Pacific Northwest The contest between Boeing and Northrop Grumman for a $40 billion contract to provide aerial-refueling tankers to the...

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Pacific Northwest

Defense

The contest between Boeing and Northrop Grumman for a $40 billion contract to provide aerial-refueling tankers to the U.S. Air Force will officially begin again today, according to a Pentagon statement.

The companies will receive a draft proposal for contract bids, the statement said. The Pentagon scheduled a news conference for 3 p.m. Washington time to explain the proposal.

The companies will review the draft and submit comments, which the Pentagon will incorporate into a request for bids on the contract with the intent of making a decision by December.

The U.S. Government Accountability Office said in June that the Air Force made “significant errors” in choosing Northrop Grumman and partner European Aeronautic, Defence & Space over Boeing for the tanker contract. Without those mistakes, Boeing would have had a “substantial chance” of winning the contract, the GAO said.

Aerospace

Boeing offers boost in lowest wages

In Boeing’s contract negotiations with the International Association of Machinists (IAM) union, the company Monday offered a $1.28-per-hour increase to its wage-scale minimums. It did not lay out any general wage increase for those earning above the minimums, promising that later.

In a message to managers detailing the proposal, Boeing top negotiator Doug Kight said the talks are making “good progress.” But the IAM response was negative, saying that the offer “fell far short of union expectations.”

The union sent a message to members pointing out that Boeing hasn’t raised its minimum-wage levels since 1992, and that in the intervening period, the state’s minimum wage has gone up $3.82 per hour.

The proposed change to the minimum wage would mainly boost entry-level wages for future hires and affect relatively few current employees.

Software

IBM suite will exclude Microsoft

International Business Machines is designing a package of programs that let users run personal computers without using any products from Microsoft.

Canonical, Novell and Red Hat will help create a suite that includes the free Linux operating software and IBM’s Lotus Notes and programs for e-mail, IBM said in a statement Tuesday. The product will cost at least 30 percent less than a PC that uses Microsoft’s Windows operating system, IBM said.

Entertainment

Sony buying out BMG music partner

Sony said Tuesday it is buying Bertelsmann out of their 50-50 music venture Sony BMG for $900 million, giving it full ownership of a roster of artists including Alicia Keys and the increased ability to leverage music over an array of electronic devices.

In a filing with the Securities and Exchange Commission, the Japanese electronics and entertainment giant said it would pay Bertelsmann $600 million and give it all of the $600 million in cash holdings of the joint venture.

Since privately owned Bertelsmann already owned $300 million of that sum, the deal is valued at $900 million.

Consumer products

P&G cleans up in 4th quarter

Procter & Gamble reported a 33 percent jump in fourth-quarter profit Tuesday as the consumer-products maker battles soaring energy and commodity costs with higher prices and product improvements.

P&G said results were also helped by good growth in developing markets such as China and Russia, the weaker dollar, and cost-cutting efforts.

The maker of Tide detergent, Olay skin care and Pampers diapers said it earned $3.02 billion, or 92 cents a share, up from $2.27 billion, or 67 cents a share, a year earlier. Excluding tax benefits, P&G earned 80 cents a share.

Shares of P&G, one of the 30 Dow industrials, rallied $2.15 to $67.97.

Computer networks

Cisco’s quarterly profit beats forecasts

Cisco Systems reported a 4 percent increase in quarterly profit Tuesday, beating analysts’ expectations by a penny per share, but signaled that the weak economy would affect results in the next few quarters.

The world’s largest maker of computer-networking gear said it earned $2.01 billion, or 33 cents a share, in the three months ended July 25, its fiscal fourth quarter. In the same period last year, Cisco earned $1.93 billion, or 31 cents a share.

Sales rose 10 percent to $10.4 billion.

Cisco shares rose 66 cents to close at $22.65.

Aviation

Delta to offer Wi-Fi on flights this fall

Delta announced Tuesday that it would begin selling wireless Internet service on its domestic flights this fall.

The airline expects to outfit 330 planes by next summer, making it the first major U.S. carrier to offer Wi-Fi on its entire domestic fleet (not including regional subsidiaries such as its Comair service).

Delta will use Aircell’s Gogo service. The service will cost a flat fee of $9.95 for flights three hours or less and $12.95 for flights more than three hours. Delta will offer it first on its MD-88 and MD-90 planes and expand to its Boeing 737s, 757s and 767s by next summer, the company said.

American Airlines has been testing Gogo and plans to offer it on selected flights. Virgin America also will be offering the service, according to Aircell.

Boeing terminated its Connexion Internet system for airlines in late 2006.

Retail

Slump, acquisition slow Whole Foods

Whole Foods Market says its third-quarter profit dropped about 30 percent due largely to costs associated with its acquisition of Wild Oats and a tough economy that hurt consumer spending.

The company reported Tuesday that it earned $33.9 million, or 24 cents a share, for the fiscal quarter ended July 6, down from $49.1 million, or 35 cents a share, in the same quarter last year.

Whole Foods reported revenue of $1.84 billion for the quarter, up from $1.51 billion for the same quarter of the prior year.

The results fell short of Wall Street’s expectations. Analysts had expected a profit of 31 cents a share on revenue of $1.9 billion.

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