Daily Briefing

ADVERTISING

Google pulling plug on radio service

Google plans to stop selling advertising on broadcast radio at the end of May. The retreat is the latest example of how the recession is forcing the Internet search leader to reassess its ambitions beyond the online ad market. Thursday’s announcement could lead to up to 40 layoffs among Google’s work force of 20,200 employees, the Mountain View, Calif.-based company said.

AUCTION

Christie’s blames economy for drop

Christie’s International said its worldwide sales declined 11 percent in 2008 against “a difficult global economic backdrop.” The London-based auction house sold $3.98 billion of art and antiques last year, it said in an e-mailed statement. The proportion of lots selling at auction —- and prices of works —- have dropped in the economic slump. Christie’s and its rival Sotheby’s are cutting jobs. Dealers said contemporary-art prices especially have dropped between 30 percent and 50 percent over the last six months, deterring buyers and sellers.

AUTOMOTIVE

Honda cuts new graduate hiring

Honda Motor Co. will cut the number of new graduates it hires next year by 40 percent. The paring back of the company’s hiring plans was because of uncertainty over the global auto market amid a deepening economic downturn at home and abroad, the company said. Japan’s No. 2 automaker will hire 890 graduates for the fiscal year starting in April 2010 compared with the 1,490 graduates the company has committed to hiring.

South Korea says no to GM request

South Korea has turned down a plea for government funds from the local arm of U.S. automaker General Motors, the company said. GM Daewoo Auto & Technology Co. President Michael Grimaldi and other company executives made the request with the head of the country’s commerce ministry, said GM Daewoo spokeswoman Lim Young-mi. “We asked for funding from the government [for] when the situation gets worse in the future,” Lim said. “The government said no for now.”

Renault to ditch dividend, models

Carmaker Renault SA announced it would scrap its dividend, halt development of three models and further cut its payroll to face what CEO Carlos Ghosn said was a crisis “of massive proportions” which would transform the industry. The declaration comes as France’s second-largest carmaker reported a $1.27 billion net loss in the second half of 2008. Ghosn said he expected the outlook to darken further as the economic and financial crisis ravages car sales.

Chrysler ready for long sales slump

Chrysler LLC Vice Chairman Jim Press says his company has a contingency plan to handle four more years of slumping auto sales. Press told the Economic Club of Chicago the industry must accept that U.S. sales may stay around 10 million vehicles per year. Sales last year totaled about 13 million, but January’s annual rate was under 10 million. Press says Chrysler has restructured to the point where it sees a strong path to profitability.

AVIATION

Pilots: AMR CEO won’t meet on talks

Pilots’ union officials say the chief executive of American Airlines and its parent won’t meet the union president to discuss stalled contract talks, with CEO Gerard Arpey suggesting instead that both sides should let federal mediators have more time to broker an agreement. The standoff, detailed in letters back and forth between the two leaders, is the latest sign of tension between AMR Corp.’s American Airlines and its three unions. Federal mediators have been enlisted to help in all three negotiations. Employees want to recover wage cuts they took in 2003, but the company, which lost $2.1 billion last year, wants to hold the line on spending.

BANKING

Trip still on despite bailout money

Wisconsin’s second-largest bank is sending about 100 employees to a Puerto Rican resort next week, nearly three months after its parent company accepted more than half a billion dollars in taxpayer bailout money. Top employees at Associated Bank have earned the trip, Chief Executive Paul Beideman said, particularly since the bank is profitable and only accepted bailout funds as a precaution, not as a result of mismanagement.

3-month interbank lending rate steady

The cost of three-month dollar loans between banks was unchanged amid further evidence that the bank rescue plan announced by the U.S. Treasury earlier this week and the passing of a $789 billion stimulus package by Congress have failed to thaw out credit markets. The British Bankers’ Association said the rate on three-month loans in dollars —- known as the London Interbank Offered Rate, or Libor —- remained at 1.23 percent, having inched higher in the immediate aftermath of Treasury Secretary Tim Geithner’s bank rescue proposal.

BANKRUPTCY

Midway Games files for protection

Video game publisher Midway Games Inc. says it has filed for Chapter 11 bankruptcy protection. The Chicago-based company known for its “Mortal Kombat” video games said the filing stemmed from a change in ownership in late 2008. The change led to accelerated debt buyback requirements that the company did not think it could fulfill. In December, media mogul Sumner Redstone sold his majority stake in Midway.

Charter to regroup under Chapter 11

Cable operator Charter Communications Inc. says it will file Chapter 11 bankruptcy reorganization documents by April 1. As part of an agreement with debt holders, they will be paid in full and Paul Allen will maintain the largest voting interest in the company. The agreement says shareholders’ stake in the company will be canceled. The company says the agreement will reduce debt by about $8 billion.

EARNINGS

Aetna profit slides on rising care costs

Health insurer Aetna Inc. says its profit fell 57 percent ($194.7 million, or 42 cents per share) in the fourth quarter as health-care costs increased. Aetna says profit from operations rose to 96 cents per share from 88 cents. Revenue grew 8 percent to $7.76 billion. Excluding net realized capital losses, revenue rose 12 percent to $7.98 billion. Thomson Reuters says analysts expected 94 cents per share and $7.96 billion in revenue.

Marriott suffers a loss on charges

Marriott International says it swung to a loss ($10 million, or 3 cents per share), dragged down partly by restructuring and timeshare charges. Bethesda, Md.-based Marriott International Inc. says revenue fell 6 percent to $3.85 billion from $4.09 billion. Analysts surveyed by Thomson Reuters forecast profit of 39 cents per share on revenue of $3.86 billion.

Elsewhere

> Diageo PLC, the world’s largest producer and distributor of alcoholic drinks, said its profit for the last six months of 2008 rose 16.6 percent ($1.63 billion), but warned the impact of the global recession has intensified, clouding its earnings outlook.

> Media conglomerate Viacom Inc. said its profit fell 69 percent ($173 million, or 28 cents per share) as the recession hurt growth and as it recorded $454 million in restructuring and other charges. Revenue was essentially flat at $4.24 billion —- in line with analyst expectations.

> Waste Management, the nation’s No. 1 waste hauler, said profit slid 29 percent ($218 million, or 44 cents per share) on declines in its recycling business and one-time charges.

> Casino operator Las Vegas Sands said it lost $136.5 million (27 cents per share), down from a profit of $39.9 million a year earlier, as gambling markets continued to decline in Las Vegas and Macau.

FINANCIAL

Harley-Davidson cuts dividend 70%

Harley-Davidson Inc. slashed its dividend by more than two-thirds as the company seeks to preserve cash and weather the sluggish motorcycle market. Harley said its board of directors approved a cash dividend of 10 cents per share for the first quarter. The dividend is payable March 19 to holders of common stock on March 5. Shortly after the dividend cut, Fitch Ratings downgraded several of its ratings on Harley and on Harley-Davidson Financial Services, its lending arm, citing financial uncertainty at HDFS.

Dow Chemical slashes dividend

Dow Chemical is cutting its quarterly dividend for the first time in 97 years. Dow cited several factors, including frozen credit markets and falling demand for its products. The Midland, Mich.-based company cut the quarterly payout to 15 cents from 42 cents. Dow has paid a dividend every quarter since 1912.

GOVERNMENT

Firms’ inventories shrink in December

U.S. businesses slashed inventories in December by the biggest amount in seven years as they coped with plunging sales in a dismal holiday season. The Commerce Department reported inventories fell 1.3 percent in December, far worse than the 0.9 percent decline analysts expected. It was the largest cut since the record 1.5 percent in October 2001. It also marked the fourth straight month that companies cut their stockpiles, matching a similar stretch of reductions that ended in August 2003.

HOUSING

Fixed rates fall on 30-year mortgages

Rates on 30-year-fixed mortgages fell this week, offering homeowners a chance to refinance their loans, Freddie Mac said. The average rate on a 30-year fixed mortgage dropped to 5.16 percent this week from 5.25 percent last week. A year ago, the 30-year, fixed-rate mortgage averaged 5.72 percent. The new rate translates into a monthly payment savings of about $188 on a $200,000 loan.

LAYOFFS

Pioneer to cut 10,000 jobs

Japanese electronics company Pioneer Corp. will cut 10,000 jobs globally to cope with sinking sales of car audio equipment and flat-screen TVs. It will also withdraw from its money-losing plasma display business. Hit by the collapse in demand for car audio equipment and plasma TVs, Pioneer said its net loss in the current fiscal year to March will swell to $1.4 billion.

LEGAL

Judge denies Dow motion vs. Rohm

A Delaware judge has denied a request by Dow Chemical to disqualify a law firm in a dispute over whether Dow should be forced to complete a proposed $15 billion buyout of specialty chemical maker Rohm & Haas. Dow’s attorney has argued the law firm of Wachtell, Lipton, Rosen and Katz has an ethical conflict in representing Rohm & Haas in its lawsuit against Dow because the firm has advised Dow in the past on similar issues.

PHARMACEUTICAL

Bayer to open Beijing R&D center

German pharmaceutical company Bayer AG said it will invest $129 million in a new global research and development center in Beijing over the next five years. China is the third largest market worldwide for the Bayer group, and it will become the third country besides Germany and the United States to host such a center for its Bayer Schering Pharma unit.

TECHNOLOGY

Verizon copies Alltel’s ‘My Circle’

Verizon Wireless said subscribers on some qualifying plans will be able to pick five or 10 phone numbers that they can call for free, without drawing down their plan’s minutes. There is no added charge for the service. It mimics a popular feature called “My Circle” at Alltel Corp., a smaller carrier that Verizon Wireless bought in January. Verizon Wireless’ announcement means that former Alltel customers will be able to keep the feature when they sign up for new plans, and expands the availability to other Verizon Wireless customers.

Kindle 2 feature irks Authors Guild

The guild that represents authors is urging writers to be wary of a text-to-speech feature on Amazon.com Inc.’s updated Kindle electronic reading device. In a memo sent to members, the guild says the Kindle 2’s “Read to Me” feature “presents a significant challenge to the publishing industry.” The Kindle can read text in a somewhat stilted electronic voice. But the Authors Guild says the quality figures to “improve rapidly.” And the guild worries that could undermine the market for audio books. It is telling authors and publishers to consider asking Amazon to disable the audio function on e-books it licenses.

UNION

Leading union official quits

A high-ranking Midwest officer of the Service Employees International Union, who had been serving as trustee of a financially troubled local, has resigned after being accused of billing the labor organization for $9,000 in personal expenses. The Chicago-based Byron Hobbs, who also sat on the union’s national board, is the latest of several Service Employees International officials to lose their positions or otherwise come under scrutiny for alleged financial improprieties. Hobbs could not be reached for comment.