The daily business briefing: June 23, 2017
Qatar Airways seeks a stake in American, big banks pass their annual stress test, and more
Qatar Airways seeks 10 percent stake in American Airlines
The state-owned Qatar Airways is making an unsolicited attempt to buy a 10 percent stake in American Airlines, the U.S. carrier said in a filing with the Securities and Exchange Commission. Qatar Airways CEO Akbar al-Baker reportedly approached his counterpart at American Airlines about Qatar's interest. The Middle Eastern airline has grown from a small regional carrier to a global competitor with 150 destinations. American has accused Qatar and other Gulf rivals of unfairly fueling their growth with government subsidies, and American CEO Doug Parker said he was "bewildered" by Qatar's move. "Why an airline we are aggressively fighting would want to take a stake makes no sense," he said. Any stake of more than 4.75 percent would have to be approved by American's board, which has yet to receive formal notice from Qatar.
Big banks pass first round of annual stress tests
The 34 biggest U.S. banks all passed the first round of the Federal Reserve's annual stress tests, which are designed to assess their fitness to withstand economic shocks. The big banks, such as JPMorgan Chase and Bank of America, would face $383 billion in loan losses in the Fed's worst scenario. That is an improvement over last year, and the banks have high-quality capital far above the threshold that regulators demand. "This year's results show that, even during a severe recession, our large banks would remain well capitalized," said Fed Governor Jerome Powell. "This would allow them to lend throughout the economic cycle, and support households and businesses when times are tough." Morgan Stanley trailed its rivals on a key leverage measure for a second straight year. Last year it had to resubmit its plan to pay out capital to shareholders in the second round of tests. Results from that round come next week.
Workers at companies touted by Trump brace for layoffs
Workers at a Boeing factory in Charleston, South Carolina, learned Thursday that the aircraft maker would scrap nearly 200 jobs, five months after President Trump visited the factory to tout his push to create U.S. jobs. "Our competition is relentless, and that has made clear our need as a company to reduce cost to be more competitive," Boeing said in a statement. In Indianapolis, more than 600 employees at a Carrier air-conditioning company plant are facing layoffs next month, despite Trump's assurance six months ago that he had worked out a deal with Carrier to cancel a move of jobs to Mexico and save nearly all of the Indianapolis positions. "The jobs are still leaving," said Robert James, president of United Steelworkers Local 1999. "Nothing has stopped."
Coal company sues John Oliver and HBO for mocking report
Coal company Murray Energy and its CEO, Robert Murray, are suing Last Week Tonight host John Oliver, HBO, and Time Warner for defamation, claiming that on his June 18 show Oliver made a "callous, vicious, and false" attack on them and the entire coal industry. The defamation suit, filed in West Virginia, said Oliver accused a "maliciously planned attempt to assassinate the character and reputation" of Murray and his Ohio-based company. In the segment, Oliver said it was wrong for President Trump to say that reducing regulations on coal companies helps out-of-work coal miners, because they "are not all in the same boat." He also described Murray, 77, as a "geriatric Dr. Evil" whose company fought against safety regulations and said former President Barack Obama's push for mine safety hurt the coal industry. HBO said it did not believe anything in the show violated Murray's rights or those of his company.
Regulators propose record fine for alleged robocall mastermind
The Federal Communications Commission on Thursday proposed a record $120 million fine for a Miami man, Adrian Abramovich, accused of orchestrating a massive robocall effort to sell vacation timeshares and other products. The regulators said the alleged scam operation faked local numbers mimicking the victim's area code and three-digit prefix, a technique known as "neighbor spoofing" believed to increase the odds that even skeptical people will answer a call. People who took the calls got an automated message urging them to press a number to hear "exclusive" vacation deals from major brands such as Hilton, Marriott, and Expedia, but instead were directed to a front operation for timeshare companies in Mexico. The FCC said Abramovich's companies made 96,758,223 calls, more than a million a day, over one three-month period.