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GM TRANSMISSION PLANT STRIKE CLOSING DOWN MORE FACILITIES

It didn't take long for the effects of a strike at a key General Motors Corp. parts plant to begin spreading across the automaker's vast North American assembly operations.

Three auto plants in Michigan and a big assembly plant in Canada were idle today. A GM source, speaking on condition of anonymity, said no further shutdowns were expected until the middle of next week.

The four plants depend on front-drive transmissions supplied by the GM Powertrain Group factory in Warren, where about 2,800 United Auto Workers members went on strike late Tuesday.

(Buffalo-area auto plants weren't immediately affected by the GM shutdowns, and plant representatives were unwilling to predict when the strike's effects might spread to the Niagara Frontier.

American Axle and Manufacturing Inc.'s Tonawanda forge and Delphi Harrison Thermal Systems in Lockport make parts for some of the affected car lines).

The automaker shut down car assembly plants Thursday in Flint, Orion Township and Lansing. With today's closure of the Oshawa, Ont., complex, a total of about 19,300 GM workers were idled, including the strikers.

Talks resumed this morning. There were some signs of optimism from those monitoring the continuing negotiations.

Cereal price cuts criticized
WASHINGTON (Los Angeles Times) -- Cuts in the cost of breakfast cereal announced a year ago by the four major manufacturers are "less than meets the consumer's eye," two congressmen charged Thursday, and they threatened to seek antitrust action if the cereal makers don't reduce their prices more.

Reps. Charles Schumer, D-N.Y., and Sam Gejdenson, D-Conn., also warned that a recent price hike by General Mills could indicate a cycle of price increases is resuming.

A report prepared by the two lawmakers showed that while Kellogg's, General Mills, Post/Nabisco and Quaker -- who control roughly 80 percent of the market -- promised cuts averaging 16 percent per box on selected products, subsequent reductions on coupons and a decision not to lower prices on all cereals meant most Americans saved about 9.7 percent.

Mortgage rates fall to 16-month low
WASHINGTON (AP) -- Average interest rates on 30-year, fixed-rate mortgages fell this week to the lowest level since early last year.

The average declined to 7.43 percent, down from 7.47 percent a week earlier, Freddie Mac said Thursday.

Fifteen-year mortgages averaged 6.98 percent this week, down from 7.01 percent a week earlier.

On one-year adjustable rate mortgages, lenders were asking an average initial rate of 5.54 percent this week, down from 5.55 percent last week.

Microsoft loses ruling on benefits
SAN FRANCISCO (Bloomberg) -- Microsoft Corp. lost an appeals court decision in a case brought by free-lance employees who wanted to participate in the software company's stock-purchase plan.

The 9th U.S. Circuit Court of Appeals ruled that Microsoft couldn't exclude from the stock plan the people it used as free-lance software testers, production editors, and for other work.

Under the program, employees can use part of their pay to buy stock in Microsoft at a 15 percent discount to the market price.

The case has been closely watched by other high-technology companies that use free-lance workers and independent contractors to help develop and test products.

Kodak buys photo library firm
ROCHESTER (Washington Post) -- Eastman Kodak Co. announced Thursday it has purchased Picture Network International Ltd., an Arlington, Va., company that manages electronic photography libraries and sells their photos on the Internet. Terms of the deal were not disclosed.

PNI, a 23-employee firm founded in 1992, will become a wholly owned subsidiary of Kodak but will remain an independent operation in Arlington.

Delta names interim chief
ATLANTA (Bloomberg) -- Delta Air Lines Inc. named Maurice Worth interim chief executive to replace Ronald Allen, who will retire July 31.

Worth, 56, is currently executive vice president of customer service.

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