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SUDBURY – Union workers at Vale Inco’s huge nickel mine here rejected the company’s final contract offer and were going on strike at midnight, the United Steelworkers union said yesterday.

Negotiations between Vale Inco – the nickel mining and processing division of Brazil’s Companhia Vale do Rio Doce – and its union broke down last week as the two sides failed to agree on bonuses, pensions and other issues.

Members of the USW’s Local 6500 voted overwhelmingly to reject the company’s contract offer. The local represents about 3,300 workers at the site, which is one of the world’s largest nickel mines.

"Our members have negotiated forward-looking and long-term contracts that have been positive for our members, the community and the company," Wayne Fraser a member of the union’s bargaining committee, said in a statement. "It’s just wrong that Vale is now trying to eliminate all that."

Eighty five per cent of the miners who voted rejected the company’s proposal, the union said.

"We find the results unfortunate and disappointing but not entirely surprising," said Vale Inco spokesman Cory McPhee, adding that there were no immediate plans to return to the bargaining table fast cash advance.

The union has urged the company to return for talks.

Miners at the company’s Voisey’s Bay nickel-copper operations already have voted to authorize a strike, which likely will take effect by the end of July.

Strikes at both sites would likely have a limited impact initially, as most of their operations have been halted through the end of July because of weak nickel demand.

The two mines are among the 10 largest nickel-producing mines in the world.

Analysts say the strikes will not have much of an effect on the price of nickel – a metal often used in the manufacture of stainless steel and cast iron – because the economic slowdown has caused an oversupply in global markets.

CVRD acquired the Canadian operations through its acquisition of Inco in 2006.

CVRD chief executive Roger Agnelli recently told media in Brazil that Sudbury is the company’s highest-cost operation and is not sustainable.

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Argentine President Cristina Fernandez de Kirchner’s first showdown with the opposition- controlled congress may be over inflation data.

The ruling coalition plans to propose changes to the National Statistics Institute two years after Fernandez’s predecessor, her husband Nestor Kirchner, sparked data-rigging allegations from statisticians by putting a political appointee in charge of inflation figures.

Fernandez is seeking to shore up support after her coalition, weakened by the inflation-underreporting speculation and an economic slump, lost its congressional majority in June 28 elections, said Carlos Fara, director of pollster Carlos Fara & Asociados in Buenos Aires. Fernandez will likely pursue changes that fall short of the overhaul that the opposition demands, including making the institute independent of the executive branch, Fara said.

The government will push for a reform that will “create the sensation of change but that will have nothing to do with the changes that the society has been asking for,” said Fara, whose company has tracked Argentine politics since 1991.

Fernandez’s post-election cabinet reshuffle, in which she picked officials from within her government to take over key posts such as economy minister, indicates she doesn’t plan a “large reform,” said Rafael de la Fuente, a senior Latin America economist at BNP Paribas in New York. He said the government may try to pass a reform before the new legislators take office in December.

San Luis Province

Annual inflation in South America’s second-largest economy slowed to 5.5 percent in May, the lowest rate in four years, according to the institute, known as Indec. Alejandro Cuadrado, an economist at Banc of America Corp. in New York, estimates the actual rate is about triple that at 15 percent. Indec is scheduled to release June figures tomorrow.

The national inflation rate has decoupled with the rate in the western province of San Luis. Consumer prices rose 14.4 percent in San Luis in the 12 months through May, according to the province’s data. In December 2006, several weeks before Kirchner handpicked a new consumer price chief at Indec, inflation in San Luis was below the national rate — 8 percent compared with 9.8 percent.

“Indec has to be normalized to regain credibility,” Senator Elena Corregido, a member of the ruling coalition, said in a telephone interview.

CPI-Linked Bonds

Fixing the data may be expensive.

The government’s peso-denominated bonds linked to inflation totaled $53 billion in December, meaning each additional percentage point of inflation would swell the debt’s principal by about $530 million easy payday loans. The inflation-linked debt accounted for almost 40 percent of the government’s overall debt of $146 billion, according to the Finance Secretariat.

The yield on the government’s inflation-linked bonds due in 2033 surged to 14.86 percent on July 10 from 5.3 percent in February 2007, the month Indec statisticians began complaining that Kirchner’s appointee had them eliminate some details from the index.

“Investors pushed these bonds aside after the problems with Indec emerged,” said Javier Salvucci, a fixed-income analyst at Silver Cloud Advisors in Buenos Aires.

Fernandez, like her husband, has maintained since taking office in December 2007 that the figures are reliable. Alfredo Scoccimarro, a spokesman at the Presidential Palace, said he has no information on planned changes to Indec.

‘Deep Changes’

Fernandez’s congressional backers will initiate debate on the matter in coming weeks, said a spokesman for the coalition’s lower house bloc, who asked not to be identified in accordance with the party’s policies. He declined to say what the proposed changes may look like.

Corregido, the ruling coalition senator, said she wants reforms that ensure Indec — which also reports gross domestic product, unemployment and trade figures — awards promotions based on merit and skill tests.

That may not be enough for opposition lawmakers such as Adrian Perez, who heads the Civic Coalition party in the lower house. He says he wants to make the institute autonomous from the government so the president can’t handpick officials.

“It’s good that the government finally agrees to discuss this issue,” Perez said in a telephone interview. “But we want deep changes, not just cosmetic ones.”

Markets Last Week

Last week, the yield on Argentina’s benchmark 8.28 percent dollar bonds due in 2033 rose seven basis points, or 0.07 percentage point, to 15.77 percent, according to Bloomberg data. The bond’s price slid 0.25 cents to 51.5 cents on the dollar.

The Buenos Aires benchmark Merval stock index fell 6.4 percent to 1,477.84. The local listing of Brazil’s state-run oil company Petroleo Brasileiro SA (APBR AF) fell 9.8 percent, while energy holding company Pampa Energia SA (PAMP AF) dropped 9.4 percent.

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PARIS–There will be no rebound in car markets in Europe and Japan before 2011, the head of car makers Renault and Nissan says.

In comments reported by the French daily Le Monde, Carlos Ghosn said the end of scrapping deals in Europe that encourage car buyers to trade in older cars for new ones would hold back any rebound in the car market. The deals have helped limit the decline in car purchases.

He predicted no pickup in Europe’s car industry until at least the first quarter of 2011. He said Japan too would have to wait until 2011 to see improvement business

The Boeing Co. on Wednesday rolled out the first of two dozen F/A-18 Super Hornets bound for the Royal Australian Air Force over the next three years.

While a shot in the arm for Boeing’s Integrated Defense Systems in St. Louis, the first international sale of its latest multirole fighter jet occurs at a time of uncertainty for the St. Louis F/A-18 line. The Defense Department sought just 31 in next year’s budget — or nine fewer than expected.

Boeing and its supporters are pushing for another multiyear contract for the Super Hornets. Boeing officials say multiyear contracts with the U.S. Navy help hold down production costs and have saved taxpayers $1.7 billion so far.

Boeing said the first of the Super Hornets bound for the Royal Australian Air Force will be delivered ahead of schedule to the Navy, which will test it and then deliver it to Australia next spring.

Australia will pay $3 billion for the 24 aircraft, said Marcia Hart-Wise, a Department of Navy spokeswoman. That price includes service and support through 2020.

U.S. and Australian military leaders said the rollout of the

F/A-18F was an important cooperative milestone between the two countries. The planes are equipped with the latest radar and weapons systems.

Boeing also is vying to provide F/A-18 Super Hornets to India, Denmark, Brazil, Greece and Japan.

Congress has added language supporting the U car loans for bad credit.S. purchase of more Super Hornets to proposed defense authorization bills. In late June, U.S.

Sen. Christopher "Kit" Bond, R-Mo., also went to bat for the purchase of more F/A-18s "as the most cost-effective, near-term means to address the Navy’s tactical fighter shortfall," and a multiyear contract, according to a June 22 letter he co-authored to the Senate Appropriations Committee.

Senator Claire McCaskill, D-Mo., also supports multi-year purchases.

Boeing is the region’s second-largest employer, and its F/A-18 fighter jet line employs 5,000 workers.

St. Louis Mayor Francis Slay trumpeted Boeing’s regional importance — from jobs to philanthropy — in remarks he made at Wednesday’s ceremony. Other speakers included Rear Adm. David Philman, director of air warfare for the U.S. Navy, and Air Marshal Mark Binskin, chief of the Royal Australian Air Force.

Despite the uncertainties, top Boeing officials remain upbeat about the future of aircraft manufacturing here.

"In case anybody’s wondering, we’re going to be building Super Hornets here for a long time to come," said Jim Albaugh, president and chief executive of Boeing’s Integrated Defense Systems.

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Steel production started Tuesday at Granite City Works mill for the first time in about seven months.

The target date for sending molten iron to an oxygen furnace — and thus making steel — was set for today. But by Tuesday afternoon, that process already started, said Dan Simmons, president of United Steelworkers Local 1899. His local union represents most of the mill’s hourly workers.

This marks yet another part of restarting United States Steel Corp.’s local operations, a process that began less than a month ago. Union officials were notified in mid-June that some parts of the idled facility would reopen. Since then, Simmons estimated, 800 or so workers have been recalled to prepare the facility.

"This is key to the restart of the facility and an indication that (U.S. Steel is) definitely committed to further restart," Michelle Applebaum, a Chicago-based managing partner with consulting firm Steel Market Intelligence, said in an e-mail Tuesday.

U.S. Steel spokeswoman Erin DiPietro declined to comment, saying the company did not provide updates on operations.

Granite City Works makes steel used in construction, automobiles and other industries. When the recession and tough credit conditions hurt those industries, demand for steel plummeted.

U.S. Steel and other steel companies idled plants, laid off workers and slashed production. At Granite City Works, U.S. Steel halted its steelmaking operations in December and laid off about 1,600 workers.

An additional 390 union and nonunion workers were laid off in February when U.S. Steel temporarily stopped production of coke direct payday loans. Coke is a key steelmaking ingredient that it had been stockpiling.

In recent months, a crew of fewer than 100 workers had worked at the plant.

But a boost in orders has led U.S. Steel to recall some of its Granite City work force and restart certain areas of the facility, such as a blast furnace, according to union officials.

The blast furnace is an important part of the steelmaking process. Coke, iron ore and lime are fed into a blast furnace to extract iron, the basic ingredient for steel.

The molten iron is shipped to the steelmaking area. Chemicals and other elements are added to the molten iron, and then oxygen is injected. Molten steel is formed.

That molten steel then is cast, hardens into slabs and ultimately is used to make finished steel products.

A gradual improvement in U.S. steel demand is coming from manufacturers’ need to replenish inventory, not necessarily an economic rebound, analysts say.

Various mills "are starting to reopen because (manufacturers’) inventories are at the lowest possible levels," said John Anton, a Washington-based steel analyst for market research firm IHS Global Insight. "Even without much economic recovery, we still have to make more steel than (in) the past nine months."

Anton said that a positive but weak economic pick-up was expected this quarter, but that "things won’t really pick up until the second half of 2010."

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The U.S. office market vacancy rate reached 15.9 percent in the second quarter, its highest in four years and rent fell by the largest amount in more than seven as demand from companies and other office renters remained weak, real estate research firm Reis said Inc.

“It’s bad,” Reis director of research Victor Calanog said. “It’s decaying and getting worse. Given the depth and magnitude of the recession, you can argue that we are facing a storm of epic proportions and we’re only at the beginning.

The weak demand helped push up the average weighted U.S. office vacancy rate 0.70 percentage points during the quarter and 2.7 percentage points compared with a year ago, according to the report released on Tuesday.

Asking rent during the quarter fell 1.4 percent to $28.43 per square foot. Factoring in rent-free months and improvement costs to landlords, effective rent — the net amount of cash landlords take in — fell 2.7 percent in the quarter to $23.42 per square foot. The second-quarter drop was more severe than the first quarter’s 2.3 percent, dampening hopes the office market is bottoming out, Reis said.

Year over year, rent was down 6.7 percent, the largest one- quarter decline since the first quarter 2002.

“This is really only the third quarter that we’ve experienced negative effective rent growth,” Calanog said. “Last time, the office sector had four years of negative effective rent growth.”

Although the sector has experienced downturns before, the current one may be lethal for lenders and investors who bought property during the boom years of 2005 from 2007 cashadvance. Many of them based the price and the loan on the belief that rents would continue to post strong growth and occupancy increases.

“It’s like taking on a lot of debt as an individual and now suddenly earning 10 percent 20 percent 30 percent less,” he said.

The dwindling cash flow resulting from higher vacancy and lower rent weakens the ability to repay financing and pushes a borrower closer to defaulting on a loan.

The weak second-quarter performance prompted Reis to maintain its February forecast calling for the U.S. office vacancy rate to top out at 18.2 percent in 2010 and for rent to continue to fall through 2011. It also sees the commercial real estate default rate to reach 4.2 percent by the end of the year and peak at 5.2 percent in 2011.

The U.S. vacancy rate was at 12.5 percent in the third quarter of 2007, but has since risen 3.4 percentage points, Reis said.

Of the 79 markets that Reis tracks, vacancy rose in 65 and effective rent fell in 72, indicating the weakness is widespread.

Vacancy in the New York area, which includes all the New York City boroughs except Staten Island, rose 1.2 percentage points to 10.8 percent, the highest since 1996, and effective rent slid 5.2 percent

“As far as we can tell for New York, the next two years will be murder,” Calanog said.

Boston and Orange County and San Jose California saw rent fall more than 5 percent. 

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WASHINGTON — President Barack Obama’s administration on Tuesday sent Congress a detailed plan to create one of the most ambitious parts of the president’s proposed overhaul of financial regulation, a Consumer Financial Protection Agency.

The Treasury Department’s proposal would gather consumer protection powers that now are spread among many bank regulators and place them under a single roof. If it’s enacted, this would be a huge step by government into private banking after a hands-off approach for the past two decades.

The most important feature is that the agency would have the sole mission of consumer protection. One lesson of the financial crisis is that the several agencies that shared that responsibility made it a lower priority than their other missions and failed to protect consumers.

Obama proposed the agency in response to the nation’s deep financial crisis, which is rooted largely in shoddy mortgage-lending practices that exploded in the first half of this decade thanks to regulatory gaps and weak enforcement of consumer protection rules.

The proposed legislation would give the new agency powers to set and enforce standards for things such as mortgage and credit card disclosure statements.

It also would cover payday lending and other forms of consumer credit — even stored-value gift cards from retailers. Its reach would span at least 16 existing consumer protection laws and numerous agencies.

"We have the view that the market, left to its own devices, isn’t always going to lead to an optimal outcome for consumers," Michael Barr, the assistant treasury secretary for financial institutions, said.

Financial institutions said the move went beyond a step back to regulation. "This is going in headfirst," said Scott Talbott, the senior vice president of government affairs for the Financial Services Roundtable, the lobby for the nation’s biggest financial firms. "This could take us back to the 1950s."

While denying that the legislation is heavy-handed, Barr acknowledged that it would open a new era of financial regulation easy payday loans.

"I don’t think it’s a surprise that big banks and institutions that benefited from the status quo want to keep it that way," he said.

In a nod to concerns raised by financial institutions, the agency would be required to weigh beforehand the potential costs and benefits of any actions it might take and to monitor how those actions worked to ensure they weren’t burdensome to commercial activity.

Although financial firms have voiced support for the concept, this proposal could get in their way significantly. For example, the new agency would have the power to restrict certain kinds of mortgages or credit card terms. That might protect consumers, but financial firms fear it also might inhibit legitimate business practices.

"It allows the agency to set the terms of a financial product, and that could have a chilling effect on creativity and innovation of products," Talbott said.

One of the agency’s main powers would be enforcing the credit card legislation Congress passed earlier this year. It aims to end unfair rate increases and will impose new rules on late-payment fees to prevent nasty surprises to consumers.

"When a customer can’t read the papers at a mortgage closing or make a quick comparison of credit cards to see which ones have hidden terms, the credit market is broken," said Elizabeth Warren, a Harvard University professor who’s the head of a congressional watchdog panel that’s overseeing the spending of Wall Street bailout money and widely credited for the idea of a Consumer Financial Protection Agency.

Importantly, the legislation would require mortgage brokers to find the best deals for prospective homebuyers. The lack of any such requirement was key to the subprime mortgage crisis. Many homeowners were pushed into exploitive mortgages, wrongly assuming that mortgage brokers, who help arrange financing, had their best interests at heart.

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