Business & Finance
Business and industry were struggling to come to grips with the economic impact of hurricane Katrina, and not just along the Gulf Coast, where risk assessors are estimating $25 billion in potential claims. The airlines and even motorists filling up at gas pumps could feel the effects well into the future from a surge in prices due to disruptions to offshore oil operations and refineries, analysts said. Crude oil futures were back above $70 a barrel in trading Wednesday. The already tenuous finances of some major airlines were being aggravated further, and Delta and Northwest could well be pushed into bankruptcy, the analysts warned. Meanwhile, snarled Mississippi River traffic and out-of-commission port facilities in New Orleans could force shippers to turn to costlier rail and trucking options to move their cargo. Cotton and sugar cane yields in the affected states were expected to drop because of Katrina. Industry officials said it's too soon to estimate the damage to port facilities in New Orleans, which handles half the shipments of corn, soybeans, and other grains for export. While harvests in some cases are still weeks away, the National Feed and Grain Association said it had reports that electricity may not be restored for a month or more to operators of storage facilities.
Boeing Co. was anxiously awaiting Thursday's vote by its unionized mechanics on what the company calls its "best and final" contract offer. The 18,000-member International Association of Machinists has recommended rejection of the three-year deal because it offers a pension benefit increase that is smaller than had been sought. Boeing has billions of dollars worth of new orders, and a strike would short-circuit its ability to fulfill them, potentially causing customers to shift their business to archrival Airbus, a spokesman said. "There's just no way we would recover," he said.
Major Chinese companies were at the center of two new multibillion-dollar developments:
• A consortium led by Goldman Sachs agreed to pay $3 billion for a 10 percent stake in the communist nation's largest lender, Industrial & Commercial Bank. The deal is the second of its type in less than a month. Earlier, Merrill Lynch & Co. and two partners agreed to buy a 10 percent stake in the Bank of China.
• A $2.44 billion initial public offering was announced by PetroChina Co. and its parent, China National Petroleum Corp. (CNPC), amid speculation that they are preparing to pursue more acquisitions of foreign energy producers. Early last week, CNPC won the bidding for PetroKazakh-stan in a deal valued at $2.4 billion.