IMMIGRATION LAYOFFS: About 1,500 factory workers at American Apparel Inc.’s L.A. facility will be laid off because they were unable to prove their legal immigration status or fix other problems with their employment records, the company announced. The terminations come two months after American Apparel disclosed that federal immigration inspectors said about 1,600 workers didn’t appear to be authorized for employment in the United States and the company faced sanctions unless they were laid off. Chief Executive Dov Charney, an immigration reform advocate, said affected workers would be “given priority treatment” for positions once they are able to get their papers in order.
CUTS PLANNED: Farmers Insurance Group announced that it will slash jobs at its newly acquired 21st Century Insurance unit in Woodland Hills. L.A.-based Farmers, the state’s largest auto insurer, said it would cut 554 jobs by the end of this year, with the total reaching 750 by the end of 2010. 21st Century Insurance currently has 979 employees. Farmers bought 21st Century from American International Group Inc.
AMNESTY SUCCESS: L.A. businesses paid $18.6 million in taxes they owed to the city under an amnesty program that allowed them to avoid penalties, city officials said. The program concluded July 31, with 8,673 businesses participating. The city waived $6.7 million in penalties. Of those businesses, 394 are newly registered and are expected to provide ongoing additional revenue to the city. The money has gone into the city’s general fund.
BOYCOTT URGED: A local hotel workers union called for a boycott of the Hilton Long Beach, saying the 397-room facility has blocked efforts to unionize. Unite Here Local 11 claimed to have the support of about 90 of the hotel’s total staff of 180. The union claims hotel management has harassed workers expressing interest in organizing. Executives of the HEI Hotels & Resorts facility said the union is denying hotel workers the right to a secret ballot election by pushing for card-check voting. At least one hotel customer, the United Church for Christ, has announced it will honor the boycott and move a scheduled event to another venue. The event isn’t scheduled until 2013, according to a hotel executive.
JOINT VENTURE: The operating partnership of Macerich Co. announced a joint venture that involves a private equity firm taking over a majority ownership of one of the Santa Monica real estate investment trust’s Colorado shopping centers. Under terms of the deal, Macerich Partnership LP will receive about $116 million in cash for FlatIron Crossing, a 1.4 million-square-foot regional mall in the Denver suburb of Broomfield. GI Partners, which is based in Menlo Park and London, will get a 75 percent interest in the shopping center. Macerich said it is selling the interest in the high-performing retail property to raise cash.
ANOTHER JUDGMENT: An L.A. judge ruled that Guess Inc. co-founder Georges Marciano must pay $55 million in damages for trying to ruin the reputation of an accountant hired to investigate five former employees who later successfully sued him. The Superior Court judge ruled that accountant Gary Iskowitz “established that Marciano’s conduct was not only intentional and in reckless disregard of the probability that Iskowitz would suffer emotional distress, but was also despicable, malicious and oppressive.” An L.A. jury earlier determined Marciano must pay the five former employees $370 million in damages for defamation and emotional distress.
PARTNERSHIP DEAL: United Online Inc. announced that its FTD.com subsidiary had signed a multiyear agreement with the United Services Automobile Association to be the exclusive floral provider to the association’s 7.2 million members. USAA is a financial services group that provides banking products and shopping discounts to members of the U.S. military, former military personnel and their families.
POSSIBLE BID: Steven Udvar-Hazy, chief executive of aircraft-leasing business International Lease Finance Corp., is reportedly in talks with American International Group Inc. to buy a piece of the L.A. company amid growing frustration at AIG’s delay in selling the unit. The Wall Street Journal reported that sources said Udvar-Hazy, a co-founder of the company, is in discussions to purchase about $2 billion of the company’s aircraft portfolio and use it to start a rival business. ILFC’s fleet is valued at more than $40 billion.
SPAC DISBANDS: Santa Monica Media Corp. said its shareholders have voted to end its status as a special purpose acquisition company and distribute more than $100 million from an April 2007 initial public offering that was placed in a trust fund. The company was founded in 2005 to acquire businesses in communications, media, gaming or entertainment. Shareholders also voted to keep the company in existence to acquire media companies but without a deadline for use of IPO proceeds.
CONTRACTS AWARDED: The Pentagon announced two supply and service contacts with Northrop Grumman Corp. totaling more than $100 million. The L.A. defense contractor was awarded a $98.7 million contract to buy equipment and upgrades for several Navy aircraft. The equipment includes pods that are externally mounted on aircraft and contain technology that improves aircraft performance. Northrop also received a $13.4 million contract boost from the Air Force to upgrade its fleet of Global Hawk unmanned aerial vehicles.
DISTRIBUTION PACT: Ixia, a Calabasas technology company, announced a strategic agreement with technology distribution giant Ingram Micro Inc. that will make the company’s IxChariot test system available to customers in the United States and Canada. IxChariot simulates real-world applications, such as Internet phone and video-on-demand services, to predict a network’s performance under realistic conditions. Its customers include phone companies and communications chipmakers.
