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Originally published January 27, 2008 at 12:00 AM | Page modified January 27, 2008 at 2:13 AM

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Sunday Buzz

Opponents call Boeing's plane "Frankentanker"

First came the jockeying over technical specifications, then the politicking and flag-waving. Now the contest between Boeing and EADS-Northrop...

Rami Grunbaum, deputy business editor, and Seattle Times Business staff

First came the jockeying over technical specifications, then the politicking and flag-waving.

Now the contest between Boeing and EADS-Northrop for the megabillion-dollar Air Force tanker contract has reached a stage the general public can enjoy: name-calling.

A cartoon deriding Boeing's proposed plane as the "Frankentanker" — a clumsily stitched-together horror made of parts from other planes — was published this past week on the op-ed pages of the Mobile, Ala., Press-Register.

Next to it was an enthusiastic letter about the rival EADS-Northrop offering, written by the chief of Mobile's Airport Authority. The city stands to gain a big new manufacturing center if EADS-Northrop wins some or all of the tanker contract.

Authorship of the cartoon is unknown — a Press-Register editor said she did not know who had produced it. But intriguingly, it's signed "Barstow Daggett," which is the name of a county airport 140 miles from Northrop's Los Angeles headquarters.

The illustration shows a tanker with crude seams that hold together sections from several different Boeing 767 models.

To complete the Frankenstein image, there's a big bolt sticking out just behind the cockpit.

And to counteract the argument that the EADS-Northrop plane will be assembled from sections made in Europe, the "Frankentanker" has "Made in Italy" and "Made in Japan" labels on its tail and fuselage.

"Never Built, Never Flown, Never Tested" is the pseudo-slogan attached to the pseudo-airplane.

What makes the caricature effective as a piece of propaganda is that the portrayal, while wildly one-sided, is essentially true.

Boeing's 767 tanker will indeed consist of a new combination of various 767 models.

It will have a 767-200 fuselage, a -300 wing and a -400 cockpit. And yes, the vertical tail is built in Italy and the fuselage panels, though put together in Everett, come from Japan.

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Does that make the airplane any more of a monster than the proposed A330 tanker, which would be built in large pieces in France, Italy, Germany, and the U.K., and then assembled in Mobile?

Call it a choice between the U.S. Frankentanker and the European Legotanker.

The Air Force is expected to make its pick next month.

— Dominic Gates

"Activist" fund looks

for action at Coinstar

Coinstar, the Bellevue owner and operator of self-service coin-counting machines, is attracting the type of attention that typically sends shivers up any CEO's spine.

The Shamrock Activist Value Fund this past week paid nearly $1.1 million for 40,000 Coinstar shares. That purchase boosted its stake to 11.6 percent, or 3.25 million shares, now worth about $91 million.

Shamrock hasn't made any public demands on Coinstar since first disclosing a 5.2 percent interest in the company nearly two years ago.

But Damien Park, president of Hedge Fund Solutions, said Shamrock typically pressures companies to put themselves up for sale, buy back shares or pay a special dividend.

"They believe the stock is trading below its intrinsic value, and if you do X, Y and Z, you'll still have enough cash to manage and run the business, and be able to return some value to shareholders immediately," said Park, whose firm outside Philadelphia advises companies "under attack" from activist investors.

"Presumably, they've engaged the management and board of directors" at Coinstar in some sort of discussion.

Shamrock is based in Burbank, Calif., and is controlled by Roy Disney (nephew of the late Walt Disney) and former entertainment lawyer Stanley Gold.

Roy Disney has made his mark on bigger companies — he created Shamrock after forcing a management shake-up at Walt Disney Co. a few years ago.

Denver Post columnist Al Lewis once wrote, "If you are a CEO and happen to notice that Disney's Shamrock Activist Value Fund has purchased stock in your company, start packing up the office."

Lewis had been talking with Ken Denman, a Denver-area resident who runs iPass, which provides secure Internet connections for businesses.

Earlier this month, iPass received a letter from Shamrock urging that the company be sold because "neither senior management nor the iPass board has the strength necessary to institute the changes needed to deliver appropriate value to iPass' long-term stockholders."

Shamrock also is rattling the cages at Jackson Hewitt Tax Service and Panera Bread, where it is seeking a seat on the board of directors.

A call to Shamrock managing director Mike McConnell was not returned.

Coinstar spokeswoman Marci Maule said the company believes it has "exciting growth potential," but she declined to discuss Shamrock, citing a policy of not commenting on shareholders' "specific activities."

Coinstar shares ended the week at $28.32, down 98 cents from a year ago — not so bad given all the turmoil in the stock market, said Ben Silverman, research director at InsiderScore.com. Silverman said Shamrock's position in Coinstar might be a bullish signal since it has yet to do anything besides buy the stock.

"It suggests Shamrock is happy with the progress of the company and the management," Silverman said. "Sometimes, silence can be golden."

— Amy Martinez

Rami Grunbaum: 206-464-8541 or rgrunbaum@seattletimes.com

Copyright © 2008 The Seattle Times Company

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