Business news in brief

Lumber Liquidators' CEO quits abruptly

Lumber Liquidators, under scrutiny for months as it faces accusations that it sold products with dangerous levels of formaldehyde, said Thursday that its chief executive had left the company.

The chief executive and president, Robert Lynch, resigned "unexpectedly," the company said. Thomas Sullivan, the company's founder, will serve as acting chief executive.

The company has been reeling since a report by the CBS program 60 Minutes broadcast in March said some of the company's laminate wood contained potentially hazardous levels of formaldehyde, a known carcinogen. That flooring came from factories in China and was mislabeled as safe, according to the report.

Lynch's resignation came weeks after the retailer announced that its chief financial officer, Daniel Terrell, would resign in June. Shares of Lumber Liquidators dropped nearly 17 percent to $21.10 in trading Thursday on the New York Stock Exchange.

The company has disputed the CBS program's testing methods and maintained that its products are safe as used. Still, Lumber Liquidators' stock has fallen more than 30 percent since the report, and the company has come under investigation by the Consumer Product Safety Commission.

Lynch, an executive with years of retail experience, had been Lumber Liquidators' chief executive since 2012. Before he joined the company in 2011, he held the top position at Orchard Supply Hardware, a garden and home improvement retailer, and also held positions at Home Depot.

-- The New York Times

Dip ends long-term mortgage rates' rise

WASHINGTON -- Average long-term U.S. mortgage rates edged slightly lower this week after rising for three straight weeks.

Mortgage giant Freddie Mac said Thursday that the average rate on a 30-year, fixed-rate mortgage ticked down to 3.84 percent this week from 3.85 percent a week earlier. The rate on 15-year, fixed-rate mortgages slipped to 3.05 percent from 3.07 percent.

Last week both rates reached their highest level since mid-March, rising along with the yield on 10-year Treasury notes -- reflecting some signs of improvement in the U.S. economy. The unemployment rate dropped last month to 5.4 percent, the lowest since May 2008.

Still, mortgage rates remain low by historic standards. A year ago, the 30-year rate was 4.14 percent and the 15-year was 3.25 percent.

To calculate average mortgage rates, Freddie Mac, the Federal Home Loan Mortgage Corp., surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage rose to 0.7 point this week from 0.6 point last week. The fee for a 15-year loan was unchanged at 0.6 percent.

-- The Associated Press

HP to sell stake in China unit for $2.3B

NEW YORK -- Hewlett-Packard is selling a 51 percent stake in its China server and technology-storage unit for about $2.3 billion to form a partnership with Tsinghua Holdings as it restructures its business in that country.

HP said Thursday that it will sell the controlling stake to Tsinghua Holdings, part of state-owned Tsinghua University, and create an entity called H3C. HP will maintain ownership of its other businesses in China, including business services, software, HP Helion Cloud and other operations.

The Chinese government has expressed concern about cyberspying and has been encouraging the use of local Chinese technology companies rather than international ones.

H3C will have about 8,000 staff members and $3.1 billion in annual revenue.

Hewlett Packard Co. is undergoing a broader restructuring as it prepares to split into two companies by Oct. 31.

HP shares rose 76 cents, or 2.3 percent, to $33.83. The stock has been down about 15 percent since the beginning of the year.

-- The Associated Press

GM's $439M to upgrade Corvette plant

BOWLING GREEN, Ky. -- General Motors announced Thursday that it will spend $439 million to upgrade the Kentucky plant that makes the Chevrolet Corvette sports car.

The project includes a new 450,000-square-foot paint shop that is almost half the size of the current production facility in Bowling Green.

Construction is to begin this summer and take about two years to complete. The new facility will feature new tooling and robots, and environmental enhancements, such as dry-scrubbing technology designed to eliminate sludge water and waste.

GM said Thursday's announcement will result in the retention of 150 jobs at the plant. The announcement follows a previous investment of $135 million in the plant over the past four years for the new Corvette Stingray and Performance Build Center.

GM announced last month that it plans to invest $5.4 billion at its U.S. plants over the next three years.

The Bowling Green plant has been making Corvettes since 1981.

-- The Associated Press

Business on 05/22/2015

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