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Business briefs, January 6

Published January 6, 2006 at midnight

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NATIONAL



Unions want companies to pay health care share

Labor unions announced Thursday they would pursue legislation in Colorado and about 30 other states this year to require large employers, including Wal-Mart, to spend more on health care benefits or contribute to Medicaid.

The AFL-CIO, a federation of unions representing 9 million workers, contends that some profitable companies shift their health insurance costs onto workers, taxpayers and other businesses. Their solution is legislation that would require large employers to dedicate a fixed percentage of their payroll to health care benefits.

IBM putting freeze on pension plan in 2008

International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance 401(k) benefits for its 125,000 U.S. workers.

Nearly all IBM's U.S. employees - everyone hired before Jan. 1, 2005 - have pension benefits accruing under a traditional annuitylike plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company.

Former Dynegy execs sentenced to prison

The two people who helped a former Dynegy Inc. executive hatch a fraudulent accounting scheme that landed him two dozen years behind bars will serve dramatically shorter prison terms.

Former Dynegy finance executive Gene Shannon Foster, 47, will serve 15 months, and former in-house accountant Helen Sharkey, 34, will serve 30 days behind bars, U.S. District Judge Sim Lake ruled Thursday in Houston.

S&P to Ford : Your credit rating is 'junk'

Standard & Poor's lowered Ford Motor Co.'s corporate credit rating further into junk territory Thursday, citing concerns about the company's ability to turn around its North American operations.

The agency cut the ratings to BB- and assigned the automaker a negative outlook. S&P first lowered Ford into noninvestment grade status last year; the latest move will make it even harder for Ford to borrow money.

Boeing logs banner year in 2005 airplane orders

Boeing Co. received 1,002 commercial airplane orders during 2005, beating a record set in 1988, the company said Thursday.

In 2004, Boeing had 272 net commercial airplane orders.

The 2005 total surpasses the previous record of 877 net orders in 1988, which included the production of McDonnell Douglas. The aerospace companies merged in 1997.

VW joins with Daimler on N. American minivan

Volkswagen AG said Thursday it will collaborate with DaimlerChrysler AG's Chrysler Group on a Volkswagen minivan for the North American market that will start production in 2008.

VW Chairman Wolfgang Bernhard told German-language reporters at the Los Angeles Auto Show that Chrysler will build the minivans either at a plant in Windsor, Ontario, or a plant near St. Louis.

The minivan will be based on the next-generation Dodge and Chrysler minivan platform, but VW will design the interior and exterior.

Insurance broker antes up $2M to settle claims

Universal Life Resources, a defunct San Diego-based insurance broker, paid $2 million to settle accusations from New York Attorney General Eliot Spitzer that the company steered clients to insurers that paid hidden fees.

The money, paid by ULR and former Chief Executive Officer Douglas Cox, will reimburse policyholders around the country who may have been harmed. Cox, who started a new company last year, admitted no wrongdoing in the accord, Brian Maddox, his spokesman, said Thursday.

DirecTV to offer shows before they are on TV

DirecTV subscribers will be able to pay to download some Fox Entertainment Group programs to their digital video recorders up to two days before traditional broadcasts.

Under a deal announced Thursday, fans of the FX series The Shield, Rescue Me, It's Always Sunny in Philadelphia and 30 Days will be able to pay $2.99 for early, on-demand access provided they have DirecTV's latest DVR.

In addition, News Corp.-owned Fox will make available several of its broadcast network's series, including 24 and Prison Break, available for 99 cents for up to a week after the national broadcast.

Northwest attendants union considers strike

Northwest Airlines' flight attendants union said in a bankruptcy filing late Wednesday that it may strike if a bankruptcy judge allows the carrier to reject its contract.

Northwest is negotiating with pilots, flight attendants and ground workers ahead of a Jan. 17 hearing in which the nation's fourth-largest airline will ask to reject their contracts.

Northwest has said it wants to use more foreign-based flight attendants on international flights and use flight attendants at a new subsidiary on smaller domestic flights.

The Professional Flight Attendants Association, which has 9,600 members at Eagan, Minn.-based Northwest, said such a move could reduce their number by half.

LOCAL



Newmont firms up plans for Nevada coal plant

Newmont Mining Corp. said it has received all the required environmental permits for a proposed $450 million coal-fired power plant in Nevada, paving the way for the start of construction. The plant is expected to be completed by mid-2008.

Denver-based Newmont, the world's largest gold producer, plans initially to use about 75 percent of the electricity produced by the 200-megawatt plant for its own operations and sell the rest to a local utility, Sierra Pacific Power Co. The plant is expected to reduce Newmont's gold-mining operating costs in Nevada by about $25 per ounce.

Vail pays $3.3 million for 1-acre Lionshead site

Vail Resorts said it bought a one-acre piece of real estate in Vail for $3.3 million as part of its Lionshead development plans.

The property is a former Amoco station, and "while the purchase of a gas station is not by itself an earth-shattering event, the fact that it facilitates potentially lucrative development is a very positive step forward," Adam Aron, Vail CEO, said.

Vail last year acquired a shopping center and office building for $10 million, expanding the property it owns to six acres in the Lionshead area.

Xcel passes on proposed Wyoming power plant

Xcel Energy has decided against using a proposed $1 billion coal- fired power plant near Douglas, Wyo., and associated high voltage lines to provide power to customers in Colorado.

Xcel released a statement saying the company would instead focus its power development within Colorado, emphasizing wind and natural gas power development here.

The announcement leaves the future of the proposed 600-megawatt coal gasification plant and accompanying transmission lines unclear. North American Power Group had proposed the plant and transmission lines.

Qwest restores service to customers in Divide

Qwest Communications officials said Thursday afternoon that service had been restored to customers in Divide, where some phones went dead earlier in the day.

Qwest spokesman Michael Dunne said the cause or extent of the outage wasn't immediately known. Divide has about 600 residents and is located about 22 miles northwest of Colorado Springs, in Teller County.

• Qwest shares declined 4.8 percent to $5.19 Thursday on heavy volume, after Bernstein Investment Research downgraded the stock from "market outperform" to "market perform."

Qwest doesn't comment on stock price movements. Analysts are beginning to adjust their ratings and target prices for the Denver telco following the company's stock price surge of 38 percent in the last quarter of 2005. The fourth-quarter performance led the Standard & Poor's 500.

ECONOMY

Jobless claims plummet to five-year low

The nation's service sector grew more rapidly in December, and the number of workers filing new claims for jobless benefits fell to the lowest level in five years as the economy showed continuing resilience after last year's devastating hurricanes.

The Institute for Supply Management said Thursday its index of nonmanufacturing activity increased to 59.8 last month from 58.5 in November. The new figure was above the 59 reading forecast by analysts.

Also Thursday, the government reported that first-time jobless claims fell by 35,000 last week to 291,000, the lowest level in more than five years and a sign that labor markets are shaking off the effects of Hurricanes Katrina, Rita and Wilma.

"We're looking at some positive expansion, solid growth in jobs and, in general, economic growth, and that's something we see continuing," said Jason Schenker, an economist at Wachovia Corp.

The two reports provide more evidence that the hurricanes took only a limited and temporary toll on the national economy, even as they caused tremendous damage to the business climate in the gulf states, he said.

• Rates on 30-year mortgages dipped this week, although it was a mixed bag for rates on other home loans.

Mortgage giant Freddie Mac reported Thursday in its weekly survey that rates on 30-year, fixed-rate mortgages dropped to 6.21 percent for the week ending today. That was down slightly from last week's average rate of 6.22 percent and was the lowest since late October.

"Interest rates for 30-year fixed- rate mortgages currently are below the monthly averages set in November and December of 2005," said Frank Nothaft, Freddie Mac's chief economist.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.76 percent this week, unchanged from last week.

THIS JUST IN...

• Colorado Springs-based Photo Stencil, a provider of stencils and other tooling for the SMT assembly industry, has hired Mike Burgess as stencil product manager.

• The Denver Press Club has named Pulitzer Prize-winning columnist and author George F. Will as the recipient of the 12th Annual Damon Runyon Award. He will accept the award at a banquet April 7 at the Grand Hyatt Hotel, 1750 Welton St. Info:

• Denver-based TeleCheck Services Inc., a subsidiary of First Data Corp., said that AutoZone Stores nationwide are using the TeleCheck Electronic Check Acceptance and TeleCheck Guarantee services.

• Commerce Secretary Carlos Gutierrez will speak at a lunch at noon Monday at the Grand Hyatt Hotel, 1750 Welton St. Gutierrez is scheduled to discuss the U.S. economy and trade policy and to highlight the accomplishments of the Monfort College of Business. Sen. Wayne Allard, R-Colo., and Gov. Bill Owens also will speak. Reservation line: 1-970-351-1464 or 1-800-288-5104, or online at Click on "events," then "registration form." Cost is $50 per person or $500 per corporate table.

• Denver-based Royal Gold Inc. said it has closed an agreement with Kennecott Minerals Co. to acquire two royalties for $25 million.

• Broomfield-based eSoft Inc., a vendor of integrated Internet security and content management solutions, said its ThreatWall Content Security Gateway has been named one of five 2006 "hot picks" for the SMB by Computer Reseller News.

• Frontier Airlines said its revenue passenger miles increased 9.4 percent on an 8.8 increase in capacity in December 2005 compared with the same month in 2004.

• Denver-based Shames-Makovsky Realty Co. said agents Scott Rosenthal, Susan Wilson, Marv Almond and David Valas have joined the company.

• WisdomNet, a Denver-based international consulting and software company, hired Dave Gilbert as client executive.

• Denver's Holland & Hart law firm has added Rick D. Bailey, Bryan K. Benard, Steven M. Gutierrez and Christopher L. Thomas as partners.

Compiled from News staff, The Associated Press, Bloomberg News, Scripps Howard News Service.