Business DigestBy TIMES WIRES
© St. Petersburg Times,
published December 11, 2001
THRIFT COLLAPSE SETTLED: The multibillionaire Pritzker family and its partner have agreed to pay $460-million to resolve issues related to the failure of Superior Bank. The Pritzkers and their partner in Superior, New York developer Alvin Dworman, admit no liability in Superior's failure and no sanctions are imposed on them in the agreement with the Federal Deposit Insurance Corp. and the Office of Thrift Supervision. The Chicago-area thrift was the largest insured U.S. financial institution to fail in nearly a decade, causing an estimated loss to the federal insurance fund of $500-million. It lost millions on risky, high-rate mortgage loans to borrowers with tarnished credit.
DELPHI EXPANDS JOB CUTS: Delphi Automotive Systems Corp. said it will eliminate 1,400 more jobs, on top of 11,500 cuts announced in March. The auto-parts manufacturer wants to reduce costs while vehicle production slows. The additional salaried workers, representing less than 1 percent of the work force of 198,000, will leave in March and April through voluntary retirements and buyouts. Delphi shares fell 76 cents to $13.39.
AIRLINE OFFERS STAKE: America West Airlines has amended its federal loan guarantee application to give the government the option to buy 10 percent of the airline. The application is the first to be considered by a panel created by Congress following the Sept. 11 terrorist attacks to extend up to $10-billion worth of loan guarantees to help support the airline industry. America West submitted an application last month seeking a government guarantee for $400-million of a $426-million financing package. The new proposal gives the government warrants to buy 3.4-million shares of its stock. America West also said it changed its application to reduce the percentage of the loan that would be federally backed to below 90 percent. Its shares closed at $2.61, up 3 cents.
COMPAQ, HP SHARES FALL: Compaq Computer Corp. shares slid 14 percent on concern that the computer company's sale will fall through after the biggest shareholder of proposed buyer Hewlett-Packard Co. opposed the deal. Compaq declined $1.62 to $9.70, or 33 percent less than Hewlett-Packard's all-stock offer. Hewlett-Packard shares fell 52 cents to $23. The David & Lucile Packard Foundation, owner of 10.4 percent of Hewlett-Packard's stock, said Friday it will vote against the purchase. However, the foundation's president and chief executive, former Los Angeles Times publisher Richard T. Schlosberg III, said the charitable organization will not play an active role in opposing the Compaq acquisition.
AT&T BROADBAND WEIGHS OPTIONS: AT&T Broadband said talks about selling its operations are ongoing, but no decision has been reached. The company, the nation's biggest cable television operator, met this weekend to discuss bids for its broadband operations. Three companies are thought to have submitted bids for AT&T Broadband, including AOL Time Warner Inc., Comcast Corp. and Cox Communications Inc. AT&T could still decide against selling AT&T Broadband and go forward with an earlier plan to spin off the division as a separate company. The company has about 14.4-million cable subscribers, including more than 3-million who use its digital video services, according to the National Cable Television Association.
IRS LOOKS FOR WORKERS: Other employers may be cutting back, but the Internal Revenue Service says it is looking for hundreds of workers to fill positions nationwide, including some in its Tampa and St. Petersburg offices. Available jobs include revenue agents and officers. Applicants must be U.S. citizens. For more information, check the IRS Web site (www.irs.gov) and click on "IRS Hiring Hundreds Now!"
KFORCE ACQUISITION: Professional staffing company Kforce Inc. of Tampa said it acquired the assets of Scientific Staffing, a Jacksonville company that provides staff to the pharmaceutical and health care industries. Full terms of the deal were not disclosed, but Kforce said it paid cash and also turned over its legal-staffing division to Scientific's parent company, Modis Professional Services Inc. The acquisition comes one week after Kforce acquired Emergency Response Staffing Inc., a Scottsdale, Ariz., company that places nurses in jobs.
DEFENSE CONTRACTS: Two companies recently won contracts for $120-million each to provide consulting assistance to U.S. Special Operations Command at MacDill Air Force Base in Tampa. Sverdrup Technology Inc. of Tampa and Gemini Industries Inc. of Billerica, Mass., were awarded the five-year contracts to deliver acquisition, logistics, management and business operations support to the military command headquarters. Also, the Defense Department said Raytheon Co. in St. Petersburg will receive an additional $9-million toward a previously awarded contract for design of cooperative engagement capability services for the Navy.
NEW ENRON BIDS EXPECTED: Citigroup Inc. and UBS AG are reportedly preparing rival bids to purchase the trading operations of Enron Corp., the Wall Street Journal and the Financial Times reported. JP Morgan Chase, which like Citigroup is a large Enron creditor, is expected to submit its own offer at a later stage, the newspapers said. The size of the bids was not reported.
TREASURY AUCTION: Interest rates on short-term Treasury bills were mixed in Monday's auction. The Treasury Department auctioned $14-billion in three-month bills at a discount rate of 1.675 percent, down from 1.735 percent last week. Another $16-billion in six-month bills was auctioned at a discount rate of 1.765 percent, unchanged from the previous week. The new discount rates understate the actual return to investors: 1.704 percent for three-month bills and 1.805 percent for a six-month bill. In a separate report, the Federal Reserve said Monday that the average yield for one-year constant maturity Treasury bills edged down to 2.21 percent last week from 2.23 percent the previous week.
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