Business Desk
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

AIRLINES
BOEING, UNION REACH TENTATIVE PACT
SEATTLE -Boeing and its Machinists union have reached a tentative contract agreement, which if approved would end a three-week strike that shut down the company’s airplane production. A spokeswoman for Machinists District Lodge 751 in Seattle, Connie Kelliher, confirmed the agreement yesterday. About 18,400 Machinists who assemble Boeing’s commercial airplanes and some key components walked off the job on September 2, forcing the Chicago-based company to immediately stop its airplane production.
Machinists in the Puget Sound area, Gresham, Ore., and Wichita, Kan., overwhelmingly rejected a three-year contract proposal their leaders had called “insulting.”
Early contract talks had been troubled by disputes over health premiums and other issues. The workers represented currently receive an average of $59,000 a year.
– Associated Press
ECONOMY
HURRICANES WILL HAVE ‘RELATIVELY MODEST’ EFFECT
The two hurricanes that battered the South over the past month will have a “relatively modest” effect on the world’s largest economy, the president’s chief economic adviser said.
“I remain pretty optimistic about the economy,” Ben Bernanke, chairman of the White House Council of Economic advisers, said in a speech at a bankers’ conference in Washington yesterday. Still, oil prices, which have risen by about 50% since the start of the year, remain a risk to growth, Mr. Bernanke said. “Obviously, there are a lot of challenges,” he said. Some 30% of American refining capacity was shut this weekend as Hurricane Rita descended on the Texas coast just three weeks after Hurricane Katrina devastated parts of Louisiana, Mississippi and Alabama. The federal government will lead in the rebuilding of infrastructure in the region, and will count on the private sector to “take the leadership in reconstruction” of other damaged property, Mr. Bernanke said.
– Bloomberg News
CONSUMER CONFIDENCE SLUMPS
Consumer confidence tumbled this month as fuel prices surged, threatening to sap spending in the aftermath of Hurricanes Katrina and Rita. Before the storms, Americans bought homes at a near-record pace and business investment on new equipment rose, reports this week may show.
Measures of consumer confidence fell in September to at least a one-year low, according to the median estimates of economists surveyed by Bloomberg News. Sales of existing homes exceeded a 7 million annual pace for a fifth month in August, purchases of new homes were the second-highest ever and orders for durable goods rose, the survey showed.
Prices of gasoline, natural gas, and crude oil soared this month as Katrina damaged Gulf Coast fuel production and Rita threatened to disrupt supply even more.
Confidence as measured by the New York-based Conference Board slumped to 95 this month, the lowest since November, from 105.6 in August, according to the median estimate of 51 economists surveyed by Bloomberg News ahead of a September 27 report. The drop would be the biggest since February 2003, a month before the start of the war with Iraq.
– Bloomberg News
COSMETICS
LAUDER HEIR SOLD SHARES AHEAD OF REPORT
An Estee Lauder heir and executive, Ronald Lauder, reported the sale of 105,000 company shares in the two weeks before the cosmetics company warned of first-quarter earnings “significantly below” prior-year results.
The cosmetics company’s shares fell $4, or 9.9%, the day following the announcement, which was made after the close of trading last Monday.
Mr. Lauder, son of founder Estee Lauder and chairman of the company’s Clinique Labs unit, disclosed in a regulatory filing that he sold 80,000 shares on September 14 and September 15 for an average price of $39.91, reaping $3.2 million in the process. A week earlier, he reported the sale of 25,000 shares for $41.10 a share, or about $1 million.
In the announcement, the New York company attributed its earnings outlook to soft sales in North America, the cost of launching products, and its timing of the expensing of stock-based compensation. Estee Lauder shares closed last Tuesday at $36.48 apiece. The stock traded recently at $35.44 a share. At Tuesday’s closing price, Mr. Lauder’s 105,000 shares would have been worth $3.8 million, or $389,523 less than what he reported getting for the shares.
– Dow Jones Newswires
AUTOMAKERS
PORSCHE TO BUY 20% OF VOLKSWAGEN
Porsche, maker of the Boxster sports car, plans to buy 20% of Volkswagen’s common shares to prevent a hostile takeover of Europe’s largest carmaker and to strengthen the companies’ partnership.
Porsche will pay for the Volkswagen stock out of existing capital, the Stuttgart, Germany-based company said yesterday. The investment would be worth about $4 billion.
Volkswagen, based in Wolfsburg, Germany, welcomes Porsche interest in “a strategic stake,” a Volkswagen spokesman, Frank Gaube, said.
Volkswagen and Porsche already cooperate on building sport-utility vehicles and developing hybrid gasoline-electric engines. The companies have blood connections as well. The family of the chairman of Volkswagen, Ferdinand Piech, controls Porsche. Speculation on September 22 that billionaire investor Kirk Kerkorian might buy a Volkswagen stake made the shares rise the most in almost a year.
– Bloomberg News