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Citigroup Inc (C.N: Quote, Profile, Research) is hiring Terri Dial, credited with reviving Lloyds TSB Group’s core UK retail banking, to take over its flagging U.S. consumer business, a person familiar with the matter said on Friday.

Dial will become Citigroup’s global head of consumer strategy, but the 58-year-old California native’s primary task will be to improve U.S. retail banking and consumer finance, the source said.

She will succeed Steven Freiberg at the helm of U.S. consumer operations. Freiberg, who used to run the bank’s North American credit card business, will take over the card business worldwide.

Lloyds (LLOY.L: Quote, Profile, Research) said Dial was leaving but did not say where she was going. Lloyds shares dipped 2 percent in Friday trading in London on news of her departure. She has been with the bank since 2005.

Separately, Citigroup said it replaced Ali Hackett and Tom Tesauro, the co-heads of global equity finance and prime brokerage, according to a memo obtained by Reuters. Nick Roe, who had run the European part of that business, will replace them as head of global prime finance, reporting to hedge fund services chief Steve Bowman, who wrote the memo.

The changes are the latest under Vikram Pandit, who replaced Charles Prince as chief executive in December. Pandit has been carrying out a top-to-bottom review of Citigroup to find ways to boost earnings and revenue, cut costs and help rejuvenate a stock that has fallen more than 50 percent in the last year.

Citigroup is also likely to announce a shuffling of its retail and corporate banking structure, The Wall Street Journal reported.

Citigroup plans to create Asia and Europe divisions, consisting of consumer and corporate banking operations in the respective regions, the newspaper said. Ajay Banga, who runs international consumer operations, will lead the Asia unit, but it is unclear who will lead the Europe unit, it said. 

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WASHINGTON — Federal regulators have ordered inspections for hundreds of older model Boeing 737 jetliners after numerous reports of fuel leaks caused by a potentially faulty bolt.

In August, a fire destroyed a China Airlines 737 when a bolt from a right wing slat pierced the jetliner’s fuel tank. All 165 people aboard evacuated unharmed just before the Boeing plane exploded on a tarmac in Okinawa, Japan.

The Federal Aviation Administration later that month ordered inspections of similar newer model 737s, but expanded the order to older models because of their design similarities, agency spokesman Les Dorr said Tuesday.

"Boeing notified us of numerous reports of fuel leaks from older models, but no fires," Dorr said.
The order affects 652 aircraft in the U.S. and more than 3,500 worldwide. U.S. carriers must get the planes inspected within 90 days of the FAA order’s effective date of April 8, Dorr said. The safety checks are to detect and fix a bolt that can fall off and puncture the aircraft’s fuel tanks.

Among the carriers affected are: Delta Air Lines Inc., Continental Airlines Inc., Southwest, UAL Corp.’s United Airlines and others.

A spokeswoman for Chicago-based Boeing said the order comes after action taken by the company and carriers "to ensure continued operational safety of the 737 fleet."

The FAA’s action is not related to a Southwest Airlines Co. investigation that showed it continuing to fly nearly 50 Boeing 737s that hadn’t been inspected for cracks in their fuselages, Dorr said. Southwest is facing a $10.2 million fine — the largest civil penalty the FAA has proposed against a carrier — the company said it will appeal.

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DANVILLE, Ill. — A new group of investors is planning to take over the biodiesel production plant that was recently finished adjacent to Bunge’s milling operation in Danville.

Deb Seidel, director of communications for Bunge North America, based in Maryland Heights, said an asset purchase agreement is being worked out between Biofuels Company of America LLC and Blackhawk Biofuels, a group of about 600 investors, including farmers and businessmen.

If the deal closes, Seidel said, Bunge would lease the property where the biodiesel plant stands to Blackhawk and would supply feedstock, such as soybean oil, to the operation. Soybean oil is a byproduct of Bunge’s milling operation and can be used to make biodiesel, a non-petroleum-based diesel fuel made from vegetable oils and animal fats. It can be used alone or as a blend in unmodified diesel engines.

Biofuels Company of America was a partnership between Bunge North America and Biodiesel Investment Group LLC, based in Memphis, Tenn. Bunge was a minority investor in that arrangement.

The News-Gazette (Champaign-Urbana, Ill.)

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Americans are finally driving less - thanks to rising gas prices.

Seventy-two percent of respondents to a recent poll said recent price increases in gasoline have caused financial hardship for them or their households, according to a national CNN/Opinion Research Corp. poll released Wednesday.

"For some time we’ve been trying to determine the breaking point for when gas prices take their toll on the consumer," said John Kilduff, an energy analyst at the trading firm MF Global. "It appears we’ve found that point."

Americans driving less. Rising fuel prices have caused most Americans to cut back on their driving. Of the over 1,000 American adults surveyed in the poll conducted March 14-16, 64% said they have made some changes to their driving behavior as a result of higher gas prices, with 19% saying they have cut back on driving enough to have a major effect on their daily lives. And 5% say they have stopped driving altogether.

Gas sales have started to sink as Americans curtail their driving. A recent Commerce Department report showed sales at gasoline stations, which have been bolstered recently by record-high fuel prices, tumbled 1%.

"Consumers have been surprisingly resilient, but it’s psychologically damaging to see prices above $3.50," said Kilduff.

Prices getting worse. The median price of gasoline hit a record $3.285 a gallon on Sunday and has only slipped about six-tenths of a cent since then, according to a fuel price survey conducted for the motorist group AAA. Drivers in California have to shell out more than $3.63 a gallon on average, and motorists in Alaska, Oregon, Washington, and Hawaii on average all had to pay more than $3.40 at the pump.

Consumers are paying 28.3% more for gas now than they were at this point last year, according to AAA.

And Americans expect the price of gas to keep climbing. Seventy-two percent said it was "very likely " for gasoline to hit $4 a gallon in 2008. One in five said it was "somewhat likely" to see $4 gas.

If gasoline hits an average $4.50 a gallon Americans say they will reduce the miles they drive significantly enough to affect their daily lives.

If gasoline hits an average of $8 a gallon, Americans said they would quit driving altogether.

Some experts say drivers should expect gas to reach an average of $4 a gallon before the price of gas finally comes down in the late spring as high prices crimp demand.

The price of gasoline usually increases this time of year, as refineries curtail output as they switch from winter to pricier summer blends. And as oil continues its record surge above $100, some think this years’ gas spike will be more pronounced.

"High gas prices have increased the costs of transportation of all goods, which impacts everything," said senior Wachovia economist John Silvia. "Real, disposable consumer income is being hit hard."

Relief may be ahead. Some analysts expect gas prices to retreat.

Gasoline prices - though rising - have not actually matched crude oil’s ascent, because gasoline inventories have reached near 15-year highs on sinking demand, according to Kilduff.

Gasoline demand has grown an average of 1% annually over the past six years, but this year’s demand for gas is expected to increase only 0.3% from last year, down from last year’s annual growth of 0.4%, according to the U.S. Energy Information Administration, a government agency that measures oil and gas supplies.

If vapid demand can successfully drive gasoline prices down, then perhaps drivers will see gas prices start falling significantly in the summer.

"That national average won’t get to $4 a gallon," said Kilduff, who believes gas will peak around $3.50 on average in mid-April before coming down again. "We’re in the process of getting the worst of this behind us." 

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Enrollment in consumer-driven and high-deductible health plans increased in 2007, but they still make up a small segment of the overall insurance market, according a study released recently by the Commonwealth Fund and the EBRI, two think tanks with interests in health policy issues.

Enrollment in high-deductible plans stood at 11 percent of the privately-insured adult population in 2007, up from 7 percent the previous year.

Among those with a high-deductible plan, 42 percent reported that they were eligible for a tax-advantaged health savings account but did not have such an account.

As in 2005 and 2006, individuals in consumer-driven plans and high-deductible plans continued to be less satisfied with various aspects of their health plan than individuals in more comprehensive plans.
However, individuals in consumer-driven plans were somewhat more satisfied with their plans in 2007 than they were in 2006.

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The U.S. Federal Reserve is expected to slash interest rates by as much as a whole percentage point at its policy meeting on Tuesday as investors warily await investment bank results that could aggravate fears of a full-blown markets crisis.

Traders expect the Fed to cut rates by a full percentage point in an effort to stop hemorrhaging in financial markets and boost the flagging economy. The Fed is expected to announce its decision around 2:15 p.m. EDT.

The Fed has cut overnight rates by 2.25 percentage points to 3 percent since mid-September as a rise in defaults on subprime mortgages has escalated into a financial crisis that this weekend claimed one of Wall Street’s most venerable firms, investment bank Bear Stearns, as a victim.

While financial markets expect the Fed to fire off its biggest rate cut since 1982, they might focus more on the quarterly results due hours earlier from Goldman Sachs Group Inc, the most profitable U.S. investment bank, and Lehman Brothers Holdings Inc, the fourth-largest.

The banks are expected to show how badly they were hit by the credit crunch in the three months ended February 29 — and any major shocks could send markets into another tailspin, especially given the vulnerability of the financial sector exposed by the fire sale of Bear Stearns to JPMorgan Chase.

The Fed has already taken a series of radical steps in an attempt to stabilize the financial system.

It narrowed the gap between the discount rate — the rate at which it lends directly to banks — and the federal funds rate, the overnight rate banks charge each other for loans and the Fed’s main policy tool, from three-quarters of a percentage point to a quarter point.

The U.S. central bank also unleashed a barrage of other unorthodox steps to provide liquidity, including $30 billion in financing to enable JPMorgan to buy Bear Stearns. In addition, it set up a new program to provide cash to a wider range of big financial firms through loans at the Fed’s discount window. 

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It’s arguably the most tedious, tiresome and at times traumatic financial task that Americans are called upon to do each year. I’m talking about doing our income-tax returns.

No surprise, as tax laws become ever more complex, that more Americans are seeking professional help. Last year, paid preparers submitted about 63 percent of returns received by the Internal Revenue Service.

To hire the right professional, you should interview several candidates, carefully considering experience and credentials.

"Go with know-how," recommends tax-publisher CCH, a unit of Amsterdam-based Wolters Kluwer. Even when tax laws don’t change, provisions can go into effect at different times. Some, such as eligibility to deduct IRA contributions, phase in and out depending on income, with the numbers sometimes changing every year.
Therefore, as CCH advises, it pays to check whether preparers belong to organizations — for example, professional groups of enrolled agents or certified public accountants — that require or at least encourage members to pursue continuing education.

You also don’t want your preparer to spend more time than necessary — and end up charging you more — by having to rifle through a disorganized mess of tax documents and receipts stuffed into the proverbial shoebox.

At least keep separate folders for each kind of tax-related documents, such as W-2s, different types of 1099s, and receipts that support tax deductions.

Also, to avoid surprises, get payment terms in writing.

If you prepare your own return, you can get help from tax-prep software, both desktop and Web-based, that has become increasingly popular and sophisticated (in 2007, some 22 million returns were filed from home computers).

I feel comfortable recommending Intuit’s TurboTax (website: www.turbotax.com); H&R Block’s TaxCut (www.taxcut.com); CCH’s CompleteTax (www.completetax.com); and 2nd Story Software’s TaxACT (www.taxact.com).

I have used TurboTax for years and like it best for what I consider to be a more-intuitive interface and clearly worded "interviews" (tax-preparation software asks you questions and, based on your answers, puts the right numbers on the right tax forms).

This year’s TurboTax features a new "life events" area that allows a more-personalized interview (for example, if you got married or divorced, had a child, or started a new business last year). The program includes enhanced tools to reduce the risk of an audit or help you respond if you get audited.

If you decide to use tax-preparation software, it’s up to you to choose one that clearly handles and explains the tax issues that apply to you. You can learn about the different products at the sites I listed above.

You also can use software to prepare your return and have a professional review it for less money than having the pro do everything from scratch. Bob Meighan, vice president of Turbo Tax, said 10 percent to 15 percent of first-time users do this before fully "trusting" the software in subsequent years.

Compared with pencil-and-paper returns, software avoids math errors and reminds you to verify all information. According to the IRS, incorrect or missing Social Security numbers are the most-common mistake in tax returns, more so than math errors. At the least, software will spot missing numbers.

When a return with incorrect or missing information is filed, the IRS rejects it and sends a notice to the taxpayer, possibly delaying a refund by weeks or even months, cautions the National Association of Tax Professionals, a group with more than 18,600 members nationwide (www.natptax.com).

In other instances, the IRS may issue a refund, but for less than you expected. This may occur when there is a missing or incorrect Social Security number for a claimed dependent on the form.

AskHumberto@aol.com

2008, TRIBUNE MEDIA SERVICES INC.

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PARIS — Soci

When the Air Force picked a plane to be its new aerial refueling tanker, apparently, size mattered.

But Boeing Co. didn’t think so.

And now the company is making that lack of information the centerpiece of its protest of the $40 billion tanker contract won last month by two of its biggest rivals.

Boeing on Tuesday officially asked government auditors to review the contract and the process that led the Air Force to give it to Northrop Grumman and Airbus parent European Aeronautic Defence and Space Co. (EADS).
It’s a step that will delay work on the tanker, known as the KC-45A, by months, and add fuel to an already roaring debate over awarding such a big military contract to a foreign-owned company.

Protesting is not something Boeing takes lightly, company executives said in a news teleconference Tuesday.

"We think we were not treated fairly," said Mark McGraw, vice president of tanker programs for Boeing’s St. Louis-based defense unit. "There were serious flaws in the process."

Chief among them, McGraw and others said, was a fundamental misunderstanding about what the Air Force wanted in a tanker.

Both planes, Boeing’s 767-based tanker and the larger Northrop/EADS A330 variant, met the Air Force’s stated requirements for fuel, cargo and people-carrying capacity, Boeing said, and there were to be no bonus points awarded for going beyond those requirements. Yet the Air Force has indicated that it picked the KC-30 because it offered "more."

"More passengers, more cargo, more fuel to offload," said Gen. Arthur Lichte, commander of Air Mobility Command, at a news conference last month announcing the decision. "More availability, more flexibility and more dependability."

Boeing was aware of the basic requirements, and said its 767 met them. It considered offering a bigger 777-based tanker, but chose not to because the 767 is more fuel-efficient, and therefore cheaper to fly, and Boeing didn’t think capacity was so important.

"If (the Air Force) wanted a bigger tanker, it would have been nice to be very clear that that was the key requirement," said Beverly Wyse, who oversees Boeing’s commercial 767 program.

The company has other objections, including concerns about late changes to the ways the two planes were measured that it says may have tipped the balance toward Northrop, and about the way the Air Force judged the overall costs of the competing planes.

Throughout the process, Air Force officials say they’ve tried to run the most open, thorough competition possible, precisely to avoid this situation. And they’ve defended their choice against withering blasts from Boeing supporters in Washington.

On Tuesday, they said again that the Northrop/EADS plane provides the best value, and that weapons buyers kept in close contact with both bidders throughout.

"The Air Force followed a carefully structured process, designed to provide transparency, maintain integrity and promote fair competition," said Lt. Col. Jennifer Cassidy, in a statement.

Now that will be reviewed by the Government Accountability Office, which has 100 days to make a non-binding recommendation about the contract. While protests rarely overturn contract decisions, they do occasionally result in a re-bid. That’s what happened when Sikorsky and Lockheed Martin challenged Boeing’s $15 billion win of a contract to build search-and-rescue helicopters in 2006; that job, which still awaits a new decision, has now been delayed 16 months.

On this contract, Boeing says it would appreciate another shot, but it really hopes for more understanding.

"We’d love to get the decision overturned. But really we just want clarity in the process," McGraw said. "If there was another competition like this we wouldn’t really know how to go forward."

tlogan@post-dispatch.com | 314-340-8291

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