AGRICULTURE: Monsanto's seed plans ambitious

Creve Coeur, Mo. —- Monsanto plans to double the yield of its corn, soybean and cotton plants by 2030. Chief Executive Hugh Grant said Wednesday that Monsanto can use advanced breeding techniques and genetic engineering to make new breeds of its three core crops. He also said the crops will also consume only one-third as much water as the varieties grown today.

Ex-official: Ethanol effect understated

The Bush administration is understating ethanol's impact on global food prices, according to a former chief economist for the Department of Agriculture. The White House Council of Economic Advisers' estimate that U.S. biofuels account for 2 percent to 3 percent of rising food costs doesn't factor in corn's effect on the price of other crops, said Keith Collins, who retired in January. As a result, the administration may be too optimistic in asserting that rising ethanol use won't add substantially to food inflation, he said.

AUTOMOTIVE: Auto plant wages drop in Mexico

Mexico City —- Mexican auto unions are taking a cue from U.S. labor leaders by offering two-tier hiring schemes and salary cuts that bring already low wages down to near-Chinese levels. As more automakers turn to Mexico, a big argument for the North American Free Trade Agreement in 1993 —- that Mexico's low wage rates would slowly rise to close the gap with U.S. wages —- seems to have been thrown in reverse. "The pressure has not been to raise the Mexican wages up; it's been to push the U.S. wages down," said Ben Davis, the director of the AFL-CIO Solidarity office in Mexico City. Wage concessions were apparently key to convincing Ford Motor Co. to direct jobs to its plant in Cuautitlan, on the outskirts of Mexico City. Union leaders told The Associated Press that they had agreed to cut wages for new hires to about half of the current wage of $4.50 per hour.

Porsche wins quality award

Porsche won the top quality ranking for a third straight year in a benchmark survey. Porsche, the German maker of the 911 sports car, had 87 problems per 100 new vehicles in the J.D. Power & Associates survey, followed by Nissan's Infiniti luxury brand at 98 and Toyota's Lexus with 99. Ford's namesake brand and General Motors' Cadillac were among U.S. vehicles that climbed in the ratings. The industry average fell to 118 problems per 100 vehicles from 125 per 100 last year.

GM office in Canada blockaded

General Motors Corp.'s main office in Canada was blockaded Wednesday by Canadian Auto Workers members protesting the automaker's decision to close a pickup truck plant. While the labor group was preventing vehicle access, employees were permitted to walk to the facility, a spokeswoman for the union said.

DEALS: Smucker to buy Folgers coffee

J.M. Smucker Co., the maker of jams and jellies, announced Wednesday that it had agreed to buy the Folgers coffee business from Procter & Gamble for $2.95 billion in stock. Ohio-based Smucker, which will also assume $350 million of Folgers debt, said it expects the acquisition to increase earnings next year by 9 percent. "Coffee is the perfect complement to breakfast or dessert —- two areas we know a lot about," Richard Smucker, the company's president, said in a statement. As part of the deal, Smuckers shareholders will receive a one-time special dividend of $5 a share.

Report: Verizon in talks with Alltel

New York —- Verizon Wireless is in talks to buy Alltel Communications LLC, the country's fifth-largest wireless carrier by subscribers, for $27 billion, CNBC reported Wednesday. Representatives of Verizon Communications Inc. and Alltel had no comment. If consummated, an acquisition would be the biggest telecom deal since AT&T bought BellSouth at the end of 2006. Little Rock-based Alltel was a public company until it was bought out by TPG Capital and GS Capital Partners in November for $24.7 billion. It has a wide-ranging network, covering parts of 35 states concentrated in the middle of the country, and has more than 13 million customers. Verizon Wireless, the No. 2 wireless carrier, uses the same network technology as Alltel.

ECONOMY: Service sector growth tops target

The service sector grew at a better-than-expected pace in May but slower than in April, suggesting that higher prices for food and fuel may be crimping business in retail, entertainment and agriculture. The Institute for Supply Management said Wednesday that its service sector index was 51.7 in May, following a reading of 52 for April. Wall Street economists surveyed by Thomson Financial/IFR had expected a reading of 50.3 in May. A reading above 50 indicates the sector is growing, while a reading below 50 indicates contraction. "It is significant that we've seen this measure manage to stay above the 50 level for the last two months," said Douglas Porter of Nesbitt Burns Securities of Chicago. "It suggests the economy has a little bit more resilience than many had expected before."

FINANCIAL: Hallmark Cards to cut 335 jobs

Kansas City, Mo. —- Hallmark Cards Inc. is cutting 335 jobs as it consolidates its greeting card manufacturing. The company plans to eliminate 195 positions at its facility in Toronto immediately, it said Wednesday. Another 80 positions at its plant in Siloam Springs, Ark., will be phased out in September and October. Sixty positions at Hallmark's Sunrise Greetings plant in Bloomington, Ind., will also be eliminated, beginning in January.

Fed chief calls stagflation unlikely

Washington —- Federal Reserve Chairman Ben Bernanke said Wednesday that he does not believe the United States will experience the out-of-control prices seen with 1970s oil shocks. His assessment came in a speech Wednesday to graduating students at Harvard University, where he earned a bachelor's degree in economics in 1975. Back then, the economy suffered from a dangerous combination of stubborn inflation and stagnant growth, dubbed stagflation. There are fears today of a repeat. "We see little indication today of the beginnings of a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward," Bernanke said.

Bond insurers' ratings may be cut

New York —- Moody's Investors Service said Wednesday that it may cut its "AAA" ratings on bond insurers MBIA and Ambac —- which are essential to ensuring the companies can book new business. The ratings service said it is reviewing its insurance financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp. and that the "most likely" outcome will be a downgrade. Such a move could increase borrowing costs for cities and counties already struggling with lower tax revenues. Moody's said its prior analysis of MBIA indicated that its capital position was sufficient to maintain a "AAA" rating. However, the company's diminishing new business prospects, combined with the potential for higher losses within its insurance portfolio, have raised concerns over whether the ratings are consistent with MBIA's current credit profile, Moody's said.

Residential Capital secures financing

GMAC LLC, the consumer lender trying to salvage its money-losing mortgage business, has arranged more than $60 billion in new and refinanced credit to quell concerns about the company's financial health. The package includes an $11.4 billion revolving credit line that matures in three years and renewal of a one-year, $10 billion commercial paper accord, according to a statement from Detroit-based GMAC. The Residential Capital unit got a one-year extension on $11.6 billion of bank facilities and $2.5 billion of new credit to finance home lending. Stung by record home foreclosures and $5.3 billion in losses in the past six quarters at ResCap, GMAC has arranged at least three infusions. With Wednesday's financing deal, ResCap is able to meet its near-term debt obligations and avoid default, GMAC Chief Risk Officer Sam Ramsey said in an interview.

Lehman shares recover slightly

New York —- Lehman Brothers Holdings Inc. shares recovered Wednesday on reports that the nation's fourth-largest investment bank may raise capital from an outside investor and allay market fears of a liquidity crisis. The stock closed up 79 cents, or 2.6 percent, at $31.40 after it fell more than 15 percent on Tuesday. Investors regained confidence in Lehman after Standard & Poor's maintained its rating on the firm and Merrill Lynch gave it a "buy" rating. Guy Moszkowski, an analyst at Merrill Lynch, said speculation about Lehman's liquidity position over the past few days is "not justified." He also doesn't believe Lehman faces the same kind of path as Bear Stearns, which collapsed when customers fled on fears it didn't have enough free cash to stay in business. "We believe concerns of a Bear-like event at Lehman are unfounded," Moszkowski said in a report obtained by The Associated Press. He maintained his $37 price target on the stock.

HEALTH CARE: GE invests in distance medicine

Hartford, Conn. —- General Electric Co. is investing $20 million in technology that will allow doctors to share and transmit images of microscopic human tissue. GE Healthcare and the University of Pittsburgh Medical Center are each putting up $20 million to establish Omnyx LLC, a business to develop and commercialize technology allowing doctors to store and display digital images of human tissue from microscope slides, allowing colleagues anywhere to participate in consultations.

REAL ESTATE: Warning raised on subprime defaults

Most of the 5.85 million subprime mortgages in the United States are in danger of defaulting in the next 12 months because of restrictions on changing terms of the loans, according to Offit Capital Advisors. About 80 percent of the loans are in bonds that "slice and dice" rights to a mortgage's interest or principal in multiyear segments, said Todd Petzel, chief investment officer for the New York-based firm. Lifting restrictions on loan modifications spelled out in the securities requires the agreement of everyone who has invested in them, Petzel said. "If you could get all the investors in the same room, there's no limit to the modifications that could be made to a loan, but that's not likely to happen," Petzel said. "Once you cut up a pig into pork chops and loins and hams, it's nearly impossible to put the pieces back together."

TECHNOLOGY: AMD unveils new network chip

Advanced Micro Devices Inc., seeking to shrink the gap with chip industry leader Intel Corp., on Tuesday introduced a set of notebook semiconductors that offer improved graphics. The chips provide high-definition video quality that's five times better than Advanced Micro's existing models, product director Leslie Sobon said in a interview. That means the video is smoother, with higher resolution. The set includes a processor and related chips, along with wireless Internet semiconductors. With the new chips, consumers will get better results in video editing and other common functions, such as accessing material from compact discs, Sobon said. The products rely on technology from Advanced Micro's ATI Technologies unit, acquired for $5.4 billion in 2006.

TRANSPORTATION: Severance benefits at Frontier OK'd

Denver —- A bankruptcy court judge has approved a severance plan that would give Frontier Airlines' six top executives $144,180 if they are terminated without cause. Frontier filed for Chapter 11 bankruptcy protection April 10 after credit card processor First Data Corp. sought to hold up to 100 percent of proceeds from ticket sales until flights were completed.

Ex-Delta exec joins United

Delta Air Lines' former executive vice president of operations, Joe Kolshak, has been named United Airlines' senior vice president of operations. Kolshak will be based in San Francisco for United. Delta announced in November that Kolshak was retiring after 20 years. He joined Delta as a pilot.

Rumors spread about American

American Airlines parent AMR Corp. said a news report suggesting that the world's largest carrier might file for bankruptcy is "way off base." "Any speculation about any kind of imminent bankruptcy filing is unfounded and just way off base," Andy Backover, a spokesman for Fort Worth, Texas-based AMR, said Wednesday in a Bloomberg News interview. "By any measure, we've put ourselves in a better position to manage through today's uncertainty." DealReporter, a provider of analysis for hedge funds, quoted two unidentified sources as saying potential bidders for AMR's American Eagle regional carrier are hesitant because of "the very real risk" of a bankruptcy filing by AMR.