Roundup: Alcoa cuts 500 jobs, 2 production lines; #1 Cochran acquires Billco; more
Alcoa cuts 2 production lines, 500 jobs at Canada plant
Aluminum smelter and parts-maker Alcoa said on Thursday that it will close two production lines at a plant in Canada and cut about 500 jobs there because of lower aluminum prices. A major portion of a planned upgrade for the facility in Quebec is being pushed back by three years, to 2019, the company said. Alcoa has reported strong demand for aluminum, but prices have fallen. Those lower prices were a factor when Alcoa reported lower-than-expected first-quarter revenue last month. On May 1 it said it might cut capacity by 11 percent, or 460,000 tons, in addition to the 13 percent of its capacity it already had idled.
#1 Cochran acquires Wexford dealership
The #1 Cochran acquired Billco Motors, Wexford, on Thursday, which gives the Monroeville automotive group its first car-dealer location in the North Hills. Billco Motors sells Volkswagen and Mazda vehicles. Virtually all of Billco's 50 workers will join #1 Cochran, said the group's CEO, Rob Cochran. The deal, whose terms were not disclosed, gives #1 Cochran 21 dealerships with 16 vehicle brands, including Hyundai and Nissan. The group added Ford and Chrysler to its brands last July with the acquisition of Charapp Automotive, Natrona Heights.
CFTC adopts weakened rule on derivatives
A rule intended to loosen the largest banks' control over the trading of complex investments and help safeguard the financial system was weakened Thursday by regulators. Critics said the changes will allow major Wall Street banks to continue to dominate the $700 trillion derivatives market. Under the rule, approved by the Commodity Futures Trading Commission, investment firms would be required to request price quotes for a derivatives contract from only two banks this year and three beginning in 2014. An earlier proposal had called for price quotes from five banks. Derivatives are investments whose value is based on some other investment, such as oil. The market was largely unregulated before the 2008 financial crisis. The rule was mandated under the 2010 financial regulatory overhaul. By requiring fewer price quotes, critics worry that the market will be less competitive.
New construction declines in April
Builders broke ground on fewer homes in April, one month after topping the 1 million mark for the first time since 2008. But most of the decline was in apartment construction, which tends to vary sharply from month to month. And applications for new construction reached a five-year peak, evidence that the housing revival will be sustained. The Commerce Department said Thursday that builders started construction at a seasonally adjusted annual rate of 853,000, a 16.5 percent drop from the March pace of 1.02 million. Applications for building permits rose 14.3 percent to a rate of 1.02 million, the most since June 2008.
Consumer prices fall 0.4%
A plunge in the cost of gas drove down a measure of consumer prices last month by the most since December 2008. Excluding the drop in fuel costs, prices were largely unchanged. The consumer price index fell 0.4 percent in April from March, the Labor Department said Thursday. The main reason the index fell was that gas prices plunged 8.1 percent. For the 12 months that ended in April, overall prices rose 1.1 percent — the smallest year-over-year increase in 2½ years.
Ex-Groupon CEO to start new company
Former Groupon Inc. Chief Executive Andrew Mason is moving from Chicago to San Francisco to start a company after recently recording an album of “motivational business music,” according to an update on his blog on Thursday. “If there's a silver lining to leaving Groupon, it's the opportunity to start something new,” Mason wrote. Groupon ousted the Mt. Lebanon native this year after the company suffered several quarters of losses as demand for its daily deals waned and its European operations fell into disarray.
Other business news
• Two Allegheny County businesses received nearly $1 million in grants the Gov. Tom Corbett administration awarded Thursday for switching vehicle fleets to natural gas fueling. Giant Eagle received $500,000 to help purchase 20 vehicles fueled by compressed natural gas. Waste Management of Pennsylvania received $491,444 to help buy 25 garbage trucks fueled by CNG. The funds come from well fees set by the state's oil and gas-law reforms of 2012. The Corbett administration awarded nearly $7 million Thursday to 18 companies statewide, according to its news release.
• Pennsylvania's Medicaid program will receive $4.5 million as part of a $500 million settlement deal between a generic drugmaker and the federal government, the state Attorney General's Office said. Ranbaxy USA Inc., a subsidiary of Indian pharmaceutical company Ranbaxy Laboratories Ltd., pleaded guilty Monday to making and selling impure drugs from two manufacturing sites in India, and lying about tests of drugs. The company agreed to a fine and forfeiture of $150 million, as well as a $350 million penalty to settle civil claims that it submitted false statements to Medicaid, Medicare and other government health care programs.
• Pennsylvania received a $1.5 million federal grant to develop a plan to lower health care costs and improve quality and efficiency, Gov. Tom Corbett said Thursday. The Center for Medicare & Medicaid Innovation awarded grants to 16 states under funding provided by the Affordable Care Act. Led by the state Department of Health, Pennsylvania will look at ways to improve access to care, better manage chronic diseases and reduce unnecessary readmissions to hospitals. The state has until Sept. 30 to submit its plan.
— Staff and wire reports