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announced that it will divide its video-streaming business and its DVD-delivery business. CEO Reed Hastings announced the move in an apologetic blog post in which he explained that the split was ultimately the reason for the price increase that got so many people worked up when it was announced. The company said the DVD-by-mail business will be named Qwikster and will be a wholly owned subsidiary of Netflix. Not giving a full explanation for the price increase that raised rates as much as 60% was a mistake, Hastings said, adding that the split was done to ensure that Netflix didn't take too long in the transition from physical to digital media. Read more at The Wall Street Journal.
After General Motors (NYS: GM) reached a deal with the United Auto Workers on Friday, other carmakers may start feeling the pressure to reach similar agreements. GM agreed to increase entry-level salaries by $2 to $3 per hour and offer a $5,000 signing bonus. The company also agreed to reopen a plant in Spring Hill, Tenn., which it had closed as part of the restructuring plan.
The deal will give leverage for workers dealing with Chrysler, whose negotiations may become more heated as its CEO returns to the table on Tuesday. More than 11% of Chrysler's employees work on entry-level salaries, compared with GM's 5% -- making an increase for Chrysler a bigger burden. Ford (NYS: F) , which also plans to enter negotiations, will review GM's plan as well but won't be able to add jobs as easily as GM, considering it has a smaller workforce. Read more at The Wall Street Journal.
In hopes of winning support for its acquisition of T-Mobile, AT&T (NYS: T) has been approaching smaller rivals, including MetroPCS Communications (NYS: PCS) and Leap Wireless International (NAS: LEAP) , with offers of spectrum and subscribers in exchange for support for its $39 billion takeover. After the Justice Department sued on Aug. 31 to stop the deal, AT&T has looked for ways to reduce the animosity from small competitors. The communications giant has also reached out to Sprint Nextel, the fourth largest U.S. wireless operator, which put up a lobbying battle to shut down the deal. If the merger passes, AT&T would become the nation's largest wireless operator. Read more at Bloomberg.
President Obama announced his plan to reduce the deficit by $3 trillion over the next the next decade. The plan includes a tax increase for people making more than $1 million, known as the Buffett Rule. The president's aides said only half of the savings would come from he increased taxes. The Republican-controlled House has already announced that it will oppose any tax increase, while the president said he will veto any legislation that would take funding from Medicare and Medicaid. Obama's proposals were met with skepticism from politicians and the business world, claiming Washington doesn't have a clear strategy on how to tackle the country's mounting debt. Medicare and Medicaid have been pointed to as a main cause for the increasing expenses. Read more at Reuters.
(NYS: TYC) announced that it's looking to split itself into three companies, dividing up its residential alarms unit, its flow control unit group, and its commercial security business. Chief Executive Edward Breen said the three new businesses will be among the industry leaders in their separate sectors. Tyco becomes the latest in the trend of companies that have decided to spin off businesses to bolster profit on the theory that companies are worth more as pieces. This is not Tyco's first split: In 2007 it spun off its health-care business and electronics group into two companies. In 2002 its finance sector became independent and is now known as CIT (NYS: CIT) . Read more at Dealbook.
So there you have it -- the top financial stories for this afternoon. If you're interested in getting all the news and commentary on these stocks, sign up for My Watchlist -- it's free!
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At the time thisarticle was published Michelle Zayed doesn't own any stocks mentioned.The Motley Fool owns shares of Ford Motor.Motley Fool newsletter serviceshave recommended buying shares of Netflix, Ford, General Motors, and AT&T.Motley Fool newsletter serviceshave recommended buying puts in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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