Roundup: PNC to cut $500M in expenses; Westmoreland's Skiavo to retire; US Airways pitches merger; more
PNC plans to cut expenses by $500M in 2013
PNC Financial Services Group plans to reduce expenses by $500 million in 2013, President William Demchak told analysts at a banking conference on Tuesday. The amount represents 5.5 percent of PNC's noninterest expenses for 2011. Demchak did not detail how the bank would reduce costs. But PNC will emphasize other delivery channels over branches, which are “really expensive,” he told attendees of a Bank of America Merrill Lynch Investor Conference in New York. Branches account for about $3 billion, or 62 percent of the cost of operating PNC retail banking, he said. Per-transaction costs amount to about $4 at a branch, 59 cents at an automated teller machine, 56 cents on-line or mobile device, and 10 cents at a call center, said Demchak. PNC plans to have about 4,000 of its new image-enabled ATMs in place by the end of 2013, he said.
Westmoreland economic growth chief to retire
John Skiavo, who has served as CEO of the Economic Growth Connection of Westmoreland County for the past 12 years, will retire at the end of the year, and Jim Smith, EGC's vice president and director of finance, will replace him. Skiavo made the announcement at the EGC's annual dinner. Prior to his appointment in 1999 as EGC president, Skiavo served as president of the Johnstown Area Regional Industries, as president of the Central Westmoreland Chamber of Commerce and the Central Westmoreland Development Corp. Smith, prior to joining EGC in February 2002, worked for the Fay-Penn Economic Development Council/Industrial Development Corp. in Uniontown.
US Airways pitches American merger to creditors
US Airways Group Inc. met with AMR Corp.'s unsecured creditors committee on Tuesday to make its case for a merger with the bankrupt company's American Airlines, people familiar with the matter said. The creditors group, which has a say in important decisions during the reorganization, will hear Wednesday from representatives of American on its plan to exit court protection independently. The meetings are in New York. US Airways CEO Doug Parker has been pushing for a merger since shortly after Fort Worth, Texas-based AMR filed for bankruptcy on Nov. 29. AMR CEO Tom Horton has fought to remain independent and to evaluate merger options after exiting Chapter 11 protection.
Gasoline prices continue to fall
Gasoline prices around Western Pennsylvania continued to fall this week, AAA East Central said on Tuesday. The average price of gas around the region on Tuesday was $3.638 a gallon, down 2.9 cents from last week's average of $3.667. Prices ranged from a high of $3.690 in Altoona to a low of $3.491 in New Castle. The national average dropped to $3.440 as oil prices threatened to fall below $80 a barrel. The price was $3.436 a year earlier. Oil for December delivery fell for a second day, declining 19 cents to settle at $85.38 a barrel on the New York Mercantile Exchange.
DynaVox posts loss; sales fall 29%
DynaVox Inc. reported a net loss of $270,000, or 2 cents a share, in the 13 weeks ended Sept. 28 as sales dropped 29 percent. The company's stock fell 8.2 percent on the report on Tuesday, closing at 38 cents a share, down 3.4 cents. The stock has dropped 89.6 percent this year. The loss at the South Side-based company, which makes communication and education products for people with speech and learning disabilities, compares with net income of $440,000, or 4 cents a share, a year before. The company blamed economic conditions for the decline. It reported sales of $18.6 million, compared with $26.2 million a year before.
Ask Vanguard founder a question
John Bogle, the famed founder of The Vanguard Group, will be the featured guest on local radio host James Lange's program on KQV 1410 AM on Nov. 28 at 7:05 p.m. “The Lange Money Hour” invites listeners to submit questions to Bogle in advance — by Wednesday, Nov. 14 — by visiting www.paytaxeslater.com and clicking “ASK John Bogle.” Bogle, who created the first index fund, is known for keeping investor costs historically low. Attorney Lange is a certified public accountant and retirement plan expert. The program will be re-aired on Dec. 2 at 9:05 a.m.
Other business news:
• Concordia Lutheran Ministries, a non-profit operator of retirement communities, said it closed a $23 million deal to buy a retirement community near Akron, Ohio. Cabot-based Concordia announced in September an agreement to buy the community, called Sumner on Ridgewood in Copley, Ohio. The renamed Concordia at Sumner offers 22 villas, 79 apartments, 40 assisted-living beds and 48 skilled-nursing beds.
• Mylan Inc. said it gained Food and Drug Administration approval for a generic blood pressure drug. Cecil-based Mylan said it started shipping Sildenafil Citrate tablets, the generic version of Pfizer Inc.'s Revatio. Revatio had U.S. sales of $338.7 million in the 12 months ended Sept. 30.
— From staff and wire reports