Sun, Dec 09, 2012 - Page 15 News List

World Business Quick Take

Agencies

AVIATION

US Airways proposes merger

US Airways Group Inc has made a formal merger proposal to American Airlines parent AMR Corp and its creditors that could value the combined airline at about US$8.5 billion, two people familiar with the matter said on Friday. Details of the proposal emerged as American Airlines pilots voted to ratify a new union contract on Friday, ending a years-long labor dispute and stabilizing the carrier as it tries to emerge from bankruptcy. Under an all-stock merger that US Airways proposed last month at a meeting with AMR’s unsecured creditors committee, AMR creditors would own 70 percent of the merged company and US Airways shareholders 30 percent, the sources said. The combined AMR and US Airways could have a value similar to Delta Air Lines Inc, which has a market capitalization of about US$8.5 billion, the sources said.

TECHNOLOGY

Kodak patents under offer

Apple Inc and Google Inc have joined forces to offer more than US$500 million to buy Eastman Kodak Co’s patents out of bankruptcy, two people with knowledge of the situation said. The two companies, competing for dominance of the smartphone market, have partnered after leading two separate consortia this summer to buy Kodak’s 1,100 imaging patents, said the sources, who asked not to be identified because the process is private. Unlikely partnerships are common in patent sales as they allow competitors to neutralize potential infringement litigation. The Apple-led group pursuing Kodak’s patents included Microsoft and Intellectual Ventures Management LLC as of this summer, the sources said, while Google’s consortium included patent aggregation firm RPX Corp and Asian manufacturers of Google’s Android phones.

AUTOMAKERS

Fiat plans workforce cuts

Fiat Auto Poland, plans to cut one third of its workforce in Poland, where it makes its popular Fiat 500 minicar, as a sales slump that has forced automakers to shut plants in western Europe hits one of Fiat’s most productive factories. Fiat, Poland’s largest car manufacturer, plans to cut about 1,500 jobs. The plant, located in Tychy, in the south of Poland, employed 4,967 workers at the end of October and is one of Fiat’s most productive. Excess production capacity is piling pressure on carmakers’ profitability as sales stagnate.Fiat’s output in Poland will be below 350,000 cars this year and will drop below 300,000 next year, less than half its 2009 total, the company said on Friday.

FINANCE

US consumer debt rises

US citizens swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove US consumer debt to an all-time high. The US Federal Reserve said on Friday that consumers increased their borrowing by US$14.2 billion in October from September. Total borrowing rose to a record US$2.75 trillion. Borrowing in the category that covers autos and student loans increased by US$10.8 billion. Borrowing on credit cards rose by US$3.4 billion, only the second monthly increase in the past five months. The strong rise in borrowing came in a month when US citizens cut back on consumer spending, reflecting in part disruptions from superstorm Sandy.

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