Business & Finance
Freddie Mac, the nation's second-largest mortgage- finance company, acknowledged a poor record in its "accounting, control, and disclosure practices," but said it expects that earnings for the past three years will turn out to be at least $1.5 billion and possibly up to $4.5 billion higher than previously reported. New president Gregory Parsegian promised to make public next month a review by an outside contractor of its financial statements. But he also warned that the adjustment and reforms probably will result in an equivalent reduction in income "in future periods." The government-sponsored but publicly traded company recently fired or accepted the resignations of three senior executives in the wake of an internal probe of accounting practices. It also is under federal and securities-industry investigations. Since 1970, Freddie Mac has helped one of every six home buyers acquire a mortgage.
In another difficult day for the airline industry:
• Deep new austerity measures calling for 3,050 layoffs, the disposal of 34 planes, and ending service to one-third of its current destinations were announced by Swiss, the struggling national airline of Switzerland. The measures will be implemented in the fall, it said. The carrier, formed last year from what was left of the collapsed Swissair, already has lost more than $700 million.
• KLM, the Dutch national carrier, needs to cut costs by $745 million a year and may have to lay off half again as many workers as it announced in April, a spokesman told the Bloomberg.com financial reporting service. That would mean 1,500 more job cuts, Bloomberg said.
• Alaska Airlines asked its unions for help in cutting costs by 15 percent. The Seattle Post-Intelligencer said the carrier seeks $112.4 million in pay concessions, plus $17 million worth of work-rule changes as well as a common benefits package for all employees.
Weyerhaeuser Co. Ltd., a subsidiary of the forest products giant, will shut down sawmill operations and timber cutting at most of its facilities in British Columbia for July, an announcement said. The company said the high duty imposed on lumber imports by the US and the cost of harvesting in coastal timberlands, coupled with weak demand, prompted the move. Weyerhaeuser's headquarters are in the Seattle suburb of Federal Way, Wash.