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Business Digest
State ranks ninth in rate of job growth

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As 2004 nears its close, Washington is the ninth-fastest-growing state in the nation in terms of jobs, reports the Western Blue Chip Economic Forecast newsletter.

Through October, the state had gained 64,400 nonfarm-payroll jobs, 2.4 percent more than at the end of 2003.

Nevada, Utah and Idaho were the three fastest-growing states, reported the newsletter, published by Arizona State University's W.P. Carey School of Business. Seven of the 10 fastest-growing states were in the West.

Next year, the newsletter says, Washington is projected to have the nation's sixth-fastest rate of job growth — 1.8 percent, the same as Oregon. The West is expected to outperform the rest of the nation.

Microsoft

Company counters Burst's e-mail claim

Microsoft rejected claims by Burst.com that it had destroyed e-mails that would weaken Microsoft's defense in antitrust suits.

Microsoft turned over 550,000 pages of e-mails in response to Burst's claim that the Redmond software company stole Burst's patented technology for broadcasting sound and video at high speeds over the Internet, Microsoft said in court documents.

California-based Burst had argued in court filings that "core documents" important to its case were destroyed because Microsoft directed employees not to save e-mails and programmed back-up computers not to retain the information. As a result, Burst argued, the jury should be instructed to assume Microsoft destroyed the documents.

In court papers filed yesterday, Microsoft argued the documents it produced for Burst were generated before the lawsuit was filed in June 2002. Those documents are proof Microsoft doesn't have the "institutional policies" of document destruction Burst alleges, Microsoft said.
 
Bsquare

Stock passes test to stay on Nasdaq

Bellevue-based Bsquare said yesterday it will remain on the Nasdaq Stock Market after it was threatened with delisting earlier this year for not trading above $1.

Nasdaq notified Bsquare in July that the company had 180 days to close above $1 a share for at least 10 consecutive days. Yesterday, the company's stock jumped 24 cents, or 19 percent, to close at $1.49 — its 14th day trading above the minimum.

In the third quarter, Bsquare made its first profit in 3-½ years. During the past few quarters, it has been restructuring its operations by cutting divisions to refocus on software, engineering and consulting for smart phones.

Seattle Genetics

New treatment to be tested on lymphoma

Seattle Genetics said yesterday it has started a preliminary human test to study the safety and dosing levels of its SGN-40 treatment in patients with non-Hodgkin's lymphoma. The company said it plans to enroll 20 patients in the study at cancer centers around the United States.

Seattle Genetics is already testing SGN-40 in patients with multiple myeloma, a cancer of the bone marrow. It plans to report preliminary results from that ongoing study this month.

Compiled from Seattle Times business staff and Bloomberg News

Nation / World

Kmart

SEC files charges against former execs

Federal regulators yesterday filed civil fraud charges against three former Kmart executives and five current and former managers of big vendor companies, saying they engineered a $24 million accounting fraud by the retailing giant in 2000-2001.

The Securities and Exchange Commission, which is investigating Kmart's decline into bankruptcy in 2002, said the discount retailer inflated earnings by improperly booking millions of dollars of payments from Eastman Kodak, Coca Cola Enterprises and PepsiCo and its Frito-Lay division.

Five of the former executives settled the charges yesterday by agreeing to pay civil fines totaling $160,000 and to refrain from future violations of securities laws.

United Airlines

Attendants union seeks strike OK

The nation's largest flight-attendants union mailed strike-authorization ballots yesterday to 21,000 United Airlines flight attendants, seeking their approval for nationwide walkouts if United or US Airways breaks its labor contracts in bankruptcy.

The board of the Association of Flight Attendants authorized a strike last month if collective-bargaining contracts are abrogated by either carrier. Both have put the process in place while negotiating new terms as part of continuing restructuring in bankruptcy.

United wants new, lower-paying labor contracts in place by mid-January — imposed by federal bankruptcy court if negotiations fail to produce an agreement.

American Airlines

Incentives offered to trim work force

American Airlines, which has indicated it will make layoffs to help speed a return to profitability, is offering incentives to some employees if they leave the company.

Many workers with at least five years seniority will be able to leave in exchange for longer travel benefits or higher severance payments.

Airline parent AMR has lost more than $6 billion since the beginning of 2001. The company has been squeezed by higher fuel prices — it would be profitable this year if oil prices remained at year-ago levels — and by tougher competition.

The company did not disclose how many employees would be offered the incentives. Pilots will not be eligible because they have a similar provision in their labor contract, said Gregg Overman, a spokesman for the Allied Pilots Association union.

Schnitzer Steel

Stock keeps falling after news of probe

Shares of Schnitzer Steel Industries, a Portland recycler of steel scrap, have fallen 9.4 percent in the past two days after the company said it's investigating its former policy of paying commissions to purchasing managers that buy its scrap.

Schnitzer stock fell $1.51 to close at $34.19 yesterday, after sinking $2.03 Wednesday.

On the recommendation of its audit committee, Schnitzer hired an independent counsel to look into the practice of paying commissions to customers' purchasing managers in Asia, it said in a Securities and Exchange Commission filing dated Tuesday.

The company dropped the practice after being advised it may violate U.S. and foreign laws. It didn't say when it was stopped. The results of the investigation will be reported to the Department of Justice and the SEC, the company said.

Schnitzer didn't say whether the company or its employees will be subject to any penalties or other actions.

Caterpillar

Union upset by plan to shift jobs to Mexico

Heavy-equipment giant Caterpillar announced plans yesterday to retool an aging Peoria, Ill.-area foundry, a move criticized by union leaders because it will shift more than 500 jobs to Mexico within four years.

The company will spend $40 million to upgrade its Mapleton, Ill., foundry, which will then produce only large engine castings for its trademark line of bulldozers and other earth-moving equipment, said Caterpillar spokesman Rusty Dunn.

Smaller parts now made in Mapleton would be moved to a foundry in Mexico that Caterpillar hopes to develop through a joint venture being negotiated with Grupo Industrial Saltillo, one of Mexico's leading manufacturing suppliers, Dunn said.

If the deal is approved early next year, work would be shifted to Mexico in 2007 or 2008.

Energizer

Victory claimed in razor dispute

A German court has ruled that Energizer's four-bladed Quattro razor does not infringe on rival Gillette's European patent on a three-bladed design, Energizer said yesterday.

In the latest development in a feud between the world's two largest makers of wet-shave products, the court also ordered market leader Gillette to reimburse unspecified court costs for Energizer, which owns the Schick-Wilkinson Sword shaving business.

The overseas ruling came 11 months after a federal judge in Massachusetts issued a similar finding, denying Boston-based Gillette's request for a preliminary injunction in the United States.

Compiled from The Associated Press and Bloomberg News