U.S. Expands Probe of Grand Cherokees
A federal investigation into a potential safety defect in Jeep Grand Cherokees has expanded significantly in recent days, based on new reports of scores of incidents as well as three previously undisclosed deaths, records show. The deaths occurred when Grand Cherokees idling in “park” allegedly lurched into reverse gear without warning.
DaimlerChrysler, maker of the popular sport-utility vehicle, has agreed to confidential settlements in at least four lawsuits arising from such accidents, according to records and interviews.
The auto maker, which has not acknowledged any liability in the settlements, said it’s fully cooperating with the investigation by the National Highway Traffic Safety Administration.
The fatalities and sealed settlements raise questions of whether the auto maker should have promptly notified authorities.
Ricardo Alonso-Zaldivar
Jobs Report Less Gloomy Than Expected
The nation’s jobless rate held steady at 4.5% during July, and the net job loss was a modest 42,000, the government said in a report that gave a less gloomy employment picture than expected.
The news sparked optimism that the business decline may have bottomed out and that the pace of activity will be picking up, stimulated by low energy prices and the boost from income tax rebates.
Other economic signs that countered analyst expectations came in a Conference Board report showing a moderate decline in consumer confidence in July, rather than an increase, and government figures indicating a strong jump in consumer spending during June despite a miserly increase in incomes.
Times Staff Writers
GM Hires Former Chrysler Official
General Motors Corp. hired former Chrysler Corp. executive Robert Lutz to a new position of vice chairman for product development, a major admission by the world’s biggest car company that it needs help revitalizing a product line that has been leaving consumers cold for decades.
Under Lutz and Chairman Bob Eaton, Chrysler in the 1990s clawed its way back from one of its many near-collapses with a series of vehicles that included the Dodge Ram truck, the PT Cruiser and the Chrysler Concorde and Dodge Intrepid with their daring “cab forward” design.
GM waived its mandatory retirement rules to lure Lutz, 69, into a three-year contract.
Lutz, who retired from Chrysler in 1998 after its acquisition by Daimler-Benz, will resign as chairman and chief executive of battery maker Exide Technologies to join GM on Sept. 1.
John O’Dell
Burger King Recalls 2 Promotional Toys
In the latest in a string of blunders involving its promotional toys, Burger King recalled two more products that pose safety risks to young children.
The hamburger chain is recalling 2.6 million Hourglass Space Sprout and Look for Me Bumblebee toys that can break apart and release small balls or beads that pose a choking hazard.
Burger King, which is owned by Britain’s Diageo, said it has received no reports of injuries. It decided to recall the toys after an examination by its own safety consultant, who was hired after a series of dangerous--and deadly--marketing mishaps. The worst incidents involved the deaths of two children in 1999.
Sam Kennedy
PG&E; Net Income Leaps to $750 Million
Despite the tumble into Bankruptcy Court by its utility, PG&E; Corp. posted second-quarter operating income of $243 million, or 67 cents a share, down from $243 million, or 69 cents, in the same period last year. But net income leaped to $750 million, including one-time gains.
Pacific Gas & Electric Co. filed for bankruptcy-law protection April 6.
The parent and the utility revealed that they spent $9 million after taxes on legal and other expenses during the second quarter because of the bankruptcy case. For the six months ended June 30, PG&E; and its utility spent $25 million after taxes on professional fees and expenses related to the bankruptcy.
Nancy Rivera Brooks
Boeing to Move Jobs out of Southern California
Boeing Co. announced it will move about 1,100 engineering jobs from its international space station and space shuttle operations in Huntington Beach and Canoga Park to Texas and Florida as a way to cut costs and place workers closer to its customer.
The relocation comes as the National Aeronautics and Space Administration has been looking for ways to trim an estimated $4 billion in cost overruns in its space station program.
The agency also is considering cutting back on shuttle upgrades. The workers, most of whom provide engineering support for the two programs, will be moved to Houston or Kennedy Space Center in Florida.
Peter Pae
Last U.S. Tuna Plant to Close Its Doors
The country’s last full-scale tuna canning plant will vanish this fall, and 250 workers will lose their jobs when Chicken of the Sea International closes its plant on San Pedro’s Terminal Island in October.
The company said it will move all production to a plant in lower-cost American Samoa. The closure marks the end of an industry in Los Angeles, where a tuna is emblazoned on the county seal.
And some fear it could mean the end of Fish Harbor, an area in the port designated for fishing-related businesses.
Melinda Fulmer
Fired U.S. Mitsubishi Managers File Suit
Five managers sued Mitsubishi Motor Manufacturing of America Inc. for discrimination, saying the U.S. unit of the Japanese auto maker fired them in 1999 from the Normal, Ill., plant because they were older than 50 and not Japanese.
The suit came less than a month after the company agreed to pay 250 African American and Latino workers up to $200,000 each to settle a lawsuit that alleged Mitsubishi allowed racial harassment and a hostile environment at the plant. And three years ago, Mitsubishi paid $34 million to more than 300 women to end a sexual harassment case in what is believed to be one of the biggest settlements of its type.
A Mitsubishi spokesman declined to comment on the latest lawsuit, but the company issued a statement saying it stood behind the 1999 layoffs.
Lisa Girion
Appeals Court Denies Microsoft Request
Microsoft Corp. lost its bid in federal appeals court to reverse a key finding of the court’s June 28 ruling, which found that the software company violated antitrust laws.
The decision by the U.S. Court of Appeals in Washington clears the way for Microsoft to appeal the case to the Supreme Court. Microsoft said it will make a decision on an appeal this week.
If Microsoft does not appeal, the case will return to district court in Washington to determine how the company should be punished for illegally monopolizing the market for operating systems. The order to break up the company was overturned.
Edmund Sanders
Metricom to Shut Down Ricochet Internet Service
Metricom Inc. announced plans to shut down its pioneering Ricochet wireless Internet service after the bankrupt company failed to attract a buyer or investor that could keep it afloat. Though Metricom attracted 34,500 customers to its high-speed Ricochet service, that wasn’t nearly enough to cover the cost of its massive investment in infrastructure.
And down the road, Ricochet faced an even bigger threat from the new generation of wireless data services that are on their way to consumers from cell phone companies.
Elizabeth Douglass and Karen Kaplan
