The news at a glance
Boeing’s Dreamliner is grounded; Apple’s stock price falters; Walmart’s all-American pledge; Facebook unveils social search function; Chase slashes CEO Dimon’s pay
Airlines: Boeing’s Dreamliner is groundedAll Boeing 787 Dreamliners were ordered grounded this week by the Federal Aviation Administration, said Terry Maxon in DallasNews.com. A day earlier, Japan’s two largest airlines grounded their Dreamliner fleets after a domestic flight between Ube and Tokyo was forced to make an emergency landing because of battery trouble and an “unusual smell” in the plane’s cockpit. That incident came in the wake of a recent series of embarrassing technical glitches involving Boeing’s newest commercial plane, including a battery fire on the ground, fuel leaks, and a cracked cockpit window. “The FAA will work with the manufacturer and carriers to develop a corrective action plan to allow the U.S. 787 fleet to resume operations as quickly and safely as possible,” the regulator said.
Boeing shares were slipping even before the announcement in Washington, said Mayumi Negishi and Tim Kelly in Reuters.com. “I think you’re nearing the tipping point where they need to regard this as a serious crisis,” said industry analyst Richard Aboulafia. “This is going to change people’s perception of the aircraft if they don’t act quickly.” A Boeing spokesman said the company was working with its customers and “appropriate regulatory agencies.” United Airlines is currently the only U.S. carrier that operates Dreamliners.
Markets: Apple’s stock price faltersApple is in a slump, said Juro Osawa in The Wall Street Journal. The company’s stock fell this week amid rumors that Apple slashed its orders for iPhone 5 parts due to weaker-than-expected demand. The company’s stock price dipped below $500 per share this week, hitting a nine-month low and down from its all-time high of $702.10 in September. The sell-off escalated after analysts warned that the iPhone’s profit margins were “unsustainably high.” Some market watchers suggested the supply cuts reflected iPhone fatigue, while others cited stiffer competition from smartphone rivals Samsung and Nokia.
Retail: Walmart’s all-American pledgeWalmart announced plans this week to increase its sourcing from domestic suppliers and to hire more than 100,000 veterans, said Anne D’Innocenzio in the Associated Press. The company’s president and CEO, Bill Simon, predicted that Walmart would spend an additional $50 billion on U.S.-made products over the next 10 years, and would partner with federal agencies to train and employ returning veterans. In a statement, First Lady Michelle Obama praised the discounter’s hiring drive, calling Walmart’s efforts “historic.”
Tech: Facebook unveils social search functionFacebook unveiled a major new feature this week, said David Lee in BBC.com. The new tool, called Graph Search, allows users to easily search their friends’ Facebook content, “such as photos, status updates, location data, as well as the things they have ‘liked.’” Early speculation suggested that Facebook was mounting a challenge to search stalwarts such as Google, Yahoo, and Bing, but Facebook CEO Mark Zuckerberg insisted the new feature was designed to help users make new connections, not to tackle the search engine juggernauts.
Banks: Chase slashes CEO Dimon’s pay JPMorgan Chase’s top executive is facing a pay cut, said Andrew Tangel in the Los Angeles Times. The bank will slash CEO Jamie Dimon’s pay by half, after an embarrassing $6 billion loss that the firm’s directors called “a serious mistake.” Dimon, who took home $23 million last year and was the highest-paid U.S. bank executive, will receive $1.5 million in salary and $10 million in stock awards for 2012. The trading blunder also roused bank regulators, who slapped the bank with sanctions and ordered it to tighten its risk management procedures.