Top Headlines - part 6

Credit Suisse Making Changes After Largest Quarterly Loss

Credit Suisse Making Changes After Largest Quarterly Loss

FINANCE

  • Bank to withdraw from commodities trading
  • Many large banks also are withdrawing
  • Bank settled with U.S. government over tax evasion

Bank Credit Suisse Group AG has announced it will withdraw from commodities trading and make cuts to its investment bank after a $776 million net loss in the second quarter to divert funds to other parts of the business and save an estimated $75 million in costs.

The second-quarter loss is the largest since the collapse of Lehman Brothers in 2008.

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Chinese Food Scandal Strikes McDonald’s, Yum! Brands

Chinese Food Scandal Strikes McDonald’s, Yum! Brands

BUSINESS

  • Supplier used expired, unsanitary meat
  • Analysts divided over affect on restaurants’ reputations
  • This is latest food scandal to hit Chinese fast-food chains

Shanghai Husi Food is under investigation after a report by Dragon TV shows its processing facilities are unsanitary. The company supplies McDonald’s and Yum! Brands, the parent company of KFC and Pizza Hut, the top two brands by sales in China.

The video shows meat that had been on the floor being packaged, expired beef and chicken being mixed with fresh meat, employees using bare hands to handle meat, and sewage and trash on the floor.

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MIT Professor Designs Robot Assistant for Household Use

MIT Professor Designs Robot Assistant for Household Use

BUSINESS

  • Crowdfunding campaign has already passed target $100,000
  • Robots sell for starting price of $499
  • Social robots seeks to design robots for personal use

Cynthia Breazeal, a media arts and science associate professor at the Massachusetts Institute of Technology, and a team of scientists and investors have developed what they are calling the first family robot.

The robot, named Jibo, is capable of doing a variety of tasks including taking photos, ordering food, telling stories and taking messages. It can recognize individuals, talk to other Jibos and it has algorithms to help it learn. It is equipped with Wi-Fi and Bluetooth.

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Pharmaceutical Company AbbVie Buys Shire for $55 Billion

Pharmaceutical Company AbbVie Buys Shire for $55 Billion

BUSINESS

  • Deal largest in pharmaceutical industry this year
  • AbbVie largest U.S. company to move overseas
  • Tax inversion increasingly common

U.S. pharmaceutical company AbbVie Inc. has agreed to purchase Irish rival Shire Plc for $54.8 billion in cash and stock, adding to its portfolio and decreasing its tax burden.

Shire manufactures drugs for rare diseases and attention deficit hyperactivity disorder. ADHD drugs accounted for 39% of Shire’s revenue in 2013. During the second quarter of 2014, the hyperactivity drug Vyvanse accounted for $1.5 billion in revenue.

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Forbes Media Sells Majority Stake to Hong Kong Investors

Forbes Media Sells Majority Stake to Hong Kong Investors

BUSINESS

  • Terms not disclosed but valued at $475 million
  • Forbes family to maintain management control
  • Transaction completes long sales process

Iconic American financial media brand Forbes Media LLC, the publisher of Forbes magazine, has sold a majority stake to an Asian consortium lead by Hong Kong investors.

The consortium is comprised of Integrated Whale Media Investments, based in Hong Kong, and Asustek Computer based in Singapore, among others. It will provide the promise of international expansion and new capital. It also will extend the Forbes digital, media and technology brands.

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Microsoft to Slash 14% of Global Workforce

Microsoft to Slash 14% of Global Workforce

BUSINESS

  • Majority of layoffs coming from Nokia unit
  • Cuts are largest job deductions in company history
  • CEO aims to make Microsoft more competitive

Software Giant Microsoft Corp. will cut up to 18,000 jobs, 14% of its global workforce by June 30, 2015, in order to eliminate redundancies and compete with other technology companies.

It is expected the majority of the cuts, up to 12,500, will come from the Nokia Oyj handset unit, which Microsoft acquired in April. Adding Nokia expanded Microsoft from 99,000 to 127,000 employees.

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Reynolds America Purchases Lorillard for $27 Billion

Reynolds America Purchases Lorillard for $27 Billion

BUSINESS

  • Merger makes second-largest U.S. tobacco company
  • British Imperial Tobacco purchasing some Lorillard products
  • Critics want menthol cigarettes outlawed

American tobacco company Reynolds American Inc. has agreed to buy with rival Lorillard Inc. for a deal worth as much as $27.4 billion including debt, forming the second-largest tobacco company in the United States and a major menthol cigarette manufacturer.

Lorillard manufactures the Newport brand, the second-most popular cigarette brand after Marlboro, which accounts for 12% of the $90 billion U.S. market and is one of the few cigarette brands to grow over the past three years.

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Chinese Government: 30% of New Federal Cars Must Be Green

Chinese Government: 30% of New Federal Cars Must Be Green

BUSINESS

  • Measure aimed at cutting pollution problem
  • After 2016 percentage of green vehicles to increase
  • Ten percent sales tax to be waived on green vehicles

China, the world’s largest car market in terms of sales, has taken steps to reduce its ever growing pollution problem. Five government ministries and departments created a plan requiring a minimum of 30% of vehicles purchased by government ministries and agencies be new energy vehicles until 2016.

The plan runs until 2016. After 2016, the percentage of green vehicles being purchase will increase yearly, and local provinces also will be required to meet a 30% minimum.

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Apple Urges FTC to Investigate Google Play Store

Apple Urges FTC to Investigate Google Play Store

BUSINESS

  • Apple letter uncovered under Freedom of Information Act
  • Apple’s own case was resolved days before
  • Children made millions in unauthorized purchases

Days after settling its own case with the U.S. Federal Trade Commission, Apple general counsel Bruce Sewell sent a letter to the FTC urging it to investigate Google for the same charges: failing to provide adequate disclosures for in-app transactions.

In the letter to FTC Chairwoman Edith Ramirez and Commissioner Julie Brill, obtained by Politico through a Freedom of Information Act request, Sewell claims the Android-based Google Play store has generated a number of consumer complaints about its in-app purchasing system. He cited an article by Consumer Reports.

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Lufthansa Expanding Budget Flights to Compete, Cut Costs

Lufthansa Expanding Budget Flights to Compete, Cut Costs

BUSINESS

  • Company reacting to lower revenue
  • It may work with Turkish Airlines
  • Budget flights will be conducted under Wings group

Germany’s Deutsche Lufthansa AG, Europe's largest airline by revenue, will be enacting new cost-cutting measures to win back customers and investors, says chief executive Carsten Spohr.

Cost-cutting measures include offering low-cost long-haul flights under a new brand. It will offer the budget flights alone or with a partner. Spohr said the airline was in advanced talks with Turkish Airlines.

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