The Washington Post leads with the ruling yesterday of a federal appeals court that the antitrust case against Microsoft proceed despite the company's request that the Supreme Court discard the case entirely. Microsoft made the appeal based on what it called the "biased and unethical" actions of the trial court judge who met with reporters to discuss the case before ruling, in early June, to break the company in two (WP). The New York Times fronts Microsoft, but leads with the Ford Motor Co.'s announcement yesterday that it plans to cut 5,000 jobs in North America and slow its production of cars and light trucks in the fall by around 8 percent, with further cutbacks possible at the end of the year. The Los Angeles Times online version stuffs Ford's woes in the business section and Microsoft's in the tech pages, and goes instead with a report that the State Department has been hiring foreign pilots via private contractors in Colombia to aid in the anti-drug campaign there. State has done this to dodge congressional rules that limit to 300 the number of civilians that can be hired by private contractors participating in the drug-war in Colombia. Apparently, the rules only count U.S. citizens toward that limit, so State's private contractors have been hiring foreign pilots and not counting them. Members of Congress see this as a sneaky bypassing of their intent and worry that these actions may escalate U.S. involvement in a volatile country plagued by a decadeslong civil war. The LAT front-page layout was unavailable when Today's Papers went to press.
The coverage agrees that the Microsoft ruling is a victory for federal prosecutors. The NYT says the one-paragraph ruling "took a swipe" at Microsoft's argument that the trial be chucked, stating that Microsoft "has misconstrued" its opinion in arguing that the judge's alleged ethical violation justified "vacating the district court's finding of fact and conclusions of law." Next week, the case will move to U.S. District Court in Washington for the "remedy" phase, when a new judge will be selected to decide on measures to rectify the company's business practices. The coverage stresses the prosecutors' concern that Microsoft Windows XP, its new operating system set to debut in October, will repeat "some of the anti-competitive behavior that sparked the first case" (WP). But, according to WP sources, prosecutors will be unlikely ask the court to block the release of XP because the computer industry is hoping the product will revive the its sagging sales. The NYT coverage adds that Microsoft's stock dropped 4 percent yesterday.
After a summer of relatively strong sales for the Big Three, buoyed by reduced interest rates, Ford, GM, and Chrysler are now experiencing a slump that has them "concerned." The Big Three have suffered from the relative strength of the dollar, which has allowed foreign companies to underprice them, and Ford, the NYT explains, has been hit especially hard because it has "a shrinking share of the shrinking auto market." The company will downsize its workforce by offering early retirement packages to its managers and engineers, a plan that will cost around $700 million but is estimated to save Ford nearly $300 million a year. The report refers to economists who speculate that reduced auto production, "rather than pulling the American economy along, is turning into a brake on growth that could help drag the nation into a recession" (NYT).
A related NYT front-pager notes that Ford's problems surfaced during a rather crummy day on Wall Street, where stocks fell sharply and broadly among big-name companies like Dell Computer, Microsoft, Intel, GM, and Gap. Analysts suggest investors were skittish about the bad news from corporate America and wary of buying stock before the Fed's meeting on Tuesday, when it is expected to cut interest rates for the seventh time this year.
The WP goes above the fold with an unsettling report on a rash of recent incidents and allegations of brutal beatings and torture of Palestinian civilians--mostly teen-agers--by Israeli police. The report explains that both Israeli and Palestinian human rights organizations find the alleged brutality "credible," and many Israelis see it as part of a "widening mentality of occupation" in the region. These abuses, warns the WP, are starting to undermine Israel's ability "to fulfill its own ambitions to be the Middle East's only democracy with Western-style rights guarantees."
The papers all go inside with the resignation, after seven months on the job, of the director of Bush's controversial Office of Faith-Based and Community Initiatives, John J. DiIulio. The coverage notes that DiIulio had only expected to steer the program for six months, and assumed that the initiative would be swiftly enacted by Congress. Instead, the House passed a downsized version of the plan on a party-line vote, and the bill now awaits further tinkering by Senate Demos. DiIulio explained his resignation by saying that he had completed his proposed tenure and goals but also that the job had begun to take a toll on his health and family life. The coverage agrees that DiIulio's job as a lone Democrat heading up the signature social program of a Republican White House was a tough one at best. According to DiIulio's backers, his "consensus-building" approach was resisted by religious conservatives who then hijacked the initiative from the political center where it originated.
The WP goes inside with news that Joseph J. Ellis, a Pulitzer Prize-winning history professor who last June was exposed by the Boston Globe for lying about being a Vietnam combat veteran, has been suspended from Mount Holyoke College for one year without pay, and will also give up his endowed chair. The college's president explained that Ellis would return to campus next year after a time of "reflection and repair." In a statement released yesterday, Ellis apologized for his actions, which he called "both stupid and wrong," and said he would use the year off to reflect and start work on a new book. Ellis has not yet announced whether the book will be nonfiction or fiction, but he has demonstrated a considerable knack for both.