Lexington equipment plant to close in November
A Lexington manufacturing plant will close its doors in November, eliminating 115 jobs, Komatsu America Corp. announced Friday. The Komatsu Remanufacturing Operation, which remanufactures used engines and other components for construction and mining equipment, is at 1105 Eastland Drive. Facilities in Candiac, Quebec, and Covington, Ga., also will close, affecting a total of 500 employees. Employees will be offered severance packages, and some will be asked to transfer to other locations, a company spokeswoman said. Komatsu acquired the plant from Louisville-based Brandeis Machinery in 1994. It was built by International Harvester in 1959.
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Slight rise in borrowing surprises analysts
Consumer borrowing rose unexpectedly in January after three months of declines, but the small increase did not shake economists' views that borrowing will remain weak this year as mass layoffs persist amid the recession. The Federal Reserve said Friday that borrowing increased at an annual rate of $1.76 billion in the first month of the year. Economists expected borrowing to decline at a rate of $5 billion. The small gain came mainly from the category that includes credit cards, which rose at a 1.2 percent rate in January after dropping 9.5 percent in December. The category that covers auto loans rose 0.6 percent after a 0.1 percent rise in December.
H&R Block's earnings better than expected
H&R Block Inc. is bracing for what could be a make-or-break final stretch of this year's income tax season. The nation's largest tax preparer reported better-than-expected earnings for its fiscal third quarter Friday. But it also said the total number of tax returns prepared by its network of retail offices or through its online and TaxCut software products was down 1.8 percent through the end of February versus a year ago. The retail offices, which generate the highest fees, saw a 3.9 percent decline from a year ago.
Roche raises offer for Genentech
Swiss drug developer Roche boosted its hostile tender offer for biotechnology pioneer Genentech Inc. to $93 per share Friday, raising the total offer value to $45.7 billion, after its initial offer failed to pick up much support from shareholders. For weeks, Genentech's board had been calling Roche's $86.50 bid too low, with much of Wall Street saying shareholders probably wouldn't bite at the offer. In its statement Friday, Roche said it received tenders for only 500,000 shares in the tender offer that was set to expire March 12, a tiny fraction of the 44 percent the company needs to take control of Genentech.
Wells Fargo to reduce dividend by 85%
Following the lead of other major banks, Wells Fargo & Co. said Friday it will slash its dividend by 85 percent to shore up its capital base. The bank, which is still digesting the acquisition of Wachovia Corp., said cutting its quarterly payout from 34 cents a share to 5 cents would result in $5 billion in annual savings. Wells Fargo also disclosed improved mortgage lending figures for the first two months of the year and said it hoped to pay back $25 billion in government rescue funds as soon as possible. It also said it has identified ways to save an additional $2 billion a year.
Georgia bank is 17th to fail this year
Regulators on Friday shut down Freedom Bank of Georgia, marking the 17th failure this year of a federally insured bank. The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Commerce, Ga. It had about $173 million in assets and $161 million in deposits as of Wednesday. The FDIC said the bank's deposits will be assumed by Northeast Georgia Bank, in Lavonia, Ga. The FDIC estimates that the cost to the deposit insurance fund from the closing of Freedom Bank will be $36.2 million.
Deere to lay off 325 at two Iowa plants
Deere & Co. plans to lay off an additional 325 workers at two plants in Iowa as the global economic downturn saps demand for construction and forestry equipment. Sales of Deere's construction and forestry equipment have tumbled amid the continuing housing slump and world economic turmoil, though its largest division — agricultural equipment — has posted strong results in recent months. Deere said 220 employees will be laid off at a plant in Dubuque and 105 in Davenport, effective March 30. The company said the employees were notified of the layoffs Friday. The job cuts followed earlier announcements that Deere would lay off nearly 700 workers in Brazil and Iowa after forecasts of lower sales. Some 388 workers have been laid off at the two Iowa plants. Deere employed 56,653 people at the end of 2008.
Compiled from Staff, wire reports