GM scoffs at bankruptcy rumorsRumors that General Motors...

BUSINESS DIGEST

October 21, 1992

GM scoffs at bankruptcy rumors

Rumors that General Motors Corp. may consider filing for protection from creditors under bankruptcy laws were dubbed "ridiculous" yesterday by the automaker's chief financial officer.

William E. Hoglund, who is also GM's executive vice president, bristled when asked about published reports the automaker might file under Chapter 11 of the bankruptcy code to help speed its reorganization. "That's the most ridiculous comment that the press has started," he said.

Banks report healthy earnings

Major banks, including Citicorp, reported solid earnings gains yesterday, primarily thanks to unusually lucrative foreign exchange trading, low interest rates and a reprieve from commercial real estate woes.

Citicorp, the nation's largest bank, with $223 billion in assets, earned $116 million, or 17 cents a share, in the third quarter, while Chemical, the country's No. 3 bank, with $139 billion in assets, reported profits of $282 million, up 35 percent from $209 million during the third quarter of 1991.

Wells Fargo Corp. was the exception, with earnings falling 72 percent as it boosted reserves for bad loans due to southern California's troubled economy.

Japan may have to cut rates

Japan's most-watched measure of money supply contracted in September for the first time since the Bank of Japan began releasing the monthly statistic in 1967, suggesting the central bank will have to lower interest rates to revive growth.

The Bank of Japan said M2 plus certificates of deposit, which includes currency in circulation, contracted by 0.4 percent in September compared to the same month in 1991. Economists say the first-ever contraction in September is the strongest sign to date that the Bank of Japan must lower the nation's discount rate from its current level of 3.25 percent to revive growth.

Delta to furlough up to 200 pilots

Delta Air Lines said it plans to furlough up to 200 pilots beginning in December. The Atlanta-based carrier said it hopes to recall the pilots eventually, but acknowledged the furloughs, Delta's first layoffs of permanent employees since the mid-1950s, are indefinite.

Delta said it had to cut the staff because of losses and plans to reduce jet purchases.

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