Friday, April 21, 2017

Daily business briefing

Tesla recalls two-thirds of the cars it made last year, Verizon posts its first-ever loss of customers, and more

Daily business briefing
1. Tesla recalls two-thirds of cars it made in 2016

Tesla on Thursday recalled 53,000 cars — nearly two-thirds of the 84,000 vehicles it made last year — to replace potentially faulty brakes. The electric car maker said the recall, its second largest to date, affected Model S and Model X cars produced between February and October 2016 due to a small gear from a supplier that might have a flaw that, if it breaks, could cause the parking brake to become locked in place. "While less than 5 percent of the vehicles being recalled may be affected by this issue, we are recalling 53,000 vehicles total out of an abundance of caution," Tesla said. Tesla shares dropped by 1 percent after the announcement.

Source: Bloomberg
2. Verizon reports its first-ever loss of customers

Verizon posted the first quarterly net loss of wireless customers in the first three months of the year, the company reported Thursday. The company lost 307,000 retail connections in the quarter, compared to a 640,000 gain in the same period last year. The longtime industry leader has been confronting intense competition from resurgent competitors T-Mobile and Sprint, as well as AT&T, and brought back unlimited data plans in February for the first time since 2011 to counter similar offers by its rivals as it struggles to hold onto customers. The move and a price war put a dent in its revenue, which fell by 5.1 percent to $20.9 billion. Excluding certain items, Verizon's profit was 95 cents a share. Analysts had expected 96 cents a share. Verizon shares dropped by 1.5 percent on Thursday.

Source: MarketWatch
3. White House pushes revised health-care bill, stopgap spending measure

White House officials are pushing a new compromise version of the Republican health-care bill in a bid to deliver on President Trump's promise to repeal and replace ObamaCare before his 100th day in office, which comes next week on Saturday, April 29. Revisions aiming to please the conservative Freedom Caucus, such as eliminating guaranteed coverage for preexisting conditions, could stoke more opposition from moderate Republicans. Also, lawmakers have to reach an agreement quickly after returning from a two week recess on Monday to reach a deal on keeping the government funded past Friday, or face a partial government shutdown. White House Budget Director Mick Mulvaney said any stopgap spending bill must include some initial funding for Trump's wall on the Mexican border, something Senate Minority Leader Chuck Schumer's (D-N.Y.) office said could be a deal-breaker.

Source: The New York Times, The Washington Post
4. Trump orders review to see whether steel imports threaten U.S. security

President Trump on Thursday ordered his administration to expedite an investigation into whether foreign steel imports were threatening national security. "This is not an area where we can afford to become dependent on other countries," Trump said. Steel industry executives support the review, and joined Trump as he signed the memo. Trump promised during his campaign to help turn around U.S. steel industry declines that have hurt Pennsylvania and other states that helped seal his election victory. China is a key target of the order, because it ships surplus steel to other countries, driving down global prices.

Source: The Associated Press, The New York Times
5. Report: O'Reilly could receive $25 million exit package from Fox News

Bill O'Reilly could receive a $25 million payout as part of the deal pushing him out of Fox News, The New York Times reported Thursday, citing two people familiar with the matter. The news provoked angry reaction from some of the cable network's employees, and from outside critics who said such a rich exit package sent a message that the company is not as committed as it says about stamping out sexual harassment. "It's terrible," said Lisa Bloom, a lawyer representing two women who accused O'Reilly of sexual harassment. The reported payout would amount to a year of O'Reilly's salary, and it would bring the total for payouts over Fox News sexual harassments against O'Reilly, former chief Roger Ailes, and others to $85 million, with $65 million of it going to exit packages for men ousted over the scandals.

Source: The New York Times
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