GM to speed payments to auto-parts suppliers
General Motors Co. has decided to speed up payments to its parts suppliers to help ease their cash flow problems and ultimately improve relations with the companies, a spokesman said Thursday.
The move is important, industry analysts say, because GM has had strained relations with its suppliers since the 1990s when it continually demanded cost cuts. As a result, suppliers offered new technology first to other automakers that paid better and more frequently, putting GM behind.
GM pays suppliers once per month and an average of 47 days after goods are delivered, Flores said. Under the new plan, GM will keep the 47-day average, but starting with Nov. 1 deliveries, payments will be made every Tuesday.
Nintendo will cut price of Wii console by $50
Nintendo on Sunday will cut the price of its popular Wii console by $50, in a bid to broaden its appeal among potential new customers as it prepares to release the Wii Fit-Plus and New Super Mario Bros. games.
The Wii, whose game control senses motions without having relying solely on buttons and levers, is the top-selling console worldwide. The new $199.99 Wii will include the Wii Remote controller, Nunchuk controller and Wii Sports software.
Speculation about a price cut had grown after the other two console makers, Sony Corp. and Microsoft Corp., reduced prices on their systems in August.
New jobless claims drop to 530,000
The number of newly laid-off workers seeking unemployment benefits fell for the third straight week, evidence that layoffs are continuing to ease in the earliest stages of an economic recovery.
The Labor Department said Thursday that initial claims for unemployment insurance dropped to a seasonally adjusted 530,000 from an upwardly revised 551,000 the previous week. Wall Street economists expected claims to rise by 5,000, according to a survey by Thomson Reuters.
Reduced expenses help Rite Aid shrink loss
Rite Aid Corp. on Thursday reported a smaller second-quarter loss than a year ago as it cut expenses, but the nation’s third-largest drugstore operator lowered its expectations for the fiscal year due to the weak economy and high unemployment.
The Camp Hill, Pa., company said it lost $120.4 million, or 14 cents per share, after preferred dividends in the three months ended Aug. 29. That compares with a loss of $227.4 million, or 27 cents per share, a year ago.
Analysts expected a larger loss of 16 cents a share for the latest quarter, according to Thomson Reuters.
Revenue fell 3 percent to $6.3 billion from $6.5 billion a year ago and missed Wall Street estimates of $6.4 billion.
Official: ‘Too big to fail’ not fixed by overhaul
A top White House economic adviser says the Obama administration’s proposed overhaul of financial rules preserves the policy of “too big to fail,” and could lead to future bailouts.
Former Federal Reserve Chairman Paul Volcker said Thursday that by designating some companies as critical to the broader financial system, the plans create an expectation that those firms enjoy government backing in tough times. That implies those financial companies “will be sheltered by access to a federal safety net,” he said.
Lawmakers should make clear that nonbank companies will not be saved with federal money, he said.
General Motors CEO sees sales growth in ’10
U.S. auto sales should improve modestly next year as tight credit for auto financing eases and the economy works its way out of the recession, General Motors Co.’s top executive said Thursday.
CEO Fritz Henderson said he expects the auto industry to sell 11.5 million to 12 million cars and light trucks in the U.S. next year, compared with about 10 million to 10.5 million vehicles this year.
Henderson spoke to reporters in Orlando on the last stop of a nine-city tour.
U.S. Bank plans to ease overdraft penalties
U.S. Bank is the latest financial institution to back off on the penalties customers face for overdrafting their accounts.
The bank’s Minneapolis-based parent, U.S. Bancorp, said Thursday that it’s changing checking account overdraft policies effective in the first quarter of next year. The move follows similar announcements by Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. earlier this week.
U.S. Bank, which lists 59 Las Vegas Valley branches on its Web site, will eliminate overdraft fees when a customer’s account is overdrawn by less than $10. That’s regardless of the number of overdraft transactions that may have occurred. And the bank will limit the number of overdraft fees charged to no more than three per day.
Research in Motion sales to miss forecasts
Research In Motion Ltd. forecast third-quarter sales that missed analysts’ estimates, signaling the BlackBerry maker may sell phones at lower prices to compete with Apple Inc.’s iPhone. The shares sank in late trading.
Revenue in the period ending Nov. 28 will be $3.6 billion to $3.85 billion, RIM said Thursday in a statement. Analysts on average projected sales of $3.91 billion.
Many analysts predict RIM will introduce a new version of its touch-screen Storm handset later this year to counter competition from the iPhone, Palm Inc.’s Pre and a raft of planned handsets based on Google Inc.’s Android software.