AUTOMOTIVE

GM considers expanding in Korea

Seoul, South Korea —- General Motors Corp. is considering launching its Chevrolet brand in South Korea, a company executive said Friday. The U.S. automaker will make a decision after completing a study by the end of this year, said James Raymond, executive director of GM's Asia-Pacific vehicle sales, service and marketing division. GM Korea currently sells Cadillac and Saab sedans in South Korea, which has become more important to automakers because imported vehicles now claim a bigger share of the market, said Raymond.

GM workers vote to end walkout

Lansing, Mich. —- A striking United Auto Workers local at a key General Motors Corp. factory ratified a new contract with the company Friday afternoon and will resume production on Monday. UAW Local 602 said on its Web site its members voted 73.5 percent in favor of the new deal. It will end a strike that began April 17 at the Delta Township plant near Lansing that makes the Buick Enclave, Saturn Outlook and GMC Acadia.

DEALS

Carlyle Group to buy Booz unit

Private equity firm Carlyle Group has agreed to acquire Booz Allen Hamilton Inc.'s government consulting business for $2.54 billion, its biggest buyout since the credit markets collapsed in July. Booz Allen, based in McLean, Va., will split off its corporate consulting unit into a separate company, Carlyle said Friday in an e-mailed statement. Booz Allen Chief Executive Ralph Shrader will run the Carlyle-owned entity focused on government clients.

Del Monte explores seafood unit sale

Del Monte Foods Co., the maker of StarKist tuna and Meow Mix cat food, said it's exploring the possible sale of its seafood division. A sale may not occur, and its board hasn't approved a transaction, the San Francisco-based company said Friday in a statement. Del Monte said it made the announcement in response to published reports on a possible sale, and that it doesn't plan to disclose developments.

Russian company to buy WCI Steel

OAO Severstal, Russia's largest steel maker, has agreed to buy Warren, Ohio-based WCI Steel Inc. for $140 million in cash. The acquisition, at $3.29 a share, will add to earnings immediately, Moscow-based Severstal and WCI said Friday in separate statements. Shareholders owning a majority of WCI's diluted shares outstanding have consented to the purchase. WCI's annual steel making capacity of 1.35 million metric tons is focused on custom flat-rolled steel for pipes and tubes, WCI spokeswoman Bette Kovach said. The purchase "solidifies our position as the fourth-largest steel producer in the U.S. by raising Severstal's total U.S. capacity to just under 11 million metric tons per year," Chief Operating Officer Gregory Mason said in Severstal's statement. The United Steel Workers union supports the purchase, Severstal said.

FINANCIAL

Fed asks for change in rules

Federal Reserve Chairman Ben Bernanke has asked Congress to immediately give the central bank authority to pay interest on commercial-bank reserves, according to a letter from the Fed chief to House Speaker Nancy Pelosi. "Congress recognized that payment of interest on reserves would contribute to the efficiency of the financial system," Bernanke said in a letter to Pelosi, a California Democrat. The central bank isn't authorized by Congress to begin making such payments until October 2011. "We recommend that the date be changed to make the legislation effective immediately," Bernanke wrote. Interest on reserves would help the central bank push money into the banking system without destabilizing its main policy tool, the federal funds rate.

Fannie, Freddie overseer alarmed

Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies, are a "point of vulnerability" to the financial system and their leverage is so high they are a risk to taxpayers, according to their regulator. The government-sponsored enterprises took on too many risky loans during the housing boom without appropriately pricing for potential losses, James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said in prepared remarks to be delivered in Chicago on Friday. The value of Fannie Mae's assets is extremely low, while Freddie Mac's assets are worth less than zero, according to Lockhart. "With that leverage, the enterprises could pose significant risk to taxpayers as well as to financial institutions and other investors that invest in and count on the liquidity of their debt and guaranteed" securities, he said.

Lehman to start cutting workers

New York —- Lehman Brothers Holdings Inc. will begin to cut about 5 percent of its staff on Monday as part of an overall plan to streamline its balance sheet amid further turbulence in the financial markets, The Associated Press reported, citing a person familiar with the plan. About 1,400 employees of the company's overall 28,000 will be informed next week that they have lost their jobs.

LEGAL

Yahoo moves to hide documents

San Francisco —- Yahoo Inc. is seeking to conceal large portions of a shareholder lawsuit alleging the Internet company's board improperly thwarted Microsoft Corp.'s $47.5 billion takeover offer, raising shareholder questions over the motives for the secrecy. In a letter sent Friday to the judge overseeing the case in Delaware, a lawyer for the shareholders argued Yahoo is trying "to whitewash embarrassing documents" because the company thinks the information will damage the board's efforts to repel a challenge by activist investor Carl Icahn. Angered by the board's handling of Microsoft bid, Icahn has nominated an alternate slate of candidates to oppose Yahoo's 10 current directors —- including Chief Executive Jerry Yang —- at the Sunnyvale, Calif.-based company's July 3 annual meeting. Yahoo is trying "to sanitize the public record and maintain a cloak of secrecy regarding unflattering evidence of breach of fiduciary duty," shareholder attorney Joel Friedlander wrote in a letter to Chancellor William B. Chandler III.

Liberty Global settlement OK'd

Liberty Global Inc., the international cable television provider controlled by billionaire John Malone, won a judge's approval to pay $25 million to settle shareholder lawsuits over its buyout of UnitedGlobalCom Inc. Malone's Liberty Media International Inc. said in January 2005 that it would pay about $3.52 billion for Denver-based UnitedGlobalCom to form Liberty Global. The purchase was completed in June that year. Investors filed 21 lawsuits in Delaware Chancery Court seeking more money.

HOSPITALITY

Four Seasons chief heads to Chicago

Denise Flanders, who helped the Four Seasons Atlanta retain its role as one of the state's top hotels during her five years as general manager, is leaving for Chicago. Flanders has been named general manager of the Four Seasons Chicago. She will take the post in June. Flanders will be replaced by Dan Normandin, hotel manager at the Four Seasons San Francisco. Normandin has been with the chain since 1997. During her tenure in Atlanta, Flanders helped the Four Seasons retain its five-star rating from Mobil Travel Guide and five diamonds from AAA. The ratings are the top accolades in the hotel business. Flanders joined Four Seasons in 1989 and rose through the ranks, working at several of the brand's top locations. She became hotel manager of the Atlanta Four Seasons in 2002, taking over as general manager a few months later.

MEDIA

Commerce chief criticizes Senate

A Senate move to reverse a loosening of media ownership rules may lead to more financial difficulties for newspapers, U.S. Commerce Secretary Carlos Gutierrez says. Late Thursday, the Senate voted to nullify a federal rule that eases the way for companies such as Tribune Co. and News Corp. to own broadcast stations and daily newspapers in the 20 largest U.S. markets. The measure needs approval by the House of Representatives, where leaders didn't immediately schedule it for consideration. Gutierrez said he would advise President Bush to veto the resolution it if passes the Democratic-controlled House. At issue is a December decision by the Republican-dominated Federal Communications Commission, which removed most restrictions on cross-ownership in the largest markets. "Overturning the FCC's approach will actually discourage a diversity of media voices" by making it harder to fund newspapers, Gutierrez said in an e-mailed statement issued after the vote.

REAL ESTATE

Fannie shifts rules on down payments

Washington —- Fannie Mae is doing away with higher minimum down payment requirements for borrowers in parts of the country where home prices are dropping. The government-sponsored mortgage finance company said Friday it will require minimum down payments of between 3 percent and 5 percent for all loans it guarantees. That replaces a December policy that required a higher minimum if the loan was for a home in a ZIP code with declining real estate prices. Fannie says the move is part of its effort to help resuscitate the flagging mortgage market.

FDIC chief urges quick action

Federal Deposit Insurance Corp. Chairman Sheila Bair said anti-foreclosure proposals in Congress have "limitations" as she urged "more immediate" solutions to address the worst housing slump in a quarter-century. Bair said Friday in a Washington speech that plans by Congress and the White House to expand Federal Housing Administration insurance to help struggling borrowers "are laudable efforts" that may not deliver aid quickly enough. "The FHA approach has its limitations," Bair said. "And new refinancing options may take more time than we have. We need something that is more immediate."

Real estate pro: Markets 'stuck'

Global real estate markets are frozen because buyers and sellers remain far apart on price and aren't ready to concede values won't return to levels achieved in 2007, Apollo Real Estate Advisors LP senior partner William Mack says. "The markets are kind of stuck," said Mack, who has helped raise almost $6 billion for new real estate investments. "The bid-ask spread is too wide. A lot of money and a lot of people are sitting on the sidelines trying to establish where the next move is." Mortgage-related losses have forced financial institutions to write down more than $300 billion in assets and constrained lending for property acquisitions. In New York City, Manhattan office building sales fell in the first quarter to the lowest level since 2005, according to Real Capital Analytics.

TRADE

Rule targets altered products

Amsterdam, Netherlands —- An international conference agreed Friday to hold producers or handlers of genetically engineered organisms liable for damage their products cause to native plants or animals when transported across borders. The agreement, concluding a five-day, 147-nation conference in Bonn, Germany, will be refined into an accord that will have the force of law for its signatories. The agreement would not be legally binding on the United States, however, because Washington has not ratified the 1992 Biodiversity Convention and is not a party to the convention's Cartagena Protocol on the safety of biotech products, which came into force in 2003.

TRANSPORTATION

US Airways, United pilots oppose deal

If US Airways and United Airlines decide to combine, they'll bring along a number of reluctant employee groups that would rather remain separate. US Airways pilots on Friday joined a chorus of criticism about a possible tie-up. The US Airline Pilots Association said United's parent, UAL Corp., is financially weak, and that mixing the carriers is a bad idea. "With mounting losses and a dismal balance sheet, UAL may not be the best dance partner for US Airways," USAPA President Stephen Bradford said in a statement. United pilots are equally resistant to pairing with US Airways Group Inc.

American: FAA's message mixed

Washington —- Federal regulators sent mixed messages to American Airlines about the condition of the fleet that was grounded last month, the airline says, including granting permission to continue flying while fixes were made. In its most complete accounting of last month's massive cancellations, American said that its maintenance shortcomings didn't justify canceling more than 3,000 flights. The carrier insisted that the problem never compromised flight safety. And while the Federal Aviation Administration has said the decision to cancel flights rested with American, the carrier indicated that an FAA official said, "You need to put those aircraft on the ground." American spelled out the controversy in a letter to U.S. Secretary of Transportation Mary Peters, which the DOT released Friday. In its own letter to Peters, the FAA said the blame was American's —- evidence that a wide gulf remains between how carriers view the FAA's role and how the regulator sees itself.

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