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At Work More companies are giving employees incentives to get healthy, see Page B3.
www.bendbulletin.com/business
THE BULLETIN • WEDNESDAY, JUNE 2, 2010
MARKET REPORT
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2,222.33 NASDAQ CLOSE CHANGE -34.71 -1.54%
STOC K S R E P O R T For a complete listing of stocks, including mutual funds, see Pages B4-5
B U S I N E SS IN BRIEF
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CLOSE 10,024.02 DOW JONES CHANGE -112.61 -1.11%
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BONDS
Ten-year CLOSE 3.29 treasury CHANGE -.30%
Repaying taxpayers gets tougher after Prudential deal falls apart New York Times News Service
The number of notices of default filed in Deschutes County in May rose more than 11 percent from the same month a year ago, from 268 in May 2009 to 298 in May 2010, according to the county Clerk’s Office. A total of 1,706 notices of default have been filed in the first five months of 2010, compared with 1,441 filed in the first five months of 2009, or an increase of more than 18 percent. A notice of default is a legal document that initiates foreclosure proceedings and is generally filed by a lender after a borrower’s mortgage is 90 days delinquent. The notice states that the property secured by the mortgage is to be auctioned off by the lender roughly 150 days after the filing of the notice, if the borrower does not bring the mortgage current.
1,070.71 S&P 500 CLOSE CHANGE -18.70 -1.72%
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$1,224.80 GOLD CLOSE CHANGE +$12.60
AIG suffers major setback By Mary Williams Walsh and Michael J. De La Merced
Deschutes default notices rise in May
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The American International Group scuttled the deal to sell its huge Asian life insurance arm to Prudential of Britain for about $35 billion, in a major setback to repaying the government for its 2008 rescue. Trying to appease its an-
gry shareholders, Prudential had tried to keep the faltering transaction alive by lowering its price for the unit to $30.37 billion at the last minute. But AIG rejected that proposal, issuing a statement Tuesday that it would “not consider revisions” of the original terms. It was a marked change from the jubilation two months ago
when AIG heralded the sale of its prized Asian subsidiary, known as American International Assurance, or AIA, as a quick, breakthrough solution to raise money. The company has wrestled with how to disentangle its network of subsidiaries and sell them for the best returns, in part because markets are inhospitable and potential
buyers include rivals looking for a fire sale. Even in good times few companies would have the ability or appetite to buy a company as big and diverse as AIA. With Prudential no longer in the picture, AIG has no obvious suitor and may have to revert to its previous Plan B, selling the Asian subsidiary in an initial public offering, probably on the Hong Kong stock exchange. See AIG / B2
“We just had an explosion of orders starting around the middle of February ...
Now we’re sitting on about a six-month backlog.” — Kelly Farrington, founder and president of Sunriver-based Velocity Sports Equipment
BOOST program aims to pump up job count The state’s economic development agency has started a new loan and grant program meant to result in job growth and retention. Businesses with 100 or fewer employees that need operating capital can access a revolving loan fund for fixed-rate financing of up to $150,000 for up to four years. Businesses of the same size can receive up to $2,500 for every new full-time job they create and retain for up to six months, with a maximum payout of $50,000 each calender year. The Building Opportunities for Oregon Small Business Today — called BOOST — fund was created by the Oregon Legislature during the 2010 special session. It is administered by the Oregon Business Development Department, known as Business Oregon. To qualify for a loan or a grant, a business must be in traded-sector industries of manufacturing, processing or distribution. Loan money can be used to pay for daily operation costs, including rent or mortgage payments, utilities, marketing expenses and certain fixed assets, such as equipment, according to Business Oregon. Loans must be secured with collateral. For more information, visit www.oregon4biz.com or call 503-986-0123.
Manufacturing expansion continues Manufacturing expanded in May for a 10th month as factories boosted payrolls to keep up with rising sales here and abroad. The Institute for Supply Management’s manufacturing gauge fell less than forecast to 59.7 from 60.4 in April, which was the highest level in almost six years. Readings greater than 50 point to expansion. The group’s export index climbed to the highest level in two decades. — Staff and wire reports
Manufacturing Purchasing Managers’ Index readings of greater than 50 indicate growth in the manufacturing economy.
Ryan Brennecke / The Bulletin
Kelly Farrington, founder and president of Velocity Sports Equipment in Sunriver, with one of the company’s recreational sky diving harnesses on Tuesday. Velocity is making a customized harness for the sky diver “Fearless Felix” Baumgartner, who will attempt to break the world record this summer for the highest jump.
HIGH VELOCITY Sunriver company playing a key role in world-record sky diving attempt
By Adrianne Jeffries • The Bulletin earless Felix” Baumgartner, an Australian sky diver, will at-
‘F
tempt to jump from more than 120,000 feet this summer, breaking the world record and the speed of sound. If he suc-
ceeds, it could mean fame and glory for Velocity Sports Equipment, the small but fast-growing company in Sunriver that is making his harness. The jump is being sponsored by Red Bull, which has branded it “Red Bull Stratos.” Velocity is one of several companies contracted to build different parts of the project — the hot air balloon, the parachute, the electronic monitoring and recording equipment and the capsule from which the sky diver will jump at nearly 23 miles above the ground. Kelly Farrington, Velocity’s founder
and president, says he got the job because his cousin, Luke Aikins, another sky diver, is a consultant on the Stratos project. Aikins steered Red Bull to Velocity after problems arose with another company that was originally supposed to build the harness. Velocity builds harness and container systems for recreational sky diving — “pretty much everything but the para-
chute,” Farrington said. He started out about 12 years ago in Washington state, where he spent his adolescence at his aunt and uncle’s sky diving center. He moved back to Central Oregon, where he was born, at the end of 2006 “for the climate,” he said. Farrington and six employees design and sew harnesses, or “rigs,” in a shop behind his house in Sunriver. The rigs cost between $1,800 and $3,000 each and Velocity usually sells about 300 a year. Farrington has been working on the Stratos rig for about 200 hours over a year and he says it’s between 90 and 99 percent done. The Stratos system is similar to the custom rigs Velocity usually builds, but with a few modifications. See Velocity / B5
70
59.7 60
Walt Disney Co. counting on Facebook friends to help sell movie tickets
50 40
By Brooks Barnes 30
New York Times News Service
M J J A SOND J FMAM 2009 2010
Source: Institute for Supply Management AP
LOS ANGELES — The Walt Disney Co. has created what it believes is a first-of-its-kind application allowing Facebook users to buy tickets to “Toy Story
3” without leaving the social networking site and while, at the same time, prodding their friends to come along. The application, called Disney Tickets Together, could transform how Hollywood sells
movie tickets by interweaving purchases with the forces of social networking. When you buy a ticket through Disney’s application, for instance, it alerts your Facebook friends and prompts you to invite them to
buy tickets of their own. Disney quietly introduced the service May 26 with a simple post on the site’s official “Toy Story 3” page, which has more than 732,000 fans. See Disney / B2
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$18.540 SILVER CLOSE CHANGE +$0.129
In Oregon, paid interns may qualify for jobless benefits Don’t be thrown off by the term ‘internship,’ official says: ‘It’s a job’ By David Holley The Bulletin
Paid interns, even if they’re hired only for a fixed period, can apply for and receive unemployment benefits after an internship ends. To take home an unemployment check, the qualifications that apply to permanent workers also apply to people who have lost temporary employment, such as a paid internship or contract labor, said Craig Spivey, a spokesman for the Oregon Employment Department. A paid internship is no different than any other job, he said. “I think what throws people off is that term, internship,” Spivey said. “It’s a job. You’re being paid to do a job. If it’s an unpaid internship, and you’re not getting any wages, it’s a different animal.” Spivey said the first thing the state researches when someone applies for unemployment benefits is the reason he or she applied. The end of an internship could be considered a lack of available work and a qualifying reason to receive unemployment, he said. Additionally, the applicant must meet a certain income ratio during a 12-month period, have minimum wages of $1,000 and log 500 hours of work in applicable industries to qualify. Workers in certain industries, such as agriculture, can’t qualify for unemployment insurance for reasons such as the seasonality of the work. See Interns / B5
ASIAN ECONOMIES
Honda strike seen as sign of sweeping changes By Hiroko Tabuchi New York Times News Service
TOKYO — The strike that has crippled production at Honda Motor’s factories in China has come as a wake-up call to Japan’s flagship exporters as they seek to remain competitive and push into China’s burgeoning market with the help of lowwage workers. Inside The strike • Government by Chinese measures workers to prokeeping test pay and China’s working condigrowth in tions has cost Honda, Japan’s check, second-largest Page B5 carmaker after Toyota, thousands of units in lost production in the world’s biggest auto market. The walkout began May 17 at a Honda transmission factory in Foshan and has shut down all four of Honda’s factories on the mainland. In Tokyo, the strike has driven home a salient point: As Chinese incomes and expectations rise in line with the country’s rapid growth, while Japan’s own economy falters, the two countries face a realignment that could permanently alter the way their economies interact. See Asia / B5