Morning Money Memo…
General Motors is changing its timeline on when it first knew about faulty ignition switches on compact cars. GM now says it received reports as early as 2001 – three years earlier than previous disclosed. The safety defect has been linked to at least 12 deaths and more than 30 crashes. The company, which is facing federal investigations over the delay, recalled 1.6 million cars with the ignitions last month.
Questions are also being raised by the manufacturer of the ignition switch involved. According to The Wall Street Journal, Delphi Automotive said “it only costs a few dollars to produce and minutes to install” a replacement part. Delphi “told Wall Street analysts this week it expects to spend between $2 and $5 to produce a replacement ignition switch that can then be “swapped out” in a matter of minutes by mechanics at GM dealerships,” says The Journal.
The Federal Trade Commission says it’s investigating Herbalife. Questions have been raised about how it markets products. The announcement led to a brief halt in trading of Herbalife, and then the shares fell more than 7 percent. “Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company said. Herbalife’s marketing has been harshly criticized by hedge fund investor Bill Ackman who made a huge bet on the stock’s collapse.
A “tsunami” of store closings is causing vacancies at many malls and shopping plazas, says a well-known retail expert. Brian Sozzi, CEO of Belus Capital Advisors, says “many retailers are adjusting the amount of stores they operate because their online businesses have been so strong.” But that could cause problems for many mall operators. “People are just not shopping large retail stores as much as they used to.”
Hundreds of store closings have already been announced by RadioShack, Staples, Sears, Kmart and others. “That is a large number–those are going to be empty spaces probably for a long period of time in many US malls,” Sozzi tells ABC News Radio.
Sodexo, one of America’s largest food service companies, is promising more nutritious choices for kids at schools, museums, and other venues. The announcement is in support of Michelle Obama’s campaign to reduce childhood obesity. Sodexo is pledging to add more nutritious options to its vending and K-12 lunchroom programs.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow