30 Jun 06. Boeing Co. said it will take as much as $1.1bn in charges to its second-quarter earnings to account for development delays on an international surveillance-jet program and a tentative legal settlement with the U.S. government. Between $300m and $500m of the charges were unexpected and relate to delays on an Airborne Early Warning & Control jet program for Australia and Turkey. The remaining $615m covers a previously disclosed settlement with the Justice Department related to the hiring of a former Air Force official and handling of a competitor’s proprietary information. The delays of as many as 18 months with the surveillance jets are a setback for Boeing and its goal of being known as the defense industry’s premier integrator of complex systems. For Boeing, delivering on this type of contract has become both crucial and problematic as the company struggles to keep high-profile contracts such as the multibillion-dollar Future Combat System for the U.S. Army on track. This is the first major round of charges that the Chicago aerospace company has taken since Jim McNerney took over almost a year ago as chairman, president and chief executive. Boeing is “pleased” to be bringing its troubles with the Justice Department to a conclusion, Mr. McNerney said in a conference call with analysts. (Source: WSJ)
27 Jun 06. Intel Plans to Sell Unit To Marvell for $600m. Intel Corp., facing tough competition in its core business, is selling its division that makes processors for handheld devices in a $600 million deal with Marvell Technology Group Ltd. The business being sold was part of a largely unsuccessful plan by the chip maker to diversify away from the computer industry, which was accompanied by more than $10 billion in acquisitions during the Internet boom. Marvell, of Santa Clara, Calif., will be acquiring the business that makes processors based on Intel’s XScale technology, which has produced the chips used in the popular BlackBerry and Treo handheld devices. The unit employs 1,400 people, and Marvell said it expects to retain the “vast majority” of them. Intel, which is also based in Santa Clara, is the No. 1 maker of microprocessors, which act as the brains of personal computers and server systems. But the company has been struggling to cope with tough competition from Advanced Micro Devices Inc.
28 Jun 06. Raytheon Company (NYSE: RTN) announced that the Securities and Exchange Commission (SEC) has authorized final settlement of a previously-disclosed investigation into the Company’s disclosures and accounting practices, primarily related to its Raytheon Aircraft Company (RAC) commuter aircraft business, during the period from 1997 to 2001.
28 Jun 06. Daimler CEO Vows Fast Action On EADS Troubles. DaimlerChrysler AG Chief Executive Officer Dieter Zetsche said “changes have to happen” at aerospace giant European Aeronautic Defence & Space Co. and the auto maker is in “tough discussions” with other EADS shareholders about how to resolve the crisis “as fast as possible.” In an interview with Wall Street Journal editors, Mr. Zetsche also said the turnaround at DaimlerChrysler’s Mercedes division is gaining momentum and is “well on its way” to hitting its target of a 7% return on sales next year. But he acknowledged that sales results so far this year for its Chrysler arm are lower than expected. Mr. Zetsche, who also serves as head of the Mercedes unit, added he has no plans to give up that post to concentrate on being CEO. Mr. Zetsche declined to say whether the auto maker, which recently said it will reduce its 30% stake in EADS to 22.5%, is demanding changes in EADS’s management, adding that “we don’t want to build further obstacles to an agreement” with EADS’s French shareholders. But, Mr. Zetsche added, “if we’re not successful, we might have to go public about where we stand” on the matter. “We definitely are convinced that to make this company as successful again as it used to be in recent times, changes h