Statesman Journal from Salem, Oregon • Page 16

Statesman JournalStatesmanJournaLcom REPORT COMING FRIDAY Short-circuit: The high-tech slump has already affected Salem-area businesses. And the future may be even bleaker. INSIDE BUSINESS Column: How much money Is enough to retire? Scott Bums checks his calculator. 7B Unemployment: The U.S. jobless rate climbs again.

7B PAGE 8B Business editor: Don Currie (503) 399-6677; dcurrieStatesmanJournal.com nn i iiiuiiltete mm 1 companies suspending matches. Many employers adopted 401 00 accounts during the late 1980s and 1990s as a replacement for traditional pension plans. They became widely popular with workers, who saw the spi-raling stock market as a way to ensure a comfortable retirement. Employers' average matching contributions, which peaked at 3.3 percent 0 U0U The contributions may be tied to profits if they are reinstated. BY ADAM GELLER The Associated Press NEW YORK A growing number of companies, searching for ways to cut costs, are suspending their matching contributions to workers' 40100 retirement 401(k) accounts over the past year.

This week, Prudential Securities became the latest employer to do so. "We needed to look for ways to achieve expense reductions that were temporary in nature and did not threaten our ability to grow and take our business forward when things turn around," said Schwab spokesman Glenn Mathi-son, whose comments generally were echoed by other accounts. Such a move by broker Charles Schwab Co. won wide attention in March, because the company has been outspoken in its support of the investment vehicle. But Schwab is not alone.

El Paso CMS Energy The Goodyear Tire Rubber Ford Motor Co. and Tech Data Corp. are among the companies that have suspended matching contributions to a Lmfflliiaiiisai osur ini tarcl r' The German airline, now serving Portland, thrives as others falter. BY WILLIAM McCALL The Associated Press PORTLAND The German airline Lufthansa, which this week started flights between Portland and Frankfurt, is well-positioned to weather economic hardships caused by the war with Iraq, CEO Wolfgang Mayrhuber said Thursday. "We can afford this, because we are not driven by fixed costs," Mayrhuber said.

Airlines are being pinched by a decline in passenger traffic and rising fuel costs stemming from the conflict Mayrhuber joined Gov. Ted Kulongoski at a news conference in Portland to launch the international service. The German executive said that Lufthansa has spent the past several years working to be flexible and adapt to changing market conditions. He said that his management team lived by a simple motto: "Don't produce more than you can sell, and don't spend more than you earn not always an easy thing to do in the airline business." The German airline has boosted profits since the Sept 11 terrorist attacks in 2001 while many other major air carriers are suffering losses and some even are facing bankruptcy. Officials from the Lufthansa cargo division, the world's largest said Thursday they had boosted operating profits nearly fivefold after selling a stake in the DHL International Ltd.

delivery service. ERIC CABLE The Associated Press PORTLAND WELCOME: Gov. Ted Kulongoski accepts a gift Thursday from Lufthansa CEO Wolfgang Mayrhuber (right) at Portland International Airport. Mayrhuber came to Portland to celebrate Lufthansa's launch of service between Portland and Frankfurt, Germany. a seek bankruptcy protection since last summer, following United Airlines and US Airways.

A bailout for domestic airlines is expected from Congress as the House proposed $3.2 billion and the Senate offered $2.7 billion to help the industry recover, including money for increased security costs, insurance for war risks and extended benefits for jobless airline workers. Lufthansa officially opened its service between Portland and Frankfurt on Monday, restoring direct international service to Oregon two years after Delta Airlines canceled its lflSflEF.1 Business resource guide out A brochure describing resources to help small businesses is now available free at several locations. Titled "Small Business Success: Where to Find Help in Marion Polk Counties," the brochure lists information on counseling resources, customers, competitors, products, delivery and more. It was produced by Vesta Ventures, a group of 17 students from the MBA program at Willamette University's Atkinson Graduate School of Management The school's Pace program requires student groups to create a business, market a product and give the proceeds to a charitable organization. Vesta Ventures produced its 30-page brochure with donations from the Salem Area Chamber of Commerce; attorneys Saalfeld Griggs; accountants Grove, Mueller Swank; SAIF the Woodburn Downtown Association and Salem Electric.

Proceeds will be donated to the Salem Area Habitat for Humanity. The brochures are available at Chemeketa Community College, Salem Area Chamber of Commerce, Salem Economic Development Woodburn Downtown Association and the Small Business Development Center. INTKfMTD STARBUCKS' ASIAN SALES DECLINING Starbucks Corp. on Thursday reported a drop in sales in parts of Asia due to the outbreak of severe acute respiratory syndrome, or SARS. The world's largest specialty coffee retailer has closed its shop in a quarantined hospital in Singapore.

Starbucks has about three dozen stores in affected countries. Employees in its Hong Kong shops are wearing masks and gloves while serving customers. The company has had no reports of employees contracting the illness. LuUifcJillI MORTGAGE RATES DROPPING AGAIN Mortgage rates around the country fell this week, after climbing for two weeks. The average interest rate on a fixed-rate 30-year mortgage dropped to 5.79 percent, from 5.91 percent last week, Freddie Mac, the mortgage company, reported Thursday.

For 15-year fixed-rate mortgages, rates went down to 5.06 percent from 5.21 percent On one-year adjustable rate mortgages, rates edged down to 3.82 percent from 3.84 the previous week. TODAY: Labor Department reports on employment for March, 5:30 a.m. Statesman Journal news services A0EK3JI FRIDAY SALEM AREA CHAMBER OF COMMERCE: Greeters, 8:30 a.m., Assistance League of Salem, at Grand Ballroom, 191 High St. NE, Salem. SALEM AREA CHAMBER OF COMMERCE: Leadership Youth ECHO, 8:45 a.m., chamber rooms A andB.

Trie Statesman Journal welcomes information from the Mid-Valleycentral coast business community for its business Agenda column. Information should be brought to the newspaper at 280 Church St. NE, mailed to the Statesman Journal, P.O. Box 13009, Salem, OR 97309 or faxed to (503) 399-6706. Deadline for material is Thursday of the week before publication.

Friday, April 4, 2003 president of the profit sharing council. Companies have reduced these variable matches during past economic downturns, he said. "I think it remains rare that fixed matches are being eliminated or suspended," Wray said. But the distinction usually written in fine print means little to workers SEE MATCHES 7B 0D3 ature House gnaws at food labeling A bill forbids local governments from imposing food label requirements. BY LAURENCE M.CRUZ Statesman Journal A House panel approved a bill Thursday that would bar local governments from imposing food labeling requirements.

House Bill 2957, sponsored by the Oregon Grocery Association, would pre-empt efforts like last year's Ballot Measure 27, which sought to require labeling of genetically modified foods sold or distributed in or from Oregon. Voters roundly defeated the proposal last November. In cases where food is subject to federal labeling requirements, the bill would bar state agencies from imposing labeling requirements that are more stringent than the federal ones. The bill was approved on a 5-1 vote and now goes to the House floor. "Oregon does not have, nor can we afford, an agency that can review and approve labeling based on scientific, nutrition and health data," Joe Gilliam, president of the grocery association, told the House Agriculture and Natural Resources Committee.

"However, the federal government does have such mechanisms at the FDA and USDA" Three supporters of state labeling of genetically modified foods testified in opposition to the bill. "This bill not only restricts the right to know it goes beyond that," said Richard North, a Portland-area resident and former CEO of the American Cancer Society in Oregon. "It restricts the right to North questioned the wisdom of unconditionally deferring to the U.S. Food and Drug Administration, saying the agency is swayed by political influence. North held up a carton of SEE LABELS 7B media party ny, the park usually sees.

"This is just a different way for us to open an attraction," Brocato said. Disney's theme parks typically make a big splash of new rides, hosting hundreds of domestic and international reporters and media outlets and often staging elaborate parties. "It looks like it will primarily be a local media event," said Sandra Haley, spokeswoman for the parks. Legisl of workers' pay in 1998 and 1999, fell to 2.5 percent in 2001, according to the most recent data available from the Profit Sharing401 (k) Council of America, an industry group. While many companies have pared or suspended their contributions to retirement accounts recently, most have been employers with so-called "variable" matches that are linked to profits, said David Wray, Minnies nonstop flights from Portland to Asia.

Mexicana plans to begin direct international service from Portland on May 1, adding a second destination. The airport already had international cargo service provided by Air China, Korean Air and Cargolux. The daily Lufthansa flights are expected to pump about $90 million a year into Oregon, including tourist spending, and boost employment by about 1,500 jobs. The Port of Portland raised $10.8 million from local corporations to help support the new Lufthansa service. a blip," says VSDA President Bo Andersen.

Now that DVD players have spread from well-to-do early adopters to value-conscious mainstream consumers, "Rental is in for a resurgence," he says. About 40 million homes have DVD players. An additional 10 million can play DVDs on personal computers or game consoles. But it will probably take more than one quarter to allay all investor concerns. The unusually cold weather and weak economy helped.

People tend to rent more videos when they're forced to stay home. was afraid to throw a party and have no one show up. News directors said they couldn't commit to providing Disneyland with air-time, and tourism writers apparently have cut back on their own travel. Tom Brocato, Disneyland Resort's publicity director, characterized the move as a "scaling back." He said media outlets and travel writers still plan to cover the opening but not in the numbers, and without the pomp and ceremo Top 1 00 Wines of the Year in 2000 by Wine Enthusiast Magazine. Oregon Gov.

Ted Kulongoski presented Lufthansa's chief executive officer Wolfgang Mayrhuber with a specially engraved 5-liter bottle of Willamette Valley Vineyards Oregon Pinot Noir on Thursday mark the occasion. European Airlines which includes Lufthansa, Air France and British Airways has estimated the Iraq war could add $2.5 billion to the losses of its 30 members. On Tuesday, Air Canada became the third large North American airline to raised last year when revenue fell to $8.2 billion. The first quarter is the year's second-most-popular time for rentals, just slightly behind the fourth quarter, when studios release videos of their summer blockbusters. The trade group's finding follows rental chain Hollywood Entertainment's announcement Wednesday that it's raising its first-quarter profit estimate as sales leapt 13 percent at stores open a year or longer.

And Netflix, which rents DVDs via mail, said this week that it had nearly IiuuulU jr csw 49.27 nn 375.22 175 642 89 10-year 3.92; Video rentals playing well in home near you Grepib rafted Lufthansa has picked an Oregon wine to serve on its first nonstop flights from Portland International Airport. Lufthansa has selected Willamette Valley Vineyards' 1998 Signature Cuvee Pinot Noirfor its first- and business-class cabins. Willamette Valley Vineyards 1998 Signature Cuvee was rated among the Lufthansa also has a lower debt load than most major airlines, allowing it to avoid layoffs, partly by invoking workload and salary reductions in labor contracts to ensure employee loyalty and avoid retraining costs. But the Association of liuutf I biiull eiunutiij I tuwO Total revenue for DVD and video rentals, not including late fees: Total year First quarter On billions) $8 1 $6-, i $4 ') tZ jj. l4.t il Ti 4 i.

Source: Video Software Dealers Association MARCY E. MULLINS Gannett News Service yean $8.4 billion in 2001. And it eases worries tiuil 1,396.58 876.45 SOS ADVANCES to First-quarter numbers point to record revenues. Gannett News Service NEW YORK Video stores are back in favor with consumers at least for now. Retailers chalked up a record $2.3 billion in cassette and DVD rental revenue in the first quarter, up 8 percent from the same period last year, according to a report from the Video Software Dealers Association.

That puts the industry on pace to top its record 1.1 million subscribers on March 31 27,000 more than it projected. These reports are easing concerns from December that the rental business was in serious trouble. Many owners of DVD players were bypassing video stores to buy discs of hot titles including "Spider-Man," "Austin Powers in Goldmember" and "Star Wars: Episode II, Attack of the Clones." Some mass marketers used the DVDs as loss leaders, selling them for as little as $15. "The first quarter is a real indicator that that was MJIISEIATAGIMCE Disney throws water on 9000 8900 8800 8700 8600 8500 8400 8300 8,240.38 I qi A '4V A. DECLINES UNCHANGED NYSE NASDAQ AM EX 1,437 1,521 388 1,774 1,577 385 Los Angeles Times The shadow of war reaches all the way to the Hundred Acre Wood, leaving Pooh with no party.

On Wednesday, Walt Disney Co. canceled a festive media event scheduled for April 11 to herald the opening of Disneyland's Many Adventures of Winnie the Pooh attraction, the first new ride at the Anaheim, theme park since Autopia was rebuilt in 2000. It seems that Disney THURSDAY'S RATE nn mm rate: 30-year fixed mortgage 5.52 New car loans 5.32 5-year CD 3.38 Home equity loan 6.90 WEDNESDAY'S RATE I 4 i 4 i i 1 w. I 1 8000 7900 7800 7700 7600 7500 7400 7300 7200 7100 7000 LAST WEEK 5.49 5.60 5.45 5.32 3.37 3.41 6.91 6.95 SOURCE: bankrate.com. Rates are national averages.

For local rates, see StatesmanJoumal.com or today's Real Estate section. March 4 FMTWT 1.