Finance & Business World

The economic crisis threatening to topple global automakers rocked two of Europe’s biggest on Thursday as BMW posted a surprise fourth-quarter operating loss and Volkswagen warned of worse ahead.

Shares in BMW, the world’s largest premium carmaker, were down over 11 percent at one point, after it posted quarterly earnings sharply under estimates, before recovering to trade down 3.66 percent at 1152 GMT (7:52 a.m. EDT).

The company posted a fourth-quarter loss before interest and tax of 718 million euros ($917.4 million) — much worse than the loss of 103 million as forecast by a Reuters poll of analysts.

The disastrous quarter dragged full-year net profit down to 330 million euros, well below a Reuters Estimate average of 1.047 billion euros, and, as a result, the company proposed cutting its dividend to 30 cents per share.

German peer VW, meanwhile, warned 2009 would be one of the hardest in its history.

Chief Executive Martin Winterkorn said he still expected Europe’s largest automaker to make a profit in 2009, but reiterated that vehicle sales, revenue and earnings would all decline.

“A difficult 2009 lies ahead of us — one the most difficult years in our company’s history,” he said.

Volkswagen shares had edged up 0 quick payday loan.74 percent by 1152 GMT (7:52 a.m. EDT) against a DJ Stoxx European Autos index .SXAP down 1.81 percent.

GM WOES

On the topic of U.S. rival General Motors’ European woes, BMW reiterated it had no plans to take a stake in the company’s German unit, Opel, denying a newspaper report.

GM officials are due to meet the European Union on Friday to discuss the fate of the struggling automaker’s European assets.

GM Europe submitted a rescue plan for Opel at the end of February, under which its German unit, along with the UK’s Vauxhall Motors, would be partly spun off from its parent and would need 3.3 billion euros in state aid.

The German government has yet to decide on whether to grant aid to the carmaker, which employs around 25,000 people in Germany.

It is also seeking help from other European governments. Opel has obtained a loan guarantee from Spain, but still needs 2.6 billion euros of the same from Germany, the head of GM Europe told a German newspaper.

GM’s Swedish Saab unit said on Thursday it had given 750 workers at its Trollhattan plant notice of redundancy. 

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Apple will take third-quarter delivery of newly developed 10-inch touchscreens from Taiwan, a source said on Wednesday, amid talk the U.S. firm is developing a touchscreen PC.

Taiwan touchscreen specialist Wintek already makes small screens for Apple iPhones, and has received orders for the larger ones that are roughly the same size as those used in mini PCs, said the source close to the Taiwan firm. He asked not to be identified because he was not authorized to talk to the media.

He added that he did not know what the final product would be, or who would make it.

Wintek spokesman James Chen confirmed Apple was a major client of his company, but declined to comment on any new product development.

Taiwan media reported this week that Apple, which has brought touchscreens to the forefront with the success of its iPhones, is currently developing a touchscreen PC, as lines begin to blur between sophisticated smartphones and traditional PCs instant payday loan.

Some of those reports have said that Taiwan’s Quanta Computer, the world’s top contract laptop PC maker, would manufacture the actual PCs for Apple.

Apple’s Hong Kong spokeswoman, Jill Tan, said the company did not comment on market speculation, while a Quanta spokeswoman also declined to comment.

(Reporting by Kelvin Soh; Editing by Doug Young and Lincoln Feast)

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LONDON – The British government has become the majority shareholder in Lloyds Banking Group PLC, raising its stake from 43.5 per cent to 65 per cent and possibly as high as 77 per cent, in exchange for insuring more than £260 billion in toxic assets payday loans. Under the deal, Lloyds promised to increase lending by £28 billion over the next two years.

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Sonnenschein Nath & Rosenthal named Jennifer A. Marler, a partner, to the role of real estate practice leader.

The Federal Reserve Bank of St. Louis named Raschelle S. Burton assistant vice president for public affairs.

Des Peres Hospital promoted Jacqueline "Jacki" Dauernheim to director of the hospital’s Acute Care for the Elderly unit.

Bob Bax joined Prudential Alliance Realtors in the Ladue/Frontenac office.

Humes & Barrington added Lori Reichert, Zachary Danner, Laura Tevlin and Amber Rognan to its tax services team, named John Roth as a tax manager on its tax services team and added Alex Ammosov, Patrick Hogan and Eric Johnson to its financial services team.

Lindell Bank promoted David Melvin Hall and Daniel Kuntz to senior vice president, Sharon Santa Cruz to vice president, Mirela Janku and Denise Chamberlain to assistant vice president and Berryl Bader to assistant cashier and business development at the Clarkson location.

Weekends Only Furniture added Angela Niemeyer as a rebuyer.

Susan Bassford Wilson joined the St. Louis office of Rabbitt, Pitzer & Snodgrass as an associate credit scores for free.

Stinson Morrison Hecker added Joshua M. Mistler as a counsel to its St. Louis office.

Eligie "Jack" Boatman joined the management team at SAK Construction and will manage business development efforts in Alabama, Louisiana and Mississippi.

Michael J. Duvall and Hannah F. Preston joined Sonnenschein Nath & Rosenthal’s St. Louis office as associates in the litigation practice.

Michael J. Dooley joined CIGNA as a group insurance sales executive.

Advantage Capital Partners promoted Matthew Kavan, Dana D. Minaudo and Adam M. Suberi to senior associates in their St. Louis office.

Lucy Unger, a partner with Williams Venker & Sanders, was named chair of the firm’s management committee.

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American Railcar Industries Inc. said Wednesday that its chief operating officer will become the company’s leader as its current head steps down.

James Cowan, 51, who has served as American Railcar’s executive vice president and chief operating officer since Dec. 2005, will take over April 1 as president and CEO. He replaces James Unger, 60, who held the post for 14 years.

The company also reported fourth-quarter net income of $7 free credit report and score.6 million, or about 35 cents per share, for the quarter ended Dec. 31 versus $7.9 million, or about 36 cents, a year ago. Revenue was $203 million compared with $161.9 million a year ago.

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Regions Financial Corp. CEO Dowd Ritter volunteered not to receive a cash bonus for 2008.

Ritter, who leads the Birmingham-based regional banking giant, was eligible to rake in more than $1.1 million in bonuses based on his performance amid the difficult economic climate, according to public documents filed Tuesday with the Securities and Exchange Commission.

Instead of a cash bonus, the bank’s Compensation Committee awarded Ritter about the same amount in restricted stocks, which is a part of his 2009 long-term incentive process. He received 323,676 shares at Feb. 24’s closing price of $3.29, which amounts to $1.06 million.

The committee’s decision would comply with new executive compensation rules outlined in the latest federal stimulus bill, which only allows executives at companies that received federal bailout funds to receive restricted stock bonuses instead of cash car loans for people with bad credit. Regions accepted $3.5 billion in federal TARP funds last year.

Despite declining a cash bonus, Ritter’s overall compensation climbed to $9.2 million in 2008, compared to $7.7 million in 2007. A stock award increase and changes to his pension plan helped contribute to the more than $2 million extra in pay for the year, according to the filing.

Within the past year, Regions Financial Corp. (NYSE:RF) encountered hefty real estate losses within its loan portfolios and it recorded its first net loss during the economic crisis in the fourth quarter. The company posted a $6.2 billion loss during the three-month period ended Dec. 31.

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What’s hurting the TSX?

Basically everything, from news of a 3.4 percent drop in the country’s GDP in the last quarter of 2008 to the crashing values of gold, oil and other commodities to the deluge of bad news coming up from Wall Street.

"It’s a sorry looking picture," said Fred Ketchen, market strategist with Scotiabank, as stocks on Canada’s main index fell on their face across the board, making yesterday’s 5.4 per cent drop the worst day on Bay Street so far this year.According to Ketchen the relentless plunge in stocks is the result of bad news in almost every sector of the economy and the market."No matter where you look in this whole mess … it’s bad," Ketchen said.

"People are panicking," said Andrew Martyn, who helps manage about $337 million at Toronto-based Davis-Rea Ltd. "We’re getting a capitulation sell-off. I’ve got more cash and bonds on my books than I’ve had in 20 years."

The day was off to a bad start in Asia and Europe as stocks plummeted on news that American International Group Inc would received another $30 billion (U.S.) in emergency funding from the U.S. government, as it posted a stunning $62 billion loss, the largest in U.S. corporate history.

Matters were made worse by Saturday’s comments by celebrity investor Warren Buffett who said the U.S. economy is in "shambles."

The TSX and the Dow Jones Industrial Average were the hardest hit with Toronto dipping to a new five-year low by midday while New York fell below 7,000 points for the first time since 1997.

Commodities tumbled and financial shares slid on concern they’ll need more capital. The cost of crude for April delivery fell $4.61 to settle at $40.15 a barrel on the New York Mercantile Exchange while even gold, a traditional safe investment in times of economic turmoil, fell for the sixth straight session, the longest slump since October, as some investors sold the precious metal to cover losses in equity markets bad credit auto loans. Gold futures for April delivery fell $2.50, or 0.3 percent, to $940 an ounce on the Comex division of the Nymex.

Suncor Energy Inc. dropped 10 percent after its shares were downgraded at Raymond James & Associates Inc. on expectations of lower oil and gas prices. Potash Corp. of Saskatchewan Inc. fell 9.8 percent on speculation that the recession will cut demand for grains and fertilizers. Manulife Financial Corp. slumped to the lowest in almost nine years on renewed speculation that it will sell stock to cover investment losses and pay for an acquisition.

Irwin Michael, a fund manager with ABC Funds, says the deluge of bad news and in the economic data coming out of public and private enterprise is perpetuating fear among investors.

"We stopped seeing these 300-500 point drops in a day, but then here we have it. I think it all weighs on people," he said.

"The markets are relatively thin so clearly there’s such an overwhelming negative psychological attitude by investors."

Michael and Ketchen both agree that what the markets need to rebound is some good news, a veritable bright light to shine down from somewhere, thereby eliviating the pressures on investors and the market.

Only problem is neither of them can see the light.

"There is hardly anything here to get excited about at all," said Ketchen.

"You want some good news? The only good news I can find is that the sun is shining. But it’s still bloody cold."

As the market enters March like a bear there’s no indication it will leave like a bull.

"Obviously it hasn’t found its bottom."

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Shares of Sony Corp outperformed those of its rivals in a sliding market on Monday, as CEO Howard Stringer’s move to directly oversee the electronics arm at the center of the firm’s problems raised investor hopes for speedier restructuring.

But market players said the management reshuffle alone, which saw Stringer replace Sony’s president with himself, was unlikely to put the company back on a growth path, and they were waiting for new products and reforms to show the firm was heading in the right direction.

Current President Ryoji Chubachi, the current Sony No.2 and head of the electronics division making Bravia flat TVs, Cyber-shot digital cameras and Handycam camcorders, will become vice chairman in the reshuffle announced on Friday.

It is the latest in a series of management changes at Japan’s top exporters in recent months including Toyota Motor Corp and Honda Motor Co Ltd as they grapple with a widening recession.

“Eliminating layers and rebuilding a system so that he can lead the business himself is not a bad decision,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

“Now it’s up to Stringer’s capacity as a top-down manager. If he can lead the company effectively, recovery would be quicker.”

Sony, which runs a long way behind Apple Inc’s iPod in portable music and Nintendo Co Ltd’s Wii in video games, is set to post an record operating loss of 260 billion yen ($2.7 billion) for the year to March 31, with problems in its electronics unit largely to blame.

Shares in Sony closed down 0 no teletrack payday loans.5 percent at 1,660 yen, outperforming the Tokyo stock market’s electrical machinery index, which lost 3.2 percent.

Sony stock fell 69 percent in calendar 2008, compared with a 54 percent decline in the subindex.

TV TURNAROUND

Nikko Citigroup raised its rating on Sony to “buy/high risk” from “hold/high risk,” citing expectations for accelerated restructuring, and it raised its target price for Sony shares 5 percent to 2,200 yen from 2,100 yen.

“We see evidence of a new importance being attached to speed and detect a readiness to reform,” Nikko Citigroup analyst Kota Ezawa said in a note to clients.

One of the top priorities for the new management is to stop bleeding red ink in its TV operations, which have been losing money in recent years despite Sony being the world’s No.2 LCD TV maker behind Samsung Electronics Co Ltd.

Stringer’s ties with the electronics division are not as close as those of Chubachi, who has been with the unit through his career at Sony, making it easier for Stringer to take drastic steps with the TV operations — including withdrawal, Akino said.

As part of the overhaul unveiled on Friday, Sony plans to set up two new business groups, one of which covers network-oriented products and services such as PlayStation video game operations and Vaio PCs, with the other handling TVs and digital cameras.

WIRELESS FUTURE? 

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Southeast Asian leaders said on Sunday they would coordinate policies and take joint actions to deal with a worsening global financial crisis battering their export-dependent economies.

The 10 leaders of the Association of South East Asian Nations (ASEAN) did not spell out any specific actions the group would take in a statement issued after their summit in this Thai seaside resort.

They welcomed expansionary macroeconomic policies, including fiscal stimulus; monetary easing, access to credit, including trade financing; and measures to stimulate domestic demand.

“Toward this end, they stressed the importance of coordinating policies and taking joint actions that would be mutually reinforcing at the regional level,” the statement said.

Asian economic growth is slowing rapidly as consumers and companies cut back spending amid the worsening global downturn.

In Southeast Asia, Singapore is in recession and economists say Malaysia and Thailand are on the brink, while Indonesian growth has slowed to its weakest pace in more than two years.

Many Asian countries have announced stimulus plans in a bid to stem the economic damage, but exports will not stage a major recovery until consumers in the West start spending again.

The leaders also agreed to stand firm against protectionism and refrain from introducing or raising new trade barriers and called for “bold and urgent reform” of the international financial system, the statement said high risk personal loans.

ROADMAP TO COMMUNITY

ASEAN has begun, with this summit, implementing a roadmap that will turn what used to be a consensus-based group long derided as a talk-shop into a single community of 570 million people with a combined GDP of $2 trillion in six years.

Economic ministers this week agreed to reduce trade barriers and open up some service industries on their way to a single economic community.

The most tangible outcome of the meetings was the signing of a free trade agreement between ASEAN, New Zealand and Australia that could eventually add $48 billion to economies in the region.

In the run-up to the meeting, ASEAN along with China, South Korea and Japan agreed to enlarge their pool of foreign reserves to $120 billion to defend their currencies from the fallout of the financial crisis.

But while ASEAN leaders stand against protectionism, they have defended their own buy-local campaigns, saying they conform with trade rules and are similar to the “Buy American” clause in the $787 billion U.S. stimulus package.

The summit, whose theme this year was “ASEAN Charter for ASEAN Peoples” held a dialogue with civil society groups, part of its drive toward creating an integrated socio-political community. 

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