Top Business Stories of The Week | Northrop Drops Out of Bid to Make Air Force Aerial Tankers: Northrop Grumman dropped its bid to supply the U.S. Air Force with its next-generation aerial refueling tankers, leaving rival Boeing uncontested in its effort to snag the lucrative contract. Northrop and its partner European Aeronautic Defense & Space (have been fighting Boeing for years over the contract. EADS, best known in civilian circles for its Airbus aircraft, is also one of Europe's biggest defense contractors. Called the KC-X program, the immediate contract is for $35 billion to build 179 planes. It could be worth $100 billion over the life of the new planes, which refuel other aircraft in flight. The Air Force on Feb. 24 issued its final request for proposals .The Pentagon plans to award the contract later this year. | Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash: The Federal Deposit Insurance is trying to encourage public retirement funds that control more than $2 trillion to buy all or part of failed lenders, taking a more direct role in propping up the banking system, said people briefed on the matter. Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets, the people said. They declined to be identified because talks with regulators are confidential. | Senate Passes $149 Billion Bill for Jobless Aid, Tax Breaks: The U.S. Senate approved a $149 billion package of jobless aid and tax breaks as Democrats continued efforts to bring down the 9.7 percent unemployment rate before the November congressional elections. The measure, which passed by a vote of 62 to 36, now heads to the House, where many Democrats have pushed for more aggressive job-creation measures. Democrats say job creation is their top priority this year as they head into an election season that could possibly cost them control of Congress. Both chambers have now passed two job-creation bills, but they have yet to resolve their differences and finish legislation that President Barack Obama can sign into law. | The Cost of Toyota (TM) Recalls Could Cost $5 Billion: The financial impact on Toyota Motor from its global recall could total more than $5 billion over the next year, due to increased incentive campaigns, litigation costs and marketing efforts by the embattled car maker, analysts say. The critical question facing the world's leading car maker is how long the fallout from the recall will affect sales in North America, its largest market. After a slow start, Toyota is biting back at its critics and has launched an aggressive sales campaign in the U.S., featuring a 0% interest five-year loan offer, competitive lease prices and free maintenance across 80% of its vehicle line-up. | BofA to Scrap Overdraft Fees on Debit Purchases: Bank of America said that it plans to ditch overdraft fees on debit card purchases this summer. The Federal Reserve recently announced new requirements that are slated to go into effect in July. But the Charlotte, N.C.-based lender's move goes one step further. The Fed's new rules will prevent banks from automatically enrolling customers in overdraft protection programs, which charge fees when consumers spend more than they have in their accounts. More than 75% of banks automatically sign customers up for overdraft programs, according to a study by the Federal Deposit Insurance Corp. | Health Secretary Piles Pressure on Insurers: Health Secretary Kathleen Sebelius ratcheted up the pressure on health insurance companies, urging them to forgo short-term profits to make coverage more affordable and to stop fighting the Obama administration's reform effort. She told a health insurance industry group that costs and premiums would rise to unsustainable levels and more Americans and businesses would drop coverage if the Democratic-written overhaul of the $2.5 trillion healthcare system were killed. "We will have a situation where the market is unsustainable," Sebelius said in a speech to a conference sponsored by America's Health Insurance Plans.
| Airlines Fight Back, Threaten to Cancel Tons of Flights Amid New Rule Protecting Fliers From Delays: Airlines are doing their best to keep a new rule protecting passengers from extensive delays from taking flight. The Department of Transportation rule forbids airlines from keeping passengers on the plane when a flight is delayed for more than three hours. Starting April 29, the airlines must let passengers off the plane when delays like this happen or risk being fined $27,500 per passenger, which adds up to more than $4 million for a fully booked Boeing 737 or Airbus A320. | U.S. Bailout Watchdog Criticizes Treasury Over GMAC: The U.S. Treasury's decision against a bankruptcy restructuring for GMAC may have increased taxpayer bailout costs for the auto finance company and made it less viable, said an oversight group. The Congressional Oversight Panel, in a new monthly report, said despite three separate bailouts totaling $17.2 billion, GMAC Financial Services continues to struggle with its troubled mortgage liabilities. "The panel remains unconvinced that bankruptcy was not a viable option in 2008," it said in the report. "In connection with the Chrysler and General Motors bankruptcies, Treasury might have been able to orchestrate a strategic bankruptcy for GMAC." | AIG Workers to Give Up $45 Million to Uncle Sam: AIG Workers to Give Up $45 Million to Uncle Sam: American International Group will recoup $45 million in controversial 2009 retention payments made to AIG employees, in part by reducing retention awards slated for employees who have already left the firm, according to people familiar with the matter. AIG employees have agreed to return $40 million, these people said. The company is expected to deduct the remaining $5 million from 2010 retention payments slated to be paid to former AIG employees, one of these people said. The resolution comes after months of discussion between Kenneth Feinberg, the Treasury Department's special master for compensation, and AIG, which is 80% owned by the U.S. Last March, the government determined it was powerless to stop $168 million in payments to employees of AIG's financial products unit, but vowed to recoup some of the money. | Yellen to be Nominated as Fed Vice-Chair: The Obama administration is set to nominate Janet Yellen, president of the Federal Reserve Bank of San Francisco, as vice-chairman of the central bank in an appointment that would tip the Fed’s interest rate-setting committee in a more dovish direction. The dollar fell to its lowest level against the euro in more than four weeks after people familiar with the selection process briefed that Ms Yellen was the top pick of Barack Obama, president, to replace Don Kohn, the outgoing vice-chairman Nonetheless, those familiar with Ms Yellen predicted only a subtle effect on the Federal Open Markets Committee if she succeeds Mr. Kohn. Although she is perhaps the most doveish member, she would take over from Mr. Kohn who has been a very influential, if less vocal, advocate of extended low interest rates. | Note * Reported according to chronology of the events |
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