HealthPartners members are able to price shop for even more health procedures under an expanded Web tool the health insurer offers its members.
The secure website, available only to HealthPartners members, recently added prices for 32 previously unlisted procedures, including various lab tests, MRI/CT scans, immunizations and complex surgeries and outpatient procedures such as gall bladder surgery, hysterectomy, colonoscopy, hip replacement and hernia repair surgery.
“Providing more specific prices for our members is another way we can be as transparent as possible,” said Scott Aebischer, HealthPartners’ senior vice president of customer service and product innovation.
“If you’re paying out-of-pocket fees, seeing the actual price really helps you determine if the care provider is right for you.”
The Bloomington-based health provider and insurer’s members can now check the price of 126 procedures, including several major surgeries and outpatient procedures.
HealthPartners launched its Web price tool in the fall of 2008.
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A Congressional panel investigating the causes of the financial crisis criticized two former leaders of Citigroup on Thursday for failing to understand the risks that eventually brought the company to its knees.
In testimony before the Financial Crisis Inquiry Commission, Charles "Chuck" Prince, former chief executive of Citigroup, apologized for his role in the crisis that roiled the U.S. economy.
"I’m sorry that the financial crisis has had such a devastating impact on the American people," Prince said. "I am deeply sorry that our management — starting with me — was not more prescient and that we did not foresee what lay before us."
Prince, who was CEO from 2003 to 2007, retired after Citi announced that it would write off up to $11 billion in losses related to its holdings of risky mortgage-backed securities. The bank eventually lost an estimated $30 billion on such securities and was forced to take a $45 billion bailout from the government.
Prince’s remarks came on the second day of this week’s three-day meeting of the commission, which was established last year to investigate the causes of the crisis. The hearings are aimed at exploring how the issuance of trillions of dollars worth of risky subprime mortgage debt contributed to the financial meltdown.
In addition to Prince, the commission heard from Robert Rubin, who was a board member and a top adviser at Citi until the end of 2009.
Rubin, who was Treasury Secretary under President Bill Clinton, said he had been concerned that market "excesses" would lead to a downturn. But he acknowledged that most regulators misjudged how severe the threats to the economy were.
"We all bear responsibility for not recognizing this, and I deeply regret that," he said.
In their defense, both executives argued that the scope of the crisis could not have been fully anticipated, echoing remarks former Federal Reserve chairman Alan Greenspan made before the commission Wednesday.
However, at least two of the 10 bipartisan commission members were not satisfied with the responses provided by the former Citi executives.
"It seems to me that, at the end of the day, the two of you in charge of this organization did not seem to have a grip on what was going on," said Commission chairman Phi Angelieds. "I’m not so sure apologies are as important as assessment of responsibility."
Bill Thomas, a former Republican Congressman who is vice chairman of the commission, criticized the panelists for reaping huge rewards while being out of touch with the risks Citi traders were taking.
Thomas said Prince and Rubin earned a combined $150 million over a four-year period when things were going up. "But that same team, on the way down, didn’t have a nickel clawed back," he added.
Rubin responded that Citi did not pay him a bonus in 2007 and 2008, per his request.
In response to an earlier question, Prince said the bulk of his pay was in the form of Citi stock, which he said he still holds today.
"My interests were aligned 100% with stockholders," he said. "I saw a substantial part of my net worth disappear because my company suffered as a result of these problems."
The problems he referred to stemmed from Citi’s exposure to "super-senior" collateralized debt obligations, which were considered at the time to be the safest CDOs. These securities were backed by mortgages, in some cases subprime loans, which were believed to be at low risk of default.
However, after the housing bubble burst in 2008 and the financial markets went into a tailspin, the value of CDOs plunged and Citi was left with billions of dollars worth of illiquid assets.
Prince reminded the panel that most banks, regulators and rating agencies considered super-senior CDOs safe.
"In hindsight, it’s very hard to see how these structured products could have been accepted in the way they were accepted," he said.
In his testimony, Rubin said the main lesson of the recent crisis was that "the financial system is subject to far more downside risk that almost anyone had seen."
He said the private sector should take steps to avoid repeating the mistakes of the past, but he maintained that the government also needs to overhaul how it regulates the financial system.
"Financial reform is imperative," Rubin said.
Among the reforms he suggested was "resolution authority," which would give the government power to break up institutions considered to be too big to fail. Rubin also called for constraints on leverage, derivatives regulation and increased consumer protections.
In his State of the Union speech Wednesday night, President Obama touted a slew of federal initiatives aimed at stimulating small business hiring and growth. Again.
Small companies employ around half of America’s workers and drive most of the country’s job growth. Obama talks frequently in his speeches about the vital role small companies play, and his administration has launched several efforts to bolster struggling Main Street businesses. But most of the president’s small business proposals remain in limbo, caught in bureaucratic logjams and the Great Black Hole of Congress.
A year ago, Obama set the stage during his first major economic speech to Congress. "I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage," Obama said in February. "That’s what this is about. It’s not about helping banks; it’s about helping people."
But small business owners across the nation say they feel left out of the stimulus and recovery action.
"Basically, it seems to me that Washington’s efforts have been to help Wall Street, not Main Street," said Kim Griebling, president of Custom Flag Company in Westminster, Colo. Griebling and her father bought the company in 1998 and now employ a staff of eight. As the economy deteriorated, so did the demand for flags.
Griebling applied in September for an America’s Recovery Capital (ARC) loan, an emergency financing program created as part of February’s stimulus bill. The program offers qualifying business owners a small, government-backed loan on very attractive terms, but those trying to land ARC loans face a gauntlet of administrative obstacles. While bailed-out financial giants like AIG got financing fast from Washington, business owners wait months.
"People don’t realize that $35,000 for a small business makes a huge difference. I am on the verge of possibly having to lay off people," said Griebling. Her loan was approved in December, but she hasn’t received the money yet — and her patience is wearing thin.
"I definitely pay attention, but I would say I am more skeptical," she says of politicians’ talk of helping small companies like hers.
Geoffrey Zeamer, the owner of scientific instrument maker Abbess Instruments in Holliston, Mass., also feels that small companies are being overlooked.
"I listen very carefully and on a daily basis as to what is going on, and I have found the last year extremely disheartening because everything is going to banks," Zeamer said.
Zeamer is an engineer who has owned his 17-employee company since 1982. He thinks the government got it backward by funneling money to banks to save the economy.
"If the government really wanted to stimulate business, then you give out orders. You order more planes, trains, you buy more bridges. If you give banks money, they look out and say, ‘nobody has any orders, we are not going lend out,’" said Zeamer. "That seems to have escaped them. I think it’s Basic Economics 101."
Here’s a rundown on where President Obama’s small business proposals from throughout the past year currently stand:
Tax credits for jobs: The government’s economists estimate that small businesses have created 65% of America’s new jobs over the past 15 years. In December, Obama delivered a speech at the Brookings Institution in which he endorsed tax breaks to encourage small businesses to hire.
But there’s a blizzard of competing proposals for what form those incentives should take, from a temporary payroll tax holiday to per-worker tax credits for new hires, and none have yet gained momentum in Congress.
In the same speech, Obama backed a trifecta of tax cuts intended to spur small business investment and capital spending. Congress hasn’t yet taken significant action on any of them.
TARP for community banks: Small businesses are still struggling to access the capital they need for their day-to-day operations.
"When you talk to small business owners in places like Allentown, Pennsylvania or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they are mostly lending to bigger companies," Obama said Wednesday. "Financing remains difficult for small business owners across the country."
In October, the President proposed a collaboration between the Treasury Department and the Small Business Administration to make capital cheaper for community banks that commit to increasing their small business lending.
Under the proposed plan, banks with less than $1 billion in assets would be able to borrow money from the government at a 3% dividend rate. That’s a discount on the 5% rate the Treasury currently offers borrowers through its Capital Purchase Program, a TARP (Troubled Asset Relief Program) initiative.
Three months later, the government is still drafting guidelines for the initiative.
Obama invoked the plan in Wednesday’s speech.
"I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat," he said.
Loan limits: In the same October speech, Obama also threw his support behind Congressional efforts to raise the ceiling on SBA loans. Currently, the maximum loan size available under the SBA’s major lending programs is $2 million. Policymakers would like to lift that limit to $5 million.
Both houses of Congress have considered the measure, but they’ve failed to agree on legislation to enact it into law.
Bigger incentives for loans: Amid a slew of stalled initiatives, one program has seen success.
SBA-backed loans represent a tiny portion of the overall small business lending landscape, but they’re a vital lifeline for many new and growing companies. Last year, the SBA’s loan volume plunged.
February’s Recovery Act set aside a $375 million funding pool to temporarily eliminate fees for a SBA loans and increase the portion of each loan that the government guarantees, up to 90%. That move proved so popular that the money allocated for it ran out around Thanksgiving. Just before Christmas, Congress appropriated another $125 million to keep the incentives running.
The data shows that lending has rebounded from last year’s lows. In the three months ended Dec. 31, the SBA’s 7(a) program processed more than 12,000 loans totaling $3.8 billion. That’s a sharp pickup from the 9,070 loans, totaling $1.9 billion, the agency backed a year earlier.
Four top bank chief executives told a panel probing the financial crisis Wednesday that they made mistakes but didn’t realize how bad they were at the time.
In a heated exchange in Washington with the head of the Financial Crisis Inquiry Commission, Lloyd Blankfein, Goldman Sachs’ CEO, agreed the banks had assumed too much exposure to risk at the height of the crisis, and he wished he could go back and change things.
"Anyone who says I wouldn’t change a thing, I think, is crazy," Blankfein said. "Knowing now what happened, whatever we did, whatever what the standards of the time were — It didn’t work out well."
"Of course, I’d go back and wish we had done whatever it took not to find ourselves in the position we found ourselves in," he added.
The remarks came during a hearing of the Financial Crisis Inquiry Commission, a 10-member panel appointed last summer by Congress. Testifying were chiefs of some of the best-known and largest banks: Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500).
The panel’s chairman, Philip Angelides, said he wanted to hear about the banks’ role in creating the crisis and benefiting from the Troubled Asset Relief Program, which was set up to provide them with liquidity.
During the hearing, Angelides cast doubt on Blankfein’s defense of Goldman Sachs’ actions in the mortgage markets — such as buying parts of risky mortgages and then placing bets against such morgages — as part of their job as a "market maker."
"It sounds to me a little like selling a car with faulty brakes and then buying an insurance policy on the buyers of those cars," Angelides said. "It doesn’t seem to me that that’s a practice that inspires confidence."
Blankfein responded that Goldman was just selling what investors wanted.
"These are the professional investors who want this exposure," he said. "Even today, people are coming for exposure to these very products. .. That’s what a market is."
The chief executives — Blankfein, John Mack of Morgan Stanley, Jamie Dimon of JPMorgan Chase, and Brian Moynihan of Bank of America — testified under oath, standing up for a swearing-in during the public session.
The hearing lasted more than three hours and most of the testimony revolved around bad lending in the housing market.
Dimon said that one of the the banks’ "big misses" was failing to "stress test" the housing market.
"We didn’t stress test housing prices going down by 40%," Dimon said.
It has been suggested that this lack of accountability could be remedied if all of the firms and individuals involved in the creation of financial instruments had to "eat their own cooking." That would, for example, require that the bulk of their fees not be taken in cash, but in the securities they created, which they would be required to hold unhedged until maturity.
One commissioner asked Morgan Stanley’s Mack if investment banks could have remediated the volume of illiquid toxic securities by eating "their own cooking," and taking fees for financial transactions via toxic securities, instead of cash. Mack said his firm did hold some of those securities.
"We did eat our own cooking and we choked on it," Mack said. " We kept positions and it did not work out."
‘Sound’ regulatory changes
Blankfein, Dimon and Mack all talked about the need for "sound" regulatory changes to help ward off future crises bad credit unsecured personal loans.
"I want to be clear that I do not blame the regulators … however, it is important to examine how the system could have functioned better," Dimon said. "The current regulatory system is poorly organized with overlapping responsibilities, and many regulators did not have the statuatory resolution authority needed to address the failure of large, global financial companies."
In written testimony, the bank chiefs laid out their banks’ mistakes that led to the crisis, detailing the housing bubble, with "new and poorly underwritten mortgage products," "excessive speculation," and mortgage securitization that allowed people to duck responsibility for poorly underwritten loans.
However, they added they didn’t expect the financial crisis and especially its magnitude.
"After the fact, it is easy to be convinced that the signs were visible and compelling," Blankfein said. "In hindsight, events not only look predictable, but look like they were obvious or known. But none of us know what is going to happen."
In the past several weeks, the commission has talked to Treasury Secretary Tim Geithner and Federal Reserve Board Chairman Ben Bernanke, but that testimony isn’t being made public yet.
Lawmakers say the commission was modeled after the Pecora Commission, a panel that was convened after the 1929 Wall Street crash and other events leading to the Great Depression.
The Pecora panel’s findings led to an overhaul of federal banking laws, including the creation of the Glass-Steagall Act of 1933. Glass-Steagall divided investment banking from government-insured commercial banking; ending that separation in the 1990s was seen by some critics as contributing to the current crisis.
Slow start
The Financial Crisis Inquiry Commission has taken a while to get up on its feet.
The panel was appointed last July and held its first meeting in September. It has only started getting staffed up over the past few months.
It has new offices in downtown Washington, a few blocks northwest of the White House. Funded to the tune of $8 million, it aims to employ between 40 and 50 investigators and other staffers.
The crisis panel’s one big goal is to complete a final report, sort of like the final 9/11 Commission report that found federal agencies missed signs of the impending terrorist attacks in 2001. The financial crisis report is due Dec. 15.
Critics have noted the panel’s impact may be blunted by timing, as the House has already passed a bill to overhaul regulations and the Senate is deep in negotiations on similar proposals.
But panel members have consistently pledged their work will serve as more than window dressing for politicians worried about the appearance that they allowed the financial crisis to happen.
The panel, which has subpoena power, plans to issue interim reports as it collects data, Angelides has said.
The panel’s second-in-command is Bill Thomas, a retired California Republican congressman described as strong-willed during his tenure running the powerful Ways and Means Committee.
Other key panel members include: Keith Hennessey, an economic adviser under President George W. Bush; former Sen. Bob Graham, a Florida Democrat; and Brooksley Born, a past chairwoman of the Commodities Futures Trading Commission, who called for stronger regulation of complex financial products such as derivatives in the 1990s.
Money is overrated: In fact, pay has little, if anything at all, to do with motivation in the workplace. That’s the controversial argument put forth by best-selling author Daniel Pink in his new book, Drive: The Surprising Truth About What Motivates Us (Riverhead Books). "Pay for performance has to be exposed as folklore," he says.
Pink contends that, provided employees receive a baseline level of compensation, three other factors matter more than moola: a sense of autonomy, of mastery over one’s labor, and of serving a purpose larger than oneself.
One case in point: the results-only work environment at Best Buy’s Richfield, Minn., corporate offices. Beginning in 2008, salaried workers there were allowed to shape their work day, putting in only as many hours as they felt necessary to get their jobs done. Productivity increased by 35% and turnover fell sharply, according to The Harvard Business Review.
Hmmm. There may be something in all this — but the executives at Goldman Sachs (GS, Fortune 500) aren’t exactly busting a gut to adjust. Like others on Wall Street, the banking giant, which is expected to earn $6 per share in the fourth quarter, argues that fat bonuses are crucial to making its numbers.
Responds Pink, in a now common refrain: That’s precisely the attitude that led to the recent financial meltdown, as traders and mortgage brokers focused on short-term rewards that encouraged "cheating, shortcuts, and unethical behavior."
Moreover, the 45-year-old author and former Al Gore speechwriter cites social-science experiments and experiences at such workplaces as Google (GOOG, Fortune 500), JetBlue (JBLU), 3M (MMM, Fortune 500), online shoe retailer Zappos, and software companies Meddius and Atlassian.
In one 2005 experiment he describes, economists working for the Federal Reserve Bank of Boston tested the power of incentives by offering monetary rewards to those who did well in games that included recalling a string of numbers and tossing tennis balls at a target. The researchers’ finding: Over and over, higher incentives led to worse performance — and those given the highest incentives fared worst of all.
From this and other cases, Pink deduces that monetary inducements remove the element of play and creativity, transforming "an interesting task into a drudge." It’s even possible, he elaborates, for outsized rewards to have dangerous side effects, like those of a drug dependency in which a recipient requires ever larger doses. He cites neuroscientific testing that shows the promise of cash rewards activates a chemical surge in the brain similar to that brought on by cocaine or nicotine.
Pink says his approach isn’t just for knowledge workers — it can motivate even those doing less creative work. He points to Zappos, where call-center employees are not given scripts and are instead instructed to handle relations with customers in whatever way they think best. Turnover, ordinarily high at call centers, is minimal at Zappos.
Pink is aware that his company examples — no GE, no IBM, no Microsoft — hardly represent the commanding heights of the economy. But he thinks his approach will catch on, even in the biggest outfits. "Executives tend to be pragmatic, and in time they will respond," he says.
President Barack Obama said he focused much of his recent week-long trip to Asia on exploring ways to increase U.S. exports and thereby create jobs.
Obama returned Nov. 19 from a trip to Japan, China and South Korea. In his weekly radio and Internet address, he said increased exports to those countries can help the U.S. recover from its highest unemployment rate in decades.
“Above all, I spoke with leaders in every nation I visited about what we can do to sustain this economic recovery and bring back jobs and prosperity for our people,” Obama said in the address, which was taped in Seoul. “Increasing our exports is one way to create new jobs and create new prosperity.”
The U.S. unemployment rate rose to 10.2 percent in October, the highest level since 1983. Obama said he will continue to focus “relentlessly” on creating new jobs.
The administration will host a jobs forum at the White House next month with business executives, economists, financial experts and representatives from labor unions to talk about government policies that can encourage job growth.
In today’s address, Obama said the administration won’t make any “ill-considered decisions” about spurring job growth because of the federal budget deficit, which reached a record $1.4 trillion in the fiscal year that ended Sept. 30.
Right Direction
Obama said the economy, which grew 3.5 percent in the third quarter, is moving in the right direction after government approval of a $787 billion stimulus package in February
“The steps we are taking are helping,” he said paydayloans. “And I will not let up until businesses start hiring again.”
Obama said his Asia trip was also marked by productive efforts to develop new clean-energy initiatives and progress in working with China to send a unified message to Iran and North Korea in opposition to the development of nuclear weapons.
In today’s Republican address, Senator Mike Crapo of Idaho said health-care legislation proposed by Senate Democratic leaders would increase insurance costs, taxes and government spending while reducing benefits.
“This is not true health-care reform and it is not what the American people want,” Crapo said.
The Senate is scheduled to take a rare weekend vote today on whether to begin debate on the $848 billion legislation, which is intended to cover 31 million uninsured Americans and curb medical costs.
Crapo said the measure would raise taxes by “nearly half- a-trillion dollars,” and cut hundreds of billions of dollars from Medicare, the government health-insurance program for the elderly and disabled.
Crapo said a better approach to health-care overhaul would be “step-by-step reforms” proposed by Republicans, such as letting consumers purchase insurance across state lines, allowing small businesses to pool together to purchase insurance for employees, and eliminating waste, fraud and abuse.
“These are the kinds of reform that make sense and would really make a difference for all Americans,” he said.
China’s Commerce Ministry on Monday rebuffed calls for the yuan to appreciate, signaling resistance to change in a controversial foreign exchange policy that loomed over U.S. President Barack Obama’s first visit to the Asian giant.
Outside pressure has been building on Beijing to let the yuan rise after more than a year of it being nearly frozen in place against the dollar, with the latest appeal voiced by the head of the International Monetary Fund on Monday.
China’s central bank last week tweaked its description of how it manages the currency, setting off a firestorm of speculation that it might be willing to give the yuan some room to run, though market expectations of appreciation have remained muted.
Any change in policy as important as exchange rate management will need to come from China’s top leadership, bridging the views of different parts of the government. The commerce ministry made clear its position.
“Either from the perspective of promoting stable global economic development, or from the perspective of promoting a recovery in Chinese exports, we must provide a stable and predictable environment for our enterprises, including macro-economic policy and currency policy,” Yao Jian, a ministry spokesman, said on Monday.
Although China’s economy has outperformed nearly all others in its recovery from the global financial crisis, many analysts believe that a sustained upturn in exports — a core concern of the commerce ministry — will be required for Beijing to let the yuan rise.
The comments by the commerce ministry’s spokesman set the stage for tension with Obama, who arrived in Shanghai late on Sunday, ready to urge China to play its part in making global growth more balanced.
Getting China to spend more and save less is a principal ingredient of such change, because China’s massive trade surplus with the United States stands as perhaps the most glaring of global economic imbalances and a major reason cited by Beijing’s critics to explain why the yuan should be rising.
RELUCTANT ON YUAN
China has adopted a range of policies to stoke domestic demand, from ramping up its social security system to building more roads to its underserved interior, but its reluctance to move on the yuan remains a thorny issue.
IMF Managing Director Dominique Strauss-Kahn said on Monday that exchange rate appreciation is part of the reforms that Beijing needs to implement to increase domestic consumption.
“A stronger currency is part of the package of necessary reforms,” he said. “Allowing the renminbi (yuan) and other Asian currencies to rise would help increase the purchasing power of households, raise the labor share of income, and provide the right incentives to reorient investment.”
Market expectations of yuan appreciation picked up a touch after China’s central bank said last Wednesday that it would consider major currencies, not just the dollar, in guiding the exchange rate.
In the same report, the People’s Bank of China dropped its customary wording about keeping the yuan “basically stable.”
Nevertheless, investors are still betting on only moderate yuan appreciation.
Hewlett-Packard Co is making a move into the network equipment market by striking a $3.1 billion deal for 3Com Corp, in a major challenge to Cisco Systems Inc.
The deal is the latest sign that technology giants from IBM to Oracle Corp are increasingly encroaching in each other’s markets as they seek to become one-stop shops for computing, networking and data storage. Cisco itself this year pushed into the server market, of which HP is a major player.
HP, which also reported higher-than-expected preliminary earnings on Wednesday, said it would pay $7.90 per share for 3Com, a 39 percent premium over its closing price. The deal values 3Com at $2.7 billion excluding its net cash.
“Cisco and HP are going to compete more and more,” said Jayson Noland, analyst at Robert W. Baird & Co. “We’re headed to a world where each of these large companies can give you everything you want.”
By buying 3Com, HP will be competing with Cisco on a wider range of network equipment, including routers and switches. 3Com also has a large presence in China and can help HP expand sales into one of the world’s fastest-growing markets.
HP is already a dominant force in personal computers, IT services, servers and printers, with recurring revenue streams that have helped it during the economic downturn.
3Com, for its part, has been pushing into the large enterprise market outside China with its H3C brand, trying to take on giants like Cisco.
“We wanted to create a powerhouse in the networking industry,” said Marius Haas, senior vice president of HP’s ProCurve networking division, adding that the 3Com deal puts HP in a good position to compete against Cisco payday cash advance.
When asked for comment, Cisco said: “While Cisco has a healthy respect for all of our competitors, acquisitions in our industry only validate the fact that networking is becoming the platform for all forms of communications and IT.”
3Com has been an acquisition target before. In 2008, Bain Capital Partners and China’s Huawei Technologies tried to buy 3Com for $2.2 billion but failed to win approval from a U.S. government security panel. Huawei is a privately held company set up by a former Chinese army officer.
3Com shares jumped 35 percent to $7.66 in after-hours trading. They climbed over 5 percent on Wednesday ahead of the announcement. HP shares edged 0.8 percent lower to $49.61.
A rise in 3Com shares and call options before the offer was announced sparked talk that the news had been leaked, option traders and analysts said.
3Com would be HP’s fourth biggest acquisition ever. The Marlborough, Massachusetts-based 3Com has 5,800 employees and posted fiscal 2009 revenue of $1.3 billion, more than half of which came from China.
TECH DEALS GALORE
Worldwide tech mergers and acquisitions have totaled $109.1 billion this year, down 20 percent from year-to-date 2008, according to Thomson Reuters data.
U.S. factory workers at Ford Motor Co overwhelmingly rejected proposed concessions it has said it needs to stay competitive, while union workers in Canada on Sunday accepted cuts aimed at retaining jobs.
The Canadian Auto Workers union voted 83 percent in favor of an agreement that freezes wages for some 7,000 workers into September 2012 in exchange for protecting most factory jobs in Canada.
The CAW had announced the tentative pact with Ford on Friday and set a whirlwind weekend vote.
The win for Ford in Canada, which accounts for a little over 10 percent of its North American output, comes as its main union, the United Auto Workers, prepares to announce a stunning defeat for a similar proposal in the automaker’s home market.
A UAW vote in the United States has dragged on for two weeks to steadily building opposition from rank-and-file workers who have objected to giving Ford the same concessions already granted to rivals General Motors Co and Chrysler as part of their government-financed bankruptcies.
An official tally was not yet available on Sunday, but UAW members voted against the concessionary deal at most of Ford’s U.S. assembly plants leaving no doubt about the outcome.
The UAW represents about 41,000 U.S. factory workers at Ford and ratification of the proposed changes required the support of a majority of votes cast.
The UAW plans to release the results formally on Monday and President Ron Gettelfinger told reporters on Friday that he had no plans to seek a revote on the deal or more talks with Ford before 2011 payday advance loan. The current four-year deal expires in 2011.
The margin of defeat was substantial at some of Ford’s biggest assembly plants. Overall, seven of the 10 listed assembly plants voted down the contract, many overwhelmingly.
Workers in Kansas City, Missouri, where Ford builds the F-150 pickup truck and Escape SUV, voted 92 percent against the deal, while those at a truck plant near the automaker’s headquarters voted 93 percent to reject it.
At a local that represents two Kentucky assembly plants the vote was 84 percent against approving the tentative agreement that Ford and the UAW announced in mid October.
The tentative UAW agreement included a “no-strike” provision on wages and benefits for the next negotiations in 2011 that became a lightning rod for opposition.
Workers also objected to a blurring of job classifications for skilled workers that would increase Ford’s flexibility and reduce its costs, and to allowing Ford to increase hiring of entry level workers at $14 per hour for a period.
The UAW and Ford agreed on other cuts earlier in 2009 that the automaker believes will save it $500 million per year.
Ford’s deal with the Canadian union is the second cost-cutting agreement between the two sides in 18 months and includes cuts in benefits, a reduction in vacation and breaktimes and higher healthcare costs for workers.
Commercial real estate company Capmark Financial filed for bankruptcy protection on Sunday, weighed on by declines in the sector and a heavy debt load related to its leveraged buyout.
Capmark, which was created out of the commercial real estate assets of General Motors’ finance arm GMAC in March of 2006, had indicated earlier this year that it might file for bankruptcy.
It had said that it was negotiating with lenders, bondholders and the Federal Deposit Insurance Corp. Its creditors include banks Citigroup and JPMorgan Chase.
The move wipes out the private equity investments of Kohlberg Kravis Roberts & Co, Goldman Sachs Group’s Goldman Sachs Capital Partners and Five Mile Capital, which bought Capmark for $1.5 billion in cash and more than $7 billion in debt.
According to the bankruptcy filing, the group owned 75.4 percent of the company while GMAC, or the General Motors Acceptance Corp, owned 21.3 percent. Employees and directors owned most of the remaining stock. Equity investors are typically wiped out in bankruptcy.
KKR already wrote down its investment in Capmark to zero earlier this year. KKR has had other failed equity investments this year, including its 2005 purchase of doormaker Masonite, which filed for bankruptcy in March and has since emerged from court.
In order to raise cash, the company signed a deal in September to sell its loan servicing and mortgage business to Berkshire Hathaway and Leucadia National for $490 million. That deal can still take place in bankruptcy.
Capmark listed $20.1 billion in assets and $21 billion in liabilities as of June 30, 2009 in the bankruptcy filing, which was made in U.S. Bankruptcy Court in Wilmington, Delaware.
(Reporting by Caroline Humer; Editing by Richard Chang)
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