UBS Under Fire, iTunes On Top
NEWS AT A GLANCE
UBS ex-president pushes breakup
Former UBS president Luqman Arnold called for the bank to break apart, separating its investment bank from its wealth management businesses and selling off its asset management unit. (Reuters) In a letter to a UBS board member, Arnold said the bank’s proposal to raise $15 billion through a rights offer may not be sufficient to reverse its fortunes, after its $38 billion in writedowns. He also opposed the board’s choice of company lawyer Peter Kurer as the new chairman. (Bloomberg) Separately, John Reed, who helped mastermind the $166 billion merger that created Citigroup in 1998, called that deal a “mistake” that failed to benefit shareholders, employees, or customers. (Financial Times, free registration)
Apple claims No. 1 music retailer title
Apple’s iTunes Store dethroned Wal-Mart as the top music retailer in the U.S., according to NPD Group. Neither Apple nor NPD Group released sales figures. This is the first time a digital download service has beaten a physical CD retailer for the top spot. “It’s a major milestone,” said Tom Adams of consulting firm Adams Media Research. (Los Angeles Times, free registration) Apple has sold more than 4 bilion songs since iTunes’ launch in April 2003. (MarketWatch) Looking to compete with iTunes, three of the four major record labels and social networking site MySpace unveiled a service that will let MySpace users listen to songs free online and pay to download them. (The Washington Post, free registration)
Motorola cuts 2,600 jobs
No. 2 mobile phone maker Motorola said it is cutting 2,600 employees, bringing its total job cuts to more than 10,000, or 10 percent of its workforce, since last year. (Los Angeles Times, free registration) The company said it will take a $104 million pretax charge related to severance costs. Its shares dropped slightly in extended trading. (Reuters) About 700 of the job cuts will be in Motorola’s Singapore manufacturing facilities. Motorola is leaving Singapore altogether by the end of the year, leaving China and Brazil as its major manufacturing hubs. (Chicago Tribune, free registration)
Gallo, at 75, is aging well
One out of every five glasses of wine consumed in the U.S. comes from Ernest & Julio Gallo, the nation’s largest wine seller, with $3.5 billion in annual sales. But the 75-year-old family-owned company also sells wine in 90 countries, through its 60 labels. Its top-selling label is Carlo Rossi, the inexpensive wine sold in a jug, but the second generation of Gallos is focusing on more discerning palates. They run an enormously efficient company that controls almost every aspect of the wine-making process, including making the corks and bottles. “There is almost no waste in that company,” says wine industry analyst Jon Fredrikson. “They have a product for every grape.” (Los Angeles Times, free registration)
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