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Fiat and Chrysler are focusing on cash-generating businesses in the United States and Brazil to help weather growing uncertainty in the European auto market, CEO Sergio Marchionne said Wednesday.

Fiat, which took over Chrysler nearly 2 1/2 years ago, saw its credit rating downgraded this week over financial risks in its alliance with the U.S. carmaker, which has been recovering from bankruptcy. Crucially, it is under severe pressure in its home market of Italy, where unions are resisting more flexible work conditions and demand is fading.

Adding to uncertainty, the Italian government appears unable to swiftly implement the austerity and growth measures aimed at preventing the country _ Fiat’s most important market _ from being swept into a spiraling debt market crisis.

“There is no doubt that a lot of elements are coming to play here, one of which may be an Italian factor. … I don’t know any more,” Marchionne said. “The stock market is up 4, 5 percent one day, then down 3. It is totally moving on rumors. There is no factual basis. I haven’t moved a forecast. I have moved nothing.”

Marchionne has maintained 2011 forecasts of euro58 billion ($79 billion) in revenues with euro2.1 billion ($2.9 billion) in trading profit for the combined automakers.

But he said there was little he can do to calm the markets.

“It is embedding a perception of risk which is totally outside of my control for me to try to cover it. We are almost helpless on this. There is nothing I can tell you, or tell the market, that will make this go away.”

The continuing economic uncertainty is hurting auto sales, particularly in Fiat’s main Italian market. Fiat registered a 7.8 percent drop in sales last month compared with a year earlier while its European market share shrank to 6.5 percent in September from 7.2 percent a year earlier.

“It impacts consumer attitudes, and that is probably the most negative thing about all of this. It really negatively impacts moods,” he said.

To maintain profitability, Marchionne said he is focusing on the cash-making parts of the business _ the U.S. and Brazilian markets _ while trying to build sales in the increasingly competitive European market, mainly outside of Italy where sales are at 30-year lows.

“They are still today the biggest profit contributors to Fiat. They need to be nurtured,” Marchionne said of the U.S. and Brazil business card. “That’s why I spend so much time there.”

Ironically, it is Fiat’s alliance with Chrysler that triggered downgrades by ratings agencies. Fitch was the last to weigh in on Tuesday, lowering the credit rating from to BB from BB+. It cited Fiat’s “intrinsic weakness,” its heavy reliance on the Italian and Brazilian markets, and exposure to increased financial risk due to the alliance with Chrysler.

Marchionne said Fiat is in a good cash position to continue with its investments in Italy and abroad for new production. Fiat expects to have euro18 billion in liquidity at the end of this year, according to its forecasts.

“We have enough liquidity now to deal with our requirements for quite a while,” Marchionne said.

But he criticized unions in Italy that continue to challenge the new contracts with more flexible work hours that Fiat has agreed at three plants. The FIOM metalworkers union has announced a one-day strike Friday at all Fiat plants.

“I think the strike, personally, is a very bad idea. It is not the manner in which one would encourage investment in this country,” Marchionne said, adding that he believes most Fiat workers support the new contracts, which have secured new investments at two plants near Fiat’s Turin headquarters and one near Naples.

Marchionne attended Wednesday the European launch of the Lancia Voyager minivan and Thema luxury sedan, both based on Chrysler models and concrete examples of the tighter integration of the two companies. In all of Europe except Britain, Chrysler models will carry the Lancia badge.

The Thema luxury sedan is Lancia’s re-entry into the premium market, after a two-year absence, at an affordable price of euro41,400. It is based on the Chrysler 300, but has been restyled and adapted for European markets with a soft leather interior, firmer suspension and redesigned front-end.

Lancia brand chief Saad Chehab said the car is the same size as the Audi A-8, but sells at a 15 percent discount over the smaller Audi A-6.

Both the Thema and Voyager will be manufactured in Canada, and aim at the higher end of Fiat’s market, with neither expected to achieve huge volumes. Chehab said they expect to sell 10,000 Themas and 11,000 Voyagers a year.

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Rakuten is not just the top shopping website in Japan. These days, the company is doing some serious shopping of its own as it turns the strong yen _ usually seen as a huge negative for Japanese companies _ into a plus.

The online shopping-mall operator has bought several overseas businesses in the last year and is not the only Japanese company on a shopping spree. Businesses from pharmaceutical companies to toy makers have been emboldened by the increased purchasing power that the rising yen gives them.

A strong yen has long been characterized as potentially fatal for Japan Inc. by making the country’s cars, consumer electronics and other goods more expensive abroad, eroding the earnings of giant exporters like Toyota Motor Corp., Sony Corp. and Nintendo Co.

But for a service company such as Rakuten Inc., the yen at post World War II highs is a boon it hopes will power its rise up the global e-commerce hierarchy, where it now trails American giants such as Amazon and eBay. The yen is up nearly 8 percent against the U.S. dollar over the past year.

“I like it,” Rakuten Chief Executive Hiroshi Mikitani said with a grin when asked about the yen’s gains. “We can buy more companies.”

Mikitani also thinks Japan’s traditional export-focused manufacturers should be taking advantage of the yen’s rise by buying rivals in emerging markets. But he said some may be reticent as they lack the management expertise to know what to buy or how to make it work.

“They should think about that, and utilize the strength of the currency as a weapon,” Mikitani told reporters. “I think we should favor the stronger yen.”

Embracing a strong yen is an uncommon attitude among Japanese CEOs, and officials. Rakuten is different in other ways too. Nearly three quarters of the hires joining the company this month were foreigners and Mikitani’s pep talk at a welcoming ceremony this week was in English, the standard language at Rakuten _ both rarities for usually insular Japanese companies.

The jump in overseas acquisitions by Japanese companies this year has come even though the global economy faces extremely uncertain times and Japan’s own economy has reeled from the March 11 earthquake and tsunami disasters.

Data compiled by Tokyo-based Recof Corp., which advises on acquisitions, found overseas mergers and acquisitions by Japanese companies gained by 30 percent in number of deals in the first eight months of this year.

The jump was most pronounced in Asia, where the number of deals increased 50 percent year-on-year to 143, a record for the region, although the purchase prices were bigger for deals in the U.S., according to Recof.

Data from Dealogic shows that the value of overseas takeovers and acquisitions by Japanese companies in January through August more than doubled from a year earlier to $46.7 billion.

Among the biggest Japanese takeovers announced in recent months was Takeda Pharmaceutical Co.’s deal to buy Switzerland’s Nycomed for $13.6 billion, giving Japan’s biggest drugmaker coveted access to emerging markets.

Another was Tomy Corp.’s purchase of RC2, the U.S. maker of Chuggington and Thomas & Friends toys in an all-cash deal valued at about $640 million.

Online securities company Monex Group Inc. bought TradeStation Group, based in Florida, in a deal valued at up to $411 million earlier this year. Brewers such as Kirin and Asahi have also been busy acquirers.

The yen’s gains can also tip the scales in favor of manufacturing investments overseas.

Last month, Honda Motor Co. announced a $50 million investment to boost transmission production in the U my credit score.S., bringing the automaker’s capital investment in Ohio to more than $400 million for this year.

Matt McCollister, vice president in charge of economic development with nonprofit Columbus2020, who visited Japan recently to woo more investments to Ohio, said the strong yen came up often in meetings with executives as a solid incentive.

“I don’t know that it’s the primary catalyst, but it can definitely be a tipping point for a project, especially if there’s one that has been under consideration,” he said. “When you start to apply the currency differential, it may make more financial sense than it did a year ago.”

Still, there is no doubt that the yen’s unrelenting strength is the source of plenty of woe for many of the Japanese corporations that are global household names. It has also added to worries in Japan that more manufacturing could be shifted overseas, hollowing out industry and jobs.

Like other Japanese automakers, Honda has been hit hard. It says the yen erased 22.5 billion yen ($288 million) from its April-June operating profit. The Tokyo-based maker of the Odyssey minivan and Accord sedan, had initially counted on the dollar trading at 80 yen this fiscal year through March 2012. The dollar is now hovering between 76 yen to 77 yen.

The automaker has been moving production to the markets where vehicles are sold. For the more specialized cars still being exported from Japan, pressure is on to cut costs to make the business worthwhile, sometimes delaying model launches until such cuts are achieved, Honda officials say.

Squeezing positives out of a strong yen is a change of pace for Japan which has been, up to now, obsessed with trying to prop up the dollar to protect exporting giants.

Such efforts have proved largely futile in recent years against larger global developments that nowadays include the financial crisis in Europe, including worries about Greek defaulting on its debts, and fears of a looming recession in the U.S.

Japan’s finance ministry mostly recently tried to weaken the yen in August by buying dollars. That did send the yen lower but the effect lasted only days.

For Rakuten, a robust yen is key to its ambitions to one day become the world’s No. 1 e-commerce company.

In September, Rakuten announced an agreement to buy British e-commerce site Play.com for 25 million pounds (3.3 billion yen, $43 million), following the acquisition of PriceMinister of France and German online shopping mall Tradoria.

The moves add to an empire that now sprawls across 10 countries, including Japan, raking in 90.7 billion yen ($1.2 billion) in April-June sales, a quarterly record for Rakuten. Its business also includes Buy.com of the U.S. and a partnership with Baidu Inc. in China, as well as ventures in Thailand, Russia, Taiwan and Indonesia.

Kevin M. Carroll, who runs EA International, an environmental engineering and consultancy company in Tokyo, says the shrinking Japanese population and the high labor costs as well as corporate taxes in Japan are making overseas growth even more crucial for Japanese companies.

The days when a big Japanese corporation could prosper just by catering to customers in Japan are long over, said Carroll.

“The strength of the yen in most foreign markets works for Japanese companies as it places them in the envious position of acquiring foreign firms or technologies at a discount,” he said.

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The Obama administration has decided to upgrade Taiwan’s existing fleet of F-16 fighter jets but not sell it the new planes it also wants, congressional staff said.

The administration gave a briefing on Capitol Hill on its decision Friday, but has yet to issue a formal notification of the intended deal. An announcement is expected by the end of this month.

Two congressional aides confirmed the decision to The Associated Press on condition of anonymity as they were not authorized to make it public.

The decision represents a compromise aimed at improving Taiwan’s ability to defend itself, while assuaging China’s concern over the arms sales. However, Beijing is still expected to react angrily. It regards the self-governing island as part of its territory.

There will also be criticism from Republicans and some Democrats in Congress who have strongly backed the sales of 66 F-16 C/D fighters that Taiwan wants, in addition to the upgrades of the 145 F-16 A/Bs that the U.S. sold it in the 1990s.

There were no immediate details on the package of upgrades the U.S. is providing for the A/Bs. But even if it includes sophisticated radar, avionics and missile systems, Taiwan’s air force will still lag far behind its Chinese counterpart, which is equipped with state-of-the-art jet fighters.

A Pentagon report issued last year painted a grim picture of Taiwan’s air defense capabilities, saying many of the island’s 400 combat aircraft would not be available to help withstand an attack from the mainland.

Wang Kao-cheng, a military expert at Taipei’s Tamkang University, said Taiwan’s air defenses could get some lift from the upgrade, but the island is still at a profound disadvantage with Beijing in the number of third-generation warplanes it has at its disposal.

“Taiwan has fallen behind in air superiority as of now, not to mention the fact that China is developing the fourth-generation stealth fighters, which could be very powerful,” Wang said. “The upgrade program will not fill the vacuum left over by the absence of the C/Ds.”

On Friday, Republican Sen. John Cornyn of Texas, where the Lockheed Martin plant that would build the F-16s is located, said the decision would be a slap in the face to strong ally Taiwan.

Howard Berman, the ranking Democrat on the House of Representatives Foreign Affairs Committee, called it a “half-measure.” He said Taiwan needed more advanced fighter aircraft to defend itself against increasing Chinese military threat.

China and Taiwan split amid civil war in 1949. While Taiwan’s relations with the mainland have greatly improved in the past three years and tensions across the Taiwan Strait are their lowest in six decades, China’s military buildup has carried on apace.

The United States is legally obligated to sell weapons to Taiwan for its self-defense. The last major arms sale announced in early 2010 prompted China to cut military ties with the U.S. for several months.

Taiwan’s Defense Ministry said it had no immediate comment on the U.S. F-16 decision.

China’s Defense Ministry and Ministry of Foreign Affairs did not respond immediately to faxes asking for comment, and calls to the Taiwan Affairs Office rang unanswered Monday.

The official China Daily newspaper had a front-page article Monday warning that an arms sale would “spark strong reaction.”

It quoted Tao Wenzhao, a senior researcher at Tsinghua University in Beijing, as saying “the (arms sale) hurts China’s core interests. And to keep on doing the wrong thing for 30 years just doesn’t make it right.”

China temporarily suspended military exchanges with the U.S. last year after the Obama administration notified Congress it was making $6.4 billion in weapons available to Taiwan, including missiles, Black Hawk helicopters, information distribution systems and two Osprey Class Mine Hunting Ships.

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As many as 9 million Americans have their identities stolen each year, according to the Federal Trade Commission. Here are tips from the FTC, National Consumers League and Gibson Research on avoiding identity theft:

Police say rioters fired gunshots at unarmed officers and a police helicopter during this month’s disturbances in the English city of Birmingham.

West Midlands Police released footage Saturday showing masked men firing shots during riots on Aug. 9.

The force said 11 shots were fired. Chief Constable Chris Sims called it “a concerted and organized attempt to kill or injure police officers.”

Police also said they had arrested an eighth suspect over the deaths of three men run down by a car in Birmingham as they protected shops from looters fast cash loans.

Four people have already been charged with murdering Shazad Ali, Abdul Musavir and Haroon Jahan.

More than 1,300 people have been charged over the riots that flared in London and other English cities for four nights.

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The taint of a hacking scandal is creeping closer to media baron Rupert Murdoch.

New documents published by U.K. lawmakers investigating Britain’s phone-hacking scandal apparently contradict claims made by the News Corp. chief’s former right-hand man and cast doubt on his son James Murdoch’s testimony before Parliament.

Among them is a letter claiming that illegal espionage was pervasive at Murdoch’s now-defunct News of the World tabloid.

Former Murdoch confidante Les Hinton said in 2009 that he’d seen no evidence that phone hacking had spread beyond a single rogue reporter at the tabloid. Yet Hinton is among those copied in on the explosive letter.

Three former lieutenants are also challenging assertions by James Murdoch that he wasn’t told the full facts about the scandal.

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Police investigating phone hacking and police bribery at defunct British tabloid News of the World on Tuesday arrested a man, believed to be a former executive at the newspaper.

The Metropolitan Police said a 71-year-old man had been arrested by appointment Tuesday morning at a London police station. They did not name him, in keeping with British police practice of not identifying suspects who have not been charged,

Sky News, which is 39 percent owned by the newspaper’s parent company, News Corp. identified him as former News of the World managing editor Stuart Kuttner.

He is in custody and being questioned on suspicion of conspiring to intercept communications _ phone hacking _ and suspicion of corruption.

Detectives investigating claims the Rupert Murdoch-owned newspaper illegally eavesdropped on the phone messages of celebrities, politicians and even crime victims have previously arrested 10 people, including Murdoch’s British newspaper chief Rebekah Brooks and Andy Coulson, a former News of the World editor who went on to be Prime Minister David Cameron’s communications chief check cash advance.

Coulson was the paper’s editor when royal reporter Clive Goodman and private investigator Glenn Mulcaire were arrested and jailed in 2007 for hacking the phones of royal staff. The newspaper claimed for years that hacking was limited to those two rogue staff, but have now admitted it was more widespread.

All those arrested have been released on bail and no one has yet been charged.

(This version adds details, corrects suspect’s age in light of new information from police.)

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Japan says the crippled reactors at its tsunami-damaged nuclear power plant have reached stability more than four months ago after the disaster.

Trade and industry minister Banri Kaieda also says the plant operators are making steady progress to bring the reactors to a cold shutdown within six months.

Officials describing progress at the plant on Tuesday said radiation around the Fukushima Dai-ichi plant has decreased from peak levels.

Officials based their assessment on several milestones. Temperatures at the bottom of reactor pressure vessels are no longer climbing. A makeshift system to process contaminated water works properly after initial problems. And nitrogen injections are helping prevent more explosions.

The damage at the plant caused by the March 11 tsunami triggered the world’s worst nuclear crisis since Chernobyl.

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The top lawyer for the National Labor Relations Board told a congressional committee Friday that while an NLRB complaint against Boeing Co. may make South Carolina workers feel vulnerable and anxious, the legal action is aimed at protecting the rights of workers everywhere.

The NLRB is suing the aeronautics giant alleging the manufacturer located its new 787 jet assembly line in South Carolina to retaliate against union workers in Washington state who went on strike in 2008.

The congressional hearing is the latest episode in a dispute between the NLRB, which has a majority of Democratic appointees, and GOP lawmakers and Boeing. The NLRB wants that work returned to Washington state, even though the company opened its $750 million South Carolina plant last week.

“Boeing has every right to manufacture planes in South Carolina, or anywhere else, for that matter, as long as those decisions are based on legitimate business considerations,” Lafe Solomon, the agency’s acting general counsel, told the House Committee on Oversight and Government Relations meeting in South Carolina.

South Carolina’s Republican Gov. Nikki Haley, who with 15 other GOP governors asked that the complaint be dismissed, called the complaint “an attack on our employers trying to keep business in America.”

The plant represents the single largest industrial investment in the history of South Carolina, a right-to-work state.

The NLRB complaint went before a judge in Seattle earlier in the week and an attorney for Boeing asked that it be dismissed, adding it had cast a shadow over the company’s employees, supplies and investments. The company said that no one has lost a job in Washington state and that Boeing has added more than 3,000 jobs at its assembly site in Everett, Wash.

South Carolina Attorney General Alan Wilson called the complaint “the shot heard around the business world” and said it could allow the NLRB to decide where companies invest business capital loan for people with bad credit.

Haley warned that workers across the nation could suffer if companies take business overseas.

“The retaliation is coming from the president. The retaliation is coming from the NLRB. It is not coming from Boeing,” she said.

Solomon told the panel’s Republican chairman, Darrell Issa of California, that the White House played no role in his decision to bring the complaint.

Before the hearing began, a small group of protesters gathered outside holding signs saying Chicago-based Boeing must create jobs legally.

Georgette Carr, who has worked as a union dock worker for 10 years, said South Carolina needs good jobs but “companies that come here need to play by the rules.”

Democrats on the committee strongly questioned why the panel was holding a field hearing the same week the NLRB complaint went to court.

“I am very concerned about the timing. His (Solomon’s) testimony today raises questions about the due process rights of litigants,” said U.S. Rep. Carolyn Malony of New York.

Haley has made no secret she opposes unions.

The International Association of Machinists and AFL-CIO sued earlier this year, asking for a court order telling Haley and state Department of Labor director Catherine Templeton to remain neutral in union matters in South Carolina.

The lawsuit stemmed from several remarks, including those Haley made last December when she nominated Templeton. Haley said her background would be helpful in state fights against unions, particularly at the new Boeing plant.

A federal judge is expected to rule next week on a motion to dismiss that case.

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The Travelers Companies Inc. says that severe weather in April and May will likely cost the company between $1 billion and $1.05 billion.

Travelers said Friday the cost estimate stems from several catastrophes including tornadoes and hail storms in the Midwest and Southeast where it had issued business and personal insurance policies. The amount is after taxes and reinsurance.

Due to the costly damages, Travelers says it will limit share repurchases to less than $250 million in the second quarter and another $400 million in excess of operating income for the second half of the year payday loan.

Its shares sank $2.03, or 3.3 percent, to $59.05 in morning trading.

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