NEWS AT A GLANCE
GM makes drive for Indian market
General Motors is investing more than $200 million in a powertrain plant in India, as part of an effort to double its share of India’s fast-growing automobile market, to 10 percent by 2010. When the new plant, in western Maharashtra state, is done, GM will be able to make more than 225,000 cars a year in India. GM is unveiling a new small car in India next year, but says it isn’t trying to compete against Tata Motors’ super-cheap Nano, set to launch in October. (Reuters) The $2,500 Nano was hailed as a car for the masses, but its launch is under threat from large protests over Tata’s alleged state-aided theft of farmland for its factories. Similar protests have stalled other factory projects in rural India. (BusinessWeek.com)
Fannie Mae shakes things up
Fannie Mae CEO Daniel Mudd replaced the mortgage giant’s chief financial officer and two other top deputies as part of an effort to restore investor confidence. The replacements for CFO Stephen Swad and the other two come from inside Fannie. (AP in Yahoo! Finance) Fannie’s shares have dropped 90 percent this year and it has sustained record losses due to the mortgage crisis. “It’s like sports, when the team is losing, everyone wants to see a new coach come in,” said Len Blum at Westwood Capital LLC. “I’m not that moved by it.” Fannie and Freddie Mac sold $3 billion of short-term notes yesterday at yields that eased immediate fears of a government bailout, but worries over their capital levels linger. (Bloomberg)
French banks hit, again, by credit crisis
Credit Agricole, France’s largest retail bank, reported a 94 percent drop in quarterly profit, to $112 million, and fellow French bank Natixis booked a worse-than-expected $1.51 billion loss. Agricole’s earnings were set back by $1.64 billion in writedowns tied to the slumping credit market and monoline insurers. (Reuters) Natixis, which is seeking $5.5 billion in new capital, was hurt by $2.23 billion in writedowns. It said it will cut back its investment banking unit. “Both banks grew too fast in corporate and investment banking,” said analyst Alain Tchibozo at ING Wholesale Banking in Paris, and both will need to “restructure their investment banks very deeply.” (Bloomberg)
Dell’s direct-sales model pays off, in India
Dell has gotten a lot of flak for relying too long on its direct-to-customer sales model in the U.S., but Indian customers are eating it up. That’s great news for Dell, because India’s PC market is growing three times faster than the U.S.’s. Thanks in part to bulk purchases by corporations, which prefer buying over the phone or Internet, Dell’s share of the Indian market has doubled over the past three years. Dell is also expanding its retail business as it seeks to grow abroad, but India is a validation for keeping its Internet sales as part of the mix. “Dell’s rise from $20 a share to $25 reflected a realization that Dell was not such a chump of a company,” said analyst Clay Sumner at Friedman, Billings, Ramsey & Co. (Bloomberg)
