AUTOMOTIVE

Ford to increase line of small cars

Detroit —- Ford Motor Co. plans to bring six small vehicles to the U.S. market from overseas. The Associated Press reported Tuesday that Ford will revamp some U.S. vehicle and engine plants to produce more small cars. The changes will accelerate Ford's efforts to move away from its heavy dependence on truck sales. Ford's U.S. sales dropped 14 percent in the first six months of this year as consumers sought smaller vehicles. Ford has already said it will sell the Fiesta subcompact and the European Focus in the United States starting in 2010.

Mini plans electric cars in mid-2009

Birmingham, Mich. —- BMW's Mini brand plans to have electric cars on U.S. roads by next summer. Mini USA Vice President Jim McDowell said Tuesday that the company is deciding whether to lease or sell the vehicles and where they'll be available. He wouldn't say how far the electric car will be able to go on one charge. U.S. Mini sales were up 34 percent in the first six months of this year as consumers sought smaller, more fuel-efficient vehicles and the Mini Clubman was introduced. But McDowell says sales could slip in the coming months because the automaker doesn't have enough of its vehicles to meet demand.

Autoliv to cut up to 3,000 jobs

Stockholm, Sweden —- Swedish auto safety systems maker Autoliv Inc. said Tuesday that it will cut up to 3,000 jobs —- about 7 percent of its work force —- in the wake of falling car sales in Europe and North America. The company, which makes air bags and seat belts, didn't specify where the cuts will be made, but spokesman Henrik Kaar said its biggest production plants would probably be affected. Stockholm-based Autoliv has 43,000 employees worldwide, with the biggest units in Mexico, France and the United States.

Nissan weighs production cuts

Nissan Motor Co. says it may trim production of some truck models built at plants in Tennessee and Mississippi if sales of midsize and large vehicles continue falling this month. "We're always evaluating production levels and sales," Bill Krueger, Nissan's U.S. senior vice president for North American manufacturing, said in Nashville on Tuesday. "One month of falling sales may be an anomaly. A third consecutive month is a shift."

FINANCIAL

H&R Block hires ex-McDonald's exec

Kansas City —- H&R Block Inc., the nation's largest tax preparer, on Tuesday named the former president of McDonald's Europe as its new chief executive. Russ Smyth, who also joins the Kansas City-based company's board, will take over as president and CEO on Aug. 1. He replaces Alan Bennett, who was appointed interim CEO in November after former Chairman and CEO Mark Ernst stepped down. Bennett will also join the board of directors.

Feds: Half of pensions frozen

Washington —- About half of employers with defined-benefit pension plans have frozen one or more of those plans, putting the retirement incomes of millions at risk, according to a government report made public Tuesday. The Government Accountability Office said more than 3 million people covered by its study, which represented about a fifth of all participants in single-employer defined-benefit plans, are affected by freezes. Most sponsors with frozen plans have set up retirement savings alternatives, such as 401(k) plans that may offset some losses, but "a freeze generally implies a reduction in anticipated future retirement benefits," the GAO said.

LEGAL

Child porn law fails court test

Washington —- A federal appeals court agreed Tuesday with a lower court ruling that struck down as unconstitutional a 1998 law intended to protect children from sexual material and other objectionable content on the Internet. The decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia is the latest twist in a long legal battle over the Child Online Protection Act, which now could head to the U.S. Supreme Court. The law, which has not taken effect, would bar people from making harmful content available to minors over the Internet. The act was passed the year after the Supreme Court ruled that another law intended to protect children from explicit material online —- the Communications Decency Act —- was unconstitutional. In its ruling Tuesday, the federal appeals court concluded that the Child Online Protection Act also violates the First Amendment because filtering technologies and other parental control tools offer a less restrictive way to protect children from inappropriate content online. The court also ruled that the law is unconstitutionally overly broad and vague.

Ex-hockey owner pleads guilty

St. Louis —- A former owner of the St. Louis Blues hockey team faces sentencing later this year after pleading guilty to a federal charge for backdating stock options. In a plea agreement reached Monday, former Engineered Support Systems Inc. co-founder Michael Shanahan Sr. also agreed to repay $7.9 million. In exchange for the guilty plea on one count of falsifying the records of a publicly traded company, the government dropped 11 other charges against Shanahan. The government also agreed to drop charges against his son, Michael Shanahan Jr.

MANUFACTURING

Caraustar cuts jobs in Chattanooga

Caraustar Industries Inc. stopped producing recycled boxboard at its Chattanooga mill, cutting 67 jobs. The company will have a pretax charge of about $7.9 million from the closing, Austell-based Caraustar said Tuesday in a statement.

Boeing to buy partner in drones

Boeing Co. on Tuesday agreed to buy partner Insitu Inc. to gain full control of the ScanEagle drone and expand in the $100 billion industry for unmanned systems. The purchase "is a key building block for us to penetrate" the growing market, Boeing spokesman Fernando Vivanco said. The Chicago-based company didn't disclose terms of the cash transaction. The purchase will close by the end of September and won't affect financial forecasts, Boeing said. The two companies have been partners since 2002 on the ScanEagle, used by the Marines and Navy in Iraq and Afghanistan.

REAL ESTATE

Prices down 4.8% year-over-year

Washington —- A government report says U.S. home prices fell a record 4.8 percent in May from the same month last year. The Office of Federal Housing Enterprise Oversight also says prices, on a seasonally adjusted basis, fell 0.3 percent from April to May. The index is down almost 5 percent from its peak in April of last year.

REGULATORY

SEC: Brokerages broke own rules

Brokerages seeking to value illiquid securities during the subprime mortgage crisis violated their own procedures and used methods of "questionable merit," regulatory inspections found. Examinations discovered that the firms reviewed used outdated information and relied too heavily on traders and staff members who lacked experience to determine values, the Securities and Exchange Commission said Tuesday, without identifying any firm. The firms "employed certain processes that appeared to be of questionable merit or failed to be sufficiently vigorous," the agency said. In certain cases, "the intended procedures as documented were not adhered to."

Bush: Wall Street 'got drunk'

Washington —- President Bush, in an unguarded moment, said Wall Street "got drunk and now it's got a hangover." He made the comment at a political fundraiser in Houston last Friday after asking members of the audience to turn off their video cameras. Someone obviously ignored his request and a snippet wound up on a blog Tuesday by Miya Shay of ABC affiliate KTRK in Houston. Bush clearly was in a good mood as he addressed a crowd in a private home. Members of the media were barred from the appearance.

TECHNOLOGY

MobileMe service disrupted for some

Apple Inc., which apologized to customers last week for bungling the introduction of its MobileMe online service, said Tuesday that some users have been unable to send or receive e-mail since last Friday. "We experienced a serious issue with one of our MobileMe mail servers" that affects about 1 percent of users, spokesman Bill Evans said. Apple doesn't disclose its number of MobileMe subscribers. Apple introduced MobileMe this month, replacing its .Mac Internet service. For $99 a year, MobileMe provides access to e-mail, contacts, calendars and other Web programs from iPhones and iPod Touch players, as well as from the Macintosh and other computers.

TRANSPORTATION

Railroads seek liability relief

U.S. railroads are asking regulators for measures to help limit carriers' liability in the event of a hazardous-materials accident in an urban area. Railroads say they're vulnerable to lawsuits that might lead to bankruptcy, because U.S. law restricts their ability to refuse to haul potentially dangerous freight. The Association of American Railroads urged changes at a U.S. Surface Transportation Board hearing in Washington on Tuesday. The agency, which regulates some rail rates, said it would like to consider policies similar to those in the nuclear industry. Those measures ensure damages could be paid after an accident by pooling insurance coverage and risk among power plants.

UTILITIES / ENERGY

EPA puts off ethanol decision

Washington —- The Environmental Protection Agency on Tuesday put off a decision on Texas' request to temporarily waive ethanol requirements for gasoline. EPA Administrator Stephen Johnson said the agency needed more time to review more than 15,000 public comments and consult with other departments. An energy bill passed in December required 9 billion gallons of ethanol to be blended into gasoline this year. Perry, a Republican, asked the EPA in April to drop the requirement to 4.5 billion gallons because the demand for ethanol is raising corn prices for livestock producers. More than four dozen House Republicans and two dozen GOP senators, including presidential candidate John McCain, wrote to the EPA in support of the waiver. The state of Connecticut also supported Texas' request. The agency said it hopes to decide in early August.

Gasoline demand declines again

U.S. gasoline demand fell 3.3 percent last week, the 13th consecutive decline, as Americans react to record pump prices by driving less, a MasterCard Inc. report showed Tuesday. Motorists bought an average 9.56 million barrels of gasoline a day in the week ended July 11, down from 9.89 million a year earlier, MasterCard said in its weekly SpendingPulse report.

Tax break proposed for oil shale

Washington —- The Bush administration on Tuesday proposed charging energy companies wanting to squeeze oil out of vast shale deposits in the West lower royalties than they pay for drilling on other federal lands. In draft rules issued Tuesday, the Interior Department recommended a range of royalty rates for the extraction of oil from shale on 2 million acres of public property in Colorado, Utah and Wyoming. All would be less —- at least for a time —- than the 12.5 percent to 18.8 percent the government currently collects from companies producing oil. Interior officials said the discounted rate, which would be fixed at 5 percent in one proposal, would offer an incentive for companies to develop oil shale, which can cost up to three times more to produce than traditional oil.

WORKPLACE

Rule would boost 401(k) information

Washington —- Millions of participants in 401(k)-style retirement plans would receive more information about the costs of those programs, a move that could help boost savings, under a rule proposed by the Labor Department Tuesday. The additional information will make it easier for employees to invest in lower-cost mutual funds and other investments, said Bradford Campbell, an assistant secretary at the Labor Department. The department estimates the disclosures would save participants $6.1 billion over 10 years, including $2.3 billion from lower fees as investment providers compete more on cost. The rest will come from the time participants save tracking down the fees, which are currently found in a range of separate documents.