Northwest Pay Cuts Approved
Northwest Airlines won permission from a bankruptcy judge to cut the pay of union workers temporarily by $446 million a year as part of a plan to reduce annual costs by $1.4 billion.
U.S. Bankruptcy Judge Allan Gropper approved agreements with Northwest's pilots and flight attendants at a hearing in New York. The International Association of Machinists, Northwest's largest union, didn't agree to or oppose the cuts. Of the $446 million in savings, $215 million will come from pilots, $117 million from flight attendants and $114 million from the 14,200 workers represented by the machinists union
Delta Seeks to Void Contract
Delta Air Lines asked a U.S. Bankruptcy Court to void its contract with the pilots' union so the beleaguered airline can impose deep wage and benefit cuts and avoid further financial erosion. Delta attorney Jack Gallagher said the airline had tried to negotiate reductions, but ultimately failed. Delta is seeking to slash $325 million from the collective bargaining agreement with its pilots.
The Air Line Pilots Association, which has offered $90.7 million in concessions, has threatened to strike if the court grants Delta's request. ALPA attorney Bruce Simon noted that the union agreed to $1 billion in concessions last year.
Earlier, a union lawyer filed a motion asking that U.S. Bankruptcy Judge Prudence Carter Beatty recuse herself from the case, saying that she had made comments in past hearings that cast doubt on her impartiality. The judge denied the motion.
Schwab Ends Some Account Fees
Charles Schwab, the nation's largest discount brokerage, said it is eliminating account service fees for small-business owners and individual retirement plans. The brokerage said the decision will affect 401(k) plans, 403(b)(7) plans, qualified retirement plans, Keogh plans, SEP-IRAs and Simple IRAs. The change in policy is effective retroactively from Oct. 1.
Tyco Chief Hints at Breakup
Tyco International chief executive Edward D. Breen Jr. said the conglomerate's board is considering splitting up the company, undoing the acquisition strategy of his predecessor, Dennis Kozlowski. Tyco's stock price rose 4 percent. The board is discussing a "full range" of actions, including accelerating share repurchases and a dividend, Breen said.
The company also reported results for its fiscal fourth quarter. Tyco said its profit more than doubled to $917 million, up from $454 million in the comparable quarter last year. Revenue increased to $10.03 billion from $9.99 billion.
Union: Delphi Pushing Job Cuts
Delphi, the largest U.S. auto parts maker, wants to eliminate more than 20,000 U.S. jobs and isn't trying to reach an agreement on wages and benefits, union leaders said.
A proposal Delphi calls its final offer would trim the union workforce in the U.S. to about 10,000, from 33,650, United Auto Workers President Ronald A. Gettelfinger said. He said the offer "is an insult, and we will not ask the locals for a vote." The company said it narrowed the proposed wage cut and called its offer "competitive."
Delphi filed for court protection Oct. 8 for its U.S. operations after chief executive Robert S. Miller Jr. failed to win concessions from unions and financial aid from former parent General Motors. Miller has said he will ask the bankruptcy court to let Delphi impose terms if unions don't agree to pay and benefit reductions by Dec. 16.
Ford Reintroduces Discounts
Ford Motor became the second of the Big Three automakers to reinstate discounts with a program that knocks thousands of dollars off the price of some vehicles.
The announcement comes two days after General Motors Corp. announced its "Red Tag" discount, which allows buyers to pay a fixed maximum price advertised on the Internet and on red tags at dealerships. Both programs end Jan. 3.
Ford's announcement came the same day it recalled about 220,000 vehicles from the 2005 model year on concern that a battery cable was rubbing against the vehicle frame and that a fuel tank strap could separate after logging tens of thousands of miles.
D.R. Horton, one of the nation's biggest homebuilders, said its fiscal fourth-quarter profit rose 61 percent, to $563.8 million from $349.6 million in the comparable period last year. Revenue increased to $5.02 billion from $3.46 billion, and homes closed increased 38 percent to 18,622 homes from 13,452 homes a year earlier.
Compiled from staff and news service reports.