December 30, 2008 in Business

Northwest Airlines plans to delay nonstop U.S.-China service

 

Northwest Airlines, due to poor market conditions in light of the weakened global economy, is the latest carrier seeking to delay or cut back long-coveted U.S.-China service.

The subsidiary of Atlanta-based Delta Air Lines Inc. said in a filing earlier this month with the Department of Transportation that it was seeking to delay proposed daily Seattle-Beijing service by a year from March 2009 to March 2010 and delay startup of Detroit-Shanghai nonstop service by more than two months from March 25 to June 3.

Washington

GMAC gets $5 billion for bailout

The Treasury Department said Monday that it will provide $5 billion to GMAC Financial Services LLC, the ailing financing arm of General Motors Corp., from the $700 billion bank rescue program.

The government will receive preferred shares that pay an 8 percent dividend and warrants to purchase additional shares in return for the money, the department said.

Treasury also said it will lend up to $1 billion to General Motors so that the company can purchase additional equity that GMAC is planning to offer as part of its effort to raise more capital.

The assistance is part of a larger government effort to aid the auto industry.

Last week, the Federal Reserve approved GMAC’s application to become a bank holding company, which made it eligible to receive money from the financial rescue fund. The Fed’s approval was contingent on GMAC raising additional capital.

Separately, GMAC said late Monday that it has accepted all the bonds tendered in a debt-for-equity swap that was also part of its capital-raising efforts.

HOUSTON

Price of crude tops $40 a barrel

Crude prices rose above $40 a barrel Monday as Israel and Palestinian militants exchanged rocket fire and the death toll mounted in the oil-rich region.

Light trading contributed to market volatility in the final days of 2008, with price swings of close to $5 a barrel.

Light, sweet crude for February delivery rose $2.31 cents to settle at $40.02 a barrel on the New York Mercantile Exchange, the first time crude has ended the day above $40 in a week. Nymex will be closed Thursday for the New Year’s Day holiday.

From wire reports


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