LITTLE ROCK — QUOTE OF THE DAY
“Banks had set aside a lot of money to cover loan losses that never occurred.They don’t see loan losses so great in the future that they need those large balances.”
James Chessen,
American Bankers Association chief economist Article, 1DFedEx buyouts offer 2 years’ pay
NEW YORK - FedEx said Tuesday that it will offer an unspecified number of employees up to two years’ pay to leave the company starting next year. The voluntary program is part of an effort by the Memphis-based company to cut annual costs by $1.7 billion within three years.
The restructuring is a response to a shift by customers away from premium package-delivery services and toward slower, less expensive modes as the global economy struggles to grow.
Employees who volunteer will receive four weeks of pay for every year of service, capped at two full years of base pay. FedEx has said previously that the buyouts should reduce “fixed head count by several thousand people.”
Those eligible will be notified in February, and have until April to apply. They’ll find out in May if they are accepted. The first wave of employees will leave on May 31, the last day of FedEx’s fiscal year. The next wave will leave six months later and the final group will depart on May 31, 2014.
Founder and Chief Executive Officer Fred Smith said in August that most of the cuts will come in the company’s Express and Services units, which have been hurt the most by the global economic conditions. A majority of those employees are in the U.S.
The Express unit has more than 146,000 employees worldwide - roughly two-thirds of those are in the U.S.
- The Associated Press
Court rejects data roaming challenge
Verizon Wireless has lost its bid to void a rule that requires it and AT&T Inc. to strike commercial deals that let smaller rivals use their airwaves for mobile Internet data connections.
A three-judge panel of the U.S. Court of Appeals in Washington on Tuesday rejected Verizon’s argument that the Federal Communications Commission exceeded limits on its power to regulate mobile-service providers when it approved the rule on so-called data roaming last year.
The commission was well within its authority to make a rule “requiring mobile-data providers to offer roaming agreements to other such providers on ‘commercially reasonable’ terms,” U.S. Circuit Judge David Tatel wrote in the unanimous opinion.
Verizon argued in a court filing that the rule deprives wireless broadband providers of the discretion to decide whether, and on what terms, to deal with other providers for access to their networks. It also argued the agency doesn’t have power to regulate Internet-service providers.
Before the rule, smaller providers weren’t able to secure data-roaming agreements with Verizon and AT&T. The shortfall was preventing seamless nationwide access to mobile Internet services, the FCC said in a court filing.
Ed McFadden, a Verizon spokesman, didn’t immediately respond to messages seeking comment.
- Bloomberg News
Chevron to drill in Iraq’s Kurd region
Chevron Corp. reiterated plans to start exploring for oil in Iraq’s Kurdish region next year even as the central government discourages companies from working in the self-governed area without its permission.
The company expects to drill one well at each of the Rovi and Sarta blocks by November of 2013, said Donald MacDonald, who manages its operations in the Kurdish area of northern Iraq. Chevron, based in San Ramon, Calif., bought 80 percent stakes in both prospects in July.
“We have a program lined up over the next two years to evaluate the true potential of these two blocks,” MacDonald said Tuesday in the Kurdish city of Erbil.
Chevron, together with Total SA and Exxon Mobil Corp., has angered Iraq’s central government by agreeing to explore and produce in the Kurdish region. The government in Baghdad urges companies to cancel their accords with the Kurds or else quit projects they may have in southern Iraq. Foreign investors say Kurdish authorities offer them more attractive contract terms than the national Oil Ministry.
Chevron maintains good relations with Iraq’s central government, even if the company’s contracts with the Kurds have had “some impact” on its dealings with authorities in Baghdad, MacDonald said.
- Bloomberg News
Baxter to buy Swedish dialysis maker
DEERFIELD, Ill. - Drug and medical device maker Baxter International plans to buy the privately held Swedish company Gambro AB for about $2.76 billion to broaden its dialysis product portfolio.
Gambro makes dialysis products for patients with acute or chronic kidney disease, and Baxter said it had sales of about $1.6 billion last year.
Baxter International Inc., based in Deerfield, Ill., said dialysis treatment rates are rising by more than 5 percent annually, partly because of growing rates of diabetes and high blood pressure. More than 2 million people globally are on some form of dialysis.
Dialysis involves removing blood from a patient, running it through a machine that cleans out impurities and then returning it to the patient’s body.
Baxter also has a bioscience division that makes vaccines and high-tech treatments for hemophilia and other bleeding disorders, burns and shock, immune deficiencies and other blood-related conditions.
Baxter will pay for the deal with a combination of debt and cash generated from overseas operations. It expects the acquisition to close in the first half of next year. The deal is worth about $4 billion, counting debt.
Gambro is owned in part by Investor AB, the Swedish investment group controlled by the Wallenberg family.
- The Associated PressQualcomm to invest in Sharp Corp.
TOKYO - Sharp Corp. says Qualcomm Inc. will become a shareholder with an investment of up to $120 million that will fund joint development of new LCD screens for mobile devices.
The Japanese electronics manufacturer has been struggling with record losses and had its credit rating downgraded to junk by Fitch Ratings and Standard & Poor’s.
There has been regular speculation California-based Intel Corp. or another technology company would become a shareholder but no major deal has materialized yet.
Sharp said Tuesday that it and Qualcomm’s Pixtronix Inc. unit will develop small displays that have high color resolution and low power consumption based on Sharp’s “IGZO” display technology.
- The Associated Press
Business, Pages 26 on 12/05/2012