Morning Business Memo…
Both Ford and General Motors are revving up production in China – now the world’s largest car market. GM has started work on a new Cadillac factory as it targets China’s lucrative luxury segment. The carmaker says it hopes to triple Cadillac sales to 100,000 units by 2015. It also wants to quadruple its share of China’s luxury car market to 10 percent by 2020. GM Chairman and CEO Dan Akerson and other executives spoke to reporters before the groundbreaking in Shanghai. The $1.3 billion plant will be able to produce 160,000 vehicles a year.
Ford is doubling engine production in China, opening a new $500 million engine plant in Chongqing with the aim of making 400,000 additional engines a year. “This is the latest stage in the automaker’s largest expansion in more than 50 years with seven plants under construction in the Asia Pacific region,” says the Detroit Free Press. GM and Volkswagen are now the leading western car manufacturers in China.
Taper talk is having a big impact on the stock market. For the past two days stock averages have made strong gains as investors increasingly believe that the Federal Reserve will not taper or scale back its policy of bond purchases and very low interest rates. Again stock futures are up this morning. Ben Bernanke is set to speak to reporters later today. Investors have been playing a guessing game lately over when the Fed might trim back its stimulus efforts.
A big change for the Securities and Exchange Commission over how it investigates financial firms and their employees. Mary Jo White, the new chair at the SEC says the agency will start requiring companies and individuals in some cases to admit wrongdoing in big settlements. Until now the SEC has allowed them to settle charges without admitting or denying wrongdoing. Critics, including a federal judge, have complained that policy doesn’t deter repeat violations. The switch could lead some serious fraud cases to go to trial as some firms would be very reluctant to admit wrongdoing and open themselves up to lawsuits.
United Airlines is making it a little harder to get a higher frequent-flier status. MileagePlus status used to require flying 25,000 miles per year. Now, United is adding a requirement for at least $2,500 in spending, too. Most frequent fliers would spend that much anyway if they are earning 25,000 miles. But those who buy discounted tickets might be affected. The change at United is similar to move by Delta in January for its SkyMiles awards program.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc