The Conference Board of Canada says its consumer confidence index fell again this month, losing 2.9 points to 71.
The think-tank’s latest poll, conducted between Nov. 6 and Nov. 13, found the largest one-month decline on record for consumer sentiment in the Prairie region. Confidence also sagged in British Columbia, Ontario and Quebec, but edged up slightly in Atlantic Canada.
Conference Board economist Paul Darby says consumer sentiment "has fallen to depths previously reached only in 1982 and 1990, which were both periods of recession in Canada."
Darby notes that "ongoing troubles in equity markets undoubtedly had a negative effect on consumers’ view of their family financial situations and future job prospects in their communities businesscards."
He did find one area of optimism: 25.9 per cent of those polled said now is a good time to make a major purchase, up slightly from October, which Darby said "may indicate that the slide in the index is bottoming out."
The Conference Board poll claims a 95 per cent likelihood of being accurate within 2.2 percentage points.
FRANKFURT–Chemical company BASF SE said Wednesday it is temporarily closing 80 plants worldwide due to slumping demand and cutting production at 100 more, including facilities in Texas and Louisiana. Some 20,000 workers are affected.
It also abandoned its goal to match last year's profit, citing slowing demand for its products, particularly from automotive customers.
BASF shares plunged 14.7 per cent to euro21.68 ($27.39) in Frankfurt after the announcement.
BASF spokesman Gareth Rees said the shutdowns and slowdown have already begun and will extend into January. Workers were being encouraged to take vacation time and reduce their overtime.
In a statement, the Ludwigshafen-based maker of everything from fertilizers and paints to glues and ingredients for cosmetics said it was trying to stem any overcapacity at its operations "as a result of a massive decline" in demand.
The measures will affect major plants in Freeport, Texas; Geismar, Louisiana; Ludwigshafen, Germany; Antwerp, Belgium; Nanjing, China; and Kuantan, Malaysia.
"BASF already drew attention to the difficult economic situation at the end of October," Chief Executive Juergen Hambrecht said in a statement. "Since then, customer demand in key markets has declined significantly. In particular, customers in the automotive industry have canceled orders at short notice.''
Last year, the company's pretax profit was euro7 cash advance in one hour.6 billion on sales of euro57.9 billion. For 2008, BASF said it doesn't expect to achieve that figure.
Hambrecht said "it was difficult to foresee how the coming year would develop and said that BASF was preparing for tough times.''
The company saw its third-quarter earnings fall 38 percent to euro758 million ($959.1 million) from euro1.2 billion a year earlier.
In Ludwigshafen, it signed an agreement with its employee council to take advantage of flex time and vacation there, moves that will affect 5,000 workers.
"We are responding flexibly to market developments and are acting quickly," Hambrecht said. "BASF will now focus even more closely on cost and budget discipline, and will use opportunities arising from the crisis.''
He said the moves would not affect its planned 6.1 billion Swiss franc (euro4 billion; $5 billion) acquisition of Switzerland's specialty chemicals firm Ciba, which it hopes to complete by the first quarter of 2009.
"We will also proceed swiftly with the planned acquisition and integration of Ciba to further optimize our business," Hambrecht said.
It’s time for a fresh approach to communication.
Companies should make it clear regarding what comes with your credit card besides reward points or cash rebates.
This week, the Financial Consumer Agency of Canada and MasterCard Canada released a model plain-language credit card application form.
When asked to test the redesigned form, consumers had the same reaction, says FCAC commissioner Ursula Menke: "Oh, my goodness, I didn’t understand this before."
People who had used credit cards for years said they were willing, and even eager, to seek out additional information.
What would you see if companies tried to educate you about your rights?
Here’s a guide to what’s in the model application.
Right on top of the first page, you find out all the rates you will be charged (such as 18 per cent for purchases, 20 per cent for cash advances, 4.9 per cent for balance transfers for six months and 20 per cent after six months).
There’s no interest charged only if you pay this month’s balance in full by the due date and you’ve also paid last month’s balance in full by the due date. (This two-month method of calculating interest on new purchases has been adopted by most credit card issuers.)
There’s no interest-free period for balance transfers. Say you transferred $5,000 to a new credit card on June 2. The interest on the balance transfer will be calculated from June 2 – even if the bill arrives July 15.
There’s no interest-free period and the interest is calculated from the day you get the cash advance free credit score.
Getting a cash advance will cost you $2 inside Canada and $4 outside Canada (in addition to interest paid).
A bounced cheque costs you $25; an extra copy of your monthly statement is $2; going over your credit limit is $20; and for transactions made outside Canada, you pay an extra 2.5 per cent of the amount in Canadian dollars.
The bank will give access to your personal information to other organizations, such as credit reporting agencies, bank affiliates and selected service providers.
For me, the privacy statement was the real eye-opener.
I didn’t realize how much latitude they had to share your personal information with companies selling unrelated products – and, of course, to profit by doing so.
Menke said she hoped credit card issuers would adopt a plain-language application. "It’s in the companies’ financial interest that people know what they’re getting into."
I disagree. Credit card issuers make their contracts almost unreadable for a reason – they’re happier if you don’t know what you’re getting into.
By communicating with customers at a Grade 5 level and disclosing all the ways they can make money at your expense, they’re opening themselves up to questions about how their businesses work.
Of course, I’d like to be proven wrong by seeing a bank adopt this model application right away.
Ellen Roseman’s column appears Wednesday, Saturday and Sunday. Email eroseman@thestar.ca.
OTTAWA–Tourism generated $19.7 billion of revenue for governments in Canada in 2007, boosted 4.3 per cent over 2006 by domestic travel.
Statistics Canada reports government revenue from domestic tourism rose 6.1 per cent to just over $14.5 billion last year, while revenue from international visitors dropped 0.6 per cent to $5.1 billion.
The agency says the share of government revenue from international visitors declined to about a quarter last year from just over a third in 2000.
Taxes on products, such as the goods-and-services tax and provincial sales taxes, were the single largest source of tourism revenue for the federal, provincial and territorial governments.
These taxes accounted for $4.7 billion for the federal government in 2007, half its revenue from tourism.
Provincial and territorial governments collected $5 payday advance services.5 billion from taxes, 60 per cent of their tourism revenue.
These tax revenues rose just 2.7 per cent in 2007, the second straight year of weak gains, largely due to one-percentage-point drop in the GST that took effect in July 2006.
Taxes on employment income and business profits were the second most important source of tourism revenue for both the federal and provincial and territorial governments.
Income taxes directly attributable to tourism rose 9.4 per cent in 2007, reflecting gains in both personal and corporate incomes and associated taxes.
These taxes brought in $3 billion for the federal government and another $1.9 billion for provincial and territorial governments.
With all three Detroit-based automakers in dire straits and seeking a Washington bailout, the moment finally has arrived for a radical reinvention of America’s domestically owned auto industry. Which means letting the Detroit Three reorganize under bankruptcy protection, from which several smaller, more nimble and competitive firms would emerge, no longer prisoner to Detroit’s hidebound, century-old decision-making traditions.
To bail out Detroit is not to rescue the U.S. auto industry, despite how the CEOs of General Motors Corp., Ford Motor Co. and Chrysler LLC continue to misrepresent the federal bailout they seek.
For more than two decades, there have been two U.S. auto sectors. There is the familiar Detroit Three (no longer the Big Three), which are corporate cripples after decades of mismanagement.
And there are the much healthier U.S. operations of Asian and European automakers that employ millions of Americans turning out Hondas, Toyotas and BMWs, sooner or later to be joined by Chinese and Indian makers. The foreign-based firms already operate 16 vehicle assembly plants and dozens of parts plants from Alabama to Ohio to Ontario.
Led by GM, Detroit is again a holdout against progress, arguing for the continuation of a failed status quo, just as it resisted everything from today’s life-saving three-point seatbelts to fuel-efficiency standards to the devastating (to Detroit) recent shift in consumer demand to small cars from gas-guzzling sport utility vehicles and heavy trucks.
Detroit arguably stands alone in chronically failing to "get it" since its laudable introduction of enclosed passenger cabins and automatic transmissions before most of today’s motorists were born.
One way or another, Detroit has been cosseted by taxpayers and motorists since the ill-fated Chrysler bailout of 1979; followed by the Reagan-era "voluntary" quotas imposed on imports, which did not deter American consumers from paying the resulting higher prices for better-built Hondas and Toyotas; followed by repeated abeyance or postponements of fuel-efficiency standards the feds sought to impose on Detroit.
The ill-fated 1979 Chrysler bailout, which secured that company’s viability for just two decades, signalled the larger GM and Ford that they also were "too big to fail" and needn’t abandon their complacent ways. The import quotas inspired first the Asian rivals and later the Europeans to leapfrog that barrier by making in America most of the vehicles they sell in America. And granting Detroit leave from onerous fuel-efficiency standards enabled the foreign-based competition to gain a competitive advantage by complying with or exceeding the U.S. mandates.
Detroit’s sense of exceptionalism has not diminished.
Rick Wagoner, GM’s chief executive, was on Capitol Hill last Thursday making a pitch for taxpayer assistance in financing its proposed merger with Chrysler – this after Detroit had secured in September $25 billion (U.S.) in federal funds to finance development of fuel-efficient vehicles.
Yes, you read that correctly. Developing products necessary to ensure their future, as foreign-based firms have long since done with their own money, is something Detroit has to be paid public money to do.
At a moment when Washington is trying to come up with the scratch to keep imperilled homeowners from losing their homes, the Detroit makers further propose that the additional bailout funds they seek – a rumoured $10 billion in GM’s case – be carved out of the $700 billion bank bailout fund that U pay advance in 24 hour.S. lawmakers rightly criticize for failing to provide for homeowners as well as Wall Street banks and brokerages.
As if chutzpah weren’t enough – GM’s finance arm, GMAC LLC, which has lost $9.1 billion in the past two years as a mortgage-lending enabler in the historic collapse of the U.S. housing market – Detroit is also stooping to coercion.
GM has lost an almost incomprehensible $70 billion (U.S.) since the end of 2004, while the U.S. economy was still healthy, and yesterday reported a $2.5-billion third-quarter loss.
Barack Obama backer Roger Altman, the former Clinton-era Treasury official forced to quit under an ethical cloud, and now a top adviser to GM in its merger talks with Chrysler, warned the Obama economic team publicly last week that the collapse of any of the Detroit Three "would be a difficult way for a new administration" to take office.
Reading from the same scare-tactics script, John Snow, a mediocre if generously compensated CEO of U.S. rail giant CSX before becoming George W. Bush’s second, invisible, Treasury secretary, and now chair of Chrysler owner Cerberus Capital Management LP, told CNBC that Washington must ensure "that a vital industry like autos, which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn."
Any bailout of GM, enabling it to purchase Chrysler, would be a bailout of the short-sighted dealmakers at private-equity firm Cerberus in their exquisitely ill-timed bet on Chrysler in buying the firm from Daimler AG last year, only to see Chrysler’s fortunes further plummet after the deal.
Detroit has been a significant destroyer of jobs and shareholder value for the past decade, and sporadically in decades past, as well. Worse, its sclerotic decision-making has helped hold America back from technological leadership in one of the world’s major industries.
As the cockpit of capitalism, banking is an essential service whose seize-up this September required a bailout by global governments. The auto sector is not as important, and the Detroit Three no longer account for more than a fraction of that sector.
And the latest straw GM is grasping at, a combination with Chrysler, proves again how lacking in smarts is the existing troika of Detroit CEOs. A GM already burdened with too many brands (eight) merged with Chrysler’s three brands would require a years-long shedding of jobs and closing of excess plant capacity in search of the "synergies" that former Chrysler owner Daimler found so elusive in its sorry nine-year-long ownership of the firm.
If an Obama who last week pledged to make aid to Detroit a top priority is serious about change, he will rule out a Detroit bailout. Or he and Congress will effectively nationalize Detroit, deploying a team of experts to preside over the dismantling of these firms that for generations have lacked the managerial acuity of founders William Durant and Alfred Sloan of GM, Henry Ford and Walter P. Chrysler.
David Olive writes on business and political issues. He can be reached at dolive@thestar.ca
Welder Robert England has been out of work since his former employer Dana Canada shut its plant in St. Mary’s last summer.
"Everyone says: `Go West.’ These days anything is worth a try," said the 34-year-old father of two, who welded Ford-150 frames at the plant near London for the past seven years.
Armed with a stack of resumés and high hopes, he and wife Melanie visited the Workwest career caravan in Mississauga yesterday with their 4-year-old son and daughter, 2, in tow, looking for work in Alberta’s oil patch.
Ontario’s manufacturing sector has been getting hammered lately thanks to the ailing auto industry, the weakening economy and a stronger loonie that’s only recently slid back – just not in time for those like England.
A dozen Western Canadian employers at the job fair are chomping at the bit to recruit Ontarians struggling in a tighter job market and eager to sign on as civic planners, labourers, firefighters, transit drivers, electricians, sandblasters, health-care professionals – you name it.
"One of the oil field companies told us the jobs pay $50 an hour. It’s hard work, but that makes it worth moving a family of four out there," said England.
Hundreds of others of various ages and training toured the booths yesterday to see what the West and its storied economic boom have to offer them.
Workwest, the Calgary-based company running career fairs for the past two years in Ontario, said despite the recent doom and gloom on world markets, most of B.C., Alberta, Saskatchewan and Manitoba continue to thrive, and have yet to feel the fallout Ontario has same day cash advances.
"We burned out our labour pool a long time ago. Even with oil at $64 a barrel instead of $150, these companies are still doing well and projects need to be built," said Workwest president Ray Edwardson.
Gary Griffin and his father Brad drove in from their Haliburton home and found it was worth the three-hour trip. They were thrilled to hear a recruiter for the City of Calgary Fire Department say they’re looking for 200 new firefighters next year and another 200 the year after.
"It’s difficult to get a job here. They had 800 applicants for the Barrie fire department when I applied," said Gary, 19, who recently graduated from Georgian College’s firefighter program and would love to move to Calgary.
"A young guy like me, I’ve got nothing to lose moving out west," agreed Brandon Chaston, 24, who has struggled to find work in Hamilton after getting a degree in environmental sciences.
Windsor resident Ranjan Subramaniam told exhibitors he’s looking for a job in information technology, noting his area has been hard-hit by job losses.
"I lost a job in January because of the U.S. housing crisis," said the 26-year-old, who worked in the banking industry in IT. "I don’t mind going where the jobs are."
The job fair continues today from 9 a.m. to 6 p.m. at the International Centre at 6900 Airport Rd. For information about employment opportunities go to Workwest.ca.
In his victory speech on Tuesday night, President-elect Barack Obama told supporters there would be a long road ahead in fixing the nation’s problems. The construction industry hopes the first steps involve building and repairing that road.
With the economy contracting, new infrastructure construction was an underlying issue in the election campaigns, which touted it as a way to create jobs.
The topic is key for construction companies already hurt by shrinking state and federal budgets for infrastructure projects.
Obama’s platform included creating what his campaign dubbed the national infrastructure reinvestment bank — a system intended to attract public and private investment for economic development projects with an initial $60 billion infusion of federal money for construction over the next 10 years. Infrastructure could include projects such as housing.
That money could bring much-needed aid for public projects in Missouri. In June, the state’s Department of Transportation said its current transportation funds would cover just 40 percent of funding needs for the next 20 years — leaving a $938 million annual shortfall.
The situation is being made worse by rising materials and labor costs for highway and road projects. Nationally, materials costs for such projects were up 22 percent in September from the previous year, according to the American Road and Transportation Builders Association, or ARTBA, the industry advocacy group which has already begun clamoring for attention.
"We’re going to work with new administration to make sure they know transportation investment is not just a political priority but a national priority," said Jeffrey Solsby, the association’s director of public affairs.
The association also advocates increasing the federal fuel tax that drivers pay to fund road construction. Obama opposes that idea.
While Obama’s idea of stimulating job creation is popular in the construction industry, some are guarded in their optimism payday advance loans.
The $60 billion investment Obama proposed, when divided among states and spread over a decade, would need a significant contribution from state and local investors in order to have much impact, said Len Toenjes, president of Associated General Contractors of St. Louis. The group represents about 450 construction firms and suppliers that stand to gain from a slate of new projects.
"I’d hate to see people oversimplify this and think that a check is going to show up from the beltway and we’re going to have all these new projects going," he said.
One example of the challenges was the defeat of the local proposition that could have built a new MetroLink line into western St. Louis County, Toenjes said.
In addition to public opposition and funding shortfalls, projects also face regulatory barriers and extensive planning needed before an infrastructure project begins.
The Obama plan to use both public and private money also presents its own set of challenges.
Forming public-private funding partnerships is a painstaking process, said Susan Stauder, vice president of infrastructure and public policy for the St. Louis Regional Chamber & Growth Association.
And finding private money may be arduous given the current credit crisis, she added.
It may be better if the new president and congressional leaders launch a stimulus package that focused on public projects, such as roads and highways.
"That would be a really positive thing that most legislators in Congress could agree on," Stauder said. "As long as we’re going to be stimulating the economy, we might as well create jobs and put in infrastructure that can be used for the next 40 to 100 years."
The Associated Press contributed to this report.
cboyce@post-dispatch.com | 314-340-8345
PHILADELPHIA — The Federal Communications Commission has opened an investigation into the pricing policies of major cable operators, including Charter Communications Inc.
The agency wants to ensure the companies’ customers are getting treated fairly, FCC Chairman Kevin Martin said in an interview.
"I’m certainly concerned with the increasing cable prices that consumers are facing," Martin said. "They are getting less and being charged the same or more."
The FCC wrote Thursday to cable operators including Town and Country-based Charter, Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Cablevision Systems Corp., Bright House Networks, Suddenlink Communications, Bend Cable Communications, GCI Company, Harron Entertainment and RCN Corp.
Phone-service provider Verizon Communications Inc., which offers pay-TV services with FiOS, also was included in the inquiry.
The agency’s letter questioned the companies’ practice of moving analog channels into digital tiers to free bandwidth for other uses, such as high-definition channels. Analog customers will have to get a digital set-top box from the operator or buy the digital TV tier to watch those channels.
Most cable customers are analog customers, and those who do not wish to upgrade to digital cannot watch the channels that are moved to the digital tier.
The agency also will look into whether cable operators and Verizon are confusing customers by linking the shift of the analog channel to the digital tier to the nation’s transition to digital broadcasts, Martin said no fax pay day loans.
The two moves are unrelated.
Linking the two in customers’ minds could prompt more people to opt for digital video and cable services because the digital TV transition in February is mandated by the federal government. The FCC has asked companies being investigated to submit information about their pricing practices within two weeks.
Martin said it appears consumers weren’t given "appropriate notice" about the channel changes.
He said the FCC has received a "significant" number of consumer complaints about the practice of moving analog channels to digital, which has accelerated this year.
The FCC’s letter was sent out a day after Consumers Union sent a letter to the Senate Committee on Commerce, Science and Transportation asking for an investigation into the practice of moving analog channels to the digital tier.
"Consumers are left paying the same monthly rate for significantly less service, or must rent more expensive set-top boxes for each television set they own," said Consumers Union, a nonprofit advocacy group.
Microsoft Corp. plans to invest $60 million in South Korea over the next three years, President Lee Myung-bak’s office said Monday.
In a statement, the presidential Blue House said Microsoft (MSFT, Fortune 500) CEO Steve Ballmer spoke of the plan during a meeting with Lee at the president’s office.
The money will be invested in areas including training and new business cultivation, the statement said.
Korean-language press materials released by Microsoft mentioned the projects but made no mention of the investment amount.
Separately, Microsoft, South Korea’s Hyundai-Kia Automotive Group and South Korea’s Institute for Information Technology Advancement opened a center to develop information technology products and services focused on automobiles.
The opening of the Automotive IT Innovation Center follows an agreement in May by Microsoft and the world’s fifth-largest automotive group to cooperate in developing next-generation in-car information and entertainment systems, Kia Motors Corp cash till payday. said in a press release.
"Microsoft and Hyundai-Kia Automotive Group share a similar vision for the role that information technology will play in connecting people to information, communications and entertainment while they are in their cars," Ballmer said, according to the release.
Also, Ballmer and Nam Yong, CEO of LG Electronics Inc., signed a memorandum of understanding aimed at strategic collaboration in the area of mobile convergence, LG said.
The number of Americans filing new claims for unemployment insurance did not change from last week, remaining at an elevated level that indicates weakness in the nation’s economy.
The U.S. Department of Labor reported Thursday that initial filings for state jobless benefits rested at a seasonally adjusted 479,000 for the week ended Oct. 25.
Economists surveyed by Briefing.com expected the number to fall to 473,000 from the initially reported 478,000. Last year, there were 332,000 Americans filing new unemployment claims.
The Labor Department reported that there were 7,400 unemployment claims related to the effects of Hurricane Ike in Texas, down from the 12,000 such claims last week.
Ian Shepherdson, economist at High Frequency Economics, had hoped the fading of the impact of Ike would allow unemployment claims to fall.
Shepherdson said the fact that claims held steady shows a labor market in decline.
"There can be no question that the labor market is deteriorating; the only issue is the speed of the decline and the eventual peak in unemployment," he wrote in a note creditreports.
He said the national unemployment rate could reach 8.5%. It currently stands at 6.1%.
The four-week average of jobless claims, which smoothes out fluctuations fell to 475,500 from the week before. Last year, the average stood at 329,750.
A level of more than 400,000 was present throughout the last two recessions.
The number of American workers continuing to collect benefits for more than one week decreased by 12,000 to 3,715,000 for the week ended Oct. 18, the most recent data available. A year ago, there were 2,598,000 Americans continuing to collect benefits.
Four weeks prior, unemployment claims spiked to 499,000, the highest level recorded since the 517,000 claims filed in the wake of the Sept. 11 terrorist attacks.
Earlier this month, Labor Department reported net payroll nationwide declined by 159,000 in September, the ninth straight month the economy lost jobs.
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