Toyota: Another week, another recall
Toyota has announced another worldwide recall, this time of 437,000 Prius hybrids built before January 2010, said Kelly Olsen in the Associated Press. “Toyota plans to fix a software glitch,” after drivers complained that the gas-electric car’s “antilock brakes seemed to fail momentarily while driving on bumpy roads.” The recall, which covers 155,000 cars sold in the U.S. and 233,000 in Japan, follows a massive worldwide recall earlier this month of eight Toyota models to fix “sticky gas-pedal systems.” But questions remain about how long the company had been aware of safety problems with its cars and whether it should have issued the recalls sooner.
Toyota faces “a long slog” in its quest to regain the trust of consumers and regulators, said William Spain in Marketwatch.com. The company has already aired a few commercials about the recalls, including one during the Super Bowl, but “it will probably need a sustained effort across all media to get out its message.” Toyota, which this year brought many of its marketing functions in-house, has hired Saatchi & Saatchi to help with its crisis-communications strategy.
Wall Street: Goldman’s Blankfein downsizes bonus
Goldman Sachs awarded CEO Lloyd Blankfein a $9 million bonus for 2009, said American Banking News. The payment is a fraction of the $100 million bonus many insiders were expecting, and less than half that awarded to JP Morgan CEO Jamie Dimon. In “a great PR move,” Blankfein will be paid in stock, which the CEO must hold for at least five years. Goldman posted a record profit of $13.4 billion in 2009, sparking rumors that Blankfein would get a nine-figure payout.
Executives: Thain signs on with CIT
Former Merrill Lynch CEO John Thain has been named CEO of CIT Group, said MSNBC.com. CIT, a lender specializing in small and mid-size businesses, emerged from bankruptcy reorganization only two months ago. Thain, 54, departed Merrill Lynch in 2009 amid uproar over his demand for a bonus and the high cost of renovating his office. New York Attorney General Andrew Cuomo is investigating whether Thain and other executives conspired to conceal Merrill’s losses before it completed its merger with Bank of America. Thain, who will be paid $6 million a year at CIT, declined to comment on the investigation.
Investigations: Insider-trading case rolls on
Prosecutors in the insider-trading case centered on billionaire hedge-fund manager Raj Rajaratnam and his Galleon Group fund claimed their 10th scalp this week, said Zachery Kouwe in The New York Times. Rajiv Goel, a former Intel executive, pleaded guilty to leaking Intel’s quarterly earnings reports to Rajaratnam in 2007. Goel’s telephone conversations with the hedge-fund chief were monitored by the FBI. Goel and Rajaratnam were classmates at the University of Pennsylvania’s Wharton business school more than 20 years ago.
Software: Sudden change at SAP
SAP, a maker of business software, this week ousted CEO Léo Apotheker and said it would return to the dual-CEO management structure it had used until seven months ago, said John Blau in Deutsche Welle. The 57-year-old Apotheker’s “lack of a clear and cohesive strategy displeased customers and employees alike.” He will be replaced by sales chief Bill McDermott and product-development head Jim Hagemann Snabe.