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Week in Review

TOP STORIES -- May 4-9

May 11, 2003|From Times Staff

Crash Case Reveals Large GM Settlements

General Motors Corp. has paid out at least $495 million -- an average of more than $1.6 million per case -- to settle lawsuits brought by victims of crashes involving a popular line of pickups.

Revelation of the payouts came last week when U.S. District Judge Donald W. Molloy in Montana released an exhibit in a case brought by the estate of a family killed in an accident. Cases involved C/K trucks that had fuel tanks outside the vehicles' protective frames. That made them prone to explode in crashes, critics say. Dollar amounts in the document refer to settlements before late 2000.

The Times had asked the judge to unseal the document, which provides a glimpse into confidential payouts by major firms in product liability cases.

GM spokesman Jay Cooney called the judge's decision "fundamentally poor public policy."

Cooney said the settlements' size and number did not mean C/K pickups were unsafe. GM made more than 9 million of the pickups from 1973 to 1987 with fuel tanks outside the frame. It then changed the design.

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Boeing Faces Possible Curb on Military Work

The Justice Department is investigating allegations that Boeing Co. illicitly used documents obtained from Lockheed Martin Co. to win a multibillion-dollar contract to build rockets for military satellites, Boeing said.

In addition, the Air Force is conducting an administrative inquiry that could result in Boeing's being suspended or banned from certain military work, a Pentagon official said.

Chicago-based Boeing said the company is cooperating fully.

Investors are particularly concerned that any finding of wrongdoing could hurt Boeing's $25-billion-a-year defense business, which has helped counter sagging commercial aircraft sales during a worldwide slump in air travel.

Federal investigators declined to discuss the scope of the inquiry, but sources said it was focused on documents obtained by a former Boeing employee who was hired away from Lockheed in 1997.

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Fed Leaves Key Rate at Four-Decade Low

Federal Reserve policymakers decided to keep the central bank's signal-sending interest rate at a four-decade low of 1.25% but indicated that they would order new rate cuts if the U.S. economy continued to show signs of weakness.

Fed Chairman Alan Greenspan and his colleagues on the Federal Open Market Committee warned that the country may face a new threat in deflation.

Analysts said the Fed's latest action set the stage for as much as a half-point cut in the federal funds rate, the interest that banks charge one another for short-term loans, if the economy doesn't show signs of snapping back after the war in Iraq.

Fed officials said that although the end of the war had helped lift consumer confidence and stock prices, recent employment and production statistics had proved disappointing.

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FCC Expected to Relax Media Ownership Rules

The Federal Communications Commission is preparing to relax media ownership rules to let a single company own as many as three television stations and one newspaper in large markets such as Los Angeles and New York, according to sources familiar with agency plans.

Current regulations limit companies to two TV stations in a market and prevent cross-ownership of a local newspaper.

In an FCC staff report to be delivered to commissioners Monday, officials also will recommend allowing large TV station groups to expand further by raising the national cap from 35% of households to 40% to 50%, sources said.

A final vote by the agency's five commissioners is scheduled for June 2.

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Gas Dealers Pump Up Their Feud With Big Oil

The California Service Station and Automotive Repair Assn. accused major petroleum companies of artificially inflating pump prices, which hit a record $2.145 a gallon in the state March 17, by refusing to allow stations to shop around for the best wholesale gasoline deals. The association sent a contingent to Sacramento to lobby for legislation that would significantly ease restrictions on wholesale purchases.

One of the bills endorsed by the association was voted down in the Assembly Business and Professions Committee. The other was approved by the Senate Energy, Utilities and Communications Committee, but political observers said it would struggle for "yes" votes in the full chamber. Similar legislation in recent years never passed.

The service station association charges that lack of competition is the primary reason California's gasoline prices remain far above the national average.

The Western States Petroleum Assn., an oil industry trade group, says pump prices are determined by market forces.

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Singapore Trade Pact Broadens U.S. Access

The United States signed an agreement with Singapore to lower barriers on $33 billion in two-way trade and provide tougher copyright protection for U.S. entertainment companies operating in the Asian city-state.

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