Business news

Oil prices rise after terror warning

New York Crude oil prices in New York surged above $40 a barrel Thursday for the first time in more than a month after the Department of Homeland Security signaled terrorists were scheming to disrupt U.S. elections. The rally reinforced the market’s pattern of buying whenever terrorism worries surface, despite government data showing across-the-board builds in petroleum inventories last week. “Credible reporting now indicates that al-Qaida is moving forward with its plans to carry out a large-scale attack in the United States in an effort to disrupt our democratic process,” Homeland Security Secretary Tom Ridge said Thursday at a press conference. August crude futures jumped $1.25, or 3 percent, to settle at $40.33 per barrel on the New York Mercantile Exchange. The rally was fed by a technical rise earlier as prices neared the $40 benchmark, as well as a slimmer-than-expected rise in U.S. commercial oil inventories and the highest gasoline demand in four weeks.

College costs to rise next year, study says

Despite a recovering economy and exasperation in Congress, college tuition will be up sharply again next year — though experts say that once financial aid is factored in, students may not be worse off. Private institutions, which account for about half of American colleges and educate about 20 percent of four-year college students, will raise tuition on average 6 percent in 2004-2005 to just over $18,000, according to a survey released Thursday by the National Association of Independent Colleges and Universities. Public colleges, only slowly emerging from years of state budget cuts, will probably charge about 10 percent more on average next year, or $5,100, estimated Travis Reindle, director of state policy analysis at the American Association of State Colleges and Universities. The only good news for parents and students is that, like cruise lines and automobile dealers, colleges don’t always charge the sticker price. NAICU says 86 percent of students at private colleges pay less than full fare. Last year, when private colleges also increased tuition 6 percent, they increased financial aid for tuition and other expenses such as room and board by 15 percent.

US, China resolve semiconductor rift

Washington The Bush administration announced Thursday that China has agreed to drop tax preferences which the United States maintains puts American semiconductor manufacturers at a competitive disadvantage. Trade Representative Robert Zoellick told a news conference that China had agreed not to certify any new Chinese semiconductor products or manufacturers for tax refunds. By next April, China will drop existing tax preferences for Chinese semiconductors, he said. In March, the United States had filed a case against China before the World Trade Organization, an effort by the Bush administration to deal with America’s surging trade deficit with China. That deficit last year hit $124 billion, the largest gap the United States has ever recorded with any nation. The U.S. complaint contended that China was violating WTO rules against discriminatory treatment by providing a preferential tax rate for integrated computer circuits produced in China that is much lower than the tax paid by U.S. and other foreign companies.

Saab and Subaru to partner on vehicle

Detroit Saab Automobile AB and the Japanese maker of Subaru vehicles will collaborate on development of a new crossover vehicle for the U.S. and Canadian markets, their second such partnership, the two companies said Thursday. Saab, a unit of General Motors Corp., and Fuji Heavy Industries Ltd. already have partnered on the Saab 9-2X premium small car that went on sale recently in the United States and Canada. The 9-2X is built on the same platform as the Subaru Impreza. The new crossover will be built at FHI’s U.S. manufacturing facility in Lafayette, Ind., where Fuji currently builds the Legacy sedan and wagon, Outback sedan and wagon and Baja light truck. Saab said no date had been set for the start of production, although it is expected to be at least a year away.

Regulators OK plan on phone disruption

Washington Federal regulators unanimously approved a plan Thursday to eliminate disruption to fire and police communication systems by Nextel Communications Inc. cell phones. The decision by the Federal Communications Commission would give Nextel Communications highly sought airwaves in a band that won’t disrupt the radio communications of emergency officials. In exchange, Nextel will abandon some of its airwaves in the 800 megahertz range, where the company’s cell phones are causing interference. Nextel must set aside $2.5 billion to make the switch. Verizon Wireless, the nation’s largest cell phone company, is expected to mount a legal challenge to the plan. Verizon claims the swap is a giveaway to Nextel because the spectrum it will receive in the swap is worth many billions of dollars. That spectrum should be offered at public auction, the company says.

Union merger creates 840,000-person group

Chicago Two national labor unions representing hospitality and textile workers agreed to merge Thursday, creating an organization with more than 800,000 active workers and retirees. About 1,500 delegates from both the Union of Needletrades, Industrial and Textile Employees (UNITE) and the Hotel Employees and Restaurant Employees (HERE) voted to combine the two labor groups at a meeting at a Chicago hotel. The new union, called UNITE HERE, boasts an active membership of more than 440,000 workers, as well as more than 400,000 retirees, in both the United States and Canada, union spokeswoman Amanda Cooper said. She said the new union will be better positioned to negotiate on behalf of its members. The combined group will represent workers in the apparel and textiles industries, along with hospitality workers in the food service, hotel, restaurant, casino and airport industries.