GM: CEO Whitacre leaves on a high note
Having just announced a “strong” second-quarter profit of $1.3 billion, General Motors, “in what almost seemed like an afterthought,” last week revealed that Chairman and CEO Edward Whitacre, 68, was giving up the CEO post, said James Healey in USA Today. The announcement surprised auto-industry analysts, who were expecting GM to announce the date of its planned stock offering—not a change in leadership. GM attributed the profit surge to a sharp reduction in profit-sapping sales incentives and customers’ growing preference for more expensive models.
For Daniel Akerson, 61, who is taking over the CEO job, the toughest task may be “selling the company to Wall Street,” said Sharon Terlep and Joann Lublin in The Wall Street Journal. Some of Akerson’s former co-workers wonder if the onetime private-equity and telecom executive is up to the job. They describe Akerson as blunt and demanding, with a penchant for “colorful language” and a dearth of diplomatic skills. But some Wall Street analysts say Akerson’s in-your-face style is just what GM needs to “avoid reverting to its plodding, spendthrift ways.”
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Scandals: Apple manager busted
The Justice Department has indicted a midlevel Apple manager in a kickback scheme, accusing him of collecting more than $1 million in bribes from Asian suppliers for Apple’s iPhone and iPad, said Pete Carey in the San Jose Mercury News. Paul Devine, an Apple supply manager, “used an elaborate chain of U.S. and foreign bank accounts” to hide payments from suppliers in several Asian countries in exchange for confidential information “that enabled the suppliers to negotiate favorable contracts with Apple.” Devine has pleaded not guilty.
Banking: Fed restricts overdraft fees
“The era of the $35 cup of coffee is coming to an end,” said Adam Rose in Huffingtonpost.com. New Federal Reserve rules taking effect this week require banks to decline ATM and debit-card transactions if there are insufficient funds in the customer’s account, unless the customer has explicitly signed up for overdraft protection. Banks formerly slapped customers with automatic fees of up to $35 on overdrawn accounts. The Federal Reserve last week ordered Wells Fargo to return $203 million in overdraft fees to customers.
Lawsuits: Oracle targets Google’s Android
Oracle’s lawsuit against Google for infringing on its patented Java software is reverberating through Silicon Valley, said J. Bonasia in Investor’s Business Daily. Oracle claims that Google’s Android cell phone operating system uses Java without proper authorization. It is seeking an injunction barring Google from using Java unless it pays royalties to Oracle, which inherited the Java patents when it bought Sun Microsystems in January. Such an injunction could paralyze every cell phone maker that uses Android.
Safety: BP fined a record $50 million for lapses
The Occupational Safety and Health Administration has levied a record $50.6 million fine against BP for violations at one of the company’s Texas refineries, said Sam Hananel in The Washington Post. An explosion at the Texas City plant in 2005 killed 15 workers. An OSHA investigation found malfunctions in equipment that was supposed to warn workers of unsafe conditions. The penalty is the largest OSHA has ever assessed. BP also agreed to invest $500 million in safety upgrades at the plant.
