– August 21, 2014

Bell back on financial feet after near-bankruptcy

(AP) — A Los Angeles suburb facing potential bankruptcy following a corruption scandal is back on its financial feet.

The state controller had warned that the city of Bell could end the year with a million-dollar shortfall. But City Manager Doug Willmore tells the Los Angeles Times ( that Bell now has two years of reserves in the bank.

The city raised $15.5 million by selling property and got $5.5 million from firms it blamed for failing to prevent officials from giving themselves exorbitant raises.

Five former City Council members and assistant city manager were convicted of crimes.

Former city manager Robert Rizzo has pleaded no contest to 69 criminal counts. He's also agreed to plead guilty to filing a false income tax return.

How do you feel about the ice bucket challenge?


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Latest Local News

Written on 08/21/2014, 10:34 am by Gordon M. Webster
With bipartisan support last week, Gov. Jerry Brown signed a $7.5 billion water bond that includes $2.7 billion for water storage.
Written on 08/21/2014, 10:14 am by PETE YOST, MARCY GORDON, Associated Press
(AP) — The government has reached a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis, the Justice Department announced Thursday. The deal calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty, another $4.6 billion in remediation payments and provide about $7 billion in relief to struggling homeowners. The settlement is by far the largest deal the Justice Department has reached with a bank over the 2008 mortgage meltdown. In the last year, JPMorgan Chase & Co. agreed to a $13 billion settlement while Citigroup reached a separate $7 billion deal. At a news conference, Attorney General Eric Holder said the bank and its Countrywide and Merrill Lynch subsidiaries had "engaged in pervasive schemes to defraud financial institutions and other investors" by misrepresenting the soundness of mortgage-backed securities. The penalties, Holder said, go "far beyond the cost of doing business." According to one example laid out by the government, Bank of America knew that a significant number of loans packaged into $850 million in securities were experiencing a marked increase in underwriting defects. Notwithstanding the red flags, the bank sold these residential mortgage-backed securities to federally backed financial institutions, the government said in a 30-page statement of facts that is part of the settlement. In California, Countrywide concealed from investors the company's use of "shadow guidelines" that permitted loans to riskier borrowers than Countrywide's underwriting guidelines would otherwise allow, according to the statement of facts. In addition, over a period of years, "Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments," said Preet Bhara, the U.S. attorney for the southern district of New York. The government said the civil settlement, the largest reached with a single entity, does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution. Bank of America CEO Brian Moynihan said in a statement that the company believes the settlement "is in the best interests of our shareholders and allows us to continue to focus on the future." Of the $16.65 billion, almost $10 billion will be paid to settle federal and state civil claims by entities related to residential mortgage-backed securities, collateralized debt obligations and other types of fraud. An independent monitor will determine whether Bank of America is satisfying its obligations under the settlement."In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together and sold them off in securities — even when the bank knew a substantial number of those loans were defective," said U.S. Attorney Paul Fishman, whose jurisdiction covers New Jersey. "The failure to disclose known risks undermines investor confidence in our financial institutions," Fishman added. The Bank of America settlement will resolve allegations that the bank and companies it later bought misrepresented the quality of loans they sold to investors. Most of the problem loans were sold by Countrywide Financial and Merrill Lynch before Bank of America bought them during the 2008 financial crisis. Consumer advocates say previous settlements show that the amounts announced in enforcement actions can overstate their actual costs to the companies being penalized. In the deal with JPMorgan in November, the Justice Department had a clear message for homeowners: Billions of dollars' worth of help was coming. Holder at the time described the appointment of an independent monitor who would distribute $4 billion set aside for homeowner relief. The actual relief is more complicated than cash handouts, however. Both Citigroup and JPMorgan earn credits under the settlement from a "menu" of different consumer-friendly activities, according to settlement documents. The options are effectively an update of the consumer relief previously provided through the national mortgage servicing settlement, a 2012 deal between state attorneys general and the major banks. JPMorgan probably will earn its $4 billion in credits under the settlement through a total of $4.65 billion of activities that qualified as relief, according to a report by Enterprise Community Partners, a nonprofit run by executives from low-income housing groups and major banks. More than half will come from principal reductions, with the rest earned through actions such as writing new loans in distressed areas, donating foreclosed properties to community groups and temporarily suspending payments on some loans. ___Associated Press writer Jeff Horwitz contributed to this report.
Written on 08/21/2014, 10:10 am by Business Journal staff
Fresno State will be providing 1,200 students with tablets and training this semester as part of President Joseph Castro's new DISCOVERe program. The students enrolled in the program will each receive $500 from a Fresno State Foundation grant to purchase a tablet. Students can choose between an iPad Air (iOS), Asus MemoPad (Android) or Lenovo Thinkpad (Windows) and each tablet comes bundled with one year of 4G Internet provided by AT&T. Training on how to use the tablets as well as laptops and smartphones will also be offered at the new DISCOVERe Hub that opens today on the first floor of Fresno State's Henry Madden Library. The program was among the first initiatives Castro announced when admitted as Fresno State's newest president last August. Castro said the program is the first step in replacing costly textbooks at the university while better training students for careers that are becoming increasingly dependent on technology. The effort comes out of Fresno State's new Tablet Program Taskforce chaired by Provost Dr. Lynnette Zelezny after investigating several successful tablet initiatives at other higher education institutions. Following special training over the past spring and summer, 33 faculty members at Fresno State will now teach a variety of courses incorporating tablet technology.
Written on 08/21/2014, 10:06 am by CHRISTOPHER S. RUGABER, AP Economics Writer
(AP) — Sales of existing U.S. homes rose for the fourth straight month in July to their highest level in nearly a year, the latest sign that the housing recovery is picking up after stumbling at the start of the year. The National Association of Realtors says home sales rose 2.4 percent to a seasonally adjusted annual rate of 5.15 million, the highest since last September. More homeowners are selling their homes, mortgage rates remain low and home price gains have slowed this year. That's made home purchases more affordable. Sales peaked in July 2013 and then fell as interest rates rose from low levels. Harsh winter weather also slowed sales earlier this year. As a result, July's sales are still 4.3 percent lower than a year ago. They also remain below the 5.5 million considered consistent with a healthy housing market. Still, the rise in home sales comes after other encouraging data show that the housing market is improving. Steady job gains and rising consumer confidence have led more Americans to purchase homes. That's a contrast from earlier this year, when weak sales and limited homebuilding led economists to peg housing as a missing piece of the economic recovery. Federal Reserve Chair Janet Yellen recently told Congress that housing has been disappointing this year. But new-home construction surged 15.7 percent in July to a seasonally adjusted annual rate of 1.09 million homes, the government said Tuesday. And applications for building permits, considered a good sign of future activity, also showed strength in July, advancing 8.1 percent to an annual rate of 1.05 million after declining in the prior two months. Separately, the sentiment index from the National Association of Home Builders and Wells Fargo rose in August to 55, up two points from a revised 53 for July. Readings above 50 indicate more builders view sales conditions as improving. "For those getting a bit antsy about the state of the housing market recovery, this rounds out a trio of better-than-expected reports that point to improving activity through the early summer months," said Robert Kavcic, an economist at BMO Capital Markets. The Realtors report also showed that healthy sales make up an increasing share of purchases. Fewer home sales stem from foreclosures or involve homes where the seller owed more on their mortgage than the home was worth. Those "distressed" sales made up just 9 percent of sales in July, the lowest proportion since the Realtors began tracking the figure in October 2008. Distressed sales, which are usually at much lower prices, made up 36 percent of sales in 2009. The number of homes for sale rose 3.5 percent in July from June to 2.37 million, the most in nearly two years. That gives buyers more choices and restrains price gains. The median time that homes remained on the market was 48 days, up from 42 a year ago. First-time homebuyers made up 29 percent of sales, up slightly from the previous month and the second straight gain. Still, that's far below the typical figure of 40 percent. First-time buyers are critical to fueling any housing recovery, as they enable current homeowners seeking to buy larger homes to sell. First-time buyers are recovering slowly from a low of 26 percent earlier this year. They are likely benefiting from strong job gains. Hiring since February has been at the healthiest pace since 2006. Home prices are increasing at a slower clip, which should help ease affordability pressures. Data provider CoreLogic said that prices rose 7.5 percent in June compared with 12 months earlier. That's the smallest year-over-year gain in 20 months. And average rates for 30-year mortgages fell to 4.12 percent from 4.14 percent, mortgage company Freddie Mac said last week. Mortgage rates are below recent peaks of about 4.5 percent at the beginning of the year.
Written on 08/21/2014, 10:01 am by SCOTT MAYEROWITZ, AP Airlines Writer
(AP) — To win the hearts of frequent business travelers, United Airlines is going through their stomachs. The carrier has been looking for ways to woo back some of its top fliers who defected to other carriers following a rocky merger with Continental Airlines. So, it's upgrading first class food options and replacing snacks with full meals on some of its shortest flights. The changes, announced Thursday, mean that instead of potato chips, chocolate chip cookies and bananas, passengers on flights of at least 800 miles will get meals such as chicken and mozzarella on a tomato focaccia roll and turkey and Swiss cheese on a cranberry baguette. Currently, meals are only served on flights of 900 miles or more — trips that usually last close to two hours. Passengers on 13 extra routes, such as Houston-to-Des Moines, Iowa, will be getting full meal service starting in February. The move comes as American Airlines goes the other way, eliminating hot meals on most flights less than 1,000 miles starting Sept. 1. The change — which upset many frequent fliers — is part of American's merger with US Airways and does expand meals to some US Airways flights that previously only had snacks. Delta Air Lines serves first class meals on flights of more than 900 miles. That means United will offer full meals on more short flights than its competitors, although each airline makes exceptions for some key shorter business routes like the 731-mile trip between New York and Chicago. United already this month replaced two bland salad options with four heartier choices. Starting Sept. 1, three frozen and reheated sandwiches currently served will be replaced by eight sandwich and wrap choices made daily. In the fall, it will add Prosecco sparkling wine to its beverage menu. "Customers shouldn't have to make sacrifices just because they are onboard an aircraft," says Todd Traynor-Corey, the airline's managing director of food design. That might be true, but in an industry known for its razor-thin profit margins, food has always been a target of cost-cutting. With U.S. airlines each year carrying 645 million passengers domestically, every little food decision had big implications. In the 1980s, then American Airlines CEO Robert Crandall famously decided to remove a single olive from every salad. The thought was: passengers wouldn't notice and American would save $40,000 a year. It's been a decade since most airlines stopped serving free meals in coach on domestic flights. Dennis Cary, an airline consultant with ICF International, says meals alone won't drive passengers to one airline over another, but can help leave a better impression of a flight. "It's on the margin," Cary says, "but it's one of the things people like to talk about." United has been struggling since its 2010 merger with Continental. It lags behind American and Delta in the number of planes with Wi-Fi, its on-time performance slipped and a series of computer glitches have left passengers angry. Business travelers who fly weekly got fed up with the repeated problems; other airlines were successful in luring some away. CEO Jeff Smisek has struggled to collect the same high airfares from business customers that other airline do, leading to pressure from Wall Street analysts. Improving food could be a start to winning back some passengers.A hot meal on a two-hour flight might not sound like a necessity, but for busy frequent fliers it might be the only chance to grab a bite. "Business travelers, running from a meeting to catch an earlier flight, don't have the time stop and pick up food along the way," says Gary Leff, co-founder of online frequent flier discussion site MilePoint.
Written on 08/21/2014, 9:48 am by ANNE D'INNOCENZIO, 
(AP) — Sears Holdings Inc. recorded a hefty second-quarter loss Thursday on another sales slump, raising more concerns about the future of a company that once was a staple of American shopping. The company, which operates Sears and Kmart, said it plans to do more cost-cutting to right the ship. That includes closing more stores beyond the 130 that it had announced earlier this year. But investors weren't encouraged. They sent shares down 4 percent in premarket trading. Sears, controlled by billionaire hedge fund investor Edward Lampert, lost $573 million, or $5.39 per share, for the period ended Aug. 2. That's more than double the loss of $194 million, or $1.83 per share, a year earlier. It marked its ninth straight quarterly loss. Revenue declined 10 percent to $8 billion from $8.87 billion. One bright spot was online and multi-channel sales, which increased 18 percent. The challenges facing CEO and Chairman Lampert are enormous. The company has been cutting costs, reducing inventory and selling assets to return to profitability. At the same time, it's shifting its focus on running a store network to operating a member-focused business called Shop Your Way. But its biggest albatross remains its stores, which have been criticized for being outdated and shabby. Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. But it has faced mounting pressure from nimbler rivals like Wal-Mart Stores and Home Depot. Sears is also facing broader issues that are tripping up many other retailers. Like other stores catering to the low- to middle-income customers, Sears is grappling with a slowly recovering economy that's not benefiting all Americans equally. It also is wrestling with shoppers' shift away from physical stores to PCs and mobile devices for shopping and research. Lampert said in a statement that the second-quarter performance was unacceptable even though he also said the chain has showed progress. "I am personally committed to investing in and driving our transformation, improving the profit performance of the company, ensuring our financial flexibility, all while creating shareholder value," said Lampert in a prerecorded call.Sears said it is still looking at options to sell its auto center business and Sears Canada operations. It recently spun off clothing business Lands' Ends as a separate public company. Sears also said it plans to improve pricing and promotions. And it said will continue to invest in its member-focused business called Shop Your Way where members receive incentives like extra discounts. Sales to Shop Your Way members climbed to 73 percent of eligible sales, compared with 71 percent a year earlier.Sales at Kmart stores open at least a year fell 1.7 percent. At Sears locations, the figure edged up 0.1 percent. Sales at stores open at least a year is a key indicator of a retailer's health because it excludes results from stores recently opened or closed. Its stock declined $1.44 cents to $34.51 in premarket trading.
Written on 08/21/2014, 9:44 am by The Associated Press
(AP) — Family Dollar is rebuffing Dollar General's takeover bid, citing antitrust issues. The discounter's board supports its existing merger with Dollar Tree. Family Dollar Stores Inc. Chairman and CEO Howard Levine said in a statement Thursday that its board and advisers reviewed Dollar General Corp.'s offer and determined it wasn't reasonably likely to be completed on the terms proposed. Dollar General declined to comment. Family Dollar became a takeover target in part because of its business struggles. The Matthews, North Carolina company has been shuttering stores and cutting prices in hopes of boosting its financial performance. In June investor Carl Icahn urged the company to put itself up for sale. On Monday Dollar General — the nation's biggest dollar-store chain — offered about $8.95 billion, or a$78.50 per share in cash, for Family Dollar. The Goodlettsville, Tennessee company said at the time that it believed it could quickly address any antitrust issues and was willing to divest up to 700 of its stores in order to get the necessary approvals. In a letter sent to Family Dollar on Wednesday, Dollar General said that it believed the number of stores it was offering to divest was "more than sufficient to take this (antitrust) issue off the table." Last month Family Dollar agreed to an $8.5 billion deal with Chesapeake, Virginia-based Dollar Tree Inc. The transaction includes $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share held. The companies valued the transaction at $74.50 per share at the time. Including debt and other costs, Family Dollar and Dollar Tree estimated the deal to be worth approximately $9.2 billion. Dollar General's stock declined 76 cents to $63 in premarket trading. Shares of Family Dollar shed 16 cents to $79.65, while Dollar Tree's stock fell 80 cents to $54.20.
Written on 08/21/2014, 9:43 am by FOSTER KLUG, JUNG-YOON CHOI, Associated Press
(AP) — Kim Min-koo has an easy reply to new American research that hits South Korea where it hurts — in the noodles. Drunk and hungry just after dawn, he rips the lid off a bowl of his beloved fast food, wobbling on his feet but still defiant over a report that links instant noodles to health hazards. "There's no way any study is going to stop me from eating this," says Kim, his red face beaded with sweat as he adds hot water to his noodles in a Seoul convenience store. His mouth waters, wooden chopsticks poised above the softening strands, his glasses fogged by steam. At last, he spears a slippery heap, lets forth a mighty, noodle-cooling blast of air and starts slurping. "This is the best moment — the first bite," Kim, a freelance film editor who indulges about five times a week, says between gulps. "The taste, the smell, the chewiness — it's just perfect." Instant noodles carry a broke college student aura in America, but they are an essential, even passionate, part of life for many in South Korea and across Asia. Hence the emotional heartburn caused by a Baylor Heart and Vascular Hospital study in the United States that linked instant noodles consumption by South Koreans to some risks for heart disease. The study has provoked feelings of wounded pride, mild guilt, stubborn resistance, even nationalism among South Koreans, who eat more instant noodles per capita than anyone in the world. Many of those interviewed vowed, like Kim, not to quit. Other noodle lovers offered up techniques they swore kept them healthy: taking Omega-3, adding vegetables, using less seasoning, avoiding the soup. Some dismissed the study because the hospital involved is based in cheeseburger-gobbling America. The heated reaction is partly explained by the omnipresence here of instant noodles, which, for South Koreans, usually mean the spicy, salty "ramyeon" that costs less than a dollar a package. Individually-wrapped disposable bowls and cups are everywhere: Internet cafes, libraries, trains, ice-skating rinks. Even at the halfway point of a trail snaking up South Korea's highest mountain, hikers can refresh themselves with cup noodles. Elderly South Koreans often feel deep nostalgia for instant noodles, which entered the local market in the 1960s as the country began clawing its way out of the poverty and destruction of the Korean War into what's now Asia's fourth-biggest economy. Many vividly remember their first taste of the once-exotic treat, and hard-drinking South Koreans consider instant noodles an ideal remedy for aching, alcohol-laden bellies and subsequent hangovers. Some people won't leave the country without them, worried they'll have to eat inferior noodles abroad. What could be better at relieving homesickness than a salty shot of ramyeon? "Ramyeon is like kimchi to Koreans," says Ko Dong-ryun, 36, an engineer from Seoul, referring to the spicy, fermented vegetable dish that graces most Korean meals. "The smell and taste create an instant sense of home." Ko fills half his luggage with instant noodles for his international business travels, a lesson he learned after assuming on his first trip that three packages would suffice for six days. "Man, was I wrong. Since then, I always make sure I pack enough." The U.S. study was based on South Korean surveys from 2007-2009 of more than 10,700 adults aged 19-64, about half of them women. It found that people who ate a diet rich in meat, soda and fried and fast foods, including instant noodles, were associated with an increase in abdominal obesity and LDL, or "bad," cholesterol. Eating instant noodles more than twice a week was associated with a higher prevalence of metabolic syndrome, another heart risk factor, in women but not in men. The study raises important questions, but can't prove that instant noodles are to blame rather than the overall diets of people who eat lots of them, cautions Alice Lichtenstein, director of the cardiovascular nutrition lab at Tufts University in Boston. "What's jumping out is the sodium (intake) is higher in those who are consuming ramen noodles," she says. "What we don't know is whether it's coming from the ramen noodles or what they are consuming with the ramen noodles."There's certainly a lot of sodium in those little cups. A serving of the top-selling instant ramyeon provides more than 90 percent of South Korea's recommended daily sodium intake. Still, it's tough to expect much nutrition from a meal that costs around 80 cents, says Choi Yong-min, 44, marketing director for Paldo, a South Korean food company. "I can't say it's good for your health, but it is produced safely." By value, instant noodles were the top-selling manufactured food in South Korea in 2012, the most recent year figures are available, with about 1.85 trillion won ($1.8 billion) worth sold, according to South Korea's Ministry of Food and Drug Safety. China is the world's largest instant noodle market, according to the World Instant Noodles Association, although its per capita consumption pales next to South Korea's. The food is often a low-end option for Chinese people short of money, time or cooking facilities. Japan, considered the spiritual home of instant noodles, boasts a dazzling array. Masaya "Instant" Oyama, 55, who says he eats more than 400 packages of instant noodles a year, rattles off a sampling: Hello Kitty instant noodles, polar bear instant noodles developed by a zoo, black squid ink instant noodles. In Tokyo, 33-year-old Miyuki Ogata considers instant noodles a godsend because of her busy schedule and contempt for cooking. They also bring her back to the days when she was a poor student learning to become a filmmaker, and would buy two cup noodles at the 100 yen shop. Every time she eats a cup now, she is celebrating what she calls "that eternal hungry spirit." In South Korea, it's all about speed, cost and flavor. Thousands of convenience stores have corners devoted to noodles: Tear off the top, add hot water from a dispenser, wait a couple minutes and it's ready to eat, often at a nearby counter. Some even skip the water, pounding on the package to break up the dry noodles, adding the seasoning, then shaking everything up. "It's toasty, chewy, much better than most other snacks out there," Byon Sarah, 28, who owns a consulting company, says of a technique she discovered in middle school. "And the seasoning is so addictive — sweet, salty and spicy." Cheap electric pots that boil water for instant noodles in one minute are popular with single people. Making an "instant" meal even faster, however, isn't always appreciated. At the comic book store she runs in Seoul, Lim Eun-jung, 42, says she noticed a lot more belly fat about six months after she installed a fast-cooking instant noodle machine for customers. "It's obvious that it's not good for my body," Lim says. "But I'm lazy, and ramyeon is the perfect fast food for lazy people." ___AP journalists Youkyung Lee in Seoul, Yuri Kageyama in Tokyo, Didi Tang and Zhang Weiqun in Beijing, and AP Food Editor J.M. Hirsch in Concord, New Hampshire, contributed to this story.
Written on 08/21/2014, 9:32 am by Business Journal staff
The Smittcamp Family Honors College at Fresno State admitted its 16th class this week, welcoming 50 high-performing students to the scholarship program. The honors college began in 1998 with a $1 million gift from Earl and Muriel Smittcamp, the patriarchs of the prominent agribusiness family and longtime supporters of Fresno State. Students enrolled in the college receive an annual President's Honors Scholarship for their undergraduate degree program up to a maximum of eight semesters, which covers their in-state registration and an optional credit for university housing. They are also required to perform at least 70 hours of community service during their first three years. There are also a variety of options and funding sources for Smittcamp students to study abroad. The latest cohort of 50 freshmen students were selected out of 500 applicants. Among them, 49 are from California while one is an international scholar from Vietnam. The 2014 cohort of President's Scholars are: • Tahrima Alam, Fresno (Clovis North)• Daniel Apuan, Palmdale (Paraclete)• Daniel Ashley, Fresno (Clovis)• John Ball, Fresno (Clovis West)• Alexa Becerra-Almendarez, Reedley (Reedley)• Wendy Bermejo-Estrada, Parlier (Parlier)• Breanna Berry, Clovis (Clovis)• Robert Brisco, Exeter (Exeter Union)• Megan Calabrese, Pismo Beach (Arroyo Grande)• Enrique Cazares-Navarro, Parlier (Sunnyside)• Haley Chapman, Fresno (Edison)• Jenna Danzer, San Diego (Mt. Carmel)• Emma DenBesten, Fresno (University High)• Zachary Emerzian, Fresno (Bullard)• Ai Enkoji, Fresno (Clovis West)• Yvette Espinoza, Fresno (Edison)• Brooke Ferdinandsen, Fresno (Clovis West)• Shoji Hishida, Fresno (Bullard)• Carragan Huerta, Clovis (Clovis)• Ashley Juskalian, Visalia (San Joaquin Memorial)• Joanie Kalmbach, Clovis (Buchanan)• Katie Karraker, Clovis (Buchanan)• Aubrey Lim, Fresno (home school)• Danielle Logoluso, Clovis (Clovis)• Kelli Lowe, Reedley (Reedley)• Samantha Mallory, Fresno (Clovis North)• Brenna Mandujano, Fresno (Edison)• Tanner Melton, Fresno (Edison)• Jenna Miller, Visalia (Redwood)• Shelby Moshier, Tollhouse (Sierra)• Huyen Nguyen, Hanoi, Vietnam (Hanoi-Amsterdam H.S. for the Gifted)• Rahul Nunna, Fresno (University High)• Shyam Patel, Fresno (Clovis West)• Jonathan Ray, Clovis (Sierra)• Lauren Ray, Fresno (Edison)• Joseph Reeves, Clovis (Clovis)• Hunter Reilly, Clovis (Logos Christian Conservatory)• Matthew Roby, Fresno (Clovis North)• Alicia Rodriguez, Madera (Madera)• Robert Rodriguez, Clovis (Buchanan)• Brandon Rowe, Corcoran (Corcoran)• Harrison Schmitt, Santa Clarita (Saugus)• Brandon Sepulveda, Sanger (Sanger)• Hailey Stinecipher, Fresno (Edison)• Ian Troupe, Fresno (Clovis West)• Jenna Van Fossen, Hanford (Hanford)• Griselda Vega, Fresno (Washington Union)• Brooke Weber, Sanger (Sanger)• Kaitlynn Webster, Fresno (University High)• Blake Zante, Fresno (Clovis West)
Written on 08/21/2014, 9:10 am by TOM KRISHER, AP Auto Writer
(AP) — When the subcompact Fit failed a crash test, Honda went back to the drawing board.  The tiny Fit, redesigned for the 2015 model year, initially flunked the Insurance Institute for Highway Safety's small overlap test, earning just a "Marginal" rating. The test simulates a 40 mph crash between the front corner of a car and an object such as a utility pole. Honda engineers strengthened the welds on the front bumper beams, so energy from a crash would be spread over the entire front of the car. This gave the driver and passengers more protection and lessened the likelihood of injury. The change got the Fit an "Acceptable" rating in a second test, and earned it a "Top Safety Pick" designation. High crash-test scores are important because they help allay buyers' concerns about whether tiny subcompacts can adequately protect a driver and passengers in a sea of larger vehicles. Of all subcompacts, only the Fit and the Chevrolet Spark won the "Top Safety Pick" designation, the institute's second-highest rating. Honda Motor Co. started installing the stronger bumpers at the Mexican factory that builds the Fit in June. a rare step for an auto company, Honda is asking owners of all 12,000 2015 Fits sold before then in North America to return them to dealers, who will replace the bumpers. "We want to make our cars as safe as we can make them for our customers," said chief safety engineer Chuck Thomas. The replacement should take about 30 minutes, Thomas said, and involves removing the original bumper beam and bolting on the stronger one. He couldn't estimate the cost to Honda. IIHS crash test results are followed widely on the Internet and are especially important for subcompacts, which by design have less structure to absorb the impact of a crash, said Karl Brauer, senior auto analyst at Kelley Blue Book. Subcompact sales are down just under 1 percent so far this year, and the poor crash test scores for most of the segment are partly to blame, Brauer said. Many buyers, he said, wouldn't consider a subcompact it didn't get at least an "Acceptable" rating on the overlap test or a "Top Safety Pick" designation. "Just having not failed would make some people open to considering the car," Brauer said. Honda sold nearly 27,000 Fits through July, down almost 12 percent from a year ago. The Chevrolet Sonic is the top-seller in the segment, at almost 57,000, according to Autodata Corp. Russ Rader, an IIHS spokesman, said it's rare for automakers to call cars back to dealers after they are retested, but it has happened about two dozen times since 1999. Most were to change air bag deployment or fix post-crash fuel leaks, he said. All Fits built on or after June 9 have the new bumpers. Honda will notify owners of Fits without the stronger parts starting in late September and replace the beams free of charge.

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Written on 08/21/2014, 9:48 am by ANNE D'INNOCENZIO, 
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