Business news in brief

States agree to $650M over air-bag peril

Dozens of states including Arkansas reached a $650 million settlement with the U.S subsidiary of a Japanese company that manufactured faulty air bags installed in millions of automobiles worldwide, bags that sprayed deadly shrapnel that killed at least 22 people and injured hundreds more.

The agreement was reached with TK Holdings, the American subsidiary of Takata, as part of a settlement with 44 state governments and the District of Columbia, requiring the $650 million payout by the Japanese firm. Nearly 34 million of the 250 million vehicles on U.S. roads have been part of the largest recall in U.S. history.

Unlike most makers of air bags, Takata uses ammonium nitrate to trigger a small explosion that inflates the air bag when the vehicle strikes something. But in some vehicles -- particularly those that were several years old and kept in regions of the country with high humidity -- the ammonium nitrate burns too fast, causing the chemical's container to explode and spray drivers and passengers with metal shrapnel.

"Companies have a moral and legal obligation to protect their customers from defective products like these incredibly dangerous air bags," Virginia Attorney General Mark R. Herring said.

Faced with the massive cost of worldwide recalls, Takata filed for bankruptcy in the U.S. and Japan last year.

-- The Washington Post

Unemployment claims fall to 5-week low

U.S. filings for unemployment benefits fell to a five-week low, suggesting tightening in a labor market already operating near what is considered full capacity, Labor Department figures showed Thursday.

Jobless claims decreased 7,000 to 222,000, while continuing claims fell by 73,000 to 1.88 million, a six-week low, in week that ended Saturday, the biggest decline since mid-2015, the report said.

Four-week average of initial claims, a less-volatile measure than the weekly figure, fell to 226,000 from the prior week's 228,250

Claims are near the lowest level in almost 45 years, a reminder that employers are holding on to existing staff given shortages of qualified workers. Applications below the 300,000 mark are considered consistent with a healthy labor market. They've been under that figure every week since March 2015.

Analysts may pay extra attention to Thursday's figures because they encompass the 12th of the month, the reference period for the Labor Department surveys that produce the monthly employment figures. The report for February is due March 9.

Michigan and Illinois showed the biggest declines in unadjusted claims in the latest week.

-- Bloomberg News

Nebraska bank drops NRA credit card

LINCOLN, Neb. -- The nation's largest privately-owned bank holding company will stop producing credit cards for the National Rifle Association in response to customer feedback, a spokesman said Thursday.

The Nebraska-based First National Bank of Omaha will not renew its contract to issue the group's NRA Visa Card, spokesman Kevin Langin said in a statement.

"Customer feedback has caused us to review our relationship with the NRA," Langin said.

Langin declined to say when the contract would expire and would not elaborate on what sort of feedback the company had received. The company released the same statement dozens of times on Twitter in response to other users who called on the company to sever its ties with the NRA.

On Thursday, the bank Web page that advertised the NRA card had been disabled. A cached version of the site touted the card as "the official credit card of the NRA" and noted the benefits of membership.

The NRA has faced intense criticism after the school shooting in Parkland, Fla., that left 17 people dead, the latest in a string of high-profile mass killings in the U.S.

An NRA spokesman referred questions Thursday to the group's licensing department. A phone message left with that office was not immediately returned.

-- The Associated Press

Mortgage rates move up a bit for week

Mortgage rates were slightly higher this week as investors waited to see what they could decipher from the minutes of January's Federal Reserve meeting.

According to the latest data released Thursday by the Federal Home Loan Mortgage Corp., the 30-year, fixed-rate average climbed to 4.40 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.38 percent a week ago and 4.16 percent a year ago. The 30-year, fixed rate hasn't been this high since April 2014.

The 15-year, fixed-rate average ticked up to 3.85 percent with an average 0.5 point. It was 3.84 percent a week ago and 3.37 percent a year ago. The five-year, adjustable-rate average edged up to 3.65 percent with an average 0.4 point. It was 3.63 percent a week ago and 3.16 percent a year ago.

The government-backed mortgage backer aggregates rates weekly from 125 lenders from across the country to come up with national average mortgage rates.

-- The Washington Post

Lincoln chief replaces ousted Ford exec

DETROIT -- A veteran executive who has led Ford's Lincoln luxury brand will now head American operations, replacing an executive who was ousted this week over allegations of inappropriate behavior.

Kumar Galhotra, 52, will replace Raj Nair starting March 1, the company said Thursday. Ford Motor Co. said in a printed release that Galhotra will lead all aspects of the North American business, the company's primary source of revenue and profits.

Galhotra has been with Ford for 29 years in a number of senior engineering and product-strategy positions. He has led the Lincoln brand since 2014 and has also led the company's marketing efforts since last year.

Ford announced Wednesday that Nair was leaving the company immediately. The automaker would not discuss the behavior that led to his ouster. Nair expressed regret in a company statement and declined comment when reached Wednesday by The Associated Press.

-- The Associated Press

Business on 02/23/2018

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