Tuesday morning headlines

L.A.-China flights: More nonstop service from Los Angeles to Shanghai would be a very big deal for the increasing numbers of folks doing business with China. United Airlines is pushing an LAX-Shanghai route, but other domestic carriers have proposed different cities as they battle for the limited number of rights to fly from the U.S. to China. Among the cities in the mix: Philadelphia, Chicago and Atlanta (Philadelphia?) At stake is an estimated $200 million in annual revenue that a U.S.-China route can bring to an American carrier. Analysts say United faces an uphill battle. From the LAT:

U.S. airlines currently operate only seven nonstop flights to China, the world's most-populous country. In addition, Northwest Airlines Corp. has three connecting flights via Tokyo, and dozens of other connecting flights to China are offered by Asian carriers such as Korean Air or Asiana Airlines. Under a U.S.-China pact reached in May, U.S. carriers will be allowed to operate six new nonstop flights to China over the next three years: one this year, another next year and four more in 2009. But it will be up to the U.S. Department of Transportation to select which routes to dole out. Seven airlines have proposed 11 routes. A decision is expected this fall.

LAX not so bad: Sure, the lines are long, but more planes at Los Angeles International Airport departed and arrived on time for the first months of the year than at most other airports. LAX shot up to fifth from 19th in the rankings of 32 major airports for on-time arrivals, though much of the gain had more to do with weather delays at other airports than with any improvements here. (LAT)

Milberg motion rejected: U.S. District Court Judge John Walter turned down several motions by the class action law firm and Steven Schulman, a former partner to dismiss the fraud and conspiracy case scheduled for trial in Los Angeles next year. The defendants had argued that payments lawyers at Milberg Weiss made to some plaintiffs in class-action lawsuits weren't illegal kickbacks. But Walter said that "it seems to me that this scheme, as alleged by the government" was a "classic kickback scheme." He added, "Whether the government can prove these allegations remains to be seen." (LAT)

Paul Allen dumping DreamWorks: The co-founder of Microsoft is selling off $150 million worth of DreamWorks Animation stock to the company and then selling an additional 10 million shares to the public in a secondary offering. He's also resigning from the board. That still leaves him with about 7 percent of the company. Allen's $500 million investment was instrumental in the founding of DreamWorks SKG (the animation group spun off into a public company), but he's been slowly divesting. (Hollywood Reporter)

Recall inquiry: So what exactly did Fisher-Price know about the lead paint found in 1.5 million Chinese-made toys, and when did it know it? That's what the Consumer Product Safety Commission wants to find out. It's conducting an investigation into the timing of the disclosure by Fisher-Price, which is a division of Mattel. Fisher-Price's record in reporting defects is checkered. From the AP:

Fisher-Price was fined $975,000 in March for not notifying authorities quickly enough about a choking hazard in a toy from its popular Little People product line. In 2001, it paid $1.1 million for a similar infraction regarding safety defects in its Power Wheels toy vehicles. Federal law requires companies to alert the safety commission within 24 hours when they discover information about a dangerous defect in a product. The information need only be enough to reasonably conclude that the defect could pose a risk of serious injury or death, or violates a federal safety standard.

Gas under $3: The latest government survey shows that an average gallon of self-serve regular was $2.965, down from $3.008 a week earlier. It was the first time local pump prices were under three bucks a gallon since March. With oil prices skidding to near $70 a barrel, there's talk about gasoline remaining on the cheap side through the fall. If that happens, it could provide the economy with a slight boost just in time for the holidays. (EIA)

Asian movies: The Weinstein Co. has unwrapped a $285 million fund to finance the development, production, acquisition, marketing and distribution of a large slate of Asian-themed films over the next six years. The fund will include a mix of theatrical and direct-to-video titles, which will mostly be shot in Asia. The company anticipates producing or acquiring 21 theatrical titles and 10 direct-to-video titles during the term for the fund. (Variety)

Register layoffs: Ever since Blackstone Group and Providence Equity Partners purchased a nearly 40 percent stake in Freedom Communications Inc., parent of the Register, skeptics have wondered when those private equity guys would look at the numbers and start asking for cuts. That time might have come with the current round of layoffs. Of course, the numbers are terrible: revenues are down 14 percent and profits are down 38 percent. Register honchos say they would save money "any way we can" - including eliminating open positions, cutting the freelance budget and dropping wire services. That's gotta generate more readers, right? (LAT)

NYT drops Times Select: That's the paper's subscription-only service for online access to its Op-Ed columnists and other content. Timing, according to the NY Post, will hinge on resolving software issues associated with making the switch to a free service. The decision to wall off well-known writers, including Maureen Dowd, Frank Rich and Thomas L. Friedman, was not exactly a popular one. The number of Web-only subscribers has been slipping.

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the problems involving local mortgage lenders, why Mattel didn't know about the lead paint on its Fisher-Price toys, and the bids for land underneath Grauman's Chinese Theatre.