Bailout estimates rely on stock gains
WASHINGTON -- The Treasury Department indicated Friday it expects taxpayers will lose billions less from the financial bailouts than earlier estimated. The problem is, its revised forecast assumes Treasury's shares of bailed-out companies are gaining value despite this week's plunge in stock prices.
Treasury predicts the bailouts will cost taxpayers $105.4 billion, according to a letter to lawmakers from Assistant Secretary Herb Allison. That's down $11.4 billion from a February projection by the Obama administration.
Most of the expected cost savings depend on Treasury's ability to profit once it sells its stakes in Citigroup Inc., General Motors and Chrysler, Allison wrote. Treasury received those investments in exchange for pumping billions into the companies to rescue them.
Toyota recalling 3,800 Lexus sedans
NEW YORK -- Toyota Motor Corp. said Friday it is recalling about 3,800 Lexus LS sedans in the United States to fix a problem with the vehicle's steering system following a similar recall in Japan. The company said the recall affects some 2009 and 2010 LS 460 and LS 600h sedans.
The recall is designed to fix a problem in which the steering wheel becomes off-center after a specific driving maneuver. The problem should not occur during normal driving, the company said. Toyota earlier Friday recalled 4,500 cars in Japan to address the steering issue.
Financier invests in big book chain
NEW YORK -- Book seller Borders Group Inc. hopes to redefine itself with a $25 investment from financier Bennett LeBow, who will become its chairman and biggest shareholder.
In an era of deep discounts on printed books and growing consumer appetite for electronic ones, the struggling company will use the infusion it announced Friday to strengthen its balance sheet and invest in its online business.
Borders, the nation's No. 2 traditional book seller behind Barnes & Noble, has cut staff and closed stores as it faces increased competition from discounters and online sellers such as Amazon.com.
Chrysler to expand in hard-hit Detroit
DETROIT -- Chrysler Group gave a big boost to the battered Michigan economy Friday when it announced plans to add about 1,100 workers to help build the new Jeep Grand Cherokee. Chrysler said it expects strong sales of the sport utility vehicle, due in showrooms next month.
Almost all of the workers will be new hires, which Chrysler can pay about $14 per hour, about half the hourly rate received by employees represented by the United Auto Workers union. The announcement is good news for Michigan, which has struggled for years with the decline of Detroit's automakers.
Burger King wins ruling over prices
MIAMI -- A federal judge ruled that Burger King has the right to dictate value menu pricing to its franchisees, marking a partial victory for the chain.
The National Franchisee Association sued over the $1 double cheeseburger, arguing that the company did not have the authority to dictate "maximum pricing" and sell an item at a financial loss.