Tuesday, January 26, 2010

Home Depot To Lay Off 1,000 Workers

Home Depot Inc., the largest U.S. home-improvement retailer, said Tuesday it is laying off 1,000 staffers as it cuts three pilot programs and cuts some support positions.

An internal memo sent to staffers by CEO Frank Blake said about 900 of the cuts stem from consolidating some support functions in its human resources, finance and other divisions.

The rest come from the company closing a small-format pilot store in Wilson, N.C.; a temporary hurricane recovery outlet in Waveland, Miss.; and a clearance outlet in Austell, Ga. Blake said in the memo there were no plans to close any full-size Home Depot stores.

The cuts are less than 1 percent of Home Depot's more than 300,000 workers. One hundred fifty of the lay-offs will come from the Atlanta headquarters, according to the Atlanta Journal-Constitution. Home Depot spokesman Ron Defeo said as part of the restructuring the company will create 200 jobs in Atlanta, where most human resources administration will be handled, although there will still be a field human resources team.

Home Depot, based in Atlanta, and other home-improvement retailers have faced sales declines from the long-standing construction slowdown and consumers holding back on do-it-yourself projects amid worry over jobs and home values. Although the U.S. housing market is stabilizing after a nearly three-year decline, home prices remain far below their peak.

Home Depot's profit is about even with last year for the first nine months of the fiscal year, a period that ended Nov. 1, while revenue is down about 9 percent. Shares rose 16 cents to $27.78 during midday trading.

Toyota Halts US Sales Of 8 Models

Toyota Motor Co. said Tuesday it was suspending U.S. sales of eight recalled vehicle models to fix accelerator pedals that stick, the latest quality problem to confront the world's No. 1 automaker.

As part of the plan, Toyota said it was halting production at five manufacturing facilities for the week of Feb. 1 "to assess and coordinate activities." There are 2.3 million vehicles involved in the recall, which was announced last week.

The Japanese automaker says the sales suspension includes the 2009-2010 RAV4, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.

Toyota said the company would stop producing vehicles at plants in Indiana, Kentucky, Texas and Canada. They said no other North American Toyota facility would be affected by the decision.

The auto company said the sales suspension would not affect Lexus or Scion vehicles. Toyota said the Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, would remain for sale.

Toyota said last week it was recalling 2.3 million vehicles in the U.S. to fix accelerator pedals with mechanical problems that could cause them to become stuck.

That announcement followed a larger recall months earlier of 4.2 million vehicles because of problems with gas pedals becoming trapped under floor mats, causing sudden acceleration. That problem was the cause of several crashes, including some fatalities.

GM To Sell Saab To Dutch Carmaker Spyker For $74M

A small Dutch automaker will try to do what U.S. auto giant General Motors Co. couldn't - make money by selling Saab brand automobiles in an increasingly competitive global marketplace.

GM signed a deal Tuesday to sell Saab to Zeewolde, Netherlands-based Spyker Cars NV for $74 million in cash plus $326 million worth of preferred shares in Saab. The deal hinges on a $550 million loan from the European Investment Bank, which the Swedish government on Tuesday committed to guaranteeing.

The sale is a coup for Spyker and a lifeline for Saab, which has lost money ever since GM bought a 50 percent stake and management control for $600 million in 1989. The Detroit automaker gained full ownership in 2000 for $125 million more. Saab employs around 3,500 people in Sweden and was within days of liquidation as part of GM's restructuring.

Saab already was struggling as a niche brand with a small market share when GM bought it, and industry analysts say the Detroit automaker ruined Saab's unique character by supplying the unit with vehicles designed for other GM brands.

Before GM, Saab specialized in egg-shaped aerodynamic small cars with rapidly sloping backs and four-cylinder engines. But sales dropped as loyal followers found the GM offerings no different than those made by other mainstream brands. Spyker will harness "the Swedishness of the brand" to reconnect with Saab's loyal following of 1.5 million drivers.

Spyker also must quickly sign deals with GM or other automakers to design and build new Saabs, said Michael Robinet, an automotive analyst with CSM Worldwide in Michigan.

The sale came after an earlier attempt to sell Saab to another Swedish automaker fell through, and after GM's bid to sell the Saturn brand also collapsed. Pontiac and Saturn now will be phased out, and GM is trying to sell its Hummer brand to a Chinese heavy equipment maker.

Robinet said GM's board pushed hard for the Saab sale, forcing management to move more quickly to focus on four core brands: Buick, Chevrolet, Cadillac and GMC. GM expects to close the sale by mid-February. The company gets a relatively small amount of cash but it unloads an expense. GM also retains the preferred shares, giving it a stake should the company become profitable.

Airlines Drop Latest Fare Increase

Major U.S. airlines have dropped an effort to raise fares by up to $16 a roundtrip after some carriers resisted the increase.

American Airlines confirmed on Monday that it had dropped a price hike from last week. American spokesman Tim Smith said Delta had pulled the increase even before American did, and Continental and United also retreated.

"We can now declare the first domestic airfare hike of 2010 ... a failed attempt," said Rick Seaney, CEO of travel Web site

Air fare increases can be tricky. They can fall apart if one or two airlines refuse to go along or don't match on every route, because other carriers don't want to risk losing customers by charging more for the same trip.

From The Wall Street Journal; AJC

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