Citigroup’s Prince cuts out amid losses
Citigroup Chairman and CEO Charles Prince resigned yesterday, as the largest U.S. bank said it would write down another $8 billion to $11 billion in subprime-related assets. Robert Rubin, the former Treasury secretary and Goldman Sachs co-chairman, was appointed chairman, while Win Bischoff, the head of Citi’s European operations, became interim CEO. (MarketWatch) Citibank shares have dropped 17 percent since Prince took over from his mentor, Sanford Weill, in 2003. “Chuck Prince took over with all the tools,” said Peter Sorrentino at Cincinnati-based Huntington Asset Management. “Citigroup hasn’t delivered.” (Bloomberg)
Hollywood writers go on strike
The Writers Guild of America went on strike this morning, after 11 hours of last-ditch talks with Hollywood producers failed to produce an agreement. It is the guild’s first strike since a five-month stoppage in 1988. The Writers Guild is the first of three unions to negotiate with the producers, and any deal would affect the directors’ and actors’ unions. (Variety) Producers have stockpiled scripts for movies and prime-time TV shows, but late-night talk shows and live daytime shows will be hit immediately. “It won’t come to a screeching halt right away,” said economist Jack Kyser of the Los Angeles County Economic Development Corp. “The big thing for the networks is the erosion of their audience. This is a real concern for them.” (Bloomberg)
Ford reaches deal with union
The United Auto Workers reached a tentative agreement with Ford over the weekend, bringing a potential close to the last of the union’s big three labor pact negotiations. The terms of the deal were not released, but negotiators said it created a union-managed health care trust fund, spared two plants scheduled for closure, and allowed Ford to pay all new hires half of what current workers start at. (The Wall Street Journal) Ford’s 54,000 UAW workers have to ratify the deal. Ford lost $12.6 billion last year and is considered in worse financial shape than GM or Chrysler. “People are just feeling stuck with whatever we can get,” said Ford assembly worker Clark Griffin. (The New York Times, free registration required)
Pirates of the mine shaft
As the price of gold rises, South African “gold pirates” are seeking to mop up any remaining ore in abandoned sections of mines. Pirate mining brings in an estimated $250 million a year, but most of the money goes to the crime syndicates who are believed to recruit the miners. The pirate miners, known in South Africa as “zama-zamas,” often spend weeks underground, with supplies brought to them by runners. Largely untrained, they smoke and cook with gas stoves underground, and they extract the gold from the ore by burning mercury. Their life expectancy isn’t very high. “Sometimes in the mine it is difficult to identify who is working next to you, it’s so dark,” said one miner. (AP in Los Angeles Times, free registration required)