French franc near collapse
Mounting tensions in the currency markets pushed Europe's monetary system a step closer to breakdown yesterday, despite continuing efforts by governments and central banks to snuff out the crisis. Weaker currencies like the Irish punt declined in value again, and several countries pushed up short-term interest rates as they tried to head off waves of speculative selling.
But the attention of the markets was focused on the French franc, which slipped against the German mark despite repeated intervention by the Bank of France.
A collapse of the franc could effectively spell the end of the European system of semi-fixed exchange rates, known as the Exchange Rate Mechanism.
Boeing to slow production
Boeing Co. said yesterday that it would slow production rates on its 757 and 767 jetliners next year, resulting in the loss of about 2,000 jobs in the Seattle area and 500 jobs in Wichita, Kan.
Boeing's production cuts, which analysts said had been anticipated, are a reflection of a steep downturn hitting the commercial aircraft industry, which in 1989 had booked a record 1,662 orders. Every major airline is putting orders on hold.
Bendix's NASA contract extended
The Bendix Field Engineering unit of Allied-Signal Inc. has received a $526 million, three-year contract extension from the National Aeronautics and Space Administration to provide mission support services at NASA's Goddard Space Flight Center in Greenbelt.
The new contract, which began Oct. 1, also has an option, worth $360 million, to extend the contract through September 1997. The work force for the contract is expected to remain at 2,100, with about 1,700 of these workers at the Goddard center and the remainder at tracking stations and facilities around the world, said a spokesman for Allied-Signal, which is based in Morris Township, N.J.
Brokers must hold more capital
In a bid to shield investors from losses when brokerages go bust, U.S. regulators yesterday raised the level of capital Wall Street firms must hold as insurance against the cost of liquidation.
Amounting to as much as a 10-fold increase in some cases, the boost is the first in 18 years. For example, firms that clear and carry customer accounts will have to maintain a minimum capital level of $250,000, up from as little as $25,000. Officials at the U.S. Securities and Exchange Commission, which approved the increase, said it is meant to ensure firms that fail have a big enough financial cushion to be liquidated in an orderly manner.