Stratolaunch Systems: Paul Allen’s Space 2.0 Venture
Just months after NASA ended its shuttle program, Microsoft (MSFT) co-founder Paul Allen is investing his own money in a new venture to launch satellites, people, and supplies into space. Instead of relying on ground-based rockets, Allen’s Stratolaunch Systems would transport cargo into the atmosphere on a mammoth airplane and then blast it into space. The plane’s wingspan will be more than 380 feet, and it will be powered by six engines culled from Boeing (BA) 747 jumbo jets. The first flight is planned within five years. The cost of funding construction of the new megaplane is expected to exceed the $25 million Allen sank into an earlier rocket venture, SpaceShipOne, in 2004.
Supreme Foodservice: The Pentagon Wants a Refund
The Defense Dept. is pressing one of its largest contractors in Afghanistan to return $756.9 million in overbilled transportation costs. The Pentagon and Supreme Foodservice reached an impasse in negotiations over rates. The Swiss company, which plans to appeal the refund request, has been paid at least $5.5 billion since 2005 to supply and transport food, water, and other goods. The Pentagon’s inspector general has singled out the Supreme contract as an example of oversight problems at the department.
Avon Products: Splitting Chairman and CEO Roles
Shares of Avon Products (AVP) surged 11 percent on Dec. 14—the most in more than three years—after the company announced that Andrea Jung will give up her CEO title next year. Jung will remain chairwoman once a new CEO arrives. The world’s biggest door-to-door cosmetics seller has experienced sluggish sales recently and is the subject of Securities and Exchange Commission inquiries. The agency is investigating whether Avon executives engaged in bribery abroad, as well as allegations of improper communications with analysts.
Chevron/Transocean: Fallout from a Spill in Brazil
Brazilian prosecutors are asking a federal court to force Chevron (CVX) and rig operator Transocean (RIG) to halt their operations immediately in that country and pay $10.7 billion in damages after an oil spill in November. Brazil’s oil regulator had already banned Chevron from drilling new wells temporarily as it investigates the eight-day leak off the coast of Rio de Janeiro, but this injunction would stop all of Chevron’s Brazilian operations. Environmental regulators are also probing the spill. Chevron and Transocean say they are cooperating with authorities.
IBM: A Settlement with the EU
IBM (IBM) settled a European Union antitrust investigation over allegations that the company hindered rival mainframe software makers. Last year, the EU began probing whether IBM restricted or delayed rivals’ access to spare parts, which would have limited their ability to compete with IBM for maintenance contracts. Under the agreement, IBM promised to ensure the availability of parts and technical information for five years to companies that service and maintain IBM’s hardware for their customers.