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Originally published Wednesday, February 13, 2008 at 12:00 AM

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Business Digest

Washington Mutual union-linked firm targets 3 directors

Pacific Northwest A union-affiliated advisory firm has targeted three directors of Washington Mutual, demanding that they explain what steps...

Pacific Northwest

A union-affiliated advisory firm has targeted three directors of Washington Mutual, demanding that they explain what steps they took to protect the Seattle-based thrift from excessive risk exposure during the mortgage boom and subsequent bust.

In letters made public Tuesday, CtW Investment Group said that absent a "compelling response," it will urge WaMu shareholders to vote against the three in this spring's board elections. The directors identified by CtW, all of whom chair board committees, are Mary Pugh, finance committee; Stephen Frank, audit committee; and William Reed, governance committee.

CtW works on corporate-governance issues with pension funds maintained by unions in the Change to Win coalition, which broke away from the AFL-CIO more than two years ago.

After a rule change in 2006, all 13 of WaMu's directors serve one-year terms. Board candidates running unopposed must offer to resign if a majority of shareholders voting in the election withhold their votes.

Besides WaMu, CtW has sent similar letters to directors at Bank of America, Wachovia, Citigroup, Merrill Lynch and Morgan Stanley.

Safeco

Insurer to lay off about 40 workers

Safeco said Tuesday it is laying off about a third of the 118 employees in its in-house training unit, Safeco University.

The layoffs are part of a broader effort to cut costs at the Seattle-based insurer, spokesman Paul Hollie said.

Two weeks ago, during Safeco's quarterly conference call with analysts, Chief Financial Officer Ross Kari said the company wanted to reduce expenses by $25 million to $50 million this year by "further outsourcing back-shop functions to lower-cost markets" and "continued review of in-house operations [to] create efficiencies."

Safeco University teaches the insurer's workers everything from working with new software to improving customer service. More of that sort of training now will be done online, the company said. Training of independent Safeco agents won't be affected.

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Some of the layoffs are immediate, and most will occur within 60 days.

Jones Soda

Airlines switching from Coca-Cola

Jones Soda has bumped Coca-Cola again, replacing it as the soda-drink partner for Alaska Airlines and Horizon Air. Beginning April 1, the Seattle-based airlines will serve Jones drinks on 1,000 flights a day.

Last year, Seattle-based Jones began pouring drinks and selling bottled beverages at Qwest Field, where the Seahawks play. Coke had poured for the Seahawks for most of the past 30 years.

The airlines will offer Jones cola, sugar-free cola, lemon lime and sugar-free cream soda. Other flavors will be available periodically.

Larry's Market Haggen plans to buy grocery

Haggen plans to buy the Larry's Market at Redmond Town Center on March 1. The 40,000-square-foot supermarket will be the chain's 33rd store. The Bellingham company plans to remodel the store and will consider other improvements, including a drive-up pharmacy lane.

Haggen will continue to operate the store as Larry's Market. It is the last store operating with that name after Larry's bankruptcy in 2006, when Associated Grocers bought the Redmond store.

Haggen operates supermarkets in Oregon and Washington under the Top Food & Drug and Haggen Food & Pharmacy names.

drugstore.com

Lepore nominated to N.Y. Times board

The New York Times Co. said Tuesday that it nominated Dawn Lepore, chairman and chief executive of Bellevue's drugstore.com., to its board of directors.

Lepore took over at online pharmacy drugstore.com in 2004 after serving as vice chairman at Charles Schwab Corp. She already is on the board of eBay and formerly was on the board of Wal-Mart.

The company — which owns The New York Times, International Herald Tribune, Boston Globe and 15 other daily newspapers — also said it has nominated Los Angeles lawyer Robert Denham for election to its board during its annual shareholders meeting April 22.

The candidates offer an alternative to the new directors proposed by two hedge funds that want The New York Times Co. to be more aggressive in pushing online sales to help lift the stock price.

Amazon.com

Plan to collect sales tax opposed

Amazon.com is fighting New York Gov. Eliot Spitzer's plan to require out-of-state online companies to collect New York state sales tax on goods they send to addresses in New York.

Spitzer estimates in his budget that the state would gain $47 million by requiring Internet giants such as Amazon.com to collect state sales tax. If that portion of the budget is passed, retailers will start being required to collect the taxes.

New Yorkers are on an honor system to report their online spending when they file their state tax returns.

"This would be a radical departure from anything that's being done anywhere in the country," said Paul Misener, Amazon's vice president of global public policy.

Other states, including California, Michigan, North Carolina and Texas have considered similar plans, but abandoned the idea, Misener said.

Nautilus

Consolidation to close call center

Fitness-equipment maker Nautilus said Tuesday that it will close a call center in Canada and move those operations to its Vancouver, Wash. headquarters.

The consolidation of its direct-sales call centers serving North America will reduce administration, systems and training costs, according to the company. The move is expected to take place during the second quarter.

The move will cut 40 jobs at the Winnipeg site and add several new positions in Vancouver, the company said. Nautilus said it will keep an existing distribution center in Winnipeg and a sales team will remain in Toronto.

Nation and World

Exxon Mobil

Venezuela halts crude to oil giant

Venezuela's state oil company said Tuesday it had stopped selling crude oil to Exxon Mobil in response to the company's drive to use the courts to seize billions of dollars in Venezuelan assets.

Exxon Mobil is locked in a dispute over the nationalization of its oil ventures in Venezuela that has led President Hugo Chávez to threaten to cut off all Venezuelan oil to the United States.

Tuesday's announcement by state-run Petroleos de Venezuela was limited to Exxon Mobil, which was accused of "judicial-economic harassment" for its efforts in U.S. and European courts.

Exxon Mobil is challenging the Chávez government's nationalization of one of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits.

Berkshire Hathaway

2 bond insurers turn Buffett down

Two of the three troubled bond insurers billionaire investor Warren Buffett offered to help early Tuesday have rejected extra guarantees on municipal bonds.

Ambac Financial said in a statement Tuesday that the reinsurance that Berkshire Hathaway is offering wouldn't be in the best interests of the bond insurer or all of its policyholders.

Buffett said Tuesday morning that one of the three bond insurers Berkshire offered reinsurance to had already said no, but he didn't say which one declined.

Ambac spokesman Peter Poillon said his company was not the one Buffett referred to and that Ambac did not respond directly to Berkshire.

Stocks on Wall Street surged after Buffett discussed a few details of his offer to three companies to reinsure about $800 billion of their municipal bonds in an interview on CNBC.

Reinsurance is coverage that insurance companies purchase when they want to completely or partly insure the risk they have assumed for their customers.

"I really don't think this does much for anyone but Warren Buffett," said Kevin Giddis, fixed-income strategist at Morgan Keegan.

Research in Motion

Outage blamed on upgrade

The company behind the BlackBerry smartphones said a three-hour e-mail outage Monday was caused by an upgrade designed to increase capacity.

Research in Motion on Tuesday said the upgrade was part of "routine and ongoing efforts," and that similar upgrades in the past had caused no problems.

The outage, which started about 12:30 p.m. PST, annoyed subscribers who are used to checking and writing e-mail whenever they're in cellular coverage range and able to make voice calls.

It affected only some of the BlackBerry users in North America — for others, the service kept working fully.

It was the second major outage for the service in less than a year.

In April, a minor software upgrade crashed the system for all users. A smaller disruption in September also was caused by a software glitch.

E-mail sent to and from BlackBerry phones in North America all goes through a Network Operations Center.

It appears the problem occurred there, when one of two Internet addresses that relay e-mail from corporate servers stopped responding, according to Zenprise, a Fremont, Calif., company that helps companies troubleshoot BlackBerry problems.

Dell

E-mail archiving gained in purchase

Dell agreed to buy MessageOne, a company about 24 percent owned by the Dell family, for $155 million to gain e-mail archiving and management software for corporate customers.

MessageOne is a subscription-based, online service, Steve Schuckenbrock, Dell's president of global services, said Tuesday.

Dell founder and Chief Executive Officer Michael Dell and his immediate family will receive about $12 million, according to a company statement.

Compiled from Seattle Times staff, Bloomberg News and The Associated Press

Copyright © 2008 The Seattle Times Company

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