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Semiconductor industry

Corporate Restructuring and Expansion: Key Takeaways from Top Industries

Strategic Insights

— 2 min read

Mitsubishi Motors Corp. is planning to terminate production of Mitsubishi-brand cars in the United States, a move that is part of a broader restructuring effort prompted by DaimlerChrysler AG, its largest shareholder. According to Kyodo News, the plan involves halting production at the company's Illinois plant, which will then focus solely on producing Chrysler-brand vehicles. Meanwhile, Royal Bank of Canada is shifting its US mortgage unit by hiring up to 300 loan officers, cutting costs, and firing 200 underperforming staff to boost revenue and profitability. Standard & Poor's, the largest credit rating company, is introducing an evaluation of corporate governance in its assessment of a company's creditworthiness, focusing on "early warning signs" such as accounting changes and aggressive acquisition strategies.

Key Takeaways:

  • Mitsubishi Motors Corp. is terminating production of Mitsubishi-brand cars in the United States, a decision driven by DaimlerChrysler AG, its largest shareholder.
  • Royal Bank of Canada is reorganizing its US mortgage unit, hiring 300 loan officers, cutting costs, and firing 200 underperforming staff to increase revenue and profit.
  • Standard & Poor's is introducing a corporate governance evaluation in their credit assessment, focusing on early warning signs such as accounting changes, aggressive acquisition strategies, and lawsuits.
  • Pepsico Inc. is increasing its dividend by 44% and substantially increasing stock buybacks to respond to investor pressure.
  • Elan Corp. is selling its European and North American rights to the Zonegran epilepsy drug to partner Eisai Co. for $130 million.
  • Intel Corp. has agreed to pay Intergraph Corp. $225 million to settle a seven-year patent dispute over technology used in Intel's Pentium and Itanium chips.
  • Luxottica Group SpA has announced a $401 million purchase of Cole National Corp.'s Loupe, a chain of optical stores, which could face antitrust review from the FTC.
  • Jones Financial Cos. may face an SEC enforcement action due to undisclosed promotional fees received from fund companies.
  • Radio Flyer, the maker of the classic little red wagon, plans to move its manufacturing operation to China, citing economic concerns.
  • Viacom is considering launching a gay cable network in the US, and its CEO, Sumner Redstone, has tightened the company's decency standards following controversy over Janet Jackson's halftime show.
  • Best Buy Co. has decided to sell new and returned products on eBay, joining other retailers like Sears, Roebuck & Co. and Sharper Image Corp.
  • Accenture Ltd.'s CEO, Joe W. Forehand, will step down in September, while AOL is expanding its online music service to include 99-cent song downloads.
  • MCI has agreed to pay $100,000 in penalties to settle accusations of violating Indiana's no-call law.
  • GE Energy has been selected as the turbine supplier for Taiwan's first large-scale wind power project, a 39-megawatt project developed by Taiwan Power Co.

Statistics:

  • Mitsubishi Motors Corp. is terminating production of Mitsubishi-brand cars in the United States.
  • Royal Bank of Canada is hiring up to 300 loan officers and cutting costs to reorganize its US mortgage unit.
  • Pepsico Inc. will increase its dividend by 44% and authorize repurchasing up to $7 billion of common stock over three years.
  • Intel Corp. has agreed to pay Intergraph Corp. $225 million to settle a seven-year patent dispute.
  • Luxottica Group SpA will spend $401 million to acquire Cole National Corp.'s optical chain.
  • Best Buy Co. will sell new and returned products on eBay to leverage the growing online market.
  • MCI has agreed to pay $100,000 in penalties to settle accusations of violating Indiana's no-call law.
  • GE Energy will provide 26 of its 1.5-megawatt wind turbines for Taiwan's first large-scale wind power project.
  • Accenture Ltd.'s CEO, Joe W. Forehand, will step down in September.

Sources:

  • Kyodo News
  • Reuters
  • Standard & Poor's
  • Pepsico Inc. press release
  • Elan Corp. press release
  • Intel Corp. press release
  • Luxottica Group SpA press release
  • Radio Flyer press release
  • Viacom press release
  • Best Buy Co. press release
  • AOL press release
  • MCI press release
  • GE Energy press release
  • Accenture Ltd. press release

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