Business in brief

AUTOMOTIVE

GM, Chrysler execs defend closing stores

Under withering criticism in Congress, General Motors and Chrysler executives on Friday called the closings of hundreds of dealerships painful steps needed to right-size the auto giants. Down-on-their luck dealers said the moves would needlessly devastate their local economies and livelihoods.

“Many dealers and the communities they serve frankly feel blind-sided,” said Rep. Greg Walden (R-Ore.).

GM CEO Fritz Henderson told a House panel the dealer cuts were “quite painful” but necessary to save over 200,000 jobs at GM’s remaining dealers.

“In essence, this is our last chance,” Henderson told the House Energy and Commerce Committee’s oversight and investigations subcommittee.

Chrysler Deputy CEO Jim Press said the cuts were part of the shared sacrifices by the United Auto Workers union, bondholders and others needed to avoid liquidation.

“Going through bankruptcy was not our choice,” said Press, who along with Henderson and the other witnesses were required to raise their right hands and testify under oath.

AVIATION

US Airways seeks leaves of 400 flight attendants

US Airways is asking for 400 flights attendants to volunteer for leaves of up to 16 months, and said involuntary furloughs could be next if there aren’t enough takers.

The Tempe, Ariz.-based company said in a newsletter that it needs fewer flight attendants because it has reduced capacity faster than flight attendants have retired or quit.

US Airways is seeking 300 volunteers from its hubs in Phoenix and Las Vegas and 100 volunteers based on the East coast. The Western flight attendants are from America West, which bought US Airways in 2005, while the flight attendants in the Eastern cities came from the old US Airways.

ENERGY

Gas prices increase for 45 consecutive days

Gas prices rose Friday for the 45th consecutive day as summer travelers hit the highways and refineries hold back on fuel production. Pump prices added less than a penny overnight to a new national average of $2.639 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Crude prices are surging as well. Benchmark crude for July delivery fell 64 cents to settle at $72.04 on the New York Mercantile Exchange, the first time oil prices have fallen in several days.

Gas is 37.2 cents a gallon more expensive than last month.

Retail gas typically rises with demand during the summer driving season. But this year those dynamics have changed somewhat. The government expects motorists to drive billions fewer miles as unemployed workers stay home.

FINANCIAL

Hartford set to offer $750 million in shares

Insurer Hartford Financial Services Group Inc. said Friday it will offer shares of stock for sales proceeds of up to $750 million. Hartford said it will use the proceeds for general corporate purposes, including the possible repurchase of outstanding debt.

The company also said it will participate in the U.S. Treasury’s Capital Purchase Program. The company said it received preliminary approval to participate in the program for about $3.4 billion. Hartford shares closed down $1.13, or 8 percent, to $12.95. The stock has changed hands between $3.33 and $73.89 over the past 52 weeks.

Dollar gains value after week of ups and downs

The dollar charged back Friday after a week of up-and-down trading amid concerns over its status as the primary reserve currency and U.S. debt levels.

The buck was still lower for the week. The 16-nation euro fell to $1.4010 in late trading Friday from $1.4126 late Thursday, while the British pound fell back to $1.6450 from $1.6589.

The dollar rose to 98.24 Japanese yen from 97.52 yen.

On Friday, the Japanese finance minister said he had confidence in the U.S. strong-dollar policy, while a Chinese government official said the country had no plan to stop buying Treasurys, said UBS analysts in a note to investors.

China is the No. 1 foreign holder of U.S. government debt, followed by Japan.

Constellation Brands pays CEO $6.36 million

Constellation Brands Inc.’s chief executive and president received compensation valued at $6.36 million in fiscal 2009 as the world’s biggest winemaker began overhauling operations to counter a sales slowdown in Australia and Europe.

Robert Sands’ pay package was up 2 percent from the $6.2 million he received in fiscal 2008. For the year ended Feb. 28, Sands drew a salary of nearly $1.1 million, a 10 percent increase from the previous year. He became CEO in July 2007, midway through fiscal 2008.

HEALTH CARE

Drugs must be labeled with suicidal, other risks

New labels on popular asthma drugs such as Merck’s Singulair must highlight language about suicidal behavior, depression and anxiousness seen in a small number of patients, federal regulators said Friday.

After 15 months of investigation, the Food and Drug Administration said Merck & Co. Inc., AstraZeneca and Cornerstone Therapeutics will have to raise label warnings about psychiatric problems reported by a handful of patients taking their drugs.

A spokeswoman for Merck said the language appears in Singulair’s label, but will be raised to the “precautions” section.

Singulair was Whitehouse Station, N.J.-based Merck’s best-selling product last year, with U.S. sales of $3.5 billion.

Companies rush to make vaccine for swine flu

With swine flu now an official pandemic, the race is on among drugmakers to produce a vaccine.

GlaxoSmithKline said Thursday after the World Health Organization declared a global flu epidemic that it would be ready within weeks to begin large-scale vaccine production. Sanofi-Aventis also said it had started working on its own version. On Friday, Swiss pharma giant Novartis announced it had created an experimental vaccine that has not been tested in people. Novartis’ vaccine was made via a cell-based technology that may prove faster than the traditional way of making vaccines, which relies on chicken eggs.

WHO and others estimate that about 2.4 billion doses of pandemic vaccine could be available in about a year.

The news pushed up Novartis shares by 4.4 percent to close at 45 Swiss francs ($41.84) on the Zurich exchange Friday.

LEGAL

Tyson Foods faces $500,000 fine in death

Tyson Foods was sentenced in federal court Friday to pay a $500,000 fine and serve a year on probation for the death of a Texarkana worker overcome by poisonous fumes at a rendering plant.

The Occupational Safety and Health Administration won the maximum fine for a willful violation of worker safety regulations. OSHA said maintenance worker Jason Kelley was overcome by hydrogen sulfide gas generated by decomposing poultry feathers. Five other people were injured.

The federal regulators said Springdale, Ark.-based Tyson didn’t take sufficient steps to reduce exposure to the gas after a March 2002 incident at the River Valley Animal Foods Plant in Texarkana. Tyson Foods pleaded guilty in January.

Amazon.com settles lawsuit with Toys R Us

Amazon.com Inc. will pay $51 million to Toys R Us Inc. to end a long-standing legal dispute between the online retailer and the toy seller.

In a filing Friday with the Securities and Exchange Commission, Amazon said it agreed Thursday to settle the dispute, which began in 2004.

Amazon will make the payment, “substantially all of which was unanticipated,” in the third quarter, which begins July 1. But the company said it will be charged to operating expenses in the second quarter.

The lawsuit was over a partnership that gave Toys R Us exclusive rights to supply some toy products on Amazon’s site. Wayne, N.J.-based Toys R Us claimed Amazon violated the partnership by letting others sell some toys on Amazon.com, while Seattle-based Amazon said the toy seller failed to keep items in stock.

The companies originally joined up in 2000 after the toy seller’s Web site, Toysrus.com, suffered a brutal 1999 holiday season in which some customers’ toys were not delivered until after Christmas. That partnership was supposed to last through 2010.