Business Briefs: Unions balk at Volkswagen cuts

Business Briefs: Unions balk at Volkswagen cuts

August 8th, 2014 by Staff Reports and Associated Press in Business Around the Region

A worker cleans a Volkswagen logo.

A worker cleans a Volkswagen logo.

Photo by Associated Press /Times Free Press.

Unions balk at Volkswagen cuts

Volkswagen's $6.68 billion cost-cutting plan has suffered a major setback after labor leaders forced management to ax detailed proposals drawn up by consultants, sources told Reuters on Thursday. The cost-cutting target itself still stands, the sources said.

The move underlines how much relations between management and workers have soured at Europe's biggest carmaker, which is struggling to raise profits amid stagnating emerging markets and low growth at home. Last month, VW said it would spend $900 million on a new sport utility vehicle, including $600 million in Chattanooga. Volkswagen will hire 2,000 workers in Chattanooga to build a new sport utility vehicle to bolster U.S. sales.

NAR economist talks to Realtors

The chief economist for the National Association of Realtors will give his real estate outlook at a luncheon Tuesday at The Chattanoogan hotel.

The Greater Chattanooga Association of Realtors and the Home Builders Association of Greater Chattanooga will host Dr. Lawrence Yun, who will provide a national perspective of the trends impacting the housing market. Those wanting to attend may register for the $20 luncheon, which begins at 11:30 a.m., at

Georgia taxes up 5.5 percent

Georgia's net tax collections in July rose by 5.5 percent over a year ago to nearly $1.49 billion.

Gov. Nathan Deal said the $78 million gain for the month reflected the improving economy. Individual income taxes were up 1.5 percent, sales and use taxes were up 4.7 percent and corporate income taxes were up 5.9 percent over the same period a year ago.

Gross tax revenue deposits in Georgia were up 5.5 percent in July to $1.95 billion, Deal said.

Mortgage rates rise slightly

Average long-term U.S. mortgage rates rose slightly this week but remained near their lows for the year.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year loan inched up to 4.14 percent from 4.12 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, rose to 3.27 percent from 3.23 percent last week.

Mortgage rates are below the levels of a year ago. They have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.

The rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Fed has been trimming its monthly bond purchases. The purchases are set to end in October.

Jobless claims fall to 8-year low

Initial claims for unemployment benefits dropped last week, indicating the labor market is strengthening.

Applications for jobless benefits fell 14,000 from the prior week to 289,000, the Labor Department said Thursday. Economists had expected new claims to rise.

The low level of claims suggests the labor market has "shifted to a higher gear," Credit Suisse analyst Xiao Cui said in a research note.

The four-week moving average, which erases some of the volatility in the numbers, dropped 4,000 to 293,500 -- the lowest level since February 2006, well before the Great Recession.