Business Digest


April 07, 2005

In the Region

McCain threatens Lockheed subpoena over C-130 expenses

Sen. John McCain said yesterday that he might seek to subpoena Lockheed Martin Corp. documents if the company doesn't provide paperwork that details cost increases since 1995 on the C-130J transport aircraft.

The transport, one of Lockheed's top three military aircraft programs, has increased in price to $67 million per plane last year from $33 million each in 1995, when the Air Force started buying the aircraft.

"We may have to ask the committee to subpoena Lockheed Martin," the Arizona Republican said at a hearing by the Senate Armed Services subcommittee, of which he is chairman. "If Lockheed Martin continues to stonewall us, we can't carry out our responsibilities."

The Pentagon announced in December that it was terminating for budget savings the current six-year, $4.1 billion contract for the transport aircraft signed with Bethesda-based Lockheed in 2003. Defense Secretary Donald H. Rumsfeld said in February that the Pentagon was reviewing its decision. McCain said that regardless of that review, he wants a full accounting of the C-130J's cost history.

MBNA raises estimates of worker separation costs

MBNA Corp., the world's largest independent credit-card company, said yesterday that job cuts, asset sales and contract terminations will result in $785 million in pretax costs, more than double its previous forecast.

Wilmington, Del.-based MBNA said it expects to record the expenses in the first quarter. About 85 percent of the amount will be cash costs, the company said in a filing with the Securities and Exchange Commission.

The company, which will report earnings April 21, said much of the increase from an earlier estimate of $350 million stems from a larger-than-anticipated number of employees taking voluntary early retirement or severance.


Suit says Sunbeam, Morgan Stanley duped Perelman

Morgan Stanley & Co. conspired with Sunbeam Corp. in a "massive fraudulent deal" to dupe billionaire financier Ron Perelman when he sold his controlling stake in Coleman Co., a lawyer for Perelman told jurors yesterday as a trial in the investor's lawsuit against Morgan Stanley began in West Palm Beach, Fla.

Perelman, chairman of cosmetics maker Revlon Inc., is suing over Morgan Stanley's role as a Sunbeam adviser. Perelman claims that Morgan Stanley helped Sunbeam conceal inflated sales before he exchanged his Coleman shares for Sunbeam stock.

Perelman is asking for $2.7 billion in damages. Morgan Stanley set aside $360 million in litigation reserves for the case, according to company filings.

TiVo tells SEC it bought six patents from IBM

TiVo Inc., whose digital video recorders let viewers pause and replay television programs, said yesterday that it had bought six U.S. patents from International Business Machines Corp. to enhance TiVo's capabilities.

The patents relate to monitoring viewing habits, integrating TV signals with Internet access and rescheduling of recordings, TiVo said in a Securities and Exchange Commission filing. The patents also cover program screening and features for on-screen program guides.

Ford paid chairman-CEO more than $22 million

William C. Ford Jr. received a compensation package valued at more than $22 million last year in his role as chairman and chief executive of Ford Motor Co., the nation's second-biggest automaker said yesterday.

The compensation package was about double the amount he received the previous year. The company's profit last year was seven times the 2003 profit. His pay package included no cash salary in either year.

This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.

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