Morning Business Memo
If you don’t like your new Chevy, you can take it back for a refund within 60 days. Chevrolet calls its new offer Love It or Return It. Between now and early September, Chevy buyers can return their new cars or trucks for a full refund as long as they’ve been driven less than 4,000 miles. The move by General Motors is part of a marketing campaign aimed at reversing Chevrolet’s recent drop in market share and clearing out Chevrolet’s remaining inventory of 2012 vehicles. USA Today reports: “deals from other makers, too, are likely,” but some hot-selling brands from Hyundai, Kia and some European makes are not expected to join the trend. Overall car and truck sales have made strong gains compared to last year.
Americans are taking out more loans. The Federal Reserve says consumer credit card debt rose by $8 billion in May by the most in almost five years. It could be a sign that more Americans are struggling to make ends meet. Or, say some economists, the increase may show shoppers are becoming more comfortable with taking on additional debt after four years of spending restraint.
The pain in Spain keeps getting worse. Prime Minister Mariano Rajoy announced more austerity measures today, including sales tax hikes, spending cuts and wage reductions for civil servants. This comes after European leaders approved a huge Spanish bank bailout. “We are living in a crucial moment which will determine our future and that of our families, that of our youth, of our welfare state,” said Rajoy.
More US cities are facing severe budget problems. San Bernadino has become the third California city in less than a month to seek bankruptcy protection. Stockton filed last month, and the ski resort town of Mammoth Lakes voted to file last week. The alternative to bankruptcy can be drastic spending cuts. That’s happening in some other cities. Municipal unions in Scranton, Pa., are filing a lawsuit after the mayor decided to cut the pay of employees to minimum wage – $7.25 an hour.
Clawback time at JP Morgan Chase. The Wall Street Journal reports the big bank “plans to reclaim millions of dollars in stock from executives at the center of the trading blunder that shocked Wall Street and tarnished the reputation of Chief Executive James Dimon.” The plans could be announced when JP Morgan reports its quarterly earnings on Friday. The bank lost as much as $5 billion in the trades.
A scandal over missing funds at the Iowa-based trading firm, Peregrine Financial Group. Some $220 million in customer funds have been unaccounted for. Authorities in Cedar Rapids say employees found their boss in his car at company headquarters, with a tube connecting the vehicle’s tailpipe to the interior. Peregrine Financial filed for bankruptcy protection yesterday, a day after founder and chairman Russell Wasendorf Sr. was discovered with a suicide note. The FBI is conducting a preliminary inquiry. The events are sure to bring more scrutiny to an industry still under a cloud after the implosion of MF Global, the futures firm founded by former New Jersey Gov. Jon Corzine. Billions of dollars in customer cash was missing when it collapsed in October.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc