Briefcase

Ford, UAW contract drops raises for profit sharing

DETROIT – The union that once set the gold standard for American wages is giving up pay raises in exchange for a piece of the auto industry’s profits and the promise of thousands of new jobs.

Under agreements struck with Ford and General Motors, most of the companies’ factory workers will get profit-sharing checks instead of annual raises. They’ll also get a signing bonus. In turn, the automakers will increase their workforces and invest billions more dollars in their factories.

Ford Motor Co. and the UAW agreed on a four-year contract Tuesday, three weeks after the union reached a similar agreement with General Motors Co. The companies are promising at least 17,000 new U.S. jobs over the life of the contracts, and are offering workers signing bonuses and profit-sharing payments. The companies save money because they won’t pay annual raises to their U.S. factory workers and they’ll hire thousands of the new workers at lower wage rates.

UAW President Bob King expects some workers will be unhappy. But he thinks they can live with the terms. GM workers have already ratified their agreement; Ford workers are expected to wrap up voting by Oct. 14.

Associated Press

BNY Mellon sued over foreign transaction rates

ALBANY, N.Y. – New York Attorney General Eric Schneiderman sued Bank of New York Mellon for $2 billion on Tuesday, claiming it earned that amount over 10 years by defrauding clients in foreign currency exchange transactions.

According to Schneiderman’s office, BNY Mellon misrepresented rates it would give currency transactions, providing nearly the worst rates of the trading day instead of the best. The case began with a 2009 whistle-blower complaint followed by an investigation. Clients include public pension funds.

The bank said the lawsuit was “prosecutorial overreach” based on “a fundamental misunderstanding” of the role of custodian banks in the global foreign currency market. BNY Mellon said it is confident it will prevail in the suit, which was filed in state Supreme Court in Manhattan.

Associated Press

Overall factory orders fall, capital goods up in August

WASHINGTON – Businesses ordered more computers, communications equipment and other big-ticket items in August, a hopeful sign for the slumping economy.

Orders for capital goods, which are considered a good measure of business investment plans, rose 0.9 percent in August, the Commerce Department said Tuesday. It was the second gain in three months.

Overall factory orders fell 0.2 percent, after rising a downwardly revised 2.1 percent in July. A sharp decline in orders for autos and auto parts dragged down the overall total. But that follows July’s jump in automotive orders, which was the biggest increase in eight years. Automakers are returning to full production after output was interrupted by Japan’s March 11 earthquake.

Associated Press