The daily business briefing: March 30, 2017
Merkel rejects a key Brexit demand, Samsung unveils its first new smartphone since the Note 7 recall, and more
Merkel rejects a key Brexit demand
German Chancellor Angela Merkel on Wednesday rejected a central proposal made by British Prime Minister Theresa May in her letter officially launching the process of Britain's exit from the European Union, saying that the EU would only negotiate the U.K.'s future relationship with the trading bloc after its departure was arranged. In her six-page letter triggering negotiations, May said the two sides should "agree the terms of our future partnership alongside those of our withdrawal from the European Union." Donald Tusk, the president of the European Council, said there would be "no winners" from Brexit, and the coming two years of negotiations would focus on "damage control."
Samsung reveals first new smartphone since Note 7 debacle
Samsung unveiled the new version of its flagship smartphone, the Galaxy S8, in the company's first product introduction since its disastrous recall of the Note 7 last year after some of the devices caught fire. The company is depending on the Galaxy S8 to put the Note 7 debacle behind it, and face off against tough competition from Apple and Huawei. The new device offers a Siri-like voice assistant, Bixby, and a bevel-less "infinity" display. "The S8 is unquestionably a strong product but Samsung must now deliver a faultless launch to move on from the difficulties of 2017," said Ben Wood, chief of research at CCS Insight, in an email to CNBC. The phone's official release date is April 21.
Westinghouse files for bankruptcy after nuclear overruns
Toshiba's Westinghouse Electric Co. unit filed for bankruptcy on Wednesday due to billions of dollars of cost overruns in the construction of four nuclear reactors in the Southeastern U.S. The new nuclear reactors in South Carolina and Georgia are to be the first new nuclear plants built in the U.S. in three decades. They were supposed to be up and running as soon as this week, but have fallen years behind schedule as costs rose due partly to tightening safety regulations. Westinghouse said it hoped to separate its profitable nuclear fuel and power plant servicing business from the construction projects, and had lined up $800 million in financing from Apollo Investment Corp. to support core operations during the restructuring.
Toyota recalls 2.9 million more vehicles over Takata airbag inflators
Toyota Motor Corp. said Thursday that it was recalling another 2.9 million vehicles across the world due to potentially faulty airbag inflators. Exploding airbag inflators made by parts supplier Takata have been linked to at least 16 deaths, leading to recalls of all 100 million of the devices, affecting millions of vehicles. The latest Toyota recall affects vehicles in Japan, China, Oceania, and other regions, but not the U.S. The cars involved include the Corolla Axio and the RAV4 crossover SUV. Fuji Heavy Industries, maker of Subaru vehicles, Mitsubishi, and truck maker Hino Motors also issued recalls affecting about 240,000 vehicles.
Fed policy makers split on pace of rate hikes
Federal Reserve Bank of Boston President Eric Rosengren said Wednesday that the Fed should raise interest rates three more times this year rather than the two times recommended by several colleagues. Rosengren said the quicker pace could help keep the U.S. economy from overheating. Rosengren said that with the employment picture brightening and inflation near the central bank's 2 percent target, the policy makers on the Federal Open Market Committee should nudge the rate higher every other meeting as long as data indicate current trends are holding. A day earlier, Fed Vice Chairman Stanley Fischer said the median estimate of two more rate hikes this year "seems about right." Two other Fed leaders are expected to weigh in Thursday.