Business news in brief

QUOTE OF THE DAY “There is a fair amount of strength in the economy. Consumer spending is on solid ground.” Nariman Behravesh, IHS Inc. chief economist Article, 1DFord to invest $80 million in truck plant

LOUISVILLE, Ky. - Ford Motor Co. said Thursday that it plans to invest $80 million in its Kentucky truck plant to churn out more F-Series Super Duty trucks. The ramped-up production will add 350 jobs, the automaker said.

The investment will increase production capacity by 15 percent, or about 55,000 pickups, as the company retools and upgrades the plant, Ford said. Improvements are planned in the body and paint shops, it said.

“This is a sizable leap forward in capacity,” said Joe Hinrichs, Ford’s president of the Americas.

Ford said the increased plant capacity is needed to keep pace with demand for the truck line. Truck sales are a good gauge of the broader economy’s health, Hinrichs said.

“This is really a testament to the underlying strength of the U.S. economy and demand for our industry-leading F-Series trucks,” he said.

The truck plant, which opened in 1969, employs about 4,000 people. The plant produces F-250, F-350, F-450 and F-550 Super Duty pickups, as well as the Ford Expedition and Lincoln Navigator.

With the increased production in 2014, the plant will build the 5 millionth Ford F-Series Super Duty truck, the company said. The truck was introduced in 1999.

30-year mortgage rate drops to 4.32%

WASHINGTON - Average U.S. interest rates for fixed mortgages slipped this week as new data showed a decline in home prices in November and a drop in new home sales last month.

Mortgage buyer Freddie Mac said Thursday that the average for the 30-year loan fell to 4.32 percent from 4.39 percent last week. The average for the 15-year loan eased to 3.40 percent from 3.44 percent.

Mortgage rates have risen about a full percentage point since hitting record lows about a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month in bond purchases. Deeming the economy to be gaining strength, the Fed pushed ahead Wednesday with a plan to reduce the bond purchases, which have kept long-term interest rates low.

To calculate average mortgage rates, Freddie Mac, the Federal Home Loan Mortgage Corp., surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan declined to 0.6 point from 0.7 point.

  • The Associated Press

Vatican bank: Sorry for ‘nasty letters’

VATICAN CITY - Dozens and perhaps hundreds of widows and Vatican pensioners recently got a rude surprise: The Vatican bank told them they had to close their accounts or risk losing access to their money - all in the name of Pope Francis’ reform efforts.

The bank now says it was all a “technical error” and that the widows and pensioners are being kept on as clients. That reversal came despite the bank’s highly publicized plan to close so-called lay accounts as it tries to mend relations with Italian authorities who have suspected that Italians were using the bank as a tax haven.

It’s all come as a big embarrassment for an institution that is trying to fend off accusations of mismanagement and corruption.

“In some cases old ladies got nasty letters,” said Max Hohenberg, spokesman for the Institute for Religious Works. “The fact that a few dozen people were categorized in the wrong way and hence got a letter which was incorrect is a mistake which we have apologized for.”

Bank President Ernst Von Freyberg penned a terse letter to these clients Sept. 19, telling them to go to the bank before Nov. 30 to transfer their money out because they no longer fit the criteria of account-holders set by the board. He warned somewhat ominously that if they didn’t meet the deadline, their money would become subject to the “internal dispositions” of the bank. He didn’t say what those “internal dispositions” were.

  • The Associated Press

China manufacturing falls to 6-month low

BEIJING - Manufacturing in China contracted for the first time in six months in January, adding to stresses in the world’s second-biggest economy, a private survey of purchasing managers indicated.

The Purchasing Managers’ Index fell to 49.5 from 50.5 in December, HSBC Holdings PLC and Markit Economics said in a statement Thursday. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

The Australian dollar and copper fell as the survey showed companies cutting jobs at the fastest rate in almost five years. Authorities are grappling with risks of financial defaults and housing-market overheating, while trying to avoid a slowdown to below the 7.2 percent growth rate that Chinese Premier Li Keqiang says is needed to support job creation.

“China’s growth momentum will continue to weaken in coming quarters,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said in a note. “The market continues to underestimate the degree of the ongoing slowdown and further negative surprises are in stock as the year progresses.”Visa CEO dismisses Bitcoin as a threat

Visa Inc. Chief Executive Officer Charlie Scharf said he’s more confident in traditional payment networks than in virtual currency Bitcoin.

“There are certainly some interesting things about Bitcoin and other things like it, but there are also a great deal of complexities,” Scharf said Thursday during a conference call to discuss quarterly results.

Payment networks such as Foster City, Calif.-based Visa are safer for consumers because of “the established network rules we have, the understanding of how things operate, understanding who the participants are, the fact that the business that we do has financial institutions on either side of the transaction.”

While Visa will continue to pay attention to developments surrounding Bitcoin, “we feel very comfortable with the business that we have here,” Scharf said.

Visa is the biggest bank-card network. Scharf is a former senior executive at JPMorgan Chase & Co., the largest U.S. bank.

  • Bloomberg News

Business, Pages 28 on 01/31/2014

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