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HAWAII

Laney questions Maui affordability

The prospect of overheating in Maui's housing market is the only blemish in an otherwise bright Valley Isle economy, according to economics expert Leroy Laney.

"The median price of a single-family home on Maui averaged $672,100 over the first six months of this year, up 25 percent from the same period in 2004," Laney said. "One wonders about the future of an economy in which those who make it run can't afford to relocate or stay here."

Maui County's jobless rate, which averaged 2.6 percent in the first half of 2005, reversed the usual trend to fall below the statewide rate of 2.8 percent. Total visitor arrivals on Maui were up 2.7 percent through June of this year.

Longer-term state forecasts for Maui during the next 10 years project annual population growth of about 1.5 percent, job growth of 1 percent and real personal income growth of just under 3 percent.

Laney spoke yesterday at the 31st annual Maui County Business Outlook Forum.

Economic commission meets

The Economic Momentum Commission, a 30-member panel of business and political leaders led by Gov. Linda Lingle and First Hawaiian Bank Chief Executive Don Horner, met yesterday to review and discuss "challenge statements" that will serve as a "foundation for solution ideas to be considered later by the commission."

The statements, which will identify challenges facing various sectors of Hawaii's economy, are now being revised into final form.

NATION

Northwest union weighs layoffs

MINNEAPOLIS » Negotiators for striking Northwest Airlines mechanics yesterday weighed a demand from the carrier for roughly 3,500 union layoffs, up from the 2,000 in a proposal that prompted the strike.

Negotiators for both sides were holed up in a downtown hotel. Union contract coordinator Jeff Mathews said that after meeting separately in the morning, the sides were scheduled to meet face-to-face in the afternoon.

The airline told the union Thursday it wanted $203 million in labor savings, up 15 percent from the $176 million it sought in the previous round of contract talks, according to the union.

Crude oil, gasoline prices decline

NEW YORK » Crude oil and gasoline prices slipped yesterday as traders' fears of further damage to the nation's oil production eased after Tropical Storm Ophelia veered away from Florida's coast.

Light, sweet crude for October delivery fell 41 cents to settle at $64.08, after reaching as high as $65.35 and as low as $63.55 in jumpy trading on the New York Mercantile Exchange. Nymex crude is more than $6 off its peak of $70.85 a barrel briefly reached during the day on Aug. 30, but is still almost 50 percent higher than a year ago.

Gasoline futures slipped more than 7 cents to settle at $1.9597 a gallon after dropping as low as $1.9350, while heating oil fell more than 3 cents to settle at $1.8965 a gallon. At the pump, however, drivers were paying more than $3 a gallon on average.

2 Morgan Stanley directors step down

NEW YORK » Two more Morgan Stanley directors resigned from the board yesterday, further underscoring the intent of new chief executive, John J. Mack, to remake the firm.

The departing directors -- Charles F. Knight, the former chief executive of Emerson Electric; and John E. Jacob, a top communications executive at Anheuser-Busch Inc. -- were closely associated with Philip J. Purcell, the former chief executive who was forced to step down in June after a bruising battle over his leadership.

Knight, who led the search for a successor to Purcell, had become the focus of investor criticism for having ruled out Mack as a potential candidate for chief executive. And as chairman of the compensation committee, he and other directors have been named in shareholder lawsuits over the severance packages awarded to Purcell and Stephen S. Crawford, the former co-president who left after Mack's appointment.

Knight -- along with Edward A. Brennan, the former chief executive of Sears and Michael A. Miles, the former chief executive of Philip Morris -- made up the core of Purcell's support on the board. The three men stood behind Purcell when he fended off a bid by Mack for the top job in 2001 and were staunch supporters, even as other directors wavered, of Purcell remaining in office, in spite of the campaign for his ouster.

L.A. hotel deal to cost $246 million in taxes

LOS ANGELES » Los Angeles would give up as much as $246 million in projected room-tax revenues from a proposed downtown hotel next to the ailing Convention Center as part of a controversial deal with the project's developers.

The full extent of the projected revenue the city would give up over 25 years to get the 56-story Hilton built has not previously been publicly discussed.

The forfeited revenue -- in addition to a $4 million fee-waiver contingent on the hotel's completion and a $16 million below-market-rate loan package -- is expected to become a point of contention as a key city panel takes up the issue and the City Council nears a decision on the deal.

"I think it will be a big debate for a lot of factors," said Councilwoman Jan Perry, who represents the area and sits on the Ad Hoc Committee on the Convention Center Headquarters Hotel, which will next consider the deal.

WORLD

Google taps Microsoft exec to open in Israel

Google Inc., the most-used Internet search engine, hired a former Microsoft Corp. executive to open an office in Israel to tap online advertising spending in the country.

Meir Brand will be country manager of Google Israel and will be based in Tel Aviv, California-based Google said yesterday in an e-mailed statement.

Google and Microsoft, locked in a legal battle over Google's hiring of former Microsoft China executive Kai-Fu Lee, are seeking technological talent to develop new products and expand in emerging markets. Sales from outside the United States accounted for 39 percent of Google's revenue in the second quarter, up from 31 percent a year earlier.

Brand most recently served as small business marketing manager at Microsoft Israel, Israeli newspaper Haaretz reported.

In other news ...

» The introduction of chicken sandwiches helped McDonald's Corp.'s same-store sales rise 3.4 percent in August over the same month a year earlier, the fast-food chain said yesterday. The increase in same-store sales was 3.2 percent at U.S. outlets and 3.6 percent in Europe, where the company said strong results in France and Germany partly offset a continuing sales slump in Britain.