Pacific Northwest Pentagon officials continue to support the Air Force's selection of a Northrop Grumman-EADS team over Boeing for the ...

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Pacific Northwest

Pentagon officials continue to support the Air Force’s selection of a Northrop Grumman-EADS team over Boeing for the $40 billion aerial refueling tanker program, the top spokesman said Tuesday.

“There has been absolutely no change in this building’s position on that,” spokesman Geoff Morrell told reporters during a news conference.

Northrop Grumman and partner European Aeronautic, Defence & Space on Feb. 29 beat out Boeing, the Air Force’s only supplier of the aircraft for half a century. Boeing protested the award to the Government Accountability Office, which must make its recommendation to the Pentagon by Thursday.

“The contracting process that eventually produced Northrop Grumman and EADS as the winner of this deal was a fair and transparent one, very deliberate, and we believe it provided our warfighters with the most capable aircraft and taxpayer the most cost-effective solution,” Morrell said.

Media

Rob Blethen to join Walla Walla paper

The Seattle Times Co. said Tuesday that Rob Blethen will become associate publisher of the Walla Walla Union-Bulletin on Sept. 2.

Blethen, currently director of advertising at the Portland (Maine) Press Herald and Maine Sunday Telegram, will report to Union-Bulletin Publisher Larry Duthie, who plans to retire in the first half of 2009.

Blethen, a fifth-generation member of the Blethen family, which holds a majority interest in The Seattle Times, is expected to succeed Duthie as Union-Bulletin publisher.

Duthie, 65, said he and his wife, Roz, will remain in Walla Walla and stay involved in the community, according to a statement by The Times.

Blethen, 35, has been at the Portland Press Herald and Maine Sunday Telegram since 2002. The Times in March put up for sale its Maine newspapers, which also include the (Augusta) Kennebec Journal and (Waterville) Morning Sentinel.

Starbucks

Starbucks food executive leaves

Starbucks’ senior vice president of global food and beverage resigned several weeks ago, according to a company spokeswoman.

Denny Marie Post’s main focus was on the food side of the business. Starbucks has not yet filled her position, but several executives continue to work on transforming Starbucks’ food offerings as it phases out warmed breakfast sandwiches and turns to more healthful fare.

Spokeswoman Bridget Baker declined to say whom Post reported to, but said “it was through the marketing and product organization.”

Post is now chief marketing officer at T-Mobile USA, which sued Starbucks this month over its Wi-Fi relationship with AT&T. The companies quickly agreed to resolve the dispute.

Nordstrom

“e.l.f” e-mails are frauds, retailer says

Seattle-based retailer Nordstrom said Tuesday it is investigating widespread e-mails from an “unauthorized and unknown source” erroneously linking it to e.l.f. cosmetics and the Web site eyeslipsface.com.

Nordstrom, which first learned about the e-mails last fall, said the source does not appear to be related to e.l.f., a New York-based line of inexpensive cosmetics.

The e-mails seek to give the e.l.f. brand credibility by suggesting it’s sold in Nordstrom stores and are believed to be a fraudulent attempt to obtain recipients’ credit-card information, company spokesman Michael Boyd said.

Nordstrom, which does not sell e.l.f. products or ask for customer account information by e-mail or phone, made Tuesday’s statement because the number of e-mails appears to have increased in the past few weeks, Boyd said.

Boeing

Guilty plea planned in secrets case

A former Boeing scientist agreed to plead guilty to unlawful retention of U.S. national-defense information, his lawyer said.

Abraham Lesnik was charged in court documents unsealed Monday in federal court in Los Angeles. In October 2003, he had unauthorized possession of 10 secret documents, including some pertaining to space radars, and one top-secret document pertaining to “national defense satellite threat mitigation,” according to prosecutors.

The government will seek a substantial prison sentence against Lesnik, his lawyer, Marc Harris, said Monday. Harris said he will ask for probation.

The Federal Bureau of Investigation searched Lesnik’s home in 2006 after Boeing confiscated his laptop computer. Lesnik, who has worked as an engineer for 28 years, had been employed by Boeing since March 2004, according to a complaint Lesnik filed in Los Angeles County Superior Court in 2006 to prevent Boeing from accessing private information on the laptop.

Lesnik was fired in January 2007, Boeing spokesman Dan Beck said.

Nation and World

Airlines

Southwest may expand fleet

Southwest Airlines, the only big U.S. carrier that’s still profitable, may expand its fleet next year as competitors shrink operations to blunt surging fuel bills, Chief Executive Officer Gary Kelly said Tuesday.

The largest low-fare airline may keep as many as 10 older planes set to be retired in 2008 and then add 14 new jets in 2009, Kelly said.

Northwest Airlines said Tuesday it will cut its capacity later this year by 3 percent to 4 percent because of high fuel prices. And United Airlines said Tuesday that its 2008 fuel bill is on pace to hit $9.5 billion based on current prices, or more than $3.5 billion higher than last year.

Also Tuesday, Air Transport Association Chief Executive Officer James May told a Senate committee that U.S. airlines may lose as much as $13 billion in 2008 as financial results will be “on par” with the industry’s worst ever.

Southwest is benefiting from its strategy to lock in fuel prices in advance. About 70 percent of its fuel needs this year are hedged at prices equivalent to oil at $51 a barrel, less than half of today’s $134.01 closing price Tuesday.

Goldman Sachs

Earnings fall but beat forecasts

Goldman Sachs, the world’s largest investment bank, on Tuesday said second-quarter earnings fell about 10 percent but still easily beat lowered Wall Street expectations on higher fees from asset management and stock underwriting.

Chief Financial Officer David Viniar said he believes that the first few weeks of March marked what most people feel was the bottom for the credit markets.

Interactive Advertising

Online-ad revenue streak comes to end

Internet-advertising revenue dipped slightly in the first quarter to about $5.8 billion, ending a streak of 13 quarters of consecutive quarterly growth.

The first-quarter figures from the Interactive Advertising Bureau still represent an increase of 18 percent from nearly $4.8 billion in the first quarter of 2007. And the fourth quarter is generally stronger because of holiday sales, so a dip between the fourth and first quarters is not unreasonable.

But the numbers suggest the overall economic slowdown might be dampening online advertising.

PricewaterhouseCoopers, which conducts a quarterly survey for the advertising trade group using data from the 15 largest online-ad sellers, sought to play down the one-quarter dip.

“The fundamentals of interactive-advertising spend continue to be positive, and I would expect to see continued growth in the future,” said David Silverman, a partner at PricewaterhouseCoopers.

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