US Airways to lay off 11,000
ARLINGTON, Va. (AP) -- US Airways plans to lay off 11,000 workers -- almost one-fourth of its work force -- and reduce its flight capacity by 23 percent, citing the loss of business connected to last week's terrorist attacks.
"The tragic events of Sept. 11 have had a dramatic effect on the nation's aviation industry, including US Airways," said company president Rakesh Gangwal in a statement issued Monday after the markets closed.
"As a result of reduced passenger demand as well as the ongoing requirements of new security procedures, US Airways has no choice but to reduce the number of its daily flights."
It's unclear where the layoffs will take effect. US Airways spokesman Richard Weintraub said the company would announce more specific details of the layoffs in the next few days.
Consumer prices up 0.1%
WASHINGTON (AP) -- Consumer inflation edged up by 0.1 percent in August as lower prices for gasoline, tobacco and airline fares helped to blunt higher costs for medical care, the government reported today.
The small advance in the Labor Department's Consumer Price Index, a closely watched inflation gauge, came after consumer prices had plummeted by 0.3 percent in July, the biggest drop in 15 years.
Excluding energy and food prices, the "core" rate of inflation rose for the second straight month by 0.2 percent. The latest readings on inflation at the consumer level were in line with analysts' expectations.
One of the reasons the Federal Reserve has been able to aggressively cut short-term interest rates this year is because inflation hasn't posed a risk to the economy.
During the first eight months of this year, consumer prices rose at a seasonally adjusted annual rate of 2.5 percent, compared with an increase of 3.4 percent for all of 2000.
Berkshire drops Finova offer
NEW YORK (Bloomberg) -- Warren E. Buffett's Berkshire Hathaway said it was dropping its offer for $500 million in notes from Finova Group, citing provisions allowing it to drop the bid in a "national or international calamity."
Berkshire, which owns The Buffalo News, said it could end the offer if there was a suspension of stock trading or "war or armed hostilities or other national or international calamity directly or indirectly involving the United States."
The purchase of 7.5 percent senior secured notes maturing in 2009 was expected to close Sept. 26. Buffett and Finova were not available to comment and it was unclear how the move will affect Finova's recovery plan.
The move is an apparent turnabout for Buffett, who helped arrange Finova's exit from bankruptcy court protection and implement its Chapter 11 recovery plan with the help of Leucadia National Corp. Berkadia LLC, a joint venture with Berkshire and Leucadia, edged out General Electric Capital Corp. to win control.
The Finova recovery plan, which went into effect in August, hinges on $6 billion in financing from Berkadia. Finova will use the loan plus its cash reserves to pay $7.35 billion to creditors. Finova specialized in lending money to aircraft purchasers.