Credit Growth Slowed in '05
Consumers increased borrowing last year by the smallest amount in 13 years. The Federal Reserve said that borrowing on credit cards, auto loans and other forms of consumer debt rose by 3 percent in 2005, down from rates of more than 4 percent in the previous three years and a 7.7 percent increase in 2001. It was the smallest increase since a 1 percent rise in 1992. Consumer borrowing ended the year moving upward, however, rising at an annual rate of 1.9 percent in December after a weak 0.3 percent increase in November and a decline of 4 percent in October, which reflected a big drop in auto sales
Toys R Us Names Chairman, CEO
Toys R Us, the nation's second-largest toy retailer, named Gerald Storch chairman and chief executive. Storch, 49, a former Target executive with experience in rejuvenating tired retailers, fills the top spot left open when John H. Eyler Jr. departed in July, after the company was taken private. Richard L. Markee, who served as interim chief executive since Eyler's departure, will continue as vice chairman of the company and president of the Babies R Us division. Storch, who left Target last October, was responsible for several of Target's most important operations: financial services; technology, including the chain's Web site; distribution; and strategic planning.
Liz Claiborne to Cut 500 Jobs
Liz Claiborne, maker of Dana Buchman and Juicy Couture clothing, plans to cut 500 jobs and may close about 20 stores in a restructuring. The job cuts represent about 4 percent of the company's workforce. The New York company said it expects to take a charge of about $60 million in the first half of 2006. Liz Claiborne also plans to group its more than 40 brands by price level, style and customer to save as much as $65 million a year starting in 2007. As much as $35 million will be saved this year, the company said.
Pfizer Weighs Sale of Drug Unit
Pfizer said it is exploring options for its nearly $4 billion over-the-counter drug unit, including selling or spinning off the business that includes Listerine mouthwash, Visine eyedrops and Lubriderm skin lotion. Sales of the consumer business rose 10 percent last year, to $3.9 billion. The business accounts for 8 percent of Pfizer's $51 billion annual revenue. Over-the-counter medicines have lower margins than prescription drugs.
Sarbanes-Oxley Faces Challenge
The Sarbanes-Oxley Act, which reshaped the accounting industry after a wave of corporate scandals, is being challenged on constitutional grounds by pro-business conservatives. The Free Enterprise Fund bitterly opposes the sweeping 2002 anti-fraud law, which requires greater financial disclosure and increased the criminal penalties for securities fraud, and it is challenging the constitutionality of the Public Company Accounting Oversight Board, which the law established to oversee the accounting industry. The anti-tax group argues that the board violates the Constitution's mandated separation of powers among the three branches of government. The group filed suit in federal court in Washington against the accounting board. The anti-tax group's legal team includes Kenneth W. Starr, who was the special prosecutor in the Monica Lewinsky case.
No Sanctions Against Chiron
Chiron said the Securities and Exchange Commission has decided not to sanction the company after a probe into the suspension of its flu vaccine license and the restatement of financial results. The company's troubles began in 2004 after the British Medicines and Healthcare Products Regulatory Agency unexpectedly suspended Chiron's license to make a flu vaccine because of contamination concerns. The resulting shortage caused Chiron to revise its results for the second and third quarters of 2004 and left the United States without half its needed vaccine supply in the flu season.
UAW: Little Progress on Delhi
Negotiations involving the United Auto Workers, General Motors and Delphi have resulted in little progress on the restructuring of Delphi, UAW Vice President Richard Shoemaker said. Unless the three parties settle, Shoemaker said, a federal bankruptcy judge would likely throw out the union's labor agreement with the nation's largest auto supplier, which could lead to a strike. Delphi, which filed for Chapter 11 bankruptcy protection Oct. 8, has said it may ask a judge to cancel its contracts if the sides do not agree by Feb. 17. The court would then need to consider the issue, a process that could take months.
GM Adds Navigation to OnStar
General Motors is adding a navigation feature that gives spoken directions to its OnStar in-vehicle communications system to compete with screen-based map systems and improve OnStar's renewal rates. The company plans to announce the Turn-by-Turn Navigation system at the Chicago Auto Show. The system, which debuts in some Buick and Cadillac sedans in March, tracks a vehicle's location by satellite and gives audio directions so that drivers can better keep their eyes on the road.
Coca-Cola reported that its fourth-quarter profit fell 28 percent, to $864 million. Revenue rose 7 percent, to $5.55 billion. For the year, Coca-Cola said it earned $4.87 billion, up slightly from a profit of $4.85 billion. Revenue rose 6 percent to $23.1 billion.
Compiled from staff and news service reports.