Televisions at a Tokyo electronics store were all tuned to Toyota Motor Corp President Akio Toyoda’s meeting with Toyota employees.Toru Hanai
Stories Report on Business is following today:
Toyoda heads to China
For a guy who was being severely criticized for staying behind the scenes for too long when his company was hitting one pothole after another, the president of besieged Toyota Motor Corp. sure is moving around quickly these days.
After spending some time in the U.S. last week being grilled by a congressional committee, Akio Toyoda continues to take his damage control on the road, apologizing for the recall of 8.5 million vehicles.
So where is Mr. Toyoda today? He's in China. China makes up only a small percentage of the autos pulled worldwide since October for sticky gas pedals, faulty floor mats and glitches in braking software. So why was it his next target?
Auto sales in China have become increasingly critical for auto makers as sales lag in traditional markets. Last year, China overtook the United States as the biggest auto market, with a 48-per-cent jump in sales, and auto makers are looking to it to offset weak global demand and drive future growth.
His message was little changed.
"The Chinese market is very important, so I flew here in person in the hope my personal expression of an apology and explanation will give customers some relief," Mr. Toyoda said.
AIG unloads Asian unit
American International Group is unloading its Asian subsidiary in order to help pay back some of the funds it was given by the U.S. government in September, 2008. AIG was rescued in a $182.5-billion (U.S.) bailout by Washington during the credit crunch that helped send global economies into recession.
British insurer Prudential PLC says it will buy AIG's Asian unit in a deal worth $35.5-billion.
AIG will get $25-billion in cash - $20-billion of that from a Prudential rights issue - and $10.5-billion in new shares and securities for the sale of AIA Group Ltd.
The combined group will be the leading life insurer in Hong Kong, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines, as well as the biggest foreign life insurer in China and India, Prudential said.
"Whilst in the longer term we can see the advantages of this audacious and opportunistic acquisition, on a 12-month view, we think that the shares will underperform," said Barrie Cornes, an analyst at Panmure Gordon.
AIG, which is now 80-per-cent owned by the U.S. government, said Friday it lost $8.87-billion in the fourth quarter as its general insurance business remained weak.
As of Dec. 31, AIG's outstanding assistance from the U.S. government totalled $129.26-billion, up 5.7 per cent from the end of the third quarter due to accrued interest.
That total includes $94.76-billion in loans and interest, and $34.5-billion tied to the value of investments the government bought from AIG. As those investments pay off or rise in value, the government recoups more money.
Goldman rejects shareholder demands
Goldman Sachs Group Inc.'s board has rejected demands from shareholders that the firm investigate recent compensation awards, recoup excessive compensation and reform pay practices.
Wall Street's dominant bank, criticized for paying billions of dollars in bonuses soon after the taxpayer bailout of the banking industry, reported the board's decision in a regulatory filing today.
Goldman reported the shareholder demands last year and said at the time that its board was considering them. The firm did not name the shareholders who made the demands.
Goldman reported a record profit in 2009 and was on pace to pay more than $20-billion in compensation heading into the fourth quarter. But facing public ire, it capped compensation expenses at $16.2-billion for the year.
The firm also paid its top 30 executives all-stock bonuses rather than cash.
Even though Goldman outperformed its biggest rivals in 2009, chief executive officer Lloyd Blankfein received a stock bonus valued at $8.9-million, roughly half of what JPMorgan Chase & Co. chief Jamie Dimon received.
Pressure to raise rates
With Canada's economy expanding at a 5 per cent annualized rate in the fourth quarter, one has to wonder when policy makers will increase interest rates this year.
Real gross domestic product increased 1.2 per cent in the fourth quarter, the largest quarterly increase since the third quarter of 2000. Statistics Canada reported the annualized rate of GDP grew 5 per cent in the fourth quarter, up from 0.9 in the third. This compared with a 5.9 per cent rate of increase in the U.S. economy.
The figures come a day before Bank of Canada Governor Mark Carney will keep his key lending rate at 0.25 per cent, all 21 economists surveyed by Bloomberg News predict. Today's report and other recent indicators will prompt Mr. Carney to raise the key policy rate quickly once his conditional commitment to keep it unchanged through June expires, Warren Jestin, chief economist at Bank of Nova Scotia told Bloomberg.
"There are a lot of signals out there that a shift in monetary conditions is near at hand" said Mr. Jestin, who predicts an increase of 2 percentage points between July and next March. "Inflation isn't an issue on a near-term basis, but almost everything we have seen coming out is stronger than expected."
The economy's fourth-quarter growth was supported by consumer spending, capital investment and trade, Statistics Canada said. Government spending also contributed to growth.
Consumer spending increased 0.9 per cent in the quarter, led by durable goods such as furniture and cars. Investment in housing rose 6.5 per cent.
More pressure for Greece
The EU pressed Greece hard to make more painful budget cuts amid reports that fellow European nations such as France and Germany are preparing a financial rescue to get the country out of its debt crisis.
Europe's financial affairs chief Olli Rehn insisted today that additional measures were necessary, a view he said was shared by the European Central Bank and the International Monetary Fund.
"I want to encourage the Greek authorities to consider and announce additional measures in the coming days" to meet deficit targets for 2010, he said after talks with Finance Minister George Papaconstantinou in Athens.
"I am aware that the effort of consolidation will not be easy," Mr. Rehn said. "But it is my firm belief respect of the targets for deficit and debt reduction are indispensable."
Mr. Papaconstantinou said the centre-left government will do "whatever is necessary - and that includes new measures" to the budget deficit by four percentage points this year.
Mr. Rehn will also meet Prime Minister George Papandreou and other senior officials to address the austerity program which the EU has warned must be expanded.
From today's Report on Business
Banks told to finance takeovers with new shares
Bulk of stimulus spending comes as worst is over, critics say
Asian firm makes push into B.C. natural gas