Standard & Poor's lowered its credit rating for US Airways from B to B- Friday, concerned that the nation's seventh-largest carrier may default on a $1 billion federally guaranteed loan, the Financial Times reported. The carrier confronts an earnings-based test on repaying the loan by June 30. The newspaper quoted an executive of the carrier as saying, "We have plenty of cash," but also conceding, "we have a huge ... loan that needs to be paid back." US Airways has struggled amid fierce competition from discount airlines since it emerged from bankruptcy last March, and has hired investment bank Morgan Stanley to explore the sell-off of some of its assets. Among those under consideration are its East Coast shuttle, regional US Airways Express operation, and one of its three hubs, according to reports in The Wall Street Journal and The New York Times.
Investors pulled a further $1.6 billion from Strong Financial Corp.'s mutual fund operations in December, a spokesman for the troubled firm said Friday, bringing the four-month tally to almost $4.5 billion. An investigation by federal and state regulators into alleged improper trades prompted the pullout and the resignation of company founder Richard Strong. Strong Financial is based in Menominee Falls, Wis.
Citing lost exports due to the "mad cow" scare, the meat-packing subsidiary of food giant Cargill Inc. announced it is cutting almost 700 jobs. Excel Corp. of Wichita, Kansas, posted notice of the layoffs Friday, affecting plants in that state and in Nebraska, Colorado, and Texas. Cargill's beef-packing operations in western Canada are still recovering from the discovery of a diseased animal there last May and subsequent drop in exports, the St. Paul (Minn.) Pioneer Press reported. The newspaper also said the IBP division of Tyson Foods, the nation's largest meat processor, and PM Beef Holdings of Richmond, Va., laid off smaller numbers of employees last week.