Britain in talks with financier over possible rival bid for HBOS

LONDON (AFP) – Britain confirmed Saturday it is in talks with a Scottish businessman over a possible rival bid for HBOS, the British banking group hit hard by the subprime crisis.

The announcement came a day after Business Secretary Peter Mandelson cleared the takeover of HBOS -- parent of Bank of Scotland and the Halifax bank -- by rival Lloyds TSB despite competition concerns.

Scottish Secretary Jim Murphy said Saturday he would be meeting with Jim Spowart, creator of HBOS-owned online bank Intelligent Finance, on the matter and had raised the idea of a new bid with the Treasury.

"I have spoken to the Treasury and if there is a second serious bid then the Treasury would be happy to talk to them," he said. The Treasury declined to comment.

The British government has a stake in HBOS, which has its corporate headquarters in the Scottish capital Edinburgh, after it balied out the bank last month.

Earlier, Spowart told the Scotsman newspaper there was "a possibility that a financial services organisation has expressed an interest in making an approach" to HBOS.

"This came as a result of a merchant banker approaching me and I thought, given what I had learnt, I should alert the government," he told the Edinburgh newspaper.

Spowart said the talks were "at a very early stage", but later told the BBC: "This is a genuine, genuine interest."

He said the new bid "would keep the bank more or less intact".

"I can't guarantee the situation on jobs but I don't think there would be job cull at the same level as what is currently estimated or anticipated by Lloyds TSB," he said.

Lloyds TSB agreed to buy HBOS in September as the banking group faced collapse owing to massive write-downs caused by the US subprime mortgage crisis and the ensuing global financial crisis.

The deal, agreed with the support of the British government, was worth 9.8 billion pounds (12.5 billion euros, 15.8 billion dollars) -- about 187 pence per HBOS share.

On Friday, Lord Mandelson said he would not refer the deal to competition watchdogs because "the possible anti-competitive effects ... are outweighed by the public interest in preserving the stability of the UK financial system".

Boeing factories set to resume work after strike

SEATTLE – Factories at Boeing Co. are due to start humming again Sunday after Machinists union members voted to end a costly eight-week strike that clipped profits and stalled deliveries by the world's No. 2 commercial airplane maker.

Workers are expected to return Sunday night to Boeing's commercial airplane factories, which have been closed since the Sept. 6 walkout. The strike cost an estimated $100 million a day in deferred revenue and production delays on the company's highly anticipated next-generation passenger jet.

Machinists union members ended their walkout on Saturday by ratifying a new contract with Boeing. Members of the union, which represents about 27,000 workers at plants in Washington state, Oregon and Kansas, voted about 74 percent in favor of the proposal five days after the two sides tentatively agreed to the deal and union leaders recommended its approval.

"This contract gives the workers at Boeing an opportunity to share in the extraordinary success this company has achieved over the past several years," Mark Blondin, the union's aerospace coordinator and chief negotiator, said in a union news release.

"It also recognizes the need to act with foresight to protect the next generation of aerospace jobs. These members helped make Boeing the company it is today, and they have every right to be a part of its future," he said.

The union has said the contract protects more than 5,000 factory jobs, prevents the outsourcing of certain positions and preserves health care benefits. It also promises pay increases over four years rather than three, as outlined in earlier offers.

The union members, including electricians, painters, mechanics and other production workers, have lost an average of about $7,000 in base pay since the strike began. They had rejected earlier proposals by the company, headquartered in Chicago.

It was the union's fourth strike against Boeing in two decades and its longest since 1995. The International Association of Machinists and Aerospace Workers staged strikes against Boeing for 24 days in 2005, 69 days in 1995 and 48 days in 1989.

"We're looking forward to having our team back together to resume the work of building airplanes for our customers," Scott Carson, Boeing Commercial Airplanes president and chief executive, said in a statement. "This new contract addresses the union's job security issues while enabling Boeing to retain the flexibility needed to run the business ... and allows us to remain competitive."

The walkout came amid surging demand for Boeing's commercial jetliners, which include 737s, 747s, 767s and 777s.

Chicago-based Boeing, which ranks as the world's second-largest commercial airplane maker after Europe's Airbus, has said its order backlog has swollen to a record $349 billion in value.

The strike also further postponed the delivery of Boeing's long-awaited 787 jetliner, which has already been delayed three times, and other commercial planes.

It remains unclear how long it would take Boeing's commercial aircraft business to return to pre-strike production levels, but the company's chief financial officer, James Bell, has said Boeing hopes it would take less than two months.

The walkout started as the global economy began sinking into turmoil. Boeing executives have said only 10 percent of the company's orders come from domestic carriers, while the rest are placed by customers in other parts of the world, particularly Asia.

As the Machinists strike wore on, Boeing began talks with another union in hopes of avoiding a second strike by 21,000 scientists, engineers, manual writers, technicians and other hourly workers.

Boeing officials and representatives of the Society of Professional Engineering Employees in Aerospace, which struck for 40 days in 2000, moved into the final phase of contract talks Wednesday. The union's two current contracts expire Dec. 1.

Negotiators at a hotel outside Seattle say they hope to present a proposal to that union's membership by mid-November.

___

Associated Press writers Tim Klass in Seattle and Daniel Lovering in Pittsburgh contributed to this report.

___

On the Net:

International Association of Machinists and Aerospace Workers: http://www.iam751.org/contract08.htm

Boeing Co.: http://www.boeing.com/2008negotiations/

No big sellers in sight to save troubled Chrysler

DETROIT – In crises past, Chrysler has somehow managed to stamp out a blockbuster hit vehicle to pull itself away from the cliff's edge. But as it faces a possible sale to another automaker and what may be the most serious problems in its 83-year history, industry analysts say there's nothing in the current product portfolio that looks like a savior.

Chrysler's U.S. sales are down 25 percent through September, the worst decline of any major automaker. Losses are mounting: well over $1 billion for the first half of the year. Things are so bad that Chrysler LLC wants to shed a quarter of its salaried work force, and its owner, Cerberus Capital Management LP, is talking with General Motors Corp. and others about a sale.

Of Chrysler's 26 models on sale in both 2007 and 2008, only four have sold more this year than last, and three of those are small-volume niche vehicles such as the Dodge Viper. The company's market share has dwindled from 16.2 percent in 1996 to 11 percent this year, according to Ward's AutoInfoBank.

Analysts say there are no cutting-edge designs or potential big sellers in sight to rescue the maker of the Chrysler, Dodge and Jeep brands.

The smallest of Detroit's three automakers, once-brash Chrysler took risks and gained big rewards for vehicles like the 300 full-size sedan in 2005. The company invented the minivan when it introduced the Plymouth Voyager and Dodge Caravan in 1984. The Plymouth ReliantDodge Aries "K-car" sedans of 1982 helped earn the money to repay $1.5 billion in government-guaranteed loans that saved Chrysler from going under in 1980. and

"If Chrysler has another hit on the way, I am unaware of it," said David Lewis, professor emeritus at the University of Michigan, who followed the auto industry and taught business history for 43 years until retiring earlier this year. "Oh, for the days when the minivan was an instant homerun, and Chrysler owned that highly profitable market segment."

With little in its product pipeline, a chilly economy and the worst U.S. auto sales slump in 15 years, analysts say Chrysler may not make it on its own, and that's why Cerberus is shopping the company to GM and others. Chrysler also has a lineup tilted toward trucks and sport utility vehicles when customers are buying mainly fuel-efficient cars.

"In many ways this really looks like the end of the road for Chrysler in the way that we know it," said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight. "They are going to face a change in ownership, that is a certainty. From what we hear, product development is on hold because of the uncertainty."

Chrysler's lackluster products, said Bragman, can be traced to the nine years it was owned by Germany's Daimler, which approved chintzy interiors and cars with more noise and vibration than the competition.

"The truth is Daimler did them no favors," said Jim Hall, managing director of 2953 Analytics of Birmingham, Mich. "They approved products that previous Chrysler management wouldn't have approved if they were completely drunk and beaten crazy."

Under Cerberus, which bought 80.1 percent of Chrysler from Daimler AG in August of last year, the Auburn Hills-based automaker has tried to improve its products. Its latest vehicles have far nicer interiors, especially the new version of the Ram pickup.

But quality concerns still haunt Chrysler. Nearly two-thirds of its model lineup were below average in Consumer Reports' annual vehicle reliability rankings this year. The Chrysler Sebring sedan was the worst-rated car.

Through the first nine months of this year, Chrysler sold 1.18 million vehicles in the U.S. — 395,304 less than the same period last year.

Chrysler's leaders say they have made cuts to stem negative cash flow and have slashed factory production so the company isn't producing more vehicles than it sells. Despite the large losses, they say Chrysler is meeting its internal goals.

The company is banking on the new Ram to pull it out of sales doldrums, but its release this fall coincided with one of the worst pickup markets in years. Chrysler also says it is making big strides on quality and plans to bring out seven new products in 2010, including a subcompact made by Nissan Motor Co.

In September, Chrysler surprised the industry by showing off three electric vehicle prototypes and promising to put one in showrooms by 2010.

Hall says there are good products coming, and that in a normal auto sales market, Chrysler could survive on its own. But now, like GM and Ford Motor Co., it's all about having enough money to survive until the economy recovers and auto sales are revived, he said.

Bragman, however, has less faith.

"I do not believe that it is a healthy company and everything's on track and all they simply need to do is wait it out," he said. "Healthy companies that are on track don't slash one-quarter of their white-collar work force."

Fearsome T-Rex was one nosy dinosaur

PARIS (AFP) – Tyrannosaurus Rex could sniff out distant prey even at night, yet another reason the flesh-ripping predator reigned supreme as king of the dinosaurs, according to a study published on Wednesday.
Earlier research had shown that the towering T-rex could see better than an eagle and would have been able to run down the fastest of humans.
The new study now unveils a previously unheralded weapon in the fearsome theropod's arsenal: a dangerously keen sense of smell.
Any trace of the brains of dinosaurs, which roamed Earth for tens of millions of years up to the end of the Cretaceous Period 65 million years ago, has long since disappeared.
But a trio of scientists led by Darla Zelenitsky at the University of Calgary in Alberta, Canada found a novel way to gage the sniffing prowess of T-rex and a couple dozen other meat-eating dinosaurs and primitive birds.
By examining fossil skull bones, the researchers were able to measure the size of indentations made by olfactory bulbs, the part of the brain associated with the sense of smell.
"Living birds and mammals that rely heavily on smell to find meat have large olfactory bulbs," Zelenitisky said in a statement.
The same animals also tend to prowl for prey at night, and cover vast areas, he added.
Of all the dinosaurs examined, the T-rex had the largest olfactory bulb relative to its overall size.
The study, published in the British journal Proceedings of the Royal Society B, also found that primitive birds had high-performance odor detectors, challenging a long-held assumption about the evolution of winged vertebrates.
"It has been previously suggested that smell had become less important than eye sight in the ancestors of birds, but we have shown that this wasn't so," said Zelenitsky.
Archaeopteryx, for example, which took to the skies during the Jurassic Period some 150 million years ago, had a sense of smell comparable to meat-eating dinosaurs along with excellent eye sight, the study said.
Somewhere along the way birds began to lose their sense of smell, but the decline probably happened far later than previously thought, the study concludes.

Mexico City's 'water monster' nears extinction

MEXICO CITY – Beneath the tourist gondolas in the remains of a great Aztec lake lives a creature that resembles a monster — and a Muppet — with its slimy tail, plumage-like gills and mouth that curls into an odd smile.
The axolotl, also known as the "water monster" and the "Mexican walking fish," was a key part of Aztec legend and diet. Against all odds, it survived until now amid Mexico City's urban sprawl in the polluted canals of Lake Xochimilco, now a Venice-style destination for revelers poled along by Mexican gondoliers, or trajineros, in brightly painted party boats.
But scientists are racing to save the foot-long salamander from extinction, a victim of the draining of its lake habitat and deteriorating water quality. In what may be the final blow, nonnative fish introduced into the canals are eating its lunch — and its babies.
The long-standing International Union for Conservation of Nature includes the axolotl on its annual Red List of threatened species, while researchers say it could disappear in just five years. Some are pushing for a series of axolotl sanctuaries in canals cleared of invasive species, while others are considering repopulating Xochimilco with axolotls bred in captivity.
"If the axolotl disappears, it would not only be a great loss to biodiversity but to Mexican culture, and would reflect the degeneration of a once-great lake system," says Luis Zambrano, a biologist at the Autonomous University of Mexico, or UNAM.
The number of axolotls (pronounced ACK-suh-LAH-tuhl) in the wild is not known. But the population has dropped from roughly 1,500 per square mile in 1998 to a mere 25 per square mile this year, according to a survey by Zambrano's scientists using casting nets.
It has been a steep fall from grace for the salamander with a feathery mane of gills and a visage reminiscent of a 1970s Smiley Face that inspired American poet Ogden Nash to pen the witticism: "I've never met an axolotl, But Harvard has one in a bottle."
Millions once lived in the giant lakes of Xochimilco and Chalco on which Mexico City was built. Using four stubby legs to drag themselves along lake bottoms or their thick tails to swim like mini-alligators, they hunted plentiful aquatic insects, small fish and crustaceans.
Legend has it that Xolotl — the dog-headed Aztec god of death, lightning and monstrosities — feared he was about to be banished or killed by other gods and changed into an axolotl to flee into Lake Xochimilco.
The axolotl's decline began when Spanish conquerors started draining the lakes, which were further emptied over time to slake the thirst of one of the world's largest and fastest-growing cities. In the 1970s, Lake Chalco was completely drained to prevent flooding. In the 1980s, Mexico City began pumping its wastewater into the few canals and lagoons that remained of Xochimilco.
About 20 years ago, African tilapia were introduced into Xochimilco in a misguided effort to create fisheries. They joined with Asian carp to dominate the ecosystem and eat the axolotl's eggs and compete with it for food. The axolotl is also threatened by agrochemical runoff from nearby farms and treated wastewater from a Mexico City sewage plant, researchers say.
Local fisherman Roberto Altamira, 32, recalls when he was a boy, and the axolotl was still part of the local diet.
"I used to love axolotl tamales," he says, rubbing his stomach and laughing.
But he says people no longer eat axolotls, mainly because fishermen almost never find them.
"The last one I caught was about six months ago," says Altamira, a wiry gondolier with rope-like muscles from years of poling through Xochimilco's narrow waterways.
Meanwhile, the axolotl population is burgeoning in laboratories, where scientists study its amazing traits, including the ability to completely re-grow lost limbs. Axolotls have played key roles in research on regeneration, embryology, fertilization and evolution.
The salamander has the rare trait of retaining its larval features throughout its adult life, a phenomenon called neoteny. It lives all its life in the water but can breathe both under water with gills or by taking gulps of air from the surface.
On a 9-foot-wide canal covered by a green carpet of "lentejilla" — an aquatic plant that resembles green lentils — Zambrano's researchers test water quality and search for axolotls. The air smells of sulfur and sewage.
A team member suddenly points to the trademark water ripple of an axolotl, and the crew hurls its net. But they only come up with two tilapia in a sopping-wet mass of lentejilla.
So far, scientists disagree on how to save the creature. But a pilot sanctuary is expected to open in the next three to six months in the waters around Island of the Dolls, so-called because the owner hangs dolls he finds in the canals to ward off evil spirits.
Zambrano proposes up to 15 axolotl sanctuaries in Xochimilco's canals, where scientists would insert some kind of barrier and clear the area of nonnative species.
Without carp, the water would clear, and plants the axolotl needs to breed could flourish again, said Bob Johnson, the curator of amphibians and reptiles at the Toronto Zoo.
"If you take the insults away, the lake has an amazing latent potential to heal itself," he said.
Veterinarian Erika Servin, who runs the Mexico City government's axolotl program at Chapultepec Zoo, is studying the possibility of introducing axolotls from the lab into the canals. But more study is needed to make sure the process doesn't lead to diseases and genetic problems from inbreeding.
Xochimilco residents could be another source of resistance.
Hundreds of people make a living pulling tilapia from canals or growing flowers, lettuce and vegetables on nearby land. Efforts to remove the fish or shut down polluting farms could face stiff opposition.
But while the debate goes on, time is running out.
Given its role in research alone, Johnson says, "We owe it to the axolotl to help it survive."

Scientists find genes that lift lung cancer risk

LONDON (Reuters) – An international research team has identified two genetic variations that appear to increase a person's risk of developing lung cancer by up to 60 percent, they reported on Sunday.
In April the same researchers identified another gene that raised lung cancer risk and they said their latest finding was relevant for both smokers and non-smokers.
"We are looking at differences in the DNA that makes you more or less likely to develop lung cancer," said Paul Brennan, a cancer epidemiologist at the World Health Organisation's International Agency for Research on Cancer.
"The idea is if you can identify genes then that might indicate why people develop lung cancer."
Lung cancer is the leading cause of cancer death in men and the second leading cause of cancer death among women worldwide, according to the American Cancer Society, with about 975,000 men and 376,000 women forecast to die annually.
Smoking is the leading risk factor but increasingly scientists are looking to genetics to help explain why some long-time smokers never develop the disease and why some non-smokers do.
The study published in the journal Nature Genetics included researchers from 18 countries who analyzed genetic mutations in more than 15,000 people -- 6,000 with lung cancer and 9,000 without the disease.
The researchers discovered a region on the fifth chromosome containing two genes -- TERT and CRR9 -- where they believe variations can boost the likelihood of lung cancer by as much as 60 percent.
"We are looking at versions of genes that everybody has," Brennan said in a telephone interview.
Not much is known about CRR9 but pinpointing the TERT gene is promising because it activates an enzyme called telomerase which is key to aging and cancer, Brennan said.
Cancer is caused by defects in DNA, the basic genetic material. All chromosomes, which carry the DNA, also have little caps on each end called telomeres.
Each time a cell divides, these telomeres become a little more frayed. When they are too worn out, the cell dies.
But when cells become cancerous, they produce telomerase, which can renew the telomeres and lets the cells reproduce out of control, eventually to form a tumor.
So implicating the TERT gene in a specific cancer can help lead to a better understanding of how cancer develops and boost the design of new drugs to stop tumors, Brennan added.
"The principle is there," he said. "If one can identify what goes wrong, it may be possible to identify targeted drugs." (Reporting by Michael Kahn; Editing by Maggie Fox and Matthew Jones)

Australia opens national tsunami warning center

CANBERRA, Australia – Australia became an integral link in a network of tsunami warning hubs across the Indian and Pacific oceans with the official opening of a national monitoring center Friday.
The Joint Australian Tsunami Warning Center that opened in the southern city of Melbourne joins India as a "tsunami watch provider" for 29 countries on the Indian Ocean rim that are prone to the killer waves, said Ray Canterford, head of the Australian Bureau of Meteorology's disaster mitigation office.
Work on the 69 million Australian dollar ($46 million) center developed by the government was launched six months after the catastrophic 2004 tsunami.
It will provide essential sea level and seismic data to the Pacific warning network to Southwest Pacific island nations. This data is critical to the Pacific Tsunami Warning Center in Hawaii and the Japanese Meteorological Agency in Tokyo, Canterford said.
Eventually, there will be a network of several countries on the Indian Ocean rim with their own tsunami warning centers sharing scientific data, he said.
"We're actually enhancing the capabilities of other countries in the Pacific and in the Indian Ocean," he said.
The center relies on high-tech deep sea buoys, five of which are located northwest of Australia below Indonesia, one in northeast of Australia in the Coral Sea and two in the Tasman Sea off the southeast coast.
Indonesia, which bore the brunt of the 2004 tsunami that killed more than 230,000 people, is expected to have its own national warning center fully operational by the end of the year, Canterford said.