Business briefs for May 27

Spirit Airlines shares falter during IPO

Shares of Spirit Airlines Inc. were trading below their $12 initial public offering price in their market debut Thursday.

Spirit Airlines shares fell 45 cents to $11.55 by the close of regular trading hours.

The low-cost airline sold 15.6 million shares at $12 each Wednesday, below the $14 and $16 range it had expected to get earlier this month. The Fort Lauderdale-based airline expects to net $171 million after expenses.

Shares are trading under the symbol SAVE on the Nasdaq Global Select Market.

Heinz posts profit, will cut up to 1,000 jobs

H.J. Heinz Co.'s global expansion efforts are paying off, driving its fourth-quarter net income up 16 percent. But the world's biggest ketchup maker said it needs to raise prices and cut jobs to continue its profitable path.

Pittsburgh-based Heinz announced Thursday that it will shed up to 1,000 jobs globally in fiscal 2012 as it closes five factories. Heinz has 37,000 workers worldwide.

The closings will include two factories in the United States, two in Europe and one in the Pacific region. Heinz has looked to emerging markets such as China, India, Russia and Brazil to help fuel its growth.

GM adding 110 jobs at Texas plant

General Motors Co. is adding 110 jobs to a Texas factory and investing $331 million to expand the plant to make full-size sport utility vehicles.

The Arlington factory will make Chevrolet Tahoes and Suburbans, GMC Yukons and Cadillac Escalades. It now has 2,400 employees.

Google launches tap-and-pay service

Google Inc. said Thursday that it's launching a trial of its smartphone payment system in San Francisco and New York in cooperation with MasterCard and Citibank.

It is opening it up to consumers in the summer. It then plans to expand across the country.

There has been talk of smart payment systems for years. Google faces the same hurdles that have stifled previous trials. The new Google Wallet will initially work on only one smartphone, the Google Nexus S 4G carried by Sprint Nextel Corp. It will connect only to MasterCard PayPass terminals.

Google calls it a "single-tap" solution, meaning shoppers should be able to pay with a single tap of their phone on a payment terminal, or a swipe past it.

Banks settle suit over service members' homes

Subsidiaries of Bank of America Corp. and Morgan Stanley will pay more than $22 million to settle allegations that the banks wrongfully foreclosed on almost 200 active-duty military service members, the Justice Department said Thursday.

According to the Justice Department, the banks went forward with foreclosure without first obtaining court orders. The agency said the victims included military officials who served in Iraq and Afghanistan.

As part of the deal, a Bank of America subsidiary formerly known as Countrywide Home Loan Servicing agreed to pay $20 million to resolve a lawsuit alleging that it foreclosed on about 160 service members between January 2006 and May 2009 without court orders.

In addition, Bank of America agreed to pay any active-duty military personnel found to be wrongfully foreclosed upon by the bank from June 2009 through 2010. The Justice Department's complaint alleged that Countrywide did not consistently check the military status of borrowers on whom it foreclosed through at least May 31, 2009.

Jobless claims' rise sign of sluggish economy

More people applied for unemployment benefits last week, the first increase in three weeks and evidence that the job market is still sluggish.

The number of people seeking benefits rose by 10,000 to a seasonally adjusted 424,000, the Labor Department said Thursday. No states cited extreme weather as a factor in the increase, a department spokesman said. Tornadoes and floods have devastated several states in the past month.

Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession.

Ricoh to cut 9 percent of global workforce

Ricoh Co. will reduce its global workforce by 9 percent as the Japanese copier maker seeks to overhaul its struggling business.

The Tokyo-based company said Thursday that it plans to cut 10,000 workers in the next three years. It also will streamline redundant operations, withdraw from unprofitable businesses and shift toward new growth areas.

Fixed mortgage rates fall to 2011 lows

Fixed mortgage rates hit the lowest point of the year for the third straight week.

Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.60 percent from 4.61 percent. That's the lowest point since mid-December. The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.78 percent from 3.80 percent. It's the lowest level since late November.

Media General makes key executive changes

Reid Ashe, Jr., executive vice president and chief operating officer of Media General Inc., will retire from the company and its board of directors Dec. 31 after a career of about 40 years in the media industry.

Ashe, 62, was president and publisher of The Tampa Tribune from 1997 to 2001 when the company combined print, television and online coverage in one newsroom.

Media General, which operates The Tampa Tribune, WFLA News Channel 8 and TBO.com in Florida, announced the change, along with other executive appointments. On Oct. 1, George L. Mahoney, 59, will become vice president, growth and performance, focusing on digital media. Mahoney is currently vice president, general counsel and secretary.

Other moves include: John A. Schauss, 55, will become vice president, market operations; James F. Woodward, 51, will become vice president, finance and chief financial officer; and Andrew C. Carington, 42, was named vice president, general counsel and secretary.

From staff and wire reports