The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market

But one area that the company is shifting on is its luxury-market strategy, and Mr. Stevens said that the future for luxury cars is China. GM’s decision to shift the headquarters of its Cadillac division to New York, Mr. Stevens said, is because “the epicenter of luxury is New York.” And while Mr. Stevens said that the current luxury leader in China is Audi, he expects in the future GM’s primary competitors there will be BMW and Mercedes.

Cadillac lacks a legacy in China, so the country represents a blank slate for GM’s luxury brand. That puts GM in the position of building from scratch in terms of everything from consumer awareness to a dealer network. “We need to work on building the brand.”

THE DAY AHEAD

Fourth-quarter gross domestic product data releases at 8:30 a.m., and the consensus expectation is for 2.1% growth during the period. Consumer sentiment for February is available at 10 a.m., and the forecast is for a strong reading of 94.0, compared to January’s 93.6. Also at 10 a.m. we’ll see data on pending home sales for January, with an expected uptick of 2%, following December’s 3.7% decline.

Diner’s dash: Del Frisco’s vs. Darden. Upscale

Del Frisco’s Restaurant Group Inc. has been serving up hot results, but it may not be the best meal in town, writes Ahead of the Tape’s Spencer Jakab. Del Frisco’s reports full-year 2014 results Friday, and analysts forecast earnings of 88 cents for the year, up from 51 cents in 2013.

CORPORATE NEWS

Coca-Cola sells $9.5 billion in euro-denominated bonds.

Coca-Cola Co.’s bond sale is the largest euro-denominated bond from a U.S. firm on record and the second-largest by any company in the currency. U.S. companies are barreling into European bond markets at the fastest clip since the financial crisis, taking advantage of record-low borrowing costs overseas.

KKR’s struggling energy firm weighs debt options. Energy producer

Samson Resources Corp., owned by private-equity firm

KKR & Co., is working with restructuring advisers, as the fall in oil and gas prices complicates its efforts to stem losses and make payments on billions of dollars in debt.

IBM pumps $4 billion into cloud, mobile services. International Business Machines Corp. plans to shift $4 billion in 2015 spending to what it calls the “strategic imperatives” of cloud, analytics, mobile, social and security technologies. IBM CEO Virginia Rometty said the spending won’t necessarily require cuts in other businesses. In many cases, she said, the company can take advantage of money freed up by operating at higher efficiency.

Shoppers return to chain stores. Shoppers are making a comeback, especially to J.C. Penney, Old Navy and retailers catering to lower income Americans, a sign that a battered segment of consumers is on the mend. The results suggest that falling unemployment and improving wages were enough to prompt budget conscious shoppers to open their wallets.

China’s coal consumption, output down last year. China’s hunger for coal fell last year for the first time in 14 years, confirming a trend that has become one of the heaviest weights sinking the global coal market. The world’s largest coal producer shrank both its output and demand by nearly 3%, according to fresh government data. The decline is an early sign of China’s success in joining countries around the world in trying to diminish air pollution and capitalize on falling oil and gas prices.

J.P. Morgan emerges as CEO breeding ground. Bill Winters, a former deputy to

J.P. Morgan Chase & Co. chief James Dimon, is the latest ex-executive to helm a large financial firm, U.K. bank

Standard Chartered PLC. Standard Chartered Chief Executive Peter Sands said he will step down in June, after months of disquiet from shareholders and executives.

RBS’s global retreat stings U.S.

Royal Bank of Scotland Group PLC will dismantle its global investment bank, including cutting more than 1,000 investment-banking jobs in the U.S. The pullback highlights the changing fortunes of the fixed-income trading businesses that once contributed disproportionately to the revenue of the world’s largest banks but in recent years have petered out. It’s also a blow to Stamford, Conn., which not long ago aspired to be a trading center 50 miles north of Wall Street but has seen a number of firms retreat in recent years.

Electric-car resale prices tumble. With gasoline prices down 33% from a year ago and buyers cooling toward electric vehicles,

Nissan Motor Co. dealers worry that weak demand for used electric Leaf cars will put a flood of used models on the market. Buyers who get a $7,500 federal tax credit on purchase of a new Leaf see little reason to shop for a preowned model.

Fashion executive sets about fixing Gucci. Longtime fashion executive Marco Bizzarri, the new CEO of

Kering SA’s Gucci, on the job less than three months, has replaced the creative chief, reined in store openings and reached out to retailers in his aim to reignite the label.

Carlyle founders took in $800 million in 2014.

Carlyle Group LP’s three founders reaped an $800 million bounty in 2014 that reflects the big payouts the firm made to investors as it seized on buoyant markets and acquisition-hungry corporations to cash out of investments. Much of that amount came from the record $2.09 a share dividend the firm paid out to shareholders for the year and from returns on their investments in Carlyle funds.

Bayer reiterates plans to divest plastics business.

Bayer AG reiterated plans to divest itself of its high-tech plastics business, saying it would legally and economically separate the Material Science division by the end of August. “In the second half of this year, we intend to decide which of the possible variations to select for the stock market flotation—either an IPO or spinoff” to shareholders, CEO Marijn Dekkers said.

New York’s Daily News exploring possibility of sale. The Daily News, one of the largest daily newspapers in the U.S., is exploring the possibility of a sale. The paper hired

Lazard Ltd. to advise on the possible sale after it was approached by a potential buyer. Owner Mortimer Zuckerman declined to discuss potential suitors.

U.S. steel prices tumble on imports. A stronger dollar helped spur a sharp rise in steel imports, flooding the U.S. market with low-priced products and sending steel prices in the nation in February to their lowest level in nearly 5½ years. Domestic steelmakers slashed prices to cope, a move that will pressure their profit margins and reduce costs for buyers of steel including auto makers.

Penn Virginia exploring sale. Energy explorer

Penn Virginia Corp. is exploring a sale as its stock price has declined, its reserves have lost value and billionaire George Soros has urged the company to find a buyer. The company has been working with

Bank of America Corp. to find a potential buyer. Penn Virginia has a stock market value of about $444 million.

B&N to keep Nook business.

Barnes & Noble Inc. said Thursday that it plans to spin off its college-bookstore unit from its retail and Nook operations, scrapping a plan to spin off its struggling e-book business. Plans to revitalize its Nook digital business remained unclear.

Shutterfly faces proxy fight. Hedge fund

Marathon Partners Equity Management LLC plans to nominate three directors to the board of online photo service

Shutterfly Inc., citing concerns about acquisition strategy and compensation. The push to shake up the board comes after Shutterfly shopped itself but failed to strike a deal last year.

Google will allow search ads in Play store.

Google Inc. said it will let software developers pay to promote their apps in the Play store for the first time. It described the program as a “pilot” involving a limited number of users. The move represents a new avenue for sales for the Web giant as its growth slows.

Amazon’s Twitch site bets on poker.

Amazon.com Inc.’s streaming videogame-streaming site Twitch has begun broadcasting online poker games with players fielding questions from viewers and talking through their strategy in real time. Twitch draws 100 million users each month to watch others play online games.

REGULATION

FCC approves net neutrality rules, setting stage for legal battle. The 

Federal Communications Commission voted to regulate broadband providers as public utilities and overruling laws in two states that made it harder for cities to offer their own Web service. Telecom and cable industry groups, which have invested billions of dollars in their networks, are expected to challenge the votes. 

Apple Inc. co-founder Steve Wozniak attended the meeting, where votes in the Democratic-controlled commission were 3-2 along party lines. He said that he has only slower DSL service at home and that providers need to be more closely regulated. “Broadband is essential, like water,” Mr. Wozniak said.

Bank of England banishes “fireside chats.” The central bank’s move to improve transparency is part of an overhaul of how it interacts with the City of London following its embroilment in the foreign-exchange rigging scandal, the Financial Times reports. “Governors’ eyebrows and fireside chats are no match for a clearly communicated framework in which all information will be gathered and decisions made,” said the bank’s deputy governor for markets and banking, Minouche Shafik.

CIT’s John Thain plays down too-big-to-fail fears. Consumer advocacy groups and bank supporters clashed in front of a panel of banking regulators reviewing

CIT Group Inc.’s proposed acquisition of

OneWest Bank NA’s parent company. OneWest is “not above the law,” said Helen Kelly, a former state prosecutor who said she encountered difficulties with the lender when she wanted to modify the terms of her mortgage. She then compared bankers to an “Ebola virus” that had spread to contaminate homeowners.

EARNINGS

Weight Watchers loses money, members.

Weight Watchers International Inc. reported a loss in the holiday quarter and said members continue to leave as the weight-loss company sheds more ground to apps and other gadgets that track calories. The company is laying off the president of its North American business, Lesya Lysyj, amid a cost-cutting move aimed to save $100 million.

AB InBev profit lifted by U.S.

Anheuser-Busch InBev NV said economic recovery in the U.S. helped offset the impact of a stronger dollar that hurt sales elsewhere in the company’s global beer empire, pushing up profits during the fourth quarter.

Pimco outflows hit Allianz.

Allianz SE’s fourth-quarter results were overshadowed by outflows at

Pacific Investment Management Co., where clients continue to pull assets in the wake of a management shake-up. Third-party net outflows at Pimco rose 18% to $268 billion last year, with more than 70% coming after September when Bill Gross, Pimco’s co-founder, left the fund.

Sears extends dismantling of company.

Sears Holdings Corp. updated its plans to split off up to 300 of its best stores into a separate company as it also reported a $159 million loss and declining sales over the holidays. Chief Executive Eddie Lampert said he is focusing on profit, not sales growth.

ECONOMY

Jobs picture brightens for recent college grads. The job market for fresh college graduates is improving, with just over half of 67,000 members of the class of 2014 who responded to a survey landing full-time jobs within six months of graduation. Many isolated pockets of the U.S., like Thief River Falls, Minn., have a surfeit of jobs. Such “job islands” are a telling aberration from a national workforce still weighed down by stagnant wages and other signs of slack.

Gas’s drop drives U.S. into deflation territory. A measure of U.S. consumer prices fell in January from a year earlier, marking the first annual decline in more than five years and potentially complicating the calculus for when the Federal Reserve will lift interest rates.

Avoiding euro exit will take a Greek drama. The next hurdle for Greece is to find economic policies that will appease the country’s people as well as its international creditors. Berlin blames the economic collapse that followed Greece’s 2010 bailout on the fiscal and other sins that predated it. Greece’s new government blames the bailout for turning a financial crisis into a full-blown depression. Opposite policy prescriptions follow from these clashing interpretations.

CFO MOVES

Lorillard Inc., a Greensboro, N.C.-based cigarette maker, named Chief Financial Officer David Taylor chief executive officer for Imperial Tobacco Group  PLC’s future subsidiary, ITG Brands LLC. Mr. Taylor will assume the role when that company comes into being following the closing of Lorillard’s pending merger with Reynolds American Inc. Mr. Taylor received compensation valued at $3.5 million in 2013, according to a proxy filing.

LKQ Corp., a Chicago-based automotive-parts company, named Dominick Zarcone CFO, effective at the end of March. Mr. Zarcone was previously CFO for Robert W. Baird & Co. LKQ named CFO John Quinn CEO and managing director for its European Operations. Mr. Quinn received compensation valued at $2.6 million in 2013, according to a proxy filing.

RSA Insurance Group PLC, a London-based insurance company, said CFO Richard Houghton will leave the role later this year once a successor is recruited. Mr. Houghton received compensation valued at $898,281 in 2013, according to the company’s 2013 annual report.

THE WEEKEND READER

Every weekend we select a handful of in-depth articles we think are worth a bit of your valuable time, either because they peel back the layers on a compelling business story, or somehow make us look at business in a different light.

Undocumented immigrant and Goldman Sachs star. Julissa Arce, who turns 32 in March, bought fake papers for a few hundred dollars and then proceeded to become an overachiever on the private-wealth-management floor at

Goldman Sachs Group Inc. Bloomberg reports that Ms. Arce went from selling funnel cakes in Texas to selling derivatives, in a tale that sheds new light on the ambitions and possibilities for those seeking a career in the U.S. against immigration laws that make it exceedingly difficult. Ms. Arce moved to San Antonio when she was 11, knowing little English, and her visa expired three years later. But by 2004 she was a freshly minted Goldman Sachs intern. “She didn’t have to adjust to Goldman Sachs’s culture of undisguised ambition because she embodied it,” Bloomberg reports. Ms. Arce said, “I just had this idea in my head that if I can work my way into this wealth and status, then it won’t matter that I’m undocumented.”

Warren Buffett is ‘one-quarter Coca-Cola.’ The Wall Street Journal writes occasionally about the healthy rituals of various standup-paddleboarding, jai-alai-playing CEOs. One executive the Journal likely won’t cover for that column is 

Berkshire Hathaway CEO Warren Buffett. He tells Fortune’s Patricia Sellers that he drinks at least five 12-ounce servings of Coke a day. (Mr. Buffett owns $16 billion in Coca-Cola stock.) Some mornings he eats potato sticks. Out of a can. On the day Ms. Sellers met him, Mr. Buffett confessed to eating a bowl of chocolate-chip ice cream.

CEOs have the same fears as the rest of us. A study by Harvard Business Review on CEO fears reveals that many are just like us. According to a survey of 116 CEOs, the top fear is being found to be incompetent. Next up is the fear of underachieving, followed by being politically attacked by colleagues and appearing vulnerable. The fear of looking foolish rounds out the top five. Where CEOs and mortals differ is that their fears can poison the organization. Roger Jones writes for HBR that there are ways for CEOs to prevent their fears from running amok. It starts with CEOs acknowledging their fears and goes from there toward the organization creating an atmosphere where fear can be voiced without repercussions. “Top team effectiveness programs should encourage executives to tell personal stories about key moments in their lives,” he writes. “This gives them insights on what drives their colleagues’ behavior, including their fears and motivations.”

Source : https://blogs.wsj.com/cfo/2015/02/27/the-morning-ledger-gms-cfo-targets-chinas-luxury-car-market/

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The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market

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The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market

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The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market

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The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market

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The Morning Ledger: GM’s CFO Targets China’s Luxury Car Market