Subcompact cars fare poorly in new crash tests

DETROIT — Subcompact cars fared poorly in new crash tests performed by an insurance industry group.

None of the 12 minicars tested got the highest rating of "good" from the Insurance Institute for Highway Safety. The Chevrolet Spark was the only car that earned the second-highest rating of "acceptable." Six of the cars — including the segment's best-seller, the Nissan Versa — got the lowest rating of "poor."

All of the cars were from the 2013 or 2014 model years.

"Small, lightweight vehicles have an inherent safety disadvantage. That's why it's even more important to choose one with the best occupant protection," said Joe Nolan, IIHS's senior vice president for vehicle research.

The institute's small overlap test, which was introduced in 2012, mimics what happens when a car's front corner collides with another vehicle or an object like a utility pole. In the test, 25 percent of a vehicle's front end on the driver's side strikes a rigid barrier at 40 mph.

The test differs from the U.S. government's frontal crash test, in which a car strikes a rigid barrier head-on at 35 mph.

IIHS says hitting only part of the front end makes it harder for cars to manage the energy from a crash. In several of the subcompacts, the structures collapsed, which can exacerbate injuries because the air bags, seats and other parts get knocked out of position.

In the test of the Honda Fit, for example, the steering column pushed so far into the vehicle that the dummy's head slid off the air bag and hit the instrument panel. IIHS said the Fit was one of the worst performers in terms of potential injuries to the driver.

Honda responded that the 2015 Fit, which goes on sale in a few months, should earn a top score on the small offset test. The recently redesigned Honda Civic, which is one size up from the Fit, is among five small cars with "good" ratings on the test. A four-door Civic is around 300 pounds heavier and 18 inches longer than the current four-door Fit.

The current Fit does get top scores in the institute's other four tests, including measurements of roof strength and side impact protection.

IIHS said the Fiat 500 was also one of the worst performers. The crash force ripped the door hinges off the 500, causing it to fall open during the test.

Spokesman Eric Maybe said the Fiat 500 meets all government safety requirements and, like the Fit, gets "good" ratings in all four of the institute's other crash tests.

Cars with "marginal" ratings were the Kia Rio, Mazda2, Toyota Yaris and Ford Fiesta. Cars with "poor" ratings — in addition to the Fit, the Fiat 500 and the Versa — were the Toyota Prius C, Mitsubishi Mirage and Hyundai Accent.

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Stocks are mixed in early trading

NEW YORK — Stocks are mixed in early trading Wednesday as investors pore over the latest batch of company earnings reports. IBM dropped after its revenue fell short of forecasts from financial analysts. Chipmaker AMD also plunged.

KEEPING SCORE: The Standard & Poor's 500 was up less than a point at 1,844 as of 10:03 a.m. Eastern. The Dow Jones industrial average fell 20 points, or 0.1 percent, to 16,394. The Nasdaq composite gained four points, or 0.1 percent, to 4,231.

BIG BLUES: IBM fell $5.16, or 2.7 percent, to $183.16 after the computing company reported lower-than-expected revenue in the fourth quarter. Revenue fell 5.5 percent, hurt by a drop at IBM's hardware business. Profit rose 6 percent and adjusted earnings beat Wall Street predictions, however. The company has reported declining revenues for seven straight quarters, according to analysts at RBC Capital.

HANDBAGS: Coach fell $3.50, or 6.7 percent, to $49.03 after the company reported a lower quarterly profit, citing weakness in women's bags and accessories in North America.

SMALL IS BEAUTIFUL: Much like last year, small companies are again outperforming their larger counterparts. While the S&P 500 has moved sideways since the start of year, and is down 0.3 percent this month, the Russell 2000, an index that tracks smaller companies, is up 1.2 percent. The Nasdaq is up 1.4 percent.

THE CHIPS FALL: Advanced Micro Devices plunged 44 cents, or 10.6 percent, to $3.73 after the company said late Tuesday that it expected its first-quarter revenue to fall 13 percent to 19 percent from the fourth quarter. That would translate into first-quarter revenue ranging from $1.29 billion to $1.38 billion, mostly below Wall Street's predictions.

AMONG THE GAINERS: TE Connectivity jumped $3.73, or 6.9 percent, to $60.28 after the electronics company reported earnings that beat analysts' expectations and posted a strong earnings outlook for the second quarter.

TREASURIES AND COMMODITIES: The yield on the 10-year Treasury note climbed to 2.85 percent from 2.83 percent late Tuesday. The price of oil rose 94 cents, or 1 percent, to $95.93 a barrel. Gold was little changed from Tuesday at $1,241.50 an ounce.

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Teen tobacco use up in smoke

New national figures, showing that declines in youth tobacco use have slowed, indicate that Big Tobacco's relentless marketing is trumping widespread prevention efforts, experts told the Herald yesterday.

A new report from the U.S. surgeon general, coming on the 50th anniversary of the landmark report that linked smoking to lung cancer, shows the number of young people who started smoking in 2012, 2.3 million, is actually up from 2002, when 1.9 million picked up their first cigarettes. Though, due to population growth, the rate of teen smokers is down, it is leveling off and not showing the kind of decline that advocates would want to see over the course of a decade.

"There's a lot of guerrilla marketing going on," said Margaret Reid, a division director at the Boston Public Health Commission.

While cigarettes aren't as popular as they used to be, tobacco companies are increasingly trying to push other products such as flavored cigars and cigarillos. Boston health officials are tracking a rise in the use of these products, which are often targeted at minority youth, according to Nikysha Harding, director of tobacco prevention and control at the city's health commission. "And they're being marketed at a very, very low price point," Harding said.

Harding said to attract the college crowd, tobacco companies hire "attractive people" to scout for potential smokers in bars, then send them coupons.

Tobacco companies have said they don't market to teens. Efforts to reach tobacco company officials for comment yesterday were unsuccessful.

Boston University public health professor and smoking prevention expert Dr. Michael Siegel said the numbers should compel government officials to revamp their anti-smoking campaign to compete with tobacco companies' evolving marketing strategies.

"We can't expect to continue progress if we can't continue investment," Siegel said. "There is a public perception that we've taken care of the smoking problem. That's dangerous. It's just not true."

Massachusetts' anti-smoking budget has been slashed from $53 million to about $4.5 million over the past decade, Siegel said.

Harvard School of Public Health research scientist Hillel Alpert said non-conventional tobacco products can be a gateway to traditional cigarettes. "The different forms of tobacco products that are on the market only serve to promote addiction," he said.

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Builder bets on Eastie waterfront

Gerding Edlen is betting on a turnaround for East Boston waterfront development and prospects for a stalled New Street project.

The Portland, Ore., developer paid $7.27 million for the 3.9-acre parcel at 6-26 New St., near LoPresti Park on the inner harbor.

The firm is now looking at approved plans for the site and any changes needed to make it more appealing in today's market, according to president Kelly Saito.

"We are excited about the future and the potential for East Boston, especially the waterfront … so we wanted to invest in what we think will be a really interesting, desirable place," Saito said.

In 2010, the Boston Redevelopment Authority approved a $90 million project pitched by Billerica's New Street Realty Trust, which sold the site to Gerding last week. With Boston's Cresset Development, it planned to raze two buildings, add seven stories to a nine-story one for 165 residential units, and erect a new six-story building for 59 residential units or 106 hotel/extended-stay rooms.

But those plans and other approved Eastie waterfront projects — save Roseland's Portside at Pier One, which broke ground last year — never got off the ground.

"A lot of it was timing," Saito said. "The economy kind of stalled ... things." But it's since rebounded and been robust for development in other parts of the city, he said, and "East Boston feels like it's bound to come around soon."

But East Boston Project Advisory Committee President Bob Strelitz said he doubts it will be soon.

"I think they're really buying it with a very long-term perspective," he said. "Why would they start before there's some credibility on the waterfront?"

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Boston Ponzi schemers get prison time

As three members of a West Roxbury family were sentenced yesterday for bilking their victims out of more than $10 million to fund their lavish lifestyle, officials warned potential investors to take steps to protect themselves from such Ponzi schemes.

"If it looks too good to be true, it probably is," said Brian McNiff of the Massachusetts Secretary of State's Office, which enforces the Uniform Securities Act.

McNiff advised people to get investment opportunities in writing and check with the office to make sure the person offering them is a registered securities broker or investment advisor, and to find out if the person has been the subject of complaints.

Steven Palladino, 56, of West Roxbury convinced dozens of people to loan Viking Financial Group — the company his family formed in 2007 — more than $10 million, promising high returns, prosecutors said.

The Palladinos transferred the funds into their personal accounts to fund luxury vehicles, a vacation in the Bahamas, rent for Steven Palladino's mistress and casino trips, prosecutors said.

Yesterday, Steven Palladino was sentenced to 10 to 12 years in state prison, with five years probation. Lori Palladino, 52, was sentenced to two years, suspended for five years. Gregory Palladino, 28, was sentenced to two years, with five years probation. All three were ordered to pay restitution.

Steven Palladino "ruined our lives," said one woman, who said she lost $280,000. She declined to give her name. "I had my own little nest egg. But there's no chance of my retiring soon now."

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WeWork to rent desks to startups

A new collaborative office space for startups is coming to Boston, and organizers say it can add a sense of community to start-ups in Boston.

"WeWork is going to bring the most amazing startup community in Boston," said Hunter Perry, a Boston startup veteran who will lead WeWork's two Boston locations when they open early next month. "We're creating a place where people within all of Boston can have access to various ways to grow."

WeWork, which has locations in New York, San Francisco, and Seattle, among other cities, targets small, early stage companies that do not need large office space. The average size of WeWork's companies is five people, Perry said.

What separates WeWork from other "co-working spaces" is the sense of community they build, Perry said. There is a sports lounge in the basement of WeWork Seaport in Fort Point, complete with arcade games, a pool table and kegs. Members also get access to WeWork companies across the country for possible partnerships.

WeWork Seaport will have nearly 700 desks, and WeWork South Station will have more than 300.

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AP Exclusive: New regs sought for child car seats

WASHINGTON — Child car seats would for the first time have to protect children from death and injury in side-impact crashes under regulations the government is proposing, The Associated Press has learned.

The National Highway Traffic Safety Administration seeks to upgrade standards for child seats for children weighing up to 40 pounds to include a new test that simulates a side crash. The agency estimates the standards will prevent the deaths of about five children and injuries to 64 others each year.

NHTSA Acting Administrator David Friedman is scheduled to announce the proposal Wednesday.

Under the proposal, the new tests will simulate a "T-bone" crash, where the front of a vehicle traveling 30 mph strikes the side of a small passenger vehicle traveling at 15 mph. The tests will position the car seat on a sled, with another sled ramming the side of the sled with the seat, rather than using actual vehicles since the aim isn't to test the crash worthiness of specific vehicles, NHTSA officials said.

Research shows that many child deaths and injuries in side-impact crashes involve a car carrying children that is stopped at an intersection, usually at a light or stop sign, officials said. When the car begins to accelerate to go through the intersection, it is struck in the side by a vehicle traveling at a higher rate of speed on the cross street.

The side-impact test — the first of its kind — simulates both the acceleration of the struck vehicle and the vehicle's door crushing inward toward the car seat. Besides using a 12-month-old child dummy already approved under NHTSA standards, the proposed test will also utilize a to-be-developed side-impact dummy representing a 3-year-old child.

"As a father of two, I know the peace of mind this proposed test will give parents," Transportation Secretary Anthony Foxx said in a statement. The test "will give parents and car seat makers important new data on how car seats perform in side crashes."

Friedman called car seats "an essential tool for keeping young children safe in vehicles and have a proven track record of saving lives."

Safety advocates have long sought tougher standards for car seats to protect against side-impact crashes.

"I think this is terrific," said Joan Claybrook, who was the NHTSA administrator during the Carter administration and later president of Public Citizen. She noted that today's passenger vehicles have eight air bags, in part to protect adults from side-impact crashes. "We have an absolute moral obligation to protect children as well," she said.

NHTSA's estimates of the number of lives that will be saved and injuries prevented by the proposed standards are "very, very conservative," Claybrook said.

The public will have 90 days to comment on the proposed regulations after they are published this week. The regulations won't be made final until after the agency has reviewed the comments and answered any important issues that may be raised. That typically takes months and sometimes years, although NHTSA officials said they hope to move quickly.

The proposal includes giving car seat manufacturers three years to make any adjustments to meet the new requirements. That window doesn't begin until the regulations are made final.

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Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

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Maine seafood company owner pleads guilty

PORTLAND, Maine — The owner of a Maine seafood company has pleaded guilty to instructing an employee to make cash withdrawals to avoid Treasury Department reporting requirements, money used to bypass lobster coop purchasing rules.

The Portland Press Herald (http://bit.ly/1dTRR7O ) reports that John Price, owner of J.P.'s Shellfish in Eliot, pleaded guilty in federal court on Tuesday to 12 counts of structuring cash transactions.

Prosecutors say the 58-year-old Kittery man had an office manager make bank withdrawals from 2008 to 2010 for less than $10,000 to avoid detection.

Employees then used the cash to pay a dock worker at the Spruce Head Fisherman's Coop in South Thomaston for lobsters. The dock worker's side transactions were made without Coop approval.

Price remains free on $10,000 bail pending sentencing in May. His lawyer refused comment.

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Information from: Portland Press Herald, http://www.pressherald.com

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Greenfield hospital declares labor impasse

GREENFIELD, Mass. — Baystate Franklin Medical Center in Greenfield has declared an impasse in its 28 months of negotiations with nurses and announced it will immediately put into effect changes it has sought through contract talks.

The move outraged the nurses' union, which said it will file a complaint with the National Labor Relations Board. Nurses will meet this week to discuss their options, including the possibility of a strike.

The changes include a 3.25 percent wage and bonuses up to $1,000. The hospital will also start transitioning to paying overtime on a weekly basis rather than a daily basis, a major sticking point in negotiations.

Hospital President Chuck Gijanto tells The Recorder (http://bit.ly/1fbFkLr ) negotiations are "hopelessly deadlocked."

Nurses say management is unjustly taking away their right to negotiate a settlement.

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Information from: The (Greenfield, Mass.) Recorder, http://www.recorder.com

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Booze-delivery start-up Drizly raises $2.25M

Boston-based alcohol delivery start-up Drizly has raised $2.25 million in venture financing, the company said today.

"It took us over a year of building and testing, and now, after the last 9 months and many thousands of orders later, Drizly is alcohol delivery," CEO and co-founder Nick Rellas said in a statement. "We are fortunate to have an incredible set of investors ranging from great institutions and successful entrepreneurs to individuals at strategic companies both inside and outside of the alcohol industry."

Drizly, which partners with local liquor stores for delivery, also announced it will expand to New York beginning today. Users can order alcohol through an iPhone app, and then track the delivery's progress. Identification and age is checked by the driver.

Drizly is available throughout much of the Greater Boston area.

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