Pacific Northwest Nautilus agreed to pay a $950,000 civil penalty to the Consumer Product Safety Commission (CPSC) for failing to give timely...

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Nautilus agreed to pay a $950,000 civil penalty to the Consumer Product Safety Commission (CPSC) for failing to give timely reports on injuries and safety defects on some of its Bowflex exercise machines.

Nautilus waited years in some cases to notify the commission about issues with some machines. There have been 85 injuries, including lacerations and chipped teeth, because of problems with the backboard bench, seat pin and incline-support bracket on various Bowflex models, CPSC spokesman Scott Wolfson said.

Vancouver, Wash.-based Nautilus recalled about 800,000 Bowflex Power Pro and Ultimate fitness machines in January and November 2004.

Nautilus spokesman Ron Arp said the company agreed to pay the fine because “we thought it would be better to put it behind us.” The company said in a regulatory filing it doesn’t admit to any of the CPSC’s allegations.

Injunction lifted in spat with Toys R Us

A state appellate court yesterday lifted an injunction imposed against in a disagreement over exclusivity rights with Toys R Us. The contract dispute could go to trial later this spring.

A three-judge appellate panel removed restraints against the Seattle Internet merchant ordered last summer by state Superior Court Judge Margaret McVeigh.

The legal fight began when Toys R Us sued on May 21, claiming Amazon violated a 2000 partnership agreement in which Amazon, in exchange for $200 million, would not let others sell certain products being offered by Toys R Us on Amazon countersued, seeking to dissolve the partnership, citing “chronic failure” by Toys R Us to keep items in stock.

In a series of orders last summer, McVeigh barred users from selling toys, games and baby products that Toys R Us selected as its exclusive offerings.

Alaska Airlines

Mediator joins talks at union’s request

A mediator assigned by the National Mediation Board yesterday joined the contract talks between Alaska Airlines and its baggage-handlers’ union.

The union requested a mediator last week because it was concerned that airline negotiators were not going to meet with union representatives, said Bobby De Pace, president of the International Association of Machinists and Aerospace Workers District 143.

The union last week submitted its latest proposal to the airline, which has said it might lay off 500 baggage handlers in Seattle.


Sales push to get more money, staff

To further its push into the large-business market, Microsoft yesterday announced a reorganization of its U.S. enterprise-sales group and a 10 percent increase in its sales-and-marketing budget.

About 200 salespeople with expertise in specific industries will be hired in the Seattle area and other metro areas across the country, said Bill Veghte, vice president for sales in the U.S. and Canada.

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


15 trading specialists charged with fraud

Fifteen specialists who managed trades on the floor of the New York Stock Exchange used their inside positions to earn an estimated $20 million in illicit gains for themselves and their firms, federal authorities charged yesterday.

The Securities and Exchange Commission also filed civil charges against 20 specialists, including the 15 charged in the criminal indictment, and the NYSE as well. An SEC official decried the violations as “profound and, at times, profane.”

Federal authorities said that between 1999 and mid-2003, specialists at five firms put their companies’ orders ahead of customers’ orders, causing those customers to get inferior prices — a scheme the NYSE’s internal regulators failed to catch.


New safety system for military transport

Boeing is spending almost $36 million to install new collision-avoidance gear on the U.S. military’s top transport plane to settle allegations that faulty equipment contributed to a near mid-air collision with paratroopers on board, according to the Air Force.

Two C-17 jets flying in close formation almost hit each other during an airdrop training mission in October 2002 at Pope Air Force Base, Fayetteville, N.C.

An Air Force investigation concluded that “contractors had difficulty meeting performance specs” on the collision-avoidance gear, an Air Force spokesman said.

Boeing in November 2004 started to provide an interim version of new collision-avoidance software while developing a final model, at an estimated total cost of $35.9 million.

Boeing said the system being replaced was provided by subcontractor Sierra Research, of Buffalo, N.Y.


Ex-CEO declines to answer investigators

Maurice “Hank” Greenberg, the former chief executive of American International Group (AIG), declined yesterday to answer questions posed by government investigators probing transactions at the insurance company he once headed.

The deposition in New York lasted about 45 minutes, according to a person who attended the meeting but asked not to be identified by name. The person said Greenberg invoked his Fifth Amendment rights against self-incrimination in response to all questions.

Greenberg, who arrived and exited the building via a tunnel, had no comments after the meeting. His lawyer had indicated on Monday that his client likely would refuse to answer questions because he had not had sufficient time to prepare.


Judge may dismiss 3 perjury charges

A federal judge indicated yesterday she would dismiss three perjury charges from the 58 total counts against Richard Scrushy as jurors in his corporate fraud trial got an in-depth look at the vast fortune of the fired HealthSouth chief executive.

Opening court after a weeklong break for jurors, U.S. District Judge Karon Bowdre granted a defense motion to bar jurors from hearing evidence about Scrushy’s sworn statement to an investigator from the Securities and Exchange Commission.

Scrushy was charged with three counts of perjury for allegedly lying during the statement, given in 2003.

Bowdre told jurors they would have “three fewer charges to deal with” because of her ruling.


Names of factories revealed for first time

After years of criticism over its labor practices abroad, Nike is disclosing for the first time the names and locations of more than 700 factories that produce its sneakers, apparel and other products.

Industry experts said the disclosure, included as part of the Beaverton, Ore.-based company’s corporate responsibility report, makes the sneaker giant the first major apparel manufacturer to voluntarily disclose its entire supply chain.

In its 108-page report, Nike discloses the names of 124 plants in China contracted to make its products, 73 in Thailand, 35 in South Korea, 34 in Vietnam — with others elsewhere in Asia, as well as in South America, Australia, Canada, Italy, Mexico, Turkey and the United States.

Some Nike critics welcomed the disclosure of the supplier locations because it challenges others to do the same.

“This is a revolution,” said longstanding Nike critic Neil Kearney, general secretary of the International Textile Garment and Leather Workers Federation, which represents 10 million workers. “Now the world can see if the policies Nike claims to be implementing are actually being implemented.”


Lawmakers target credit-rating industry

Key members of Congress said yesterday they will draft legislation to impose regulatory oversight over the credit-rating industry, saying they are concerned about the power of rating firms and frustrated by federal regulators’ reluctance to curb it over the past decade.

Rep. Richard Baker, R-La., called the rating business a government-granted monopoly because the Security and Exchange Commission has given a national designation to only five rating firms, and investors have come to view it as the federal agency’s stamp of approval.

Baker also expressed concerns when raters issue unsolicited ratings of companies that did not seek a rating but feel compelled to pay the raters’ fees. The raters have companies “by the throat,” he said.

Critics have voiced other concerns about the credit raters, who wield power by handing out letter grades to companies and countries that want to borrow money by issuing bonds. The major raters, for instance, get the bulk of their revenue from the fees they charge to the entities they rate, raising questions of conflicts of interest.

Compiled from The Associated Press, Bloomberg News and the Los Angeles Times Washington Post News Service