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Business Briefing, July 2

Rocky staff and wire reports

Published July 1, 2008 at 9:05 p.m.

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Joshua Kane

Joshua Kane

Karen Sousa

Karen Sousa

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NATIONAL

Bank of America completes purchase of Countrywide

Bank of America Corp. completed its purchase of Countrywide Financial Corp. on Tuesday, making the Charlotte, N.C.-based bank the nation's leading mortgage originator and servicer.

Bank of America now controls between 20 percent and 25 percent of the country's home loan market.

AT&T'S PLANS FOR iPHONES AT&T Inc. will sell the new version of the iPhone without a service contract for $400 more than the price with a two-year plan, a break from the rules set when Apple Inc.'s popular touch-screen gadget debuted last year.

Two new models of iPhones go on sale July 11 for $199 and $299, depending on the amount of memory, with two-year AT&T contracts.

The no-contract versions will cost $599 and $699 and will be sold sometime "in the future," AT&T said.

Buyers would then go month-to-month on AT&T's service.

NEW CEO AT COCA-COLA The Coca-Cola Co.'s second-in-command has taken over the top post at the world's largest beverage maker.

Muhtar Kent officially became chief executive of the Atlanta-based company on Tuesday, replacing Neville Isdell.

IRS PROBE A federal judge agreed Tuesday to allow the IRS to serve legal papers on Swiss banking giant UBS AG in an expanding investigation into U.S. taxpayers who may have used overseas accounts to hide assets and avoid taxes.

The order from U.S. District Judge Joan Lenard came one day after the Justice Department requested authority for the IRS to issue "John Doe" summons to UBS.

STUDENT LOANS Changes in the federal student aid program that took effect Tuesday will lessen interest rates for some students while increasing the amount they can borrow.

Among the biggest changes, the interest rate on new, subsidized Stafford loans to undergraduates drops from 6.8 percent to 6 percent.

FUEL ECONOMY STANDARDS A lobbying group for 10 major automakers said Tuesday the government is underestimating the cost of increasing fuel economy standards and wants those standards to go into effect too quickly.

In a 77-page response to a request for comments on the government's proposed new rules, the Alliance of Automobile Manufacturers said the National Highway Traffic Safety Administration's goal of increasing fuel economy by 4.5 percent per year between 2011 and 2015 "goes beyond what is technologically feasible and economically practicable."

PILOTS' STAKE Northwest Airlines Corp. pilots stand to get a nearly 2.4 percent equity stake in Delta Air Lines Inc. after the combination of the two companies is completed, according to a summary of a joint contract agreement reached between pilot negotiators from both carriers.

LOCAL

Kempe Foundation receives $900,000 to help with move

The Kempe Foundation for the Prevention and Treatment of Child Abuse and Neglect received $900,000 from two groups to help move its operations to the Children's Hospital in Aurora.

The Gary-Williams Co.'s foundation provided a $500,000 gift to Kempe's capital campaign, while the Gates Family Foundation awarded a $400,000 challenge grant.

STATE CAN SEIZE FUNDS Arizona can seize funds sent through Western Union Co., the Greenwood Village-based money-transfer company, as part of a probe into drug and immigrant smuggling, state officials said, citing an appeals court ruling.

The Phoenix-based state court reversed a trial judge's decision to quash a 2006 warrant that allowed investigators to seize money transfers believed to be payments to human smuggling organizations in northern Sonora, Mexico, Arizona Attorney General Terry Goddard said Tuesday in an e-mailed statement.

Western Union sued in 2006, saying the seizures were unconstitutional and threatened its relationship with customers.

FOREST OIL STOCK Forest Oil Corp., the oil and natural gas producer that was formed in 1916 in Pennsylvania, rose to its highest stock price in almost 18 years, after the company said it added acreage in the Haynesville Shale region in Texas and Louisiana.

Denver-based Forest Oil gained $3.47, or 4.7 percent, to $77.97 Tuesday, the highest close since Jan. 23, 1990.

MOCAPAY CEO Mocapay, a Boulder-based mobile payment and marketing company, appointed a former executive of First Data as its chief executive officer Tuesday.

Kevin Grieve, who most recently was president of First Data's prepaid services division, replaces Mocapay founder Rod Stambaugh as CEO, effective immediately. Stambaugh will continue with Mocapay as chief strategy officer and a board member, company officials said in a release.

STA TRAVEL Student travel company STA Travel Inc. recently announced it closed 48 of its 65 U.S. locations - including three in Colorado - to increase cost efficiencies in a "difficult economic environment," officials said.

In Colorado, STA closed its three retail locations in Denver, Fort Collins and Boulder.

VAIL PARKING Vail construction workers promised Monday to park farther away from their job sites and carpool more.

Town officials asked workers at a meeting to free up parking in the Vail Village garage for tourists, retail and restaurant workers and other people who park there.

More than 2,000 construction workers come to Vail each day to work on the projects that make up Vail's "renaissance."

LOUISVILLE WATER Containers filled with purified water from Louisville are headed to a retailer's shelves across the state.

More than eight months after reaching an agreement with the city of Louisville to purify and bottle a portion of the municipal water supply, Eldorado Artesian Springs Inc. announced Monday that it had begun shipping a new purified drinking water line to an undisclosed retailer.

THIS JUST IN...

* The Colorado Judicial Institute elected Jeri Barajas, Joe Blake, Lynn Karowsky, Marcia Krieger, Meghan Martinez, Barbara Thompson, Yvonne Zuber, Robert N. Miller, Elinor M. Greenberg, Sheila M. Gutterman, James E. Scarboro, Peter D. Willis, Anne Garcia and Rod Yokooji to its board of directors.

* Loveland-based McWhinney hired Joshua Kane as principal and chief financial officer.

* The Latin American Educational Foundation appointed Donald J. Mares as president of its board of directors, Perla Gheiler as board vice president, Luis Ramirez as treasurer and Frank Sanchez as secretary.

* The University of Denver's Brand Marketing and Creative Department and the Office of Communications and Marketing at the Daniels College of Business received top honors at the recent Colorado American Marketing Association's PEAK Awards.

* Boulder County Business Report will host its Ninth Annual IQ Awards at 5:30 p.m. on Aug. 14 at the Folsom Field Stadium Club in Boulder.

* Karen H. Sousa joined the University of Colorado Denver College of Nursing as associate dean for research and extramural affairs.

* ServiceMagic.com, headquartered in Golden, will add nearly 100 new full-time positions to its current staff of 845 in two locations.

* Larisa LaBrant, executive director of the Rocky Mountain Masonry Institute, earned the Certified Association Executive credential from the American Society of Association Executives.

* Benjamin West named Steven Angelier as chief financial officer.

* Michelle MacMullen joined The Broadmoor sales team.

* Exempla Good Samaritan Medical Center joined Anthem Blue Cross and Blue Shield's network of hospitals.

* The Denver Northwest Market Center of Keller Williams Realty hired Scott Grow as a Realtor.

* DTJ DESIGN Inc. of Boulder was given a Grand Award and Home of the Year award at the Gold Nugget Awards for the Pacific Coast Builder's Conference.

* GMB Business Advisors promoted Chris Hammond to managing director.

* Robert Jones joined The Group Inc. as a broker associate/partner.

* Ellis Armistead, president of Heartland Investigative Group, was re-elected as a regional director of the National Association of Legal Investigators.

ECONOMY

Spending on construction slides lower

Construction spending fell in May for the 11th time in the past year as a continuing slump in housing offset strength in nonresidential building.

The Commerce Department reported Tuesday that construction spending dropped 0.4 percent in May, slightly less than had been expected.

There was strength in spending on hotels and office buildings but continued declines in housing, which has been in a slump for two years.

Residential construction dropped 1.6 percent in May, the 25th decline out of the past 26 months.

Home builders have been frantically slashing back on their production in the face of the worst slump in housing in more than two decades.

Analysts believe that housing activity will keep falling for some time because even with the cutbacks in production, the backlog of unsold homes nationwide is remaining near record levels.

The problem is that a rising tide of foreclosures is forcing even more properties onto the already glutted market.

* A huge jump in commodity prices overshadowed feeble growth in manufacturing in June, while a rise in inventories signaled more trouble for makers of food, chemicals, furniture and electronics.

The Institute for Supply Management said Tuesday that its index of prices manufacturers pay for raw materials hit 91.5 in June, up from 87 in May and the highest reading since 1979.

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