Autos: Ford slashes white-collar jobs
Under pressure from investors, Ford announced this week it will cut 10 percent of its salaried jobs in North America and Asia, said Neal Boudette in The New York Times. The automaker will eliminate roughly 1,400 positions by September, through early retirement and other incentives, “as part of a cost-saving move aimed at increasing sagging profits and propping up its stock price.” Factory jobs will be unaffected. After seven years of steady profit growth, Ford and other U.S. automakers “are being challenged by slowing sales.” Ford’s sales fell 5.6 percent in the first four months of 2017, and its stock has fallen almost 10 percent since January.
“Auto executives are facing a tough choice in whom to please: Wall Street or the White House,” said John Stoll and Mike Colias in The Wall Street Jour nal. With the industry facing its first downturn in years, automakers are “quickly retreating” from the lavish hiring promises that many of them have made to curry favor with President Trump. Ford and General Motors are both making job cuts “that could far outpace” the hiring touted by both companies earlier in the year. In January, for example, Ford said it would close a plant in Mexico and create 700 jobs in Michigan building electric vehicles, a move hailed by Trump at the time.
Autos: Lyft, Waymo gang up on Uber
Ride-hailing app Lyft is teaming up with Waymo to work on selfdriving cars, said Nathan Bomey in USA Today. The partnership, announced this week, gives Lyft a “powerful new ally” in its rivalry with the much larger Uber. It also places Waymo, which began as Google’s driverless car project, “a step closer to becoming a business with real-world customers.” Few details have been released, but the collaboration “is expected to involve a pilot program in which consumers will ride in vehicles equipped with Waymo’s self-driving system.”
Health care: Obamacare loses another insurer
“Aetna is saying goodbye to Obamacare,” said Tami Luhby in CNN.com. The nation’s third-largest health insurer announced last week that it will stop selling individual policies in the last two states where it offered plans, Nebraska and Delaware, next year. “Aetna’s withdrawal is the latest in a series of insurers leaving Obamacare,” including Humana earlier this year. Insurers are blaming higher-than-expected costs—Aetna expects to lose more than $200 million on the exchanges this year—as well as uncertainty over Congress’ plans to reform the law.
Retail: German grocer Lidl to expand in U.S.
Walmart and other major U.S. supermarket chains are bracing for the arrival of a German discount grocer “with a track record of disruption,” said Sarah Nassauer and Heather Haddon in The Wall Street Journal. Lidl is set to open 20 stores in Virginia, North Carolina, and South Carolina by the summer, and real estate analysts say the German chain has plans to open 200 or more U.S. stores in the coming years. Lidl, along with German discounter Aldi, has already reduced sales for Asda, Walmart’s U.K. chain.
Tech: Snap’s first earnings disappoint
Snap missed the mark “in its first earnings report as a public company,” said Anya George Tharakan and David Ingram in Reuters.com. The messaging service reported a slowdown in user growth and revenue, sending its stock plummeting after “a red-hot March initial public offering.” Snap’s revenue increased to $149.6 million—a fourfold increase from a year earlier—but it still missed analysts’ forecasts. The comp any also reported an eye-popping $2.2 billion net loss, tied to stock-based compensation from its IPO. Although the loss was expected, “investors were surprised to see all of it show up in a single quarter rather than spread out over time.”