Business in brief: Saturn deal collapses; automaker to shut down
Detroit – General Motors Co. will shut down Saturn now that a deal with former race car driver and auto dealer magnate Roger Penske has collapsed, marking the end of a brand that was supposed to revolutionize the way small cars were built and sold in America.
The deal with Penske was supposed to be finalized Wednesday. But the unexpected end came when his company, Penske Automotive Group Inc., was unable to find a manufacturer to supply vehicles for the brand’s dealerships. GM had agreed to keep building Saturn models like the Aura, Outlook and Vue through at least 2011, but after that, Saturn would have to come up with its own products.
Penske’s tentative deal to buy Saturn was announced in early June.
“This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality,” GM CEO Fritz Henderson said. He said Saturn and its dealership network will be phased out.
BofA CEO stepping down one year after Merrill Lynch deal
Charlotte, N.C. – Ken Lewis, the embattled CEO of Bank of America Corp., is leaving the company, succumbing to nearly a year of strife that followed his company’s acquisition of Merrill Lynch & Co.
The bank, the nation’s largest by assets, said Wednesday that Lewis, 62, decided on his own to leave and would retire as CEO and also leave the company’s board by the end of the year. The company did not announce a successor, saying one would be selected by the time Lewis steps down Dec. 31.
The fact that no succession plan was announced indicated that the Bank of America board did not expect Lewis’ decision at this time. Nonetheless, the news, coming after shareholders had stripped Lewis of his chairman title earlier this year, wasn’t surprising because of the intense pressure he came under after the Merrill deal. Lewis had said he would stay on as CEO until after the company’s financial problems were resolved, a process expected to take several years.
The Merrill Lynch deal was first questioned after Bank of America disclosed that Merrill’s losses were far more than expected. Bank of America then asked for and got an additional $20 billion from the government, in part to offset those losses.
American Express dropping fee on unused gift cards
New York – At a time when credit and debit card fees are under fire, American Express Co. said Wednesday it will no longer charge monthly fees on its gift cards.
The change will apply to cards currently in stores and even in people’s wallets. Previously, a monthly $2 fee kicked in a year after the card was issued. Such inactivity fees are common among the gift cards on the market.
So if a gift card were left unused, a monthly fee would eventually deplete a card’s value in most cases.
Coca-Cola making nutritional information more prominent
Atlanta – Coca-Cola Co. will change the packaging on almost all its products to more prominently display certain nutritional facts amid increasing pressure on lawmakers to consider taxes on sugary sodas, which some health experts blame for rising obesity rates.
The effort, announced Wednesday, will place calories-per-serving and servings-per-container details on the side of almost all of the soft drink maker’s products sold in more than 200 countries.
The company said it hopes the broken-out details – displayed in black text set in a white oblong box – will be more convenient for customers who want quick nutritional information at a glance.
But some critics see the change as little more than an effort aimed at fending off a possible tax on its products, including a levy being promoted in a September issue of the New England Journal of Medicine.