Business Stories of the Week: Sept. 29, 2017

by September 29, 2017

The credit bureau monitoring service Equifax announced on Tuesday its chief executive will retire early in the wake of its monster credit hack. (Photo courtesy of Pexel)

Trump rolls out tax plan and questions begin

For months, Republican leaders have vowed to overhaul the American tax code. On Wednesday, the party’s leaders unveiled a nine-page framework that would slash tax rates for the rich, middle class and businesses, while keeping tax deductions that spur home buying and charitable giving, The Washington Post reported. While the framework identified broad cuts, many key questions remained unanswered, including how lawmakers plan to avoid adding to the nation’s debt. The proposed cuts would not help poorer families that do not pay federal income taxes, The Washington Post reported.

Equifax CEO retires

The fallout for the credit-bureau monitoring service Equifax picked up on Tuesday after the company announced its chief executive is retiring, The Washington Post reported. The announcement comes just weeks after the beleaguered credit service announced it had suffered a major hack that compromised the private financial information of 143 million people. The agency came under fire in recent weeks from both consumer groups and federal officials over its handling of the data breach. While CEO Richard Smith will step down, Equifax’s board of directors appointed board member Mark Feidler to serve as the company’s non-executive chairman. Paulino do Rego Barros Jr., who led the company’s Asia Pacific division, will become interim chief executive, The Washington Post reported.

Target hikes minimum wage

On Monday, the retailer Target made waves when it announced it is hiking its minimum hourly wage to $11 next month, with a rise to $15 per hour by the end of 2020, Bloomberg reported. The increase would apply to regular full-time employees and 100,000 seasonal workers it hires in the fall and winter to help with the holidays. With unemployment at 4.3 percent in May, Target and other retailers must compete for a narrow pool of job seekers willing to work in the retail sector. Rival Walmart raised its minimum wage to $10 an hour last year.

Women sue over baby powder

The drug and consumer goods company Johnson & Johnson is being sued individually by thousands of women over its baby powder, claiming talcum powders causes ovarian cancer, The New York Times reported on Thursday. The stakes are high for both sides: Johnson & Johnson risks its reputation if the public deems baby powder, one of its oldest products, unsafe. Plaintiffs, many of whom are critically ill, face long and expensive court battles. Many of the 4,800 plaintiffs (as of July 2) are seeking financial damages worth millions of dollars and asking Johnson & Johnson to add a warning to its baby powder label or to replace the product with one made with cornstarch. So far, the evidence that baby powder causes ovarian cancer is inconclusive, The New York Times reported.

Stakes climb for Volkswagen

German carmaker Volkswagen isn’t out of hot water yet. A German investigation into emissions test cheating expanded on Thursday after German authorities arrested a former high-ranking executive, two people with knowledge of the arrest told The New York Times. In January, the carmaker agreed to pay $4.3 billion to U.S. regulators over accusations the company rigged its software to pass emissions tests. German news outlets identified the executive as Wolfgang Hatz, former chief of engine development at Volkswagen. Hatz worked closely with Matthias Muller, now the company’s chief executive, when both were on the Porsche board. Hatz was being held in Munich without bail, The New York Times reported.

Panic spreads for toymakers

Toymakers are reeling after Toys R Us announced it was filing for bankruptcy last week, The Washington Post reported on Thursday. Toys R Us owes $7.5 billion to more than 100,000 creditors, including most of the household names in America: Mattel (owed $136 million), Hasbro ($59 million), Spin Master ($33 million), Lego ($32 million), Radio Flyer ($12 million), Crayola ($2.6 million). The results could be devastating for smaller and mid-sized toy companies, many of which say they are likely to lose millions of dollars as a result of the bankruptcy, causing problems throughout the entire toy industry. The future of Toys R Us hangs in the balance as suppliers make difficult decisions about whether they will ship to the retailer heading into the holiday season.