BUSINESS BRIEFS
Automakers likely will get $25 billion in federal loans
Associated Press
WASHINGTON — Among the few bills likely to actually become law before Congress closes shop for the elections is a plan to give struggling U.S. automakers $25 billion in federal loans.
Opponents criticize it as a taxpayer-funded industry bailout, but the legislation is steaming ahead anyway, buoyed by the support of both Sen. John McCain and Sen. Barack Obama.
It's no coincidence that the legislation would help manufacturing states like Michigan and Ohio, whose voters could determine the outcome of the presidential election.
The loans would be used to help General Motors Corp., Ford Motor Co., and Chrysler LLC retool their factories to produce cleaner, more fuel-efficient vehicles as required under an energy bill passed last year.
The automaker loan program was established — but not funded — under the same bill. That sets it apart from the federal government's intervention to prevent the collapse of Bear Stearns and a takeover of mortgage giants Fannie Mae and Freddie Mac.
Funding is needed before any loans can be made. The money would subsidize the loans, provide a cushion for possible defaults and absorb the cost of permitting automakers to defer loan payments for up to five years. The Congressional Budget Office says the $25 billion in loans would cost the government $7.5 billion.
2 INDIAN FACTORIES' DRUGS BANNED
WASHINGTON — The government closed U.S. borders yesterday to more than 30 generic drugs — including popular antibiotics and cholesterol medicines — made by India's biggest pharmaceutical company, citing poor quality in two of its factories.
The Food and Drug Administration's move doesn't end U.S. sales by Ranbaxy Laboratories Ltd. Instead, it blocks imports of generic drugs — including generic versions of the antibiotic Cipro and cholesterol pill Zocor — as well as pharmaceutical ingredients made at the two suspect plants.
FDA inspections earlier this year found violations that could lead to contamination, allergic reactions and other problems, and the company hasn't taken proper steps to correct them, said Deborah Autor, director of FDA's compliance office.
OIL CONTINUES FALL, GAS EDGES HIGHER
NEW YORK — Oil prices extended their retreat yesterday, shedding $10 a barrel in a violent, two-day slide as tumult on Wall Street signals another drop in U.S. energy demand.
Crude, which shot up near $150 a barrel only two months ago, is now down 8 percent for the year.
Meanwhile, gas prices edged higher at the pump, topping $3.85 a gallon amid the aftermath of Hurricane Ike. However, given crude's continuing slide, retail gas was expected to turn lower within a few weeks.
BEST BUY'S PROFIT FALLS, REVENUE UP
CHICAGO — Best Buy Co. said yesterday that its second-quarter profit slid 19 percent as it spent money to boost cell phone sales by completing the rollout of its Best Buy Mobile concept to nearly 1,000 North American stores.
Revenue rose, however, as consumers bought more flat-panel TVs, laptops and cell phones, ahead of forecasts.
The nation's largest consumer electronics retailer earned $202 million, or 48 cents per share. That's down from $250 million, or 55 cents per share, during the same period last year. Revenue rose 12 percent to $9.8 billion.
MCCLATCHY TO CUT WORKFORCE BY 10%
NEW YORK — The McClatchy Co. is trimming its payroll by about 1,150 more employees nationwide, or about 10 percent of its workforce. McClatchy blamed a "difficult advertising downturn."
The company expects about half of the reductions will come from voluntary buyouts and attrition. It says the job cuts and other initiatives will save $100 million over the next year, not including severance costs of about $20 million.
