Business briefs, May 17

Thursday, May 17, 2007

NATIONAL

Former Fed chief Greenspan has deal with bond firm Pimco

Alan Greenspan, the former Federal Reserve chairman whose pronouncements continue to jolt world markets, has signed a consulting deal with Pimco, the giant bond management firm.

Greenspan, 81, will meet with executives of Pacific Investment Management Co. once a quarter to discuss economic trends and has agreed to discuss Fed policy, but only behind closed doors, an associate with knowledge of the deal said. Greenspan also will hold periodic telephone and video conferences with senior executives. The company is his first client since leaving the Fed.

BP DOCUMENTS Severe budget cuts at a time when BP PLC was making huge profits put pressure on managers to ignore corrosion protection at the oil company's Alaska North Slope pipelines, which sprung leaks last year, according to internal company documents.

A U.S. House committee investigating the North Slope spills, which forced a partial shutdown of Prudhoe Bay oil production last summer, said it has obtained e-mails from the company showing repeated concerns by managers that cost-cutting was preventing corrosion protection in the lines that eventually failed.

BAUSCH & LOMB TO BE SOLD Bausch & Lomb Inc., the eye-care product maker beset by product recalls and accounting woes, agreed to be acquired by private equity firm Warburg Pincus for about $3.67 billion in cash, the 154-year-old company said Wednesday.

Warburg Pincus agreed to pay stockholders $65 per share, an amount Bausch said represents a 26 percent premium to the average price of the stock over the 30-day period when rumors began circulating about a possible buyout.

SOUTHWEST HAS DEAL Southwest Airlines Co., the largest low-fare carrier, signed a 10-year contract with the Galileo ticketing service to boost business- travel sales, helping offset rising fuel and labor costs, Chief Executive Officer Gary Kelly said.

The Galileo accord will provide "a significant revenue growth opportunity" and will "help us further penetrate the business travel segment," Kelly told shareholders at the company's annual shareholder meeting in Dallas.

NORTHWEST PLAN Northwest Airlines Corp. overcame a major obstacle on its path to exiting bankruptcy Wednesday when a judge approved a settlement with a shareholder group that had opposed the carrier's reorganization.

Judge Allan Gropper in New York approved the $5 million settlement at the start of a Northwest hearing to seek acceptance of its restructuring plan. The hearing was scheduled to continue today.

BLACKSTONE DELAY SOUGHT The AFL-CIO asked the Securities and Exchange Commission to delay the approval of a proposed $4 billion public stock offering from Blackstone Group LP and suggested that the private-equity firm be regulated by the agency as an investment company.

The SEC is reviewing the plan by Blackstone, one of the world's biggest private-equity firms. Blackstone's rival, hedge fund Fortress Investment Group LLC, this year became the first private-equity or hedge fund to go public in an offering valuing Fortress at $7.4 billion.

H-P EARNINGS Hewlett-Packard Co.'s second-quarter profit fell 7 percent despite a dramatic rise in sales of personal computers and servers, narrowly beating Wall Street's forecast.

For the three months ended April 30, H-P earned $1.78 billion, or 65 cents per share, compared with $1.90 billion, or 66 cents per share, in the same period last year. The latest quarter's results were weighed down by restructuring and other one-time expenses amounting to 5 cents per share. Last year's second-quarter results were boosted by a tax settlement gain of 15 cents per share. Sales in the quarter leaped to $25.53 billion, a 13 percent increase from the $22.55 billion H-P rang up in the same quarter last year.

LOAN GUARANTEE The Washington-based Export-Import Bank of the United States said Wednesday it will provide a $500 million loan guarantee to Reliance Petroleum Ltd., which is building a $6 billion oil refinery and petrochemical complex in India.

The new refinery is expected to be completed in December 2008. It will produce gasoline, jet fuel, diesel and other fuels. It will be the world's sixth-largest and will be adjacent to an existing one. Together, the two refineries make up the largest refining complex in the world, the bank said.

LOCAL

Grand Junction board votes for new name for regional airport

A Colorado airport on the Western Slope will be known by a new name.

The board of the Walker Field Airport Authority voted 6-0 on Tuesday to change the name of the facility to Grand Junction Regional Airport. Board members also agreed to change the name of their group to the Grand Junction Regional Airport Authority.

NEW FACILITY New World Millworks, a manufacturer of fine architectural woodwork in Colorado, will open its 100,000- square-foot, $6 million manufacturing facility in Castle Rock on June 8.

The space, featuring new equipment, will allow the company's 90 employees to keep up with current demand and future business growth.

CHAMBER HONORS SIX The Denver Metro Chamber of Commerce honored six leaders in the business community at its 2007 Business Awards Ceremony on Wednesday.

DocuVault LLC was named Small Business of the Year; Mad Greens LLC was named Emerging Business of the Year; Folsom Point LLC was named Minority-Owned Business of the Year; and Goodwill Industries of Denver was named Nonprofit Organization of the Year.

The David E. Bailey Small Business Advocate Award went to Tamela Lee, director of contract compliance for the city and county of Denver. Susan Matthews Brown, founder and president of the Boppy Co., received the Small Business Administration's Small Business Person of the Year Award.

ECONOMIC SURVEY Adams County Economic Development said 92 percent of businesses it surveyed in the county expect to either remain stable or expand their business through 2010.

The group also said 86 percent of the respondents reported stable or increasing sales.

ECONOMY

Building-permit requests fall farthest since '90

Construction of new homes posted a small gain in April, but applications for building permits plunged by the largest amount in 17 years, a dramatic sign that the nation's housing industry still is in a steep slump.

The Commerce Department reported Wednesday that construction of new homes and apartments rose by 2.5 percent in April compared with March to a seasonally adjusted annual rate of 1.528 million units.

Even with the improvement, housing construction is 25.9 percent lower than a year ago. And in a worrisome sign for the future, builders cut their requests for new construction permits by 8.9 percent in April. That was the sharpest drop since a 24 percent fall in February 1990, another period when housing went through a significant downturn.

• The Federal Reserve reported that industrial output rose by 0.7 percent in April, a stronger-than-expected showing that reflected a continued rebound in manufacturing and a big jump in output by the nation's utilities.

Output had fallen by 0.3 percent in March.

Manufacturing increased 0.5 percent in April following a 0.6 percent rise in March, with production of autos, computers and electronic equipment showing big gains. Output at utilities surged by 3.5 percent as electric power generation during a colder-than-normal April boosted demand for energy.

The 0.7 percent rise in overall production was more than double the 0.3 percent gain that had been expected.

THIS JUST IN...

• The Denver campus of Johnson & Wales University has appointed Vincent Wincelowicz as department chairman of the College of Business, effective June 1.

• Gov. Bill Ritter will honor four companies with the Governor's Award for Excellence in Exporting today. Qualmark Corp. will receive the award for Excellence in Exporting in the category of Small-Sized Manufacturer; Western Slope Industries Inc. will receive the award for Excellence in Exporting in Large-Sized Manufacturer; Merrick & Co. will receive the award for Excellence in Exporting in the Service category; and Leprino Foods Co. will receive the award for Excellence in Exporting in Agriculture.

• Arapahoe County-based Gasco Energy promoted Peggy Herald to vice president, accounting and administration, and Keith Doss to controller.

• The State Student Advisory Council annual awards program recently presented Linda S. Bowman, president of the Community College of Aurora, with its President of the Year award.

• Timothy P. Weber joined the Denver office of EFL Associates, a national executive search firm, as senior consultant, higher education practice.

• Colorado-based PRACO named Matt Whitfield vice president and creative director.

• OccMed Colorado, a medical practice specializing in occupational medicine and musculoskeletal care, hired Lisa Selby to direct its sales operations and added nurse practitioner Monica Fanning.

• Jeffrey H. Schwartz, chief executive officer of ProLogis, was given the additional title of chairman, succeeding K. Dane Brooksher.

• CTEK, a nonprofit specializing in fostering entrepreneurship, named Marc Silverman as executive director of CTEK Boulder.

• Richard Townsend joined the Lakewood office of Short Elliott Hendrickson Inc., a professional consulting services firm, as the district business development manager.

• Canyon Resources Corp., a Colorado-based mining company, hired Stephen Zahony as vice president, exploration.

• Kimberly Kaye joined LBA Interiors, a division of Lantz- Boggio Architects, as director of hospitality.

Rocky staff and wire reports