No Summer Slowdown for GM, Ford and Chrysler

Morning Business Memo…

Thousands of US auto workers may have to cancel their vacation plans. Growing consumer demand for cars and trucks has the industry changing its usual summer vacation schedule. Ford says the traditional two-week summer break is being cut to a single week. General Motors isn't doing any shut downs. Chrysler plans a two-week break at only four of its 10 North American assembly plants. The biggest boost in demand is for full sized pickups - as the home construction industry rebounds from a very deep slump. After closing more than two dozen factories during the recession, American automakers need to use their remaining capacity to its fullest.

Today investors will be listening closely to what Ben Bernanke has to say before a joint congressional committee. He's likely to hint the Federal Reserve will continue its big round of bond purchases and keep interest rates very low. The current policy of monthly $85 billion in purchases of mortgage-backed bonds and long-term Treasuries has encouraged lending and boosted stock prices. The "QE" policy drove interest rates down to record lows and makes stocks more attractive than tiny yields from bonds. More than 400 out of 500 companies in the S&P 500 pay dividends - and most are considerably higher than 10-year bond rates.

The reviews are in on how Apple CEO Tim Cook weathered an expected grilling from supposedly hostile members of the Senate's Permanent Subcommittee on Investigations. His bid for the moral high ground proved "surprisingly successful," says the Financial Times. The New York Times gushed: "Timothy Cook came to the lion's den on Capitol Hill on Tuesday, prepared to face down lawmakers furious over evidence that Apple, the famous company he runs, had avoided paying billions in taxes. By the time Mr. Cook walked out, the big cats on a Senate committee were practically eating out of his hand." Joshua Green of Bloomberg Businessweek listed "10 reasons why Tim Cook dominated Congress," writing that he "spun a tale worthy of Mark Twain and emerged not only intact but unscathed. No one laid a glove on him." Key to Cook's success were charm, directness, knowing when to stay quiet, and calling for comprehensive reform of the corporate tax code.

Sony's CEO Kazuo Hirai says the company's board will discuss a proposal by American hedge fund manager Daniel Loeb to spin off up to 20 percent of its movie, TV and music division. Shares of Sony jumped after the announcement and have nearly doubled in value since Loeb began pushing for a break-up. Loeb said money from the sale could be used to shore up Sony's ailing device manufacturing unit. Sony initially responded by saying its entertainment business was not for sale, though some analysts said the strategy might help Sony unlock hidden value.

The stock market rose to another record high. The Dow rose 52 points yesterday. The S&P 500 was up 3 points, which is a similar percentage gain. Home Depot rose more than 2 percent. Autozone surged 5 percent as home improvement and car sales rose.

Richard Davies Business Correspondent ABC News Radio Twitter: daviesabc

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