- The Washington Times - Wednesday, January 9, 2008


The risk of Sallie Mae defaulting on its debt rose to the highest ever as the appointment of a new chairman and chief financial officer at the biggest U.S. education lender failed to ease concerns that the Reston company’s financial standing will deteriorate further.

Sprint Nextel of Reston, the third-biggest U.S. mobile-phone company, said at the Consumer Electronics Show in Las Vegas that becoming the first national carrier to offer the WiMax high-speed wireless technology will give it an advantage over competitors. Employees are testing the network in the District, Baltimore and Chicago, and commercial service will begin later this year, Sprint said.

McLean satellite company International Launch Services (ILS) said it won $1.5 billion in new launch orders in 2007, its first year as an independent company marketing the Proton Breeze M vehicle. This total represents contracts for 17 launches on Proton, Russia’s heavy-lift launcher, through 2013. ILS has exclusive rights to market the Proton vehicle worldwide to commercial satellite operators.

Northrop Grumman and Lockheed Martin of Bethesda are open to negotiating a refund for faulty ships they provided the Coast Guard, but do not appear ready to pay the $96.1 million the agency has requested. The Coast Guard in May revoked its acceptance of eight 123-foot patrol boats because of hull buckling.

Lockheed Martin, the world’s largest defense company, said it is discussing potential sales of its most advanced Patriot interceptor missile to Saudi Arabia and Qatar. Those countries may become the third and fourth Middle East nations to receive the Patriot Advanced Capability-3, after the United Arab Emirates and Kuwait.

Altria Group Inc.’s Philip Morris USA, the Richmond tobacco giant, said it sued two New York companies claiming they illegally imported counterfeit Marlboro cigarettes into the U.S. Philip Morris filed complaints against C.H. Rhodes and U.S. Sun Star Trading Inc. in Brooklyn, N.Y., federal court seeking to block the reputed illegal trafficking and use of Philip Morris trademarks.

Office cleaners in the Distict, Baltimore and Montgomery County voted to ratify new four-year contracts, ending the threat of a strike. Officials with the Service Employees International Union say the contracts will provide pay increases of up to 28 percent over four years and better health care benefits. The contracts cover about 2,200 cleaners in Baltimore and Montgomery County and 4,500 cleaners in Washington.


Bear Stearns Cos. Chief Executive Officer Jimmy Cayne resigned as the securities firm’s shares languish following unprecedented losses from the collapse of the subprime mortgage market, a source said. Board members were notified by Mr. Cayne, 73, that he was steppig down effective immediately as CEO and remain chairman.

Avon Products said it will cut 2,400 jobs as part of its multiyear restructuring plan, which will cost more than originally expected and ultimately save the beauty-products maker $430 million annually. The restructuring plan will cost $530 million. About 4,000 jobs globally will be cut by the restructuring, but new jobs will be created, resulting in a net reduction of 2,400 jobs.

KB Home, the Los Angeles builder that has lost more than half its market value, reported a wider-than-estimated fourth quarter loss after $917.6 million of write-downs and tax expenses. The net loss increased to $772.7 million ($9.99 a share) from $49.6 million (64 cents) a year earlier. Revenue slid 31 percent to $2.07 billion as orders slumped. The company’s shares dropped 9.2 percent.

Citigroup will combine units that underwrite mortgages and package them into bonds after defaults on home loans led to at least $9 billion in write-downs. The merged U.S. home-lending business will be led by Bill Beckmann, head of the bank’s mortgage unit since July 2005, according to an internal memo.

Shares of ETrade fell to their lowest point in more than 11 years on concern the online brokerage may report more mortgage-loan losses later this month. ETrade dropped 58 cents, or 20 percent, to $2.25, its lowest since November 1996. Shares of the New York-based company have lost 90 percent of their value since the start of 2007, wiping out almost $8.5 billion in market value.

McGraw-Hill, a major educational publisher that also owns the Standard & Poor’s credit ratings agency and BusinessWeek magazine, said it is cutting more than 600 jobs, resulting in a fourth-quarter charge of $43.7 million. The cuts will come across the company’s divisions. About half will come in its education division. McGraw-Hill attributed the cuts in its financial services division to current business conditions.

The Federal Communications Commission will investigate complaints that Comcast actively interferes with Internet traffic as its subscribers try to share files online, FCC Chairman Kevin J. Martin said at the Consumer Electronics Show in Las Vegas. A coalition of consumer groups and legal scholars asked the agency in November to stop Comcast from discriminating against certain types of data.

Yahoo Inc., after failing to dent Google Inc.’s dominance of the Internet-search market, expects to work with its rival to reach more mobile-phone users. Yahoo said it will provide software that lets independent developers and companies build programs for phones, including handsets running Android, Google’s operating software for wireless devices.

AT&T;, the biggest phone company in the U.S., will upgrade its high-definition television service so customers can connect more than one set at a time. Buyers of the company’s U-verse service will be able to watch television on two sets, and possibly three, by the end of the year, a spokesman said at the Consumer Electronics Show in Las Vegas.

An emergency board appointed by President Bush to help resolve a labor dispute at Amtrak said the passenger rail company is mostly to blame for not having a deal. Now the railroad and the unions have until Jan. 30 to make a deal. If they don’t, the workers will be free to strike unless Congress intervenes. The report recommends Amtrak provide full back pay to employees who have been working without an updated contract for eight years.

The Chicago Sun-Times debuted a smaller edition, following in the footsteps of scores of other newspapers that are scaling back the size of their publications. The revamped tabloid, published by Sun-Times Media Group Inc., is about 12 inches long, roughly an inch shorter than its earlier editions.The change is part of the media company’s efforts to trim operating costs by $50 million this year.


Barclays’ investment banking arm is losing one of its co-presidents, the company said, as the British bank struggles to overcome write-downs related to the collapse of the U.S. subprime mortgage market. Grant Kvalheim is leaving Barclays Capital and Co-president Jerry del Missier was named president.

From wire dispatches and staff reports



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