It’s an $8 billion proposal by O’Fallon, Mo.-based McEagle Properties to redevelop about 1,500 acres across three neighborhoods in north St. Louis. McEagle says the project will build 10,000 new homes and generate 22,000 new jobs over two decades, and is asking city officials for redevelopment rights and $410 million in tax financing — by far the biggest such request ever made in St fast cash without a hassle. Louis.
Top officials from the United States, European Union and Brazil on Friday awaited a pivotal World Trade Organization ruling on subsidies to Airbus that stands to impact the global aircraft sector.
The confidential WTO verdict is due to be issued to U.S. and European diplomats in Geneva around 1400 GMT, and will soon thereafter be reviewed by government and industry leaders in Brussels, Washington and around the world.
Ministers meeting in India to advance negotiations on a new global free trade pact, the Doha round, will be presented with a report which may run to 1,000 pages or more.
“It is important to the European Union, it is important to the U.S. We will wait and see what happens with the ruling,” said EU Trade Commissioner Catherine Ashton.
The three-member WTO dispute settlement panel is expected to agree with complainant Washington that the billions of euros of “launch aid” Airbus received to build the A380 and other top-selling planes was anti-competitive and broke trade laws.
Such a finding could limit Airbus’ options to finance new airliners, such as the wide-body A350 due in the next decade, and also affect how industry rivals in Brazil, Canada, China, Russia and Japan fuel their expansion.
“Of course we will be very interested because it may affect the way others operate,” said Brazilian Foreign Minister Celso Amorim, who flew to New Delhi on an Embraer jet. Embraer and its Canadian rival Bombardier were also embroiled in years of WTO litigation over aircraft subsidies.
NEGOTIATION
The Airbus case, and a counter-claim by Brussels about support to Boeing, whose findings are expected in six months, represent the biggest and most commercially significant dispute in WTO history personal business card.
Boeing claims Airbus got a cumulative boost of $205 billion from advantageous loans and other perks from France, Germany, Spain and Britain over two decades, giving it an unfair edge.
Airbus says the loans were fair and claims in turn that Boeing got illegal subsidies from U.S. agencies including NASA plus big tax breaks from several states, worth some $24 billion.
U.S. Trade Representative Ron Kirk, speaking in New Delhi, said he hoped the long-awaited WTO verdict should prompt changes in the way Airbus operates.
“We continue to believe, and it is a fairly straightforward reading of the statutes, that the extraordinary amount of launch aid that France, Germany — some members of the EU — have provided is not permissible in an open, competitive economy,” he told Reuters.
Friday’s Airbus report will not be made public for several months to give both sides the chance to review it. WTO panels virtually never change the substance of their preliminary rulings before they are made public as final versions.
Years could pass before the WTO arbitration process runs its full course and most industry analysts expect the Boeing-Airbus fight to be settled through negotiation before the cases are appealed to the Appellate Body, the WTO’s top court.
But the extent to which Airbus or Boeing comes out cleaner than the other in the twin preliminary rulings will affect the dynamics of those settlement talks, which both sides have said they eventually want to hold.
World Trade Organization judges will rule on Friday for the first time on whether the European Union handed out illegal subsidies to Airbus in a verdict that could affect planemakers worldwide.
The three-member WTO panel is widely expected to agree with complainant Washington that the billions of euros in “launch aid” Airbus received to build the A380 and other top-selling planes was anti-competitive and violated trade laws.
Their findings, to be distributed to U.S. and European diplomats at about 1400 GMT (10 a.m. EDT), will set the markers for acceptable government funding in civil aviation and also color transatlantic relations at a sensitive time for the global economy and multilateral trade talks.
It also stands to impact Airbus’ strategy as it develops its next airliner, the wide-body A350 due in the next decade.
“This will likely be a fairly significant document,” said Brendan McGivern, a partner with the law firm White and Case in Geneva, which has not been involved in either the Airbus case or a counter-suit by Brussels against U.S. rival Boeing whose findings are due out in six months.
Trade lawyers expect Washington to lose that parallel case. That would leave both sides bruised as a result of the biggest and most commercially significant arbitration in WTO history.
The extent to which Airbus or Boeing come out cleaner than the other in the twin preliminary rulings will affect the dynamics of negotiations to settle their differences privately, which both sides have said they eventually want.
BUSINESS IMPACT
Friday’s preliminary Airbus report — expected to run to 1,000 pages or more — will not be made public for several months to give both sides the chance to review it. WTO panels virtually never change the substance of their reports before they are circulated to the public as final versions.
The WTO declined to speak about the size of the aircraft dispute or the number of staff assigned to work on it. “We never comment on specific disputes,” spokesman Keith Rockwell said.
McGivern said the Airbus ruling would build on years of litigation on aircraft subsidies between Canada’s Bombardier and Brazil’s Embraer, companies that will be looking to the latest WTO findings with interest.
Upcoming industry players in China, Russia and Japan are also expected to pore over the complex ruling to inform their own decisions about how to finance their aircraft market expansion.
“This is a make-or-break case because it will set the standard for everyone who wants to be involved in free trade and develop and export aircraft without tariffs,” said Doug McVitie, founder of the aerospace consultancy Arran Aerospace.
Boeing spokesman Tim Neale also said the report should have a direct impact on how planemakers do business.
“A strong, clear ruling on launch aid and other subsidies not only will ensure a fair and level playing field for Boeing and Airbus, but for all governments and companies that want to compete in the global commercial airplane market,” he said.
As shares of bailed-out banks bottomed out earlier this year, stock options were awarded to their top executives, setting them up for millions of dollars in profit as prices rebounded, according to a report released on Wednesday.
The top five executives at 10 financial institutions that took some of the biggest taxpayer bailouts have seen a combined increase in the value of their stock options of nearly $90 million, the report by the Washington-based Institute for Policy Studies said.
“Not only are these executives not hurting very much from the crisis, but they might get big windfalls because of the surge in the value of some of their shares,” said Sarah Anderson, lead author of the report, “America’s Bailout Barons,” the 16th in an annual series on executive excess.
The report — which highlights executive compensation at such firms as Goldman Sachs Group Inc, JPMorgan Chase & Co, Morgan Stanley, Bank of America Corp and Citigroup Inc — comes at a time when Wall Street is facing criticism for failing to scale back outsized bonuses after borrowing billions from taxpayers amid last year’s financial crisis. Goldman, JPMorgan and Morgan Stanley have paid back the money they borrowed, but Bank of America and Citigroup are still in the U.S. Treasury’s program.
It’s also the latest in a string of studies showing that despite tough talk by politicians, little has been done by regulators to rein in the bonus culture that many believe contributed to the near-collapse of the financial sector.
The report includes eight pages of legislative proposals to address executive pay, but concludes that officials have “not moved forward into law or regulation any measure that would actually deflate the executive pay bubble that has expanded so hugely over the last three decades.”
“We see these little flurries of activities in Congress, where it looked like it was going to happen,” Anderson said. “Then they would just peter out.”
The report found that while executives continued to rake in tens of millions of dollars in compensation, 160,000 employees were laid off at the top 20 financial industry firms that received bailouts.
The CEOs of those 20 companies were paid, on average, 85 times more than the regulators who direct the Securities and Exchange Commission and the Federal Deposit Insurance Corp, according to the report.
(Reporting by Steve Eder; editing by John Wallace)
U.S. government incentives likely pushed U.S. auto sales to a 20-month high in August, leaving analysts and the industry guessing how hard a landing to expect with the “Cash for Clunkers” program now exhausted.
Automakers could see the U.S. seasonally adjusted rate of sales, a closely watched indicator of demand for big-ticket items, jump to nearly 16 million vehicles in August under the “clunkers” program, analysts said. That would be the highest monthly sales rate since December 2007.
But with the incentive program ended and only heavily picked over vehicles left in inventories, September is expected to be a much leaner sales month, with the severity of the pullback dependent on the U.S. economy’s health.
The annualized sales rate reached 15.8 million vehicles in August under the program, but likely will drop off the rest of the year, although not back to the lows seen early in 2009, Barclays Capital analyst Brian Johnson said in a note.
“We expect sales for the remainder of the year to fall well below August results, but believe momentum from the program as well as the stabilization in the economy and improvement in consumer confidence could boost sales above the 9.5 million average seen in the first half,” Johnson said.
Johnson said the seasonally adjusted annual rate could be in the 10 million unit range in September and 10.5 million vehicles for the fourth quarter.
Among U.S. carmakers, Barclays expects Ford Motor Co sales to be up 53 percent in August from a year earlier. General Motors sales, which were strong in August 2008 due to an incentive program, are expected to be down 9 percent and Chrysler Group LLC sales up 2 percent, it said best payday loan.
For Japanese automakers, Toyota Motor Corp sales are expected to be up 22 percent, Honda Motor Co Ltd sales up 20 percent and Nissan Motor Co Ltd sales up 5 percent, Barclays said.
The top 10 “clunkers” program vehicle sales were dominated by Toyota and Honda, which had three vehicles each on the list, and by Ford with two vehicles.
‘CLUNKERS’ SUPPORT
Dealers submitted 690,114 new vehicle transactions under the “clunkers” program that started in late July and ran out three weeks into August at a cost of about $2.88 billion.
How many of “clunkers” deals landed in August is not completely clear, though U.S. Department of Transportation data suggests roughly 450,000 sales in August and 240,000 in July.
Also unclear is how many of those August deals would have been completed without the incentives, and whether they were pulled forward from the near future.
“Our only concern is how much of that will truly be incremental volumes as opposed to just borrowing from the future,” Rebecca Lindland, director of automotive research at IHS Global Insight, said in an interview.
IHS Global Insight estimated that about 250,000 vehicles were sales that would not otherwise have been made, though that figure could be higher, Lindland said.
The Federal Reserve has made $14 billion in profits on loans made in the last two years, The Financial Times reported on Monday, citing officials close to the matter.
The U.S. central bank also earned about $19 billion from interest and fees charged to institutions that tapped liquidity facilities during the global financial crisis, the report said.
If the Fed had invested the same amounted loaned out in three-month Treasury bills since August 2007, it would have earned $5 billion in interest, the FT said.
This estimate excludes company bailouts and purchases of long-term assets as well as unrealized gains or losses on the Fed’s portfolio of mortgage-backed securities and Treasuries purchased as part of the $1.75 trillion asset purchase program.
The Fed was not immediately available for comment on the report.
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