Leaders of a House panel say they plan to make Obama administration officials answer for putting taxpayers on the hook for a half-billion-dollar loan that went to a now-bankrupt solar panel manufacturer.
The panel is conducting a hearing Wednesday that will examine what went wrong with Solyndra Inc., which had received a federal loan of nearly $528 million and recently filed for bankruptcy. GOP leaders of the subcommittee describe the loan as a “half-billion bust” that raises red flags about the administration’s efforts to generate more jobs in the renewable energy sector.
“It is not the role of government to pick winners and losers in the market,” said Republican Reps. Fred Upton of Michigan and Cliff Stearns of Florida, in a joint statement. Upton is chairman of the House Energy and Commerce Committee, while Stearns oversees the committee’s investigations and oversight panel.
The panel will hear from officials with the Energy Department and the White House Office of Management and Budget, which played the central roles in approving a loan guarantee for Solyndra. The guarantee essentially works as an insurance policy that covers a company’s debt obligation in the event of default. In many cases, the loans come from private banks, but in Solyndra’s case, the financing came from the federal government itself.
Two executives with Solyndra Inc. were also invited to testify but are now expected to appear voluntarily next week. The two Solyndra executives invited to appear before the panel were Brian Harrison, the company’s president and chief executive officer, and W.G. Stover Jr., a senior vice president and chief financial officer.
A news release about the hearing did not provide any reason for the delay, but a Solyndra spokesman, David Miller, said numerous factors played a role, including “legal complexities arising from last week’s activities and the urgency of bankruptcy proceedings.”
“It is in the best interest of all interested parties for them to remain in California to engage with potential purchasers,” Miller said.
The release from the Energy and Commerce Committee said lawmakers have been assured of the pair’s appearance next week. Miller said the company was in contact with committee staff and was working with them on a future date.
Republicans on the panel have been highly critical of the loan to Solyndra. They say the company’s financial woes should raise red flags about the federal government’s efforts to jump-start renewable energy projects. Those efforts include the loan guarantee program.
The $862 stimulus bill that Congress passed in early 2009 included money for the loan guarantee program. GOP lawmakers are also using the company’s collapse to attack economic stimulus legislation in general.
Lawmakers also say Solyndra misrepresented the company’s viability when company officials visited Capitol Hill in July. While company officials painted a picture of improving finances, the company was preparing to restate financial statements projecting reduced revenues, according to staff with the Energy Department’s loans program.
The Energy and Commerce subcommittee has been investigating Solyndra for nearly six months. They’ve questioned whether the Energy Department and the White House conducted a proper review of Solyndra’s application for a loan guarantee. They’ve also asserted that politics may have played a role in approving the loan guarantee by pointing out that investors in Solyndra had helped raise money for President Barack Obama’s 2008 campaign.
Solyndra was heralded as one of the nation’s bright spots of green technology innovation, creating a solar tube of sorts that could soak up sunlight from many angles, producing energy more efficiently and using less space. The company’s panels were also light and easy to install, which was meant to save upfront costs.
But over the past few years, other companies caught up and provided similar products at a lower cost.
Administration officials noted that a loan guarantee for Solyndra was sought by both the Bush and Obama administrations and that private investors also put more than $1 billion into the company.
A tropical storm watch has been issued for Bermuda as Tropical Storm Maria crawls up the Atlantic.
Early Tuesday, Maria has maximum sustained winds near 50 mph (85 kph) with some strengthening forecast during the next two days.
Maria is centered about 340 miles (545 kilometers) east of the southeastern Bahamas and is moving north-northwest near 5 mph (7 kph) payday loans. The U.S. National Hurricane Center in Miami says Maria is expected to pass west of Bermuda on Thursday.
Maria’s forecast track shows it curving away from the U.S.
As the world commemorates the 10th anniversary of the World Trade Center attacks, Sunday is doubly significant for Japan. It marks six months since the massive earthquake and tsunami on March 11, a date now seared in the national consciousness.
Up and down the hard-hit northeast coast, families and communities came together to remember victims. Monks chanted. Survivors prayed. Mothers hung colorful paper cranes for their lost children.
At precisely 2:46 p.m., they stopped and observed a minute of silence. March 11 changed everything for them and their country.
The magnitude-9.0 earthquake produced the sort of devastation Japan hadn’t seen since World War II. The tsunami that followed engulfed the northeast and wiped out entire towns. The waves inundated the Fukushima Dai-ichi nuclear power plant, triggering the worst nuclear accident since Chernobyl.
Some 20,000 people are dead or missing. More than 800,000 homes were completely or partially destroyed. The disaster crippled businesses, roads and infrastructure. The Japanese Red Cross Society estimates that 400,000 people were displaced.
Half a year later, there are physical signs of progress.
Much of the debris has been cleared away or at least organized into big piles. In the port city of Kesennuma, many of the boats carried inland by the tsunami have been removed. Most evacuees have moved out of high school gyms and into temporary shelters or apartments.
The supply chain problems that led to critical parts shortages for Japan’s auto and electronics makers are nearly resolved. Industrial production has almost recovered to pre-quake levels.
But beyond the surface is anxiety and frustration among survivors facing an uncertain future. They are growing increasingly impatient with a government they describe as too slow and without direction.
Masayuki Komatsu, a fisherman in Kesennuma, wants to restart his abalone farming business.
But he worries about radiation in the sea from the still-leaking Fukushima plant and isn’t sure if his products will be safe enough to sell. He said officials are not providing adequate radiation information for local fisherman.
“I wonder if the government considers our horrible circumstances and the radiation concerns of people in my business,” said Komatsu, who also lost his home.
Another resident, 80-year-old Takashi Sugawara, lost his sister in the tsunami and now lives in temporary housing. He wants to rebuild his home but is stuck in limbo for the time being.
“My family is not very wealthy, and I only wish that the country would decide what to do about the area as soon as possible,” Sugawara said.
He might be waiting for a while. The Nikkei financial newspaper reported this week that many municipalities in the hardest-hit prefecture of Miyagi, Iwate and Fukushima have yet to draft reconstruction plans.
Of the 31 cities, towns and villages severely damaged by the disaster, just four have finalized their plans, the Nikkei said. The scale of the disaster, the national government’s slow response and quarrels among residents have delayed the rebuilding process.
The Red Cross also expressed frustration over the layers of bureaucracy that delayed distribution of assistance to victims.
“The speed and scope of implementing the response during the emergency phase was not as swift and comprehensive as (the Red Cross) wished, partly due to the structure of disaster management in Japan, partly because of insufficient preparedness,” it said in a six-month report.
Criticism of the government’s handling of the disaster and nuclear crisis led former Prime Minister Naoto Kan to resign. Former Finance Minister Yoshihiko Noda took over nine days ago, becoming Japan’s sixth new prime minister in five years.
He spent much of Saturday visiting Miyage and Iwate prefectures, promising more funding to speed up recovery efforts and trying to shore up confidence in his administration.
But the trip was overshadowed later in the day by his first big political embarrassment. Noda’s new trade minister Yoshio Hachiro resigned, caving into intense pressure after calling the area around the nuclear plant “a town of death,” a comment seen as insensitive to nuclear evacuees.
Public support for the new government started out strong, with an approval rating of 62.8 percent in a Kyodo News poll released last Saturday. Hachiro’s resignation will likely translate into a drop and new doubts about Noda’s ability to lead.
On Sunday, he apologized for hurting the feelings of Fukushima residents.
“I continue to believe that without a revival in Fukushima, there will be no revival of Japan,” Noda said.
Regardless of politics, what’s clear is that the road ahead will be long.
“Given the enormous scale of the destruction and the massive area affected, this will be a long and complex recovery and reconstruction operation,” Tadateru Konoe, the Red Cross president, said in a statement. “It will take at least five years to rebuild, but healing the mental scars could take much longer.”
U.S. stocks rallied for the first time in three days Wednesday after a German court backed the country’s role in bailing out other European countries. The ruling renewed hopes that Europe will find a solution to its long-running debt problems.
At noon, the Dow Jones industrial average was up 175 points, or 1.6 percent, to 11,314. The Dow and other U.S. indexes fell over the previous three days on worries about Europe’s debt woes and weakness in the U.S. jobs market. Verizon and McDonald’s were the only two of the 30 Dow stocks to fall.
“The market has been pricing in an out-and-out recession, so any hints that policy issues might be solved is a plus,” said Brian Gendreau, market strategist at Cetera Financial Group
The Standard and Poor’s 500 index rose 23, or 2 percent, to 1,188. All 10 company groups that make up the S&P index rose. The Nasdaq composite rose 51, or 2.1 percent, to 2,525.
European indexes rose broadly after the German court ruling eased fears that Europe’s bailouts of Greece and Ireland could be stalling. Germany’s DAX index surged 4.1 percent; France’s CAC-40 jumped 3.6 percent.
The ruling also pushed the prices of Treasury securities lower as investors were more willing to hold risky assets like stocks. Treasury prices have been rising over the past week, sending their yields lower, as demand for lower-risk investments increased.
The yield on the 10-year Treasury note rose to 2.04 percent. It traded at 1.97 percent late Tuesday, one of the lowest rates since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. Gold, another traditional safe haven, fell $56, or 3 percent, to $1,817 an ounce. It closed at $1,891 on Aug. 22.
Yahoo and Bank of America rose sharply after announcing the departures of key executives after the market closed Tuesday. Yahoo gained 4 percent, to $13.45, after announcing that CEO Carol Bartz had been fired. Some analysts said the move made the company a takeover target. Bartz spent nearly three years steering the company.
Bank of America jumped 5 percent, to $7.37, after the bank said two top officers will leave. The changes were seen as one of chief executive Brian Moynihan’s most dramatic moves to reshape the embattled bank. Bank of America shares have fallen 48 percent this year through Tuesday, compared with a 7 percent drop in the S&P 500 index.
Financial companies were the top performing group in the S&P 500 index. JP Morgan Chase & Co., Goldman Sachs and Wells Fargo each rose more than 2 percent.
Urban Outfitters fell 3 percent, to $25.14, after the retailer said its sales were slipping in the current quarter. Computer graphics company Nvidia Corp. jumped 8 percent, to $14.22, after the company said it expects its revenues to be higher than Wall Street analysts forecast.
The Federal Reserve will release its snapshot of regional business conditions at 2 p.m. The Fed’s last survey was the weakest this year. Growth slowed in eight of the regions in June and July, bolstering concerns that the U.S. economy was headed back into another recession.
The departure of Steve Jobs from the role of CEO leaves Apple Inc. with a deep bench of executives who have been with the company for more than a dozen years
Brown Shoe Co. is unloading the men’s basketball brand AND 1 from its portfolio about six months after the company procured it as part of the acquisition of American Sporting Goods.
The Clayton-based footwear company said today that it was selling the brand for $55 in cash to Galaxy International, a newly-formed brand management company. Brown Shoe said it would use the proceeds from the sale to pay down debt.
In February, Brown Shoe completed its $145 million acquisition of American Sporting Goods, which also includes the brands Avia and Ryka. The acquisition of the athletic shoe company was part of Brown Shoe’s strategy to increase its offerings in the active and healthy living category.
“AND 1 is a great brand with a strong heritage, however, it did not cleanly align with our strategy to focus on the key consumer platforms of healthy living, contemporary fashion and family,” Diane Sullivan, the company’s chief executive, said in a statement.
When Sullivan took over the reigns of the company as chief executive in May, she said one of her top priorities would be evaluating Brown Shoe’s portfolio of brands and divesting from those that don’t fit into its strategic focus in key categories fast cash. She said she will continue to review brands in the second half of this year.
The company also reported its earnings today for the second quarter. It had a net loss of $4.6 million, or 11 cents a share, compared to a profit of $5.3 million, or 12 cents a share, in the same period last year. The company blamed the drop in part on a more rapid-than-expected decline in toning footwear and to some continuing costs associated with the implementation of a new information technology system.
Net sales in the quarter rose 7.2 percent to $628 million, up from $586 million. The company attributed much of the gain to the increased sales from the American Sporting acquisition.
Thousands of striking Verizon workers will return to work starting Monday night, though their contract dispute isn’t over yet.
Both the company and the union say they have agreed to narrow the issues in dispute and have set up a process to negotiate a new contract. But the talks are likely to be contentious. The two sides still disagree on touchy subjects such as health care benefits, pensions, and work rules.
About 45,000 employees went on strike on Aug. 7, after their previous contract expired. They work in the company’s landline division in nine states from Massachusetts to Virginia.
Verizon says that it needs to cut costs in the traditional landline phone business, which is in decline as more Americans switch to mobile phones. The company has proposed freezing its pension and switching union workers to its non-union health plan, which has higher costs for employees.
The unions counter that the landline business supports the growing wireless business and that Verizon, which earned about $3 billion in the first half of the year, can afford to maintain the benefits in the contract that expired on Aug. 6. They also say Verizon put too many proposals on the table.
Of the 45,000 striking workers, 35,000 are covered by the Communications Workers of America, while 10,000 are covered by the International Brotherhood of Electrical Workers.
Jim Spellane, a spokesman for the IBEW, said the strike occurred because Verizon “came in with an extreme set of proposals and never really moved off of them.”
But after the 14-day strike, “I think they realized the unions are serious,” he said. “It’s in everybody’s best interest to get back to work.”
Verizon spokesman Richard Young said that many of the benefits and work rules were put in place when Verizon faced much less competition in its landline business. “The contracts are not reflective of today’s marketplace,” he said.
Spellane said that much of the traditional phone network helps support the faster-growing wireless business. And many of the technicians that went on strike install and maintain the company’s new fiber optic network, FiOS, which provides Internet, video and phone services.
Verizon has 196,000 workers, with 135,000 of those non-union. The wireless division, which wasn’t affected by the strike, is mostly non-union.
Nearly 30 percent of U.S. homes have dropped landline phone service and rely on mobile phones only, according to the National Center for Health Statistics.
Verizon Wireless added 1 paperless payday loans.3 million wireless customers in the April-June quarter, for a total of 89.7 million. That growth has been helped by the addition of Apple Inc.’s iPhone in February. The company owns 55 percent of Verizon Wireless, with Britain’s Vodafone owning the rest.
Meanwhile, total voice connections, which measures FiOS digital voice connections in addition to traditional landlines, declined 7.9 percent to 25 million. But the company has seen increases of more than 20 percent in customers subscribing to both FiOS Internet and TV services over the past 12 months.
Candice Johnson, spokeswoman for the CWA, said Verizon is asking $20,000 per worker in annual concessions. The company has disputed that but hasn’t offered its own figure.
Johnson said earlier this month that the union’s best-paid Verizon workers get about $77,000 a year in New York. The company puts the figure at $91,000 and said benefits average $50,000.
“These are very important issues” being negotiated, she said. “They are issues that help families ensure a middle-class life.”
While union workers walked the picket lines, managers and non-union employees performed their duties.
Verizon’s Young said the company began training managers and non-union workers at the beginning of the year to prepare for the strike. Thousands of employees were brought in from as far away as Texas, California, and Colorado, he said. They have worked 12 hours a day, six days a week, he said.
The company also used newer technologies to resolve 50,000 problems a day remotely, Young said, such as resetting set-top boxes and routers and testing lines.
Peter Thonis, Verizon’s chief communications officer, acknowledged there was “a little bit of a slowdown” in installing new services like FiOS, but said replacement workers largely kept up on repair work.
The company said in its statement that it will “quickly address any backlog in repairs and unfulfilled requests for service.”
While customers who will now get their FiOS services installed on time may be winners, Verizon’s Thonis said neither the company nor the workers could claim a victory.
“We still have a lot of hard and difficult bargaining to do. None of the major issues that were on the table before the strike, are off the table,” he said.
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AP radio correspondent Julie Walker contributed to this report.
Moviegoers may want to take two bites of the same apple next year: A pair of live-action adventure flicks based on Snow White will come out in theaters just months apart.
As it stands, the first, still-unnamed Snow White movie is scheduled for release March 16. That gives moviegoers two and a half months before “Snow White and the Huntsman” on June 1.
Executives are confident that both projects can succeed, given their differences in stars, tone and plot.
However bizarre the coincidence is, history shows that two similar projects like these can both attract large audiences.
In May 1998, viewers turned out for “Deep Impact,” a movie about a comet threatening Earth. They showed up again that July when an asteroid did the same in “Armageddon.” “Deep Impact” sold $349 million in tickets worldwide, and “Armageddon” followed with $555 million.
Audiences didn’t duck for cover either when “Dante’s Peak” blew in February 1997 only to have “Volcano” erupt that April. The first made $169 million and the other $120 million at the box office.
The latest standoff pits a couple of “frenemy” studios against each other _ newbie studio Relativity Media and its longtime distribution partner, Universal Pictures.
Since 2005, Relativity had provided financial backing for most of Universal’s new movies in a deal that was to last through 2015. But Relativity has been eager to make money from distributing as well, as it did with the March 8 release of “Limitless,” which has sold more than $150 million in tickets worldwide.
So in June, Relativity passed its co-financing deal with Universal to Relativity’s financial backer, Elliott Management. That paved the way for the two studios to compete head to head _ Relativity with the unnamed movie and Universal with “Huntsman.”
“Everybody kind of goes into this eyes wide open,” said Tucker Tooley, Relativity’s president of worldwide production. “It’s the nature of competition. It’s the nature of this business.”
Universal executives declined to comment.
Executives argue that the two Snow White movies are spaced far enough apart so that advertising one won’t inadvertently drive people to the other.
Most movies make 95 percent of their sales in the first four weeks. On average, people in North America see four movies a year. There’s plenty of time to get refreshed and go out again.
“Ten weeks in the movie business is a lifetime,” said “Huntsman” producer Joe Roth.
He should know. Roth was head of Disney’s studios when its “Armageddon” opened second but still sold $200 million more in tickets worldwide than “Deep Impact.”
The casts of both Snow Whites are also distinct enough to merit a return trip to the theater.
In Relativity’s version, billed as a family comedy, Julia Roberts is in for an intriguing role reversal as the former “Pretty Woman” plays the Evil Queen.
“She’s a very fun and evil and wicked Evil Queen,” said producer Bernie Goldmann, who also produced “300.” Nathan Lane is set to add a humorous touch as a bumbling Huntsman.
In Universal’s epic action adventure, Kristen Stewart of “Twilight” fame gets “Karate Kid”-like fight training from buff Chris Hemsworth of “Thor.” Hemsworth plays the mercenary Huntsman, who disobeys orders to kill her. The action-packed movie also involves a love triangle with Prince Charmant, played by Sam Claflin.
“At its heart, it becomes a girl’s empowerment movie,” Roth said.
Timing and casting aside, Snow White is a tale that has been told many times with many different plot twists. These versions follow that tradition.
In an early Italian retelling, the good guy we know from Disney’s 1937 animated classic as Prince Charming rapes Snow White while she’s sleeping, according to Tina Boyer, a professor of German at Wake Forest University. She awakes not to a kiss, but to her baby being born. Another tale has Snow White fleeing her father, not her wicked stepmother, because he’d like to make her his incestuous wife.
Relativity’s movie has Snow White teaming up with the seven dwarves to fight the Evil Queen. In Universal’s, she teams up with the Huntsman to fight back.
Reading the 20-plus different versions is partly what inspired Melisa Wallack to write her own take in the script that Relativity later bought, said Goldmann, Wallack’s husband.
“It enabled us to understand that there was a lot of freedom in expanding the story,” he said.
Evan Daugherty had written the other Snow White script while he was a film student at New York University many years ago. He also takes many liberties with the plot. Universal, now owned by Comcast Corp., bought it following a bidding war.
It helped that “Alice in Wonderland” sold $1 billion at the box office last year and revived interest in classic stories that feature young girls and have fallen out of copyright protection.
Even if producers of both projects saw success and jumped on the bandwagon, there aren’t enough complex roles for young women these days anyway, said Marjorie Rosen, a professor of film and journalism at Lehman College. Having characters as rich as Snow White and the Evil Queen on screen is a blessing, Rosen said, even if there are going to be two versions of them.
She said pent-up demand for strong female leads has led to the success of a slew of recent bride movies, from “27 Dresses” and “Bride Wars” to the recent “Bridesmaids.”
“Women were lining up for the first week or two because they were desperate for movies about them,” Rosen said. “Maybe (the studios) are hoping that Snow White is kind of like that but better.”
And if there’s two, why not a third? Word has it that Disney has been working on a live-action remake of its animated classic for the past decade. In that one, Snow White ends up in a forest with seven Shaolin monks.
At its core, each iteration is about a dysfunctional family, something that touches everyone at some level. That may be why the story is still relevant today.
“They can take the basic themes if they want to and go with it because that’s what fairytales and folklore are all about,” said Wake Forest’s Boyer. “They have to be reinvented. That’s how they stay alive.”
Investors pulled the most money from global stock funds since 2008 in the past week as the Standard & Poor’s downgrade of Treasuries and the deepening European debt crisis prompted a flight into cash and gold.
Funds that buy global equities suffered $3.5 billion in net withdrawals in the week ended Aug. 10, the most since the second week of October 2008, according to Cameron Brandt, director of research at EPFR Global of Cambridge, Mass.
Investors removed $11.7 billion from funds that invest in U.S. equities, the most since May 2010, following a one-day market plunge that erased $862 billion in U.S. stock values.
“This week had a feeling of capitulation as we saw investors running for cover,” Brandt said in a telephone interview.
“The last time we saw this kind of flight to safety” was in 2008, he said.
Investors have rushed into money-market funds and gold as global equity markets lost $6.8 trillion in value since July 26.
On Aug. 5, S&P downgraded U.S. debt for the first time, sending the benchmark Standard & Poor’s 500 index down by 6.7 percent on the first trading session after the move. In Europe, riots swept across Britain and the sovereign-debt crisis deepened.
U.S. money funds attracted $61 billion in the week ended Aug. 9, according to data from iMoneyNet in Westborough, Mass.
Gold and precious metals funds drew $2.1 billion in the past week, EPFR said.
UPDATED: at 3:49 p.m. with more details.
ST. CHARLES
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