BUSINESS BRIEFS
UAW leaders endorse contract
Advertiser Staff and News Services
DETROIT — Local union leaders yesterday endorsed a tentative agreement between General Motors Corp. and the United Auto Workers that requires GM to pay out at least $35 billion for retiree healthcare and offers an unprecedented number of promises for future work at U.S. plants, according to a summary of the agreement provided by the UAW.
The agreement still is subject to a vote of GM's 74,000 UAW members, which should be completed by Oct. 10. UAW President Ron Gettelfinger said he's confident members will support the agreement and that Ford Motor Co. and Chrysler LLC will match many of its terms.
GM spokesman Dan Flores said both UAW workers and the company benefit from the agreement.
GM didn't release any specifics of the contract yesterday; the company typically waits until the contract is ratified to make detailed comments.
Gettelfinger said he hadn't yet decided whether the union would negotiate with Ford or Chrysler next, but he expects to make that decision next week.
DOLLAR AT RECORD LOW AGAINST EURO
The dollar fell to a record low against the euro for the seventh consecutive session while the Canadian dollar hit a 31-year high as inflation data raised expectations that the Federal Reserve Bank would again lower interest rates.
The 13-nation European currency reached $1.4274 in late New York trading — exceeding its previous peak of $1.4189, reached Thursday.
The euro had bought $1.4160 in New York late Thursday.
The euro spiked above $1.42 after the release of data showing that a key measure of inflation in the U.S. eased last month to the slowest pace in 3 1/2 years. The inflation data boosted hopes that the Fed would cut interest rates despite surprisingly positive consumer spending data.
The 1.8-percent rise in core inflation over the past year, which excluded energy and food, was within the Fed's comfort zone for core price increases of between 1 percent and 2 percent, meaning they could cut again.
MORTGAGE FAILURES CLOSE NETBANK
WASHINGTON — NetBank Inc., an online bank with $2.5 billion in assets, was shut down by the government yesterday because of an excessive level of mortgage defaults.
It was the largest savings and loan failure since the tail end of the industry's crisis more than 14 years ago. Federal regulators appointed the Federal Deposit Insurance Corp. as a receiver for Alpharetta, Ga.-based NetBank.
Customers with less than $100,000 deposited with NetBank will be protected by FDIC insurance.
While dozens of mortgage companies have closed due to soaring defaults of home loans made to borrowers with weak, or subprime, credit, those problems previously had occurred among non-bank lenders such as New Century Financial Corp. NetBank is federally regulated.
ECONOMIC WOES HURT AUTO SALES
DETROIT — September auto sales are expected to be weak due to a credit crunch, high gas prices and the troubled housing market, reflecting an overall slowdown for the year but little effect from the brief strike against General Motors, industry analysts say.
Indeed, the impact of the two-day strike could be small in what could become the most sluggish year for sales since 1998, according to industry experts.
Jesse Toprak, chief economist for the auto information site Edmunds.com, predicts Honda Motor Co. will be the only automaker to report an increase in sales, helped by the arrival of the new 2008 Honda Accord. Automakers are scheduled to report September sales Tuesday.
Auto sales will probably be down 4 percent compared to last September, JPMorgan auto analyst Himanshu Patel said.
Patel predicts Ford Motor Co. will be among the weakest performers, with double-digit declines from last September, as the automaker cut back on incentives as well as sales to rental car companies. Patel said GM should be flat while Chrysler LLC will also see some declines.
