EXECUTIVES

FORD’S SCHEELE TO RETIRE; CFO LECLAIR EXPANDS DUTIES

Ford Motor Company President Nick Scheele, who was summoned from Europe to America three years ago to help stop losses, will retire February 1 as part of a transition Chief Executive William Clay Ford Jr. began eight months ago.

The chief operating officer, Jim Padilla, 58, will succeed Mr. Scheele as president, the company said yesterday in a statement. Ford Motor set the stage for the move in April when Mr. Scheele yielded the COO title to Mr. Padilla.

In his first three years as CEO, Bill Ford turned to veteran executives such as Mr. Scheele, who turns 61 next month, and Vice Chairman Allan Gilmour, 70, who is also retiring February 1. Below Mr. Padilla, eight executives ranging in age from 39 to 55 received promotions or additional duties today. One, Don LeClair,52, succeeds Mr. Gilmour in overseeing Ford’s consumer credit unit, the chief source of its profits.

Bill Ford tapped Mr. Scheele to be his president and COO in October 2001 to soothe relations with the automaker’s employees, dealers, and suppliers. He asked Mr. Gilmour to come out of retirement to improve the automaker’s financial reporting and relations with investors. Mr. Gilmour initially returned as chief financial officer while looking for his own replacement.

– Bloomberg News

HARLEY CHIEF BLEUSTEIN TO RETIRE, REMAIN CHAIRMAN

Jeffrey Bleustein, one of 13 executives who bought Harley-Davidson from AMF in 1981 and helped boost its stock price fivefold as chief executive, will retire in April.

Mr. Bleustein, 65, who joined the company 29 years ago and became chief executive in 1997, will remain chairman, the company said in a statement. Chief Financial Officer James L. Ziemer, 54, will replace Bleustein next year, the company said.

Harley-Davidson’s revenue climbed to $4.6 billion last year from $1.5 billion in 1996, the year before he took over as CEO, and net income rose to $761 million from $143 million, part of 18 straight years of record sales and earnings. Mr. Bleustein in 1987 helped the Milwaukee-based company regain its position as the top American maker of heavyweight motorcycles.

The company, which makes about half of all motorcycles with 650cc or larger engines sold in the U.S. and one in four worldwide, has said it will build 317,000 of its namesake cruisers this year, 8.9% more than in 2003.

– Bloomberg News

IN THE COURTS

BDO MEMO IS ‘SMOKING GUN’ PROVING FRAUD, LAWYERS SAY

Lawyers suing BDO Seidman LLP, the world’s no. 5 accounting firm, say they found a “smoking gun” memo that shows BDO promoted a tax shelter even after learning the Internal Revenue Service had ruled it was illegal.

BDO, along with Jenkens & Gilchrist, a Dallas-based law firm, and others are accused in a lawsuit of selling sham tax investments to generate millions of dollars in fees. The plaintiffs, who owe back taxes, are seeking damages.

In March, Jenkens & Gilchrist agreed to pay $75 million to more than 1,100 people who bought the shelters to settle its part of the case.

After settling, Jenkens gave documents to lawyers for the plaintiffs, according to court papers. In one of them, an August 11, 2000 memo filed with the court, BDO principal Michael Kerekes said of a new IRS pronouncement, “Our transactions may be potentially-abusive tax shelters under the new rules.”

Plaintiffs’ lawyer David Deary says in a legal filing in New York that the Mr. Kerekes memo “is a smoking gun that demonstrates BDO knew it was engaged in a fraudulent scheme.”

According to the complaint, BDO continued to tout the shelter, known as COBRA, after August 11, 2000.

BDO, a member firm of BDO International, said in a statement that it wouldn’t comment on the substance of the memo because the document is a privileged communication between attorney and client that shouldn’t be allowed into evidence.

– Bloomberg News

DISNEY EX-DIRECTOR SAYS OVITZ TENURE WAS LIKE CANCER

A former Walt Disney Company director told a judge that former President Michael Ovitz’s tenure at the company was “like a cancer” and that the chief executive, Michael Eisner, was justified in firing him.

Thomas Murphy, who served on the Disney board from April 1996 through November 2003, yesterday said he “absolutely” agreed with Mr. Eisner’s decision to fire Mr. Ovitz after only 15 months on the job and thought it was “the right thing to do.”

“He was just not working out,” said Mr. Murphy, testifying in the Georgetown, Del., trial of a shareholder lawsuit seeking the return of Mr. Ovitz’s $140 million severance to the company. “It was like a cancer in the organization to have someone in that high a position and it just not working out.”

Mr. Eisner hired Mr. Ovitz, a former talent agent who represented stars including Tom Cruise and Kevin Costner, in mid-1995 and fired him in December 1996. Disney investors claim former and current Disney directors should be held financially responsible for Mr. Ovitz’s severance because they failed to oversee his hiring and firing properly. Messrs. Eisner and Ovitz are also defendants.

In pretrial depositions, Eisner, 62, said the firing was necessary because Ovitz never fully made the transition to a corporate executive and alienated colleagues inside the company. Eisner testified in court earlier in the seven-week-old trial that the severance was contractually required.

Former director Ignacio Lozano yesterday told Judge William Chandler that the firing was “in the best interest of everyone including Disney shareholders and employees.

– Bloomberg News

PHARMECEUTICALS

PFIZER WILL ADD HEART WARNING FOR BEXTRA, FDA SAYS

Pfizer Inc. will warn doctors that its Bextra painkiller, which is similar to Merck & Company’s withdrawn Vioxx, is linked to an elevated risk of blood clots, heart attacks and strokes, American regulators said.

Pfizer, the world’s biggest drug maker, also will strengthen existing warnings of a potentially fatal skin reaction to Bextra, the Food and Drug Administration said yesterday in a posting on its Web site.

Bextra is one of five drugs that FDA reviewer David Graham identified as unsafe at a November 18 Senate hearing. A study of more than 1,500 cardiac-surgery patients found that those treated with Bextra were more likely to have heart attacks, strokes and blood clots in their legs and lungs than those who didn’t take the drug, the FDA said.

“FDA will continue to monitor the side effects related to Bextra and take additional actions as appropriate,” the agency said in a statement.

Bextra is part of a class of painkillers that inhibit the body’s production of the Cox-2 enzyme, which is linked to pain and swelling. The group also includes Merck’s Vioxx, withdrawn September 30 in the biggest drug recall ever after a company study showed patients taking it 18 months or longer had twice the risk of heart attacks and strokes as those taking a placebo.

– Bloomberg News

NATIONAL

TYCO’S DIVIDEND BOOST MAY SIGNAL ROSY PROSPECTS

Tyco International hadn’t raised its dividend in a dozen years, but the New Jersey-based company made up for lost time Thursday with an eightfold increase in its payout.

Tyco will now pay a quarterly dividend of 10 cents a share, up from just 1.25 cents a share previously. Its last dividend increase was late in 1992 when Tyco raised it to 10 cents a share, which turned into 1.25 cents since, due to three two-for-one stock splits from late 1995 through late 1999. The move seems a clear indication that the conglomerate’s management sees a bright future ahead. Perhaps more importantly, the boost might signal that Tyco feels the woes of its recent past – brought on by the tarnished regime of former top executive L. Dennis Kozlowski – are largely behind it.

Tyco on Thursday also backed its outlook for both its fiscal first quarter and full year. Most importantly, as it relates to Tyco’s ability to sustain the new 10-cent quarterly dividend, the Princeton, N.J.-based company said it sees about $7 billion in cash from operating activities and more than $4.5 billion in free cash flow for fiscal 2005. Such vibrant cash-flow could underscore Tyco’s comments last month indicating it completed restructuring moves, like exiting several businesses, ahead of plan and with more benefits than expected.

– Dow Jones Newswires