BP's life on the frontiers at risk

LONDON — At a celebration of BP's centennial last October, CEO Tony Hayward boasted to guests that the oil company "lives on the frontiers of the energy industry."
But last week, in the first major sign that the Gulf oil spill may have caused lasting damage to the company's long-term strategy of embracing projects with high risks, BP decided not to bid on potentially lucrative license to drill for oil off the coast of Greenland.

The Arctic setback comes as BP's plans to begin deep-water drilling in Libya and the North Sea have been delayed, and its vast offshore U.S. operations remain under a cloud.

BP may face less difficulty in carrying out risky projects in parts of the world where regulation is less restrictive, such as in Angola, Russia and Iraq. But it can ill afford another major accident as years of investigations and costly lawsuits linked to the Gulf spill loom.

To help cover the costs of the spill, BP has begun shedding assets around the world, with a goal of raising $30 billion. Analysts say that cleanup, fines and lawsuits could cost BP more than that, although the company appears to have avoided some worst-case environmental scenarios, like oil washing up the East Coast.

Safety may now come first

By selling mostly land-based assets, BP is signaling that it intends to remain a deep-water driller.

Still, with Hayward gone soon, incoming CEO Bob Dudley is expected to mimic the safety-first strategy pursued by ExxonMobil Corp. after its historic 1989 spill in Alaska's Prince William Sound.

For example, Exxon quickly appointed an executive to develop a new inspection system that would examine every major piece of equipment within the company's global operation.

"I don't see (BP) marching off into new frontiers anytime soon," said Dougie Youngson, an analyst with Arbuthnot Securities in London.

The company's aggressive growth, including its acquisition of Amoco in 1998, made it the largest producer of oil and gas in the Gulf of Mexico. And, until the deadly explosion of the Deepwater Horizon rig on April 20, it would have been expected to be at the center of the new oil rush in the Arctic.

Contributing: Associated Press reporters Chris Kahn, David Koenig, Robert Barr and Jan Olsen.

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Small companies in holding mode

Small businesses have put hiring, supply buying and real estate expansion on hold as they wait out the vote on a small-business aid bill that stalled in the Senate earlier this summer.
The much-debated legislation offers tax breaks and waived loan fees. But it also comes with more divisive components, such as a $30 billion fund that would help community banks give loans to small businesses. Opponents say the fund would be a mini version of the often-criticized TARP large-bank bailout program.

Many small businesses had hoped the legislation would pass the Senate by the end of July. With two weeks left until Congress reconvenes, those firms are in a holding pattern.

"I'm still waiting for Congress to sign off on the bill," says Amarjit Kaur, who runs a convenience store and gas station in Wood Village, Ore. She leases her property but has a chance to buy it. With the waived-fee provision, Kaur says, she could save about $35,000 on her pending loan.

Kaur's is among about 1,000 other small businesses that "have their bank papers all done and will be funded in the days — moments — after the bill passes," says U.S. Small Business Administration Administrator Karen Mills.

In Kaur's case, she's concerned that the property seller is going to get antsy as she waits out the political decision-makers. "I keep asking my seller if he can give me a couple more weeks," she says.

Many other businesses have paused expansion as they wait for the outcome of the bill, says Bob Coleman, publisher of the Coleman Report, which provides information on small-business lending.

Some businesses can save thousands of dollars on the waived loan-fee provision alone, and they are thinking, " 'I might as well hold off and save the money,' " Coleman says.

Less pressure on banks

What's in the bill:

• An increase on government guarantees to as much as 90 percent on some of the most popular loans. That would mean a little less pressure on banks if a company defaults because the government would insure a larger percentage of the loan, Coleman says. With current guarantees topping out at 75 percent, "there is a bit more exposure" for banks, he says.

• Community banks with assets of $10 billion or less would be able to tap into the $30 billion fund when making small-business loans. About 8,000 banks would be eligible.

• Small businesses would get about $18 billion in tax breaks, such as larger write-offs on capital equipment investments, and get credits for new hires.

• The SBA would be able to increase the maximum for certain loans to $5 million from $2 million.

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Logan's Roadhouse agrees to buyout by equity firm Kelso

Nashville-based Logan’s Roadhouse, Inc., a steakhouse chain with 214 locations in 23 states, has agreed to be acquired by Kelso & Co., a New York private-equity firm.
At present, Logan’s is owned by a group of private-equity firms, including Bruckmann, Rosser, Sherrill & Co. of New York and Black Canyon Capital and Canyon Capital Advisors LLC of Los Angeles, as well as members of Logan’s management.

No terms of the transaction were announced. The deal will be consummated after meeting “regulatory approvals and customary closing conditions,” according to an announcement of the sale.

LRI Holdings, Inc., the parent company of Logan’s, had filed for an initial public offering of its stock in June. The company said at the time that it wanted to raise $200 million in that offering to pay down some debt and redeem outstanding preferred stock. No public offering was completed, however.

Logan’s, which began in Lexington, Ky., in 1991, became a wholly owned subsidiary of Cracker Barrel Old Country Store, Inc., in 1999, and was part of that company until it was sold to the present owners in December 2006.

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Expiring subsidies put COBRA out of reach

Teresa Beazley had paid $189 a month for government-sponsored health insurance since she was laid off last year from her job in the accounting center of a major grocery store chain.
Last month, though, the Hendersonville woman got a jolt when her bill more than doubled to $453 a month.

"I was sort of in a bind," the 59-year-old Beazley said. "I have to have health insurance, so I went ahead and paid it." She's not sure she can afford to pay the higher bill again.

Like thousands of others still out of work and with no job prospects in sight, Beazley finds herself caught in a gap created when a subsidy to help cover COBRA health insurance premiums for the country's unemployed ran out this summer.

RelatedChart: Unemployment in Middle Tennessee

People who started on COBRA before May 31 can get the federal 65 percent subsidy for 15 months. Those who have exhausted the subsidy or have been laid off since the end of May are out of luck, and must pay the full freight on their own for the year and a half that people between jobs are eligible for COBRA.

Beazley is angry that the subsidy has run out for many while unemployment rates remain stubbornly elevated in much of the state and nation.

"There's no nice way to put it, especially at my age," she said. "I did not ask to be laid off."

In Tennessee, the statewide unemployment rate was 9.8 percent in July — still high but the first time it has fallen below double digits since February 2009. The 13-county Nashville area registered a jobless rate of 8.8 percent for the month; while Davidson County alone had a 9.3 percent rate, according to labor data released Thursday.

COBRA — the Consolidated Omnibus Budget Reconciliation Act of 1985 —allows people who have lost their jobs to stay on their former employer's health plan if they pay the entire premium, plus a 2 percent administrative fee, usually for 18 months.

Although costly, it's typically less expensive than private insurance available to individuals and their families who aren't on employer-sponsored plans.

Last year, Congress approved the COBRA subsidy, which was funded by the federal stimulus. Advocates for workers had hoped Congress would expand the subsidy when it extended jobless benefits this summer — but that didn't happen.

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Yelp tests one-day sales of coupons

SAN FRANCISCO — Review website Yelp said Thursday that it is testing out "Yelp Deals" — large discounts at local businesses that site users can buy on one day only.
The move comes as sites such as Groupon have gotten extremely popular by combining social media with the power of group buying, offering shoppers daily deals on products and services in their communities.

With Groupon, however, the deals are only made active once a certain number of people in a city have agreed to participate.

In Yelp's case, there is no minimum participant requirement.

Right now, Yelp is just testing the service in San Diego and it isn't offering one deal each day. It has offered two deals so far: one at a spa and another at a Yoga studio.

The Yoga studio deal was offered to users on Thursday, giving them five yoga classes for $30 — $35 off the normal price at The Little Yoga Studio.

Revenue from the coupons is divided between Yelp and the participating business, though Yelp isn't saying what percentage each party gets.

Yelp plans to test the feature out in San Francisco and New York in the coming weeks, and, depending on how that goes, more cities may be added.

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Toyota recalls 1 million more cars

LOS ANGELES — Just days after U.S. auto safety regulators stepped up a probe into the risk that more than 1 million Toyota Corolla and Matrix vehicles could stall because of defective electronic engine control units, the Japanese automaker announced a recall of the vehicles.
Toyota Motor Sales USA Inc. said Thursday that it would recall 1.13 million 2005 to 2008 model year Toyota Corolla and Corolla Matrix vehicles sold in North America to address a problem with an electronic component called an engine control module that may have been improperly manufactured. No other Toyota or Lexus vehicles are involved in this recall.

This latest action brings the number of vehicles Toyota has recalled in the past year to about 10 million worldwide, a figure that is now approaching the total number of vehicles that will be sold by all manufacturers in America this year. The quality issues have affected the automaker's sales position and hurt its once-sterling reputation for reliability and dependability. Through the first seven months of this year, Toyota's U.S. market share has dropped to 15.2 percent from 16.3 percent, dropping it to third place in the U.S. auto market behind General Motors Co. and Ford Motor Co.

Toyota has been plagued by a rash of quality problems involving faulty gas pedals, floor mats, brakes, electronic stability control systems, steering systems and other defects.

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In the Corollas, Toyota said there is a crack that may develop on or in the component. When this happens, the check engine light may go on and the driver may experience harsh shifting. The engine might not start, and in some instances the engine can stall while the vehicle is being driven. Toyota said there are three unconfirmed accidents alleged to be related to this condition, one of which might have resulted in a minor injury.

Toyota plans to replace the module on all of the recalled vehicles at no charge to owners. It will mail notice of the recall to owners starting in the middle of September. People will be told to bring their cars to dealers as replacement parts become available. Owners who have already experienced the problem and paid for the repair will be instructed on how to collect reimbursement.

People with questions can go to www.toyota.com/recall or call Toyota at 800-331-4331.

On Wednesday, safety regulators began an engineering analysis of stalling in Corolla and Matrix cars.

The National Highway Traffic Safety Administration had received 26 complaints of vehicles stalling when it opened a preliminary evaluation in November. It reported 163 complaints when it opened the engineering analysis.

"The engine can stall at any speed without warning and not restart," NHTSA said on its website.

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Investment advisers don't expect double dip recession

SAN FRANCISCO — A majority of investment advisers say that a double-dip recession is unlikely and that the stock market will improve over the next six months — but their clients are more worried, according to a survey of money managers released Wednesday by financial-services firm Charles Schwab Corp.
Almost 60 percent of advisers said it's unlikely the U.S. economy will head back into recession in the next six months — 28 percent said it's likely to happen — and 63 percent said the S&P 500 will rise in that time, according to the survey in July of 1,199 advisers who work at independent firms with assets held at Schwab.

About half of the advisers said their clients are less optimistic about the economy than clients were in 2009. And 50 percent of advisers said their clients are less optimistic now than they were last year about being able to retire on time, while 40 percent said their clients are less positive about their investments' performance. When it comes to their pocketbooks, 47 percent of clients are trimming back on expenses. More than half are cutting back on spending.

Also, advisers are more worried about meeting their clients' goals: Seventy-one percent said it's difficult to meet client expectations in the current market environment, up from 58 percent who said that in the same survey in January. Still, that's down from the 84 percent of advisers who said that in January 2009.

RelatedEconomy skids closer to return of recession

Clients appear to need less hand-holding these days: Thirty percent of advisers said their clients needed reassurance in the past six months about being on track to meet their goals, down from the 49 percent with that response in January 2009.

Some worries on rise

The advisers have soured a bit on some aspects of the economy in the past six months: Forty-two percent said consumer spending will increase, down from 47 percent in January, and 53 percent said the housing market will continue to soften, up from 46 percent in January. Thirty-two percent said unemployment will increase, down from 40 percent who said that in January.

"A lot of the indicators still point to being cautious, (but) I think there's an optimism that's beginning to creep back into the marketplace," said Bernie Clark, executive vice president for Charles Schwab Advisor Services.

And the clients keep coming: Ninety-two percent of advisers said they'd brought in new client money in the past six months. Of those, 41 percent said clients came from full-service brokerage firms, 34 percent said they came from some other type of firm or financial professional, and 25 percent said the new clients were do-it-yourself investors.

Some money managers said recent global events have affected their investment decisions: Sixty-seven percent said the European debt crisis had at least a moderate impact on their investing choices, and 48 percent said declines in the Chinese market had a moderate impact on their decisions (while 47 percent said that had no effect).

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Vanguard Health's Q4 earnings rise

Vanguard Health Systems posted fiscal fourth-quarter net income of $2.8 million, up from $1.8 million a year ago.
Total revenues rose 3.9 percent to $858.4 million with patient service and premium revenues up from a year ago.

For its fiscal year that ended June 30, the Nashville-based hospital chain reported net loss attributable to its stockholders of $49.2 million vs. a net income of $28.6 million during the previous year.

Total full-year revenues rose 6 percent to $3.4 billion.

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TN loan program helps businesses go green

Tennessee businesses seeking energy-efficient makeovers will soon have access to a $50 million low-interest loan program, state officials announced Wednesday.
The Energy Efficient Loan Program will provide loans from $20,000 to $1 million to businesses with a plan for energy-saving upgrades, ranging from solar panels and high-efficiency lighting to geothermal installations and large-scale industrial process transformations requiring new machinery or a redesigned production line.

The program is designed to address the Catch-22 businesses typically face — the improvements make businesses more profitable over time, but a company may lack the cash to implement them.

"For companies, the problem is that they don't have capital in their internal budgets, and traditional lenders are hesitant to make that kind of loan," said Clint Gwin, president of Pathway Lending, a nonprofit organization with headquarters in Nashville that's administering the program.

Pathway Lending is contributing $5 million in startup costs for the loan program, whose other partners — the state of Tennessee, the Tennessee Valley Authority and Pinnacle Financial Partners — are contributing $15 million each, Gwin said. The program will charge below-market interest rates and aims to be an ongoing, self-sustaining fund.

The genesis of the program was to make Tennessee's industrial base more competitive, but research found that commercial as well as industrial enterprises were equally in need of access to capital.

"By providing access to this type of financing, we are making Tennessee businesses more competitive and that means more jobs," Gov. Phil Bredesen said. The initial application deadline is Nov. 1. Businesses must provide an "energy audit" outlining detailed energy upgrade plans. For more information or to apply, visit Pathwaylending.org or call 615-425-7171.

Reach Anita Wadhwani at awadhwani@tennessean.com or call 615-259-8092.

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Hollywood fears launch of Google TV

LOS ANGELES — Google revolutionized the way people access information. Now it wants to transform how people get entertainment.
The search giant is touting an ambitious new technology, called Google TV, that would marry the Internet with traditional television, enabling viewers to watch TV shows and movies unshackled from the broadcast networks or cable channels on which they air.

Users would need to buy a TV or set-top box with Google software that could connect to the Internet, along with a keyboard to type commands. Users could also use their iPhone or Android phone to operate Google TV.

The prospect of Google getting into television frightens many in Hollywood, who worry that Silicon Valley will upend the entertainment industry just like the Internet ravaged the music and newspaper industries.

By bringing the Web directly to the living room TV, entertainment industry executives fear Google TV will encourage consumers to ditch their $70 monthly cable and satellite subscriptions in favor of watching video free via the Internet.

Others believe it will fan piracy because Google refuses to block access to bootleg movies and television shows.

And, perhaps most troubling to Hollywood, Google doesn't yet know how it will make money on Google TV — and whether it intends to compensate the studios and networks for the content.

"It's kind of an end-run around their control of signal, and that's scary," said Harold Vogel, president of media investment firm Vogel Capital Management, of broadcasters' response to Google TV. "Because if you don't control the signal, then you can't provide your own advertising. It really destroys the legacy business model."

'There's no secret plan'

Google sees its role as harnessing the power of the Internet to improve television viewing. It is an opportunity, company project managers argue, for the movie studios and television networks to use the limitless storage capacity of the Web to make their libraries of programs available whenever someone wants to watch an old episode of All in the Family or classic films such as Jean-Luc Godard's Weekend .

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Samsung Galaxy S phones do Android platform proud

SAN FRANCISCO — The more phones that hit the market using Google's Android operating software, the harder it is for each offering to stand out from the black-and-silver crowd.
Samsung is the latest company trying to turn heads, hoping consumers will snatch up its new Galaxy S smart phones, which are both attractive on the surface and well-appointed beneath the hood.

AT&T already sells the Samsung Captivate, and T-Mobile offers the Vibrant. Two more are coming: Sprint will start selling the Epic 4G at the end of August, and Verizon plans to roll out the Fascinate this fall.

I tested the Captivate, Vibrant and Epic 4G, which all have plenty of great features in common: bright, crisp screens; 5-megapixel cameras that can also take high-definition videos; speedy 1 Ghz Hummingbird processors and Google Inc.'s easy-to-use Android operating software.

The phones have plenty of memory, too: The Epic 4G includes a 16-gigabyte microSD memory card, while the Captivate and Vibrant have the same amount of internal storage.

This could come in handy when Samsung opens up its forthcoming Media Hub, which will let Galaxy S users rent or purchase movies and TV shows on their phones.

Beyond all the similarities, there are plenty of things that make each Galaxy S phone unique:

Samsung Vibrant (T-Mobile, $200 with a two-year contract and after a rebate)

Though the Vibrant's black body — with silver trim — looks like an older iPhone, it distinguishes itself as a pretty solid Android phone that's good at multitasking.

The phone is the lightest of the bunch, tipping the scales at 4.2 ounces. While its design isn't revolutionary, it has familiar-looking rounded corners, so it fits really nicely in the palm of your hand.

One catch: The Vibrant also seemed to freeze up fairly frequently, such as when I was searching the Android Market for new applications or using ones I already have. Most of the time, though, it worked speedily, whether I was snapping photos or streaming music from online subscription service Rdio.

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Bankruptcy filings rebound

Long-term unemployment and small-business failures continue to propel personal bankruptcy filings, with Tennessee in step with a national trend that shows the number of cases spiking in July for the first time after declining for three months.
In addition, personal filings across the country surged 21 percent for the 12-month period ending June 30 compared with the same period a year ago, and Tennesseans continue to file for bankruptcy protection at a higher pace than residents of 48 other states.

"So many of us thought people would be back at work and the economy would start improving by this time, but it's not happened," said Nashville attorney Maria Salas, who said her solo law practice has seen just as many filings this year as a year ago.

Tennessee perennially scores high bankruptcy rates and this past year ranked behind only Nevada for having the second-highest bankruptcy rate nationally, according to the Administrative Office of the U.S. Courts.

For those who were laid off at the start of the recession nearly three years ago, some are just now filing for bankruptcy after failing to find work, exhausting savings and retirement funds while they

hunted for jobs and ran up credit card debts to pay household bills, bankruptcy lawyers say.

Small-business failures, such as those in the financial and construction sectors, have also thrust more middle- to upper-income families into bankruptcy court.

"It's not unusual for me to see someone with a $450,000 house — someone who made good money in the mortgage business or as a successful project manager for a construction company — who was living high, and now they're not," Salas said.

A total of 1.5 million personal bankruptcy cases were filed in federal courts during a 12-month period ending June 30, compared with 1.25 million for the same period a year earlier, according to the U.S. courts.

Add in tens of thousands of business filings, and this is the highest number of bankruptcy cases since many provisions of a revamped federal bankruptcy law took effect in 2005.

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Manufacturing jobs make comeback in TN

Production lines are gearing back up, and a few more people are going back to work in manufacturing here, traditionally among the best-paying jobs in Tennessee just as the national employment picture dims again.
"We generally have seen gains this year, and while the levels are really low, the pattern is at least one of growth," said University of Tennessee economist Bill Fox.

A 2 percent increase in factory jobs statewide this year has largely been driven by a recovering auto sector, which provides the bulk of Tennessee's manufacturing work. The growth is particularly strong among small auto-parts suppliers, whose fortunes fell over the past two years as big automakers struggled with poor sales.

"Detroit getting back on its feet is good for Tennessee," said David Penn, an economist at Middle Tennessee State University. "Our auto suppliers produce not only for plants in the state, but for other states as well."

RelatedJobs resources and tipsChart: Manufacturing jobs show gain

Tennessee's jobless rate was 9.8 percent for July, the state Labor Department said on Thursday. That's the lowest unemployment rate in almost a year and a half.

Tennessee's data were much brighter than a companion national report showing that first-time unemployment claims in the U.S. rose last week to 500,000 — a level worse than economists had expected.

"The recovery is clearly slowing," said Paul Ashworth, an economist at Capital Economics.

In Tennessee, though, the jobless rate has edged lower for several months and finally reached single digits. Still, some companies are holding off on permanent hires for now, and instead are giving current employees overtime hours or hiring temporary workers.

Manufacturing employees statewide worked an average of 43.2 hours a week in June, up from a recent low of 38.5 hours in January 2009, according to the Bureau of Labor Statistics. Rising hours are often viewed as a precursor to more hiring.

Temporary-employment agencies have added about 10,000 jobs during the past six months, Penn said, with many of those in manufacturing.

"I think we're just now seeing manufacturers starting to nibble at hiring permanent workers instead of temps," he said.

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Housing Fund to receive $750,000

WASHINGTON — The Housing Fund Inc., a Nashville-based nonprofit that finances affordable housing and neighborhood revitalization projects, will receive $750,000 as part of $105 million in awards announced Thursday by the U.S. Treasury Department to financial institutions serving struggling communities.
The money will be used as financing capital, the Treasury Department said. The Housing Fund, founded in 1996, has helped more than 2,600 first-time homebuyers receive $17.3 million in down payment assistance loans, as well as providing more than $45 million in financing to help individuals and organizations buy, rehabilitate or build homes for low- and moderate-income families, according to its website.

The grants from Treasury's Community Development Financial Institutions Fund will go to 180 institutions in 44 states.

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Community Health's acquisition gets antitrust clearance

Community Health Systems has received federal antitrust clearance for its planned acquisition of Youngstown, Ohio-based Forum Health.
Franklin-based Community’s deal to buy the three-hospital system out of bankruptcy is pending approval of Ohio’s attorney general.

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Owner cashed out accounts after insurance raid

Twenty-five minutes after an early August federal raid on the offices of United States Benefits, a Nashville company targeted in a probe of bogus health insurance sales, owner Timothy Thomas headed to his stockbroker to clear his accounts of more than $123,000.
Thomas followed the visit to brokerage firm Morgan Keegan with an afternoon trip to a bank to withdraw more than $10,000 in cash and seek a $9,100 cashiers check. The next day, Thomas signed over a check for $411,000 to a friend, while his wife, Kennan Dozier Thomas, cashed out $7,800 from another bank.

The series of events, described by a U.S. Federal Trade Commission attorney in a court hearing on Wednesday, amounted to a brazen "bank run" even after Thomas was served with a federal judge's order freezing all his assets after the Aug. 5 raid on his company's Murfreesboro Road office.

Altogether, in a two-day period after the federal shutdown of United States Benefits, even as a court-appointed receiver sent faxes to a number of banks informing them of the court-sanctioned asset freeze, Thomas and wife tried to cash out or withdraw more than $670,000 from numerous financial institutions, federal agents say.

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Meanwhile, the couple spent lavishly on food, boating and booze: $1,400 in restaurant tabs, $2,000 on boat fuel and hundreds of dollars at TJ Maxx, Costco and the Puffy Muffin in the two weeks that followed the raid.

Federal and state authorities presented the timeline of events in federal court in a bid to hold the couple in contempt for what trade commission attorney Arturo DeCastro described as a "flagrant and egregious violation" of the court order freezing Thomas' assets.

The FTC is involved in the case because it involves complaints of consumer fraud.

"Consumers who have been duped by their deceptive practices will never see that money." DeCastro said. "Mr. Thomas essentially went on a bank run, a spending spree."

United States Benefits has been accused of selling bogus health insurance policies, becoming the second Middle Tennessee firm shut down for allegedly duping consumers into thinking they were buying full insurance policies when, authorities say, they got much less.

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Business briefs: LifePoint deal to go forward

A Nashville bankruptcy judge this week approved a settlement agreement that allows for the sale of Sumner Regional Health Systems to Brentwood-based LifePoint Hospitals Inc. to go forward. The deal is expected to close Aug. 31.
The agreement approved by Judge Marian F. Harrison of U.S. Bankruptcy Court for Middle Tennessee was signed by the Gallatin-based Sumner Regional, Sumner County, the bond trustee and a committee of unsecured creditors. The four-hospital Sumner Regional system first disclosed its agreement to sell to LifePoint along with a bankruptcy filing in late April.

— GETAHN WARD

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Prime Outlets in Lebanon, an outlet mall, said Toys R Us Express plans to open a 4,006-square-foot store there on Friday. It joins 45 other stores at the shopping destination.

— RANDY MCCLAIN

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Music royalties compromise would require cell phones to offer FM radio

WASHINGTON — A long-running dispute between radio broadcasters and the recording industry over music royalties has taken an unexpected turn with a proposed settlement that threatens to drag the mobile phone industry into the ring.
The compromise under discussion by radio broadcasters, recording labels and recording artists could include a federal mandate that all new cell phones come with a built-in FM radio chip. While a deal is far from final, the prospect that the government could dictate a key design decision for such a ubiquitous consumer device has alarmed electronics manufacturers and wireless providers.

"This is two old-media industries attacking the new wireless broadband industry," said Gary Shapiro, head of the Consumers Electronics Association. "This is a battle that doesn't involve us."

Building FM radio into cell phones requires an additional antenna, which could add weight and bulk to devices prized for their sleekness, Shapiro said. It could also drain battery life more quickly, which could lead manufacturers to remove other features from their devices, he added.

"We don't think Congress should accept a back-room deal on how an iPhone should be designed," Shapiro said. "We think consumers should choose and companies should choose."

For decades, the National Association of Broadcasters has been fighting a music industry proposal that would require radio stations to pay music royalties to recording labels and performers for the right to play their songs on the air.

Current law requires broadcast radio stations to pay royalties to songwriters, but not recording labels or artists. Broadcasters argue that the existing arrangement makes sense because radio airplay provides free promotion and drives music purchases and concert ticket sales.

But compact disc sales have dropped off, and sales of digital albums haven't made up the difference, prompting labels and artists — represented by a group called musicFirst — to step up their push to start collecting royalties, too.

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Bankruptcy judge approves Sumner Regional's sale to LifePoint

A Nashville bankruptcy judge this week approved a settlement agreement that allows for the sale of Sumner Regional Health Systems to Brentwood-based LifePoint Hospitals Inc. to go forward.
The deal is expected to close Aug. 31.

The agreement approved by Judge Marian F. Harrison of U.S. Bankruptcy Court for Middle Tennessee was signed by the Gallatin-based Sumner Regional, Sumner County, the bond trustee and a committee of unsecured creditors.

The four-hospital Sumner Regional system first disclosed its agreement to sell to LifePoint along with a bankruptcy filing in late April.

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Visteon ordered to restore benefits

WILMINGTON, Del. — A Delaware bankruptcy judge told auto parts supplier Visteon Corp. on Tuesday that it must restore health and life insurance benefits for more than 6,500 retirees.
Judge Christopher Sontchi made the remarks in advance of a scheduled hearing on motions by attorneys for the retirees seeking to compel Van Buren Township, Mich.-based Visteon to restore benefits it terminated after Sontchi ruled in December that the company could do so.

A union representing some 2,100 people who worked at two Visteon plants in Indiana challenged Sontchi's ruling, and a federal appeals court panel overturned his decision last month. The panel ruled that Visteon could not terminate the retiree benefits without following certain procedures spelled out by the bankruptcy code.

While taking initial steps to restore the benefits, Visteon also challenged the appeal panel's ruling, which it described as "unique if not revolutionary" and conflicting with an earlier federal appeals court decision.

But Visteon's request for a hearing by the full appeals court was denied, and Sontchi said his reading of the panel's ruling left no doubt about what it meant.

"All retiree benefits that were terminated in December will need to be restored at some point, and that restoration will need to be backdated," Sontchi said.

The judge scheduled a hearing for Friday on how and when to restore benefits to retirees who worked at the shuttered Indiana plants and are represented by the Industrial Division of the Communications Workers of America, as well as United Auto Workers retirees who worked in Pennsylvania and Puerto Rico, and some 1,500 salaried retirees.

The judge declined a request by the salaried retirees to appoint an official committee to represent nonunion retirees in Visteon's bankruptcy, suggesting that doing so could interrupt the case schedule, which includes an Aug. 31 hearing on whether to confirm the company's reorganization plan.

"I have grave concerns about derailing the confirmation process in this case," Sontchi said. "I have grave concerns about keeping this company in bankruptcy longer than absolutely necessary."

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Home Warranty FAQFake CMA festival merchandise can be seized on the spot

Mazda recall to fix power-steering problems

Mazda Motor Corp. is recalling more than 300,000 Mazda3 and Mazda5 vehicles in North America to fix problems with the power-steering system that could lead to a crash, a problem the automaker addressed in Japan a year ago.
The Japanese automaker told the government the recall involved model year 2007-2009 Mazda3 and Mazda5 vehicles built from April 2007 through November 2008. Mazda said the vehicles could have a sudden loss of power-steering assist, making it difficult for the driver to steer and increase the risk of a crash.

— ASSOCIATED PRESS

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Chrysler works to get healthyJones Lang LaSalle, Other Companies Add Solar to Service and Product Lines

Homeowners favor short-term loans

More homeowners are refinancing into shorter-term loans, saving a bundle by taking advantage of the lowest mortgage rates in decades.
Nearly a third of borrowers refinancing fixed 30-year loans in April through June picked loans with 15- or 20-year terms, according to mortgage finance giant Freddie Mac. It was the highest share since 2004.

The trend has been driven by near-weekly drops in rates all summer. Average rates on fixed 15-year loans fell below 4 percent for the first time last week, dropping to 3.92 percent, according to Freddie Mac. A year ago, the average 15-year rate was 4.68 percent. Meanwhile, the rates on fixed 30-year loans now average 4.44 percent, Freddie Mac found.

At today's rates, a borrower with a 30-year loan at a 6.5 percent interest rate and a $200,000 principal balance could save about $70,000 in interest over the life of a shorter 20-year loan.

"It's borrowers looking to build equity more quickly, and borrowers have generally been paying down their loans more quickly," says Keith Gumbinger, vice president of HSH Associates, publisher of mortgage and consumer loan information.

Retirement motivates

Peter Iche, president of Carthage Federal Savings and Loan Association in Carthage, N.Y., says he has seen an increase in people who are approaching retirement refinancing to shorter-term loans.

"They realize that they can afford a heavier payment," he says. "They're getting closer to retirement where they are willing to suck it up for a few years."

Many lost jobs, equity

Most of the customers trying to refinance to shorter-term loans usually qualify, he says. And with rates as low as they are now, "For the group of people that can afford to do it, it's a good time to wrap things up."

Many can't, however.

With rates at record lows, a higher volume of refinancings would be expected, says Mark Zandi of Moody's Analytics.com. But high unemployment and lost home equity is preventing many borrowers from doing so, he says.

Application volume for home-purchase mortgages and refinancings has been tepid because many potential borrowers lack high enough credit scores, sufficient income or enough equity in their homes to qualify for new loans.

Borrowers' monthly payments rise when they refinance into a shorter-term loan, so lenders generally require borrowers to have higher monthly incomes to get a 15-year mortgage than a 30-year.

In addition, because property values in many areas have fallen sharply the past three years, about a quarter of residential properties with mortgages are worth less than the loan balances.

Contributing: Jillian Berman, USA TODAY .

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30-Year Rate Holds, 15-Yr Mortgage Rate Touches Yet Another LowObama studies U.S. role in mortgages

Sluggish recovery has no easy fix

WASHINGTON — The Federal Reserve has little power left to lift the economy out of its rut. Congress, with an election looming, has no appetite for more stimulus. Shoppers are reluctant to spend, and businesses are slow to hire.
Let's face it: There is no easy or imminent fix for the flagging recovery.

The sluggish economic summer wore on Friday with news that Americans spent less at most retail stores in July. Earlier this month came word that the trade deficit is ballooning and companies are not adding jobs fast enough to bring down unemployment.

Typically, the Fed can lower interest rates to encourage Americans to borrow money and spend it, invigorating the economy. But the benchmark interest rate controlled by the Fed has been almost zero for more than a year now.

RelatedCongress to spar over who keeps tax cuts

The Fed last week took a new step by announcing that it would use the proceeds from its huge portfolio of mortgage securities to buy government debt. The idea is to make cheap credit a little cheaper, particularly for things like mortgages.

The problem there: Americans who are worried about their jobs, not to mention volatility in the stock market, don't want to borrow. They saved 6.2 percent of their disposable income this spring. Before the recession, it was more like 1.2 percent.

"You can't force people to take out a loan or spend money that they don't want to spend," says Alice Rivlin, who served as the Fed's No. 2 official in the late 1990s.

Sure, the Fed still has options. It could launch another trillion-plus-dollar program to buy government debt or mortgage securities like it did when it was battling the recession and financial crisis.

But the Fed is unlikely to commit that much money unless things get a lot worse. Plus there are risks. Regulators don't want to push interest rates on mortgages so low that they encourage speculative buying, like the kind that inflated the housing bubble.

Or the Fed could cut to zero the rate it pays banks to keep money parked there, a move aimed at getting banks to lend more. But banks are not exactly feeling free with their cash, either.

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Obama studies U.S. role in mortgages30-Year Rate Holds, 15-Yr Mortgage Rate Touches Yet Another Low

Comdata adds 120 new jobs

A company that handles credit card payments and taxes for trucking companies, Comdata Corp. said today it would add about 120 new jobs to its Brentwood headquarters to handle growth in its business.
The new employees will support the company’s regulatory compliance division, which does things like file fuel tax returns for trucking companies and get oversize load permits for them.
“Comdata has been a member of the Middle Tennessee business community for over forty years, and we are excited to expand our workforce here in this area,” Comdata president Brett Rodewald said in a news release. “We are known for our ability to deliver innovative solutions and world-class customer service, and our Middle Tennessee associates have played a large role in establishing that reputation.”

Comdata already employs about 750 to 800 workers out of its Brentwood corporate office and more than 1,000 total in the U.S. and Canada. The company sells a Mastercard to the trucking companies that gives discounts at fuel stations and helps companies manage and track their spending. Comdata, which handles about $23 billion in card payment transactions annually, was founded in 1969.
The company said applicants for the new jobs could apply online at: http://www.comdata.com/comdata/about_us_careers.jsp

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Real Estate Outlook: After the CreditsNashville People in Business

Pinnacle's real estate fallout

When Pinnacle Financial Partners got started 10 years ago, the bank's executives, who had survived many a past real estate collapse, pledged to focus lending on business and industry — not real estate development.
Now, the bank is beset by loan problems linked to real estate and homebuilding plans gone awry across Middle Tennessee, quite the opposite of its original goals.

This much seems clear: A series of acquisitions of suburban banks in the past few years shifted a larger concentration of the bank's loans into real estate development in fast-growing areas around Nashville, leading to questions about how smart its bank purchases truly were.

The fallout has been severe.

RelatedPinnacle shares drop 23 percent on weak quarter

Pinnacle surprised investors with a nearly $30 million second-quarter loss a few weeks ago, and the stock fell more than 20 percent in one day. Wall Street analysts downgraded the company, with one bemoaning ever recommending it to investors.

By the end of last week, the stock price had dropped to $9.06 a share in trading on Nasdaq, down 41 percent in the past three months.

A review of foreclosures in Nashville and nearby counties shows that Pinnacle and the banks it acquired had been giving loans to developers in Nashville's fast-growing suburban areas, including Rutherford and Wilson counties and Antioch in Davidson County, as late as 2007. The subsequent real estate bust hit those areas hard.

Pinnacle President and CEO Terry Turner has blamed many of his bank's loan problems on acquisitions of suburban banks, including Bank of the South in Wilson County in 2007 and Cavalry Bancorp in Rutherford County a year earlier. Both institutions had benefited from years of a real estate boom and were purchased by Pinnacle shortly before the bottom fell out of the housing market.

After the acquisitions, Pinnacle went from having about 10 percent of its loan portfolio in construction and land development to nearly 20 percent by the end of 2007.

Sterne Agee bank analyst Peyton Green called Pinnacle's acquisitions "a deviation from discipline." He added: "Long-term, they will have a benefit. Short-term, it's come at a dear cost."

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Geithner: Credit conditions won’t stall economic recoveryReal Estate Outlook: After the Credits

Brentwood rejects senior care facility

BRENTWOOD — A plan for a senior care facility was the latest to fall this week as part of a rezoning request for a 6-acre-plus property known to locals as the "donkey farm."
It joins a preschool and a new post office as uses rejected for the northwest corner of Concord Road and Wilson Pike. The land is zoned residential.

Morning Pointe, a senior assisted-living facility planned for the tract, didn't even make it through a first reading when the Brentwood City Commission shot down the rezoning request.

"I ran on keeping residential residential. And honestly, I think that's the best use of the property: for houses. I think traffic is a problem," Commissioner Regina Smithson said.

A similar issue came up in 2005 when the "donkey farm" — so nicknamed after a herd of donkeys was housed there many years ago — was proposed for Crème de le Crème Preschool with a capacity for 250 students. That educational service rezoning was denied because of traffic concerns.

In 2004, the U.S. Postal Service announced that it intended to build a brand-new 32,000-square-foot facility there to relieve overcrowding at the post office on Brooks Chapel Road. Among the reasons for the groundswell of opposition was that neighbors were worried about the number of people driving to and from the new facility to gather their mail, as well as the safety factor as post office delivery trucks would have to use busy Concord Road to get to Interstate 65.

After the public outcry, federal postal officials scrapped their plans and decided to instead keep retail operations at the current post office, a building constructed in 1983, and move the carriers out to a facility on Gen. George Patton Drive.

To explain her "no" vote for Morning Pointe, Commissioner Anne Dunn cited the number of cars already on the road as people travel to various institutions, including the YMCA, the library and several churches, not to mention a Concord Road convenience market across the street, which was grandfathered in to the area.

Commissioner Paul Webb was concerned about the precedent that changing what is now residential zoning to a commercial designation would bring for that area.

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Nashville People in BusinessJones Lang LaSalle, Other Companies Add Solar to Service and Product Lines

Randy McClain: Save early, often, exec turned author advises

Jackson National Life Insurance has already turned out to be a stellar corporate citizen — even before its newly planned regional headquarters with a projected 400 or more employees gets in full swing in Franklin.
The Michigan-based insurer has given at least $250,000 to local flood relief, and now it's dispatching Gregory Salsbury, a corporate executive turned author, to Nashville to offer key lessons in 21st-century retirement planning to a populace shell-shocked by Wall Street turmoil, bank bailouts and uncertain 401(k) accounts.

Salsbury, an executive vice president with Jackson National Life Distributors, will be at the Hilton Nashville Downtown on Saturday, Aug. 28, for a 90-minute financial help session. It starts at 10:30 a.m. and runs until noon, and there'll be time for questions from the audience.

His advice — delivered in a colorful new book, Retirementology, Rethinking the American Dream — gently scolds working Americans for a history of missteps with money and an unfortunate knack for skewed or no financial planning. Among the gaffes that damage our retirement goals are:

Too many people fall into the trap of thinking only in terms of "the zone." The zone revolves around the false premise that there is a crucial 10- or 15-year period before you quit working in which it's possible to make up for lost time and amass enough cash to live comfortably in retirement, no matter how little you may have put aside earlier in life. Solution: Spend wisely, save consistently.

Few investors are logical about saving for retirement. Everyone obsesses about "the one true number" they'll need. But too many people fail to take advantage of simple strategies offered to them. Seventy percent of Generation Y workers don't take part in their employer-sponsored retirement accounts. And too many workers 45 and up stop contributing to their 401(k) accounts, Salsbury says.

Don't waste money

Think of every financial decision — even those made in your 20s — as a retirement decision. And don't waste money. Salsbury jokes about "zoomers," those over-caffeinated baby boomers spending up to $20 a day on designer coffees, when that extra money should go in a piggybank.

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U.S. rethinks subsidies for home ownershipJones Lang LaSalle, Other Companies Add Solar to Service and Product Lines

Nashville People in Business

Michele Beasley has been promoted to director of design services for cj Advertising.
Brian Couch has been appointed director of category management at Vista-Pro Automotive, a designer, manufacturer and distributor of automotive parts. He was manager of sales and marketing services for United Components Inc.

Economic development

Jamie Stitt has been named the director of the Three-Star Program for the Tennessee Department of Economic and Community Development. Still was a regional economic development specialist.

Financial services

Independent investment advisory firm CapWealth Advisors LLC and CapWealth Investment Services LLC named Scott Roland as president. Roland joined CapWealth Advisors in February as chief operating officer. He will retain that title as well.

RelatedNEXT UP: TALIA PETERS

WFG Investments Inc. of Dallas has opened a branch office in Brentwood, to be run by LeRoy Bizzell.

Melvin Jones Jr. was sworn in as president of the Nashville Chapter of the Association of Government Accountants for 2010-11. Jones is a certified government financial manager and is the director of internal audit and consulting services for the state Department of Revenue.

PricewaterhouseCoopers LLP has named David Pickett managing partner in its Nashville office. Before moving here, Pickett was managing partner for the firm's Birmingham, Ala., office.

Health care

Billy J. Kim, M.D., has joined Summit Medical Center as a board-certified vascular surgeon with Vascular & Endovascular Specialists.

Urologist Gregory Head, M.D., has joined the medical staff of Skyline Medical Center. Head received a medical degree from the University of Louisville School of Medicine, and completed general surgery and urology residencies at the University of Arkansas for Medical Sciences.

Gaye Smith, who has served as Vanderbilt University Medical Center's chief privacy and health record official for the past seven years, has been named chief patient experience and service officer.

Arnold Malcolm, M.D., has been named chair of the department of radiation oncology at Vanderbilt-Ingram Cancer Center. Malcolm has served as interim chair since May 2009 after the departure of Dennis Hallahan, M.D.

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Jones Lang LaSalle, Other Companies Add Solar to Service and Product LinesNashville People in Business

O'Charley's reports $2.5 million loss

Nashville-based O’Charley’s, Inc. reported today it lost $2.5 million, or 12 cents per share, mostly from a $2.9 million interest expense in the quarter. It was the fourth consecutive quarter of losses for a company that continued to show declining revenues and sales at its flagship brand, O’Charley’s restaurants.
The stock price fell 31 cents to $5.55 per share on the Nasdaq as of early this afternoon.
Excluding the interest expense, the loss of 3 cents per share was close to the average analyst expectation of a 5 cent loss in the quarter, according to Thomson Reuters.
Company executives are hoping for a turnaround from recent changes to the menu and a new CEO David W. Head, who starts his new job Sept. 1. Head comes from Captain D’s Seafood Kitchen in Nashville, where he was chairman, president and CEO.
Analyst Bryan Elliott of Raymond James & Associates said Head has experience sustaining a struggling chain but will have issues to face at O’Charley’s.
“The continuing high single digit (same-store sales) declines at the core O'Charley's brand are disappointing and troubling,’’ he wrote in a note to investors.
Same-store sales at O’Charley’s company owned stores fell by 7.9 percent in the quarter, both on fewer guests and lower average checks.
Same-store sales at the company’s other restaurants also fell, but by lesser amounts, as more diners were offset by lower average checks. Revenues fell 5.9 percent overall in the second quarter to $194.1 million.

The company has been suffering from a weak economy and an oversaturated dining market for casual, sit-down chains, analysts have said.
“While we were disappointed with the second quarter financial performance of the O’Charley’s concept, we believe that enhanced focus on innovative food offerings, service improvements and value will lead to a shift in sales trends later this year,’’ interim CEO Philip Hickey, Jr. said in a statement. “I look forward to working closely with David to continue our pursuit of positive momentum.”
O’Charley’s introduced recently a 2 entrees for $14.99 deal available every day, all day.
Ninety Nine Restaurants has been advertising nine entrees for $9.99 each in a play off the restaurant’s name. For the third quarter, O’Charley’s, Inc. is forecasting revenue of between $186 million and $192 million, and a loss from operations of between $1 million and $4 million.

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Home Warranty FAQHealthStream’s Q2 revenues up, net income down

Hard health-care decisions await next governor

The Tennessee governor's race is down to two candidates. The Republican is Bill Haslam, the moderate mayor of Knoxville. The Democrat is Mike McWherter, the son of the governor who created TennCare.
The public eye is keenly focused on health-care issues. Big health-care questions will face the next governor. Let's explore three particularly prickly questions.

The first major decision will be the expansion of Medicaid. At its apex, TennCare was consuming 35 cents of each dollar in Tennessee tax revenue, including all new tax revenue.

Under national health reform, a state must continue the program at its current level and expand the program to receive new federal funds. If the program is expanded to the full breadth intended by federal law, the federal government will pay 95 percent of the expansion cost.

This expansion will bring badly needed federal money to Tennessee health-care providers. However, the new governor must decide if the voters will view Medicaid expansion as an endorsement of the highly controversial federal health reform.

The pragmatic mayor from Knoxville would appear hard-pressed to turn down this amount of federal funds for Tennessee health care. For candidate McWherter, TennCare II is family legacy. Medicaid expansion should be automatic.

Second, the new Tennessee governor must decide if Tennessee will run its own health insurance exchange or cede such to the federal government. Recently, Tennessee was one of 21 states that decided to let the federal government run its high-risk pool.

Gov. Phil Bredesen said there were too many uncertainties and preferred to let the feds own the high-risk pool issues and control.

But the health insurance exchanges offer much broader authority and responsibility. It will be difficult not to accept the state responsibility for the health insurance marketplace. However, with this responsibility comes the political reality of very unpopular subjects.

Finally, the new governor must address the highly partisan issue of tort reform. As the former governor of Vermont Howard Dean once said, "But for the trial lawyers, tort reform would be included in a national health reform package."

Tennessee is one of the few Southern states that have not passed comprehensive tort reform.

Health-care tort reform, particularly in the hard hit area of long-term care, is sure to be a major question.

Haslam has indicated a willingness to consider it. McWherter is unlikely to do so.

The new governor also will have to face the fact that health care is a major cost for Tennessee state government.

Medicaid amounts to approximately 25 percent of the state budget, and state employees' health benefits cost another 5 percent.

Gov. Bredesen came into office from a career in health-care management.

Neither Haslam nor McWherter has this background. With nearly 30 percent of state tax revenues being absorbed in health care, the next governor will need to quickly balance intense political emotions with enormous financial consequences.

Dick Cowart is chairman of the Health Law and Public Policy departments of the Baker Donelson law firm, and he is a past president of the American Health Lawyers Association. He can be reached at dcowart@bakerdonelson.com.

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Bell construction widens its scopeReal Estate Outlook: After the Credits

U.S. rethinks subsidies for home ownership

Just how much should Uncle Sam do to help Americans buy their own homes?
For 70 years — and for the last 15 in particular — the answer has been: Whatever it takes.

Now, policymakers are pausing to reconsider. In the next few months, they'll weigh whether there can be too much of a good thing when it comes to helping families finance the American Dream.

The rethink could mean a shakeup for a mortgage market addicted to government subsidies.

RelatedTN to get $81M in mortgage aid to help the unemployed avoid foreclosure

"This process of figuring out the government's role is going to involve some hard choices," says Alyssa Katz, author of Our Lot: How Real Estate Came to Own Us . "The moment you start changing the nature of what is guaranteed by the government, what is subsidized, you start to change the alignment of winners and losers. ... We took for granted that anyone could get a mortgage."

Using guarantees and tax breaks, the government pushed homeownership past 69 percent in 2004. Then it all came crashing down.

Housing prices started crumbling in 2007, panicking financial markets, forcing the government to seize mortgage giants Fannie Mae and Freddie Mac, and pushing the economy into the worst recession since the 1930s. Homeownership has fallen below 67 percent.

Now, Washington is preparing to rebuild the national mortgage market atop the ruins of Fannie and Freddie. The proposal, due early next year from the Obama administration, could make it harder to buy a home by reducing available credit or requiring bigger down payments. Low-income renters might get more government help.

Congressional Republicans doubt the administration has the nerve to make bold changes. They say the White House squandered an opportunity to deal with what they see as the No. 1 problem — limiting taxpayer losses on Fannie Mae and Freddie Mac — in an overhaul of financial regulations Congress passed last month.

"What you've seen is two years of lip service," says Rep. Spencer Bachus of Alabama, ranking Republican on the House Financial Services Committee. "The administration and the congressional Democrats have not shown any willingness to address the issue other than to talk about it and have planning sessions."

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30-Year Rate Holds, 15-Yr Mortgage Rate Touches Yet Another LowObama studies U.S. role in mortgages

Chrysler works to get healthy

DETROIT — Chrysler is stanching its losses, seeing increased demand for its cars and trucks and preparing for a major product rollout 14 months after emerging from bankruptcy protection.
But the automaker is far from healthy, and its CEO says Chrysler has more tough work ahead as it tries to make a profit and pay off government loans.

Chrysler Group LLC narrowed its second-quarter loss to $172 million, a $25 million improvement from the first quarter, it said Monday. Revenues climbed 8.2 percent to $10.5 billion. U.S. market share is rising. The company, which was in Chapter 11 for most of the second quarter last year, has made steady progress since being taken over by Italian automaker Fiat SpA in June 2009.

But there's a catch. Many of its sales — Chrysler won't say exactly how many — were to rental-car, government and corporate fleets, which are less profitable than sales to individual buyers. Chrysler has struggled getting individual buyers into its showrooms because of an aging lineup.

RelatedHonda recalls 300,000-plus Accords, Civics

Chrysler CEO Sergio Marchionne said that will change when 11 new or revamped cars come to market between now and the end of the year.

Among them are new versions of the Chrysler 300 and Sebring sedans, revamped minivans and a new Dodge crossover. Chrysler also hopes to lure buyers with the U.S. debut of the Fiat 500, a European mini-car that will compete in the niche occupied by the Mini.

Those models "lay the groundwork for a significant increase in performance in 2011," Marchionne said in a conference call with media and analysts.

Jeep Cherokee gives lift

Chrysler already got a boost from the 2011 Jeep Grand Cherokee, which came out in June and is the first new vehicle released since Fiat took over.

The Jeep has a more fuel-efficient engine and a new suspension system that can rise 10 inches for off-road driving. Reviews have been positive, and sales surged 54 percent in July. Marchionne said Chrysler already has 70,000 orders for the Jeep and may add another shift to the factory that makes it.

"It's the first tangible proof that the work we've been doing here privately for the last 14 months is beginning to bear fruit," Marchionne said.

George Magliano, an auto analyst with IHS-Global Insight, said Chrysler's results were stronger than anticipated, and the company is moving in the right direction. But he's concerned about Chrysler's level of fleet sales and its relatively high incentive spending. A lot rests on the cars and trucks coming to market this fall, he said.

Home sales take unexpected dipReal Estate Outlook: After the Credits

Tennessee officials meet on bond rating

Gov. Phil Bredesen has been meeting with three credit rating agencies this week in New York.
He and members of the State Funding Board had meetings scheduled with Fitch Ratings Ltd., Moody's Investors Service and Standard & Poors to discuss Tennessee's bond rating.

In April, Moody's raised Tennessee's rating from Aa1 to Aaa. Fitch adjusted it from AA+ to AAA. Both are the highest available level.

The higher bond rating means lower interest rates on borrowing.

Bredesen has participated in these meetings every year since 2004.

Tennessee Commerce gets hit with regulatory actionDeveloping The Skill Of Qualifying Buyers

Obama studies U.S. role in mortgages

WASHINGTON — Keeping Fannie Mae and Freddie Mac in business will cost taxpayers billions. But getting the federal government out of the mortgage business would cost homebuyers dearly, in the form of higher interest rates.
The Obama administration will begin tackling this dilemma next Tuesday at a public conference on the future of the mortgage system. Fannie and Freddie lost a combined $9 billion in the April-to-June quarter and have needed more than $148 billion to stay afloat since the government rescued them nearly two years ago.

Figuring out what to do with Fannie and Freddie could take years and involves a more difficult question: How much should the government do to subsidize the housing market?

The government has helped make mortgages attractive to Americans for decades with a range of policies, from allowing homeowners to deduct mortgage interest payments to backing loans that make long-term fixed-rate mortgages widely available.

RelatedWith tax credits gone, July home sales plunge

Now, Fannie and Freddie are facing scrutiny for the billions that taxpayers have covered for the bad loans made during the housing boom. And the administration and Congress are under pressure to address Fannie and Freddie's role that contributed to the mortgage crisis after leaving that out of the broader financial regulatory overhaul.

Status quo may prevail

Some would like the government to scale back its support for Fannie and Freddie to give the private sector a chance to compete. But others say ending it is unrealistic because it would make the 30-year fixed-rate mortgage less available or more expensive.

"When Congress overhauls the housing finance system, it's going to have to preserve something close to the status quo," said Jaret Seiberg, an analyst with Concept Capital's Washington Research Group. "Our whole housing system is built upon the ability of borrowers to get 30-year fixed-rate mortgages. You just can't remove that product from the market."

Without the government's backing, banks would prefer not to make loans that leave interest rates fixed for more than five years. They don't want to take the risks that interest rates will skyrocket, leaving them with an unprofitable loan a decade later.

Fannie and Freddie buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors. The pair nearly collapsed two years ago under the weight of soaring foreclosures and defaults.

On Monday, Freddie said it lost $6 billion, or $1.85 per share, in the April-to-June period. The company lost $840 million, or 26 cents a share, in the same quarter last year. And it asked for an additional $1.8 billion from the federal government, bringing its total request to $63.1 billion.

30-Year Rate Holds, 15-Yr Mortgage Rate Touches Yet Another LowHome sales take unexpected dip

Apple tries to prevent remote attack

Apple is quietly wrestling with a security conundrum. How the company handles it could dictate the pace at which cybercriminals accelerate attacks on iPhones and iPads.
Apple is hustling to issue a patch for a milestone security flaw that makes it possible to remotely hack — or jailbreak — iOS, the operating system for iPhones, iPads and iPod Touch.

The patch is completed, Apple spokeswoman Natalie Kerris said in an interview. But Kerris said on Friday that she was not able to give a time frame for its public release.

Jailbreaking refers to hacking iOS to download Web apps not approved by Apple. This used to be difficult. A website came along this spring called JailbreakMe.com that made it trivial to jailbreak your own iPhone or iPad. Last week, a technique for remote jailbreaking appeared on the site. It's now possible to access the operating system of an iPhone or iPad owned by someone else.

An attacker would get "fairly complete control of affected devices," said Michael Price, an operations manager for McAfee Labs. No such attacks are known to have happened, he says.

For the moment, the most visible concern for Apple has been pranksters going into Apple and Best Buy retail stores and jailbreaking display models, according to tech blog Engadget. Yet, the security and privacy issues are serious.

Security experts expect the pattern that has come to dominate the PC world to begin to permeate smart phones. Bad guys continually flush out new security flaws in PCs, then tap into them to launch malicious attacks. Good guys, meanwhile, scramble to patch and block.

Now, cybercriminals are rapidly adapting PC hacking techniques to all smart phone platforms, including Symbian, Google Android, Windows Mobile, RIM BlackBerry and Apple iOS.

"It's a brand-new game with new rules," said Dror Shalev, of DroidSecurity, which supplies protection for Google Android phones. "We're seeing rapid growth in threats as a side effect of the mobile Web app revolution."

IPhones have become a pop culture icon in the U.S., and now it's the iPad. "The more popular these devices become, the more likely they are to get the attention of attackers," said Joshua Talbot, intelligence manager at Symantec Security Response.

Home Warranty FAQBlackberry takes fight to iPhone

Shipbuilders, repair shops feel pain of Gulf drilling ban

GALVESTON, Texas — The effect of the government's moratorium on deep-water oil and gas drilling is evident here at an almost deserted boat dock.
Normally, two or three boats that service offshore oil rigs would be here, getting equipment or repairs. On a recent Saturday, there was one. Craig Marston, general manager of the 80-employee Malin International Ship Repair, didn't have any oil-related clients scheduled to come in. Instead, he's bracing for a 30 percent to 40 percent drop in business in the next few weeks as the full impact of the moratorium, in its third month, sets in.

"A quarter of my work force is at risk (of layoffs) right now," Marston says.

The BP oil spill, which is having a diminishing effect on the Gulf of Mexico's water, continues to wreak havoc on the offshore oil and gas industry and the businesses that service and supply it. Of the 33 deep-water rigs in the Gulf, 24 have been idled by President Barack Obama's moratorium, which was imposed to beef up safety. Several rigs have left for work in other parts of the world. Government permits for shallow-water drilling have slowed, too. Less drilling means less business for hundreds of companies from Texas to Alabama, including shipbuilders, repair shops and those that supply boats to service the rigs.

The moratorium's full impact has yet to be felt. Some companies picked up business because many boats were enlisted to work on the spill. Malin was one of them, getting a 20 percent bump in business, Marston says. But that work is lessening now that the well has been capped.

Boat company Laborde Marine of Morgan City, La., has eight of its 21 boats enlisted in spill response, says Jimmy Skiles, Laborde executive vice president.

"It's been pretty good for us," he says. The unknown is how long the moratorium will go and how intense new safety requirements will be for offshore drilling, which may slow projects, Skiles says.

"Everybody feels like the hammer is going to fall. We just don't know when," Skiles says.

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Nashville area home sales fall 21 percent in July

Home sales fell for the first time in 10 months in July, as the tax credits expired and fewer first-time homebuyers bought homes, the Greater Nashville Association of Realtors reported today.
Home sales fell 21 percent in July to 1,745 closings, driven downward by lagging sales of single-family homes and condos in the region.

However, the median price of a home in the Nashville area stayed about $180,000 – the second straight month when prices climbed back to what they were two years ago. The median price of a single-family home in July was $181,000, a 5.8 percent increase from last July, the association said. The median price of a condo was $149,900, also a nearly 6 percent increase from last year.

“The tax credit helped drive nine consecutive months of increased home sales,” said GNAR president Lucy Smith in a statement. “Until the overall economy strengthens and employment numbers increase, it is appropriate to expect some softness in the real estate market both nationally and regionally.”

Inventory of single-family homes climbed by 1.7 percent to 15,172 homes on the market in July.

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Weak hiring hobbles economy

WASHINGTON — The nation isn't creating nearly enough jobs to reduce persistently high unemployment.
For the third straight month, the private sector hired cautiously, July figures show. And those meager gains in the job market were nearly wiped out by tens of thousands of cuts at all levels of government.

Many of the new jobs being created do not pay well enough to significantly jump-start spending by shoppers and stimulate the broader economy.

The unemployment rate was stuck at 9.5 percent for the second straight month, the Labor Department said Friday. Analysts said it probably would climb back into double digits because the private sector is not creating jobs fast enough.

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Private employers reported a net gain of 71,000 jobs for July, far below the 200,000 it takes for the unemployment rate just to hold steady and keep pace with the growing work force.

Counting the jobs lost at the local, state and federal levels in July, the net gain was only 12,000 jobs. And on top of that, 143,000 temporary jobs with the Census Bureau for the 10-year population count came to an end.

State and local governments wrestling with budget shortfalls have shed 169,000 jobs this year. Further losses are on the way despite $26 billion in federal aid. Up to 30,000 more job cuts a month are expected over the rest of the year.

The weak report could put pressure on the Federal Reserve to take new steps to boost the economy when it meets next week.

Economists are especially concerned that the recovery is losing momentum as it enters the second half of this year, when the benefits of most of the government's stimulus spending will start to wear off.

For now, most of them are betting the economy will continue to grow, though at a lackluster pace, through the rest of this year. Some analysts fear the recovery could fizzle altogether, though.

"If we don't see significant job growth by the end of the year, the economy could be in serious trouble," said Bill Cheney, chief economist at John Hancock.

President Barack Obama noted that the economy has added private-sector jobs for seven straight months but said the progress "needs to come faster."

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Real Estate Outlook: After the CreditsShoppers are choosy in shaky economy

Healthier Ford will again pay chairman

DETROIT — After a five-year wage freeze, Ford Motor Co. Executive Chairman Bill Ford Jr. is getting paid again.
It's another sign that the automaker founded by his great-grandfather Henry Ford is healthy enough to award its top executives generous pay packages. The company recently said it earned $2.6 billion in the second quarter, its fifth-straight quarterly profit.

Bill Ford will be paid $4.2 million in salary and stock options worth $11.6 million. The total represents pay he has earned over the past two years. He was to be paid Friday.

"The ongoing success of Ford Motor Company is my life's work and I am fully confident we are on track for sustained profitable growth through our commitment to building great products, a strong business and a better world," Bill Ford said in an e-mail to employees obtained by The Associated Press.

In 2005, when Bill Ford was chairman and chief executive, he stopped taking a salary or bonus as the automaker floundered and racked up record losses. The next year, he stepped aside as chief executive and hired former Boeing Co. CEO Alan Mulally for the job. Mulally has been widely credited with streamlining the company and turning its operations around.

In 2008, Ford's compensation committee ruled that Bill Ford could be paid from the start of 2008 once automotive operations returned to profitability. The committee recently decided the conditions had been met. Ford made $2.7 billion in 2009, its first annual profit in four years.

Ford's U.S. sales rose 28 percent in the first six months of this year, almost double the overall industry's sales increase, thanks to well-received products, good quality rankings and consumer good will. Unlike General Motors Co. and Chrysler Group LLC, Ford avoided bankruptcy and didn't take federal bailout money last year. Ford also grabbed sales from Toyota Motor Corp. after Toyota recalled millions of vehicles.

Ford expects profit this year

Ford has said it expects to make a profit this year and next and expects to end 2011 with more cash than debt. It has $27.3 billion in debt and $21.9 billion in cash.

Mulally made $17.9 million in 2009, about 1 percent more than the prior year. Most of that total was in stock options; his salary was $1.4 million. Mulally and Bill Ford each took a 30 percent salary cut in 2008 that remains in effect.

Still, Mulally's salary has been a sticking point for some Ford factory workers, who cited his pay when they rejected a new round of wage concessions in October.

In a filing Friday with the U.S. Securities and Exchange Commission, Bill Ford said he is selling $28 million worth of shares.

In the e-mail to employees, he said he is donating $1 million to a college scholarship fund for employees' children.

In afternoon trading, Ford shares rose 1 cent to $12.99.

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VW chief: Chattanooga won't get engine plant

CHATTANOOGA — Volkswagen's chief in Chattanooga said Friday he does not expect the city to win a new VW engine plant that the German automaker is planning for North America.
Frank Fischer, CEO of VW's operations here, said while local company officials pitched Chattanooga, the engine plant will go elsewhere as it now stands.

Read the full story: Engine plant in city unlikely at the Chattanooga Times Free Press.

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Community Health wins bid for Ohio hospitals

A bid of $120 million from Community Health Systems beat out another Nashville-area-based hospital operator in a bankruptcy auction of the assets of a Youngstown, Ohio-based nonprofit hospital system on Thursday.
Franklin-based Community had entered the fray before Tuesday's deadline for rival bids, joining Nashville-based Ardent Health Services, which two months ago had signed an agreement to buy assets of Forum Health.

The latest deal comes amid a flurry of U.S. sales activity in which for-profit chains like Community have bought nonprofits. Analysts say federal health-care reform's promise of extending insurance to 32 million uninsured Americans, improved credit markets and a greater willingness by nonprofits to consider partnerships or outright sales have sparked a perfect storm for more acquisitions.

The Community purchase announced Thursday still requires a review by Ohio's attorney general to protect community benefits and ensure that for-profit Community's purchase is in the public's best interest. The proposed sale also is subject to final approval of a bankruptcy judge in a hearing set for early next week.

Community's last-minute bid for Forum shows a level of increased competition among for-profit hospital chains for other medical operations viewed as highly valued, analysts said.

"What it says is that when Community sees a property they want, they're not afraid to spend to get it," said Sheryl Skolnick, an analyst with CRT Capital in Stamford, Conn.

On Tuesday, Community had offered $100 million for Forum's assets, $30 million more than Ardent's initial offer. At Thursday's auction, the two companies went back and forth above the $100 million level before Community finally won by offering its
$120 million bid.

"We always knew that CHS would be back and knew that it would be competitive," said Kevin Gwin, a spokesman for Ardent. "We're disappointed, but we leave feeling good about our approach, our vision and what we did in northeast Ohio."

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Real Estate Outlook: After the CreditsArdent agrees to buy Ohio hospitals

Shoppers are choosy in shaky economy

With the economy only limping along, Americans again are being picky at stores, many of them buying only at deep discounts because they can't shake uncertainty about their jobs.
Retailers around the country posted a sales increase of just 2.8 percent for July over a year earlier — and at that time, the economy looked much bleaker than it does today.

The July figure, released Thursday by the International Council of Shopping Centers based on results from 31 chains, was the fourth straight month of weak retail numbers. For the most part, economists were disappointed.

Without more jobs, Americans probably will remain cautious with their spending, restraining the economic rebound, they said. But without more spending, companies probably will be slow to hire.

"To break out of this, we need both employment and consumption to come up together," said Nigel Gault, an economist at IHS Global Insight.

Today, the government will release its snapshot of the nation's job market for July, and no one expects anything strong. Private companies are expected to have added 90,000 jobs for the month, not nearly enough for healthy economic growth.

The overall figure is expected to show a loss of 65,000 jobs for July, because of the end of temporary positions with the U.S. Census Bureau. Unemployment is not expected to budge much from its current 9.5 percent, and may rise.

"With limited hiring by the private sector, it is becoming increasingly difficult for the recovery to be sustained," said Andrew Gledhill, an economist at Moody's Economy.com.

The stock market finished just about flat a day ahead of the jobs report.

Initial jobless claims rise

In a reminder of how weak the job market is, the government said Thursday that first-time claims for unemployment benefits rose last week to their highest level in four months.

Claims rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have now risen twice in the past three weeks.

Economists closely watch initial jobless claims because they are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire. And even at a time when profits are coming back, businesses aren't very willing.

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Digital song sales weaken for first time

In a world of record store closures and album sales slowdowns, digital downloads have come to be seen as the one bright beacon in an otherwise troubled music industry.
The download demand may be starting to dim, though, according to data released by Billboard magazine and Nielsen SoundScan, which tracks music sales.

Digital track sales stalled during the first six months of 2010, industry data show. Midway through the year, track sales have declined, by 0.2 percentage points, for the first time since they were tallied — to 597.4 million downloads of songs for the six-month period, according to Nielsen SoundScan.

Last year, those single song downloads were up about 8 percent over the previous 12 months, but that paled in comparison to prior years of explosive growth. In 2008, for instance, the annual digital track growth rate was 26.7 percent. In 2007, it was 45.1 percent. In 2006, it was up 65 percent over 2005.

"It's certainly not a pretty picture," said Mike Dungan, president and CEO of Capitol Records Nashville. "The really disturbing part of this to me is the flattening out of individual digital track sales. That to me looked like the way of the future, even though it's not a business model we all embrace wholeheartedly."

The digital hiccup comes in the midst of a continued freefall in the sale of albums and CDs. In fact, total album sales (physical and digital combined) are down 11 percent this year, even though digital albums were up somewhat at midyear. But digital albums make up a relatively small part of the total and don't move the sales needle much.

The latest data come after the worst decade for U.S. music sales in history, as consumers' music listening and buying habits shift.

With the introduction of iTunes in 2001, digital track sales grew dramatically, upsetting the old world order of album sales in stores. Total album sales were sliced by half, with U.S. music sales revenue plunging more than 40 percent in a decade, according to the Recording Industry Association of America.

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