8 - The Michigan Daily - Wednesday, September 8, 2004
-BUSINESS/ECONOMY
BUSINESS BRIEFS
ARLINGTON, Va.
US Airways, pilot union fail to reach deal
US Airways' efforts to extract $800 million in cost cuts from its unions
and avoid a return to bankruptcy suffered a major setback when a deeply
divided pilots union refused to submit a contract proposal to its membership
for a vote.
Investors sent US Airways shares down 13 percent, or 30 cents, to $2.05 a
share yesterday on the Nasdaq Stock Market.
US Airways has warned that a bankruptcy filing could be imminent in the
coming weeks if it cannot cut new labor deals with its unions. A study com-
missioned by the pilots' union also concluded that bankruptcy loomed as soon
as mid-September if the airline could not implement changes to its current
operations.
DENVER
Invesco settles allegations of improper trading
Invesco Funds Group and its sister company have agreed to pay $376.5 million
and surrender $75 million in fees to settle state and federal allegations of improp-
er trading, with the money mainly going to investors hurt by the practices.
Denver-based Invesco will pay $325 million to resolve litigation alleging it
permitted excessive market-timing activity in its funds, Attorney General Ken
Salazar said. Its sister company, AIM Advisors Inc. of Houston, agreed to pay
$50 million.
The money will be paid to investors in what Salazar called one of the largest
settlements yet in the market-timing scandal that has swept the $7 trillion mutual
funds industry.
HOUSTON
Halliburton may pull out of Army contract
If the U.S. Army divides what is now Halliburton Co.'s massive logistics
contract into too many pieces to seek competitive bids and spread the work,
the Houston-based oil services conglomerate may not join the bidders, its chief
executive said yesterday.
Halliburton CEO Dave Lesar told analysts at a New York energy conference
that he wasn't certain if the company would rebid if the contract was separated
into too many pieces, Halliburton spokeswoman Wendy Hall said.
The Wall Street Journal reported in yesterday's editions that the Army plans
to break up the contract - valued at as much as $13 billion - and dole out the
work to more companies.
U.S. Defense Department officials told the newspaper the plan to rebid the
contract was intended to increase efficiency by spreading the workload, rather
than as a punitive measure to Halliburton subsidiary KBR, which has more than
30,000 employees and subcontractors in Iraq and Kuwait.
SAN FRANCISCO
Netflix, TiVo plan to offer online DVD service
Home entertainment trendsetters Netflix Inc. and TiVo Inc. hope to link up on
a service that will use high-speed Internet connections to pipe DVD-quality mov-
ies into the homes of their mutual subscribers.
The.recently drooping stocks of both companies perked up yesterday as inves-
tors embraced the prospect of an alliance between two pioneers that have changed
the way millions of households rent DVDs and watch television.
Los Gatos-based Netflix has attracted 2.1 million subscribers to its $21.99-per-
month service, which mails up to three DVDs at a time after customers place their
orders on the Internet.
The service, which draws upon Netflix's library of 25,000 DVD titles, doesn't
charge late rental fees - a concept that has forced video rental giant Blockbuster
Entertainment to change its practices.
AP PHOTOS
Left: Democratic;
2.:
presidential nom- W.
Inee Sen. John Wy'>'
Kerry gestures to
the crowd during
a town meeting
In Greensboro
N.C., yesterday. -
Right: President .
Bush greets
the crowd at a'°"
campaign rally
at Lee's Summit
Hi h S h o nLee's Sum m it,-'-MNp.'>
Mo., yesterday a
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The Associated Press
President Bush and rival John Kerry yesterday
offered different ways to boost the sluggish job
market, the president calling for legal reforms to
help workers and businesses while his Democratic
opponent proposed ending tax breaks for compa-
nies that send jobs overseas.
Kerry, moving aggressively in the face of polls
showing his candidacy lagging, used the latest fore-
but still the highest ever - Kerry told supporters in
North Carolina that the deficit represented other bad
Bush choices.
"Only George W. Bush could celebrate over a record
budget deficit of $422 billion, a loss of 1.6 million jobs
and Medicare premiums that are up by a record 17 per-
cent," Kerry said. "W stands for wrong - the wrong
direction for America."
When Kerry claims that the nation has lost 1.6
million private sector.
cast of a record budget deficit
to bolster his contention that
Bush is leading the country in
the wrong direction. The Bush
administration described the
lower deficit prediction as
positive economic news.
In his second day of cam-
paigning in Missouri, a state
he won in 2000 by just 79,000
votes out of 2.3 million cast,
Bush plans to deal
with job losses include
increasing funding for
community colleges and
creating "opportunity
zones" of reduced taxes.
jobs during the Bush adminis-
tration, he does not include
government jobs. Nonfarm
payrolls are down 913,000
since Bush took office when
growth in federal, state and
local government jobs is
included in the total.
Kerry said he would end
tax breaks for companies
that outsource overseas, a
potent issue in North Caro-
in Iraq.
"No matter how many times Senator Kerry chang-
es his mind, it was right for America then and it's
right for America now if Saddam Hussein is no lon-
ger in power," the president told supporters Monday
in Poplar Bluff, Mo.
Kerry's plan to deal with the problem of outsourc-
ing jobs would eliminate rules allowing companies
to defer paying taxes on income earned by their for-
eign subsidiaries until they bring the profits back to
the United States.
Kerry says the elimination would ensure that
American companies will be taxed on their foreign
subsidiaries' profits just like they are taxed on their
domestic profits. "He's actually encouraging the
export of American jobs," Kerry said of Bush's sup-
port for the current rules.
The president's plan for dealing with job losses is
through job training, increased funding for commu-
nity colleges and creation of "opportunity zones" of
reduced taxes.
Bush said the jobs picture is improving, largely
due to tax cuts that he said have helped push down
the unemployment rate to 5.4 percent.
The economy "is strong and is getting stronger,"
Bush told a Labor Day crowd in Poplar Bluff.
Political analysts point to one potential problem
for Kerry in Missouri - lingering bitterness in the
Democratic Party's ranks over a primary election
that ousted incumbent Democratic Gov. Bob Holden.
Kerry needs a huge turnout of loyal Democrats to
win the state in November.
Bush told a rally in suburban Kansas City that Kerry
had stood in the way of legal reforms that would help
generate jobs and protect workers and businesses. He
called Kerry "one of the trial lawyers' most reliable
allies in the Senate."
Bush, linking Kerry policies to campaign dona-
tions from trial attorneys, said "junk lawsuits" hin-
der job creation and cost the economy more than
$230 billion a year.
With the nonpartisan Congressional Budget
Office predicting this year's federal deficit will
reach $422 billion - less than earlier forecasts
lina and other states that have suffered job losses.
"Because of George Bush's wrong choices, this
country is continuing to ship good jobs overseas -
jobs with good wages and good benefits." Kerry said.
Kerry's criticism on the economic front came a
day after he leveled harsh criticism at Bush over the
war in Iraq, declaring that the president had sent U.S.
troops to the "wrong war in the wrong place at the
wrong time."
Bush dismissed Kerry's remarks on the war as yet
another switch in position by a senator who origi-
nally voted to give the oresident the authority to act
- Compiled from Daily wire reports
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