GM to form China venture, invest $293 million

SHANGHAI (Reuters) - General Motors said on Sunday it has agreed to set up a light commercial vehicle production venture with major Chinese automaker FAW Group, with total investment of 2 billion yuan ($293 million).

The 50-50 joint venture, based in the northeast China city of Changchun in Jilin province, will make light-duty trucks and vans, GM said in a statement.

"For us in China, this is an important complement to the rest of our portfolio," Kevin Wale, president and managing director for GM's China operations, told reporters in a conference call.

"We are well established in passenger vehicles and mini commercial vehicles and we haven't had a presence in the truck segment. Adding a truck portfolio rounds that out."

The venture will use two existing FAW plants in Changchun and the city of Harbin, also in the northeast, with combined annual capacity of roughly 90,000 vehicles, Wale said.

A greenfield plant, currently under construction in Harbin, will add 100,000 units of capacity by the end of next year, he said.

Vehicles made at the venture will carry the FAW brand and will focus on supplying the China market, but they could be exported under a GM brand through the Detroit automaker's global network in the future, Wale said.

GM is making Buick, Chevrolet and Cadillac models at its flagship China venture with SAIC Motor Corp. It also makes minivans, pickup trucks and the Spark compact car in a three-way tie-up with SAIC and Liuzhou Wuling Automobile.

SAIC-GM-Wuling sold 87,925 vehicles in July, up 90.7 percent from a year earlier, helped by Beijing's stimulus initiatives to support the industry, including subsidies for buyers in rural areas.

GM, which now holds 34 percent of SAIC-GM-Wuling, has been seeking to raise its stake in the venture.

Domestic media reported earlier this month that GM had secured an initial deal to take over Liuzhou Wuling Auto's 15.9 percent stake for roughly 300 million yuan ($43.9 million).

Wale reiterated the U.S. automaker's interest in raising its stake in the venture but made no further comment on the issue.

($1=6.830 Yuan)

New flu hit estimated 10 percent of New Yorkers

WASHINGTON (Reuters) - The new H1N1 swine flu is estimated to have infected about 800,000 people in New York City in the spring, a top U.S. health official said on Sunday, citing a study due to be released later this week.

Dr. Thomas Frieden, who heads the U.S. Centers for Disease Control and Prevention, said surveys suggested the virus was widely spread around the city. Frieden was New York City's health commissioner before taking the top CDC job in June.

"In New York City where we had a lot of H1N1 this last spring the estimate is about 800,000 people, about 10 percent of New York City residents, got infected with the flu," Frieden said in an interview with C-SPAN television aired on Sunday.

"That's a lot of people."

New York City health department officials say the full study is being finished and will be released within days.

Frieden said there had been a twenty-fold variation in influenza infections around the country. "We expect that some places will have more flu. Some places will have less," he said.

Swine flu has infected well over 1 million people in the United States, and is now the CDC's No. 1 priority. Other research also shows that older children and young adults are by far the most likely to be infected with the new virus.

The World Health Organization predicts a third of the world's population will eventually be infected.

The virus is still circulating and most health experts expect a resurgence in the northern hemisphere's autumn as temperatures cool and schools, traditional breeding grounds for infection, reopen after summer holidays.

Detailed reports on outbreaks can help health officials prepare for epidemics in their communities.

Every year, seasonal flu infects between 5 percent and 20 percent of a given population and kills between 250,000 and 500,000 people globally. Because hardly anyone has immunity to the new H1N1 virus, experts believe it will infect far more people than usual, as much as a third of the population.

It also disproportionately affects younger people, unlike seasonal flu which mainly burdens the elderly, and as a result may cause more severe illness and deaths among young adults and children than seasonal flu.

Chicago health authorities said last week that the pandemic H1N1 flu infected 14 times as many children as adults over 60 there, and also disproportionately affected blacks and Hispanics.

WHO said pregnant women and people with asthma, diabetes and heart diseases are at special risk of severe complications of death from H1N1 flu.

Some countries are reporting that as many as 15 percent of patients hospitalized with the new H1N1 pandemic virus have needed intensive care, further straining already overburdened healthcare systems, WHO said on Friday.
Companies are preparing vaccines against H1N1, which will be given in addition to the regular seasonal influenza immunization.

Japan opposition crushes LDP in historic election

TOKYO (Reuters) - Japan's opposition was headed for a historic victory in an election Sunday, exit polls showed, a win that would oust the long-ruling conservative party and give the untested Democrats the job of reviving a weak economy.

Exit polls by private broadcasters showed the Democratic Party of Japan (DPJ) could win two thirds of seats in parliament's powerful 480-member lower house.

That matched opinion polls that had forecast a huge loss for Prime Minister Taro Aso's Liberal Democratic Party (LDP). A senior LDP official acknowledged the extent of the drubbing, saying the party was headed for a "historic defeat."

"The predictions by the media were shocking. We had doubts, but now I think they are becoming a reality," said Yoshihide Suga, deputy chairman of the LDP's Election Strategy Council.

A Democratic Party win would end a half-century of almost unbroken rule by the LDP and break a deadlock in parliament, ushering in a government pledging cash for consumers, a cut in wasteful spending and less power for bureaucrats.

It would unravel a three-way partnership between the LDP, big business and bureaucrats that turned Japan into an economic juggernaut after the country's defeat in World War Two. That strategy foundered when Japan's "bubble" economy burst in the late 1980s and growth has stagnated since.

"This is about the end of the post-war political system in Japan," said Gerry Curtis, a Japanese expert at Columbia University.

"It is the only time any party other than the LDP has won a majority in the lower house of the Diet (parliament). It marks the end of one long era, and the beginning of another one about which there is a lot of uncertainty."

Financial markets have sought an end to the stalemate in parliament, where the Democrats and their allies control the less powerful upper chamber and can delay bills, but bond yields may rise if a new government increases spending.

LDP EMASCULATED

Most exit polls showed the LDP wining just over 100 seats, down from 300. Its partner, the New Komeito Party, was expected to win around 20 seats. The Democratic Party had just 115 seats in the last lower house.

"I'm happy, but at the same time I'm feeling a sense of big responsibility," Yoshihiko Noda, the Democrats' deputy secretary- general, told TBS television.

Democratic Party leader Yukio Hatoyama, 62, the wealthy grandson of a former prime minister, spoke in sweeping terms on Saturday when he said the election would change Japanese history.

He often invoked the word change during the campaign, a theme that came up time and again in interviews with voters Sunday. Many were prepared to give the Democrats a chance even if they were unsure the party would pull Japan out of its worst recession in 60 years.

"I don't like what's going on now in this country. Things have to change," said Kazuya Tsuda, a 78-year-old retired doctor in Tokyo who voted for the Democratic Party.
The Democrats have pledged to refocus spending on households with child allowances and aid for farmers while taking control of policy from bureaucrats, often blamed for Japan's failure to tackle problems such as a creaking pension system.

The party wants to forge a diplomatic stance more independent of the United States and build better ties with Asia, often strained by bitter wartime memories.

"(The Democrats) are saying that they will escape from bureaucratic dominance of politics, but they must also skillfully use bureaucrats to implement their policies," said Norihiko Narita, a professor at Surugadai University near Tokyo. "How to cooperate with bureaucrats will be a very important point."

Analysts worry spending plans by the Democrats, a mix of former LDP members, ex-Socialists and younger conservatives founded in 1998, will inflate Japan's massive public debt and push up government bond yields.

The party has vowed not to raise the 5 percent sales tax for four years while it focuses on cutting wasteful spending and tackling problems such as a shrinking and greying population.

Japan is aging more quickly than any other rich country, inflating social security costs. More than a quarter of Japanese will be 65 or older by 2015.

The economy returned to growth in the second quarter, mostly because of short-term stimulus around the world, but the jobless rate rose to a record 5.7 percent in July..

Friends, colleagues gather at church for Kennedy's funeral

BOSTON, Massachusetts (CNN) -- A funeral Mass to honor the life of Sen. Edward M. Kennedy was being held on a gray Saturday that matched the solemn mood at a Boston church packed with mourners.

His renowned family, fellow senators and former presidents Jimmy Carter, Bill Clinton and George W. Bush, were attending the service at Our Lady of Perpetual Help in the Mission district.

President Obama is set to deliver the eulogy.

The program opens with an undated quote from Kennedy: "For all my years in public life, I have believed that America must sail toward the shores of liberty and justice for all. There is no end to that journey, only the next great voyage. We know the future will outlast all of us, but I believe that all of us will live on in the future we make." Watch as funeral Mass begins

California Gov. Arnold Schwarzenegger, a Republican who is married to Kennedy's niece Maria Shriver, entered the church shortly before the funeral was scheduled to begin.

The actor Jack Nicholson was also present, as was civil rights leader Jesse Jackson.

Other mourners included Vice President Joe Biden and former Vice Presidents Al Gore and Dan Quayle, all veterans of the Senate, where Kennedy served for 47 years.

Irish Prime Minister Brian Cowen was due to attend, while British Prime Minister Gordon Brown sent regrets.

Massachusetts Gov. Deval Patrick, CIA chief Leon Panetta, and several Cabinet members also turned out to pay their respects. Watch as guests arrive for the funeral

Sen. John McCain, the 2008 Republican presidential candidate, chatted with Sen. Chris Dodd, a Connecticut Democrat, in the pews before the ceremony began.

Honorary pallbearers at the service include Supreme Court Justice Stephen Breyer, Democratic Sens. Dodd and John Kerry, of Massachusetts, and long-time Massachusetts congressman Ed Markey, also a Democrat.
Actual pallbearers will include Kennedy children, nieces and nephews, while Kennedy's son Ted and nephew Patrick are scheduled to deliver remembrances.

World-renowned cellist Yo-Yo Ma will perform two pieces during the service, being joined by the tenor Placido Domingo for one of them.

"America the Beautiful" is scheduled to be the recessional hymn, and Boston's archbishop, Cardinal Sean O'Malley, is to deliver the final commendation.

Kennedy will be buried Saturday evening at Arlington National Cemetery, outside Washington -- 95 feet south of the grave of his brother Sen. Robert Kennedy, which is in turn just steps away from brother John Kennedy's burial site.

Kennedy, the patriarch of America's leading Democratic family for more than 40 years, died at the age of 77 on Tuesday, 15 months after being diagnosed with brain cancer

Democrats seek to avoid politics at Kennedy memorial

BOSTON (Reuters) - Senator Edward Kennedy's Democratic party sought to avoid turning his memorial events into a liberal political rally and to guarantee instead a solemn tribute to the fallen statesman.

Republicans and Democrats were coming together at a private memorial service on Friday to honor Kennedy, the standard-bearer for liberal Democrats who championed causes from civil rights, immigration and healthcare to the end of apartheid in South Africa, opposition to the war in Iraq and peace in Ireland.

The senator's body lay in repose in Boston where members of the extensive Irish-American Kennedy clan greeted the more than 30,000 people who came to pay their respects. Preparations were under way for a private burial on Saturday near the graves of his slain brothers President John Kennedy and Senator Robert Kennedy at Arlington National Cemetery outside Washington.

Kennedy, a senator from Massachusetts for 47 years, died late Tuesday of brain cancer. He was 77.

President Barack Obama was to give a eulogy on Saturday during a funeral Mass at a Roman Catholic basilica in Boston, and aides promised Obama would not use the occasion to rally support for healthcare reform, Obama's top domestic priority and an issue Kennedy called "the cause of my life."

Lawmakers felt keenly the absence of Kennedy during his illness as they and Obama struggled to overhaul the $2.5 trillion U.S. health care system in which nearly 46 million people go uninsured. A consummate deal-maker, they said he would have been uniquely able to win the issue, now beset by fractious debate across the country.

Talk show host Rush Limbaugh, one of the most influential voices on the U.S. right wing, predicted Democrats would politicize Kennedy's death.

"They can't help themselves because this is their religion," Limbaugh said on his national radio show. "This, liberalism, is their religion, and they are burying their pope."

But the White House had already sought to end speculation that Obama would link Kennedy's death to the healthcare debate.

"Our country lost a beloved leader and the politics and implications of that are the last thing on the president's mind right now," Deputy Press Secretary Bill Burton told a news briefing on Thursday. "This is going to be a very personal statement that he makes on Saturday."

FORMER PRESIDENTS TO ATTEND

While Kennedy was considered an historic figure and was well-liked by his Senate colleagues, "most Republicans and conservatives still see him as the 'liberal lion,'" said Thomas Mann of The Brookings Institution.

"It's not as if he's this unifying, tremendously popular figure in the country. He's not," Mann said.

Three of the four living ex-U.S. presidents -- Jimmy Carter, Bill Clinton and George W. Bush -- were also expected to attend. Former President George H. W. Bush, 85, was said to be unable to travel.

The Friday service was to bring together family members and longtime close friends such as former Republican presidential candidate Senator John McCain, who lost in 2008 to Obama, Republican Senator Orrin Hatch and Democrats Vice President Joe Biden and senators Christopher Dodd and John Kerry.
Democrats worked this week to find a way to fill the senator's seat quickly, thus ensuring the votes needed to overcome Republican objections to a healthcare vote this year.

Kennedy requested Massachusetts lawmakers allow Governor Deval Patrick to name a temporary replacement to serve in his vacant Senate seat before a special election was to be held early next year.

McCain, who had worked many years with Kennedy to reach consensus on controversial legislation, said on CNN's Larry King Live on Thursday Kennedy's wife Victoria had asked him to speak. "And I told her I would move heaven and Earth, I would be there. And so I'm very honored to -- to have the opportunity to say a few words on behalf of the last lion of the Senate."

U.S. moves toward formal cut off of aid to Honduras

WASHINGTON, Aug 27 (Reuters) - U.S. State Department staff have recommended that the ouster of Honduran President Manuel Zelaya be declared a "military coup," a U.S. official said on Thursday, a step that could cut off as much as $150 million in U.S. funding to the impoverished Central American nation.

The official, who spoke on condition he not be named, said State Department staff had made such a recommendation to U.S. Secretary of State Hillary Clinton, who has yet to make a decision on the matter although one was likely soon.

Washington has already suspended about $18 million aid to Honduras following the June 28 coup and this would be formally cut if the determination is made because of a U.S. law barring aid "to the government of any country whose duly elected head of government is deposed by military coup or decree."

The official said that $215 million in grant funding from the U.S. Millennium Challenge Corporation to Honduras would also have to end should Clinton make the determination that a military coup took place.

About $76 million of that money has already been disbursed and a second U.S. official said this implied that the remaining roughly $139 million could not be given to Honduras should the determination be made.

Diplomats said that the United States had held off making the formal determination to give diplomacy a chance to yield a negotiated compromise that might allow for Zelaya's return to power.

Such efforts, however, appear to have failed for now and so the United States is taking steps -- including its decision on Tuesday to cease issuing some visas at its embassy in Tegucigalpa -- to raise pressure on the de facto government.

"The recommendation of the building is for her to sign it," said the first U.S. official said of the 'military coup" determination, saying this was a response to the de facto government's refusal to accept a compromise that would allow Zelaya to return to power ahead of November elections. (Editing by Jackie Frank)