BUSINESS BRIEFS
Boeing workers reject contract, begin strike today
Associated Press
SEATTLE — Despite a 48-hour contract extension, negotiations between Boeing Co. and Machinists Union officials failed yesterday and the union said a strike was set to begin at 12:01 a.m. PDT today.
When talks broke off, the union sent out a message to members saying: "The strike is on!"
The company said it would not try to assemble planes during the strike.
Boeing spokesman Tim Healy said the company is open to further discussion, but both sides were too far apart to reach agreement. He added no additional talks were scheduled.
Union members on Wednesday voted 80 percent to reject Boeing's final three-year contract offer and 87 percent to go on strike, mainly over job security.
Both sides agreed to the extension at the request of Gov. Chris Gregoire and federal mediators.
Though the company does not intend to assemble airplanes during the strike, it would deliver completed planes and supply customers with spare parts, Scott Carson, president and CEO of Boeing Commercial Airplanes, said in a statement.
Analysts have said a strike could cost Boeing about $100 million per day in deferred revenue. During the last strike — a 24-day walkout in 2005 that was one of the shortest in company history — Boeing was unable to deliver more than two dozen airplanes on schedule.
MORTGAGE DEFAULTS HOBBLING MARKET
WASHINGTON — The source of trouble in the mortgage market has shifted from subprime loans made to borrowers with bad credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.
The Mortgage Bankers Association said yesterday that more than 4 million American homeowners with a mortgage — a record 9 percent — were either behind on their payments or in foreclosure at the end of June.
As the economy falters and home prices keep falling, concern is building about a second wave of mortgage defaults flooding the market through 2010.
OIL PRICES REACH FIVE-MONTH LOW
NEW YORK — Oil prices sank to a five-month low yesterday as a jump in the U.S. unemployment rate signaled to traders that Americans might keep paring back their energy use to save money.
Light, sweet crude for October delivery fell $1.66 to settle at $106.23 a barrel on the New York Mercantile Exchange — its lowest settlement since early April. During the session, it fell as low as $105.13.
GE'S ACCOUNTING MAY LEAD TO FINES
FAIRFIELD, Conn. — General Electric Co. says it has been informed that the Securities and Exchange Commission may recommend fines and other action for possible violations of securities law related to accounting changes the company made.
GE said in a regulatory filing yesterday that the notification, called a "Wells notice," is related to issues dating to several years ago concerning GE's accounting for certain derivatives used for hedging interest rate risk as well as other transactions.
GE said it disagrees with a recommendation for civil action and is cooperating with the SEC.
AIG SCHEME COST INVESTORS $1 BILLION
NEW HAVEN, Conn. — Federal prosecutors in Connecticut say a scheme to manipulate the financial statements of the world's largest insurance company, American International Group Inc., resulted in a loss of more than $1 billion to investors.
Four former executives of General Re Corp. and a former executive of American International Group were convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. They await sentencing.
One of the defendants, Christopher Garand, said in court papers filed Sept. 2 that the government contends the loss from the scheme exceeded $1 billion.
