Business Briefs

Reported by Star-Bulletin staff & wire

Thursday, April 9, 1998

Japanese airline strikes
spread, but not to isles

From staff and wire reports

TOKYO -- All Nippon Airways Co.'s pilots said they'll extend their strike against a 15 percent pay cut for a fifth day tomorrow, forcing the airline to cancel most of its flights to Europe and the United States through Monday.

All Nippon Airways, Japan's second biggest airline, canceled 22 more international flights, from Saturday through Monday, affecting a further 4,600 passengers. That brings the total flights canceled to 49 and passengers affected to 8,000.

But the airline said today it has not canceled any of its daily Nagoya to Honolulu flights.

Tom Fredo, manager of public relations for ANA's North America division, said it won't likely cancel any of its Hawaii flights because it is ANA's only international flight out of Nagoya.

So far, the cost to ANA has been about $3 million, according to Paul Smith at HSBC Securities Japan Ltd.

"We're losing a lot of money," said Naoto Takada, ANA spokesman. "But what's worse, is our loss of credibility." Takada said the airline will pay customer compensation,and is paying to fly passengers on other airlines.

In Japan, unions generally say how long the strike will last, and avoid walkouts in busy periods.

Japan Airlines Co.'s pilots, who went off the job at midnight last night, told JAL the strike would last 24 hours. The 225 pilots will return to work tomorrow, said Yoshihiro Yamabe, Vice Chairman of JAL's pilots' union, even though the company hasn't backed down on its 10 percent pay cut.

JAL, the largest carrier in Japan-Hawaii service, said it didn't cancel any flights because pilots in management stepped in.

Bloomberg News contributed to this report.

Watt Homes merging with British company

The California-based parent of Watt Homes is merging with a unit of a British-based residential developer.

Encino-based Watt Residential partners -- the developer of the Malanai and Aeloa projects at Kapolei -- is merging with John Laing Homes, in a deal that creates one of the 25 largest U.S. home builder, the companies said.

The combined companies, which will be known as WL Homes LLC, expect to build more than 2,000 homes this year and project 1998 revenues of $400 million.

H. Lawrence Webb, president of John Laing Homes' California division, will be the new chief executive officer of WL Homes.

John Laing Homes is a unit of London-based John Laing Plc.

Thirty-year mortgages drop to 7.09 percent

WASHINGTON -- The average rate for on a 30-year, fixed rate mortgage fell to 7.09 percent last week, compared with 7.15 percent a week ago, according to a survey released today by the Federal Home Loan Mortgage Corp.

Meanwhile, 15-year loans dropped five basis points to an average 6.74 percent from 6.79 percent last week, Freddie Mac said. One-year adjustable rate mortgages were unchanged this week at an average 5.68 percent.

A year ago, the 30-year rate averaged 8.15 percent, the 15-year 7.67 percent and the ARM 5.91 percent.

House Democrat wants mega-merger delayed

WASHINGTON -- A House Banking Committee Democrat says the proposed merger between Citicorp and Travelers Group Inc. should be delayed until allegations that Citibank laundered drug money for the jailed brother of the former Mexican president are fully investigated.

"No merger should go forward unless Citibank is completely exonerated of these charges," Rep. Maxine Waters of California, the Congressional Black Caucus chairwoman, said today in declaring her opposition to the deal announced this week.

Joseph Coyne, a spokesman for the Federal Reserve, which must approve the merger, said Citicorp and Travelers Group had not yet submitted a merger application. He declined further comment except to say that "we take into account anything involving the companies." The Justice Department has been investigating to see whether U.S. laws were violated when Raul Salinas transferred millions of dollars from Mexico through New York to Switzerland.

McDonald's plans major Asia-Pacific expansion

OAK BROOK, Ill. -- McDonald's Corp. plans to invest $1.5 billion in the Asia-Pacific region in the next three years, saying it's confident it can weather Asia's economic problems while building markets to offset weak U.S. sales.

McDonald's has more than 4,500 restaurants in 17 countries in the region, including 2,400 in Japan. It plans to build more than 2,000 Asia-Pacific restaurants during the next three years, doubling its presence in some areas.

The Oak Brook, Ill.-based fast-food company shifted its focus overseas and curtailed its U.S. expansion last year after franchise owners complained that new stores were eating into their sales.

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