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Briefs: Delta's board to study US Airways merger bid

| Wednesday, Dec. 6, 2006

Delta Air Lines Inc. Chief Executive Officer Gerald Grinstein said the bankrupt carrier's board will formally consider US Airways Group Inc.'s $8.53 billion takeover bid. "Soon we'll share" the airline's analysis of the hostile offer with Delta's board and official creditors committee, Grinstein told Delta's 51,000 employees in a letter Tuesday. The review of US Airways' bid "in the next few weeks and days" also will include an examination of Atlanta-based Delta's efforts to cut costs and generate new revenue since filing for Chapter 11 in September 2005, Grinstein wrote. Delta is pursuing its strategy to emerge from bankruptcy as a stand-alone carrier in the first half of 2007. After rejecting the Nov. 15 bid from Tempe, Arizona-based US Airways, Delta executives met with US Airways and creditors last week to go over the proposal. Spokeswoman Betsy Talton reiterated Delta's intention to remain independent and said the company's strategy to pare annual expenses by $1.9 billion and add $1.1 billion in revenue is working.

JetBlue bullish on deal

No matter what comes of the hostile bid for Delta Air Lines Inc. by U.S. Airways Group, the result should be positive for the much smaller, low-cost carrier JetBlue Airways Corp., the chief executive of the New York-based airline said Tuesday. If U.S. Airways prevails in its $8 billion-plus cash-and-stock offer, "they've already said capacity will come out of the market," David Neeleman said. That means reduced Delta flights at New York's John F. Kennedy International Airport, where JetBlue is based, or fewer flights at U.S. Airways' Philadelphia hub. Neeleman said JetBlue would be interested in taking over U.S. Airways and Delta gates at LaGuardia Airport in New York and Reagan National Airport in Washington.

US Airways traffic slips

US Airways boarded about 5.4 million passengers in November, a 0.2 percent decline from the year earlier, the airline said Tuesday. The carrier also had reduced capacity, or number of available seats, by 2.3 percent during the month. As a result, US Airways' load factor, or percentage of filled seats, improved to 77.8 percent from 75.2 percent the year earlier. The data include operating results from both US Airways and merger partner America West Airlines.

Local gas prices jump

Prices across Western Pennsylvania for regular unleaded gasoline jumped 7.4 cents a gallon this week, AAA's weekly Fuel Gauge survey found. For the week ending Tuesday, the average price per gallon was $2.32, up from $2.246 one week ago and $2.124 one year ago. Across the region, the lowest price of $2.286 was found in Brookville, Jefferson County, while the highest per gallon price of $2.355 was found in Warren, Warren County.

Strikers get bonuses

Striking Goodyear Tire & Rubber Co. workers and hundreds of others on picket lines this holiday season are getting a little extra cash from their union, the United Steelworkers said Tuesday. The Pittsburgh-based union said it will give a $100 Christmas bonus to the more than 12,000 workers on strike from Goodyear across the U.S. and Canada, as well as some 900 other workers striking or locked out from various companies. The money is in addition to the weekly strike benefit the union pays the workers. Regular strike pay is $100 a week through eight weeks. The union increases it to $115 a week if a strike goes longer than that.

Bankruptcy filings fall

The number of bankruptcies filed in the first nine months of the year fell to a third of what they were last year, one result of a landmark law enacted in October 2005. From January to September, the total number of personal and business bankruptcies fell by 68.5 percent to 443,750 from the 1.41 million in the same period last year. This year's figure is the lowest since 1987. "Today's numbers confirm that we are seeing filing levels not present since the 1980s," said Samuel Gerdano, executive director of the American Bankruptcy Institute.

Bayer raises Schering offer

Bayer AG, which owns more than 96 percent of Schering AG shares, said Tuesday it has increased its offer for the rest by nearly 11 percent. The company said it will pay remaining minority shareholders of Schering $131.73 a share, up from the $118.94 a share it had offered in November. Bayer acquired control of Berlin-based Schering earlier this year in a deal worth nearly $22.49 billion.

Bridgestone buys retread maker

Tire maker Bridgestone Americas Holding Inc. has agreed to buy Bandag Inc., a maker of retread tires, for $1.05 billion in cash, the companies announced Tuesday. Bridgestone Americas, a subsidiary of Japan-based Bridgestone Corp., will pay $50.75 per share for Bandag, a 13 percent premium to the company's closing stock price on Monday. The Bandag board of directors approved the sale, which is expected to close by the second quarter of 2007. The Muscatine, Iowa-based Bandag has a global network of more than 900 franchised dealers that market retread tires.

Presque Isle job fair

Presque Isle Downs in Erie will hold a job fair Saturday to find employees for its racetrack slots parlor, which is expected to open in mid-February. Presque Isle Downs expects to employ between 400 and 500 people when it opens and plans to eventually employ about 750. "Presque Isle Downs will soon be ready to open our doors, but we first we need to build a team of great people to operate it," said Ted Arneault, CEO of MTR Gaming. The job fair will be held from 9:30 a.m. to 3:30 p.m. at the Ambassador Conference Center in Erie.

GM unveils crash-test facility

General Motors Corp. opened a $10 million crash-test facility on Tuesday that will help the automaker study rollover crashes. The Detroit-based company also said that by 2012 it will make rollover-enabled air bags a standard feature on all of its retail vehicles. The air bags currently are used on 43 percent of GM's trucks. GM said it planned to perform 150 rollover tests next year at its Milford Proving Grounds in suburban Detroit to help it better understand rollover crashes, which in 2005 accounted for about 4 percent of all crashes but 33 percent of the deaths of occupants of passenger vehicles.

Earnings

• Kroger Co. posted a 16 percent profit increase in the third quarter and said profits for the year would be higher than its previous forecasts. The nation's largest traditional grocery chain said it earned $214.7 million, or 30 cents per share, in the quarter ended Nov. 4 compared with $185.4 million, or 25 cents, a year ago. Revenue rose 5 percent to $14.7 billion from $14.02 billion last year.

• Luxury home builder Toll Brothers Inc.'s fourth-quarter earnings fell 44 percent, but the company said it sees some signs of stabilization in the slumping housing sector. In the fiscal fourth quarter, Toll Brothers posted net income of $173.8 million, or $1.07 per share, compared with $310.3 million, or $1.84, during the same period last year. Quarterly revenue dropped 10 percent to $1.81 billion from $2.02 billion

Other business news

• Compunetix Inc., a Monroeville-based maker of electronic platforms for teleconferencing, has sold a Contex Summit system to G-Net Integrated Services Co. Ltd., a provider of business collaboration services headquartered in Beijing. This marks the first sale of Compunetix equipment in mainland China.

• Pittsburgh-area stocks rose Tuesday. The Bloomberg Pittsburgh Index of stocks rose 1.46 to 327.26.

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