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Top Business Headlines for December 10

December 10, 2009

Citi Presses to Pay Back Bailout Aid

It has been a year and Citigroup has not been able to pay back the remaining $20 billion of its government bailout money.  Funds  were loaned to the Wall Street giant under the Trouble Asset Relief Program.  The company is increasing its efforts to pay the debt to demonstrate its ability to stand alone without the governments oversight. The government currently has a one-third stake in the enterprise, approximately 7.2 billion shares. Citigroup executives must find a way to persuade the government to sell.  It is also attempting to encourage shareholders to purchase more shares. Analysts are skeptical that Citigroup will be able to pay back the funds in a reasonable amount of time. It is even further skeptical if the company will be allowed. Regulators will come to an agreement in the new few days.

Source: New York Times, December 10, 2009

Volkswagen, Suzuki to join forces, buy mutual stakes

By mid-February Volkswagen will become Suzuki’s largest shareholder. With increasing competition from Toyota and Honda, the alliance will prove mutually beneficial.  Last year their combined production reached 8.5 million cars, exceeding the no. 1 ranked automaker—Toyota. Suzuki will purchase up to half of the amount Volkswagen will buy from Suzuki. The relationship will focus on improving each other strengths and weaknesses. This will be accomplished through product development, sales and production rates.  Additionally, the two companies will focus on hybrid and electric vehicles.  The alliance comes after the end of a more than 20 year old relationship with GM. In 2006, GM sold 17% of its stake in Suzuki and the remaining 3% last year.

Source: The Washington Post, December 10, 2009

Enterprise 2.0 is vital for business

Utilizing the new online media tool is nothing new to those adept in digital media practices. Many business, however, are just catching on to the benefits of using this technology. Andrew McFee calls this Enterprise 2.0. According to McKinsey consultancy firm’s study published in September, business are seeing great benefits such as an increase in employee and customer satisfaction, innovation, and collaborations. In stark contrast to traditional organization, much needed connections have been made in informal business organization. Informal organization is classified as the ability to connect with experts outside of the organization, free from the support of the IT department.  These tools are relatively easy to learn, inexpensive,  and do not require centralized coordination. There are risks involved; however, the occurrence is very small. Those benefits greatly outweigh the risks, and it is imperative to seize all opportunities  to support business.

Source: Financial Times, December 10, 2008

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