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Archive for Saturday, August 31, 2002

Business Briefcase

August 31, 2002

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Wall Street: Markets to be closed

Financial and commodity markets are scheduled to be closed Monday in observance of Labor Day. They are scheduled to reopen Tuesday.

Economy: Consumer spending up; income levels flat in July

Motivated by free financing on cars and merchandise discounts, consumers splurged in July, ratcheting up their spending by the largest percentage in nine months.

At the same time, though, personal income growth stalled, a potential pothole for the struggling economic recovery.

Consumer spending in July rose by a brisk 1 percent, twice as fast as the 0.5 percent increase posted the previous month, the Commerce Department reported Friday.

But Americans' incomes, which includes wages, interest and government benefits, were flat in July, compared with a sizable 0.7 percent advance in June. The weakness in July reflected the stagnant job market. Wages and salaries actually dipped by 0.2 percent.

Arkansas City: Closed beef plant finds possible owner

LeForce Signature Beef recently confirmed that it signed a letter of intent to purchase and reopen bankrupt Future Beef's plant in Arkansas City.

Terms of the deal, which would require the approval of the U.S. Bankruptcy Court in Denver, still were being worked.

Parker, Colo.-based Future Beef's Chapter 11 bankruptcy reorganization was converted to Chapter 7 liquidation on Aug. 16 the same day the Arkansas City plant closed, leaving hundreds of workers without jobs.

Retail: Kmart allowed to dig deeper in investigation

A federal judge granted Kmart Corp. the power to issue subpoenas as it investigates whether management practices and policies led to the retailer's bankruptcy filing.

Kmart also received permission to revise the terms of a $2 billion loan package so it could lose up to four times more money before lenders find the retailer in default.

A financial review by Kmart's management team uncovered a $501 million accounting error related to vendor rebates and allowances this spring.

Former managers could ignore Kmart's requests for information and documentation. But subpoena power gives Kmart the right to talk to them and compel them to turn over documents related to its probe.

Kmart has a distribution center and store in Lawrence.

Union: Midwest Express attendants may strike

Midwest Express flight attendants will be locked out if they walk off their jobs, an airline attorney said Friday. The warning came after the attendant's union authorized a strike and contract talks broke down.

A union spokesman said no flight attendants had walked out as of Friday. The Oak Creek-based airline flies to 51 cities with its subsidiary, Skyway Airlines.

Carol Skornicka, senior vice president and general counsel for Midwest Express, said the airline has filed a lawsuit in U.S. District Court, contending that the walkouts its flight attendants have threatened in their contract dispute are not protected under federal labor laws.

Midwest Express is one of the largest airline carriers operating out of Kansas City International Airport.

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