugar cane.
The average price of U.S. domestic ethanol, derived from corn, reached a record $2.76 a gallon Sept. 8 after Hurricane Katrina pushed the price of crude oil for October delivery to a record $70.85 a barrel on the New York Mercantile Exchange. Brazilian ethanol was trading at $1.09 a gallon in the week ending Sept. 9, according to figures from the University of Sao Paulo.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday increased to 3.45 percent from 3.435 percent last week. Rates on six-month bills rose to 3.67 percent from 3.57 percent. The annualized return to investors is 3.529 percent for three-month bills, with a $10,000 bill selling for $9,912.79, and 3.791 percent for a six-month bill selling for $9,814.46. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 3.76 percent last week from 3.77 percent the previous week.
Compiled from staff and news service reports.