Friday, November 16, 2001

Business Digest

Burlington to reorganize

        Burlington Industries Inc., once the world's largest textile maker, filed for bankruptcy protection Thursday, saying it had no choice as it struggles to cope with soft sales, heavy debt and increased competition from cheaper Asian imports.

        “This decision was not made lightly and we believe it is in the best interest of the long-term viability of the company,” said George W. Henderson III, chairman and chief executive.

        The company, which has 11,000 employees, said it will reorganize to concentrate on its Lees Carpets business, expand globally through a Hong Kong subsidiary and accelerate manufacturing improvements in its North American operations.

        Thursday's announcement didn't mention layoffs. Burlington operates plants in the United States, Mexico and India, and has about 3,500 workers in factories near its corporate headquarters in Greensboro, N.C.

Job results mixed

        New claims for state unemployment benefits fell for the third straight week, but the number of laid-off Americans collecting benefits still reached an 18-year high.

        The Labor Department reported Thursday that for the workweek ending Nov. 11, new jobless claims fell by a seasonally adjusted 8,000, to 444,000.

        Even though new claims declined for the third straight week, the level of claims remained high enough to suggest that the labor market continues to be weak.

        The number of laid-off workers continuing to receive unemployment benefits climbed to 3.83 million for the workweek ending Nov. 3, indicating that jobless workers are having a difficult time finding employment. That was the highest level since Feb. 12, 1983.

Kennametal cuts jobs

        Kennametal Inc., a maker of industrial tools and equipment, will close three plants and fire 350 workers because of lower sales as U.S. factories produce less.

        The plants in Chicago, Pine Bluff, Ark., and Monticello, Ind., will be closed by the end of March, Kennametal said in a statement. The move will cost as much as $20 million in the fiscal second quarter ending in December. The Latrobe, Pa.-based company has 12,000 employees.

        Kennametal's sales fell 10 percent, to $406.6 million, in the first quarter from a year earlier, according to the National Association of Purchasing Management.

Mortgage rates rise

        Rates for 30-year mortgages edged up this week after having dropped last week to the lowest level in 30 years of record keeping.

        The average interest rate on 30-year fixed-rate mortgages rose to 6.51 percent from 6.45 percent last week, according to a nationwide survey released Thursday by Freddie Mac, the mortgage company.

        Last week's rate of 6.45 percent was the lowest level since Freddie Mac began conducting its nationwide survey in 1971. Even with the uptick, this week's rate of 6.51 percent marked the 14th week in a row that 30-year mortgages have been under 7 percent.

        Fifteen-year mortgages, a popular option for refinancing, rose to 5.98 percent this week.


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