California Leads Nation in Job Losses

A total of 44 U.S. states lost jobs in April, according to a U.S. Labor Dept. report released on May 22. Leading the layoff pack was California, where employers axed 63,700 positions. Texas and Ohio ranked No. 2 and No. 3 on the list, respectively. In a few states companies are actually hiring—Arkansas and Montana each added 1,500 jobs from the previous month. Buried deep in the data was one piece of good news: Mass layoffs (defined as job cuts of 50 or more by a single employer) seem to be on a downward trend after hitting a monthly record of 2,933 in March.

Source: Bloomberg

Magna Fleshes Out Bid for Opel

Canadian car-parts maker Magna International says it would pour as much as $981 million into Opel and Vauxhall, if it succeeds in acquiring a stake in GM’s struggling European divisions. At a May 22 press conference in Austria, where Magna has its European headquarters, co-CEO Siegfried Wolf said the investment would be made in partnership with OAO Sberbank, Russia’s No. 1 lender. Italy’s Fiat and Swiss buyout firm RHJ International are also bidding for the GM units.

Source: Bloomberg

Cigarette Makers Lose Appeal

A U.S. Federal appeals court upheld the major elements of a landmark 2006 ruling that found top cigarette makers guilty of racketeering and fraud for deceiving the public about the dangers of smoking. In its May 22 decision, the court also upheld requirements that tobacco companies alter the way they market their products, including eliminating misleading labels such as “low tar” and “ultra light”. Two of the defendants, Philip Morris USA and its parent Altria Group, say they will appeal the case to the Supreme Court.

Source: Reuters

U.S. Debt Rating At Risk?

The U.S. could eventually lose its top AAA credit rating, according to Bill Gross, co-chief investment officer of Pacific Investment Management Co — the world’s biggest bond fund. The announcement spooked the financial markets on May 21 and could keep the dollar, stocks, and bonds under heavy selling pressure in the near future. The U.S. isn’t the only country facing issues with its credit rating. Standard & Poor’s has lowered its outlook on Britain to “negative” from “stable,” a move that could pave the way for an eventual downgrade of that country’s debt rating.

Source: Reuters

Florida’s BankUnited in Largest Bank Failure of 2009

BankUnited — Florida’s biggest regional bank — was seized by regulators on May 21 and sold to a consortium of private equity firms in the largest bank failure so far in 2009. Under the deal, the buyers will inject $900 million of new capital and assume $12.7 billion in assets and $8.3 billion in deposits.

Source: New York Times

China Faces Uphill Struggle to Dislodge Dollar

China is on the offensive. Long a bystander in international economic affairs, Beijing has announced initiatives to remold the global financial system. The aim? To knock the U.S. dollar off its perch. But before China gets ahead of itself, there are a number of challenges that Beijing must overcome.

Source: Financial Times

General Motors Bankrupt by End of Next Week

The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing. The move comes as the White House prepares to lift struggling Chrysler from bankruptcy protection as soon as next week.

Source: Washington Post

GlaxoSmithKline in $1.9 Billion Tax Fight

British-based drug company GlaxoSmithKline is fighting U.S. authorities over $1.9 billion in back taxes, interest and penalties. GSK already had outlined the dispute in its annual report, but the IRS is now investigating a tax-savings technique known as “earnings stripping.” The practice involves a company reducing taxable profits in the U.S. by claiming excessive interest deductions on intercompany loans from units abroad.

Source: Reuters

Johnson & Johnson Forks out $970 million for Cancer Drug

Drugmaker Johnson & Johnson said it had agreed to acquire a cancer drug developer Cougar Biotechnology on May 21 for $970 million. The company said it had agreed to pay $43 a share — a 16% premium to Cougar’s May 21 closing price.

Source: New York Times

U.S. Carbon Emissions Legislation Approved

On May 21, a U.S. House of Representatives’ committee approved a bill to create the first national limit on greenhouse gas emissions. The legislation would create a cap-and-trade system. Over the next decades, power plants, oil refineries, and manufacturers would be required to obtain allowances for the pollution they emit. Those who need more or less could turn to a Wall-Street-like market in the allowances.

Source: Washington Post

British Airways Posts $595 Million Loss

British Airways — Europe’s third-largest airline — reported its first full-year loss since 2002 on May 22 and said it will slash capacity as the global recession hits air travel. The company announced an annual net loss of $595 million, compared with net profit of $1.1 billion a year earlier.

Source: Bloomberg

Profiting From Online Networks

Companies are working fast to figure out how to make money from the wealth of data they’re beginning to have about our online friendships. The relationships speak volumes about us as consumers and workers, and decoding the data can lead to profitable insights. Calculating the value of these relationships has become a defining challenge for businesses and individuals.

Source: BusinessWeek

Conversation of the Day: MBAs – Public Enemy No. 1?

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