September 9, 2004
House OKs Disclosure of Pension Information
The House of Representatives on Wednesday voted to allow workers and
retirees to find out from a federal agency just how severe the
shortfalls are in their companies’ pension plans, Reuters
reported. Responding to growing concerns about underfunded pension
plans, such as at bankrupt United Airlines, lawmakers voted 268-148 to
allow the agency that insures pensions to disclose to plan participants
the funding information that companies now supply to it confidentially.
The amendment was tacked onto a bill providing funding for government
education, labor and health programs that is expected to pass the House.
It will also have to pass the Senate before becoming law. The
amendment’s sponsor, Rep. George Miller (D-Calif.), argued that
there was no reason why the pension insurer, the Pension Benefit
Guaranty Corporation, should know how poorly funded some pensions were,
while workers and retirees affected by the shortfalls do not, the
newswire reported. The Republican chairman of the House Education and
Workforce Committee, Rep. John Boehner (R-Ohio), said he was working on
a comprehensive bill to make sure old-style pensions are funded.
Asbestos Prospects Dimming, But Frist, Daschle Keep Talking
Although prospects for a Senate vote on a trust fund for asbestos
victims appear to be dimming, Senate Majority Leader Bill Frist
(R-Tenn.) and Minority Leader Tom Daschle (D-S.D.) are continuing to
negotiate, CongressDaily reported. “Senator Frist and
I—have exchanged a good deal of paper and thoughts on how we can
narrow the gap,” Daschle told reporters yesterday. “That
effort continues, and I’m still hopeful that before the end of
this year we could complete our work.” Frist told reporters that
the leaders still have not settled differences on a host of issues
related to the proposed trust fund.
Slow Pace on Netting Law Draws Ire of Two GOP Lawmakers
Two House Financial Services Committee Republicans on Wednesday
denounced Congress’s failure thus far to enact a netting provision
that aims to promote stability in the financial markets by allowing a
quick resolution to complex derivatives contracts in the event that a
party goes bankrupt, CongressDaily reported. Congress has
been “slacking in its discipline” in not pushing harder for
enactment of netting legislation, Rep. Jim Leach (R-Iowa)
said during a hearing on efforts to protect the nation’s
financial infrastructure. The House passed a netting provision last
January as part of its bankruptcy bill, which stalled in the Senate over
Democrat-favored abortion language. But Bush administration officials
have warned that a failure to enact a netting provision could increase
the risk of economic instability in the event of a terrorist attack, the
newswire reported.
Greenspan: Economy Regaining Traction
The U.S. economy is pulling out of a June soft patch and picking up
steam, Federal Reserve Chief Alan Greenspan said yesterday in remarks
economists saw as pointing to a September interest-rate rise, Reuters
reported. “The most recent data suggest that, on the whole, the
expansion has regained some traction,” the central bank chairman
told the House of Representatives Budget Committee. “Despite the
rise in oil prices through mid-August, inflation and inflation
expectations have eased in recent months,” the Fed Chief said.
Analysts saw his economic assessment as more lukewarm than they’d
expected, and that caution was reinforced by a separate Fed report that
painted a decidedly mixed picture, Reuters reported.
Delta Unveils Its Turnaround Plan
Delta Air Lines launched its campaign to persuade employees,
creditors and investors that the struggling company has a strategy
viable enough to justify billions of dollars of concessions the company
is seeking from key constituencies, the Wall Street Journal
reported.
Eight months into his tenure as Delta’s CEO, Gerald Grinstein
unveiled what the airline termed a realignment of its routes, new
customer-service amenities and restructured operations aimed at cutting
annual costs by $5 billion by 2006. As expected, the strategy includes
increasing its long-haul and international flying, abandoning the
carrier’s money-losing hub at Dallas-Fort Worth International
Airport, cutting 7,000 jobs, and expanding flights at hubs in Atlanta,
Cincinnati and Salt Lake City, the newspaper reported.
S&P Cuts US Airways Group Ratings Deeper Into Junk
Standard & Poor’s on Wednesday cut the debt ratings for US
Airways Group Inc. deeper into junk territory, citing the
company’s stalled negotiations with its pilots’ union and
the dwindling time left to hammer out new contracts outside of
bankruptcy, Reuters reported. Since emerging from chapter 11 bankruptcy
in spring 2003, US Airways has been hurt by soaring fuel prices and
competition from low-cost carriers like Southwest Airlines Inc. The
company is looking to cut costs by $1.5 billion by the end of the month
to stave off another trip to bankruptcy court. Those efforts were
stalled yesterday when the company’s pilots union rejected
proposed wage concessions of around $300 million, the newswire
reported.
Alitalia Warns of Collapse, Unions Balk
Italy warned Alitalia’s unions on Wednesday that the airline
could collapse this month unless they backed a radical restructuring,
Reuters reported. But with the exception of pilots, whom Alitalia said
appeared open to a possible deal, other labour groups indicated that
they were not ready to fall into line. The large union demanded a
meeting with Italian Prime Minister Silvio Berlusconi, the newswire
reported.
Hayes Lemmerz Posts Loss, Cuts Outlook
Auto parts supplier Hayes Lemmerz International Inc. on Wednesday
posted a quarterly net loss on lower North American car production and
increased steel prices, pushing its shares down 9 percent, Reuters
reported. Hayes Lemmerz said it faces intense price pressure from
customers and competitors and that high materials costs are expected to
continue. It also cut its full-year earnings forecast. Hayes Lemmerz
reported a net loss of $10 million, or 26 cents per share, for the
second quarter ended July 31. The company, which emerged from bankruptcy
in June 2003, said earnings from operations excluding fresh-start
accounting adjustments and restructuring costs fell to $9.5 million from
$20.4 million a year earlier.
Ex-WorldCom CEO Ebbers Requests Relocation of Trial
Former WorldCom Inc. Chief Executive Bernard Ebbers asked a federal
judge to move his upcoming fraud trial to Mississippi from New York,
saying the Southern state is the “center of gravity” in the
case, the online Wall Street Journal reported.
WorldCom’s former headquarters are in Clinton, Miss., and a number
of potential witnesses live nearby, making Mississippi a better location
for the trial, set to begin Nov. 9, Ebbers’s lawyer Brian M.
Heberlig argued in court papers filed late last week.
Enron Reaches Deal with IRS on Debt Discharge
Enron Corp. said Wednesday in a regulatory filing that an agreement
had been reached with the Internal Revenue Service over how the energy
trader would recognize income generated from the discharge of debt, the
online Wall Street Journal reported. The agreement stems
from the treatment of discharged claims outlined in the company’s
chapter 11 plan confirmed by the U.S. Bankruptcy Court in Manhattan on
July 15, according to a Form 8-K filing submitted to the Securities and
Exchange Commission.