Wednesday morning headlines

FedEx glum on economy: A weak economy and surging fuel costs are taking their toll. The package delivery company forecast earnings of $4.75 to $5.25 a share for the current fiscal year; analysts had projected $5.92. "The operating environment for fiscal 2009 is expected to be very difficult," says CFO Alan B. Graf. Stocks are taking a hit this morning. (AP)

Northrop, Boeing wait it out: The two aerospace giants could find out today whether government auditors discovered irregularities in the Air Force awarding of that huge tanker contract to the team of Northrop and Airbus. Boeing protested the award, which set in motion an investigation by the Government Accountability Office. No one knows what the GAO will conclude, though last week's disclosure that the Air Force made mistakes in its calculations raises the prospect that at least part of Boeing's protest could be upheld. If Boeing loses the protest, it might abandon its aerial refueling program. (Reuters)

Steel deal: L.A.-based Reliance Steel & Aluminum Co. is buying PNA Group Holding Corp. for more than $300 million. The seller is Bev Hills buyout firm Platinum Equity (that’s the one run by Bev Hills billionaire Tom Gores). Platinum stands to make more than 25 times the $17.5 million that it invested in PNA. Reliance and PNA have benefited from soaring global demand driven by rapid growth in China and other emerging economies. From the LAT:

Both companies buy steel from large manufacturers of the metal, then cut and shape it for customers in such industries as construction, oil, equipment manufacturing, telecommunications and utilities. Reliance operates about 180 processing plants in the U.S., Canada, China, South Korea, Britain and Belgium. The acquisition would add PNA's 23 U.S. locations plus interests in seven locations in the U.S. and Mexico that PNA holds through joint ventures.

Tiger Woods to sit out season: Bad news for NBC and CBS, which have come to rely on golf's superstar for ratings boosts. The left knee that gave him fits during the U.S. Open will require more surgery. He had surgery to clean out cartilage on April 15, but the AP is reporting that he suffered a stress fracture while preparing for his return. That's apparently what caused his pain over the weekend. Missing the rest of the season means the British Open, PGA, Ryder Cup and the FedEx championship.

Dog bites man: The latest survey from J.D. Power & Associates finds that customer satisfaction with the airline industry has hit a three-year low. Continental ranked the best in customer service for full-service airlines (not much competition). JetBlue was tops as the best low-cost carrier. Alaska Air also did well. At the bottom were Northwest and United. (Business Travel News)

Palmdale gets more flights: Planes have been less than one-third full, but United will still add two daily flights to SF, starting in September. The new service will make it easier for the business and military people to make connecting flights. What's not mentioned in today's stories is that the city of L.A. subsidizes United for all those empty seats, an effort to divert traffic from LAX. Otherwise, there's no way United would be there. (Daily News)

Calpers director in trouble: Louis F. Moret, appointed to the 13-person Calpers board earlier this year, is being sued by the city of South Gate for allegedly conspiring to fix a $48-million garbage contract. The suit centers on Moret's relationship with disgraced political boss Albert Robles. Through his attorney, Moret denied profiting from the garbage contract. From the LAT:

At Robles' trial, Moret testified that while working as a $12,000-per month city consultant, he gave interview questions in advance to a firm that Robles wanted to win the garbage contract, but not to its competitors. And when Robles' favored firm for a sewer contract turned out to be the high bidder, Moret testified that he helped arrange for the contract to be rebid. Moret was named to the board of [the California Public Employees' Retirement System] in February by then-Assembly Speaker Fabian Nuñez and confirmed by the state Senate Rules Committee. The board oversees the fund's investments and decides who is hired to manage them.

Port deal near?: West Coast shippers and the union representing dockworkers have come to terms on health benefits, according to the Daily Breeze, but there are several other issues to work out. The Pacific Maritime Association and the International Longshore and Warehouse Union have been negotiating a new three-year pact since March. The contract runs up July 1. Besides health coverage, the union is looking for pay raises - some of its members already make more than $200,000 - and improvements in worker safety.