Late Edition November 03 2008 at 02:53 PM Chi-Chu Tschang and Harry Maurer
Car Sales Get Even Worse
Everyone knows it's a bad year for the auto industry, but the numbers for October are nevertheless startling. Sales at three big carmakers fell into a ditch: General Motors down 45% from a year ago, Ford down 30%, even mighty Toyota down 23%. Volkswagen looks downright healthy, with just a 7.9% drop. Other carmakers will release results later today.
GM sales were hurt by new lending restrictions at its troubled financing arm, GMAC, which now offers auto loans only to customers with credit scores of 700 or better. But Toyota, which offered no-interest financing through the month, also got whacked. The financial crisis has left consumers deeply worried, even as the price of gasoline has declined sharply.
Source: New York Times
Circuit City Shutting Stores
The electronics chain, which has been struggling to fix itself for years, said it will shutter 155 stores, cut back openings, and renegotiate leases to preserve cash as vendors tighten payment terms. The closures mean about 17% of Circuit City's workforce will lose their jobs.
Source: MarketWatch.com
U.S. Manufacturing at a 26-Year Low
The Institute for Supply Management reported that its manufacturing index slid to 38.9 in October, down from 43.5 the month before. The October reading is the lowest since September, 1982. Economists had predicted a reading of 42. Any number below 50 means that manufacturing activity is contracting, and a reading below 41 indicated the economy is in recession.
Source: CNNMoney.com
KKR Public Offering Postponed Again
Private equity giant Kohlberg Kravis Roberts, which unveiled plans to go public in June, has postponed the offering for a second time and now says it won't get done until sometime in 2009. The firm put off the IPO not long after its announcement, as the subprime mortgage market started to unravel. Under the complex deal, the firm would go public by bailing out its Amsterdam-based affiliate, KKR Private Equity Investors. KKR Private Equity reported heavy losses today, a $649 million drop in the value of its investments during the third quarter.
Source: Wall Street Journal
Boeing Workers Return After 8-Week Strike
Workers at Boeing began returning to work on Sunday after members of the machinists union voted to end a costly eight-week strike that clipped profits and stalled deliveries.
Source: AP/New York Times
Panasonic Likely to Bid for Sanyo Electronics
Japanese electronics giant Panasonic, formerly known as Matsushita, is set to unveil a takeover of smaller rival Sanyo this week, in part to secure its position as a leading producer of lithium ion batteries for cars. Analysts welcome the move as a step towards long-overdue consolidation in the Japanese electronics business.
Source: Times of London
Persian Gulf Investor Leads Barclays Recapitalization
Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi's royal family, became the latest wealthy Persian Gulf investor to come to the rescue of an ailing Western institution when he helped lead an $11.6 billion recapitalization of Britain's Barclays on Friday. Meanwhile, on a tour of the Gulf, British Prime Minister Gordon Brown implored Saudi Arabia to help buttress the International Monetary Fund, which has been instrumental in recent bailouts for Iceland, Ukraine, Hungary, and Belarus.
Source: Wall Street Journal, AP/CNN Money
Societe Generale Profits Plunge 84% on Writedowns
Net earnings at France's third-largest bank, which early this year suffered from a rogue trading scandal, fell by 84% in the third quarter due to writedowns tied in part to the failure of U.S. investment bank Lehman Brothers.
Source: Bloomberg
Effectiveness of AIG Bailout Questioned
A number of financial experts now fear that the federal government's $143 billion effort to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.
Source: Washington Post
Talks End Between Chrysler and Renault-Nissan
Sources close to Cerberus Capital Management, the private equity firm that took over ailing Chrysler last year, revealed over the weekend that they had ended discussions with Renault and Nissan about a possible deal, leaving a takeover by GM as the most viable remaining option.
Source: Wall Street Journal
South Korea Unveils $11 Billion Stimulus Plan
South Korea said on Nov. 3 that it will pump an extra $11 billion into its economy next year to help soften the impact of the global financial storm, which is beginning to hit exports, the country's economic lifeblood.
Source: Reuters
Pressure Mounts for EU and British Bank Rate Cuts
Monetary policymakers at the European Central Bank and Bank of England are facing growing pressure to cut lending rates when they meet this week amid growing indications of economic weakness in Europe.
Source: Financial Times
Emerging Signs of Distress for Smaller U.S. Telecoms
The telecommunications industry has been relatively immune so far to the economic slowdown. But now there are signs that companies other than giants AT&T, Verizon, and Comcast are feeling the pinch from weaker demand and tighter financing.
Source: Washington Post
Conversation of the Day: Design and Customer Loyalty
Reader O. Santiago writes: "Outside US/Europe, Apple is far from keeping pace. Mac has become a fetish amongst graphic designers, and that has fueled most of the awe on Apple products."
Read the Story and Tell Us What You Think
Hot Topic on the Business Exchange: Semiconductors
The world of semiconductors is extremely important. This topic talks about the news and trend in the semiconductor industry and covers the companies that create them. Olga Kharif and others are sharing their insights.
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