Washington Mutual Inc. secured $7 billion in new capital Tuesday, an injection that is aimed at reviving the company despite ballooning loan losses but which may also push it to rethink its strategy, slim down and revamp the management.
The thrift said it will get out of the wholesale lending business, close all remaining standalone home loan centers and lay off about 3,000 workers.
Bank spokeswoman Darcy Wilmot said the Spokane loan office in the Liberty Building will close at the end of the month, as will 185 other offices around the country. There are 23 in Washington, none in Idaho.
Wilmot said she did not know how many employees would be affected but that some would be placed in bank branches, where home loans will still be available.
“Customers are not going to notice anything,” she said.
The country’s largest savings and loan has been badly hurt by rising delinquencies and defaults on mortgages, and efforts last year to rehabilitate its finances fell short despite assurances from management that slashing its dividend, raising nearly $3 billion in a stock sale and leaving the subprime mortgage business would be sufficient.
Washington Mutual said it would get the new capital from an investment group led by private equity group TPG, but will cut its dividend again and post both a wider loss and set aside more in loan loss provisions for the first quarter than had been expected. TPG founding partner David Bonderman, a former WaMu director, will also rejoin the board.
– From staff and wire reports
Itron announces ASL contract
Itron Inc. on Wednesday announced a $250,000 donation to the Applied Sciences Laboratory, and a $450,000, three-year contract for material science research.
Chairman LeRoy Nosbaum said Itron-made meters and meter-reading equipment operate in some of the harshest environments. New materials might help assure the devices work for 20 years despite heat up to 185 degrees and down to minus 40 degrees Fahrenheit, he said.
Many are also under water for months at a time, Nosbaum said.
Itron, with $1.8 billion in revenues projected for 2008, could do material research in-house, he said, but the cost would be “really painful.”
“This partnership allows us to move more quickly from research to real-world application,” Nosbaum said.
The study of advanced materials is a specialty at ASL, a 2004 spinoff of the Institute for Shock Physics at Washington State University. Much of its research has been financed by the U.S. Department of Defense, but Itron is on a short but growing list of private-sector clients.
“Working with corporations is an important aspect of ASL’s mission,” founder Yogendra Gupta said. “Itron’s support and involvement will ensure that our research efforts have an impact around the globe.”
Itron’s gift will be matched by The Harriet Cheney Cowles Foundation, which is funded by the Cowles Co., whose holdings include The Spokesman-Review.
– Bert Caldwell