General Motors: Starting to dig out
General Motors said this week that it would begin to repay its $6.7 billion federal loan within weeks and could repay the full amount by mid-2010, said Robert Snell in The Detroit News. The unexpected good news came as the automaker announced its first quarterly financial results since emerging from bankruptcy on July 10. The company lost $1.15 billion, compared with a $2.5 billion loss a year ago, on revenue of $28 billion. The results give GM chief Fritz Henderson “some concrete results” to show the automaker’s impatient board.
Unfortunately, most recipients of federal bailout funds are in no position to repay their debts, said Tomoeh Tse in The Washington Post. Under the Troubled Assets Relief Program, the U.S. “poured about $700 billion into scores of companies,” ranging from giants like GM and AIG to small regional banks. Of those companies, 46 missed required payments to Washington as of Sept. 30. Critics fault federal TARP officials “for providing funds to firms that were so sick they couldn’t recover.”
Electronics: LCD makers join forces
Two Taiwanese technology companies have agreed to merge, “creating one of the world’s leading makers of liquid-crystal-display panels for TV sets and computers,” said Charmian Kok in The Wall Street Journal. The $5.3 billion deal between Innolux Display and Chi Mei Optoelectronics “reflects intensifying competition among Asia’s major producers of LCD panels.” Taiwanese producers are racing against their South Korean rivals to capture the fast-growing Chinese market. The combined company will be the world’s third-largest LCD producer, trailing Samsung Electronics and LG Display, both Korean.
Microchips: Intel, AMD bury the hatchet
Two of high-tech’s most bitter rivals have struck a truce, said Erika Morphy in Ecommercetimes.com. AMD, the world’s No. 2 maker of the microprocessors that power computers, has agreed to drop several lawsuits against Intel, the largest chip-maker, in exchange for a $1.25 billion payment and Intel’s promise to halt marketing practices that AMD calls anti-competitive. “Despite the settlement, Intel’s troubles are not over.” It’s still facing antitrust investigations by both the European Union and New York Attorney General Andrew Cuomo.
Disney: Downturn spurs executive reshuffle
Two of Disney’s top executives swapped jobs last week, as the entertainment giant flounders in the recession, said Richard Siklos in Fortune. Jay Rasulo, for the past seven years the head of Disney’s theme parks, will become chief financial officer, while CFO Thomas Stagg will occupy Rasulo’s former post. “It’s kind of like asking the guys who play Pluto and Donald Duck to change costumes.” Stagg faces the “extra-onerous task” of cutting costs at the parks while convincing frugal consumers to spend.
Computer networking: HP bulks up with 3Com
“In a bid to become a one-stop shop for corporate customers seeking everything from servers to networking equipment,” computer maker Hewlett-Packard has agreed to buy network services firm 3Com for $2.7 billion, said Michael Corkery in The Wall Street Journal. The price is $500 million more than Bain Capital unsuccessfully bid for 3Com in 2007, before the financial crisis hit. The deal with HP shows how “some companies, such as 3Com, have not only withstood the crisis, they have emerged even stronger.”