• U.S. sales in November fell 31% for Ford Motor Co. (F) and 34% for Toyota Motor Corp. (ADR:TM) Every line of Ford vehicle posted falling sales, and the company responded by slashing first-quarter North American output for 38% to 430,000 vehicles, Bloomberg reported.

• Crippled by global slowdown, British Airways plc (OTC:BAIRY) said it is in merger talks with Australian airliner Qantas Airways and Spain’s Iberia, Reuters reported. Should the three mesh together, it would create the largest airline company.

• U.S. conglomerate General Electric Co. (GE) said it is looking for ways to cut costs, including job cuts and its finance and industrial units, in order to reach the low end of its fourth-quarter profit forecast. “Obviously the macro environment remains very challenging,” Keith Sherin, GE’s chief financial officer, said in a briefing with investors, Reuter reported. “We know that we have to reduce our cost structure in this environment.”

• In the midst of a dour holiday shopping season, Sears Holdings Corp. (SHLD) posted a wider-than-expected third-quarter loss, as its Sears and K-Mart stores took a beating from the U.S. recession. The company also announced it would close more stores and buy back as much as $500 million of its stock, MarketWatch reported.

• Oil prices fell to a 3-year low yesterday (Tuesday) as mounting job losses and fears of a protracted recession continued to weigh on investor confidence. Light, sweet crude for January delivery fell $2.32 – more than 4% – to settle at $46.96 a barrel on the New York Mercantile Exchange. Prices touched $46.82 earlier in the day, the lowest level since 2005.

• U.S. credit card write-offs will continue to increase in 2009, as the unemployment rate continues to climb from the 6.5% reached in October, the top executive at Discover Financial Services (DFS), said yesterday (Tuesday) according to The Associated Press. David Nelms, Discover’s chief executive, said write-offs could be near 5% in the fourth quarter and 6% in the first quarter of 2009.

Source: Global Investing Roundups Wednesday, December 3rd, 2008

* Oil prices rallied off a 17-month low yesterday (Wednesday), soaring $5.12, or 8.16% to settle at $67.85 a barrel. Earlier in the day, crude jumped 9% to a session high $68.91 a barrel. Part of the reason for the oil’s rebound was the Energy Information Administration’s weekly report, which showed inventories rose 500,000 barrels last week, less than many analysts expected. Oil prices have fallen by 55% since peaking at $147 a barrel in mid-July.

* Hungary yesterday (Wednesday) secured a $25 billion aid package from the International Monetary Fund, the European Union and the World Bank, The Associated Press reported. According to the terms of the deal The IMF will provide a 17-month standby loan of $15.7 billion, the European Union will make $8.1 billion available, and World Bank will give $1.3 billion in an effort to keep Hungary’s economy from collapsing under the weight of the global financial crisis.

* Procter & Gamble Co. (PG) yesterday (Wednesday) announced a 9% increase in its fiscal first quarter sales. Net income rose to $3.3 billion, or $1.03 per share, up from $3.1 billion, or 92 cents a share, a year earlier, after double digit growth in emerging markets boosted total revenue to $22 billion.

* Qwest Communications International Inc. (Q) yesterday (Wednesday) that it would cut 1,200 jobs or 3% of its work force after third-quarter revenue fell 2% to $3.38 billion. The cuts will come before the end of the year and leave the company with 33,500 employees. Qwest earned $151 million, or 9 cents per share, in the quarter, down 93% from $2.06 billion, or $1.08 per share, a year ago. Though, the 2007 results were bolstered by a $2.1 billion tax benefit.

* The merger between Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWA) received antitrust clearance yesterday (Wednesday) from the U.S. Department of Justice. The approval paves the way for the merger, which will create the largest airline based on traffic, The Wall Street Journal reported.

* Average airfare for U.S. domestic flights increased 8.1% in the second quarter, the Bureau of Transportation Statistics announced yesterday (Wednesday). The average fare price of $352 is the highest in the 13-years the agency has been tracking the data, surpassing the previous record of $348 set in the first quarter of 2001, Bloomberg News reported.

* Shares of Comcast Corp. (CMCSA) slumped almost 9% yesterday (Wednesday) as the company announced it lost 147,000 cable subscribers in the third quarter due to weak economic conditions, Reuters reported. Comcast shares lost $1.68 each to close at $15.28.

* Shares of biotech firm Biogen Idec Inc. (BIIB) plunged more than 11% in after hours trading yesterday (Wednesday) after the company announced a participant in a drug trial for its multiple sclerosis drug Tysabri had been diagnosed with a life-threatening brain illness. The patient had received 14 infusions of the MS drug and was diagnosed with progressive multifocal leukoencephalopathy, or PML, Biogen said today in a regulatory filing, Bloomberg News reported.

Source: Global Investing Roundups Thursday, October 30th, 2008

The troubled airline industry has been beset by a host of problems on all sides as rising oil prices and a weakening U.S. economy have combined to take a big bite out of the carriers’ bottom lines. At the same time, efforts to increase cost efficiencies through mergers have been blocked by labor unions.

Airlines looked like they were battling back from a five-year slump following the 9/11 terrorist attacks, a period in which carriers rolled up $35 billion in losses. But while demand for air travel remains high, passenger satisfaction is at a historic low. Operational performance, which includes everything from on-time arrival to lost luggage, is at its lowest point in 20 years, according to the latest Airline Quality Rating study. “With the U.S. airline industry at rock-bottom in terms of overall performance, greater accountability is necessary,” said Brent Bowen, a researcher on the study who’s with the University of Nebraska at Omaha.

Airlines are searching for ways to cut costs without adding to the already unpopular passenger charges and fees, especially as consumer spending wanes. Fuel is the biggest expense category for airlines, and with oil north of $100 a barrel and heading higher, consolidating to capitalize on economies of scale seems to make sense.

Although a number of deals have been proposed, none have really been able to get off the ground.

Stalled U.S. Airline Merger

Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWA) have been in merger talks for months now. Several important issues have already been decided. The combined carrier will fly under the Delta name and will be based in Delta’s home city of Atlanta.

Delta Chief Executive Officer Richard H. Anderson will remain on as head. But the stumbling block in a deal that would create the largest domestic carrier is the endorsement of the pilots.

In the past, airlines have had the pilots hammer out a deal after a contract has been signed. But hoping to have a fully functional combined airline that much sooner, Delta and Northwest encouraged their pilots to negotiate as soon as the planned merger was announced.

Unfortunately, the extra time hasn’t helped. The two unions have been unable to come to an agreement on seniority, which affects pay as well as route selection and the types of aircraft flown for the 12,000 pilots involved in the merger.

Without an agreement, the two unions have refused to endorse the merger.

Labor union support is critical to any merger, as Delta’s pilots’ union was instrumental in derailing a hostile bid takeover by U.S. Airways Group Inc. (LCC). But without the merger, Delta and Northwest will be forced to implement other cost-saving measures, including raising fees and cutting jobs.

UAL Corp.’s (UAUA) United Airlines and Continental Airlines Inc. (CAL) had also started merger talks earlier this year, but negotiations are on pause as the two airlines are waiting to see what happens with Delta and Northwest, a source with knowledge of the matter told Reuters.

European Merger Woes

Meanwhile, across the pond, Franco-Dutch carrier Air France-KLM (OTC: AFLYY) is facing similar labor opposition to its buyout of Italian carrier Alitalia – Linee Aeree Italiane S.p A.

Alitalia recently suspended trading of its shares and is estimated to be losing almost $1.5 million (the equivalent of 1.0 million euro) a day. The struggling carrier desperately needs the merger to go through in order to survive. Without a much-needed capital infusion from Air France-KLM, the carrier will undoubtedly have to file for bankruptcy protection.

But unions failed to approve the Air France-KLM bid, which included a 10% staff reduction, a $1 billion capital infusion and an all-stock bid that valued Alitalia at $217.7 million (138 million euros).

Air France-KLM said on Monday this was “the only plan able to allow Alitalia to return to health swiftly,” Reuters reported.

The Italian government is eager to divest its share of the financially unsound airline and Economy Minister Tommaso Padoa-Schioppa, the driving force behind the sale, has said unions must make a move fast or risk having the government appoint a special administrator to take over the negotiations.

With Italy’s elections looming on April 13 and 14, the government is eager to find a favorable solution.