June 2008 Archives

Two South Bay firms were included in the Russell 3000 stock market index, thereby increasing their profile with investors.

Carson-based aerospace subcontractor Ducommun Inc. and Torrance-based PC Mall Inc., a direct marketer of technology products, were added to the index on Friday. They will remain on the index for one year.

Inclusion in the index was based on market capitalization.

The Russell 3000 and other Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for investment strategies.

DIRECTV Group, the El Segundo-based satellite TV provider, launched a nationwide on-demand service, the company said Monday.

DIRECTV on Demand allows customers to download programming from a library to their DVRs. The service offers more than 4,000 standard-definition and high-definition titles.

The service includes customized homepages for channels -- such as The Discovery Channel -- as well as remote scheduling through the Internet, thousands of free titles and expanded pay-per-view titles.

Installation of the new service is available free to subscribers with a DIRECTV Plus(R) HD DVR or R22 DVR receiver.

It's this week's At Work profile.

AT WORK: Business here can blow hot and cold By Muhammed El-Hasan, Staff Writer

Bill Hammer is the owner of Hammer Heating & Air Conditioning, which is run out of his Redondo Beach home. (Brad Graverson / Staff Photographer)Bill Hammer's career took shape when he was still attending Mira Costa High School.

In 1987 at age 17, Hammer answered a newspaper ad for a job at a heating and air conditioning installer.

About 21 years later, he still works in this field.

Today, Hammer, 37, owns Hammer Heating & Air Conditioning, which he runs from his Redondo Beach house.

What does your job entail?

Read the full story.

High-end homes lagging By Muhammed El-Hasan Staff Writer

The South Bay's real estate market had been relatively insulated from the worst of the region's downturn.

That changed in the past two months, with the median price of a single-family home sold in May at $675,000, down 6.6 percent over May of last year, according to the South Bay Association of Realtors, which released a housing report Friday.

In April, the median price dropped 10.6 percent, year over year, to $625,000, the association said.

Read the full story.

The South Bay's real estate market had been relatively insulated from the worst of the region's downturn.

That changed in April and May, with single family home sales down 22.8 percent year over year in May, with an annual drop of 36.3 percent in April, according to the South Bay Association of Realtors, which released a housing report Friday.

The association's figures represented the South Bay, excluding the Palos Verdes Peninsual.

The median price of a single-family home sold in May was $675,000, down 6.6 percent over May of last year. In April, the median price dropped 10.6 percent, year over year, to $625,000, the association said.

It runs every Friday.

Business Casual: Gaining an edge just by chilling out

By Muhammed El-Hasan

Soak up the sun. Embrace the sandy beaches. Give thanks for the easygoing lifestyle, dude.

The South Bay's geography and culture do more than just help you totally chill out.

They give this area a competitive economic edge.

I have witnessed this advantage while covering the local business beat for nearly eight years. Through countless interviews, I learned that the South Bay's comely features - from beautiful ocean sunsets and the lushness of the Palos Verdes Peninsula to beach volleyball - serve as a magnet for talent and ambition.

Read the full column.

Folks,

My first business column, called Business Casual, debuted today.

We still have to work out some of the kinks, but I'm happy with the first edition. The column will run each Friday and will cover various parts of the South Bay's business community.

I look forward to your feedback.

Here's a link to Business Casual.

This could last a long time to shake out.

No decision yet on US air tanker purchase: Gates

WASHINGTON (AFP) -- US Secretary of Defense Robert Gates said Thursday that he has not yet taken a decision on reviewing the 35-billion-dollar refueling air tanker deal feud between Boeing and Northrop Grumman, but acknowledged problems with the contract.

On June 18, the Government Accountability Office (GAO), the investigative arm of Congress, backed a protest by US aerospace giant Boeing over the huge aerial refueling tanker contract awarded to rival Northrop Grumman and its European partner EADS, and recommended the US Air Force review the deal.

"I haven't made any decisions yet," Gates said. "But I would say that I take the GAO report very seriously. They've clearly pointed out some areas where we were deficient.

"We've clearly had problems with the tanker contract. And this time around is not the first time, obviously. And so, I think I need to get a better feel for the GAO report and for the criticisms and the nature of the criticisms that they have made."

Read the full story.

Space Exploration Technologies Corp., the Hawthorne-based developer of low-cost rockets, said Thursday that it had successfully conducted the final test before launch of the Falcon 1 rocket.

Dubbed SpaceX, the firm completed a full launch dress rehearsal and hold down firing of the Falcon 1 Flight 3 vehicle Wednesday at the Omelek Island launch site at the Kwajalein Atoll in the Pacific Ocean.

In the coming weeks, SpaceX will conduct a thorough review of all data prior to the opening of the launch window for flight, which runs from late July through early September.
The Falcon 1 will carry the Trailblazer satellite for the Department of Defense and secondary payloads that include two small NASA satellites.

DaVita Inc., the El Segundo-based provider of kidney dialysis care nationwide, said Thursday that its third annual "Kidney Awareness Time" Walk-a-thon will kick-off on Sunday in Virginia Beach, Va.

The nationwide tour will include 20 cites, including Los Angeles, concluding on Dec. 7 in Orlando, Fla.

The tour is expected to include 13,000 participants who will raise $1.5 million to improve public awareness of kidney health.

The tour is open to the public. Each walk will also offer free kidney evaluation and screening courtesy of The Kidney TRUST. More details and registration material are at http://www.davitakatwalks.com.

What will happen to the satisfaction score when gas hits $5 a gallon?

Gas prices fuel drop in car owner satisfaction

DETROIT (AP) -- Drivers of new cars were less satisfied with their vehicles this year for the first time in at least five years due mainly to rising fuel prices, according to an annual survey released Thursday.

The survey by the J.D. Power and Associates marketing and consulting company saw the industry average drop by two points to 770 this year from 772 in 2007. The survey measures owner satisfaction with the design, layout and performance of new vehicles.

It was the first drop in at least five years, said Neal Oddes, J.D. Power's director of product research and analysis. Gas prices rose 27 percent in the period between the 2007 and 2008 surveys, he said, but the latest survey found that fuel economy stayed the same at an average of 21 miles per gallon.

"The fuel economy hasn't improved from last year to this year," Oddes said. "You just haven't seen that movement."

Foreign nameplates again dominated the survey, but U.S.-based automakers continued to show improvement.

Porsche led all brands, scoring 854 out of a possible 1,000 points, followed by Jaguar at 844. Cadillac was the highest-scoring U.S.-based brand at 827, the research company said.

It also found that models that were given mild updates scored higher on average than models that were entirely redesigned, a departure from previous years.

The Honda brand captured more model segment awards than any other automaker with three each. Its subcompact Fit, Odyssey minivan and Ridgeline midsize pickup scored highest in their segments.

Porsche, Toyota and Volkswagen each took two segment awards. The Porsche Cayman won in compact premium sporty car, and its Cayenne took the midsize multi-activity vehicle honors. Volkswagen's GTI/R32 won for compact sporty car, while its Passat won for midsize car. Toyota's FJ Cruiser won in the compact multi-activity vehicle category, while its Sequoia large multi-activity vehicle won its segment.

Also winning segment awards were the BMW 5 Series midsize luxury sedan, Buick Enclave midsize multi-activity vehicle, Chevrolet Avalanche large pickup, Dodge Magnum large car, Land Rover's Range Rover large premium multi-activity vehicle, Lexus IS entry premium vehicle, the Mercedes-Benz S-Class large sedan and the Mini Cooper compact.

Of the eight most-improved nameplates, all were U.S. brands, according to the survey. Buick brand posted the largest improvement, followed by Chrysler, Ford, Mercury and Dodge.

The survey, conducted for the past 13 years, is based on responses from more than 81,500 people who bought or leased vehicles from November to January. They were surveyed between Feb. 4 and April 30, Oddes said. It has a margin of error of one point on the scale of 1,000.

The survey is designed to complement J.D. Power's annual initial quality rankings, which were released last month. Those rankings showed the quality of new cars improved across the industry this year, with Porsche, Honda, Toyota, General Motors and Ford among the automakers leading the pack.

Of course, California's housing market is being hit harder than most.

Home slump harder to reverse than usual: Harvard

NEW YORK (Reuters) - Record foreclosures and limited access to credit will make it harder than usual for the U.S. housing market to rebound from this slump, the worst at least since World War Two, according to a Harvard University study on Monday.

A two-year home price drop is eating into housing wealth, curbing consumer spending and slicing away economic growth. This is unlikely to change until potential home buyers are convinced that prices have stopped tumbling, the study found.

The downturn has room to run.

The highest home loan rates in nine months and strict lending standards are keeping buyers on the sidelines, even after aggressive Federal Reserve intervention and a 16 percent national home price slide from the 2006 peak, by some measures.

"Historically, housing markets recover only after the economy has entered a recession and a combination of falling mortgage interest rates and house prices have improved housing affordability," Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard, said in a statement.

"It will take longer this time to rebound given the unusually high levels of foreclosures and constrained credit markets," he said. "The slump in housing markets has not yet run its full course."

Price declines and mortgage defaults are the worst on records dating back to the 1960s and 1970s, the study noted. Job losses and falling prices intensify risk of foreclosure.

The number of homes entering foreclosure nearly doubled to 1.3 million in 2007 from about 660,000 in 2005.

Payment shock after rate resets on some adjustable loans, many made to higher-risk borrowers, has propelled owners into foreclosure. For others in trouble, falling prices leave them with mortgages larger than the home's value, and they are often unable to refinance or sell.

Foreclosures are adding to an already massive supply of unsold homes, which further pressures prices.

"With credit markets in such disarray, the for-sale housing inventory at record levels ... emerging from today's housing slump could take some time," the study found.

Read the full story.

Of course, California's housing market is being hit harder than most.

Home slump harder to reverse than usual: Harvard

NEW YORK (Reuters) - Record foreclosures and limited access to credit will make it harder than usual for the U.S. housing market to rebound from this slump, the worst at least since World War Two, according to a Harvard University study on Monday.

A two-year home price drop is eating into housing wealth, curbing consumer spending and slicing away economic growth. This is unlikely to change until potential home buyers are convinced that prices have stopped tumbling, the study found.

The downturn has room to run.

The highest home loan rates in nine months and strict lending standards are keeping buyers on the sidelines, even after aggressive Federal Reserve intervention and a 16 percent national home price slide from the 2006 peak, by some measures.

"Historically, housing markets recover only after the economy has entered a recession and a combination of falling mortgage interest rates and house prices have improved housing affordability," Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard, said in a statement.

"It will take longer this time to rebound given the unusually high levels of foreclosures and constrained credit markets," he said. "The slump in housing markets has not yet run its full course."

Price declines and mortgage defaults are the worst on records dating back to the 1960s and 1970s, the study noted. Job losses and falling prices intensify risk of foreclosure.

The number of homes entering foreclosure nearly doubled to 1.3 million in 2007 from about 660,000 in 2005.

Payment shock after rate resets on some adjustable loans, many made to higher-risk borrowers, has propelled owners into foreclosure. For others in trouble, falling prices leave them with mortgages larger than the home's value, and they are often unable to refinance or sell.

Foreclosures are adding to an already massive supply of unsold homes, which further pressures prices.

"With credit markets in such disarray, the for-sale housing inventory at record levels ... emerging from today's housing slump could take some time," the study found.

Read the full story.

The tanker deal will continue to dog McCain.

McCain's Boeing Battle Boomerangs

(Newsweek) One of John McCain's most celebrated achievements in recent years was his crusade to block a Pentagon contract with Boeing for a new fleet of midair refueling tankers. Incensed over what he denounced as a taxpayer "rip-off," McCain launched a Senate probe that uncovered cozy relations between top Air Force officials and Boeing execs. A top Air Force officer and Boeing's CFO ended up in prison. Most significantly, the Air Force was forced to cancel the contract--saving taxpayers more than $6 billion, McCain asserted.

But last week, McCain's subsequent effort to redo the tanker deal was dealt a setback. Government auditors ruled that the Air Force made "significant errors" when it rebid the contract and awarded the $35 billion project to Boeing's chief rival, partners European Aeronautic Defense and Space Co. (or EADS) and Northrop Grumman. It's likely the Air Force will have to redo the bid yet again, which analysts say will delay the replacement of the fleet's 1950s-era refueling tankers. The auditors' ruling has also cast light on an overlooked aspect of McCain's crusade: five of his campaign's top advisers and fund-raisers--including Tom Loeffler, who resigned last month as his finance co-chairman, and Susan Nelson, his finance director--were registered lobbyists for EADS.

Critics, including some at the Pentagon, cite in particular two tough letters McCain wrote to Deputy Secretary of Defense Gordon England in 2006 and another to Robert Gates, just prior to his confirmation as Defense secretary. In the first letter, dated Sept. 8, 2006, McCain wrote of hearing from "third parties" that the Air Force was about to redo the tanker competition by factoring in European government subsidies to EADS--a condition that could have seriously hurt the EADS bid. McCain urged that the Pentagon drop the subsidy factor and posed a series of technical questions about the Air Force's process. "He was trying to jam us and bully us to make sure there was competition by giving EADS an advantage," said one senior Pentagon official, who asked for anonymity when discussing a politically sensitive matter. The assumption within the Pentagon, the official added, was that McCain's letters were drafted by EADS lobbyists. "There was no one else that would have had that level of detail," the official said. (A Loeffler associate noted that he and Nelson were retained by EADS after the letters were drafted.)

Read the full story.

The tabled have turned in this competition big time.

Boeing wins key round in Air Force tanker protest

WASHINGTON (AP) -- Boeing scored a major victory Wednesday in its battle to wrestle back a $35 billion Air Force contract from Northrop Grumman and its European partner.

The Government Accountability Office upheld Boeing's protest of the refueling tanker contract and recommended the service hold a new competition. The congressional watchdog said it found "a number of significant errors" in the Air Force's February decision, including its failure to fairly judge the relative merits of each proposal.

While the GAO decision is not binding, it puts tremendous pressure on the Air Force to reopen the contract and could pave the way for Boeing to capture part or all of the award from Northrop and Airbus parent European Aeronautic Defence and Space Co. And it gives ammunition to Boeing supporters in Congress who have been seeking to block funding for the deal or force a new competition.

The decision also is a setback for Sen. John McCain, the Republican presidential nominee in waiting, who was instrumental in the Pentagon's long attempt to complete a deal on the tanker.

The Air Force will determine its next steps after completing a review of the GAO ruling within 60 days. The service will select the "best value tanker for our nation's defense, while being good stewards of the taxpayer dollar," said Air Force Assistant Secretary Sue C. Payton.

Boeing said it looks forward to working with the Air Force on the next steps in this "critical procurement for our warfighters." Northrop said it continues to believe its plane was the best option for the military.

The GAO decision marks the second big blow to the Air Force this month, coming on the heels of the ouster of its two top officials over mistaken nuclear shipments.

The Air Force also is trying to rebuild a tattered reputation following a 2003 procurement scandal that sent its top acquisition official to prison for conflict of interest and led to the collapse of an earlier tanker contract with Boeing. McCain played a key role in exposing that scandal.

McCain sent two letters in 2006 urging the Defense Department to make sure the bidding proposals guaranteed competition between Boeing and Airbus. Months later, Airbus's parent company retained the firm of a McCain campaign adviser to lobby for the tanker deal.

McCain on Wednesday called the GAO decision "unfortunate for the taxpayers," saying Air Force officials "need to go back and redo the contracting process and ... hopefully they will get it right."

Democratic presidential nominee-in-waiting Sen. Barack Obama, D-Ill., lauded the GAO decision and called for a "fair and transparent" rebidding of the contract.

With a leadership vacuum, a concerned Congress and an upcoming change in the White House, the Air Force needs to act quickly, said Jim McAleese, a defense industry consultant in Virginia.

The tanker contract has sparked a fierce backlash among lawmakers from Washington, Kansas and other states that stand to gain jobs if Boeing succeeds in landing the award.

"The Air Force will have no choice but to rebid this project," said Sen. Maria Cantwell, D-Wash.

Sen. Pat Roberts, a Kansas Republican, said he would introduce legislation requiring a new competition if the service does not reopen the process.

The tanker contract also has touched off a heated debate over the military's use of foreign contractors because the Northrop tanker would be based on an Airbus plane largely built in Europe. Backed by union officials representing Boeing workers and "Buy-American" proponents, Boeing supporters on Capitol Hill have painted the competition as a fight between an American company and its European rival.

Boeing estimates the tanker contract would support 44,000 new and existing jobs with more than 300 U.S. suppliers. The company would perform much of the work in Everett, Wash., and Wichita, Kan.

Northrop said its tanker would support four new factories and 48,000 jobs with 230 U.S. suppliers, including more than 1,500 new positions in Mobile, Ala., where the tanker would be assembled.

Sen. Richard Shelby, R-Ala., said it is "very disturbing" that the Air Force "will likely have to go back to square one on the warfighter's No. 1 priority."

The contract for 179 aerial refueling tankers is the first of three deals worth up to $100 billion to replace the Air Force's entire tanker fleet over the next 30 years.

Although the GAO denied some parts of Boeing's protest, it offered a lengthy rationale for why the contract should be re-competed. Among its conclusions was that the Air Force awarded the Northrop team improper extra credit for offering a larger plane that could carry more fuel, cargo and troops. It also found that the Air Force improperly increased the likely costs of the Boeing bid and failed to show that Northrop's tanker could refuel all necessary planes.

"The GAO has issued a sweeping denunciation of Air Force acquisition practices that raises fundamental questions of fairness," said Loren Thompson, a defense industry consultant based in Virginia.

Boeing's backers in Congress also maintain that illegal European Union subsidies to Airbus gave Northrop/EADS an unfair advantage. Those subsidies are at the heart of U.S. Trade Representative complaint against the EU before the World Trade Organization.

Sen. Patty Murray, D-Wash., stressed that Congress needs to examine more than just the narrow technical issues raised by the GAO review, including the role of subsidies and American jobs in defense contracts.

In this global economy, what happens in other parts of the world affects us at the pump.

Oil rebounds on word Israel practiced Iran attack

NEW YORK (AP) -- Oil futures rebounded Friday as Pentagon officials said a large scale Israeli military exercise in the eastern Mediterranean early this month could have been a demonstration of Jerusalem's ability to attack Iranian nuclear facilities.
Prices also rose as investors reconsidered whether Thursday's sharp declines, which were based on an announced fuel price hike in China, were merited.

At the pump, gas prices rose slightly.

Light, sweet crude for July delivery rose $3.90 to $135.83 a barrel on the New York Mercantile Exchange, recovering much of the $4.75 that the contract lost Thursday after China's announcement.

While Thursday's news from China reduced investor concerns about surging global demand for oil and fuel, Friday's news from the Middle East injected fresh supply worries into the market.

Still, analysts suggested both price moves were overreactions.

"Whenever you get Israel and Iran within the same sentence, you have a price reaction," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

But price moves based on the possibility of conflict between the two nations are likely to be short-lived, analysts believe. An actual attack would be a different matter entirely, and could send prices sharply higher.

Meanwhile, several analysts said China's fuel price hike could actually increase the nation's crude demand. Many Chinese refiners have resisted producing fuel in recent months as the retail prices they're allowed to charge were not high enough to cover the costs of their main raw ingredient, crude oil. Now that they can charge more for fuel, Chinese refiners may actually produce more diesel and gasoline, using more crude oil in the process.

"The increase in prices can be seen ... as an attempt to reduce shortages through encouraging domestic supply," said Barclays Capital analyst Kevin Norrish in a research note. "Indeed, it could well be that case that effective demand actually rises, dependent on the current level of shortages."

Some analysts also questioned whether the modest price hikes were enough to dampen demand.

"It remains uncertain whether this fuel price hike in China will really significantly impact demand growth in China in a negative way," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "This (was) a knee-jerk overreaction by the market."

Also supporting prices Friday were reports that Nigerian oil workers have decided to strike at a Chevron Corp. facility beginning Monday, a move that could further cut oil supplies from Africa's largest producer.

The July crude oil contract expires at the end of trading Friday; trading in expiring contracts is often volatile.

On another front, investors were awaiting the outcome of a weekend summit in Saudi Arabia between oil consuming and producing nations to discuss high oil prices.

The dollar fell against the euro Friday, putting more upward pressure on oil prices. Many investors buy commodities such as oil as a hedge against inflation when the greenback weakens. A falling dollar makes oil less expensive to investors overseas.

At the pump, meanwhile, gas prices inched 0.2 cent higher to a national average of $4.075 a gallon Friday, according to AAA and the Oil Price Information Service. Gas prices have drifted lower this week since hitting a record $4.08 a gallon on Monday.

Gas prices will likely hold steady near current levels, as long as oil continues trading in its current range between roughly $132 and $138, analysts say.

Diesel fuel, used to transport the vast majority of the world's food, consumer and industrial goods, fell 0.5 cent overnight to a national average of $4.786 a gallon. Diesel reached a record $4.797 on Monday.

In other Nymex trading Friday, July gasoline futures rose 8.81 cents to $3.4407 a gallon, while July heating oil futures rose 11.72 cents to $3.8307 a gallon. July natural gas futures rose 23.3 cents to $13.094 per 1,000 cubic feet.

In London, August Brent crude rose $3.97 to $135.97 a barrel on the ICE Futures Exchange.

After Wednesday's GAO conclusion that the Air Force made errors in awarding the $35 billion aerial refueling tanker contract to Northrop Grumman over Boeing, business groups seconded the GAO's recommendation for a new bidding process.

Mark Mitchell, vice president & musiness manager Local 20 of the International Federation of Professional and Technical Engineers, said in a statement:

"We applaud today's GAO ruling that the Air Force's tanker competition and decision was flawed. We agree wholeheartedly that the contract must be overturned and a new bidding process restarted."

Bob Muscat, executive director of the IFPTE Local 20, said in a statement:

"The GAO only confirms what so many of us have been saying for some time: this was a flawed decision based on a flawed process and it's now time for Congress to step in and require a new competition."

Joel Ayala, President and CEO of the California Hispanic Chamber of Commerce, said in a statement:

"California's economy, our U.S. troops, and national security will be better served if the Air Force takes the GAO's concerns to heart and moves to redo the bidding process for the air tanker."

Tom Brandon, secretary treasurer of the California Conference of Machinists, said in a statement:

"Today's GAO decision is an important first step to right a terrible wrong. The Air Force under the watchful eye of the US Congress must take immediate steps to re-bid the tanker contract. We thank the American people for the outpouring of support in our effort to keep tens of thousands of experienced and loyal machinists working to protect our national security. Americans will be safer and our economy will be stronger if Machinists Union members continue a tradition of more than 50 years of top quality and skilled work on this next generation of transport tankers."

Here's today's article.

Review of Northrop bid urged

In a surprise turnaround, congressional investigators Wednesday upheld Boeing Co.'s protest of a $35 billion Air Force contract awarded to competitor Northrop Grumman Corp.

The Government Accountability Office also recommended that the Air Force hold a new competition to build 179 aerial refueling tankers to replace an aging fleet.

The ruling could further delay the start of the program, which eventually could reach $100 billion.

Northrop's El Segundo-based Integrated Systems sector had won the contract in February with partner and Airbus parent European Aeronautic Defence and Space Co., which is based in France and Germany.

Much of the production and final assembly for Northrop's KC-45 tanker would occur in Mobile, Ala., with thousands of subcontracting jobs created in Southern California.

Read the full story.

Fresh & Easy Neighborhood Market, which will open a new location in Harbor City within months, will donate $1,000 to a local organization or charity nominated by the community.

The winning organization will be chosen by employees at the new store, at the northeast corner of Palos Verdes Drive and Western Avenue.

To nominate a local organization, visit www.freshandeasy.com/goodneighbor, and explain in 150 words or less why you think your choice is worthy of $1,000.

Fresh & Easy will begin accepting submissions on June 25, with a cutoff on July 23.

Southern California as a whole saw an increase in foreclosures of about 13 percent from April 2008 to May 2008, and an increase of 219 percent from May 2007 to May 2008, according to Default Research, which compiles foreclosure data.

Los Angeles County had 11,770 foreclosure documents (6,396 Notices of Default recordings and 5,374 were Notice of Trustee Sales recordings) filed in May 2008.

Home prices in L.A. County have come down about 18 percent in the last year, and they continue to decline.

Just to recap, Northrop's El segundo-based Integrated Systems sector would be in charge of the tanker program if the Air Force stays with the Northrop-EADS team. However, most of the production would occur in the Mobile, Ala.

But local subcontractors would do work on the tanker.

Boeing wins GAO tanker ruling

WASHINGTON (AP) -- Congressional investigators have upheld Boeing's protest of a $35 billion Air Force tanker contract awarded to Northrop Grumman Corp. and Airbus parent European Aeronautic Defence and Space Co., and recommended that the service hold a new competition.

The Government Accountability Office said Wednesday that it found "a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman."

The Air Force had no immediate reaction to the GAO findings, saying only that it is aware of the report and will review it.

While the GAO decision is not binding, it puts tremendous pressure on the Air Force to reopen the contract and could help Boeing capture part or all of the award. It also gives ammunition to Boeing supporters in Congress who have been seeking to block funding for the deal or force a new competition.

"Boeing and the American people are the big winners in this decision," said Sen. Maria Cantwell, D-Wash. "The GAO criticisms were a scathing indictment of the Air Force's process. The Air Force will have no choice but to rebid this project."

The contract for 179 aerial refueling tankers is the first of three deals worth up to $100 billion to replace the Air Force's entire tanker fleet over the next 30 years.

The award has become a flashpoint in a heated debate over the military's use of foreign contractors. It has triggered a fierce backlash on Capitol Hill among lawmakers from Washington, Kansas and other states that stand to gain jobs if Chicago-based Boeing succeeds in capturing the deal. Backed by union officials representing Boeing workers and "Buy-American" proponents in Congress, they have painted the competition as a fight between an American company and its European rival.

Sen. Patty Murray, D-Wash., stressed that Congress needs to examine more than just the narrow technical issues raised by the GAO review, including the impact of defense contracts on American jobs.

It seems more and more people agree with this view.

EADS chief: high oil prices here to stay

PARIS (AP) -- The head of Airbus' parent EADS said Wednesday that high oil prices are here to stay and the entire industry -- from airlines to air traffic controllers -- will have to adapt.

"We don't see how the price of oil can fall substantially, even if there is a speculative part in the price," CEO Louis Gallois said during a lunch with journalists in Paris.

Airline profits have been pummeled by surging fuel costs combined with a slowing economy, and Gallois didn't rule out the cancellation or delay of deliveries for new aircraft.

"We are very attentive," he said.

Airbus is cushioned by an order backlog that will take around six years to fill, but Gallois' comments highlight the plight of the industry.

"The increase in oil prices is forcing us to reflect on what the air transport of tomorrow will look like," he said.

Finding more efficient methods of fuel consumption is a question for planemakers, airlines, air traffic controllers, airports and government, he said.

Airbus is being asked by airline bosses including Air France-KLM CEO Jean-Cyril Spinetta to consider making more fuel-efficient planes, he said.

Spinetta has asked for an elongated version of the A380 superjumbo, which Gallois said is "possible," and a replacement for the single-aisle A320.

Airbus has no plans to replace what Gallois called its "cash cow" just yet, and is waiting for engine makers such as Rolls Royce and General Electric who in 3 to 4 years could unveil engines that are 25 percent more efficient, he said.

Light, sweet crude for July delivery rose 24 cents to $134.24 a barrel Wednesday on the New York Mercantile Exchange. Prices surged to a record $139.89 per barrel Monday.

While there have been reports that high oil prices are hurting demand in the U.S., by far the world's biggest oil consumer, demand in booming Asian markets and other parts of the world is accelerating rapidly. That growth ensures worldwide supplies remain tight even as U.S. drivers ease up.

Over the weekend, Saudi Arabia told U.N. Secretary-General Ban Ki-moon that it would increase oil output by 200,000 barrels a day, or 2 percent, from June to July. In May, the country raised production by 300,000 barrels a day.

It may not be much, but I'll cling to any good news out there.

What Inflation? Some Items That Actually Cost Less

(CNBC) Inflation may be climbing faster than the humidity level, but there are still some things that actually cost less than they did a year ago.
Amid all the headlines about soaring energy and food prices, many consumers may not notice that they're getting a break on some items they buy every day.

"People don't often remember [the positives]," said Jim Glassman, senior U.S. economist at JPMorgan Chase. "The economy is not falling apart. It's just stuck."

Friday's report on the consumer price index confirmed the predicted rise in gasoline and food costs, but core prices remained relatively flat. While financial markets cheered the results, they didn't give much comfort to consumers. The latest snapshot of consumer sentiment on Friday showed that it plunged to a 28-year low in June.

With that in mind, here's a look at a few of those things that aren't pinching your wallet.

Electronics

The average price of a point-and-shoot digital camera has fallen $28 from a year ago, to| $178, according to the NPD Group, a consumer tracking service.

The cost of LCD flat-panel TVs is also expected to drop $18 this year, to an average $848, while notebook computers are forecast to fall 9 percent, to $775, according to the Consumer Electronics Association.

Read the full story.

How much of what he's saying resembles what other observers have said?

Market full of oil, price trend "fake": Ahmadinejad By Hashem Kalentari

The market is full of oil and the rising price trend is "fake and imposed," Iran's president said on Tuesday, partly blaming a weak U.S. dollar which he said was being pushed lower on purpose.

"At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed," President Mahmoud Ahmadinejad said in a televised speech.

"It is very clear that visible and invisible hands are controlling prices in a fake way with political and economic aims," he said when opening a meeting of the OPEC Fund for International Development in the central Iranian city of Isfahan.

Iran, the world's fourth-largest oil exporter, has repeatedly said the market is well-supplied with crude and blames rising prices on speculation, a weak U.S. currency and geopolitical factors.

"As you know the decrease in the dollar's value and the increase in energy prices are two sides of the same coin which are being introduced as factors behind the recent instability," Ahmadinejad said.

Read the full story.

In today's Breeze ...

Here comes hydrogen to Torrance

Scott Robinson Honda in Torrance and two other Southern California car dealerships will be among the world's first to offer leases on a zero-emission fuel cell vehicle that runs on hydrogen, the Japanese automaker said Monday.

The first commercial production model of the car, the FCX Clarity, rolled off a Honda assembly line in Japan on Monday. About 200 of the vehicles will be part of the milestone leasing program over the next three years in the United States and Japan.

Power Honda Costa Mesa and Honda of Santa Monica also will participate in the leasing program for the FCX Clarity.

"This is an important day in the history of fuel cell vehicle technology and a monumental step closer to the day when fuel cell cars will be part of the mainstream," John Mendel, executive vice president of American Honda Motor Co., the carmaker's North American headquarters, said in a statement.

Read the full story.

OSI Systems, the Hawthorne-based security and technology company, won two contracts totaling about $16 million from two undisclosed international customers, the company said Monday.

The first contract was for multiple Rapiscan Eagle Mobile high-energy X-ray cargo and
vehicle inspection systems. The systems are expected to be deployed by local customs
officials at various land borders for the inspection of inbound trucks for duty evasion and contraband.

The second contract consists of security inspection systems including the Rapiscan Eagle Mobile, the Rapiscan MVXR 5000 automated hold baggage inspection
system and a variety of baggage and parcel inspection X-ray systems. These systems are to be deployed at a major Middle Eastern international airport.

In today's Breeze.

Carson gets a West Coast first
By Muhammed El-Hasan, Staff Writer

Amid the crackle of french fries cooking and the clanking of kitchen utensils, an employee shouts, "Two in the door," as a woman and her young son step inside for lunch.

Soon two becomes dozens as the small eatery fills with hungry customers.

The only Five Guys Burgers and Fries restaurant west of Missouri opened three weeks ago at Carson's Southbay Pavilion mall.

"Probably 15 to 20 percent of our customers in the first two weeks know about us and sought us out because of their experience on the East Coast," said Phil Ratner, who co-owns the casual Carson restaurant.

Burger fans also will be able to eat at Five Guys sites in other parts of Southern California as Ratner and partner Bob Zanolli - two longtime restaurateurs - pursue their goal to open 30franchise locations in the next five years in southern Los Angeles County and northern Orange County.

The pair are planning their second location for Cerritos and are looking at other possible sites including in the South Bay, Zanolli said.

Read the full story.

I wish I were a CEO

CEO pay chugs up in '07 despite economy

NEW YORK (AP) -- As the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year, an Associated Press analysis shows.

The AP review of compensation for the heads of companies in the Standard & Poor's 500 index finds the median pay package added up to nearly $8.4 million. That's a comfortable gain of about $280,000 from 2006.

The 3 1/2 percent pay increase for CEOs came even as the landscape for both workers and shareholders darkened considerably and the economy was choked by a housing market in free fall, layoffs and soaring prices for fuel and food.

At the top of the AP list: John Thain, who took the reins of Merrill Lynch on Dec. 1, 2007. His $83 million pay package was supercharged by a signing bonus and other enticements that lured him from the New York Stock Exchange to lead the investment bank as it was suffering its worst-ever losses.

Collectively, the 10 best-paid CEOs made more than half a billion dollars last year. Yet half the members of this stratospheric club were leading companies whose profits shrank dramatically.

The AP examination of CEO pay in 2007 mined data from the 410 companies in the S&P 500 that filed compensation disclosures with federal regulators in the first six months of this year.

The AP's formula, based on data from the past two years, adds up salary, perks, bonuses, above-market interest on pay set aside for later, and company estimates for the value of stock options and stock awards on the day they were granted last year.

That provides a clearer picture than pay totals required by the Securities and Exchange Commission, compensation experts say, because the SEC totals include expenses companies book during the year for previously granted stock compensation and retirement benefits.

The value of stock and options given to CEOs may turn out to be significantly higher or lower if they are ultimately cashed out, but the numbers in the AP formula do reflect the board of directors' estimate of the likely eventual payout.

The median salary figure of about $8.4 million means half the CEOs in the AP analysis made more than that and half made less.

There were some signs companies were pulling back on pay at the top: Out of the 316 companies in the AP survey that had the same CEO two years running, about two-fifths lowered the total pay package for their CEOs. However, the primary culprit for some was falling stock prices that cut into the value of the shares included in pay packages.

In many more cases, overall pay ballooned.

Rick Wagoner, chief executive of General Motors Corp., announced earlier this month the company had to close four plants that make trucks and SUVs because of lagging demand as fuel prices soar. That followed the posting of a $39 billion loss in 2007, a year when its stock price fell by about 19 percent, without adjusting for dividends.

And Wagoner? His pay rose 64 percent, to $15.7 million.

Last year was rocky for the economy and the stock market, making it a useful test of a concept called pay for performance -- a term companies use to sell shareholders on the idea CEOs are being paid based on how well the company does.

According to this concept, trotted out frequently by the compensation committees of corporate boards in their proxy statements, a big chunk of CEO pay is considered "at risk," meaning it could disappear if CEOs don't meet established metrics.

But the AP analysis found that CEO pay rose and fell regardless of the direction of a company's stock price or profits.

Take KB Home, battered by the subprime lending crisis and the weak housing market. According to the Los Angeles-based homebuilder's proxy statement, CEO Jeffrey Mezger is entitled to a cash bonus based on a percentage of KB's profit.

The problem was there was no profit. KB Home lost almost $930 million in 2007 and its stock lost 60 percent of its value. But Mezger still made $24.4 million, as valued by the AP, including a $6 million cash bonus.

He pocketed that bonus because he exceeded certain objectives the board had set out for him. Among them were improving performance on a customer satisfaction survey and developing senior leadership in his first year as CEO.

"Compensation has become a shell game," said Richard Ferlauto, director of pension and benefits policy for the American Federation of State, County and Municipal Employees, a Washington labor group representing government workers.

How long will this dip last?

Oil Falls for a Second Day as Saudi Arabia May Increase Output

June 16 (Bloomberg) -- Crude oil fell for a second day in New York on speculation Saudi Arabia will increase production, reducing risks to global growth from near-record energy prices.

Saudi Arabia, the world's biggest oil exporter, may announce an output increase at a meeting it is hosting in Jeddah on June 22, an OPEC official said yesterday. The Middle East kingdom will pump an extra 200,000 barrels a day next month, Agence France- Presse reported yesterday, citing United Nations Secretary- General Ban Ki-Moon. This would boost world supply by 0.2 percent.

``I wouldn't be surprised if they do'' increase output, Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney, said in a Bloomberg Television interview. ``It's just a little bit in their hands. When you control the spigot, you control the refineries, you control the whole game.''

Crude oil for July delivery fell as much as $1, or 0.7 percent, to $133.86 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $134.05 a barrel at 12:01 p.m. in Singapore.

The contract dropped 1.4 percent to settle at $134.86 a barrel on June 13, taking last week's decline to 2.7 percent.

``Everybody is going to take a wait and see approach on this,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. ``It's prudent for people to back off and see what happens.''

Read the full story.

But how much will this impact the price?

UN chief sees Saudis move on oil

(BBC) UN Secretary-General Ban Ki-moon says major oil producer Saudi Arabia views current prices as "abnormally high".

He also said that the country, the leading producer in the Opec cartel of oil output nations, is willing to take action to bring prices down.

Mr Ban was speaking after a meeting with the Saudi monarch, King Abdullah.

Oil prices fell on Friday after reports that Saudi Arabia might boost oil production. US light, sweet crude was trading at $134.86 in New York.

'Adequate levels'

Speaking after the weekend talks in Jeddah, Mr Ban said: "He [King Abdullah] acknowledged that the current oil prices are abnormally high due to speculative factors and some other national government policies.

"He is willing to what he can to [bring] the price of oil to adequate levels."

And he added that the Saudis, who appear poised to take "concrete measures", also seemed "to be considering very seriously how they can address this issue by increasing production".

Read the full story.

Question: When will it end?
Answer: Don't hold your breath.

US foreclosure filings surge 48 percent in May

WASHINGTON (AP) -- Soaring foreclosures are continuing to raise questions about the mortgage industry's claims that lenders are making a dent in the housing crisis.
Foreclosure filings last month were up nearly 50 percent compared with a year earlier. Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, foreclosure listing service RealtyTrac Inc. said Friday.

The latest grim foreclosure news comes as criticism mounts that efforts by government and the mortgage industry to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners. Critics say a Bush administration-backed mortgage industry coalition, dubbed Hope Now, is falling far short.

"It's clear that these voluntary efforts in and of themselves cannot really make a dent," said Allen Fishbein, director of credit and housing policy at the Consumer Federation of America. "Government intervention is going to be necessary."

Mark Zandi, chief economist of Moody's Economy.com and an adviser to Republican John McCain's presidential campaign, wrote earlier this week that "the Bush administration's efforts to encourage loan modifications and delay foreclosures are being completely overwhelmed."

A Credit Suisse report from this spring predicted that 6.5 million loans will fall into foreclosure over the next five years, reaching more than 8 percent of all U.S. homes.

Sobering statistics like these are leading to more calls for government intervention, especially from lawmakers pushing a plan for the government to guarantee as much as $300 billion in new loans to help borrowers refinance into cheaper, fixed-rate mortgages.

A new government report released Wednesday found that among mortgages held by nine large banks, including Bank of America and Citigroup Inc., foreclosures climbed to 1.23 percent of all loans in March from 0.9 percent in October.

In a speech, Comptroller of the Currency John Dugan said the federal agency conducted its own examination of foreclosures and loan modifications after finding "significant limitations" with data collected by trade groups like Hope Now.

"Virtually none of the data had been subjected to a rigorous process to check for consistency and completeness," Dugan said. "They were typically responses to surveys that produced aggregate, unverified results from individual firms."

The comptroller's report found that 2.7 percent of seriously delinquent mortgages had been modified as of March, up from 1.8 percent in November 2007.

The industry has continued to favor repayment plans, which help borrowers get back on track after missing a few payments, rather than permanent loan modifications, such as lower interest rates.

Faith Schwartz, executive director of Hope Now, said in an e-mailed statement that the group's statistics "encompass more member data and provide a broader view of the range of solutions delivered by a larger number of mortgage servicers."

Rep. Barney Frank, D-Mass., said this week that Dugan' analysis shows that "much more aggressive action is needed."

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.

Making matters worse, mortgage rates have been rising, reflecting increased concerns about what the Federal Reserve might do to battle inflation. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.32 percent this week, the highest level in nearly eight months and up sharply from 6.09 percent last week.

According to the RealtyTrac report, one in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record.

Foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates.

Metropolitan areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif. and the Cape Coral-Fort Myers area in Florida.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices, the company said.

In Nevada, one in every 118 households received a foreclosure-related notice last month, more than four times the national rate. In California, one in every 183 households faced foreclosure.

Rick Sharga, RealtyTrac's vice president of marketing, said foreclosures are unlikely to peak until sometime this fall, as more loans made to borrowers with poor credit records reset at higher levels. "I don't think we've seen the high point," he said.

About 50 to 60 percent of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance.

As foreclosed properties pile up, they add to the inventory of homes on the market and drag down home prices. The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.

Nationwide, one out of every four sales between January and March was a distressed sale, and that figure jumps to more than 50 percent in the hardest-hit areas like Las Vegas, Detroit and distant suburbs of Los Angeles, according to Moody's Economy.com.

In some neighborhoods, lenders are slashing prices dramatically to rid themselves of an unprecedented number of foreclosed properties, sparking bidding wars and multiple offers. While that's a positive for the real estate market, buyers in other parts of the country are still holding back.

"I think a lot of people are waiting to see if we really have hit the bottom," Sharga said.

Lehman Brothers economist Michelle Meyer said in a report Thursday that U.S. home sales are likely to hit bottom at the end of this summer, but said a recovery in sales is likely to be "feeble."

ESPN said Thursday that it had agreed to purchase Student Sports Inc., a Torrance-based high school-focused digital media and event production company.

The price was not divulged.

Student Sports was founded by Andy Bark, the company's president and CEO. Bark will continue with the company after the deal is completed.

Student Sports has been involved in producing high school sports content for 22 years. Its assets include StudentSports.com and DyeStat.com, and more than 160 events such as Elite 11, Area Code Baseball and Nike Combines/Nike SPARQ Mini Camps, all of which will be integrated into ESPN's recently announced high school initiative ESPN RISE.

The fight over Yahoo isn't over yet.

Yahoo seeks Google's aid after Microsoft talks die

SAN FRANCISCO (AP) -- Yahoo Inc. became Microsoft Corp.'s takeover prey largely because Google Inc. established such a commanding lead in the Internet's lucrative search advertising market.

But after eluding Microsoft's grasp, Yahoo is now turning to Google to help squelch a rebellion among its shareholders who believe it should have accepted Microsoft's $47.5 billion buyout offer while it was still available last month.

Yahoo announced its decision to let Google handle some of its advertising sales late Thursday, just a few hours after revealing it unsuccessfully tried to persuade Microsoft to renew its previous offer of $33 per share. The snub caused Yahoo to conclude that there is no hope for any kind of deal with Microsoft.

Although Yahoo believes Google could help boost its annual revenue by $800 million, the advertising partnership wasn't enough to ease the disappointment of investors who had been holding out hope for a Microsoft deal.

Yahoo shares plunged $2.63, or 10.1 percent, to finish Thursday at $23.52 and shed another seven cents after the market closed.

Part of the problem for Yahoo is that antitrust concerns might prevent an alliance with Google.

Google already holds about 75 percent of the $11 billion search advertising market in the United States with Yahoo a distant second at 9 percent, according to the research firm eMarketer Inc.

Microsoft and a variety of consumer-interest groups already have signaled they will turn up the political heat in an attempt to prevent Google from working with Yahoo.

The outcry already has drawn the attention of U.S. Sen. Herb Kohl, chairman of the Senate subcommittee on antitrust, competition policy and consumer rights.

"The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal further," said Kohl, a Wisconsin Democrat.

Yahoo and Google have voluntarily agreed to wait until late September to begin working together to give the government adequate time to review the arrangement. If it isn't blocked, the partnership could last for the next decade.

The antitrust scrutiny appears to be the least of Yahoo's worries for now.

The Sunnyvale-based company also is trying to fend off a shareholder mutiny led by activist investor Carl Icahn, who has vowed to replace the company's board because of the way the directors handled the Microsoft negotiations during the past 4 1/2 months.

But Icahn has been hoping to engineer a sale to Microsoft, so his campaign could be hurt by the perception that the software maker has lost all interest in buying Yahoo. Shareholders may be reluctant to support Icahn's attempted coup unless he can demonstrate his slate of directors has a better turnaround plan than the current board.

Icahn did not return phone calls seeking comment Thursday.

The fate of Yahoo's board is scheduled to be determined at the company's Aug. 1 annual meeting.

"If you are a Yahoo shareholder, you just have to be scratching your head right now," said Standard and Poor's equity analyst Scott Kessler.

If Wall Street's backlash becomes severe enough, Kessler said he believes Yahoo might have to consider replacing co-founder Jerry Yang as its chief executive -- something Icahn has already promised he will do if he wins control of the board.

After Yang took over the reins from Terry Semel a year ago, Yahoo's stock price fell from $28.12 to $19.18 at the time Microsoft launched its unsolicited takeover attempt in January.

Yang "has been slow to move, slow to act and it has cost shareholders as a result," Kessler said.

Many Yahoo shareholders blame Yang for letting his emotional attachment blur his judgment during the Microsoft negotiations.

Yahoo's board sent Yang and fellow co-founder David Filo to a pivotal May 3 meeting in Seattle to discuss Microsoft's oral offer to buy the company for $33 per share, up from its initial bid of $31 per share. After Yang demanded $37 per share, Microsoft CEO Steve Ballmer withdrew the offer.

In recent weeks, Ballmer has been trying to buy Yahoo's search engine instead.

Yahoo concluded that its search engine was too important to sell piecemeal.

Without explaining its logic, Microsoft said it believed a deal involving Yahoo's search engine would have been more valuable to Yahoo than if it had bought the entire company at $33 per share. The Redmond, Wash.-based software maker said it remains open to buying Yahoo's search operations.

Yahoo's deal with Google includes an escape hatch should Microsoft or another suitor buy the company. If Yahoo is sold, Google would receive a termination fee of up to $250 million.

That clause could still raise hope that Icahn might be able to renew the Microsoft talks if he can win control of Yahoo's board.

The deal shapes up as a major victory for Mountain View-based Google, which didn't want Yahoo to fall into Microsoft's clutches.

"I am happy to be helping them to stay independent," Google co-founder Sergey Brin said in a Thursday interview.

With a Yahoo deal off the table, Microsoft could set its sights on a smaller acquisition that still might help its unprofitable Internet operations. Analysts have cited Time Warner Inc.'s AOL, Internet software service provider Salesforce.com Inc. and leading online social networks, News Corp.'s MySpace and Facebook Inc. as possible targets.

The Google partnership expands upon a two-week trial conducted in April while Yahoo was trying to pressure Microsoft into raising its bid. The tests confirmed Google's technology would generate more revenue for Yahoo than its own system, which cost more than $2 billion to acquire and improve.

Nevertheless, Yahoo still intends to use its own search engine to distribute some ads and process all search requests. Working with Google will give Yahoo "the best of both worlds," Yahoo President Sue Decker said a Thursday conference call.

The Boeing Co. received the Satellite Industry Leadership Award on Wednesday at the 2008 International Satellite and Communications exchange, dubbed ISCe, a major satellite industry conference, in San Diego.

Boeing builds its satellites at a giant facility in El Segundo, which employs more than 5,000 people.

"Boeing was selected by the distinguished members of the ISCe Advisory Board based on the company's consistent and significant leadership in the advancement of the satellite and communications sector," David Bross, ISCe conference chairman, said in a statement.

Boeing Satellite Systems International president Stephen T. O'Neill accepted the award on Boeing's behalf.

Boeing has more than 2,500 years of cumulative on-orbit satellite service.
El Segundo-based DIRECTV Group won the ISCe award in 2002.

My family will be taking United for a trip this summer.

United joins American with $15 bag fee

(AP) CHICAGO - United Airlines will follow rival American Airlines in charging $15 for a first checked bag.

The new fee was announced Thursday, three weeks after American set the precedent.

United says the fee affects customers who buy tickets beginning Friday for domestic flights from Aug. 18 or later.

Also, the Chicago-based carrier is increasing the fee to check three or more bags, overweight bags or items that require special handling to $125 from $100, or to $250 from $200, depending on the item.

The fees reflect a struggling airline industry passing the costs of high fuel prices to passengers.

Airline expert Tom Parsons says, as of July 1, Southwest Airlines will be the only U.S. carrier that permits two checked bags for free.

The economy could be like the Energizer Bunny, but in reverse. It just keeps getting weaker and weaker and weaker.

Fed: High energy, food prices keep economy weak

WASHINGTON (AP) -- The economy remained "generally weak" heading into summer as rising costs for energy and food pounded consumers and forced some companies to push their own prices higher.

The Federal Reserve's new snapshot of business conditions, released Wednesday, underscored two big sore spots for the country: listless economic activity coupled with high energy and food prices. Those rising prices carry the risk of both spreading inflation and putting another drag on overall economic growth.

Chafing under price hikes, "consumer spending slowed ... as incomes were pinched by rising energy and food prices," the Fed said. Manufacturing activity, meanwhile, was "generally soft" and the housing market remained stuck in a rut.

Businesses also were hit by higher costs, especially for energy, metals, plastics, chemicals and food. Such reports were "widespread," the Fed said. To cope, manufacturers in several areas "noted some ability to pass along higher costs to customers" the Fed said. Retailers, however, reported "mixed results with respect to raising final goods prices," the Fed said.

Over the past week, Fed Ben Bernanke and his colleagues have been sounding an ever-louder alarm against inflation. Given those concerns, Bernanke has signaled the Fed's rate-cutting campaign, started last September to bolster the weak economy, is probably over.

Many economists predict the Fed will leave its key rate at 2 percent, a four-year low, when it meets next, on June 24-25.

For now, "policymakers won't raise rates because of concerns about the economy, but they can't lower them because of concerns about worsening inflation. So it's basically a stalemate. The right thing for the Fed to do is to leave rates alone," said Stuart Hoffman, chief economist at PNC Financial Services Group.

However, with inflation moving up on the Fed's list of concerns, Wall Street investors and others are now thinking the Fed might be forced to start boosting rates later this year to curb inflation.

On Wall Street, stocks tumbled as soaring oil prices fanned inflation concerns. The Dow Jones industrials plunged 205.99 points. Oil prices closed at $136.38 a barrel. Gasoline prices reached another record -- a national average of $4.052 a gallon.

One of the things the Fed will be paying close attention to is the extent to which people think prices will keep going up, something that can make them act in ways that would worsen the inflation climate. If such "inflation expectations" were to "drift higher or even to fail to reverse" that would have "troublesome implications," Donald Kohn, the Fed's vice chairman, said in a speech Wednesday.

James Bullard, president of the Federal Reserve Bank of St. Louis, echoed that point. "It is rule No. 1 in modern central banking that inflation and inflation expectations be kept under control," he said.

Raising rates too soon, though, could deal a set back to the already fragile economy.

It's a dicey situation for Fed policymakers.

The housing, credit and financial crises have badly bruised the economy and sharply slowed its growth. Consumers and businesses alike have hunkered down. Employers have cut jobs every month so far this year and the unemployment rate zoomed to 5.5 percent in May, from 5 percent in April -- the largest one-month increase since 1986.

Bernanke, in a speech earlier this week, downplayed the big jump in the jobless rate, saying the danger that the economy has fallen into a "substantial downturn" appears to have waned over the past month or so.

The Fed's powerful doses of interest rate cuts, the government's $168 billion stimulus package, further progress in the repair of problems in financial and credit markets, a gradual ebbing of the drag from the deep housing slump and still solid demand from abroad for U.S. exports should help the economy over the remainder of this year, Bernanke predicted.

At the same time, Bernanke sent a fresh warning that the Fed will be on heightened alert against inflation dangers, especially any signs that investors, consumers and businesses are thinking inflation will get worse.

The Fed "will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation," the Fed chief said Monday evening.

With hiring slowing, the Fed's report on Wednesday suggested there's little danger of wage inflation taking off. Wage pressures were reported as "moderate or limited for all but a few skilled-labor positions," the Fed said. That's consistent with Bernanke's recent assessment that he doesn't see a repeat of the 1970s-style situation where workers demanded -- and received -- higher wages to keep up with ever-rising prices.

The Fed's survey is based on information supplied by the Fed's 12 regional banks. The information was collected before June 2.

In the short term, it may be that some rise in both inflation and unemployment will have to be tolerated, Kohn suggested.

Setting interest rates "in a manner that balances the undesirable effects of a shock to the system on both inflation and employment will tend to be more efficient than setting policy so as to deliver more extreme outcomes in either inflation or unemployment," he said.

Lockheed Martin Corp. conducted the first test flight of a version of the F-35 Lightning II to be used by the U.S. Marine Corps, the company said Wednesday.

The test flight from the Naval Air Station Fort Worth, Texas, is considered a major milestone in development of the aircraft, which is also known as the Joint Strike Fighter.
The plane has three versions depending on the military branch that will use it.

Wednesday's test was for the short takeoff/vertical landing jet version, which also will be used by Britain's Royal Air Force and Royal Navy, and the Italian Air Force and Navy.

Northrop Grumman Corp, Lockheed and Raytheon Co. collectively employ about 2,800 people in El Segundo and Palmdale to work on various parts of the F-35.

Marine Corps Brig. Gen. David R. Heinz, deputy F-35 program director, said in a conference call with reporters: "this truly is a milestone day. . . . Above the water, it looked just like a swan, but we know how much kicking was going on underneath."

By 2010, who knows how expensive gas will be.

Toyota promises plug-in hybrid vehicle by 2010

TOKYO (AP) -- Toyota is introducing a plug-in hybrid with next-generation lithium-ion batteries in Japan, the U.S. and Europe by 2010, under a widespread strategy to be green outlined Wednesday.

The ecological gas-electric vehicles, which can be recharged from a home electrical outlet, will target leasing customers, Toyota Motor Corp. said. Such plug-in hybrids can run longer as an electric vehicle than regular hybrids, and are cleaner.

Lithium-ion batteries, now common in laptops, produce more power and are smaller than nickel-metal hydride batteries used in hybrids now.

The joint venture that Toyota set up with Matsushita Electric Industrial Co., which makes Panasonic products, will begin producing lithium-ion batteries in 2009 and move into full-scale production in 2010, Toyota said.

Toyota also said it's setting up a battery research department later this month to develop an innovative battery that can outperform even that lithium-ion battery.

Japan's top automaker, which leads the industry in gas-electric hybrids, has said it will rev up hybrid sales to 1 million a year sometime after 2010.

Hybrids reduce pollution and emissions that are linked to global warming by switching between a gas engine and an electric motor to deliver better mileage than comparable standard cars. Their popularity is growing amid soaring oil prices and worries about global warming.

"Without focusing on measures to address global warming and energy issues, there can be no future for our auto business," Toyota President Katsuaki Watanabe told reporters at a Tokyo hall.

He said developing breakthrough technology was critical to allow Toyota and other automakers to continue to grow while avoiding damage to the environment.

The Prius, which has been on sale for more than a decade, recently reached cumulative sales of 1 million vehicles. When including other Toyota hybrids, the company said it sold 1.5 million hybrids so far around the world.

Toyota said it is also working on fuel cell vehicles, which produce no pollution by running on the energy produced when hydrogen combines with oxygen in the air to produce water.

It is also improving mileage of all its models, including gasoline engine and clean diesel vehicles, it said.

The company plans to set up more environmentally friendly factories that will produce fewer carbon gas emissions and develop production techniques that require less energy, using solar energy and planting trees, Watanabe said.

On Tuesday, Toyota said it will start making the Camry hybrid in Australia and Thailand as part of its efforts to step up production of "green" cars around the world.

The two plants were only Toyota's second and third overseas production point for the Camry hybrid after its Kentucky plant in the U.S. The only other nation where Toyota manufactures its hybrids besides Japan is China.

Toyota, close to overtaking General Motors Corp. as the world's No. 1 automaker, faces competition from rivals, which are also all working on ecological technology.

For 2010, General Motors is planning a Chevrolet Volt plug-in electric vehicle, while Nissan Motor Co. is planning electric vehicles for the U.S. and Japan. Honda Motor Co. is also developing new hybrid models, targeting sales of 500,000 hybrids a year sometime after 2010.

This could be good news if it peaks at ONLY $4.15.

EIA Ups Gas Price Forecast, Expects Peak Of $4.15/Gallon In August

(RTTNews) - The Energy Information Administration has upped its forecast for gasoline prices this summer, predicting that gas will peak at a nationwide average of $4.15 per gallon in August. Gas reached another record high Tuesday, tacking on 2 cents to $4.043 per gallon, according to a survey of gas stations by AAA.

Last month the EIA called for an average price of $3.54 per gallon between April and September, peaking at $3.73 in June. The agency is now predicting an average of $3.78 per gallon in 2008, nearly $1 more per gallon than in 2007. Diesel is expected to average $4.32 per gallon in both 2008 and 2009, tacking on $1.44 from last year's average.

"This forecast reflects a sizable narrowing of refiner gasoline margins from those of last year because of weakness in gasoline demand and growth in ethanol supply," the EIA said.

Read the full story.

Apparently there is.

I Am A Member Of The Cult Of iPhone

(TechCrunch.com ) I've been to enough Steve Jobs keynotes now to know that the man is able to take a crowd and bend it to his will. Every time, I've been a willing subject - sometimes (but not every time) to find myself in a hangover-like state a day later when I try to remember exactly why I thought that whatever he was pitching would change my life forever.

Steve Jobs is masterful and charismatic when he's on stage and all eyes are on him. And when, like yesterday, the crowd is carefully packed with a throng of Apple developers cheering him on, the press in attendance can easily get caught up in the hype. He's not nearly so charismatic in person, and I believe that's why Apple will probably not, as Dave Winer suggests, ever move to a televised delivery of their big news while Jobs is in charge. The videos just don't communicate the man's magnetic charm in quite the same way.

So while I agree with Charles Cooper that Apple may sometimes get more press, and more compliant press, than they "should," I think he and others miss the (much) larger point: Apple, and Steve Jobs, stoke our imagination in a way that no other technology company has ever done. Apple is about elegance, design, and potential, and we love them for it.

Read the full story.

Here's this week's At Work profile.

Homeopath says there's nothing 'wu-wu' in her cures
By Muhammed El-Hasan Staff Writer

Sally Kneifel is in the business of curing people's ailments.

Yet she is not a medical doctor, nurse, pharmacist or even a paramedic.

Kneifel, 75, is a homeopath.

At her Torrance clinic, Kneifel gives her "patients" remedies to achieve better health and balance in their lives.

Previously, the Manhattan Beach resident worked as a travel agent, a job that included taking groups on African safaris.

In 1995, at the age of 63, Kneifel decided to satisfy a personal interest by studying homeopathy at a school in West Los Angeles and through the Internet.

By 1998, she was practicing the field professionally, even as she continued to study.

What does your job entail?

In homeopathy, we treat the person, not the symptoms.

Read the full story.

Manhattan Beach firm converts diesel vehicles to run on restaurants' used oil
By Muhammed El-Hasan Staff Writer

Do you want fries with that burger?

How about a gallon of grease for your car?

The ever-rising cost of fuel is spurring motorists to find alternatives, from hybrid cars to public transportation to walking.

Add to that a growing trend of using pure vegetable oil to run a vehicle's engine.

The trend is nationwide, including the South Bay, where auto mechanic Ken Meikle converts diesel vehicles to use vegetable oil.

About four years ago, Meikle, co-owner of Dynamic Performance in Manhattan Beach, began experimenting with the conversion process for diesel vehicles. He started with his own car, and then began offering the service to customers.

Now he uses a conversion kit he buys from a Los Angeles firm.

"I've been doing it in earnest about two years," Meikle said of the conversions. "I've done close to a hundred of them."

Read the full story.

Read it and weep.

Gas hits national average of $4 for the first time

NEW YORK (AP) -- The average price of regular gas crept up to $4 a gallon for the first time over the weekend, passing the once-unthinkable milestone just in time for the peak summer travel season.

Prices at the pump are expected to keep climbing, especially after last week's furious surge in oil prices, which neared $140 a barrel in a record-shattering rally Friday.

While Americans who have to drive will feel the biggest squeeze, the increased prices also translate into higher costs for consumers and businesses, who will be forced to shoulder increased costs for food and anything else that needs to be transported.

"I don't think we've felt quite the full impact of $138 or $139 a barrel oil," said Jason Toews, co-founder of fuel price research site GasBuddy.com.

Gas prices rolled past their latest threshold Sunday, increasing to $4.005 a gallon overnight from $3.988 the day before, according to AAA and the Oil Price Information Service.

Of course, drivers in many parts of the country have already been paying well above that price for some time.

California has seen some of the highest prices; a gallon there now averages $4.436 a gallon, the most in the country. Missourians are paying the least at the pump, with a gallon in the Show-Me State selling for a relatively cheap $3.802 a gallon.

Prices have risen by about 20 cents in the past three weeks, according to a report by the Lundberg Survey released Sunday.

Truckers and others with diesel engines under the hood have it even worse off. A gallon of diesel now sells for $4.762, up nearly a penny overnight, according to AAA and OPIS. Prices hit a record atop $4.79 at the end of May.

Skyrocketing oil prices, which are trading at more than double their level last year, are largely to blame for the surge. Crude prices shot up more than 13 percent late last week in their biggest two-day price gain in history.

Benchmark light, sweet crude for July delivery officially finished the week at $138.54 on the New York Mercantile Exchange, but at one point jumped as high as $139.12.

"This could be a real weight on the economy," James Cordier, president of Tampa, Fla.-based trading firm Liberty Trading Group, said of oil's jump Friday. "With every nickel that gas goes up, people are driving less and less."

Oil's latest surge caught some longtime petroleum industry veterans off-guard, and left analysts wondering if it represented a one-time spike or the beginning of a new wave of advances.

Yolanda Cade, managing director of public relations at AAA, said gas prices are likely to rise further, although the automotive club is waiting to see where oil prices head this week before making any new predictions.

"We've cautioned gasoline station owners against not recklessly increasing retail prices just because of one big jump in the crude market," she said Sunday. "One day of trading doesn't constitute a market trend."

I'm still a bit nervous about jumping in.

Stock Selloff Offers Good Chance to Seek Bargains

(CNBC) The wild selloff in stocks, which many analysts see as overreaction, could set up a perfect opportunity for investors to go bargain hunting.

The frantic run-up in oil prices and a 22-year high in unemployment sparked yet another round of panic-selling on Friday, a trend market pros say will continue until people stop getting rattled by every bit of bad news that comes along.

"It's the classic knee-jerk overreaction," Diane de Vries Ashley, managing partner of Zenith Capital Partners, said of Friday's market implosion. "I admire the concept of a thoughtful and logical market, I just don't think it exists."

The unemployment report set the stage for the sell-off.

Nevermind that the total number of new jobless claims actually was less than Wall Street had anticipated. Traders instead focused on the sharp rise in the percentage of jobless, from 5.1 percent to 5.5 percent. They took that as a sign that the economy was weakening, even though economists said the rise was attributable mostly to more unemployed people trying to get back in jobs market and college and high school students looking for summer work.

Then there was oil.

Crude prices surged more than $6 a barrel towards record highs, a phenomenon largely seen as speculator-influenced even though the supply-demand equation undeniably is a significant factor in the overall energy picture.

Still, it all added up to a wild close to a manic week in which the market scored its biggest single-day gain in two months on Thursday, then followed with Friday's unrelenting drop.

Some, though, weren't panicking.

"History dictates that the seeds of the next bull market are being planted right now. It's very often that first leg up will come amid a gloomy data scenario," says Quincy Krosby, chief investment strategist at The Hartford.

Read the full story.

This reminds me of the California electricity shortages a few years ago. Has demand for oil risen so fast in such a short period of time?

Oil rises jump almost $7, closing in on record

(AP) Oil prices shot up nearly $7 a barrel Friday, extending big gains from the previous day and racing toward an all-time high after a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July.

A further weakening of the dollar helped keep prices high by enticing overseas buyers armed with stronger currencies and other investors looking for a hedge against the greenback.

Light, sweet crude for July delivery jumped as much as $6.96 to $134.75 on the New York Mercantile Exchange, before easing slightly to trade at $134.40, up $6.61.

Prices pushed sharply higher Friday after Morgan Stanley analyst Ole Slorer said he expected strong demand in Asia could drive prices to $150 by Independence Day, when millions of Americans are expected to take to the roads. Shipments from the Middle East are mimicking patterns seen in the third quarter last year, when Morgan Stanley based its "oil price spike" predictions on falling supplies in the Atlantic, he said.

"We made the same call using the same parameters, but now we are starting from much lower inventory levels," Slorer said.

Friday's surge builds on a $5.49 gain Thursday, which was the biggest single-day price increase in the history of the Nymex crude contract. That spike came as the dollar fell after the European Central Bank suggesting it could raise interest rates.

"We had a rally of something like $12 in about 24 hours. It makes no fundamental sense," said Stephen Schork, an analyst and trader in Villanova, Pa. "With oil pushing back up to the mid-$130s, it's the make it or break it point. If we go past that, we set the course for uncharted waters and head up toward $150."

Meanwhile, U.S. gas prices at the pump continued to hover just shy of an average $4 a gallon, easing only 0.3 cent from Thursday's record.

Drivers are now paying an average of $3.99 for a gallon of regular gas nationwide, according to AAA and the Oil Price Information Service; in many parts of the country, consumers are already paying well over $4. Retail diesel slipped a penny overnight to $4.76.

Pump prices are bound to rise even further if oil sustains its advance. James Cordier, president of Tampa, Fla.-based trading firm Liberty Trading Group, predicted prices could rise to $4.25 as early as the end of the month.

"Unfortunately, drivers cutting back isn't going to lower the price of gasoline any time soon," he said.

The dramatic reversal in what had been a weakening oil market began Thursday after ECB President Jean-Claude Trichet suggested the bank could raise interest rates and the euro climbed against the dollar. When interest rates rise in Europe, or fall in the U.S., the dollar tends to weaken against the euro.

Is the worst still ahead?

Foreclosures hit a record high -- and more coming

WASHINGTON (AP) -- The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too -- an alarming sign that the housing crisis and its damage to the national economy may only get worse.
Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices -- extending a vicious cycle.

Slumping home values are being blamed in large part for the rising tide of foreclosures. Troubled borrowers are left owing more to the bank than their homes are worth. They can't sell without taking a huge financial hit, so they just walk away.

In fact, Americans' equity in their homes -- usually their single biggest asset -- now has dropped to the lowest level on record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up.

Watching their home values sink, consumers have pulled back on spending, a factor in the economy's slowdown. Buoyed by rebate checks, shoppers did get back in the buying groove in May, but analysts predict that consumers -- pounded by galloping gasoline prices -- will still be cautious.

"The economy is treading water, and the housing market is one of the undercurrents trying to pull it down," said Stuart Hoffman, chief economist at PNC Financial Services Group.

Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83 percent over the last three months in 2007.

The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35 percent -- or 2.87 million loans -- compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are 30 or more days past due.

Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up," Jay Brinkmann, the association's vice president of research and economics, told The Associated Press.

Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.

The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.

The association's survey covers just over 45 million home loans.

More problems also cropped up with loans to more creditworthy borrowers.

The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payments rose to 3.71 percent from 3.24 percent.

The Aerospace Corp. in El Segundo was named to The Ethisphere Institute's second annual list of the World's Most Ethical Companies.

Ethisphere, a think-tank dedicated to the research and promotion of profitable best practices in global governance, business ethics and corporate responsibility, announced its list of honorees at the joint Ethisphere-Forbes conference, "Driving Profit through Ethical Leadership," held on Tuesday in New York.

The group honored 93 companies. The selection process included reviewing more than 10,000 of the world's leading companies on six continents. The analysts reviewed codes of ethics, litigation and regulatory infraction histories and other aspects of corporate responsibility.

The Aerospace Corp. is a Pentagon-funded think tank for government procurement of rockets, satellites and other space systems.

DIRECTV, the El Segundo-based satellite TV provider today announced the launch of Azteca Mexico, a new 24-hour satellite-only channel to be aired through
DIRECTV Mas in the United States.

Azteca Mexico will offer exclusive programming from TV Azteca's three Mexican networks: Channel 7, 13 and Proyecto 40 and will differ from programming viewers receive on broadcast network Azteca America.

Azteca Mexico will air on DIRECTV;s Channel 442 nationwide and be identified in programming guides as AZM 442, starting Wednesday of next week.

Azteca Mexico will offer viewers programs in the U.S., many of which will be shown at
the same time as they air in Mexico on TV Azteca.

On a related point, as American and European car makers continue to cut the gap in quality between them and Japanese brands, the Japanese companies have had to turn to fuel efficiency and environmentally friendly technologies to separate themselves from the pack.

J.D. Power: Vehicle quality improves industrywide

DETROIT -- The quality of new cars improved across the industry this year, with Porsche, Honda, Toyota, General Motors and Ford among the automakers leading the pack, the marketing and consulting company J.D. Power and Associates said Wednesday.

Porsche was the top brand in J.D. Power's annual ranking of initial vehicle quality, which measures both mechanical and design problems in the first 90 days of ownership. Others in the top five were Nissan Motor Co.'s Infiniti, Mercedes-Benz, and Toyota Motor Corp.'s Lexus and Toyota brands.

In rankings by vehicle segments, Honda was the only brand with three winners -- the Fit subcompact, Civic small car and CR-V crossover. Toyota, General Motors Corp. and Ford Motor Co. had three winners each across all their brands. Overall, 26 of the 36 nameplates in the rankings improved from last year.

Chrysler LLC's Jeep was the worst performing brand, with 167 problems per 100 vehicles. Other brands in the bottom five were BMW AG's MINI, Land Rover, GM's Saturn, and Suzuki.

David Sargent, vice president of automotive research at J.D. Power, said the most improved vehicle this year was the Volkswagen Passat. He also cited the Chevrolet Malibu and Infiniti EX-Series, saying both vehicles had strong launches with relatively few problems, which is rare for all-new vehicles.

J.D. Power says overall quality improved to an average of 118 problems per 100 vehicles from 125 problems last year. Vehicle quality has steadily improved over the last decade; there were 176 problems per 100 vehicles in 1998.

The rankings were based on questionnaires from 81,500 people who bought or leased new 2008 vehicles between November and January. The questionnaires ask 228 questions on issues from handling, braking and engine trouble to seat comfort and stereo systems. Sargent said consumers reported that quality was up in every category except audio, entertainment and navigation systems.

The rankings are closely watched by automakers and are frequently used in advertising despite persistent questions about whether they show any real statistical difference between automakers. For example, if Jeep has 167 problems per 100 vehicles, that equals 1.67 problems per vehicle, making the difference with Porsche -- at 0.87 problems per vehicle -- seem less significant.

Sargent said there are more profound differences in the numbers for individual models, which aren't released publicly but are shown to automakers.

"Most brands produce some very good cars, and many brands produce some cars or vehicles which are not so good," Sargent said during the release of the numbers before a meeting of the Automotive Press Association.

He also said that even though the differences seem insignificant, they have an effect on consumers and whether they will stay with a brand or recommend it to others.

"For every small, incremental increase in quality, you will get more customers coming back to your brand," Sargent said.

Sargent said rising gas prices had some effect on the rankings this year. While the average number of problems with vehicles' fuel consumption stayed the same as in 2007, the owners of large vehicles were more likely to complain about high fuel consumption, while the owners of small vehicles were less likely to complain.

"I believe this is entirely due to increased gas prices and people's sensitivity to the issue," Sargent said.

Sargent also said hybrid vehicle owners were also slightly more likely to complain about fuel consumption.

J.D. Power also gave awards to the plants which produce the vehicles with the fewest mechanical complaints and defects. The Mercedes-Benz plant in Sindelfingen, Germany, was the best overall, averaging 33 problems per 100 vehicles. In North and South America, the winner was the Toyota plant in Baja California, Mexico, which produces the Toyota Tacoma. In Asia, the top plant was Toyota's Fujimatsu plant in Japan, which makes the Toyota Prius.

Pervaiz Lodhie, founder and president of LEDtronics Inc., the Torrance-based maker of LED bulbs, was awarded with the California Assembly's Outstanding Individual in Entrepreneurship Award.

The honor was presented to Lodhie on May 23 at the First Annual Asian Pacific American Community Awards ceremony held at the George Nakano Theater in Torrance.

Assemblymember Ted W. Lieu presented the award to Lodhie.

LEDtronics was founded in 1983 by Lodhie and Almas Lodhie as a small two-person manufacturing organization. Todya, the company employs 300 people and has sales representatives around the world.

Hopefully, this report will spur China and Hong Kong to improve their websites.

New report identifies dangerous Web domains

By JORDAN ROBERTSON

(AP) When surfing the Internet for safe Web sites, not all domains are equal. Companies that assign addresses for Web sites appear to be cutting corners on security more when they assign names in certain domains than in others, according to a report to be released Wednesday by antivirus software vendor McAfee Inc.

McAfee found the most dangerous domains to navigate to are ".hk" (Hong Kong), ".cn" (China) and ".info" (information).

Of all ".hk" sites McAfee tested, it flagged 19.2 percent as dangerous or potentially dangerous to visitors; it flagged 11.8 percent of ".cn" sites and 11.7 percent of ".info" sites that way.

A little more than 5 percent of the sites under the ".com" domain -- the world's most popular -- were identified as dangerous.

More spammers, malicious code writers and other cybercriminals can establish an online presence when domain name registry businesses cut requirements for registering a site in order to boost their profit and profile. The report doesn't identify domain name registration companies McAfee believes are responsible for those lapses.

Hundreds, perhaps thousands, of companies are in the business of registering domain names; some are large and well known, while others are small and less reputable, offering their services on the cheap and with flimsy or no background checks to lure in more customers.

The fact that Internet scam artists gravitate to domain name services with lower fees and fewer requirements isn't new.

What McAfee's "Mapping the Mal Web" report, now in its second year, tries to do is identify the domains that are populated with the highest concentration of risky sites.

The servers for ".hk" and ".cn" Web sites don't have to be in China; Web site operators can register sites from anywhere to target different geographies.

Other risky domains include ".ro" (Romania), with 6.8 percent, and ".ru" (Russia), with 6 percent of sites flagged as dangerous.

Shane Keats, research analyst for McAfee and lead author of the report, said the increase in dangerous sites registered under the ".hk" and ".cn" domains over last year's report was caused in part by better data collection on McAfee's part on those domains and by apparent security lapses in some registrar companies' processes for registering addresses.

"My advice about surfing behavior is that if you're really desperate for cheap Prozac and the pharmacy ends in '.cn,' don't do it. Just don't do it," Keats said. "Find another place to get your Prozac."

Many Internet frauds involve fake sites for pharmaceuticals.

The McAfee report is based on results from 9.9 million Web sites that were tested in 265 domains for serving malicious code, excessive pop-up ads or forms to fill out that actually are tools for harvesting e-mail addresses for sending spam.

Keats said domain name registrars that are strict about authenticating that Web site owners are operating a legitimate business see far fewer malicious Web sites using their services.

Where McAfee found some of the least-risky domain names:

• ".gov" (government use), with 0.05 percent flagged;

• ".jp" (Japan), with 0.1 percent flagged and

• ".au" (Australia), with 0.3 percent flagged.

AcuNetx Inc., the Torrance-based seller of diagnostic, analytic and therapeutic medical tools said that its chairman, Charles E. Phillips, retired because of health reasons.

The company's board of directors appointed Robert S. Corrigan, currently a member of the board, as the new chairman.

In a statement, Corrigan said: "I view my most important responsibility as board chairman is to assist and support CEO Ron Waldorf as we usher in a host of new products and opportunities which we believe will enhance shareholder value in the months and years ahead."

Well, here's the full story. I'm not sure if it'll appear in the print edition. So enjoy.

By Muhammed El-Hasan Staff Writer

If the occasional heated argument and bruised ego on the reality TV show "Sunset Tan" seem intense, at least there's no spitting.

On Sunday at the LA Sunset Tan in Redondo Beach -- where an episode of the reality TV show was recently taped -- two men allegedly entered the business, with one of them spitting in a manager's face, according to witnesses and a police report.
Adding to the drama, one of the two men is allegedly the owner of a competing tanning salon chain.

"It's like tanning salon wars," said Tony Trutanich Jr., who owns the LA Sunset Tan at 1020 S. Pacific Coast Highway. "He's just really upset that we're opening up and putting him out of business."

Added Trutanich's wife, Anna, who oversees the store and witnessed the incident: "It was shocking."

When asked about the alleged assault, Redondo Beach Police spokesman Sgt. Phil Keenan said, "It sounds like a reality TV show, doesn't it?"

The incident was captured on the store's video security system, according to Trutanich and Keenan. But Trutanich's lawyer declined to allow a Daily Breeze reporter to see the footage.

(Tony Trutanich, a real estate investor, is the son of the late owner of Tony's on the Pier and Tony's Fish Market in Redondo Beach.)

LA Sunset Tan, a Beverly Hills-based tanning salon with its own reality TV show on the E! Entertainment channel, opened the Redondo Beach location two weeks ago in a glitzy grand opening that included the show's stars, a red carpet and valet parking.

The Trutaniches, who own the Redondo Beach franchise, plan to open three other South Bay locations within the next 18 months.

According to the police report, Charles Agozino of Los Angeles allegedly entered the store and angrily demanded to speak to Trutanich. Agozino was accompanied by Steven Biale, who owns Cop-a-Tan, a tanning salon chain with nine locations including six in the South Bay, Keenan said.

Anne Vangelisti reportedly told Agozino that Trutanich was out of town. Then, while allegedly spewing verbal abuse against Vangelisti, Agozino walked out the door with Biale. Agozino walked out the door with Biale. Vangelisti locked the door behind them.

"The victim unlocked the door to allow a customer in and the suspect then tried to enter. And when she tried to stop them from entering, he spit in her face, according to her," Keenan said.

Vangelisti said the incident was "pretty scary," and added, "They reeked of alcohol."

The two men then left in a black Mercedes, according to Keenan. Redondo Beach Police stopped the pair, but determined the driver, Biale, was not driving under the influence.
Spitting on another person is technically battery, Keenan said.

"The city prosecutor's office would have to gather information," Keenan said of the investigation.

Keenan said it was unclear what precipitated the alleged attack, or what Agozino's relationship is with Biale.

Biale and Agozino could not be reached for comment Monday. Biale did not return a message left for him at a Redondo Beach Cop-a-Tan store.

Tony Capozzola, a Redondo Beach attorney representing Tony Trutanich, referred to Agozino as Biale's "little henchman."

"If these allegations are true, there are several actions we might consider, both civil and criminal," Capozzola said.

Mike Misetic, a spokesman for LA Sunset Tan, said the incident was unlikely to appear in an episode of the associated reality TV show. He added that the alleged attack also will not affect the tanning salon chain's plans to expand in the South Bay.
"Sunset Tan is here to stay," Misetic said.

If the occasional heated argument and bruised ego on the reality TV show "Sunset Tan" seem intense, at least there's no spitting.
On Sunday at the LA Sunset Tan in Redondo Beach -- where an episode of the reality TV show was recently taped -- two men allegedly entered the business, with one of them spitting in a manager's face, according to witnesses and a police report.
Adding to the drama, one of the two men is allegedly the owner of a competing tanning salon chain.
"It's like tanning salon wars," said Tony Trutanich Jr., who owns the LA Sunset Tan at 1020 S. Pacific Coast Highway. "He's just really upset that we're opening up and putting him out of business."
Added Trutanich's wife, Anna, who oversees the store and witnessed the incident: "It was shocking."
When asked about the alleged assault, Redondo Beach Police spokesman Sgt. Phil Keenan said, "It sounds like a reality TV show, doesn't it?"

The rest of the story should appear in Wednesday's edition of the Daily Breeze.

If the occasional heated argument and bruised ego on the reality TV show "Sunset Tan" seem intense, at least there's no spitting.
On Sunday at the LA Sunset Tan in Redondo Beach -- where an episode of the reality TV show was recently taped -- two men allegedly entered the business, with one of them spitting in a manager's face, according to witnesses and a police report.
Adding to the drama, one of the two men is allegedly the owner of a competing tanning salon chain.
"It's like tanning salon wars," said Tony Trutanich Jr., who owns the LA Sunset Tan at 1020 S. Pacific Coast Highway. "He's just really upset that we're opening up and putting him out of business."
Added Trutanich's wife, Anna, who oversees the store and witnessed the incident: "It was shocking."
When asked about the alleged assault, Redondo Beach Police spokesman Sgt. Phil Keenan said, "It sounds like a reality TV show, doesn't it?"

The rest of the story should appear in Wednesday's edition of the Daily Breeze.

Read it for yourself.

She's at home with painting
By Muhammed El-Hasan, Staff Writer

"I had a mortgage and three kids and I had to survive."

That's how Linda Benecke described her circumstances as a single parent in 1988, when she was laid off from her job working with computers at a local aerospace company.

Twenty years later, Benecke owns a commercial painting business called The Paintress.

Read the full story.

Read today's Business Lives feature.

Global Wings
CEO expands aviation services worldwide while maintaining a local feel
By Muhammed El-Hasan, Staff Writer

From his corporate headquarters in Westchester, Joseph Czyzyk scans the globe like an airplane passenger 40,000 feet up may see the ground below: with a broad, panoramic view.

Yet, for Czyzyk (pronounced Chizzick), the ground below is within his grasp.

The chairman and CEO of Mercury Air Group Inc., an aviation services company, is expanding his firm's worldwide reach.

The private company recently opened the Middle East's largest private air terminal facility, at Kuwait International Airport. The company is considering opening facilities in other countries including India.

Mercury Air Group already provides services in many parts of North, Central and South America, Asia, the Middle East and the Mediterranean region.

Customers include corporate aircraft operators, major airlines and the U.S. military.

"We are, whether we like it or not, a global economy," Czyzyk said in a recent interview. "And there's no reason this local company in the South Bay should not be part of that. And we are."

Read the full story.

It could happen to anyone these days.

Drivers putting less gas in tank, then running out

(AP) Brent Saba had just dropped a church group off at Philadelphia International Airport on Sunday morning and was heading north on Interstate 95 when it happened: His 15-passenger van ran out of gas.

Saba, a 24-year-old church pastor, made it to the shoulder just past the Ben Franklin Bridge and waited more than 30 minutes for someone to stop and lend him a cell phone. Then he waited a while longer for AAA to arrive with fuel.

With gas prices hovering at $4 a gallon, motorists like Saba are putting less fuel in their tanks -- then coming up empty on the highway.

Though national statistics on out-of-gas motorists don't exist, there's plenty of anecdotal evidence that drivers unwilling or unable to fill 'er up are gambling by keeping their tanks extremely low on fuel.

In the Philadelphia area, where the average price for a gallon of regular broke $4 on Friday, calls from out-of-gas AAA members doubled between May 2007 and May 2008, from 81 to 161, the auto club reported.

"The number one reason is they can't stretch their money out from week to week," said Gary Siley, the AAA mobile technician who helped Saba.

"Some of them are embarrassed. ... They say, 'I was trying to make it till Friday,' and they couldn't do it," said Siley, who has assisted numerous out-of-gas motorists.

Saba blames himself for not paying enough attention to the fuel gauge, saying he doesn't normally let the tank get so low. But he said the spiraling cost of gas has led the church to reduce its use of the fuel-guzzling van.

And when he does get gas, he puts in only a half-tank.

"If the prices were lower, I'd probably just fill it up," Saba said.

Research from The Nielsen Co. shows that drivers have been making more frequent trips to the pump but limiting how much they put in the tank.

Convenience stores, which sell about 80 percent of the nation's gas, are seeing fewer fill-ups, said industry spokesman Jeff Lenard.

"When the pump hits a certain dollar amount now, you're seeing more customers stop," said Lenard, with the National Association of Convenience Stores. "They're purchasing fewer gallons."

And that means playing Russian roulette with the gas gauge.

In Dallas, Courtesy Patrol -- a roadside assistance program operated by the sheriff's department -- reports a doubling in the number of daily fuel calls from stranded motorists in recent months. Sheriff Lupe Valdez herself recently came to the aid of a mother and her two children who had run out of gas along an interstate.

In some cases, motorists have gotten stuck in the middle of the highway, creating a dangerous situation, said Lonnie Lankford, a Courtesy Patrol shift leader. "It's just breaking the backs of the people, these gas prices," he said.

Transportation officials in Oregon and Tennessee also report increasing numbers of stranded motorists in need of gas.

AAA Mid-Atlantic, which has nearly 4 million members in Delaware, Maryland, New Jersey, Pennsylvania, Virginia and the District of Columbia, reported a 15 percent year-over-year increase in calls from members with empty tanks.

"We're seeing a lot of frustrated motorists who are trying to cut corners, and this is one way they're doing it," said AAA Mid-Atlantic spokeswoman Catherine Rossi. "But they're shooting themselves in the foot, or the wallet, in the long run."

That's because perpetually running on fumes can damage a car's fuel pump -- requiring repairs that make a full tank of $4 gas seem like a bargain.

As for Saba, he was just thankful he made it back to North Philadelphia in time for his 11:30 a.m. church service.

"What I was thinking to myself was, at least the weather's nice," he said. "It was beautiful outside and that made things a lot better."