Colgate Palmolive to close KCK plant

Colgate Palmolive Co. said Wednesday it plans to close a historic soap-making plant in Kansas City, Kan., that currently employs about 250 people.

The New York-based company said in a statement that it was outsourcing the production of bar soap to “an established U.S. third party starting in third quarter 2005,” and that the Kansas City plant would close in late 2006.

Colgate officials say they plan to meet with the union representing plant employees and intend to offer severance packages and transition assistance.

The move is part of a four-year restructuring plan announced in December. With the personal products industry struggling with higher costs, the company said it would cut its worldwide work force by about 12 percent, or 4,400 jobs, and close a third of its factories.

Economy

Consumer prices dip; factory output rises

Consumer prices in May posted the first decline in 10 months as energy costs staged a sizable retreat. At the same time, the pace of activity at U.S. factories jumped sharply.

A variety of reports released Wednesday depicted an economy shaking off the effects of an oil price surge in the early spring and resuming solid growth.

The Federal Reserve released a new nationwide survey of business conditions that described the economy as expanding at a healthy pace in recent weeks, with the Fed’s 12 regional banks describing activity with such words as “moderate,” “solid” and “well sustained.”

The Fed report, which will serve as the basis for discussions when policy-makers meet June 29-30, said manufacturing had continued to expand with labor markets improving in most districts.

But private analysts cautioned that even with May’s big drop in energy prices and the rebound in industrial production, the economy remained vulnerable to further oil price hikes in the months ahead.

Energy

OPEC pledges to boost output

OPEC failed to cool the sizzling global energy market Wednesday with pledges to increase its crude production target by half a million barrels a day and consider a second boost of that size later this year.

Instead, oil prices rose following the cartel’s decision to raise its daily output ceiling from 27.5 million barrels to 28 million barrels beginning July 1. Oil futures are running about 50 percent higher than a year ago.

Analysts derided Wednesday’s decision by the 11-nation Organization of Petroleum Exporting Countries as purely symbolic, since the group already is exceeding the higher quota. Analysts said the move wouldn’t provide any meaningful relief to drivers coping with high prices at the gas pumps.

Five dissident unions seek AFL-CIO breakup

Five dissident unions moved a step closer Wednesday to breaking up the AFL-CIO, forming a coalition aimed at pressuring federation president John Sweeney and boosting labor’s dwindling ranks.

The possible weakening or even demise of the organization has leaders of the Democratic Party nervous because the party depends on the AFL-CIO to mobilize millions of dollars and turn out voters.

As the parent organization for dozens of union affiliates, the AFL-CIO has some 13 million members. The unions in the new coalition represent about five million of those workers.

The Change to Win Coalition is comprised of unions that have made no secret of their unhappiness with Sweeney.

The complaining unions say the AFL-CIO has wasted time and money on politics and has not done enough to combat a steady decline in union membership since the heyday of labor leaders like George Meany, Walter Reuther and John L. Lewis in the mid-20th century.

Health

Flu shot firm cuts forecast

Chiron Corp. said Wednesday it may not deliver as many flu shots this year as it had promised, prompting the beleaguered biotechnology company to cut its 2005 financial forecast.

The Emeryville, Calif.-based company, one of only two major makers of the nation’s flu vaccine, caused a public health scare in October when it failed to deliver 50 million shots at the beginning of flu season because of manufacturing problems. That was about half the nation’s expected vaccine supply.

Chiron said its Liverpool, England, factory is still plagued with problems and that it now plans to produce 18 million to 26 million doses of its Fluvirin vaccine for the 2005-2006 season, down from a previous forecast of 25 million to 30 million doses.