Bad week for German automakers: Huge costs, new probe
WOLFSBURG, Germany (AP) — It’s been a bad week for German automakers.
Volkswagen said Friday that a diesel emissions-cheating scandal would cost it an astounding $18.2 billion just for 2015, while Daimler revealed that U.S. authorities are sniffing around its tailpipes.
Both companies saw a niche with U.S. buyers who wanted performance, gas mileage and clean air. So they marketed their diesels as alternatives to boring hybrids.
But there is growing evidence that neither was able to back up the claims without violating pollution standards. Some management experts put the blame partly on ambitious, top-down corporate structures.
Enough with the earnings: SEC may reduce company reports
NEW YORK (AP) — It’s a regular Wall Street event: companies announce their quarterly earnings. Stocks can rise or plunge based on the results. And three months later it all happens again.
But regulators are wondering if it’s time for a change.
The Securities and Exchange Commission said Wednesday that it may change those rules, citing drawbacks to the requirements, like the cost to prepare the reports and important information gets lost in the flood of information.
The SEC didn’t propose any specific new rules or commit to making changes yet.
US home rents up in March, but signs suggest an easing trend
WASHINGTON (AP) — Americans paid more to rent homes last month, but broader measures suggest that the surging increases of prior years have moderated in much of the country.
Real estate data firm Zillow said Friday that the median U.S. monthly rent rose a seasonally adjusted 2.6 per cent in March from a year ago to $1,389. That was slightly more than the year-over-year increase of 2.5 per cent in February.
Prices ticked up slightly last month in the Los Angeles, Boston, Phoenix and Portland, Oregon, metro areas. Rents fell in Cleveland, Memphis and Oklahoma City.
Starbucks expresses confidence in rewards overhaul
NEW YORK (AP) — Starbucks expressed confidence that an overhaul of its rewards program will drive up sales over the long term, but warned the transition could be bumpy.
The company reported disappointing sales growth Thursday for the first three months of the year. Global comparable sales rose 6 per cent, including a 7 per cent increase in its flagship U.S. market.
While the reward changes went into effect just last week, Starbucks said early signs are encouraging and that customer spending is up across loyalty program members, including those who stood to lose out from the change.
McDonald’s US sales jump, boosted by all-day breakfast
NEW YORK (AP) — McDonald’s said U.S. sales jumped in the first quarter as it raised prices, worked on improving service and benefited from the popularity of its all-day breakfast menu.
Sales rose 5.4 per cent at established U.S. locations, marking the third straight quarter the figure has climbed.
As part of its push to stage a comeback, McDonald’s CEO Steve Easterbrook said the company is sparing no detail in looking at ways to step up operations. The most notable change has been the company’s launch of an all-day breakfast menu in the U.S. last fall. The company also introduced a “McPick 2” value deal this year to draw the price-conscious customers it had lost after abandoning the Dollar Menu.
Fiat Chrysler recalling more than 1.1 million vehicles
DETROIT (AP) — Fiat Chrysler is recalling more than 1.1 million cars and midsize SUVs worldwide because their gear shifters may confuse drivers and allow them to exit their vehicles without placing them in “park.”
The recall covers the 2012-2014 Dodge Charger and Chrysler 300 sedans and the 2014-2015 Jeep Grand Cherokee SUV. FCA is recalling 811,586 vehicles in the U.S. and 317,616 elsewhere.
An investigation by FCA and the U.S. government found that the electronic gear shifters in the vehicles were confusing and might lead people to believe that they were parked even if they weren’t. FCA is aware of 41 injuries potentially related to the problem.
American Airlines earns $700 million, beats Street forecasts
FORT WORTH, Texas (AP) — Airlines have saved billions in the past two years from falling oil prices, but cheaper jet fuel also seems to be contributing to lower fares, which pleases passengers but worries investors.
American Airlines is the latest case in point. The world’s biggest airline reported a $700 million first-quarter profit on Friday, beating Wall Street expectations. But average fares are still dropping and that American’s revenue this summer could be weaker than last summer.
The results mirrored those from United Airlines on Thursday, and airline stocks slumped Friday for a second straight session.
GE sees dip in 1Q profit, but industrial revenue rises
NEW YORK (AP) — General Electric Co. reported a slight decrease in its core quarterly profit as the company continues to shed and distance itself from its finance and capital businesses.
The company earned $1.93 billion, or 21 cents per share, down 2 per cent from $1.97 billion, or 20 cents per share, a year prior. The figures include only the conglomerate’s industrial businesses. Overall for the period, the company lost $98 million, or 1 cent per share, including costs associated with its financial units.
Cuba relents, allows Cuban-born travellers on historic cruise
MIAMI (AP) — Cuba has loosened a policy banning Cuban-born people from arriving by sea, allowing Carnival Corp. to go forward with the first U.S. cruise to the island in a half-century.
The company at first barred Cuban-born Americans from buying tickets for the planned May 1 cruise to comply with Cuba’s ban, drawing complaints from the Cuban-American community and a discrimination lawsuit. Then, the company said it would sell tickets to Cuban-Americans but hold the cruise only if Cuba relented and changed its policy.
Early Friday, Cuban state media announced the loosening of the maritime ban, and Carnival CEO Arnold Donald said in a statement that the trip would go forward.
German automakers to recall 630,000 diesel cars in Europe
BERLIN (AP) — Five German automakers have agreed to recall a total of 630,000 diesel vehicles in Europe following an investigation into their emissions levels, officials said Friday.
Germany’s transport minister, Alexander Dobrindt, identified the companies concerned as Mercedes, Opel Volkswagen and its subsidiaries Audi and Porsche.
The move followed a probe of 53 models by Germany’s Federal Motor Transport Authority that was sparked by revelations last year about Volkswagen’s emissions test cheating.
VW has acknowledged using special software to rig U.S. emissions tests and offered to pay substantial fines and compensations to American owners of affected diesel vehicles.
The Dow Jones industrial average rose 21.23 points, or 0.1 per cent, to 18,003.75. The Standard & Poor’s 500 index added 0.10 points, or 0.0 per cent, to 2,091.58. The Nasdaq composite index slid 39.66 points, or 0.8 per cent, to 4,906.23.
Benchmark U.S. crude rose 55 cents, or 1.3 per cent, to close at $43.73 a barrel in New York. Brent crude, used to price international oils, gained 58 cents, or 1.3 per cent, to close at $45.11 a barrel in London. Natural gas gained 7 cents, or 3.5 per cent, to close at $2.14 per 1,000 cubic feet. Wholesale gasoline added about a penny to close at $1.53 a gallon. Heating oil also rose a penny to close at $1.31 a gallon.