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United joins American in boosting airfares
CHICAGO >> United Airlines yesterday raised non-sale fares on its North American routes by $10 per round trip starting June 1, matching a move made by American Airlines a day earlier.
United spokesman Jason Schechter declined to elaborate on the reason behind the increase beyond citing the action by American.
Tim Wagner, a spokesman for American, said he could not comment on a reason for the fare increase, which was approved Thursday and starts June 1.
Both American and United -- the world's two biggest airlines -- are desperate for revenue after losing billions of dollars in the airline industry's worst slump ever.
Tax bill may boost housing market
Washington >> The U.S. housing market, which has benefited from record low mortgage rates, would receive another boost under a provision in the Senate's tax-cut plan to let some homeowners deduct mortgage insurance.
The Senate Finance Committee approved the deduction, which would cut government revenue by $660 million during the next 10 years, as an amendment to the tax-cut bill late Thursday.
MGIC Investment Corp., the largest U.S. mortgage insurer, PMI Group Inc., GE Capital Corp. and Radian Group Inc. would benefit from a tax deduction for mortgage insurance, Chris Buonafede, an analyst with Fox-Pitt, Kelton Inc told Bloomberg News. Lenders, to protect themselves against defaults, require homeowners to buy the insurance if they have less than 20 percent equity in their properties.
Buonafede estimated an owner of a $150,000 home would save $200 a year under the plan. "It could fuel the housing market a little more."
The Senate bill differs from a version the House passed yesterday and the final bill may not include a mortgage-insurance deduction, though both Republicans and Democrats have supported such a deduction before.
McDonald's Japan picks new CEO
TOKYO >> McDonald's Japan picked Pat Donahue, an American who headed the fast-food chain's Canadian business, as chief executive and chairman yesterday to reverse sinking sales.
Donahue, representative director at McDonald's Holdings Co. Japan, replaces Den Fujita, the founder of the chain in Japan who stepped down in March.
Donahue has been in charge of Japan at the U.S. parent since last year. He was the executive in charge of McDonald's in Canada for three years starting in 1998.
Although Fujita, 77, gave his age as the reason for his resignation, analysts say the chain has been in need of new leadership after it posted its first loss in 29 years last year.
Donahue's selection underscores the greater role McDonald's Corp. of the United States will likely play in turning around the Japan business. McDonald's Corp. owns 50 percent of the Japanese business.
Ford, Subaru top crash test
Washington >> Ford Motor Co.'s Crown Victoria and the Subaru Forester received top safety ratings as U.S. regulators released the second round of crash-test results for the current model year, according to a Bloomberg News report.
The Crown Victoria sedan and Forster sports-utility vehicle won the top five-star ranking in four categories of tests on 2003 models, the National Highway Traffic Safety Administration said. Subaru of America Inc. is the U.S. arm of Japan's Fuji Heavy Industries Ltd.'s automobile unit.
Kia Motors Corp.'s Rio and Hyundai Motor Co.'s Accent sedans received two stars in at least one category, the lowest ratings of the 12 models most recently tested.
The agency on May 6 released the first group of ratings for 2003 models.
Buffett said to be working on biography
New York >> Billionaire investor Warren Buffett is cooperating with Morgan Stanley analyst Alice Schroeder on a project to write his biography, people familiar with the matter said.
Buffett, 72, has said Schroeder, 46, was the only brokerage analyst whose work he reads, according to a Bloomberg News report. Schroeder hosts a dinner at the annual meeting of Berkshire Hathaway Inc., Buffett's insurance and investment company.
Schroeder has been Institutional Investor magazine's top rated property-casualty analyst the past two years. She is one of five analysts that follow Berkshire. She rates it "overweight- inline," equivalent to "buy." Neither Schroeder nor Buffett returned telephone calls seeking comment.
Thailand to gather sugar producers
BANGKOK, Thailand >> Thailand will host a meeting of the world's major sugar exporters in late May in an effort to boost global sugar prices, a senior government official said yesterday.
The Cane and Sugar Board, chaired by Prime Minister Thaksin Shinawatra, agreed at a meeting yesterday to invite the world's key sugar exporters to discuss measures to support prices, said Manu Leopairote, permanent secretary at the Industry Ministry.
Prices have fallen recently due to subsidies by European countries which are distorting the global market, he said. Australia, Brazil, Guatemala, South Africa and Thailand together supply around 65 percent of the sugar in the world market, Manu said.
Genentech to pay janitors' health insurance
SAN JOSE, Calif. >> Biotechnology giant Genentech Inc. volunteered yesterday to chip in for the health insurance costs of janitors who clean its headquarters, an unusual move that may pressure other corporations that rely on outsourced maintenance crews to do the same.
The South San Francisco-based company submitted a proposal to Service Employees International Union Local 1877, offering to pay 95 percent of out-of-pocket contributions for about 120 janitors over the next three years. If all 120 janitors are eligible for insurance and opt for maximum coverage, the offer would cost Genentech almost $200,000 per year.
Genentech's bid comes eight days before a strike deadline imposed by 5,000 Silicon Valley janitors, who are protesting a proposal to increase their monthly out-of-pocket costs for health insurance from $77 to $145, or about 10 percent of their take-home pay.
Michael Jackson sues Vivendi over royalties
Los Angeles >> Vivendi Universal SA, owner of the world's largest record company, has been sued by singer Michael Jackson. He claims he has been cheated out of royalties from pre-1976 recordings, according to a Bloomberg News report.
Jackson claims he hasn't received "a single dollar in royalties" since he signed an agreement in 1980 to let Motown Record Corp. distribute music he recorded by himself and with The Jackson Five, according to his complaint. His current label is Sony Corp.
The singer of "Beat It" and "Thriller" asks in the suit to see the financial records of Universal, which purchased Motown in 1980, and he also wants all of the rights and master recordings from his pre-1976 songs returned to him. The suit arises from a 1980 agreement that settled a lawsuit The Jackson Five brought against Motown over the label's royalty payments to the group.
Universal Music spokesman Bob Bernstein said he hasn't seen the suit and declined to comment.