Star Tribune from Minneapolis, Minnesota • Page D1

RWBGY X1234567 business STARTRIBUNE.COM/BUSINESS SATURDAY, SEPTEMBER 9, 2006 SECTION FRAUD INDICTMENT The CEO of an Eden Prairie wireless data transmission company has been indicted on fraud charges by a federal grand jury. D3 HP CHAIRWOMAN CONDEMNS PROBE Battling to keep her job, Hewlett-Packard Chairwoman Patricia Dunn tried to defuse the uproar over a company investigation that relied on a potentially illegal ruse to obtain the personal phone records of her fellow directors and at least nine reporters. D3 SATURDAY HOMES Home incentives: Too good to be By CHRIS SERRES ick Potts braced himself for disappointment on his maiden trip to the store on Nicollet Mall, which as of this morning is officially no longer Marshall Potts, 26, an architectural intern and founder of the now-closed protest website www.keepitfields.org, expected a cookie- cutter store with cheaper designer knock- offs. But relieved that kept much of the store intact, including the downstairs marketplace and second-floor barbershop. I like all the changes? No.

Am I coming back? Potts said as he fingered a rack of dress shirts. That Potts would even consider shopping at is just one telling sign that the switch from Marshall may not be the public relations disaster that many retail pundits predicted. Even in Chicago, where passions for are highest, shoppers on Friday continued to pour into the flagship store on State Street. But were it not for the aggressive lobbying of management in Minneapolis, the outcome could have been very different. In meetings last fall, former Chief Executive Frank Guzzetta pushed to keep many of core traditions, including the lavish holiday display, flower show, Frango mints and decorative window displays.

I fought for most is remaining said Guzzetta, now chairman and CEO of North, which oversees 63 stores. hard to fight for, in a way, because Federated wanted a national department store with a local flavor to A year ago, the mood at Marshall headquarters on Nicollet Mall was decidedly less relaxed than it is now. Federated Department Stores Inc. of Cincinnati had just acquired parent company. 8 How was able to salvage some of Marshall most-loved traditions.

Familiar feel to By THOMAS LEE A few weeks ago, Ed Buechel, manager of the at the Mall of America, left the store to grab a Coke. That sounds like a relatively easy task, but this being the Mall of America, Buechel had to bump elbows with the huge crowds that normally swarm the mall on a Saturday afternoon. For Buechel, his job suddenly became blindingly clear: how to get all of those people roaming outside his store to come into his store. this was another mall on a weekend where there was no traffic, you would have an Buechel said. the traffic is Today, Federated Department Stores Inc.

officially converts Marshall stores to But during the past few months, Buechel has been trying to bring a little Marshall to his a strategy Federated hopes will boost sales at the store that has become more of an afterthought for Twin Cities shoppers despite its famous location. Among the things the mall store has borrowed from the Marshall playbook: more upscale national brands, culinary services, two new restaurants, and yes, Frango mints. always get that Federated wanted to change to look more like Marshall said Frank Guzzetta, chairman of the North division and former leader of Marshall The at the Mall of America poses a special dilemma for Federated. About 40 percent of its customers are tourists. That means the store must stock merchandise that appeals to out-of-towners and locals.

8 As Marshall stores become today, the once-lone Minnesota at the MOA is getting a face-lift to make it less like a standard and more like, well, a Marshall JONES Michelle Prior waited for a friend Friday in one of the remodeled fitting room areas at at the Mall of America. The question facing company executives is how the store, once the lone Minnesota will stand out from the 60 Marshall that are now Megamall A AT THE MALL OF AMERICA New national brands, including Anne Klein, Kenneth Cole, Karen Kane, Jospeh Abboud Next spring, a sit- down restaurant and grab-and-go-outlet Sunglass Hut Culinary services 2,400 winter coats, about three times more than found in previous selections continues: Loyal shoppers talked of a possible boycott of D4 Frank Guzzetta Dow 60.67 11,392.11 Nasdaq 10.50 2,165.79 500 4.90 1,298.92 NYSE 6.83 8,294.64 ST100 1.47 159.42 Gold (oz.) $7.60 $617.30 Oil (bbl.) $1.07 $66.25 3-month T-bill 4.92% 2-year T-note 4.81% 10-year T-note 4.77% 30-year T-bond 4.92% Prime rate 8.25% LIBOR 1 month 5.330% U.S. dollar 0.7889 euro 0.0032) 116.87 yen 0.47) Newspaper companies and cereal companies have something in common: They are often shared over the breakfast table by loyal customers. They also are mature businesses that have turned to big acquisitions and brand extensions, such as Internet editions or fruit-laced Cheerios, in search of growth. And not always easy.

General Mills, which bought Pillsbury a few years ago, suffered a big case of shareholder heartburn en route to the eventual digestion of its crosstown rival and improved financial health. Now that the McClatchy acquisition of Knight Ridder Inc. (owner of the St. Paul Pioneer Press) has gone through, see if big gamble pays off similarly. So far the returns have not been promising.

stock is down nearly 19 percent this year and nearly 40 percent over the past 12 months. a bigger decline than its rivals have had in an out-of-favor industry. The still out on big deal ON BUSINESS NEAL ST. ANTHONY St. Anthony continues onD4 Job 1 for Ford CEO is learning on the fly By TOM KRISHER Associated Press DETROIT In an ideal world, the CEO of Ford Motor Co.

should know all the details of a restructuring plan that is critical to the future. But world is far from ideal these days, and as its executives head into board meeting to present what most likely will be a deeper round of cuts and faster new product introductions, new CEO Alan Mulally know the intricacies. because much of it was drawn up under Mark Fields, president for the Americas, while Mulally was being wooed away from Boeing Co. during the summer. Shortly after announcing appointment as president, CEO and a board member last week, now-Executive Chairman Bill Ford said that Mulally will be able to make changes in the plan after presented.

While an odd way to do business, some industry observers say the only way Ford can react. got a crisis over there, and things going to happen the way they teach you in business said Gerald Meyers, former chairman of American Motors Corp. who now teaches leadership at the University of Michigan. The company has too much factory space and too many workers for its reduced market share to support. has to take certain actions to reduce costs immediately due to the losses incurred this said Charles Moore, managing director of the corporate turn- around firm of Conway, MacKenzie and Dunleavy in Birmingham, Mich.

wait for the new CEO to get up to In a filing with the Securities and Exchange Commission, Ford said Friday that Mulally will get an annual base salary of $2 million and an immediate payout of $18.5 million for taking the chief executive job. That includes a $7.5 million hiring bonus, and Ford will pay him $11 million to offset forfeited performance and stock option awards from Boeing. Ford also granted Mulally 4 million stock options and 600,000 restricted stock units. 8 The board will consider a new round of restructuring and job cuts just days after CEO arrival on the job. Alan Mulally Bill Ford Ford continues: The automaker lost $1.4 billion in the first half of D3 Facebook answers privacy complaints By ANICK JESDANUN Associated Press NEW YORK Users of the online hangout Facebook revolted and won as the site agreed Friday to let them turn off a new feature that drew privacy complaints because it lets others easily see changes made to their personal profile pages.

really messed this one chief executive, Mark Zuckerberg, said in an open letter to users. The backlash came over Face- decision Monday to deliver automated, customized alerts about a closest friends, classmates and colleagues. Users who log on might instantly find out that someone they know has joined a new social group, posted more photos or begun dating their best friend. All of the information presented had been available before, but a person had to visit a profile page and make note of any changes for example, noticing that the friend now has 103 friends instead of 102, and identifying which one got added. The feature was meant to help users save time.

Instead, Facebook saw thousands of users joining protest groups on the site and signing online petitions. A Web journal was even set up calling for users to boycott the site next Tuesday. The boycott was called off Friday, as was a protest Monday outside the headquarters in Palo Alto, Calif. 8 The Web-based hangout provided options for users who protested a new feature that made personal information too freely available. Facebook continues: Additional privacy options let users block entire information categories from feeds.

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