---

BACK TO TOP
|

Consumers borrow more money

WASHINGTON >> Consumers, despite job worries, increased their borrowing in April by the largest amount since the beginning of the year.

The Federal Reserve reported yesterday that consumer credit shot up by a seasonally adjusted $10.7 billion, or at a brisk annual rate of 7.3 percent. That marked the biggest increase in both dollar terms and percentage terms since January.

"Consumers were responding to very attractive interest rates for various goods, especially automobiles," said Lynn Reaser, chief economist at Banc of America Capital Management.

The increase pushed total consumer debt up to $1.76 trillion.

April's rise marked a big leap from March, when consumer borrowing rose at a rate of just 0.8 percent, or by $1.1 billion, as war uncertainties turned consumers cautious.

Rivals match United incentives

MINNEAPOLIS >> The battle to lure business travelers back into the air heated up yesterday, as Northwest Airlines and American Airlines essentially matched an offer by United Airlines a day earlier.

All three carriers are offering a free ticket to members of their frequent flyer clubs who fly three round-trip flights.

In Northwest's promotion, customers can earn a free round-trip ticket for travel in the 48 contiguous United States after flying three round trips on select fare types to any of Northwest's destinations worldwide by Oct. 7. The flights may be on Northwest, Northwest Airlink or KLM trans-Atlantic flights.

The qualifying flights on American and United -- which announced its promotion Wednesday -- must be made by Sept. 30.

Customers of the three airlines -- who must register in advance for the promotion -- can earn a total of two free trips.

Report links Ebbers to fraud

McLEAN, Va. >> Former WorldCom Inc. chief executive Bernard Ebbers participated in meetings in which company officials discussed ways to make their revenue appear higher than reality, according to an investigative report to be released Monday.

The in-depth report provides new information about Ebbers' role in the $11 billion accounting scandal that led to the telecommunications company's bankruptcy, but makes no conclusions about Ebbers' actions at those meetings, according to a WorldCom board member.

Dennis Beresford, who was appointed to the WorldCom board after the company filed for bankruptcy, said Ebbers and other senior executives who are potentially facing criminal charges did not talk to the investigators who prepared the report at the company's request. That forced the investigators to rely on scores of documents and memos that did not always provide full details.

Volkswagen to cut old-style Beetle

BERLIN >> Volkswagen said yesterday it will stop making the original rear-engine Beetle later this year, bringing the curtain down on the nearly 70-year history of the classic "bug."

Production of the last old Beetles at the VW plant in Puebla, Mexico, will "end this summer," spokesman Fred Baerbock said, adding that an exact date was not set.

He said there had been sinking demand for the original model, manufactured only in Puebla since 1978.

The first version of what would become known as the Beetle was developed in 1934 under the guidance of Adolf Hitler, who wanted to build a "people's car" -- or in German, a Volkswagen. It first entered mass production after World War II.

Over the decades, the VW became a favorite of both thrifty postwar Germans and 1960s American hippies before competition from Japanese compacts elbowed it aside.

Volkswagen sold more than 21 million of the cars over the decades, but says it produced less than 30,000 at Puebla last year.

Wal-Mart to shield covers of some magazines

Wal-Mart Stores Inc., the world's largest retailer, said it will obscure the covers of four women's magazines beginning next month because of they carry pictures and language that offends some customers.

Plastic shields will be placed over Glamour, Marie Claire, Cosmopolitan and Redbook magazines, spokesman Tom Williams said at Wal-Mart's annual meeting in Fayetteville, Ark.

Wal-Mart last month stopped sales of three men's magazines, Maxim, Stuff and FHM, after customers and Christian groups voiced concern about their sexual content. Williams said the company had already pulled the four women's magazines from two checkout lanes in every store and will now have the plastic shields in the remaining lanes.

"It's an extension of listening to the customer," Williams said. "Some customers were uncomfortable."

The June cover story of Cosmopolitan's was titled "99 Sexy Ways to Touch Him." Hearst Corp. publishes the magazine, along with Marie Claire and Redbook. A company spokeswoman referred questions to the Magazine Publishers of America.

'The MPA firmly believes that freedom of choice is fundamental to the American way of life and therefore believes that millions of people who enjoy their favorite magazine should not be deprived of their ability to purchase them with full knowledge of their contents," said Ronni Faust, spokeswoman for the group, which represents 240 publishing companies.

Advance Publications Inc.'s Conde Nash unit publishes Glamour. A spokeswoman who declined to give her name said the company wasn't commenting on the magazine covers.

Daiei lenders parse assets

UFJ Holdings Inc., Daiei Inc.'s biggest creditor, and other banks may ask the retailer to sell its baseball team and hotel separate from other businesses to pay debt of &YEN120 billion ($1.02 billion), the Mainichi newspaper said.

Kobe-based Daiei's six creditors are discussing a new plan to sell Fukuoka Dome and the Daiei Hawks professional baseball team as one set and Sea Hawk Hotel & Resort and the Hawks Town shopping mall as another, the paper said, without citing anyone.

"We are still considering a plan and nothing has been decided," said Daiei spokesman Minoru Sano in Tokyo. "We won't sell the baseball team," he said, reiterating the company's stance that it has no plans to give up the Hawks, currently atop the standings in the Pacific League.

The banks are considering the plan because some bidders for Daiei's Fukuoka businesses offered better prices if a package includes the team, the paper said. Five companies, including foreign investment companies, had bid for the businesses by the end of last month, the paper said.

Funny Cide jockey to sport Budweiser logo

Funny Cide jockey Jose Santos goes into today's Belmont Stakes with the Triple Crown on the line and a Budweiser logo on his pants.

Santos, along with Empire Maker jockey Jerry Bailey and Scrimshaw rider Gary Stevens will wear sponsors' logos on the thighs and backs of their the riding pants, along with the another logo on their undershirt collars for the race in Elmont, N.Y.

It's the first time that jockeys will wear sponsors' logos in either the Belmont, Preakness Stakes or the Kentucky Derby, the three races that make up the sport's Triple Crown.

"I am ecstatic that we were able to get this done in time for the Belmont," said Kelly Wietsma, president of Equisponse Inc., the New York marketing firm that arranged the contracts with Jockey Management Group, which represents about 150 riders.