Ford Motor (F) will lay out details of a "comprehensive" restructuring this fall, Chief Executive Bill Ford Jr. told reporters on Aug. 23. Ford is scrambling to restore profitability to its North American auto operations, plagued by sinking market share and steep materials and health-care costs. The unit lost $907 million pretax in the second quarter.
The carmaker already began eliminating 2,750 white-collar jobs this summer, or nearly 8% of its North American total, and may cut further. The CEO says Ford must tackle overcapacity and didn't rule out closing more assembly plants. Some analysts think Ford may close as many as four plants after labor talks in 2007.
The belt-tightening has spread overseas. Ford's Volvo Car unit on Aug. 23 said it will lay off as many as 1,500 workers in Sweden, or 5% of its global workforce. However, Ford's CEO vows that besides slashing costs, the restructuring will include positive initiatives. That might include pumping out more hybrids.
The Boston Stock Exchange, founded in 1834, is going high tech with help from some some big investors. Backed by Fidelity Investments, Citigroup (C), Credit Suisse First Boston (CSR), and Lehman Brothers (LEH), it plans to launch an electronic arm. The Boston Equities Exchange, or BeX, is set to open in 2006 and aims to grab 5% of all trades. Boston's move follows plans by the New York Stock Exchange, the Philadelphia Stock Exchange, and the NASDAQ Stock Market to add electronic platforms. But mutual funds have criticized the Big Board's plan for favoring its old-fashioned specialist firms. What's more, unlike publicly traded competitors, BeX won't face pressure from shareholders to raise transaction fees.
Hollywood heartthrob George Clooney is teaming with Related Cos., developers of the Time Warner Center in New York, to build a $3 billion hotel, condominium, and casino project in Las Vegas. Las Ramblas will consist of 11 high-rise towers on 25 acres along the Harmon Avenue corridor, which cuts through the center of the city's famed Strip. Some 50,000 new condos are already under construction in Las Vegas, which is becoming a second-home destination for the world's well-to-do. Clooney, who'll be an investor, resident, and designer in the project, says he'll donate 25% of his profits to charity. Construction is to begin in mid-2006.
A week after an arbitration panel cleared former Kmart (SHLD) Chairman and CEO Charles Conaway of mismanagement in a suit brought by former Kmart creditors, the Securities & Exchange Commission accused him of misleading investors about the retailer's finances before it filed for bankruptcy in 2002. The SEC brought similar fraud charges against former Kmart Chief Financial Officer John McDonald. The commission did not accuse the pair of fudging Kmart's numbers. Rather, it faulted them for failing to give investors a clear picture of the liquidity crisis the company faced in 2001. Lawyers for Conaway and McDonald said the two expect to be exonerated.
The federal government on Aug. 23 proposed new rules that would raise the fuel economy of sport-utility vehicles, minivans, and pickup trucks by 8% from 2008 to 2011. The new regs would split trucks into six categories, each with its own mileage standard. Current rules demand a 21-mpg average for all the trucks an auto company sells. Detroit heaved a sigh of relief over the rules. Those big SUVs and pickups will only have to average 21.3 mpg by 2011, while the smallest SUVs must improve mileage by 35%, to 28.4 mpg on average. The biggest trucks, including General Motors' (GM) Hummer H2, are still exempt because of a regulatory loophole.
-- Under a deal with New York Attorney General Eliot Spitzer, AOL (TWX) will make it easier to cancel its service.
-- Federal bankruptcy filings jumped 11%, to a record 467,333, in the second quarter from a year earlier.
-- Whirlpool (WHR) will acquire Maytag (MYG) for $2.7 billion in cash and stock.
Score one for the gila monster. Shares of Amylin Pharmaceuticals (AMLN) soared 31.6%, to $28.86, in the two trading days ended Aug. 24, after the company disclosed good trial data on a long-acting form of Byetta, a diabetes treatment derived from the lizard's saliva.