NEWS AT A GLANCE
Chrysler plugs in
Chrysler LLC, the smallest of Detroit’s Big Three automakers, unexpectedly unveiled three functioning battery-powered vehicles, jumping headlong into the race to build a mass-produced electric car. “I didn’t think they were a player,” said Jim Hossack at consultancy AutoPacific. “I’m impressed. This suggests a lot of bravado.” The three vehicles—a minivan, a Jeep, and a sports car—are slated to hit the market by late 2010. (Los Angeles Times) The cars were introduced as Congress is mulling over $25 billion in government-backed loans, possibly tied to increasing fuel efficiency. (BusinessWeek.com) The parent of Indian automaker Tata, meanwhile, said the credit crisis is making the U.S. and Europe ripe for acquisitions. (Bloomberg)
Buffett bets $5 billion on Goldman
Warren Buffett’s Berkshire Hathaway invested $5 billion in Goldman Sachs, in a key vote of support during a time of financial chaos. The deal gives Buffett perpetual preferred shares with a 10 percent annual dividend. Goldman had a market value of $53 billion yesterday, giving Buffett about 10 percent of the firm. (The New York Times) Goldman said it will raise an additional $2.5 billion in a public stock offering. And Buffett, along with his $5 billion stake, also gets warrants to buy $5 billion worth of shares at $115 a share for five years. (AP in Yahoo! Finance) Goldman closed at $125 yesterday, then jumped 11 percent in extended trading. “It’s a hell of a deal for Buffett,” said analyst Brad Hintz at Sanford C. Bernstein & Co. (Bloomberg)
EDF buys British Energy for $23 billion
French nuclear-power giant Électricité de France agreed to buy British Energy Group at a sweetened price of $23.2 billion. The sale price is 35 percent higher than British Energy’s stock price in March, before talks started. EDF has already secured the agreement of the British government, which owns about 36 percent of British Energy, and other big investors. (MarketWatch) Centrica, the U.K.’s largest energy provider, is in talks with EDF to buy 25 percent of British Energy after the deal closes. EDF gets eight sites in Britain on which it will build four nuclear reactors. “British Energy’s existing assets are aging,” said analyst Tina Cook at Charles Stanley & Co. “EDF will contribute its expertise, as well as replacing those assets.” (Bloomberg)
Down, maybe not out, on Wall Street
More than 120,000 jobs have been cut across the finance industry this year, and that number will probably jump by 10 to 20 percent with the fall of Lehman Brothers and Merrill Lynch. Most of these jobs weren’t held by Porsche-driving traders will million-dollar paychecks. Still, for bank employees, both high-pay and low, the sudden change is a shock. Some of these workers have found new jobs in the industry, unable to give up the still-higher-than-elsewhere paycheck. Others have used the change to take stock. “It’s really not comfortable; it’s disorienting,” said former Bear Stearns tech. analyst Andy Neff, who opted to study Jewish sacred texts. “But I find it unfortunate that people tend to focus on how much they lost.” (The New York Times)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
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- In defense of Gwyneth Paltrow
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