Sun, Oct 09, 2011 - Page 11 News List

Business Quick Take

Agencies

AUTOMAKERS

GM delays second Volt shift

General Motors Co (GM) is delaying plans to add a second shift at the factory that makes Chevrolet Volt electric cars. The company said on Friday it has found ways to make one shift more efficient, so it can produce the same number of cars as two shifts. Spokesperson Chris Lee said GM still will add 300 workers at the Detroit-Hamtramck plant — but not a second shift — by the end of this year to make more Volts. In May, the company announced it would add a second shift late this year to increase Volt production from 16,000 a year to 60,000. GM said on Friday the change had nothing to do with Volt sales, which have been slower than expected.

TELECOMS

Sprint looks to raise funds

Sprint Nextel Corp said it needs to raise more money and signaled it will burn through its cash reserves, raising concerns about the wireless provider’s financial stability and business strategy. Sprint outlined a plan to spend US$7 billion on a network upgrade that it wants to complete by the end of 2013, and chief financial officer Joe Euteneur said Sprint would pay for the upgrade with cash from its balance sheet and by raising capital. The company also flashed a presentation slide saying it expects its liquidity to improve after 2013, implying a tough two years before that. Shares fell 20 percent to close at US$2.41 on Friday, while its credit default swaps rose, reflecting greater concerns about a default risk.

UNITED STATES

Consumer debt drops

Consumers unexpectedly pared debt in August after 10 straight months of gains amid rising concerns about the economy, central bank data showed on Friday. Consumer credit fell to a seasonally adjusted US$2.44 trillion, a decline at an annual rate of 4.6 percent, the Federal Reserve said. According to the Fed data, the decline in August was led by a drop in nonrevolving credit, such as automobile financing and student loans. Revolving credit, essentially credit-card transactions, fell for the second month running in August, at a rate of 3.4 percent per year.

AUTOMAKERS

JAC to build Brazil factory

Chinese automaker JAC Motors (江淮汽車) said on Friday it will invest US$500 million to build a factory in Brazil’s northeastern state of Bahia, its first outside China. The factory, slated to open in 2014, will have the capacity to produce 100,000 units, JAC said in a statement. A total of 3,500 jobs are expected to be created. The investment will be made by the parent company in China together with the SHC Group, which represents its business interests in Brazil. In August, the company put the preliminary value of its investment at US$900 million.

TELECOMS

EU approves Skype bid

The European Commission has approved Microsoft Corp’s proposed US$8.5 billion acquisition of the Internet voice and video communication provider Skype, saying the deal would not significantly impede competition in Europe. The approval, announced on Friday, appears to be the final step in the technology giant’s effort to acquire Skype. Brad Smith, general counsel and executive vice president of Microsoft, said in an e-mailed statement that the company is pleased with the decision. Smith says it’s “an important milestone,” because the company has “now received clearance from both the United States and the European Union.” The European Commission is the EU’s executive branch.

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