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FORD HAS ROSIER OUTLOOK: Ford Motor Co. and its former auto parts arm Visteon Corp. announced agreements Monday aimed at untangling pricing and cost sharing issues. Ford said it will book a $1.6-billion pretax charge to fourth quarter earnings to cover the new deal. The world's second-largest automaker behind General Motors Corp. also increased its full year 2003 earnings forecast to $1.05 to $1.10 a share, from a range of 95 cents to $1.05 a share, excluding one time expenses. Ford cited continued cost savings, strong results at its finance business and healthy sales of its new F-150 pickup. Part of the deal involves 20,000 United Auto Workers members assigned to Visteon, who will move to Ford as jobs become available. Visteon, in turn, hopes to fill those jobs with new workers at lower wages.
FRANKLIN NOTES MORE SUBPOENAS: Franklin Resources Inc. said Monday it has received additional subpoenas from federal investigators in connection with the ongoing mutual fund trading probe. In its annual report filed Monday with the SEC, the mutual fund manager said U.S. attorneys in northern California and Massachusetts and some foreign regulators have issued subpoenas. Franklin said it was providing documents and information in response to the subpoenas. The regulators have been investigating certain practices in the mutual fund industry, including late trading, market timing and sales compensation arrangements with brokers.
ODYSSEY HIRES COIN EXPERTS: A Tampa company that says it is recovering tens of thousands of gold and silver coins from a Civil War era shipwreck has hired Numismatic Conservation Services and Numismatic Guaranty Corp. of Sarasota to conserve, grade and package the coins for sale. Odyssey Marine Exploration said it gave Numismatic an exclusive contract to handle all coins recovered from the SS Republic, which sank off the Florida-Georgia cost in 1865.
NEMATODE BATTLER GETS CASH: Advantage Capital Florida Partners of Tampa and Gordon River Capital of Naples have invested $750,000 in an Alachua biotech. Pasteuria Bioscience LLC said it will use the capital to ramp up commercial production of a naturally occuring soil bacteria that infects and controls harmful nematodes. Nematodes are root-attacting parasites that cause up to $100-billion of crop damage each year. Pasteuria Bioscience has developed a patent-pending production technology for its nematode-attacking bacteria. The company will begin field tests of its product in the spring on small plots of tomatoes, peanuts and cucumbers.
PFIZER TO BUY ESPERION: The stock of Esperion Therapeutics Inc. soared 52 percent to $34.53 per share Monday on the news that pharmaceutical giant Pfizer Inc. plans to buy the tiny company, which is pioneering "good cholesterol" therapies. Pfizer announced Sunday it would pay $35 a share, or $1.3-billion, for Esperion. Esperion was founded five years ago to develop therapies that mimic HDL, or good cholesterol, to remove the plaque that causes blood clots from artery walls. The drugs, which are still in the research stage, could supplement popular heart drugs like Lipitor, the world's best-selling anticholesterol drug, which is made by Pfizer.
PARMALAT INVESTIGATION BEGINS: Italian prosecutors looking into the crisis at Parmalat Finanziaria SpA placed the company's founder and former chief executive Calisto Tanzi as well as nearly 20 other officials under investigation Monday after the dairy company admitted to a multibillion-dollar hole in its balance sheet. They are looking into possible fraud and other charges concerning the suspected falsification of company documents. The company made international headlines Friday when it stated that the Bank of America Corp. was not holding about 3.95-billion euros ($4.91-billion) that the Italian company had reported in September. The letter guaranteeing the funds was fake, the bank said.
CHRYSLER EX-CEO TESTIFIES: Former Chrysler chief financial officer Gary Valade testified Monday that he didn't know why notes he took on the merger that produced DaimlerChrysler were not provided to attorneys for investor Kirk Kerkorian, who is suing the automaker over the deal. The automaker also revealed it had found another document Sunday that it should have given Kerkorian's attorneys. Valade testified before a special master that his notes were put into a box with other material that was sent to the general counsel's office at Chrysler after the lawsuit was filed. DaimlerChrysler attorney Michael Schell, however, said Valade had some of the 61 pages with him last week.
FANNIE, FREDDIE DON'T HELP: Fannie Mae and Freddie Mac enjoy huge subsidies from the federal government, but those benefits translate into only a tiny drop in the mortgage rates paid by home buyers, a Federal Reserve economist concluded Monday. The study calculated that Fannie and Freddie, the two government-sponsored corporations, receive a government subsidy of between $119-billion and $164-billion. Despite these huge benefits, the Fed study estimated that Fannie and Freddie lowered the cost of home mortgages by only about 0.07 percentage point.
T-BILL RATES FALL: The Treasury Department sold $15-billion in three-month securities at a discount rate of 0.870 percent, down from 0.885 percent last week. An additional $14-billion was sold in six-month bills at a rate of 0.970 percent, down from 0.980 percent. The Federal Reserve said Monday that the average yield for one-year constant-maturity Treasury bills fell to 1.27 percent last week from 1.31 percent the previous week.