SEATTLE â€“ Two top officials at Safeco Corp. were ousted from their posts at the Pacific Northwest insurer after concerns from the board of directors about the company's falling profits.
Investors cheered the news, sending the stock up 15 percent.
Chairman and chief executive officer Roger Eigsti, 58, announced that he would retire Dec. 31. The longtime Safeco executive spearheaded the acquisition of American States Insurance in 1997 and made Safeco a household name in the Northwest.
Randy Stoddard, 52, resigned Thursday, effective immediately, as president of Safeco's insurance operations, which have been blamed for a steep drop in profits over the last year.
The company would not comment on any kind of severance packages. Neither man was made available for comment.
Safeco president and chief operating officer Boh Dickey will take over Mr. Stoddard's duties. Although the company will hire a search firm to find a new CEO, Mr. Dickey is considered a top contender for the job.
Wall Street reacted favorably to the news, sending Safeco's stock up $3.38 to $25.31 in late trading on the Nasdaq stock market. The company hit a 52-week low of $18 on March 10.
Mr. Eigsti has been a top executive at Safeco since 1988, when he joined the board of directors. He's been CEO since 1992 and chairman of the board since 1993 and oversaw the transformation of Safeco from a regional insurance company to a national financial services corporation.
However, the last couple of years have seen dramatic drop-offs in profits, which led to the dissatisfaction with the company's executive team.
Payout for flight delays: $298,000
In May, Rosenbluth International's Biztravel.com Web site offered cash refunds to customers whose flights on five major airlines were delayed.
The basic terms: $100 for a flight arriving more than 30 minutes late and $200 for a flight more than an hour late; if a flight is more than two hours late, the full ticket price is refunded. The offer is still in effect.
The timing wasn't exactly the world's greatest. The air system screeched to near-gridlock in June, with a record 50,000 delayed flights.
Biztravel.com's total payout for its money-back offer as of last week: $298,832.33.
Hal Rosenbluth, the iconoclastic boss of the travel management company, said the weekly payouts in June and July were about two to three times the $10,000 to $15,000 that he had anticipated.
But he's not complaining.
Thanks to the delays and the word of mouth about the refunds, ticket sales on the site are up 40 percent.
"Perversely, the delays have been great for us, though I'm hoping that as we get out of the summer and into the fall, the weather improves," he said.
Factory orders soar in June
WASHINGTON â€“ Orders to American factories surged by the largest amount in nine years, but the nation's biggest retailers reported lackluster sales in an economy sending mixed signals Thursday about whether the slowdown is really here.
The Commerce Department said factory orders jumped 5.5 percent in June, the biggest advance since July 1991, led by a record 42.2 percent increase in orders for aircraft and other transportation products.
The orders report showed that demand for nondurable products actually fell in July by a slight 0.1 percent as orders dropped for chemicals, paper and tobacco products.
However, orders for durable goods, items expected to last three or more years, jumped by 9.7 percent, a downward revision from an advance report last week but still the biggest gain since July 1991.
Strength was centered in transportation and a record 175.2 percent jump in the volatile aircraft sector.
But analysts noted that demand for nondefense capital goods shot up 16.5 percent in June, reflecting the boom in capital investment that was highlighted in the spring gross domestic product report.
June shipments of goods from the nation's factories rose 1 percent, while inventories increased 0.5 percent.
The inventories-to-shipments ratio fell to a record-low 1.25 months in June from 1.26 months in May.
GLOBAL ECONOMY: European bank holds the line on interest rates
The European Central Bank kept its key interest rates unchanged Thursday, despite creeping inflation, snowballing economic growth and a flagging currency, which hit a new 10-week low during the course of the day.
SAFETY: Ford investigating Firestone tires
Ford Motor Co. said Thursday that it is reviewing the safety of Firestone tires after reports linking the tires to accidents, many involving Ford Explorers, in which 21 people have died. Bridgestone/Firestone has encouraged owners to go to a Firestone Tire and Service Center for a free inspection and maintains that the tires are "among the safest tires on the road today."
CINCINNATI: Boeing settles whistle-blower's suit
A $61.5 million settlement was reached Thursday in a lawsuit filed by a whistle-blower who accused the Boeing Co. of installing faulty gears in at least two Army helicopters that crashed, the Justice Department said. Plaintiff Brett Roby alleged that Boeing knew that Speco Corp. of Springfield, Ohio, had produced faulty transmission gears for Chinook transport helicopters. Two Chinook CH-47D helicopters crashed, one in 1991 and the other in 1993, causing injuries but no deaths. Boeing denied any wrongdoing but said it would settle "because resolving this protracted litigation is in the best interests of both Boeing and its U.S. Army customer."
MEDIA: Reader's Digest, Bertelsmann hold talks
Reader's Digest Association Inc. may combine some businesses with Bertelsmann AG, the world's No. 4 media company, the Wall Street Journal reported Thursday, citing people close to the situation. Both firms declined to comment.