Government fine hardly the end of GM recall saga

DETROIT — General Motors' agreement to pay a $35 million federal fine for concealing defects in small-car ignition switches and to give the government greater oversight of its safety procedures closes one chapter of the automaker's recall saga. But it's far from over.

Besides agreeing to pay the penalty — the largest ever assessed by the National Highway Traffic Safety Administration — GM admitted that it broke the law by failing to quickly tell the government about the problems. The automaker agreed to report safety problems a lot faster — it only started recalling 2.6 million small cars this February, more than a decade after engineers first found a flaw in the switches.

The switches in older-model small cars such as the Chevrolet Cobalt and Saturn Ion can slip out of the "run" position and shut down the cars' engines. That disables the power-assisted steering and brakes and can cause drivers to lose control. It also disables the air bags.

The company says at least 13 people have died in crashes linked to the problem, but trial lawyers suing the company say the death toll is at least 53.

GM faces issues both in the near-term and longer term related to the recall. Here's a breakdown:

— THE INTERNAL INVESTIGATION: Late this month or early in June, former U.S. Attorney Anton Valukas will finish an investigation for GM into why the company delayed recalling the cars. GM has promised an "unvarnished" report and said it will make at least some of the results public. The company must provide NHTSA with the full report.

— THE CRIMINAL INVESTIGATION: The U.S. Justice Department is investigating GM's conduct and may bring criminal charges. The same team that got Toyota to agree to a $1.2 billion penalty for hiding unintended acceleration problems from NHTSA is working on the GM case. In the Toyota case, the company agreed to a long statement of facts that included multiple allegations of cover-ups. That investigation lasted four years.

— CONGRESSIONAL ACTION: Two congressional subcommittees have promised to call GM CEO Mary Barra back to Washington for further hearings after the Valukas report is released. At hearings in April, Barra repeatedly said she couldn't answer questions because the internal investigation wasn't finished.

— RECALLS: Barra promoted longtime engineer Jeff Boyer as GM's safety chief, with the mandate to look into other safety issues that should have resulted in recalls. On Thursday, GM announced it would recall another 2.7 million cars and trucks. So far this year the company has had 24 recalls with a total of 11.2 million vehicles. GM is working to get new ignition switches as well as parts for the other recalls from suppliers. Its ignition switch maker plans to add two assembly lines this summer to the one already working. GM expects to have all the switches made by Oct. 4.

— BOTTOM LINE: So far, recall-related charges are up to $1.5 billion, mostly for repairing vehicles. GM also faces dozens of lawsuits from families of those killed in crashes and from people who were hurt. The company has hired compensation expert Kenneth Feinberg to negotiate settlements. Lawyers say they have at least 400 possible cases against GM. That could cost the company billions. GM also faces lawsuits from shareholders and people whose cars have lost value. In addition, GM must pay NHTSA $7,000 for every day it fails to answer a list of questions from the agency. The fines started April 4 and already are above $300,000.

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Turkish miner who survived says company to blame

SAVASTEPE, Turkey — Miner Erdal Bicak believes he knows why so many of his colleagues died in Turkey's worst mining disaster: company negligence.

And he knows one other thing — he's never going back down any mine again.

Bicak, 24, had just ended his shift Tuesday and was making his way to the surface when managers ordered him to retreat because of a problem in the Soma coal mine in western Turkey. Workers gathered in one area to hastily put on gas masks.

"The company is guilty," Bicak told The Associated Press, adding that managers had machines that measure methane gas levels. "The new gas levels had gotten too high and they didn't tell us in time."

The miner also said government safety inspectors never visited the lower reaches of the Soma mine and have no idea of how bad conditions get as workers trudge deeper underground.

Government and mining officials have insisted, however, that the disaster that killed 301 workers was not due to negligence and the mine was inspected regularly. Akin Celik, the Soma mine's operations manager, has said thick smoke from the underground fire killed many miners who had no gas masks. High levels of carbon dioxide and carbon monoxide have also been a problem for rescue workers as well.

Bicak, whose leg was badly injured and in a cast, recounted his miraculous escape late Friday while at a candle-lit vigil for Soma victims in the town square of nearby Savastepe.

Public anger has surged in the wake of the Soma coal mine inferno. Police used tear gas and water cannon Friday to disperse protesters in Soma who were demanding that Prime Minister Recep Tayyip Erdogan's government resign. In Istanbul, police broke up a crowd who lit candles to honor the Soma victims.

On Saturday, police increased security in Soma to prevent new protests and detained lawyers who scuffled with police after objecting to identity checks, NTV television reported. The lawyers came to offer legal advice to the victims.

Energy Minister Taner Yildiz said crews located the bodies of the last two missing miners Saturday, raising the death toll to 301. He said 485 miners escaped or were rescued.

"Our efforts will be coming to an end," Yildiz said. "However, our friends will be scouring all corners (of the mine) once again" to confirm the final death toll.

Bicak said he ended up about a kilometer (.6 miles) underground with 150 people Tuesday afternoon when he heard an explosion. He said they were given old oxygen masks that he thought hadn't been checked in many years.

Bicak and a close friend tried to make their way to an exit, but the smoke was thick. The path was narrow and steep, with ceilings so low the miners couldn't stand up, making it difficult to leave quickly. He and his friend took turns slapping each other to stay conscious.

"I told my friend 'I can't go on. Leave me here. I'm going to die,'" Bicak said. But his friend said to him, "'No, we're getting out of here.'"

Bicak eventually made it out of the mine with his friend — by then lapsing in and out of consciousness. He said he lost many friends and out of the 150 miners he was working with, only 15 made it out alive.

The Milliyet newspaper said Saturday it saw a preliminary report by a mine safety expert who went into the Soma mine that suggested smoldering coal caused the mine's roof to collapse. The report said the tunnel's support beams were made of wood, not metal, and there were not enough carbon monoxide sensors.

Labor Minister Faruk Celik said investigations have been launched by both prosecutors and officials but "there is no report that has emerged yet."

Bicak said the last inspection at the Soma mine was six months ago. He said mine managers know that government inspectors only visit the top 100 meters (yards) of the mine, so they just clean up that part and the inspectors never see the narrow, steep, cramped sections below.

Mine owners are tipped off up to a week before an inspection anyway, said Ozgur Ozel, an opposition lawmaker from the Soma region who has criticized the government for not adopting the International Labor Organization's convention on mine safety.

Bicak says his mining career is now over.

"I'm not going to be a miner anymore. God gave me a chance and now I'm done," he said.

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Suzan Fraser contributed from Ankara.

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Follow Desmond Butler at http://twitter.com/desmondbutler

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Hub co. raises $12M for diet pill

A Boston biotech company working on a new kind of weight-loss pill to reduce obesity has received a 
$12 million boost from investors that it will use to continue clinical trials and development.

"It will help you to lose weight ... by making you feel satisfied with smaller portions," said Yishai Zohar CEO and founder of Gelesis. "It's a capsule that contains thousands of small particles that can absorb 100 times its original weight in gastric fluid."

Regulated as a medical device rather than medication, Gelesis100 is a "smart pill" whose particles travel through the stomach and the small and large intestines, making the patient feel full from less food and for longer.

"We don't want to prevent people from eating, we just want them to eat a little bit less," Zohar said.

The infusion of cash comes from the Pritzker/Vlock Family Office, founder PureTech and undisclosed investors, the company said.

Dr. Caroline Apovian, a professor at the Boston University School of Medicine who serves on many advisory boards for obesity treatments — including Gelesis — said the current treatment options aren't sufficient.

"We need more options," she said. "There are people who need to be treated who may not be able to tolerate medication."

The other alternative is surgery, but many people don't want to undergo such an invasive procedure. And an increasing number of adults are being diagnosed as obese, Apovian said.

"This is an alarming rate of increase," Apovian said. "We're at epidemic levels."

Zohar said development is continuing, but the pill is still several years from being commercially available.

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Casino co. drops suit over tribal preference

A company that wants to build a resort casino in New Bedford has ended its legal battle with the state over a section of the gaming law that gives initial preference to a federally recognized Indian tribe in the southeastern part of the state.

In court documents filed yesterday, the 1st Circuit of the U.S. Court of Appeals said an appeal by KG Urban Enterprises had been voluntarily dismissed.

"We have filed our initial application with the MGC (Massachusetts Gaming Commission) and engaged in conversations with the city of New Bedford," Andrew Paven, a spokesman for KG, said in an email. "Our focus is on winning a license, not litigation."

The company sued the state after the passage of the 2011 law allowing for up to three regional resort casinos and one slots parlor. The lawsuit argued that a provision that effectively gave the Mashpee Wampanoag tribe temporary exclusivity in the southeast region was unconstitutional because it discriminated against commercial developers such as KG.

In 2013, the gaming commission voted to begin accepting casino applications from commercial developers in the region, while still keeping tabs on the tribe's efforts to win federal approval for a proposed casino in Taunton.

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Obama to trumpet tourism at Baseball Hall of Fame

WASHINGTON — President Barack Obama says he's heading to the Baseball Hall of Fame to stress how tourism can lead to good-paying jobs.

In his weekly radio and Internet address, Obama says he'll be in Cooperstown, New York, on Thursday.

Obama also is urging Congress to spend more to modernize U.S. bridges, roads and ports. He says first-class infrastructure attracts first-class jobs.

Obama warns that almost 700,000 jobs are at risk if Congress doesn't authorize more transportation dollars by the end of summer.

In the Republican address, Sen. John McCain of Arizona says reported delays in care for veterans are unconscionable. He says the Department of Veterans Affairs needs to be overhauled.

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Online:

Obama address: www.whitehouse.gov

GOP address: http://www.youtube.com/user/gopweeklyaddress

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Riots in Vietnam leave 1 Chinese dead, 90 injured

HANOI, Vietnam — A 1,000-strong mob stormed a Taiwanese steel mill in Vietnam overnight, killing at least one Chinese worker and injuring 90, Taiwan's ambassador said Thursday, the first deadly incident in a wave of anti-China protests prompted by Beijing's deployment of an oil rig in disputed seas.

The spreading unrest is emerging as a major challenge for Vietnam's authoritarian and secretive leadership, and is damaging the country's reputation as an investment destination. Companies from Taiwan, many of which employ significant numbers of Chinese nationals, are bearing the brunt of the protests and violence.

The overnight riot took place at a mill in Ha Tinh province in central Vietnam, 250 kilometers (155 miles) south of Hanoi, operated by the conglomerate Formosa Plastics Group, one of the biggest foreign investors in Vietnam, according to Ambassador Huang Chih-peng and local hospital officials.

Huang, who spoke to a member of the management team at the mill Thursday morning, said rioters lit fires at several buildings and hunted down the Chinese workers, but did not target the Taiwanese management. He said the head of the provincial government and its security chief were at the mill during the riot but did not "order tough enough action."

He said he was told one Chinese citizen was killed in the riots, while another died of natural causes during the unrest. He said around 90 others were injured

A doctor at the Ha Tinh General Hospital said about 50 people, most of them Chinese nationals, were admitted to the hospital Wednesday night and early Thursday morning. He didn't give his name because he was not authorized to speak to the media.

Huang said the rioters left the complex at 6 a.m., but he feared they "might be going for a rest and could come back."

Anti-Chinese sentiment is never far from the surface in Vietnam, but it has surged since Beijing deployed an oil rig into disputed waters in the South China Sea on May 1. The government protested the move as a violation of the country's sovereignty and sent a flotilla of boats to the area, which continue to bump and collide with Chinese ones guarding the rig, raising the risk of conflict.

On Tuesday and Wednesday, mobs burned and looted scores of foreign-owned factories in southern Vietnam near Ho Chi Minh City, believing they were Chinese-run, but many were actually Taiwanese or South Korean. Authorities said they had detained more than 400 people.

Ambassador Huang said the mill in Ha Tinh is Vietnam's largest foreign-invested project, and one of the largest integrated steel mills in Southeast Asia. It employs 1,000 Chinese nationals, he said. Vietnamese Prime Minster Nguyen Tan Dung attended the groundbreaking ceremony for the complex in 2012.

Low wages, especially compared to next-door China, have been driving investment in Vietnam over the last years.

Investors and analysts said that if order wasn't restored quickly, then investor confidence could take a hit.

"If this madness continues and spreads out in the next couple of days to other parts of Vietnam, definitely it will have a very damaging effect on exporters, because they might not be able to commit to their delivery day," said Willy Lin, who heads a Hong Kong trade group representing knitwear manufacturers and exporters.

Hong Kong-based contract clothing maker Lever Style, which started outsourcing production to Vietnamese factories three years ago, has sent some Chinese quality assurance and technical support staff working at those factories back to China as a safety precaution, said CEO Stanley Szeto.

"You always have these little hiccups, no matter where you go," Szeto said. "Other than our staff, we're not really affected."

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Associated Press writer Kelvin Chan in Hong Kong contributed to this report.

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Abramson replaced as NYT executive editor

NEW YORK — The New York Times on Wednesday announced that executive editor Jill Abramson is being replaced by managing editor Dean Baquet after two and a half years on the job.

The company didn't give a reason for the change. Abramson and Baquet had both been in their current positions since September 2011.

Baquet, 57, who would be the first African-American to hold the newspaper's highest editorial position, originally joined the Times in 1990 as a reporter and held positions including deputy metropolitan editor and national editor. He left the paper for the Los Angeles Times in 2000, where he served as managing editor and then editor. He rejoined the Times in 2007 and was Washington bureau chief before becoming the managing editor for news.

"It is an honor to be asked to lead the only newsroom in the country that is actually better than it was a generation ago, one that approaches the world with wonder and ambition every day," Baquet said in a statement released by the newspaper Wednesday.

Prior to his first stint at the Times, Baquet worked at The Chicago Tribune and The Times Picayune in New Orleans. While at the Tribune in 1988, he and two other journalists won the Pulitzer Prize for investigative reporting, for looking into corruption in the Chicago City Council. He was a finalist in the same category in 1994.

The move comes amid a shift in the Times' focus, and that of the newspaper industry overall, toward digital products and away from traditional print papers as print circulation and advertising revenue declines.

In its most recent quarter, the Times Co. saw overall advertising revenue rise for the first time in three years, jumping 3 percent to $158.7 million. The company's print and digital advertising rose compared with the same period a year ago.

The company also added digital subscribers and increased home-delivery prices. At the same time, the company posted a small profit that fell slightly short of Wall Street analysts' expectations.

Arthur Sulzberger Jr., the newspaper's publisher and chairman of its parent company, called Baquet the best qualified journalist to take on the job in the Times' newsroom.

"He is an exceptional reporter and editor with impeccable news judgment who enjoys the confidence and support of his colleagues around the world and across the organization," Sulzberger said in a statement.

Sulzberger added that Baquet was closely involved with Abramson in the Times' digital transformation over the past six months.

The managerial change came with little warning or explanation to Times employees, according to several staffers. Workers were sent an email Wednesday afternoon that asked them to gather in the newsroom. There, less than ten minutes later, publisher Arthur Sulzberger Jr. introduced Baquet as the Times' new executive editor.

According to one staffer, Sulzberger said a concern about newsroom management led to the change. Staffers applauded Baquet's promotion. Abramson was not present at the gathering.

Abramson, 60, was the paper's first female executive editor. She joined the newspaper in 1997 after working for nearly a decade at The Wall Street Journal. She was the Times' Washington editor and bureau chief before being named managing editor in 2003.

"I've loved my run at The Times," Abramson said in the company's statement. "I got to work with the best journalists in the world doing so much stand-up journalism."

Baquet succeeded her as managing editor after she was named to the top editing spot.

New York Times Co. shares fell 71 cents, or 4.5 percent, to end the regular trading session at $15.06.

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Michael Sisak contributed to this report.

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Markets muted after soft European growth figures

LONDON — A disappointing batch of economic growth figures out of Europe kept global stock markets in check Thursday as well as weighing on the euro.

Eurostat, the EU's statistics office, said the economy of the 18 countries that share the euro saw economic output grew by only 0.2 percent in the first quarter from the previous three-month period. The modest rise came despite a better-than-expected 0.8 percent advance in Germany.

Though that marked the fourth straight quarter of expansion following the recession, the rise was below economists' expectations — the consensus in the markets was for a 0.4 percent increase.

A large chunk of the blame for the underperformance can be placed on a flat performance in France, Europe's second largest economy behind Germany. Between them, the two make up roughly half of the eurozone economy.

"This is very disappointing just as we thought the area was heading in the right direction, instead we're seeing another setback," said Craig Erlam, market analyst at Alpari.

In Europe, Germany's DAX was flat at 9,751 while the CAC-40 in France fell 0.2 percent to 4,493. The FTSE 100 index of leading British shares was up 0.1 percent at 6,884.

The selling pressure on the euro continued after the figures as traders think the below-forecast growth figures makes it more likely that the European Central Bank will provide a fresh stimulus to the eurozone economy at its next policy meeting on June 5. The euro was down 0.4 percent at $1.3660.

Wall Street was poised for a subdued opening, with Dow futures and the broader S&P 500 futures down 0.1 percent.

Earlier in Asia, robust quarterly growth figure in Japan failed to boost sentiment. Investors reduced risky assets following a pullback in U.S. stocks from record levels.

Tokyo's Nikkei 225 stock index fell 0.8 percent to 14,298.21 despite the government reporting that the economy expanded at an annualized 5.9 percent in the first quarter, the fastest pace in nearly three years.

The growth was attributed to consumers and companies bringing forward spending ahead of a sales tax hike on April 1. Economists say the tax increase could cause a contraction in the economy in the current quarter.

China's Shanghai Composite fell 1.1 percent to 2,024.97.

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Bayer sells division to Boston Scientific

BERLIN — Germany's Bayer AG says it's selling its interventional division to the Boston Scientific Corporation for $415 million so that it can focus on growth in other areas.

The Leverkusen-based company said Thursday the sale includes its AngioJet system used to remove blood clots, its Jetstream system for arterial disease treatment, and the Fetch 2 Aspiration Catheter used in cardiology, radiology and peripheral vascular procedures.

Bayer says the sale will allow its HealthCare unit to focus more on growing its radiology and diabetes care business segments.

Natick, Massachusetts-based Boston Scientific says the acquisition is expected to expand the company's access to customers in need of such treatments.

The transaction is subject to antitrust approval and is expected to clear in the second half of 2014.

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Report: Mass. hospital profitability up last year

BOSTON — A new report says the overall profitability of Massachusetts hospitals improved last year, but 11 of the 64 still lost money.

The 2013 fiscal year report released Wednesday by the Center for Health Information and Analysis said the total margin of Massachusetts hospitals — the percentage of revenues exceeding expenses — climbed to 4.1 percent in the period ending Sept. 30, from 3.8 percent a year earlier.

The Boston Globe (http://bit.ly/1jiwbqm ) reports that at the state's six academic medical centers, the margin increased to 4.6 percent from 3.6 percent.

But at 23 hospitals that serve a disproportionate number of Medicaid and Medicare patients, the margin fell to 3.6 percent from 5.6 percent.

The state's most profitable hospital was Boston Children's. The largest loss, $20.3 million, was posted by Salem's North Shore Medical Center.

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