Wednesday morning headlines

Market watch: This could be a rebound day, with bond yields slipping a bit and better-than-expected retail sales in May. After an hour of trading, the Dow is up around 85 points.

Passport woes: The State Department may have loosened its passport requirements for travel to Mexico this summer (only a government-issued photo ID is needed), but Mexico still requires a birth certificate if you don't have a passport. That's created new logjams at airports, with carriers refusing to let ticketed passengers board planes. Some folks sent off their birth certificate as part of the passport application process. One little piece of good news: Travelers who paid an extra $60 to get their passports expedited but still had to wait for them beyond the time period were promised a refund from the government. Wonder how long it'll take to process those checks? LAT

Boeing 787 vs. Airbus A350: The Airbus folks must have gotten all excited with word earlier this week of a snag at Boeing: a 0.3-inch gap where the left side of the 787 nose-and-cockpit section didn't line up with the fuselage section behind it. But the gap has supposedly been fixed - a spokeswoman characterized it as "a normal part of the production process" for new airplanes. Airbus can’t seem to get anything go its way, with so many complaints about the A350’s comfort and fuel efficiency that the European manufacturer agreed to a redesign (that's before passenger service has started). Up to now, Boeing has booked nearly 600 firm orders for its 787 Dreamliner, while Airbus has booked 13.From the WSJ:

"We sent the first A350 to the cemetery, and many months later, Airbus still hasn't provided the kind of details that would make us rush to place an order," said Steven Udvar-Hazy, chairman of aircraft-leasing titan International Lease Finance Corp., a unit of American International Group Inc. (and based in L.A.) Mr. Udvar-Hazy is expected to announce a deal with Boeing for at least 50 of the 787s, according to people familiar with the matter. The deal is valued at about $10 billion at list prices, although such orders usually carry big discounts. Mr. Udvar-Hazy confirmed that ILFC is in "advanced negotiations with Boeing." The expected ILFC deal would push Boeing's order book for the 787 past 600. It is scheduled to enter service in May 2008. So far, in addition to its 13 firm orders, Airbus has 148 less-firm commitments for the A350. It hasn't managed to persuade customers to convert an additional 91 orders and 22 commitments for a previous version of the A350 into orders for the revamped model.

CEOs deflect criticism: Sure, there's been more heat on excessive pay packages for company chieftains, but as the LAT's Tom Petruno points out, most shareholders are sticking with management. That was made clear when Yahoo easily beat back a shareholder proposal to tie executive pay more closely to company performance (though 35 percent favored the idea). Meanwhile, shareholders at Calabasas-based Countrywide Financial are voting on a proposal that would require the company to hold a yearly shareholder referendum on executive compensation. Countrywide is a frequent target of shareholder activists because Angelo Mozilo is routinely among the highest paid CEOs in the country ($48 million last year). The vote would be merely advisory, not binding on the company's directors or officers.

Some governance experts say the stock market's strength this year, at least until recent days, may have damped investors' interest in sending a negative pay message to managers of the companies they own. "As the market comes back investors are happy again," said Lawrence Mitchell, a George Washington University law professor and author on corporate governance issues. What's more, managers of private investment pools such as hedge funds — which have become huge players in the stock market in recent years — have themselves been criticized for the often outsized incomes they take home. That may make them more empathetic toward generous executive pay packages when they vote their proxies, McGurn said.

Bad ad news: If you thought the first quarter was weak, just wait for the rest of the year, according to ad tracker TNS Media Intelligence. It's shaping up to be the worst year since 2001, with U.S. advertising expenditures growing just 1.7 percent, down from a previous forecast of 2.6 percent. Several factors are cited: no elections or Olympics, an uncertain economy that has big advertisers pulling back, and an ongoing shift to the Web and other, less expensive advertising alternatives. NY Post

Studio sale: It's Manhattan Beach Studios, where they shoot "CSI: Miami" and "Boston Legal." The new owner is investment firm Carlyle Realty Partners, which is buying the 22-acre complex from Oaktree Capital Management for $150 million (a $50 million appreciation in less than three years. The studio, with 14 soundstages and nine production offices, was built in 1999 by Burbank-based Shamrock Holdings, Roy E. Disney’s investment vehicle. LAT

Hollywood north: The Wayans brothers ("Little Man," "White Chicks") are back again with development plans for Oakland. Their new proposal is a $300 million film studio and commercial and retail development at the former Oakland Army Base. The city council voted to enter a second exclusive negotiating agreement with the four Wayans brothers and L.A.-based developer Pacifica Capital Group. The original plan was for a studio/theme park. WSJ

New Century fires CEO: Still unclear is how much co-founder Brad Morrice will be paid. His severance package at the OC-based subprimer would give him as much as $5 million, but because the company is in bankruptcy, his exit pay is more likely to be in the $40,000 neighborhood, according to the LAT. Morrice still faces federal civil and criminal investigations of New Century's finances and accounting practices and is a defendant in dozens of shareholder lawsuits. Also let go was executive vice president, Anthony T. Meola.

Barneys big sale: The chain of luxury department stores (NY, Bev Hills, etc.) is close to being sold for nearly $1 billion. Fittingly enough, the buyer would be a private-equity firm owned by the Dubai government. The NY Post has the scoop, noting that talks between Jones Apparel and Istithmar have reached the final stages after dragging on for several months. Jones, which bought Barneys three years ago for $400 million, has been shopping the chain around for some time.

Queen Mary update: The last piece of litigation against the company that leases the Long Beach tourist attraction has been dismissed. That clears the way for an auction-style sale in August - and already there are several interested parties looking to spruce up the place. Queen's Seaport Development Inc. filed for bankruptcy two years ago and it's taken a while to sort out the various legal and financial problems. Press-Telegram