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Second isle plan boots Putnam

A second Hawaii government workers' retirement plan is pulling out of Putnam Investments. Trustees of the state Deferred Compensation Plan voted yesterday to take $43 million out of a mutual fund managed by Putnam and place it with a new manager.

The fund, which operates as the Island Savings Plan, is a $1 billion tax-deferred savings plan for employees of the state government and all the counties except the City & County of Honolulu. It is a supplement or alternative to the state Employees' Retirement System, which voted Nov. 7 to remove more than $400 million from Putnam's management.

Kathleen Watanabe, state human resources director and chairwoman of the Deferred Compensation Fund's trustees, said yesterday the fund has an agreement with a new manager, but because the terms are still being negotiated she cannot disclose the name.

The bigger ERS fund, which has nearly $8 billion with various managers, will hear proposals Friday from four managers seeking to replace Putnam and another fund, Alliance Bernstein, which was dropped because of poor returns on its investments.

Putnam was dropped because of a disclosure that it had allowed outsiders and its own managers several years ago to engage in market timing, a practice that allows quick trades that skim profits from longer-term investors.

Longs' stock rises on buyout talk

Shares of Longs Drug Stores Corp., which operates 467 stores in Hawaii and on the West Coast, rose as much as 17 percent on speculation the company may be acquired, an investor said.

Longs spokeswoman Phyllis Proffer said the retailer doesn't comment on rumor.

In May, Business Week magazine reported that Longs may receive a buyout offer from the Safeway Inc. supermarket chain. Shares of Longs closed up $2.23 to $24.12 on above average volume of 3 million shares. They are up 16.3 percent this year.

Honolulu-Osaka service to return

Northwest Airlines will resume the daily Osaka-Honolulu service it suspended on Oct. 1. The airline said the service will restart April 28, using a McDonnell-Douglas DC10-30 aircraft, with 243 seats in coach and 26 seats in business class.

Northwest said it will be a seasonal service, operating through the spring and summer from Kansai International Airport.

Under an alliance with Hawaiian Airlines, Northwest's passengers in the Japan service can accumulate frequent-flyer miles on Hawaiian's interisland flights.

Aloha switches mid-Pacific planes

Aloha Airlines will bring its long-range Boeing 737-700 jets into its mid-Pacific service starting Dec. 4, flying between Honolulu and the Marshall Islands destinations of Kwajalein and Majuro.

The change was made because Johnston Atoll was recently closed to air traffic as part of its cleanup from being a chemical weapons dump.

The result, Aloha said, was to cut Johnston, switch planes and go to Kwajalein and then Majuro. That meant a change to the longer-range 737-700 from the 737-200 it has been using to the Marshalls since 1999. The new Flight 351 will leave Honolulu on Mondays and Thursdays at 3 p.m.

Hawaii koa company to open Waikiki outlet

Upscale Hawaii furniture maker Martin & MacArthur is expanding its retail presence into Waikiki.

Its line of koa furniture and handcrafted works by hundreds of island artisans will be offered in the company's new retail space in the Hyatt Regency Waikiki beginning next month. No specific date was given.

The street-level, oceanfront showroom across from the statue of Duke Kahanamoku will be the fifth retail location for the kamaaina woodworking company. Its others are in Aloha Tower Marketplace and Ala Moana Center on Oahu and Whaler's Village and the Shops at Wailea on Maui.

Senators urge SEC head to pursue fund abuses

WASHINGTON >> Senators urged the head of the Securities and Exchange Commission yesterday to end a turf war with state regulators and go after mutual fund abuses.

At the same time, Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow cautioned Congress against passing mutual fund reforms that could cost investors more in fees and diminished returns. It was the first public statement by Greenspan and Snow on proposed legislation to deal with mutual fund abuses. Several senators and House members of both parties are proposing measures to overhaul the way the $7 trillion industry operates.

In other news ...

>> An administrative law judge yesterday advised state energy regulators to reject crucial elements of a proposed $7.2 billion bailout of Pacific Gas and Electric, raising doubts about the bankrupt utility's comeback plans.

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[Hawaii Inc.]

RECOGNITION

>> The American Chamber of Commerce in Okinawa, Japan, will honor its first president, Honolulu resident Cliff Coleman. He is a broadcaster, retired insurance broker and was a lieutenant in the U. S. Occupying Army in Japan during the cessation of hostilities in World War II.

>> In support of National Employ the Older Worker Week, Experience Works honored 80-year-old Faith Nakano as Hawaii's outstanding older worker for 2003. She recently celebrated 60 years of employment at Shriners Hospital for Children. When she started at the hospital in 1942 upon graduation from nursing school, she cared for polio patients before moving to the operating room, where she worked for 38 years and was instrumental in establishing pre-surgery procedures. She has worked for the past 18 years in the medical records division as a health information services clerk, tracking patient charts to ensure information has been recorded correctly. Experience Works is a training and employment services agency for mature workers.

NEW JOBS

>> Dennis Tulang has joined Hawaii consulting engineering firm M&E Pacific Inc. as a senior project manager. He will supervise all of the company's water, wastewater and environmental projects. He has more than 30 years of wastewater and environmental engineering experience. Prior to joining the company, he was the state Department of Health Wastewater Branch engineer program manager.