Here are highlights of the week:
- Ford announced that it would be reducing its white-collar, salaried global workforce by 10% (or, 7,000 positions) in an effort to keep up with competitors and reverse profit declines. The move is expected to save the company $600 million annually and will include 800 layoffs in North America.
- The U.S. Postal Service is testing self-driving trucks supplied by TuSimple on a 1,000 mile run between Phoenix and Dallas. The 22-hour trip is currently serviced by outside trucking companies that use two-driver teams to comply with federal regulations of limiting drivers’ hours behind the wheel. “This run is the sweet spot of where autonomy is valuable,” says the TuSimple company spokesman.
- Best Buy announced a rise in profits during the past quarter as a result of its growing online sales of appliances and electronics, which offset flat sales in stores. Comparable sales increased 1.1% the first quarter, ending May 4th, which was the ninth consecutive quarter of growth for the company’s online operations.
- Grocery Outlet Holdings, which is a small discount food retailer, has announced intentions to file for an IPO. Unlike other recent IPOs, the California-based company is profitable. In addition to that, Grocery Outlet has a hook: it caters to bargain minded shoppers, selling brand name labels like Vlasic pickles using a “treasure hunt shopping environment,” (ref WSJ). The company buys merchandise at big discounts after order cancellations or label/packaging changes. It’s said that customers, who spend around $25 each on average, feel like they’ve walked away with a deal.
- General Electric’s CEO Larry Culp has plans to tackle the company’s ailing financial services business after he cuts overall debt and stabilizes its power generation business. GE Capital has been a key part of the company’s profit engine during past decades but has run into problems in recent years. When asked how quickly GE can shrink the size of GE Capital, Culp responded that that will take place after he’s been able to shrink the size of GE’s $100 billion debt and the power division is “back on its feet.” He also remarked that future cash contributions for the Capital unit would be “meaningfully less” than the $4 billion needed this year, (ref WSJ).