Union Rejects Boeing's Final Offer
The union representing more than 18,000 Boeing machinists recommended that they reject what the company called its final offer, which includes a 10 percent increase in pension payouts but would pass some health care costs to the workers.
Union members will vote on the offer Thursday. Their contract with Boeing expires Friday.
The proposed pension increase was less than the union demanded. That and higher medical premiums and drug costs, and revised work rules that would require fewer workers, led International Association of Machinists and Aerospace Workers leaders to recommend a strike.
Factory Orders Decline in July
The value of U.S. factory orders declined in July for the first time since January, reflecting less demand for aircraft, computers and machinery. Orders fell 1.9 percent during the month, the most since April 2004, after a 0.9 percent increase in June, the Commerce Department said. Excluding transportation equipment, bookings dropped 0.5 percent after a 1.5 percent gain.
GM Recalls Pickups, SUVs
General Motors recalled about 800,000 sport utility vehicles and pickups in 14 northern states because corrosion was affecting their antilock brake systems, leading to more than 200 low-speed crashes. GM said the recall involved the 1999-2002 model years of the Chevrolet Avalanche, Chevrolet Silverado, Chevrolet Tahoe, GMC Sierra, GMC Yukon and GMC Yukon XL.
The National Highway Traffic Safety Administration opened an investigation in late April of more than 1.2 million GM pickups and SUVs in 20 states because of questions over the antilock brakes. The investigation is pending.
Hedge Fund Probe Widens
The Arizona attorney general seized $101 million that may have come from Bayou Management, a Connecticut-based hedge fund under investigation for fraud. The money, in a Wachovia account under the name of Majestic Capital Management, was seized after officials detected rapid transfers of money.
Investors received a July 27 letter from Bayou's founder, Samuel Israel III, announcing that the Bayou funds would return their money and close, but investors claim they have not received refunds and cannot contact the company.
Connecticut officials said they will form a task force to look into making changes to the hedge fund industry in response to the possible collapse of Bayou Group.
Boies Quits as Adelphia Counsel
Boies, Schiller & Flexner, the law firm led by litigator David Boies, quit as counsel to bankrupt Adelphia Communications after the discovery of financial ties between his family and Amici, which was hired to store and manage Adelphia's bankruptcy documents, according to a court filing. Boies Schiller attorney Philip C. Korologos said in the filing that the firm has "no direct or indirect ownership interest in Amici." "We resigned because we were asked to resign," Korologos said, not because of improper activity.
Guilty Pleas in Market Timing
Two former executives of Arizona-based Security Trust pleaded guilty to criminal charges in a mutual fund investigation. New York state Attorney General Eliot L. Spitzer accused former chief executive Grant Seeger and former president William Kenyon of facilitating and participating in fraudulent mutual fund late trading and market timing schemes by a group of related hedge funds, including Canary Capital Management.
Their lawyers said the plea agreement will result in no prison time, but they will get probation and each pay a $50,000 fine. Seeger's attorney, Susan Necheles, said the defendants admitted to setting up accounts through which market-timing trades were done, not conducting the late trades.
DHB to Replace Police Vests
DHB Industries, the No. 2 U.S. supplier of police body armor, said it will pay as much as $60 million in the third quarter to replace vests that lost their safety certification. Customers will be offered replacement body armor for products containing Zylon fiber, DHB's finance chief Dawn M. Schlegel said. A Justice Department agency last week suspended its safety certification of vests containing Zylon.
United Outsources 777 Upkeep
United Airlines hired a Chinese company for major maintenance of its Boeing 777 aircraft. The estimated value of the five-year contract is more than $30 million, said He Li, chief executive of Aircraft Maintenance and Engineering Corp., a Beijing-based joint venture of Deutsche Lufthansa and Air China.
United didn't say how much it expects the contract to save. The airline is cutting costs as it prepares to exit bankruptcy protection by early next year.
Compiled from staff and news service reports.