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Closing Bell: Harley-Davidson


It has been five years since George Shaheen ran a company, but the Siebel Systems (SEBL) director found himself back on top on Apr. 13, when the board asked him to replace CEO J. Michael Lawrie, who resigned after just 11 months. Shaheen, 60, got beaten up badly the last time he was a boss. He ran online grocer Webvan, which self-destructed in 2001.

Shaheen's rise came one week after Siebel warned it will post a first-quarter loss because of weaker-than-expected software sales. Lawrie had just one bad quarter, but Chairman Thomas Siebel has a history of replacing executives rapidly.

Analysts see Siebel as a potential takeover target; the company is besieged by competition -- including SAP (SAP) and Salesforce.com (CRM). That's why many think Shaheen's best bet may be to simply find a buyer. But Shaheen insists he's no temporary CEO. "I'm here to continue to build this company," he says.

That would go a long way toward restoring his tarnished image.

A potential deal by Northwest Airlines (NWAC) to purchase up to 18 Boeing (BA) 787 jetliners, worth about $2.1 billion at list prices, could be a blow to the rival Airbus A350 jetliner. Sources say Northwest Airlines, an important Airbus customer, is in final negotiations to buy Boeing's 787, which costs 10% less to fly than similar-size airplanes. Northwest hasn't publicly confirmed the sale. If Northwest buys its first 787, it could force Airbus to rethink the A350. The latest version calls for using the same engines as the 787 and adding more weight-saving composites. But other than Air Europa, no airline has expressed serious interest in the A350. Meanwhile, Boeing has orders and commitments for 203 787s in just 15 months, not including the Northwest deal.

Ford Motor (F) investors are bracing for more bad news on Apr. 20 when first-quarter earnings appear. Analysts expect Ford to announce cuts to second-quarter output, on the heels of slashing its 2005 earnings forecast on Apr. 8 by 27%, to a range of $2.75 billion to $2.3 billion. Faced with rising steel and oil prices, soaring health-care costs, and a weak dollar, as well as tough competition, Ford says its auto operations will break even on a pretax basis, at best. CEO William Ford Jr. also admitted Ford will miss his goal of $7 billion in pretax earnings in 2006.

The odds of a congressional crackdown on loosely regulated information brokers rose with the Apr. 12 disclosure by LexisNexis that thieves may have gained access to personal records of 310,000 individuals -- 10 times higher than its estimate in March. LexisNexis said it has chronicled 59 instances over the past two years in which criminals may have obtained such data as Social Security numbers. On Apr. 13, lawmakers warned greater oversight may be coming. One idea: a federal law that brokers alert consumers when files are breached -- now required only by California.

The New York Stock Exchange isn't out of the woods yet, despite a settlement on Apr. 12 with the Securities & Exchange Commission over the Big Board's alleged failure to prevent trading abuses by member firms. The NYSE, without admitting or denying wrongdoing, agreed to underwrite an outside monitor and to videotape some traders regularly. Federal prosecutors indicted 15 top NYSE traders on charges that they cheated customers. The SEC filed civil fraud charges against the 15 and five other traders for mishandling customer orders from 1999 through 2003. Moreover, the SEC is probing possible misconduct by current or former NYSE officials who were supposed to detect and punish the abuses, which occurred before the exchange beefed up oversight. The NYSE declined to comment on the ongoing SEC investigation.

-- Stock-option expensing for most public companies is likely to be delayed until January.

-- Apple Computer's quarterly earnings soared 530%.

-- Morgan Stanley (MWD) star bankers Joseph Perella and Tarek Abdel-Meguid quit.

Harley-Davidson (HDI) shares skidded 17%, to $48.93, amid slowing growth. Harley plans to make 329,000 bikes this year -- up 12,000 from 2004, but 10,000 below earlier estimates. First-quarter profits rose 11% on a 6% jump in sales, but analysts fear a bike glut.


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