Business in brief

AUTOMOTIVE

Auto suppliers ask for support from Congress

Auto suppliers appealed to lawmakers Wednesday for federal support, warning that the U.S. supply base could buckle under the weight of General Motors and Chrysler LLC.

Several small auto suppliers, which make tooling, plastic molds and metal castings for cars and trucks, said at a congressional hearing that Chrysler’s bankruptcy has left them in limbo, with some awaiting payment for millions of dollars worth of parts.

If GM is forced into bankruptcy, they said some suppliers could be forced to shut their doors

“A recovery plan for Chrysler and GM is simply not viable unless it takes into account the entire automotive supply chain,” said Chris Norch, president of Denison Industries, a metalcasting company that employs 125 in Denison, Texas.

AVIATION

Airport slot auctions for New York canceled

The Transportation Department said Wednesday it will cancel its proposal for “slot auctions” at New York City airports, following strong backlash from airlines and industry groups.

The auctions were part of a plan to cut congestion at New York’s three major airports. Airlines were to bid for take-off and landing times. But because of lawsuits and a court-ordered stay, the auctions had not started.

“We’re still serious about tackling aviation congestion in the New York region,” Transportation Secretary Ray LaHood said.

LaHood said the auction plan was dropped because “the rulemaking was highly controversial” and other changes, such as the deteriorating economy, have made the plan less vital. Congestion has eased somewhat at airports around the country as airlines reduce flights and fewer passengers fly in the recession.

Continental closing Tampa call center

Continental Airlines said Wednesday it is closing a call center in Tampa and cutting 500 reservation agents companywide. It cited a weak economy and customers’ growing preference for Web-based reservations.

About 100 of the eliminated positions will be in Tampa, spokeswoman Kelly Cripe said. The company is offering voluntary programs to employees, including “early out” severance and leave of absence programs.

Some Tampa-based reservations agents can transfer to other reservations centers in Houston and Salt Lake City.

FINANCIAL

Congress grills AIG on plan to repay bailout

The government-installed head of AIG told Congress Wednesday the insurance giant is making progress toward repaying U.S. taxpayers by selling foreign assets, but lawmakers questioned whether the plan makes sense and demanded details.

Chief Executive Edward Liddy said the company has reduced, but not eliminated, the risk its failure could pose to the global economy despite getting more than $180 billion in bailout aid.

“The assurance I can give you is we will do everything we can to not require more federal money” but that will hinge on how long the recession drags on and the condition of financial markets, he told the House Oversight and Government Reform Committee.

“What is the plan to repay the American people and does it have a realistic chance of working?” asked committee chairman Rep. Edolphus Towns (D-N.Y.).

“We will work with you to provide everything that we possibly can,” Liddy said.

MGM Mirage offerings would raise billions

Casino operator MGM Mirage, majority-owned by billionaire Kirk Kerkorian, said Wednesday it plans to raise $2.5 billion through stock and bond offerings to pay off some of its more than $14 billion in debt and strengthen its balance sheet.

MGM Mirage, which said it also is modifying an existing loan agreement, plans to raise approximately $1 billion from a public offering of 81 million shares and $1.5 billion from private placement of senior notes.

The company has restructured its debt repeatedly this year as it made required contributions toward the $8.5 billion CityCenter casino development it is building in Las Vegas with Dubai World.

GOVERNMENT

FCC speeds up transfer of phone numbers

The Federal Communications Commission voted Wednesday to force landline phone companies to act faster when subscribers want to move their number to a rival service.

The commission will require companies to transfer, or “port,” landline phone numbers within one business day, down from the current four-day requirement.

Wireless numbers are currently ported within one day —- in many cases within hours —- and the commission said landline companies should be just as fast.

The shortened period should take effect in about a year.

HEALTH CARE

Prescription use falls as prices drive spending up

Prescription drug use in the U.S. fell last year, although spending on drugs increased as prices rose sharply on brand-name products, pharmacy benefits manager Medco Health Solutions said Wednesday.

Medco said the overall decline in prescriptions was the first in a decade. The company said prescription use was down because few new drugs were launched last year, former blockbuster drugs like Zyrtec became available without a prescription, and some drugs faced safety issues that led to decreased use.

Those factors had a bigger impact on prescriptions than the recession, the company said.

Total spending grew 3.3 percent, Medco said.

MANUFACTURING

Harley-Davidson might close Pennsylvania plant

Harley-Davidson is considering closing its main motorcycle assembly facility in Pennsylvania and moving production elsewhere as it aims to lower costs and cope with a sales downturn, a spokesman said Wednesday.

Bob Klein said the Milwaukee-based company is exploring ways to reduce costs at its York location. That could include a move, though he declined to say where. The York facility employs about 2,400 workers and consists of two factories that assemble its Touring and Softail motorcycles.

Indiana steel producer to lay off nearly 1,000

The world’s largest steel maker, ArcelorMittal, will indefinitely lay off nearly 1,000 workers at a northwestern Indiana plant this summer as part of a temporary shutdown of the mill’s iron-producing operations.

Luxembourg-based ArcelorMittal blamed the “extraordinary economic environment” for its decision to lay off 978 workers in July at the company’s Indiana Harbor West mill.

Although the mill’s iron-producing operations will be suspended indefinitely, another blast furnace at the East Chicago mill will remain in operation, the company said Wednesday.

RETAIL

Circuit City auctions its brand and other assets

Bankrupt Circuit City’s brand, trademarks and e-commerce business have been sold at auction to Systemax, the company that purchased CompUSA’s intellectual property when it closed in 2008.

A spokeswoman for Streambank LLC, the intellectual property consulting firm hired by Circuit City, said the assets were sold at auction Monday. A federal bankruptcy judge in Richmond approved the sale Wednesday.

Systemax manufactures and sells consumer electronics online, by direct mail and in retail stores under the TigerDirect and CompUSA brands.

Macy’s loss grows as it works to localize stores

Macy’s Inc. reported a first-quarter loss Wednesday as it restructures its businesses to adapt to a drop in consumer spending.

Macy’s lost $88 million, or 21 cents per share, for the period ended May 2. That compares with a loss of $59 million, or 14 cents per share, a year earlier.

The results included restructuring charges of $138 million, or 5 cents per share.

Revenue fell to $5.12 billion from $5.74 billion a year ago. Analysts surveyed by Thomson Reuters, who generally exclude one-time items, were expecting a loss of 20 cents per share on sales of $5.2 billion.

The chain expects to see an improvement in sales from its localization efforts beginning in the fourth quarter of 2009, and particularly in the spring of 2010.

Whole Foods profit slips but beats expectations

Whole Foods Market Inc. said Wednesday its profit fell 32 percent in its second fiscal quarter as shoppers cut back.

However, it beat Wall Street expectations and reaffirmed its full-year outlook.

The Austin-based chain earned $27.3 million, or 19 cents per share, for the quarter ended April 12, down from $40 million, or 29 cents per share, last year. Sales were flat at $1.86 billion.

Analysts expected it to earn 18 cents per share on revenue of $1.87 billion.

TECHNOLOGY

EU fines Intel for antitrust violation

Intel Wednesday was fined a record $1.45 billion by antitrust regulators in Europe for illegally using its dominant position to edge out its only rival, Advanced Micro Devices.

The European Commission said Intel, which has 70 percent of the global chip market, gave hidden discounts to computer makers to use only the company’s chips and paid the companies not to use AMD chips. It also paid a major retailer to stock only computers outfitted with Intel chips, the commission said.

Intel said the decision failed to acknowledge how such companies operate. It plans to appeal.

Google to reshoot all photos of Japan streets

Google said Wednesday it will reshoot all photos in Japan for its Street View service after residents complained the 360-degree images provided a view over the fences around their homes.

The service has triggered privacy complaints around the world, including in Greece, where it was banned Tuesday.

The photos were taken by cameras mounted on a stick attached to a car roof. Google Japan said it would lower the cameras after many residents said they were high enough to look over fences. Others have complained that images on the service recorded vehicle license plates.