Business news in brief

QUOTE OF THE DAY

“We just got off to a slower start than expected.The second half [of 2013] will be better.”

Maury Harris, chief economist for UBS Securities LLC, on

Wednesday’s downward revision of U.S. first-quarter GDP growth.

Article, 1D

Chicago storms ground over 300 flights

Thunderstorms forced airlines Wednesday to cancel more than 300 flights at Chicago’s O’Hare airport, the second busiest in the U.S., and threatened to slow regional air traffic for most of the day as delays topped two hours.

United Airlines and American Airlines, both of which have hubs at O’Hare, were among the carriers scrubbing flights there. Southwest Airlines Co. scrapped trips at its base at Chicago’s Midway Airport, said Michelle Agnew, a spokesman for the Dallas-based carrier.

Cancellations at hubs such as O’Hare, which trails only Atlanta in annual passenger totals, can ripple across the rest of the U.S. Severe thunderstorms were expected from Chicago to Boston on Wednesday with high winds, hail and heavy rain, according to the U.S. Storm Prediction Center in Norman, Okla.

Flights headed to Chicago were delayed an average of two hours, 14 minutes, according to Houston-based FlightAware.

  • Bloomberg News

Honda foresees jet business taking off

Honda Motor Co., preparing to enter the market for business jets, said it’s won two-to-three years of orders for what it calls “flying sports cars” and signaled the business will turn profitable before the end of the decade.

The aviation business is on track to turn profitable five years after it begins delivering planes, and that could be as soon as next year, Michimasa Fujino, president of Honda Aircraft, said Tuesday in Tokyo. Though he declined to specify the number of orders received so far, Fujino said sales of the $4.5 million jet plane may reach 80 units to 90 units annually in a few years.

Honda, Japan’s third-largest carmaker, is betting that lessons drawn from its main automotive business will help the Tokyo-based company compete against Textron Inc.’s Cessna and Brazil’s Embraer SA. While the U.S. currently accounts for most of the demand for business jets, Fujino said Brazil and India are among markets that offer the most growth potential.

Fujino said the location of Honda’s engines, which unlike conventional planes are lodged on top of the wings, will increase fuel efficiency by about 15 percent and allow cabin space to be 15 percent to 20 percent roomier than in comparable aircraft. With a cruise speed of 480 miles per hour, the jet is also 10 percent faster than the average plane and more resistant to turbulence, he said.

  • Bloomberg News

Court: Starbucks baristas must split tip

Starbucks Corp. baristas must share tips with shift supervisors, while assistant managers can be excluded from gratuity pools, New York’s highest court said in answering questions posed by a federal appellate panel.

The world’s biggest coffee chain was sued in 2008 in federal court in Manhattan by two former baristas who accused the company of violating state labor laws by including shift supervisors in tip pools. An assistant managers group sued in the same court, saying they were illegally excluded from the pool.

A federal court in Manhattan supported Starbucks in both suits, ruling that shift supervisors can share in tips because they have limited managerial responsibilities while it wasn’t obligatory to include assistant store managers in gratuity pools.

The plaintiffs in both cases appealed and a U.S. appellate panel in New York asked the state’s highest court in Albany to answer two questions: What factors determine whether an employee is an agent of his employer and ineligible to receive distributions from a tip pool; and does state law permit employers to exclude eligible employees from such pools?

The Court of Appeals in Albany Wednesday said under state law employees whose main duties are serving patrons can participate in tip pools. That would include shift supervisors, whose primary responsibility is to serve food and beverages, and not assistant managers, who participate hiring or firing workers.

  • Bloomberg News

Owner: Standoff at China-plant ending

An American businessman who says his employees haven’t let him leave the factory he owns on the outskirts of Beijing for more than five days said Wednesday the standoff may be resolved soon.

Talks between the labor union, government officials and legal counsel that began Tuesday continued all day Wednesday, Charles Starnes said.

Starnes’ company, Specialty Medical Supplies is a Coral Springs, Fla.-based manufacturer of alcohol prep pads and lancing devices. He said workers refused to let him leave over a wage dispute that began when the company decided to move part of its production to India, where labor costs are lower, and pay severance to some employees.

Workers who were to remain at the factory learned about the decision and decided to quit, demanding severance pay, according to Starnes. He had said Tuesday that this was an “unreasonable” request given that he has no plans to close the Chinese operation. Wednesday, Starnes said that position was being reconsidered.

The company is discussing an agreement under which it would give a lump sum payment to local government officials, with the government deciding how to distribute the money, Starnes said.

Business, Pages 26 on 06/27/2013

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