General Mills Inc., will cut about 40 jobs at its cereal plant and flour mill in Buffalo in March as part of a $32 million restructuring in its second quarter that will cut up to 200 jobs nationwide.
The company will take a charge against earnings equal to 21 cents per diluted share of common stock and will be posted in the quarter ending Nov. 29, General Mills said Tuesday. It is related to operational changes previously announced in May.
About half the cuts are among salaried workers, senior vice president Austin Sullivan said. The cuts in Buffalo, amounting to 10 percent of the company's local work force, will be accomplished mostly through early retirements, with about five layoffs expected, he said. Employees will opt for the severance window through December and the cuts will take effect in March.
The company said the restructuring should cut costs and contribute about 11 cents per share in increased earnings beginning in fiscal 2000.
The company announced in May that it would consolidate its flour milling, food-service and packaged-foods operations to increase productivity and reduce manufacturing and distribution costs.
General Mills' products include Cheerios, Wheaties, Yoplait yogurt, Pop Secret microwave popcorn and Betty Crocker dessert mixes.
Personal savings rate down 0.2%
WASHINGTON (AP) -- Americans spent more than they earned again in October, borrowing and dipping into their savings, mutual funds and home equity to maintain their standard of living.
The U.S. personal savings rate -- savings as a percentage of after-tax income -- was minus 0.2 percent last month. That followed a rate of minus 0.1 percent in September and was the worst performance since 1959, when the government began tracking the figure on a monthly basis.
On an annual basis, the rate hasn't been negative since 1933, at the depth of the Depression. But the reoccurrence of a negative savings rate doesn't mean the country is sinking into recession, economists said. More likely, it shows Americans are spending some of their gains from the booming stock market.
Negative savings also occurs when people finance spending by borrowing, withdrawing savings or cashing out part of their home equity when they refinance a mortgage.
Home sales up 2.1% in October
WASHINGTON (Reuters) -- Sales of existing homes rose 2.1 percent in October to a seasonally adjusted annual rate of 4.79 million units, thanks to the lowest borrowing costs in more than 30 years, the National Association of Realtors said today.
The NAR expects existing home sales to hit 4.75 million units for 1998, shattering last year's record of 4.22 million resales.
October sales were up from a 4.69 million unit annual rate in September, and were 9.4 percent above the 4.38 million unit rate of October 1997, the realtors' group said.
The median price for an existing home was $130,900 in October, down from $131,200 in September but up from $124,400 in October 1997. Half of homes sold for above the median price and half below.
The biggest rise in October home sales came in the South, with a gain of 6.9 percent. Home resales rose 0.8 percent in the Midwest but were off 2.8 percent in the West. They fell 1.5 percent in the Northeast, the group reported.
Yield increases on two-year T-note
WASHINGTON (AP) -- Yields on two-year Treasury notes rose in Tuesday's auction to the highest level in three months.
The yield was 4.629 percent, up from 4.025 percent at the last auction on Oct. 28.
The notes will carry a coupon interest rate of 4 5/8 percent with each $10,000 in face value selling for $9,999.20.
J.C. Penney to buy Genovese chain
PLANO, Texas (AP) -- In a move that will bolster its already profitable Eckerd drug store division, J.C. Penney Co. Inc. will buy Genovese Drug Stores for $432 million in stock and assume $60 million of debt.
The deal announced Tuesday will give Penney a greater presence in the New York area, where Melville, N.Y.-based Genovese operates 141 drugstores. The Genovese stores will be renamed Eckerd.