General Mills 4Q profit rises (By CHRIS WILLIAMS, Associated Press Writer)

MINNEAPOLIS - General Mills Inc., which makes Wheaties and Cheerios, Yoplait yogurt and Progresso soup, said Thursday its fourth-quarter profit edged up on a 7 percent jump in sales
But the company ramped up advertising spending and saw costs rise for supplies ranging from corn to oats and dairy products.

Chief financial officer Jim Lawrence told analysts Thursday the company would offset the rising costs with a combination of productivity gains and price increases.

The company has begun shipping cereals in smaller boxes. Consumers will pay lower prices per box but will be getting less cereal and paying more per ounce — the net effect being a price increase of a few percent.

For the quarter ended May 27, the company earned $224 million, or 62 cents per share, up from $222 million, or 61 cents per share, in the same period a year ago. The results included restructuring costs.

Sales rose 7 percent to $3.06 billion from $2.86 billion.

Analysts, on average, expected earnings of 63 cents per share on sales of $2.99 billion.

The company forecast a profit range for fiscal 2008 of $3.39 to $3.43 per share, which represents growth of 7 percent to 8 percent over 2007 results. The company does not provide quarterly profit estimates.

Shares fell 77 cents, or 1.3 percent, to $58.68 in afternoon trading.

For the full year, the company earned $1.14 billion, or $3.18 per share, up from $1.09 billion, or $2.90 per share, a year earlier.

Revenue for the year rose 6 percent to $12.44 billion from $11.71 billion.

Net sales in the company's snacks division jumped 10 percent on the year, led by granola and Fiber One bars, while Big G cereals showed a 2 percent sales increase. Yoplait yogurt sales grew 6 percent, led by Yoplait light varieties, Go-gurt and Yoplait Kids yogurt with DHA Omega 3, a chemical the company says fosters brain development.

"For 2007, our ingredient and energy and labor costs rose at a combined rate of nearly 4 percent, which we offset primarily through product activity and strong plant operating performance," Chief Executive Officer Stephen Sanger told analysts on a conference call.

The company also increased spending on consumer marketing 8 percent during the year, he said.

The 2008 earnings target includes higher marketing spending and a predicted 5 percent increase in input costs over 2007, which includes a $260 million rise in the price of grains, natural oils and dairy.

"We are expecting a significant increase in our input costs for the coming year," Sanger said in a brief interview. "At some point in these cycles they do flatten out or sometimes go down. Energy costs for example in the coming year, we think will be a little lower than this last year."

Ken Powell, chief operating officer, said General Mills has been losing out at the checkout aisle to competitors who sell cereal in smaller boxes at lower prices per box.

"Those higher unit prices can blur consumer's perception of relative value," Powell said. "Most consumers compare the price per box, not the price per ounce. On a per-package basis, the competitors smaller box has the lower price."

He said the company expects to save $20 million a year by switching nearly all of its brands to the smaller boxes. The move will reduce the overall number of package sizes the company sells.search engine optimization

Also for 2008, Lawrence said the company would continue its share repurchase plan next year. The goal for 2008 is to reduce outstanding shares by 2 percent, or 353 million shares, from the total at the end of 2007.

Union members ratify GE contract (By STEPHANIE REITZ, Associated Press Writer)

Asbestos Cancer . HARTFORD, Conn. - Members of the two largest unions representing General Electric Co. employees have ratified new contracts affecting more than 20,000 workers nationwide, the company and the unions said Thursday.
Almost 80 percent of the voting members approved the deals, which replace contracts that expired June 17. They include a 16 percent pay increase over four years and improved health care benefits, while limiting the increase of health care costs borne by workers.

The Fairfield-based industrial conglomerate reached the tentative agreements this month with its two largest employee unions: the International Union of Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America and the United Electrical, Radio and Machine Workers of America.

The IUE-CWA and its locals represent about 10,030 GE employees, and the UE represents about 4,050 workers.

Terms of the new contracts will be extended to nine other unions with local contracts with GE. The contracts cover more than 20,000 employees nationwide.

"We are happy that the majority of members agreed with the national bargaining committee and conference board in recognizing the value that this contract brings to them and their families," said Bob Santamoor, the IUE-CWA conference board chairman.

GE officials said they were informed Thursday morning that the contracts were approved in ratification votes that concluded late Wednesday.

"We are confident that these contracts are good for our employees and good for GE. We are gratified that our union-represented work force agrees," William J. Conaty, GE's senior vice president for human resources, said in a written statement Thursday.

In addition to the pay raises and health care cost changes, the contracts update formulas used to determine pension benefits for current employees.

In one formula, the top benefit rate will increase from $60 to $70 a month for each year of service and higher pension pay for many other employees.

The two sides also agreed to add Veterans Day as a paid holiday.

The agreements also include higher pay for night shift and an additional week of vacation for younger workers, which they will receive sooner than in the current contract.

Older workers won protections for pensions and health care in retirement.

The new contracts provide two early retirement opportunities for employees aged 55 to 59 with 30 years of service. Five hundred employees might take advantage of the option this year, and 400 might do so in 2009, officials have said.

But employees hired in the future will not have supplemental Medicare health insurance provided by GE after age 65.

Company officials have said the provision matches GE's policy for nonunion employees.

Improved health care benefits include added coverage for preventive care such as routine physicals, screenings and vaccinations, and expands coverage for clinical trials for serious illnesses.

The contracts will require workers to pay more for their health insurance, but the union said GE will not substantially shift costs.

The proportion paid by workers now is between 18 percent and 19 percent, which will rise to 20 1/2 percent in the new contracts.

GE also has negotiated local contracts with the Machinists union, International Brotherhood of Electrical Workers, auto workers, steel workers and other unions.

GE's union workers make aircraft engines, appliances, locomotives, medical equipment, power turbines and other products across the country. The terms cover GE workers in Arkansas City, Kan.; Louisville, Ky.; Lynn, Mass.; Schenectady, N.Y.; Erie, Pa.; and elsewhere.

GE shares slipped 2 cents to $38.04 in midday trading Thursday.

Senate blocks immigration bill(By CHARLES BABINGTON, Associated Press Writer)

WASHINGTON - The Senate drove a stake Thursday through President Bush's plan to legalize millions of unlawful immigrants, likely postponing major action on immigration until after the 2008 elections.
After the stinging political setback, Bush sounded resigned to defeat.

"Legal immigration is one of the top concerns of the American people, and Congress' failure to act on it is a disappointment," he said after an appearance in Newport, R.I. "A lot of us worked hard to see if we couldn't find common ground. It didn't work."

The bill's Senate supporters fell 14 votes short of the 60 needed to limit debate and clear the way for final passage of the legislation, which critics assailed as offering amnesty to illegal immigrants. The vote was 46 to 53 in favor of limiting the debate.

Some senators in both parties said the issue is so volatile that Congress is unlikely to revisit it this fall or next year, when the presidential election will increasingly dominate American politics. t

Bush appeared glum as he spoke. His negotiators had expressed optimism the vote would go their way — or, at least be closer.

"Congress really needs to prove to the American people that it can come together on hard issues," Bush said. He turned attention to other his other goals in Congress this year, including energy, health care and balanced-budget initiatives.

Last year a similar immigration effort collapsed in Congress, and the House has not bothered with an immigration bill this year, awaiting Senate action.

The vote was a defeat for a bipartisan group of lawmakers who advocated the bill as an imperfect but necessary fix of current immigration practices in which many illegal immigrants use forged documents or lapsed visas to live and work in the United States.

It was a victory for Republican conservatives who strongly criticized the bill's provisions that would have established pathways to lawful status for many of the estimated 12 million illegal immigrants. They were aided by talk radio and TV hosts who repeatedly attacked the bill and urged listeners to flood Congress with calls, faxes and e-mails.

Voting to allow the bill to proceed by ending debate were 33 Democrats, 12 Republicans and independent Joe Lieberman, Conn. Voting to block the bill by not limiting debate were 37 Republicans, 15 Democrats and independent Bernard Sanders, Vt. Tim Johnson, D-S.D., did not vote.

The bill would have toughened border security and instituted a new system for weeding out illegal immigrants from workplaces. It would have created a new guest worker program and allowed millions of illegal immigrants to obtain legal status if they briefly returned home.

Bush, making a last-ditch bid to salvage the bill, called senators early Thursday morning to urge their support. Homeland Security Secretary Michael Chertoff and Commerce Secretary Carlos Gutierrez approached senators as they entered and left the chamber shortly before the vote.

But conservatives from Bush's own party led the opposition. They repeatedly said the government must secure the borders before allowing millions of illegal aliens a path to legal status.

Sen. Elizabeth H. Dole, R-N.C., said many Americans "don't have confidence" that borders, especially with Mexico, will be significantly tightened. "It's not just promises but proof that the American people want," Dole said.

But the bill's backers said border security and accommodations to illegal immigrants must go hand in hand.

"Year after year, we've had the broken borders," said Sen. Edward Kennedy, D-Mass. "Year after year, we've seen the exploitation of workers."

After the vote, he said: "It is now clear that we are not going to complete our work on immigration reform. That is enormously disappointing for Congress and for the country." Kennedy, a chief proponent of the bill, said, "we will be back. This issue is not going away."

But before the vote, Sen. Dianne Feinstein, D-Calif., told colleagues the political climate almost surely would not allow a serious reconsideration until 2009 or later. It would be highly unlikely, she said, "in the next few years to fix the existing system ... . We are so close."

From the beginning, the bill's most forceful opponents were southern Republicans. GOP Sens. David Vitter of Louisiana, Jim DeMint of South Carolina and Jeff Sessions of Alabama led the charge, often backed by Texan John Cornyn.

Two southern Republicans — Lindsey Graham, S.C., and Mel Martinez, Fla., who was born in Cuba — supported it.

Also crucial to the bill's demise was opposition from three Democrats recently elected from GOP-leaning states: Jon Tester of Montana, Claire McCaskill of Missouri and Jim Webb of Virginia.

All the Democratic presidential candidates in the Senate voted to end debate and advance the bill. Among the Republican candidates, only Sen. John McCain of Arizona voted to keep the measure alive. Sen. Sam Brownback, R-Kan., at first voted with McCain, but switched his vote when it was clear the bid to end debate would fail.

Sessions said on the Senate floor after the vote that Americans "are not mean-spirited, but they are concerned about a lawful system of immigration."
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DeMint told reporters, "I think the only victory here is for the American people and, symbolically, a government of the people and for the people. The people responded to this issue in a very emotional and just a very engaged way, which changed the minds of many people here in the Senate."
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DeMint said he hoped "we'll proceed with the security and enforcement aspects of this bill, and that will pave the way of how we solve some of the other problems."

Harry Potter magic spells losses for booksellers(By Justin Grant)

NEW YORK (Reuters) -
Harry Potter has no spell for bookstore profits.
Millions of people will descend on stores for a copy of "Harry Potter and the Deathly Hallows" in July, but deep discounts mean many will struggle to turn a profit from the jamboree.

"Everywhere you go there is huge, ridiculous discounting by the chains," said Graham Marks, children's editor at the British-based trade magazine Publishing News.

"They are literally not going to make one penny out of the book. It is stupid -- just throwing money away ... The world has gone mad."

Online retailer Amazon.com and Wal-Mart Stores Inc. have slashed nearly 50 percent off the book's $34.99 list price, forcing many independent booksellers to follow suit to stay competitive.

Barnes & Noble Inc. and Borders Group Inc., the world's largest booksellers, are selling it at 40 percent off.

Such price cuts drive sales, but usually result in minimal profit margin, something Jefferies & Co analyst & Co. analyst
Tim Allen said typically happens on every bestseller.

"It's so discounted, there's minimal, if any, gain," Allen said. "Retailers try to make up the shortfall by marketing loyalty cards, which they hope will entice shoppers back into their store."

The conclusion to
J.K. Rowling's saga about the boy wizard's battles with the forces of evil could be among the fastest-selling books in history, and some large retailers have broken records for orders well ahead of its July 21 release.

Amazon.com boasted more than 1 million advance orders for the book, easily besting advance orders for Rowling's 2005 release, "Harry Potter and the Half-Blood Prince."

In April, Barnes & Noble said advance orders for "Deathly Hallows" topped 500,000 copies, breaking the bookseller chain's record for advance sales.

But with widespread discounting biting a gigantic chunk out of any potential profits, many booksellers are not enthused about its release. And for smaller, independent book stores, the discounting makes for a hard calculation.

"The bookselling trade has lost millions by having to discount Harry Potter as heavily as they do," said Caroline Horn, children's editor at Bookseller, a British trade magazine.

"A lot of independent bookstores won't be selling Potter. They say it would be cheaper to buy it from a supermarket than the publisher."

The Chapter One Bookstore, an independent bookseller in Hamilton, Montana, is selling the book at full price and donating $7 of each sale to a library of the buyer's choice.

"The discounting -- online and at the chains -- does affect what you think you can sell," said Russ Lawrence, head of the American Booksellers Association and part-owner of the Chapter One Bookstore.

"Each bookseller has to decide how to deal with that."

MAGICAL INVENTORY

Scholastic Corp. -- the U.S. publisher of the "Potter" series -- is planning to release a record-breaking 12 million copies of "Deathly Hallows," so retailers expect no problems getting inventory.

"We placed our orders for them and they've guaranteed us we'll get them," said Dara La Porte, the children's book manager at Politics and Prose, an independent bookstore in Washington, D.C. "The last couple of Harry Potter titles -- we've gotten them within 24 hours of when it released."

Borders has been taking reservations for "Deathly Hallows" since December, giving the company a solid gauge for what it will need to order from Scholastic, company spokeswoman Ann Binkley said.

"As we get a little closer to (July 21), we'll sit with Scholastic and talk about what our reserves are ... We partner very closely with our vendors."

NATIONAL BOOK CLUB

Whether the book has a happy ending for Harry Potter and his wizard friends is still not generally known, but booksellers say the series has been able to create millions of young readers in an era of video games and the Internet.

"We get to host a party in July for probably 200 kids who are excited about a book. And that's a real opportunity for us to promote the whole idea of reading for pleasure," Lawrence said of plans for the Chapter One Bookstore.

Since bursting onto the scene in 1997, the Harry Potter series has sold more than 325 million books worldwide, spawning four feature films.

The fifth film, "Harry Potter and the Order of the Phoenix," will hit theaters a week ahead of the new book's arrival.

"There's people informally chatting about a book everyone is reading that normally wouldn't do that," said Mark Suchomel, president of Chicago-based Independent Publishers Group.

"For a few weeks, it's almost a national book club."

(additional reporting by Paul Majendie in London)

YouTube to test video ID with Time Warner, Disney(By Kenneth Li and Eric Auchard)

NEW YORK/SAN FRANCISCO (Reuters) - Top online video service YouTube will soon test a new video identification technology with two of the world's largest media companies, Time Warner Inc. and Walt Disney Co..
The technology, developed by engineers at YouTube-owner Google Inc., will help content owners such as movie and TV studios identify videos uploaded to the site without the copyright owner's permission, legal, marketing and strategy executives at YouTube told Reuters in an interview on Monday.

The so-called video fingerprinting tools, which identify unique attributes in the video clips, will be available for testing in about a month, a YouTube executive said.

"The technology was built with the Disney's and Time Warner's in mind," Chris Maxcy, YouTube partner development director, said, adding that, since early this year, Google has been testing audio-fingerprinting tools with record labels.

These tools will be used to identify copyrighted material, after which media companies can decide if they would like to remove the material or keep it up, as part of a revenue-sharing deal with YouTube, which can sell advertising alongside it.

Once proven to work, the technology could be used to block the uploading of copyrighted clips, YouTube product manager David King said. It aims to make the tools widely available to any copyright owner later this year.

YouTube has come under fire from several other traditional media companies, which say it has dragged its heels in offering reliable ways to identify video clips uploaded by regular users without permission.

Unable to reach a distribution agreement, MTV Networks-owner Viacom Inc. sued Google and YouTube for more than $1 billion in damages in March, charging the company with "massive intentional copyright infringement" after demanding the removal of clips of its popular shows "Colbert Report" and "Daily Show," hosted by comedian
Jon Stewart.

Media companies have eyed the wildly popular video-sharing site as a mixture of opportunity and threat as they seek to reach consumers wherever they spend time.

On one hand, they view YouTube as a powerful promotional medium to drive viewers back to television or their own sites. On the other, YouTube's traffic has soared as users upload copyrighted shows globally onto the service.

Nine months ago, YouTube said such tools would be made available to media companies for testing by the end of 2006. But the reliable identification of content has proved a complex task that required Google to develop its own technology tools.

Maxcy said other media companies planned to test the technology, but he declined to name these other parties. "There are a couple," he said, referring to Disney and Time-Warner. "There are more that we can't talk about right now," he said.

YouTube officials said they have quietly been testing ways to help identify the audio tracks of video clips with major record labels using technology from privately held Audible Magic as early as the first two months of 2007.

These tools will be made available to all content owners later this year depending on the results of the tests, YouTube executives said on Monday.

"It's typically not something we talk about," Maxcy said, adding, however: "We wanted to clear the air."

Maxcy said that over time, Google planned to add additional layers of technology to better spot content on its service.

Clinton seeks support of minority women(By BETH FOUHY, Associated Press Writer)

NEW YORK - Anticipating a vigorous competition for black and Hispanic votes, Democrat
Hillary Rodham Clinton's presidential campaign has scheduled a meeting Tuesday with some 300 "women of color" to urge them to raise money and spread the word among friends to encourage support for Clinton's candidacy.
Organizers of the gathering, scheduled at a Washington hotel, hoped to draw an ethnically diverse group of women from business, politics and the arts.

Members of Congress who have already endorsed Clinton were expected to be on hand, including Reps. Sheila Jackson Lee (news, bio, voting record) of Texas, Stephanie Tubbs Jones (news, bio, voting record) of Ohio, and Nydia Velasquez of New York. Mary Wilson, a former member of the Supremes, was also scheduled to attend; poet Maya Angelou was sending a video tribute.

The meeting was to be run by Clinton campaign manager Patti Solis Doyle and by Ann Lewis, the campaign's director of women's outreach. Uber-strategist Harold Ickes was also expected to attend, while campaign chairman Terry McAuliffe planned to make the fundraising pitch.

Clinton was also expected to address the gathering, which was closed to press coverage.

With top rival Democrat Barack Obama (news, bio, voting record) campaigning to be the first black president, the Clinton team has moved aggressively to shore up support among minority communities, especially women.

"It's important at this juncture for us to try and do some serious targeting," said Reta Lewis, a former political director during President
Bill Clinton's first term. "We need to give these women a voice and show our strength."

Lewis, who helped organize the event, acknowledged the competition for minority votes with Obama and other Democrats in the field, including New Mexico Gov. Bill Richardson, who hopes to become the first Hispanic president. But for Lewis, the choice was simple.

"Democrats have an awesome and very diverse field, but for me the issue was leadership — someone who could take charge from day one," she said.

Not to be undone, several Democratic candidates have worked to peel away support from Clinton among women voters, which polls indicate are her strongest constituency. Both Obama and
John Edwards have launched aggressive campaigns targeting women voters, using their popular wives, Michelle Obama and Elizabeth Edwards, as prominent campaign surrogates.

GOP blocks Gonzales no-confidence vote(By LAURIE KELLMAN, Associated Press Writer)

WASHINGTON - Republicans blocked a Senate no-confidence vote on Attorney General Alberto Gonzales Monday, rejecting a symbolic Democratic effort to force him from office amid blistering criticism from lawmakers in both parties.
The 53-38 vote to move the resolution to full debate fell seven short of the 60 required. In bringing the matter up, Democrats dared Republicans to vote their true feelings about an attorney general who has alienated even the White House's strongest defenders by bungling the firings of federal prosecutors and claiming not to recall the details.

Republicans did not defend him, but most voted against moving the resolution ahead.

Monday's vote was not the end of scrutiny for Gonzales and his management of the Justice Department — more congressional hearings are scheduled and an internal department investigation continues.

Short of impeachment, Congress has no authority to oust a Cabinet member, but Democrats were trying anew to give him a push. Gonzales dismissed the rhetorical ruckus in the Senate, and
President Bush continued to stand by his longtime friend and legal adviser.

"They can have their votes of no confidence, but it's not going to make the determination about who serves in my government," Bush said in Sofia, Bulgaria, the last stop on a weeklong visit to Europe.

"This process has been drug out a long time," Bush added. "It's political."

The attorney general said he didn't plan on leaving anytime soon.

"I am focused on the next 18 months and sprinting to the finish line," Gonzales said as he met Monday with child advocates in an impoverished Mobile, Ala., neighborhood.

In the Senate, seven Republicans voted with Democrats to advance the no confidence resolution.

Even before the controversy over fired prosecutors, lawmakers of both parties complained that Gonzales allowed Justice to violate civil liberties on a host of other issues — such as implementing Bush's warrantless wiretapping program.

One veteran Republican said Gonzales had used up all his political capital in the Senate.

"There is no confidence in the attorney general on this side of the aisle," said Arlen Specter (news, bio, voting record) of Pennsylvania, the senior Republican on the Senate Judiciary Committee. Specter voted to move the resolution forward, but he said many of his GOP colleagues would not because they feared political retribution.

Democrats said it was only fair to put senators on record for or against Gonzales, particularly since five GOP senators have called for the attorney general's resignation and many more have said they have lost confidence in him.

The mere debate shook loose another Republican call for a new attorney general.

Sen. Susan Collins (news, bio, voting record), R-Maine, for the first time publicly declared she had lost confidence in Gonzales.

"I think his continued tenure does not benefit the department or our country," she said.

Chief sponsor Charles Schumer (news, bio, voting record), D-N.Y., urged more like her to vote their true feelings.

"If senators cast their vote with their conscience, they would speak with near unanimity that there is no confidence in the attorney general," said Schumer. "Their united voice would undoubtedly dislodge the attorney general from the post that he should no longer hold."

"He deserves to be fired," said Senate Majority leader Harry Reid (news, bio, voting record), D-Nev.

Whatever Gonzales may or may not deserve, some Republicans said, it's not the Senate's job to hold forth on a member of the president's Cabinet.

"This is a nonbinding, irrelevant resolution proving what? Nothing," said Sen. Trent Lott (news, bio, voting record), R-Miss. "Maybe we should be considering a vote of no confidence on the Senate or on the Congress for malfunction and an inability to produce anything."

The vote cut across party lines.

Among the Republicans voted for the no-confidence resolution were four who had already called for a new attorney general: Sens. John Sununu (news, bio, voting record) of New Hampshire, Gordon Smith (news, bio, voting record) of Oregon, Chuck Hagel (news, bio, voting record) of Nebraska and Norm Coleman (news, bio, voting record) of Minnesota. Joining them were Specter and Maine Republicans Olympia Snowe (news, bio, voting record) and Collins.

Sen.
Joe Lieberman of Connecticut, an independent who often votes with the Democrats, voted no.

And Sen. Ted Stevens (news, bio, voting record), R-Alaska, voted present. Federal agents investigating corruption in Alaska have probed the remodeling of Stevens' home there. Stevens is not considered a target of the investigation, law enforcement officials familiar with the probe have told the Associated Press.

Those not voting included Sen. John McCain (news, bio, voting record), R-Ariz., a presidential candidate who had called for Gonzales' resignation.

House Democrats announced that Gonzales' deputy, Paul McNulty, who has announced his resignation, would testify June 19 about his role in the U.S. attorney firings. Gonzales last month said he relied on McNulty more than any other aide to decide which U.S. attorneys should be fired last year. But internal Justice Department documents showed that McNulty was not closely involved in picking all of those fired.

And the Justice Department's internal inspector general is investigating whether department officials improperly considered the party affiliation of candidates for career jobs there.

Majority Democrats toned down the language in their one-sentence resolution to attract more support from Republicans. The measure read: "It is the sense of the Senate that Attorney General Alberto Gonzales no longer holds the confidence of the Senate and of the American people."

___

Associated Press Writer Melissa Nelson contributed to this report from Mobile, Ala.

`Peyton Place' was Maine attraction (By CLARKE CANFIELD, Associated Press Writer)

CAMDEN, Maine - When moviemakers wanted to film "Peyton Place" in this small seaside town, the best-selling novel the movie was to be based on was so scandalous the local library didn't even keep it on its shelves.
The book had sparked outrage with its titillating look behind closed doors in a proper New England town. People read it in secret, and it was banned from many schools and homes.

But that didn't keep Camden from welcoming 20th Century Fox to turn its streets, homes and people into "Peyton Place." Now 50 years ago, film crews transformed the small mill and summer resort town into a movie set for a story about adultery, sexual abuse, murder and lies.

At the time, Barbara Dyer was among those who were indignant that such a movie was being made in Camden. What would people think?

It wasn't until decades later that Dyer watched the movie. When she looks back now, the movie seems tame and she laughs at being offended.

"At that time, 50 years ago, it was a different time," said Dyer, who is 83. "Up until that time, movies were censored. When Clark Gable said `Damn' (in `Gone With the Wind'), that was terrible."

Grace Metalious' 1956 novel "Peyton Place" was dubbed "trash" by some critics, but it made for juicy reading and sold more than 12 million copies.

The book focuses on the lives of three women in a small New Hampshire town in the 1940s, and brings with it themes of class privilege, sexual desire and hypocrisy. In revealing the hidden secrets behind the straight-laced facade of a quaint New England town, the book rocked the region's stuffy reputation; the term "Peyton Place" has come to mean any place with sordid secrets.

The novel also has been credited with providing social commentary on previously taboo subjects such as sex, alcoholism, incest and spousal abuse.

It wasn't long before Hollywood decided to cash in.

When moviemakers first looked for a location to film, they were rejected by towns in Vermont and New Hampshire. So producers looked to Maine, choosing Camden over Skowhegan, Waterville and Wiscasset.

During the month of filming, more than 500 locals got roles as extras. The movie — starring Lana Turner,
Hope Lange, Arthur Kennedy and Russ Tamblyn — was nominated for nine
Oscars (it didn't win any) and spawned a 1960s prime-time TV soap opera.

Throughout June of 1957, Glenna Drinkwater pedaled around Camden on her bike to watch the movie being made in hopes of catching a glimpse of Hollywood stars.

The 15-year-old read the book under her bed covers with a flashlight because her mother had forbidden her from reading it. When she was chosen as an extra — she was paid $10 a day — it was doubly exciting because of the racy nature of the book.

"It was wonderful. But it was a scandalous thing because it was a taboo book," she said.

The filming became a defining time for the town, said Terry Bregy, who will narrate a trolley tour of the film's landmarks next weekend as part of the town's 50th anniversary celebration of the film.

At the time, Camden was mainly a working man's town with a small wealthy summer community, Bregy said. Now it's a major tourist destination with pricey real estate and high incomes.

"If there was a seminal event that changed the mind-set of the people here, this was it," Bregy said. "Having a major motion picture made here made people think this must be a unique place."

After the movie was released, tourists flocked to Camden in search of the places where "Peyton Place" was filmed; a half century later, they're still coming.

To commemorate the 50th anniversary, the local chamber of commerce is holding a two-day celebration June 15-16 with a parade, trolley tours, receptions, a panel discussion and, of course, a screening of the movie.

Visitors will find that the town still looks remarkably like it did in the movie.

The Village Restaurant and the Village Shop are still there. The town's amphitheater overlooking Camden Harbor is the same, as is Mount Battie, where an innocent kiss is shared in the film. The Whitehall Inn still has rocking chairs on its big front porch, and the house at 77 Chestnut St. still has a white fence.

The arched sign that says "Entering Peyton Place" in the film can be found on Union Street, except that it welcomes people to Camden.

There are differences as well.

The Camden movie theater on Mechanic Street, where the film made its world premiere on Dec. 11, 1957, is now a clothing and shoe store. The Knox Mill, which was renamed Harrington Mills for the movie, has been converted into offices, shops and condos. The Western Union store is now a restaurant, and the Tweed Shop is now Planet Emporium.

Todd McIntosh expects a crowd at the anniversary festivities. In the movie, he's the one in a red nylon James Dean-style jacket and a crew cut rowing a boat in the mill pond during the Labor Day picnic scene.

Though there were reservations about the film 50 years ago, the movie is now a cherished part of the town's heritage, McIntosh said.

"`Peyton Place' has attached itself to Camden," he said, "and Camden to `Peyton Place.'"

___

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Film producer says more Shreks to come(

ERLIN - Galvanized by the success of "Shrek the Third," Jeffrey Katzenberg says the tale of the green ogre who married a princess will continue. "More Shreks are coming!" producer Katzenberg, flanked by "Shrek" stars
Cameron Diaz,
Mike Myers and
Justin Timberlake, said at a news conference in Berlin on Friday.

Katzenberg said there will be a half-hour animated TV special, "Shrek the Halls," featuring the Shrek characters' versions of holiday traditions.

As for the plot of the fourth installment of the "Shrek" movie franchise, Katzenberg would only reveal that Shrek will have to come to terms with something difficult in his past.

The DreamWorks animated blockbuster opens in Germany on June 21.

Timberlake, who voices the future King Arthur, said his favorite moment while working on "Shrek the Third" was listening to director
Chris Miller do the voices of the animated cast.

"He can actually do every voice," said Timberlake. "He does a pretty good Mike (Myers). He can't do a very good Shrek, but he can do a good Mike doing Shrek, so it was a lot of fun to work with him."

___

DreamWorks is a unit of DreamWorks SKG Inc.

Hilton sent back to jail in hysterics (By LINDA DEUTSCH, AP Special Correspondent)

LOS ANGELES - She was taken handcuffed and crying from her home. She was escorted into court disheveled, without makeup, hair askew and face red with tears. Crying out for her mother when she was ordered back to jail,

Paris Hilton

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Paris Hilton's cool, glamorous image evaporated Friday as she gave the impression of a little girl lost in a merciless legal system.

"It's not right!" shouted the weeping Hilton. "Mom!" she called out to Kathy Hilton, who also was in tears.

The 26-year-old hotel heiress tried to move toward her parents but was steered away by two sheriff's deputies, who held her by each arm and hustled her from the courtroom.

Superior Court Judge Michael T. Sauer was apparently unmoved by the pleas of Hilton's lawyers to send her back to home confinement because of an unspecified medical condition. He ordered Hilton returned to a Los Angeles County jail to serve the rest of her 45-day sentence for violating probation in an alcohol-related reckless driving case.

The judge gave no explanation for his ruling. But his comments showed he was affronted by county Sheriff Lee Baca's decision to set aside his instructions and release Hilton after three days in jail to finish her time in the luxury of her Hollywood Hills home.

Her lawyers said the reason for her release was an unspecified medical condition. The judge suggested that could be taken care of at jail medical facilities.

After the hearing, Hilton was taken to a correctional treatment center at the downtown Twin Towers jail for medical and psychiatric examination to determine which facility she will be held in, said sheriff's spokesman Steve Whitmore.

"She'll be there for at least a couple of days," he said.

The sheriff defended his decision, citing jail crowding — although Hilton was in a special unit and did not have a cellmate — and what he termed "severe medical problems."

He said he had learned from one of her doctors that she was not taking a certain medication while previously in custody, and that her "inexplicable deterioration" puzzled county psychiatrists.

Baca also charged that Hilton received a more severe sentence than the usual penalty for such a crime, which he said would have been either no jail time or direct placement in home confinement with electronic monitoring.

"The only thing I can detect as special treatment is the amount of her sentence," the sheriff said.

But he said he would not try to overrule the judge's decision again.

Hilton's jailhouse saga began Sept. 7, when she failed a sobriety test after police saw her weaving down a street in her Mercedes-Benz on what she said was a late-night hamburger run.

She pleaded no contest to reckless driving and was sentenced to 36 months' probation, alcohol education and $1,500 in fines. In the months that followed she was stopped twice while driving on a suspended license. The second stop landed her in Sauer's courtroom.

After being taken to court Friday in a black-and-white police car, paparazzi sprinting in pursuit and helicopters broadcasting live from above, Hilton entered the courtroom weeping and continued to cry throughout the hearing, which lasted more than an hour.

Her blond hair was pulled back in a disheveled knot, in contrast to the glamorous side-swept style in her booking photo earlier in the week. She was wrapped in a long, gray fuzzy sweat shirt over slacks.

Several times she turned to her parents, seated behind her in the courtroom, and mouthed, "I love you." At one point, she made the sign of the cross and appeared to be praying.

Her body shook constantly as she cried, clutching a ball of tissue, tears running down her face.

Seconds later, the judge announced his decision: "The defendant is remanded to county jail to serve the remainder of her 45-day sentence. This order is forthwith."

Hilton screamed.

Eight deputies immediately ordered all spectators out of the courtroom. Hilton's mother, Kathy, threw her arms around her husband, Rick, and sobbed uncontrollably.

Deputies escorted Hilton out of the room, holding each of her arms as she looked back.

Despite being reincarcerated, she could still be released early. Inmates are given a day off their terms for every four days of good behavior, and her days in home detention counted as custody days. It appeared that Friday would count as her sixth day. Baca indicated she would serve about 18 more days.

Friday's hearing was delayed by a misunderstanding. Hilton apparently thought she was going to be able to participate from home by telephone. But the judge, who had not authorized that, angrily denounced a media outlet for spreading the rumor, although a court spokesman also gave that information to news media. He ordered sheriff's deputies to go to Hilton's home and take her to court. The process took nearly two hours.

Once the hearing began, Sauer was blunt in his criticism of the sheriff for disobeying his orders, which specifically banned home confinement with electronic monitoring.

"I at no time condoned the actions of the sheriff and at no time told him I approved the actions," he said. "At no time did I approve the defendant being released from custody to her home."

The hearing was requested by the city attorney's office, which had prosecuted Hilton and wanted Baca held in contempt for releasing Hilton despite Sauer's order that she go to jail. The judge didn't act on the contempt request.

Hilton's attorney, Richard Hutton, implored the judge to hear testimony in his chambers about Hilton's medical condition before deciding whether to send her to jail. The judge did not respond.

The last lawyer to speak was a deputy city attorney, David Bozanich, who declared: "This is a simple case. There was a court. The Sheriff's Department chose to violate that order. There is no ambiguity."

Bush war adviser was skeptical on Iraq

By ANNE FLAHERTY, Associated Press Writer
WASHINGTON - Lt. Gen. Douglas Lute, picked by
President Bush' name=c1> SEARCHNews News Photos Images Web' name=c3> President Bush as his White House war adviser, said Wednesday he had been skeptical of Bush's decision to send thousands more U.S. troops into
Iraq' name=c1> SEARCHNews News Photos Images Web' name=c3> Iraq.
In a written response to questions by the
Senate Armed Services Committee' name=c1> SEARCHNews News Photos Images Web' name=c3> Senate Armed Services Committee, Lute confirmed news reports that he had voiced doubts during a White House-led policy review that led to Bush's Jan. 10 announcement that 21,500 more combat troops would go to Baghdad and Anbar province.
The buildup was hotly contested in Congress, including among several Republicans who favored greater pressure on Iraqi security forces to take over combat.
"During the review, I registered concerns that a military 'surge' would likely have only temporary and localized effects unless it were accompanied by counterpart 'surges' by the Iraqi government and the other, nonmilitary agencies of the U.S. government," Lute wrote in a document obtained by The Associated Press.
"I also noted that our enemies in Iraq have, in effect, 'a vote' and should be expected to take specific steps to counter from our efforts," he added. "The new policy took such concerns into account. It is too soon to tell the outcome."
Lute was scheduled to testify in public for the first time Thursday since being picked for the position.
If confirmed by the Senate, Lute would hold the title of deputy national security adviser. He would report directly to the president — briefing Bush daily — and work with other government agencies, including the
Pentagon' name=c1> SEARCHNews News Photos Images Web' name=c3> Pentagon and the State Department.
White House officials said Lute's challenge would be to cut through bureaucracy and deliver fast responses when requests come in from military commanders and ambassadors.
"In practical terms, this will mean taking a sober view of where we are now and focusing fully on the needs of Iraq and
Afghanistan' name=c1> SEARCHNews News Photos Images Web' name=c3> Afghanistan, even though there is a full range of competing global commitments," Lute wrote committee members.
Several senators were expected to question whether putting a three-star general at the White House now amounts to too little, too late to salvage a deeply unpopular war.
"I think there's a lot of questions that need to be answered as far as what his role is" and his relationship to other administration officials, said the committee chairman, Sen. Carl Levin (news, bio, voting record), D-Mich. "Where does he fit in precisely?"
The position was difficult to fill, given the unpopularity of a war in its fifth year and uncertainty surrounding the clout that the war coordinator would have.
The search was complicated given Democrats' demands that Bush bring U.S. troops home from Iraq and Republican's skepticism over the troop buildup. The White House tried for weeks to fill the position and approached numerous candidates — including retired four-star generals who turned the job down — before settling on Lute.
At the confirmation hearing, Lute was expected to tell senators that early results of the troop buildup have been mixed.
"No one is satisfied with the status quo: not the Iraqis, not key regional partners, not the U.S. government, and not the American public," according to his prepared remarks.
Lute noted that "conditions on the ground are deeply complex and are likely to continue to evolve — meaning that we must constantly adapt."
Lute has meet in private with committee members. While Lute's position has drawn questions, lawmakers said his character has not.
"He has a lot of stature," said Sen. Ben Nelson (news, bio, voting record), D-Neb. "This is a very good general."
When asked whether he thinks Lute could make a difference in the war effort, Levin indicated he had his doubts.
"Look, the policy is set by the president," the chairman told a reporter shortly before meeting with Lute.
Another concern is whether Lute would be exempt from testifying before Congress in future hearings on Iraq because of his role as a presidential adviser. White House officials have not guaranteed the war adviser will be made available, claiming executive privilege.
Sen. Robert Byrd (news, bio, voting record), D-W.Va., "believes this is a position that has a strong role in this war ... and that the people's representatives ought to have the ability to talk to and ask questions" of the individual, said Byrd's spokesman Tom Gavin.
Lute has been director of operations for the Joint Chiefs of Staff since September. Before that, he served for more than two years as director of operations at U.S. Central Command, during which he helped oversee combat operations in Iraq and Afghanistan.
Last month, when Bush announced that Lute was his choice, the president described him as an "accomplished military leader who understands war and government and knows how to get things done."

Immigration deal survives Senate hurdles(By CHARLES BABINGTON, Associated Press Writer )

WASHINGTON - A proposed immigration overhaul narrowly survived strong Senate challenges Wednesday, boosting its backers' hopes that the fiercely debated legislation might soon win passage and advance to the House. Senators first turned back a Republican bid to reduce the number of illegal immigrants who could gain lawful status. Hours later, they rejected a Democrat's effort to postpone the bill's shift to an emphasis on education and skills among visa applicants as opposed to family connections.
Both amendments were seen as potentially fatal blows to the fragile coalition backing the bill, which remains under attack from the right and left. The bill — which would tighten borders and give many of the country's estimated 12 million illegal immigrants a pathway to legal status — is a priority for
President Bush' name=c1> SEARCHNews News Photos Images Web' name=c3> President Bush.
The long day and night of votes contained some setbacks for the coalition's leaders, however. They failed to defeat a Republican proposal to give law enforcement agents access to rejected visa applications, which could lead to the arrest and deportation of some illegal immigrants who otherwise might escape detection.
On balance, however, the coalition's "grand bargainers" felt they had withstood their toughest challenges. "This means people want a bill very badly," said Sen. Lindsey Graham (news, bio, voting record), R-S.C.
The Senate voted 51-46 to reject a proposal by Sen. John Cornyn (news, bio, voting record), R-Texas, to bar criminals — including those ordered by judges to be deported — from gaining legal status. Democrats siphoned support from Cornyn's proposal by winning adoption of a rival version that would bar a more limited set of criminals, including certain gang members and sex offenders, from gaining legalization. The Senate backed that amendment 66-32.
The Senate also rejected a proposal by Sen. Robert Menendez (news, bio, voting record), D-N.J., that bill supporters called a "killer amendment." It would have delayed the bill's shift in favor of attracting foreign workers with needed skills as opposed to keeping families together. Menendez won 53 votes, seven short of the 60 needed under a Senate procedural rule invoked by his opponents.
Menendez's proposal would have allowed more than 800,000 people who had applied for permanent legal status by the beginning of 2007 to obtain green cards based purely on their family connections — a preference the bill ends for most relatives who got in line after May 2005.
Sen. Jon Kyl (news, bio, voting record), R-Ariz., a chief advocate of the bill, said most of the visa applicants Menendez wanted to help are so far back in line that it would be decades before the
Homeland Security' name=c1> SEARCHNews News Photos Images Web' name=c3> Homeland Security Department could process them. The Senate adopted Kyl's alternative, which would retain the family preference status for applicants who might win approval by 2026 under the department's projections.
Menendez, whose parents were Cuban immigrants, called the Kyl amendment "a fig leaf" that would make no meaningful change to the bill.
Cornyn had painted his criminals amendment as a "defining issue" for any presidential candidate — a sign of the degree to which the contentious debate is bleeding over into the GOP campaign fray.
Sen. John McCain (news, bio, voting record), R-Ariz., alone among his party's presidential aspirants in backing the immigration measure, opposed Cornyn's bid and backed the Democratic alternative offered by Sen. Edward M. Kennedy, D-Mass.
McCain was joined in opposing the amendment by the Senate's four Democratic presidential hopefuls, Sens. Joe Biden of Delaware,
Hillary Rodham Clinton' name=c1> SEARCHNews News Photos Images Web' name=c3> Hillary Rodham Clinton of New York, Chris Dodd of Connecticut, and Barack Obama (news, bio, voting record) of Illinois.
After his defeat, Cornyn said those who voted against the proposal "failed to take an opportunity to help restore public confidence that we're actually serious about passing an immigration law that could actually work."
Cornyn prevailed on another matter opposed by the grand bargainers, however. His amendment, adopted 57 to 39, would make it easier to locate and deport illegal immigrants whose visa applications are rejected.
The bill would have barred law enforcement agencies from seeing applications for so-called Z visas, which can lead to citizenship if granted. Cornyn said legal authorities should know if applicants have criminal records that would warrant their deportation.
Opponents said eligible applicants might be afraid to file applications if they believe they are connected to deportation actions. Sen. Dianne Feinstein (news, bio, voting record), D-Calif., said in an interview that Cornyn's amendment was "not a deal-killer" but would have to be changed in House-Senate negotiations.
Other amendments defeated Wednesday included a Democratic effort to alter the temporary guest worker program that would be created by the bill.
Sen. Jeff Bingaman (news, bio, voting record) of New Mexico wanted to allow workers to come for six consecutive years. The Senate voted 57-41 to reject the amendment, retaining the bill's call for most guest workers to go home for a year between each of three two-year stints.
The Senate also rejected an amendment by Sen. Jim DeMint (news, bio, voting record), R-S.C., to change the Z visa program whereby illegal immigrants could gain lawful status. DeMint proposed requiring them to buy high-deductible health plans to be eligible for visas.

ABN chief expects LaSalle decision by early July

THE HAGUE (AFP) - The chairman of ABN Amro, at the centre of possibly the biggest takeover battle in banking history expects a supreme court decision about the sale of US subsidiary LaSalle to fall late June, early July, the ANP news agency reported Wednesday.
The sale of LaSalle is a pivotal element in the take over battle for ABN Amro which pits British bank Barclays against a European consortium of three banks led by Royal Bank of Scotland.
Late May the consortium bid 71.14 billion euros (95.64 billion dollars) mostly in cash for the Dutch bank, outgunning Barclays' agreed all-shares bid of 67 billion euros.
As part of the Barclays takeover, ABN management had agreed to the sale of the US subsidiary in a deal viewed by analysts as a "poison pill" to prevent rival bidders. The consortium has said their offer is conditional on LaSalle not being sold.
A Dutch court froze the sale of LaSalle until ABN shareholders could vote on the matter. ABN Amro has appealed that decision and now says the supreme court could rule on the matter late June, early July, ANP reported, quoting from an interview Groenink gave to ABN Amro's intranet news service.

Immigration deal survives Senate hurdles (By CHARLES BABINGTON, Associated Press Writer )

WASHINGTON - A proposed immigration overhaul narrowly survived strong Senate challenges Wednesday, boosting its backers' hopes that the fiercely debated legislation might soon win passage and advance to the House.

Senators first turned back a Republican bid to reduce the number of illegal immigrants who could gain lawful status. Hours later, they rejected a Democrat's effort to postpone the bill's shift to an emphasis on education and skills among visa applicants as opposed to family connections.
Both amendments were seen as potentially fatal blows to the fragile coalition backing the bill, which remains under attack from the right and left. The bill — which would tighten borders and give many of the country's estimated 12 million illegal immigrants a pathway to legal status — is a priority for
President Bush' name=c1> SEARCHNews News Photos Images Web' name=c3> President Bush.
The long day and night of votes contained some setbacks for the coalition's leaders, however. They failed to defeat a Republican proposal to give law enforcement agents access to rejected visa applications, which could lead to the arrest and deportation of some illegal immigrants who otherwise might escape detection.
On balance, however, the coalition's "grand bargainers" felt they had withstood their toughest challenges. "This means people want a bill very badly," said Sen. Lindsey Graham (news, bio, voting record), R-S.C.
The Senate voted 51-46 to reject a proposal by Sen. John Cornyn (news, bio, voting record), R-Texas, to bar criminals — including those ordered by judges to be deported — from gaining legal status. Democrats siphoned support from Cornyn's proposal by winning adoption of a rival version that would bar a more limited set of criminals, including certain gang members and sex offenders, from gaining legalization. The Senate backed that amendment 66-32.
The Senate also rejected a proposal by Sen. Robert Menendez (news, bio, voting record), D-N.J., that bill supporters called a "killer amendment." It would have delayed the bill's shift in favor of attracting foreign workers with needed skills as opposed to keeping families together. Menendez won 53 votes, seven short of the 60 needed under a Senate procedural rule invoked by his opponents.
Menendez's proposal would have allowed more than 800,000 people who had applied for permanent legal status by the beginning of 2007 to obtain green cards based purely on their family connections — a preference the bill ends for most relatives who got in line after May 2005.
Sen. Jon Kyl (news, bio, voting record), R-Ariz., a chief advocate of the bill, said most of the visa applicants Menendez wanted to help are so far back in line that it would be decades before the
Homeland Security' name=c1> SEARCHNews News Photos Images Web' name=c3> Homeland Security Department could process them. The Senate adopted Kyl's alternative, which would retain the family preference status for applicants who might win approval by 2026 under the department's projections.
Menendez, whose parents were Cuban immigrants, called the Kyl amendment "a fig leaf" that would make no meaningful change to the bill.
Cornyn had painted his criminals amendment as a "defining issue" for any presidential candidate — a sign of the degree to which the contentious debate is bleeding over into the GOP campaign fray.
Sen. John McCain (news, bio, voting record), R-Ariz., alone among his party's presidential aspirants in backing the immigration measure, opposed Cornyn's bid and backed the Democratic alternative offered by Sen. Edward M. Kennedy, D-Mass.
McCain was joined in opposing the amendment by the Senate's four Democratic presidential hopefuls, Sens. Joe Biden of Delaware,
Hillary Rodham Clinton' name=c1> SEARCHNews News Photos Images Web' name=c3> Hillary Rodham Clinton of New York, Chris Dodd of Connecticut, and Barack Obama (news, bio, voting record) of Illinois.
After his defeat, Cornyn said those who voted against the proposal "failed to take an opportunity to help restore public confidence that we're actually serious about passing an immigration law that could actually work."
Cornyn prevailed on another matter opposed by the grand bargainers, however. His amendment, adopted 57 to 39, would make it easier to locate and deport illegal immigrants whose visa applications are rejected.
The bill would have barred law enforcement agencies from seeing applications for so-called Z visas, which can lead to citizenship if granted. Cornyn said legal authorities should know if applicants have criminal records that would warrant their deportation.
Opponents said eligible applicants might be afraid to file applications if they believe they are connected to deportation actions. Sen. Dianne Feinstein (news, bio, voting record), D-Calif., said in an interview that Cornyn's amendment was "not a deal-killer" but would have to be changed in House-Senate negotiations.
Other amendments defeated Wednesday included a Democratic effort to alter the temporary guest worker program that would be created by the bill.
Sen. Jeff Bingaman (news, bio, voting record) of New Mexico wanted to allow workers to come for six consecutive years. The Senate voted 57-41 to reject the amendment, retaining the bill's call for most guest workers to go home for a year between each of three two-year stints.
The Senate also rejected an amendment by Sen. Jim DeMint (news, bio, voting record), R-S.C., to change the Z visa program whereby illegal immigrants could gain lawful status. DeMint proposed requiring them to buy high-deductible health plans to be eligible for visas.