GE is selling its assets in GE Capital to return to being a full-time industrial company; import prices fall as expected. Here are the top news stories for April 10, 2015.
GE Dumps Its Financial Services Business
General Electric will rid itself of the assets in its GE Capital unit and one again became a full-time industrial company, the firm announced Friday. GE will sell the assets in GE Capital and return most of the proceeds to shareholders in the form of a $ 50 billion share buyback. The company is selling its commercial real estate assets for $ 26 billion on Friday, and will sell most of those assets from GE Capital Real Estate to funds managed by Blackstone and Wells Fargo. GE will keep the financial operations it uses to help customers finance the purchase of their equipment form the company. It is expected GE will return more than $ 90 billion to investors through 2018.
Amazon Can Test Drones
The Federal Aviation Administration has granted Amazon's request to test delivery drones. In a letter released Wednesday, the FAA said Amazon can use drones as long as they fly at an altitude of no more than 400 feet and no faster than 100 miles per hour. This comes less one month after Amazon blasted the federal government for being slow to approve the testing of drones for commercial use. Amazon has been trying for more than a year to get approval for delivering packages by air using the self-piloted aircraft. Amazon is looking to deliver packages over distances of 10 miles or more via drone.
PG&E Won't Contest Record Penalty
California Public Utilities Commission voted Thursday to penalize Pacific Gas & Electric Co. $ 1.6 billion for a 2010 gas pipeline explosion that killed eight people and destroyed more than three dozen homes in suburban San Francisco, the Associated Press reports. California’s largest power utility said it won’t appeal the unprecedented penalty. The fine requires PG&E shareholders to pay $ 850 million toward gas transmission safety improvements. It also orders PG&E to pay a $ 300 million fine that goes into the state’s general fund. It mandates the utility pay $ 400 million in bill credits, and it directs approximately $ 50 million toward other remedies.
At the Intersection of Cost-Cutting and Closed
Walgreens Boots Alliance announced plans to close about 200 U.S. Walgreens stores as part of its first earnings report since it merged with European drug retailer Alliance Boots last year, USA TODAY reports. Walgreen's, the largest U.S. drugstore chain, said it will close the stores amid plans to boost its previously announced cost-cutting initiative by $ 500 million. Walgreens expects to reduce costs by a projected $ 1.5 billion by the end of fiscal 2017, the company said. The company has not yet decided which stores it will close but it is not focusing on a specific geographic area nor does it have a timeline for the closings. Walgreens has 8,232 drugstores in the United States, Puerto Rico and the U.S. Virgin Islands. Walgreens also said it opened 71 new drugstores in this region in the first half of fiscal 2015, including 25 relocations.
Domestic Flight Delays Improved
The U.S. Department of Transportation's Air Travel Consumer Report founds that tarmac delays improved in February from the previous year, although departures from Chicago airports are still among the tardiest. The Transportation Department reported it received about 15,000 complaints about Chicago-based United Airlines, which refused to honor mistakenly low fares that Internet-savvy consumers tried to book through the carrier’s Denmark website on Feb. 11. Of the 24 excessive delays reported in February, nine were due to a Feb. 27 snowstorm in Texas. The only Chicago delay was a three-hour tarmac delay on a Southwest Airlines flight at Midway airport bound for Detroit on Feb. 25. Overall, airlines arrived on time 72.8 percent of the time in February, up from 70.7 percent in February 2014.
Import Prices Fall As Expected
The Labor Department Friday said U.S. import prices fell 0.3 percent in March, following a revised gain of 0.2 percent in February. The reason for the drop is believed declining prices for goods other than oil. This serves as another reason why some people believe the Federal Reserve will not raise interest rates in June. In the 12 months through March, import prices have fallen 10.5 percent, and that is the largest annual drop since September of 2009.
kmcdill@spectrem.com Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title "100 Things Bulls Fans Should Know And Do Before They Die', published by Triumph Books. In August 2013, his new book "100 Things Bears Fans Should Know And Do Before They Die" gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald's Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.
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