FedEx to Raise Express Rates
FedEx announced it will raise shipping rates for its FedEx Express shipments by an average of 3.5 percent. The shipping company, which also owns document services provider Kinko's, said the rise includes a 5.5 percent average increase in standard list rates, offset by a 2 percent reduction in its fuel surcharge. The rates take effect Jan. 2.
Separately, FedEx chief executive Gary M. Kusin said the company would expand its FedEx Kinko's retail operations, adding 3,000 shops in the United States and an additional 1,000 overseas by its fiscal 2011. FedEx still is finalizing the expansion plans and did not disclose a cost.
Fitch Drops Delphi Credit Rating
Delphi, the largest U.S. auto supplier, had its credit rating lowered two levels by Fitch Ratings, from B- to CCC, amid concerns that the company may file for bankruptcy protection. Steve Miller, chief executive of Delphi, plans to file for bankruptcy protection as early as Oct. 17 if the company does not receive financial aid from former parent General Motors and concessions from the United Auto Workers.
Bill Would Widen Pension Aid
U.S. senators have agreed on airline pension legislation that would extend assistance to two more carriers, American and Continental, according to Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee. The measure would allow Delta and Northwest 14 years to make some pension payments that otherwise would be due in the next few years. It had cleared two Senate committees but stalled in part because Continental and American sought similar help.
Airlines say the law would give them time to shore up their plans and keep paying retirees. The House has pending pension legislation without airline-aid provisions, and the separate Senate and House proposals eventually would have to be reconciled before a law could be enacted.
Creditors Back Delta's Delay
Creditors of Delta Air Lines, which filed for bankruptcy protection last month, support the airline's decision to skip an October contribution to the company pension plan, arguing the payment would unfairly favor retired pilots.
The Delta Pilots' Pension Preservation Organization asked the U.S. Bankruptcy Court to order the payment after the company informed pensioners in a Sept. 15 letter that it did not plan on making the contribution.
The creditors said in a court filing that forcing Delta to make the payment would let retired pilots receive payments while other creditors remain unpaid -- a violation of U.S. bankruptcy law.
Shari Redstone Named Vice Chair
Viacom, planning to split into two companies next year, named Shari Redstone as non-executive vice chairwoman of both units and said investors will receive half a share in each new business for every Viacom share they own. The boards of the new Viacom and CBS will share three other directors, including Redstone's father, Chairman Sumner M. Redstone, according to a regulatory filing that gave details of the breakup.
McKesson Sues Over Audits
McKesson, the biggest U.S. drug wholesaler, accused its former auditor Arthur Andersen of negligence for work on a 1998 acquisition that led to billions of dollars in losses. In a lawsuit filed in California Superior Court in August and transferred to federal court in San Jose, McKesson said Andersen failed to uncover inappropriate accounting methods at HBO & Co., a software company that McKesson acquired in 1998.
McKesson's restatement after the accounting problems were disclosed led to a one-day drop in the company's stock that wiped out $8.6 billion in market value. This year McKesson agreed to pay $980 million to investors related to the restatement. McKesson said Andersen and a former audit partner are liable for those losses.
Yum Brands, operator of the KFC, Taco Bell and Pizza Hut chains, posted its biggest profit gain in more than a year as sales surged in China. Third-quarter profit rose 16 percent from the comparable year-ago period, to $214 million. Sales increased 3 percent, to $2.24 billion.
Compiled from staff and news service reports.