- - Monday, November 14, 2011

MASSACHUSETTS

Starbucks drops bean surcharge after fine

BOSTONStarbucks Corp. has stopped tacking on a surcharge for bags of coffee beans weighing less than a pound nationwide after a Massachusetts consumer-protection agency fined the company over the practice.

The Massachusetts Office of Consumer Affairs and Business Regulation found in August that the coffee giant was adding a surcharge of about $1.50 for bags of coffee beans weighing less than a pound without notifying the customer as legally required.

That meant beans listed at $11.95 per pound ended up costing $7.45 for a half-pound — not $5.98, or half the price.

The state fined Starbucks $1,575 for overcharge violations.

A Starbucks spokesman tells the Boston Globe the company charged extra for half-pound bags to cover additional labor and packaging costs. The practice has since been dropped nationwide.

AUTO INDUSTRY

Regulators probing gear shift trouble with GM cars

Federal safety regulators are investigating problems with the automatic shift levers on several General Motors Co. cars that have caused at least seven crashes.

The National Highway Traffic Safety Administration said on its website Monday that the probe began with complaints about the Saturn Aura midsize car from the 2007 and 2008 model years, affecting nearly 89,000 vehicles.

But the agency said it is now checking to see if the problems extend to other GM vehicles. The Chevrolet Malibu from the 2004 to 2008 model years and the Pontiac G6 from the 2005 to 2008 model years have similar shifting systems, the agency said in documents filed on its website.

NHTSA said the protective jacket around cables connecting the floor shift lever to the transmission can deteriorate, exposing the cables to the elements. Cables can corrode and weaken, and the shift lever position may not match the car’s gear. That means a driver could put the car in park but the transmission could be in drive or reverse. In some cases, the car may not shift at all.

The agency said it received three reports of crashes caused by the problem, while GM received four, with one person hurt. In that crash, the driver put the gearshift in park, got out of the car, and was hit when the car unexpectedly rolled backward, NHTSA said in documents filed on its website. No details were given on whether the driver was seriously hurt.

GM told the agency that the problem affects mainly models with four-speed transmissions, but not six-speed transmissions.

NORTH CAROLINA

Lowe’s 3Q profit sinks 44 percent on charges

MOORESVILLE — The home improvement retailer Lowe’s Cos. says costs related to closing stores and other restructuring pushed its net income down 44 percent, but adjusted results beat expectations.

Retailers such as Lowe’s are facing tough times as consumers continue to hold back on large scale home improvement projects. Lowe’s has started closing stores and cutting costs to offset weak demand.

But with the housing market moribund and consumers’ continued caution on spending, CEO Robert Niblock said he does not expect a full rebound until at least 2013.

The Mooresville, N.C., company said Monday it recorded charges in the third quarter that reduced pre-tax earnings by $336 million, or 17 cents per share. Lowe’s announced last month that it would close 20 underperforming stores in 15 states and cut nearly 2,000 jobs to focus on its more profitable locations.

The company also has scaled back expansion plans. Its results have been pressured as consumers continue to stick to home renovation products under $500. The company said purchases topping $500 fell nearly 1 percent.

Mr. Niblock said he expects consumer demand will improve once home prices bottom out, which could occur in 2012.

TRANSPORTATION

Airline fined $900,000 for lengthy tarmac delays

The Transportation Department is fining a regional affiliate of American Airlines $900,000 for keeping passengers cooped up on planes for more than three hours in Chicago earlier this year.

The department said Monday that American Eagle Airlines had tarmac delays of more than three hours on 15 flights arriving at O’Hare on May 29. A total of 608 passengers were aboard the delayed flights.

American and American Eagle are owned by AMR Corp. of Fort Worth, Texas.

Coming on the eve of the busy holiday travel season, the fine is a clear warning to airlines that the government won’t tolerate similar incidents.

American Eagle says the delays were caused by airport congestion resulting from poor weather. The airline says it has apologized to passengers and offered travel vouchers.

From wire dispatches and staff reports