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February 15, 2005
Shifts May Mean Prolonged Job Market Weakness—Economists
U.S. job growth has been well below normal since the last recession
ended in November 2001, CNN Money reported. But rather than
strengthening anytime soon, the labor market may not pick up, at least
for the foreseeable future, a growing number of labor market experts and
Wall Street economists are saying. “I do think we’re in a
new era now in which job growth will remain sluggish for quite some
time,” former Labor Secretary Robert Reich said.
href='http://money.cnn.com/2005/02/14/news/economy/jobs_outlook/index.htm?cnn…'>Read
the full article.
Chain Store Sales Rise in Latest Week
Chain store retail sales rose in the latest week, as increased
customer traffic at discount and department stores continues to drive
sales, a retail report said today, Reuters reported. Sales rose 0.1
percent in the week ended Feb. 12, compared with a 2.2 percent increase
the previous week, the International Council of Shopping Centers and UBS
said in a joint report. Compared with the same week a year ago, sales
slowed to a 1.7 percent increase after a 3.0 percent rise the preceding
week.
US Airways Gets Extended Bankruptcy Plan Deadline
US Airways Group Inc. and its largest creditor, General Electric Co.,
amended their aircraft restructuring agreement yesterday to give the
carrier 30 more days to file a reorganization plan, the airline said.
While a bankruptcy judge in Alexandria, Va., has given the airline until
the end of March to submit its new business plan without interference
from third parties, US Airways had agreed with General Electric
Co.’s aircraft financing unit late last year to file the plan
before Feb. 15.
Ebbers Disregarded Advice on Forecasts, Witness Says
Bernard J. Ebbers, the former WorldCom CEO, disregarded advice from
his deputies about the company’s forecasts, according to testimony
yesterday from Scott D. Sullivan, the company’s former CFO, the
New York Times reported. Prosecutors in federal district
court in Manhattan played a televised interview from 2002 showing Ebbers
denying speculation that MCI would be unable to pay a dividend. Sullivan
said he warned Ebbers in a written note two weeks before the interview
that there might not be enough cash to pay the dividend, and it was
ultimately never paid, the newspaper reported.
Separately, Reuters reported that the trial of Ebbers was
unexpectedly suspended yesterday, delaying the cross-examination of
Scott Sullivan. U.S. District Judge Barbara Jones announced the delay
until Wednesday as prosecutors wrapped up their questioning of Sullivan
after his four days on the witness stand, the newswire reported.
ATA Airline Pilots Agree to 20 Percent Wage Cuts
Pilots at ATA Holdings Corp. yesterday ratified a labor deal that
cuts their pay by 20 percent and saves bankrupt ATA Airlines up to $12
million over four months while it restructures, Reuters reported. The
pay cut is even deeper than one the pilots rejected a month ago. The
change reflects pilots’ growing confidence in the airline’s
reorganization efforts, particularly a new program that lets ATA and
Southwest Airlines Co. sell seats on each other’s flights,
according to the Air Line Pilots Association, the newswire reported.
United Air: Lenders Offering $2.5 Billion Debt Financing
United Airlines said it has received four offers of debt financing
worth as much as $2.5 billion to help the carrier emerge from
bankruptcy, the Associated Press reported. United expects to learn more
about when it could receive the funds in about 90 days, after it
resolves pension and other business issues with employees. United has
said it must replace its traditional pensions to exit bankruptcy, the
newswire reported.
Northwest and Its Pilots Study a Pension Freeze
Pilots at Northwest Airlines plan to discuss with the carrier the
possibility of freezing their underfunded pension plan, following moves
by other airlines to freeze pensions or eliminate them while under
bankruptcy-court protection, the online Wall Street Journal
reported. The Air Line Pilots Association said union officials will
discuss with the airline freezing the current defined-benefit plan and
starting a new company-funded defined-contribution plan, as well as a
company-funded disability plan.
Japan Bankruptcies Slide for 25th Month In January
The improving health of small and mid-sized Japanese firms helped
push the number of companies that went bankrupt lower in January for the
25th straight month, a research firm said yesterday, Reuters reported.
“The liquidity which has been provided by banks in Japan and the
improving balance sheets of the banking sector have led to a decline in
corporate bankruptcies in the sense that banks have been able to
maintain loans to small to medium-sized companies,” said Hiromichi
Shirakawa, chief economist at UBS in Tokyo, the newswire reported.