DEFENSE

PENTAGON AWARDS $12M CONTRACT FOR BATTLEFIELD ROBOTS

SAN FRANCISCO – The Pentagon awarded $12 million in grants yesterday to develop an unmanned “trauma pod” designed to use robots to perform full scalpel-and-stitch surgeries on wounded soldiers in battlefield conditions. The researchers who pitched the Defense Department on the idea have prepared a futuristic “concept video” that seems straight out of a teen fantasy game, showing with full color and sound effects the notion that robots in unmanned vehicles can operate on soldiers under enemy fire and then evacuate them. “The main challenge is how can we get high-quality medical care onto the battlefield as close to the action and as close to the soldiers as possible,” said John Bashkin, head of business development at SRI International, a nonprofit laboratory that often handles Defense Department research. “Right now, the resources are pretty limited to what a medic can carry with him.” SRI researchers caution that the project remains at least a decade away from appearing on any battlefields. Surgeons will need to manipulate the robot in real time, using technology that prevents any delays between their commands and the robot’s actions. The “trauma pod” has to keep connected wirelessly without giving away its position to the enemy, and it has to be nimble and hardy enough to perform under fire. Still, some of the initial technology is already being put to use in hospitals, and the goal of the initial $12 million project is relatively modest – researchers hope to show that a surgeon, operating the robot remotely, can stitch together two blood vessels of a pig.

– Associated Press

INSURANCE

SEC SUBPOENAS AIG EXECUTIVES AS CHAIRMAN RESIGNS

WASHINGTON – The Securities and Exchange Commission has sent subpoenas to a dozen executives at American International Group Incorporated amid several probes into whether questionable transactions were used to improperly bolster the insurance titan’s financial standing, a person familiar with the matter said yesterday. The person, speaking on condition of anonymity and confirming a report yesterday in The Wall Street Journal, also said federal investigators were aware of 10 transactions that warranted review. Also yesterday, Maurice “Hank” Greenberg has decided to retire as chairman of AIG, ending a four-decade career with the insurance company, according to a newspaper report. Mr. Greenberg’s departure from the insurer, expected to take effect within days, comes two weeks after AIG ousted him as CEO, The Wall Street Journal reported last night on its Web site, citing people familiar with the matter. There had been widespread speculation about how long AIG would continue its relationship with Greenberg. An AIG spokesman did not immediately return a call seeking comment.

– Associated Press

SOFTWARE

MICROSOFT TO COMPLY WITH E.U. ANTI-TRUST JUDGEMENT

BRUSSELS, Belgium – Microsoft Corporation said yesterday it would use an “N” to designate Windows XP versions stripped of the company’s media player to comply with an anti-trust judgment from the European Union. The agreement with the EU came after anti-trust regulators rejected Microsoft’s first choice, “Windows XP Reduced Media Edition,” on grounds it would discourage sales and mislead customers. The player-free operating system will simply go by “Windows XP Home Edition N” and “Windows XP Professional Edition N” – the “N” standing for “not with media player.” A year ago, EU regulators ordered Microsoft to produce for European consumers a version of Windows without media player software for viewing video and listening to audio. Regulators had ruled that Microsoft abusively wielded its monopoly to lock out competitors, such as RealNetworks and its Real Player software. Microsoft also was fined a record $665 million and ordered to share some software blueprints. The Redmond, Wash.-based company is appealing. Microsoft’s top lawyer in Europe, Horacio Gutierrez, said company officials “have some misgivings” about the new name, but decided to cooperate “in order to move forward and accelerate the pace of the implementation process.”

– Associated Press

TELECOMMUNICATIONS

QWEST GIVES MCI A WEEK TO DECIDE ON VERIZON MERGER

Qwest issued a deadline to MCI yesterday, giving the long-distance telephone company one week to decide if it will jilt merger partner Verizon in favor of a richer buyout proposal from Qwest. The ultimatum was delivered in a letter to MCI’s board that also said Qwest Communications International lenders have committed an extra $500 million in financing to back the $8.45 billion bid, which is currently worth $1.9 billion more than the Verizon deal. MCI, formerly known as WorldCom, declined to comment on the letter or on whether a week of negotiations with Qwest had proven fruitful. The MCI board met yesterday, but it was unclear whether any announcements were imminent. Verizon Communications agreed last week to give MCI until the end of yesterday to meet with Qwest. There was no requirement, however, that MCI immediately issue a verdict on those talks or on Qwest’s efforts to dispel worries that its financial ailments make its higher bid too risky to accept. Qwest’s letter said it now has $5.75 billion worth of outside financial backing and has submitted a revised proposal to MCI.

– Associated Press

REGULATION

GE SHOULD LET SHAREHOLDERS VOTE TO STOP ANIMAL TESTING, SEC SAYS

STAMFORD, Conn. – General Electric should allow shareholders to vote on a proposal by an animal rights group to stop animal testing, the Securities and Exchange Commission said. GE is the latest of several major companies hit with similar advisory opinions from the commission’s staff. People for the Ethical Treatment of Animals also won cases against Dow Chemical, 3M, Johnson & Johnson, and Schering-Plough. “We are pleased that the SEC agrees with us that shareholders have a right to vote on important issues affecting their investments,” PETA’s senior vice president, Mary Beth Sweetland, said Friday. “With caring consumers now boycotting companies that conduct animal tests, adopting progressive, humane alternatives can have a significant impact on a company’s bottom line,” she said. The proposal, which will be on the agenda at GE’s annual meeting next month, calls for the company to replace animal-based tests with non-animal methods. PETA said it wants to replace five common tests that involve injecting animals with drugs or applying chemicals to their skin without painkillers with non-animal test methods using human cells and human blood. The proposal was rejected last year.

– Associated Press

RETAIL

WALGREEN SHARES SLIP

CHICAGO – Walgreen shares slipped yesterday as escalating expenses related to the drugstore chain’s digital photo labs overshadowed a 13.7% increase in earnings. The cost of converting its photo-processing labs to a digital format partly offset continued strength in pharmacy sales and a solid holiday shopping season at the nation’s largest drugstore chain. Net profits for the December-through-February period were $490.9 million, or 48 cents a share, up from $431.6 million, or 42 cents a share, a year earlier, the company said yesterday. Excluding a gain of $4.7 million from litigation settlements, Walgreen’s earnings were $487.9 million, or 47 cents a share – a penny below the average estimate of analysts surveyed by Thomson First Call.

– Associated Press

FOOD

JAPAN MAY REOPEN MARKET TO AMERICAN BEEF

TOKYO – Japan’s food safety panel ruled yesterday that relaxing domestic cattle testing standards for mad cow disease won’t put consumers at risk, raising the possibility that Tokyo will reopen its lucrative market to American beef imports. The Food Safety Commission found that tests for the fatal bovine illness on cattle aged 20 months or younger were unable to detect the proteins linked to the fatal bovine illness. Scientists believe the proteins associated with mad cow disease do not accumulate in cows that young. Still, scientists don’t know enough about the disease to rule out risk completely, the panel said in a statement, which urged Tokyo to improve testing methods. Japan banned American beef imports in December 2003 after the discovery of America’s first case of mad cow disease.

– Associated Press