Morning Money Memo…
Electric-car maker Tesla Motors and Panasonic, the Japanese-owned electronics firm, have signed an agreement for a giant battery "gigafactory" in the US. The manufacturing facility would help Tesla become a mass manufacturer of electric cars. Tesla will manage the battery factory and Panasonic will manufacture and supply cylindrical lithium-ion cells. "The gigafactory represents a fundamental change in the way large-scale battery production can be realized," says JB Straubel, CTO and co-founder of Tesla Motors. Tesla projects that the battery plant will employ about 6,500 people by 2020.
Argentina has defaulted on its debt for the second time in 13 years. Ratings firm Standard and Poor's says Argentina was in technical default after missing a $539 interest payment on some restructured bonds. The default came after talks with bondholders collapsed, although there is a possibility the negotiations could resume. The standoff follows a long legal battle between Argentina's government and a small group of hedge funds that demanded full payment of bonds that were in default years ago. Argentina refused to pay - despite a US court order. Argentina's Economy Minister Axel Kicillof said the country won't accept the demands of American hedge fund investors, calling them "vulture funds." But Argentina's defiance may cause further harm to its fragile economy and block its access to international bond markets for a considerable time.
Is a name change in the works for Malaysia Airlines after two recent disasters? The carrier will seek to rebrand its image after the disappearance of flight MH370 in March and this month's crash of flight MH17 which was shot down over Eastern Ukraine. The crashes have made the carrier a symbol for international tragedy, says an International Business Times article. Malaysia Airlines has begun "a public relations offensive, trying to move the carrier's brand away from tragedy," the newspaper said.
Target has hired Pepsi executive Brian Cornell as its new chairman and CEO as it looks to recover from a huge data breach and troubles in Canada. Cornell replaces interim CEO John Mulligan, who stepped into the job in May when Target's top executive Gregg Steinhafel resigned. Cornell, 55, most recently served as CEO of PepsiCo Americas Foods. Prior to that, he was CEO and president of Sam's Club of Wal-Mart International and CEO of Michaels Stores.
Samsung Electronics says its second-quarter profit dropped 20 percent as smartphone and tablet sales fell. The South Korean firm says its quarterly earnings fell to $6.1 billion, the lowest since the second quarter of 2012 and below forecasts. Samsung is struggling to compete in the cheap smartphone business, which is the fastest-growing smartphone segment.
Richard Davies Business Correspondent ABC News Radio abcnews.com