The United Arab Emirates’ Central Bank stands behind local and foreign banks operating in the country and made an additional liquidity facility available to them, it said in an e-mailed statement today.
MONTREAL–Bombardier Aerospace says a lack of new orders will force it to lay off an additional 715 workers at its Montreal-area facilities next year as it reduces production of its CRJ regional jets.
Thursday’s announcement came two weeks after Bombardier president, Pierre Beaudoin, warned of impending job losses. The cuts are in addition to 4,360 layoffs previously announced this fiscal year for the firm’s worldwide operations.
"The economic circumstances and the situation with the airline industry continue to make it difficult to get new CRJ orders," spokesman Marc Duchesne said.
The 715 layoffs include about 40 employees affected by the reduced output rate for its Bombardier 415 amphibious aircraft.
About 200 of the affected workers are administrative. The remaining 515 are unionized employees who can now exercise their rights to bump workers with less seniority.
The move doesn’t reduce production of business jets, which decreased earlier this year as the company forecast deliveries would fall by 25 per cent this year.
Any additional cuts to business jet production, should they be required, could be announced Dec. 3 when the company discloses its third-quarter results immediate payday loans online. There were 116 regional jets in Bombardier’s backlog of orders as of July 31.
A campaign to increase that total attracted just one letter of interest for 22 CRJ700s from American Airlines. But Duchesne said the layoffs don’t mark the death of the CRJ. Bombardier’s latest market forecast calls for 5,800 planes over the next 20 years.
Benoit Poirier of Desjardins Securities said the reduced production rate was widely expected. Bombardier doesn’t disclose daily production rates or aircraft production forecasts. But Poirier said in a note on Thursday that he expects Bombardier will deliver 52 regional jets this fiscal year, ending Jan. 31, and 45 in fiscal 2011. It has delivered 37 so far this year.
The latest layoffs will begin in January and will last through the first two quarters of the next fiscal year.
Bombardier said costs associated with the layoffs will be about $10 million (U.S.). On the TSX, Bombardier shares fell 18 cents to $4.60.
The Canadian Press
All three working-age generations – Boomers, Generation X and Generation Y – agree that the youngest ones are more difficult to manage than other generations, a Conference Board of Canada analysis has revealed.
The two older generations, the board’s November study found, believed Gen Y workers "require more close supervision, are less likely to follow procedures and are less results-driven than other generations."
On the other hand, Gen-Y – people aged 18 to 29 – "may not understand why their Boomer or Gen-X colleagues fail to recognize how busy their lives can be," the report found.
The board did their own national workplace survey and analyzed other data about the consequences of a new wave of multigenerational angst sweeping Canadian workplaces.
Two factors were exacerbating the angst, the board said: an ever-aging workforce and a wrenching shift "away from hierarchical structures" that Boomers are comfortable with to "a more team-based approach" in workplaces that suits Gen-X and Gen-Y more.
"No longer are younger workers largely dependent on the older generations for information and knowledge," the board said. "Younger workers can now access information online and many are often the most expert person at a given skill or task."
Hence, the conflict is "arguably now even greater than before."
Statistics Canada data show that while 14.1 per cent of the Canadian workforce in 2001 was nearing retirement age, 16.9 per cent was by 2006 and more than 20 per cent will be by 2016.
Bosses have the delicate task of getting these three generations to cooperate at work and adapting the environment to get the best work out of each, the board said.
Standing in the way are ingrained myths and perceptions on all sides, which its study attempted to explode. The Conference Board warned against "managing by stereotype."
Boomers were defined as people age 45 to 64 and Gen-X as 30 to 44. For both, the world they grew up in shaped them, be it Sixties idealism or skepticism wrought by corporate downsizing and the political upheaval of 1989, the board said.
All three generations agreed Boomers are "less comfortable with technology, less open to change and less accepting of diversity." The difference was in the degree.
Among the Gen-Y myths the study exploded was their over-confidence. The results showed the youngest workers were more cautious than their older co-workers gave them credit for.
Gen-Y employees told the survey they "strive to have a life that will make them happy." They agreed they are "less willing to work hard and feel they are owed more." They admitted they "seem to have a negative effect on productivity but a positive effect on morale because they are younger, full of energy and complain less than other generations."
They know they’re "often unreliable, tend to do things their own way and do not always follow the rules," the study found. But there’s a good reason for that, Gen-Yers told the board: "One group strictly wants to follow processes while the other wants to get stuff done."
Another challenge for bosses, the study said, is to temper the perceptions each generation has of the other. Among them:
Gen-Y found Gen-X "annoying and aggressive."
Gen-X said Boomers are "have difficulty giving up control," while Gen-Y said Boomers "live to work rather than work to live."
Boomers described Gen-X as "loners" who "lack patience."
And Gen-X contended Gen-Y "think they know everything."
In particular, the study found, Gen-Y workers said they like someone to review their tasks, while Boomers absolutely don’t.
And while Boomers were uncomfortable with the other two generations’ reliance on emails to communicate, the study found the perception of younger generations as careless with spelling and grammar wasn’t true. While 88 per cent of boomers felt it was important to be careful with grammar and spelling, 83 per cent of Gen-Xers and 85 per cent of Gen-Yers agreed.
Similarly, 87 per cent of Boomers said they were careful with details, as did 81 per cent of Gen-X and 79 per cent of Gen-Y.
Porsche SE is headed for a second consecutive annual loss in the billions of euros, as the hangover lingers from ex-Chief Executive Wendelin Wiedeking’s failed takeover of Volkswagen AG.
The indebted automotive holding company created as a vehicle for the acquisition will stay deeply in the red as it is forced to deconsolidate its Volkswagen stake and much of its Porsche AG sports car business, officials said on Wednesday.
The complex untangling at Porsche — now set to merge in 2011 with its 51-percent owned Volkswagen unit — cemented its reputation as a financial black box that scarcely resembles its roots as a maker of sports cars such as the 911 Turbo.
As its debt mounted just as car markets collapsed, Porsche was forced to drop its takeover and agree a merger with Volkswagen. The first step is selling to VW a 49.9 percent stake in the Porsche AG sports car business by the end of this year.
“To take into account the rather unlikely possibility that the merger does not take place after all, the parties concerned have incorporated a put/call structure into the transaction concept,” said Hans Dieter Poetsch, finance chief of both Porsche SE and Volkswagen.
This includes transferring the remaining 50.1 percent of Porsche AG to Volkswagen by no later than 2014, he added fast cash advance loan.
Poetsch warned on Wednesday that the deconsolidation loss in the fiscal year to July would be triggered if VW’s home state of Lower Saxony once again gets the right to appoint two members to VW’s supervisory board at the next annual meeting.
According to International Financial Reporting Standards, this would mean Porsche would have to book its VW stake at market value, he told Porsche’s annual news conference.
“This would give rise to a considerable loss based on the current market price,” Poetsch said.
Including the sale of the minority stake in the sports car business, the structural changes in its consolidated statements would lead to a loss “in the low single-digit billion euro range.”
Porsche SE posted a group net loss of about 3.6 billion euros ($5.37 billion) for the fiscal 2008/09 year. Net debt at the end of its fiscal year on July 31 was 11.4 billion euros.
Porsche shares were barely changed by 1306 GMT while the DJ Stoxx European car sector index dipped 0.2 percent.
(Editing by David Holmes)
($1=.6708 Euro)
Big St. Louis hotels that depend on corporate meetings and charity events for much of their business will face a lean winter and are unlikely to recover fully until 2011, a hotel analyst said Monday.
Among them is the Chase Park Plaza, the Central West End landmark that is falling short of income projections made in 2006, when real estate investment trust Behringer Harvard took over as majority owner. The $180-million deal included $95 million for an ongoing renovation.
In a conference call script attached to a quarterly financial filing last week, Behringer Harvard’s chief accounting officer Bryan Sinclair said the firm had "recognized" a $5 million reserve for an unpaid rent balance from its 5 percent partner, Kingsdell LP, which runs the Chase Park Plaza.
Kingsdell’s owner, Jim Smith, said Monday that hotel revenue is short of the projections but added that Behringer Harvard’s action is no indication the Chase Park Plaza is in financial trouble.
"The lease payments are just internal cash flow," he said. "We are 100 percent current on our debt payments. We pay all our taxes."
The complex at Kingshighway and Lindell Boulevard is comprised of 350 hotel rooms, 51 corporate apartments, 86 condominiums, meeting rooms, restaurants and a movie theater. The $4.5 million penthouse condo remains unsold but 65 percent of the condos have been purchased, Smith said.
He would not provide hotel occupancy rates but said the economic downturn and renovation of some hotel rooms had pushed down the rate. But Smith added that next year the owners will pay off the construction loan on the condo portion of the complex and "significantly pay down" the hotel loan.
Hotel analyst Gary Andreas, a partner at H&H Financial in Chesterfield, said the Chase Park Plaza is among area hotels hurting from reductions in corporate meetings.
"And a lot of charitable groups have cut back on fancy functions," he added.
Andreas said big hotels are unlikely to see a significant turnaround until late next year. Hotels in most cities, including St. Louis, look to return to normal in 2011. Chase Park Plaza appears to be performing as well as its competitors, he added.
"I’ve not heard any rumbling that they’re in trouble," Andreas said.
Current valuations of waste managers such as Waste Connections Inc, Waste Management Inc and Republic Services Inc give the company’s shares a lot of room to rise, according to a Barron’s story.
In its November 23 edition, Barron’s said Waste Connections shares could rise to $37.50 in a year, citing Raymond James analyst William Fisher’s price target for the stock, which closed at $31.79 on the New York Stock Exchange Friday.
According to Barron’s, investor Todd Lowenstein of Highmark Value Momentum Fund sees Waste Management shares rising as high as $40 from their Friday NYSE close at $32.30.
Republic Service’s Chairman Jim O’Connor has said that analysts’ discounted cash-flow analysis pegs his company’s value in the mid $30s range, according to the story low fee payday loans. This compares to Republic Services NYSE close of $27.40 on Friday.
The story also noted that Warren Buffett has bought 1 percent of Republic Services, based on Berkshire Hathaway Inc filings.
It said that Bill Gates investment vehicle had doubled its shares in Waste Management, giving it a 15 percent stake.
(Reporting by Sinead Carew; Editing Bernard Orr)
Federal Finance Minister Jim Flaherty warned card companies and banks if they don’t comply with a proposed voluntary code of conduct for the multibillion-dollar credit and debit markets he would bring down the hammer of regulation.
The code, which was designed to address merchants’ claims they’re being gouged, won high praise from retailers and small business owners but drew more cautious response from credit card companies and banks.
While critics worry that a voluntary code would not be enforceable, Flaherty said Thursday he would not hesitate to get tough.
"If we are unsuccessful … with the voluntary code, then we can create an involuntary code," Flaherty said in Ottawa. "We have that power to do that.
"But we’d rather do it in concert with the important stakeholders and arrive at a conclusion that will work for everybody rather than use the heavy hand of regulation. But if we have to, we would, of course."
The long-awaited code contains proposals that would give merchants more clout in dealing with global credit card giants, payment processors and big banks over card fees.
The Retail Council of Canada estimates such fees cost $4.5 billion a year and lead to higher prices for consumers.
Among other things, the code would give merchants the ability to cancel contracts without penalty following notification of a fee change, to offer a variety of discounts for different payment options – and control how debit transactions are processed. Additionally, banks could only issue premium credit cards to consumers on consent or request.
"This is the first time the card companies, the banks and their processors are going to have to compete for the merchants’ business. We’re no longer the milk cows. We’re the customer," said Diane Brisebois, president of the Retail Council of Canada.
However, critics say Flaherty missed an opportunity to go further by making the code mandatory and they’re worried the measures could get watered down during the 60-day public consultation period.
Liberal Senator Pierrette Ringuette said without enforcement, fines or penalties, Visa and MasterCard will be able to cherry-pick which measures to follow. "`Pretty please,’ will not make them abide," Ringuette said.
Liberal MP Dan McTeague said many merchants wouldn’t be able to opt out of their contracts for fear of losing customers. He was also disappointed consumers were not given the same opportunity to cancel their card contracts without penalty.
MP Glenn Thibeault, the NDP’s consumer protection critic, agreed that consumers have no one to complain to if provisions of the code are breached. "With this government, big business is the one that ends up always being on the winning end of any type of voluntary code of conduct."
Credit card companies expressed concern about the impact of the code on market competition.
This "should resolve a commercial dispute for which the global retail lobby operating in Canada has sought government intervention over private negotiation," said Kevin Stanton, president of MasterCard Canada. In particular, he noted the code "could alter the competitive landscape."
Visa said it was "disappointed that the code would allow merchants to supersede consumer choice at the point of sale," adding the announcement "significantly undermines" the introduction of competition in debit.
The proposed code could mean Visa’s new chip card readers, which accept its debit cards, may have to be reprogrammed and 2.5 million Bank of Montreal MasterCard Maestro debit cards already on the market may have to be reissued, a source said. It was not immediately clear who would bear those costs.
The Canadian Federation of Independent Business, which had lobbied for a voluntary code, called it "an early Christmas present."
The Interac Association welcomed the code but said it would work with government to "fill in" the details.
The Canadian Bankers Association said most of the measures don’t apply to banks. Still, it cautioned "customers are best served by an open, competitive marketplace."
It is "inadequate" for global regulators to merely create new rules for the financial sector, because preventing another crisis also requires an equivalent focus on the day-to-day supervision of the industry, says Canada’s top banking regulator.
Julie Dickson, superintendent of the Office of the Superintendent of Financial Institutions, made the remarks Wednesday during an address at the Women in Capital Markets luncheon in Toronto. While the OSFI is updating its supervisory framework and increasing its oversight of risk management, Dickson does not want to cross the line by intruding into the management of banks.
While regulations tend to focus on issues such as banks’ capital requirements, supervision centres on when and how regulators intervene in the industry, Dickson said. When it comes to supervision, there are significant differences in supervisory regimes around the world.
"To the extent that some financial systems were more resilient than others, we need to focus on what worked well," Dickson said. "Day-to-day supervision is one such area that deserves focus and that has not been discussed as yet in any great depth internationally; it should be."
Supervision can involve more on-site visits and proactive intervention when a company’s risk management process appears weak. Dickson made it clear that the regulator will not hesitate to step up its on-site verification if it feels that a financial institution is being deliberately opaque about its business. "We have considerable powers to use if required," she said cash advance now.
While some U.S. supervisors have established permanent offices in the banks, the OSFI prefers to take a "balanced" approach. That’s because its mandate stipulates "regulation and supervision must be carried out having regard to the fact that boards of directors are responsible for the management of financial institutions."
Still, whenever a company appoints a new chief risk officer, the OSFI does consider how that appointment affects its own risk assessment.
"We discuss how much depth the new CRO (chief risk officer) has, the person’s clout and general disposition toward risk. At times, I have to say we have expressed, within OSFI, positive and negative views about such appointments," Dickson said.
Nonetheless, she is wary about the regulator being involved in the actual selection of those individuals. "I think you are crossing the line when you do that," she said.
The OSFI, meanwhile, is "developing guidance on minimum expectations for firms in setting risk appetite," while bolstering its scrutiny of risk management around the use of models.
With respect to board composition, Canadian financial institutions should be filling more of those seats with bankers in an effort to "deepen" expertise on financial issues, she said. "It’s something all institutions should be paying attention to."
Of all the headaches Bank of America faces these days, none is more painful than its ongoing quest to find a new CEO.
More than a month-and-a-half has passed since Ken Lewis announced his plans to retire from the Charlotte, N.C.-based bank at the end of the year. Still, a successor has yet to emerge.
Some have blamed disorganization among company board members, who were arguably caught flat footed when Lewis first made his stunning announcement at the end of September.
Lewis had previously said he planned to serve until after the bank paid back the money received last fall under TARP, or the Troubled Asset Relief Program.
But the government aid might be part of the problem. Over the past year, regulators pumped more than $45 billion into the nation’s largest bank, nearly half of which came after Bank of America (BAC, Fortune 500) realized that the scope of losses at investment bank Merrill Lynch were much more severe than first thought. BofA agreed to buy Merrill last year just as Lehman Brothers was about to go under.
As one of seven companies to get "exceptional" assistance, BofA has had to succumb to a handful of government demands, including having the pay packages of its top executives reviewed by Kenneth Feinberg, the Obama administration’s so-called "pay czar".
That has apparently scared away some potential successors.
William Demchak, for example, a leading executive at Pittsburgh-based PNC (PNC, Fortune 500), reportedly brushed aside inquiries by the firm amid fears about what kind of scrutiny might be imposed by Feinberg, according to the a recent report by the Wall Street Journal.
Robert Kelly, the chairman and CEO of Bank of New York Mellon (BK, Fortune 500), was also believed to be in the running for BofA’s top post earlier this month before announcing to staff he was not interested.
"No one wants to work for an institution where the government is calling the shots," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
Looking inside and out
That reluctance could give some internal candidates, who have already come to grips with life under the government’s thumb, a leg up on the competition.
At least two BofA insiders are believed to be in the running for Lewis’ job - Brian Moynihan, the recently appointed head of BofA’s key retail banking business and Greg Curl, the bank’s chief risk officer.
Neither candidate, however, has won a ringing endorsement from Wall Street.
"We believe the board will find it cannot justify either candidate based on their professional merits," wrote Jonathan Finger, a partner at the Houston-based investment manager Finger Interests, in a regulatory filing earlier this month. The firm owns shares of BofA.
Finger and other big institutional investors who helped lead a successful campaign to strip Lewis of his title of chairman earlier this year, have instead lobbied for making a clean break with the Lewis era.
They have demanded that the company hire an outsider, or at least someone who has been away from BofA for some time.
A Bank of America spokesperson said that the company was interviewing both internal and external candidates, but would not comment on recent speculation on who those candidates might be bad credit cash loan.
Two names outside the company that were widely cited in the wake of Lewis’ resignation were James Hance and Alvaro de Molina, two long-time BofA veterans. Both had previously been chief financial officer for the bank. Hance is now the chairman of telecom firm Sprint Nextel (S, Fortune 500).
Molina has suddenly become available after stepping down as CEO of auto financing firm GMAC on Monday. Some experts have downplayed his chances though since he may have generated some ill will by hiring away dozens of BofA employees following his departure in late 2006.
"Even burned down bridges can be repaired, but I don’t know if BofA can forgive his recruiting efforts when he left," said Raymond James analyst Anthony Polini.
The speculation hasn’t stopped there. Even New Jersey governor Jon Corzine, who lost a bid for re-election this month, was briefly mentioned as a successor, before the former Goldman Sachs (GS, Fortune 500) executive quashed such rumors last week.
Many challenges for a new leader
As rabid as the speculation is about who will replace Lewis, no decision is expected to be made until next week at the earliest. A company spokesperson said the board was looking make a decision "around Thanksgiving."
Whoever does secure the position, however, will certainly have their hands full.
The new CEO will have to establish an exit strategy to pay back TARP funds and get out from under the government’s thumb.
Lewis’ successor will also have to navigate a minefield of new industry regulations that could hurt BofA more than other banks.
A sweeping set of changes are set to go into effect for the credit card industry in February. BofA is currently the second largest issuer of credit cards in the country, according to the industry trade publication Nilson Report. Even more changes are likely ahead as Congress pushes forward with additional financial regulatory reforms.
There has even been increased talk on Capitol Hill of giving regulators the power to break up some of the nation’s largest financial institutions, a group that would most certainly include BofA.
On top of all that, there are many internal challenges facing the company, namely the integration of Merrill Lynch, said William Atwood, executive director of the Illinois State Board of Investment, which owns nearly 2 million shares of BofA.
The company also faces what could be an ugly legal fight with the Securities and Exchange Commission over BofA’s alleged failure to notify shareholders of its decision to pay Merrill executives outsized bonuses last year.
BofA had originally worked out a $33 million settlement with the SEC over the matter, but a judge threw out the agreement, setting the stage for a trial early next year.
"The board has a singular opportunity to get it right," said Atwood. "In one fell swoop they can really strengthen the whole organization."
Russia is unlikely to change the structure of its reserves from dollars and euros even as currencies including the yuan gain more importance in regional trade, VTB Group Chief Executive Officer Andrei Kostin said.
“Inevitably with the growth and importance of other economies like China or other BRIC countries’ economies, the role of their currencies should be more important,” said Kostin, who heads Russia’s second-biggest bank, in an interview yesterday in Singapore. “We think that the yuan and the ruble can be currencies in which we conduct bilateral trade. But as a reserve currency, I think the central bank is still dividing mainly between the dollar and the euro.”
The ruble gained 0.2 percent against the euro to 42.8600, the strongest level in almost ten months, at 1:12 p.m. in Moscow. The Russian currency was little changed against the dollar.
Russia has sought to promote regional currencies in trade and finance to reduce the risks posed by the dominance of the dollar. Medvedev has blamed the global financial crisis on an over-reliance on the U.S. currency and the U.S. role in the financial system.
“Things are changing for sure and I think the crisis showed the weaknesses of being dependent on only one currency,” said, Kostin who was accompanying President Dmitry Medvedev at the Asia-Pacific Economic Cooperation forum. ‘There is more concern among many investors, even in Russia, that America is printing too much money and that could devalue it.”
State-run VTB is Russia’s second-biggest bank after OAO Sberbank.
Border Arrangements
Prime Minister Vladimir Putin traveled to China last month to strengthen a relationship forged by Russian oil exports to Asia’s largest energy consumer. The total value of oil deals signed with Chinese companies this year is about $100 billion, according to the Russian government.
China, the world’s fastest-growing major economy, has signed 650 billion yuan ($95 billion) in currency-swap agreements since December with Argentina, Belarus Hong Kong, Indonesia, Malaysia and South Korea, encouraging greater use of its currency guaranteed online payday loans.
Russia already has agreements that allow the use of the ruble and yuan in cross-border trade, First Deputy Central Bank Chairman Alexei Ulyukayev said on Oct. 23. Russia is also in talks with India and Brazil to use their currencies in trade.
Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said today that the yuan may in future be added to the basket of currencies that set the value of IMF monetary units, called special drawing rights.
Reserve Currency
The yuan may be added in a “while,” Strauss-Kahn said at a press briefing in Beijing today. The move would require the currency to be market-based, he said.
While Chinese officials, including central bank Governor Zhou Xiaochuan, have called this year for an alternative to the dollar as the main reserve currency, they maintain controls on the yuan that prevent it for now from becoming a competitor.
Leaders from the APRC, who met in Singapore over the weekend, declined to back U.S. calls for a stronger yuan.
It’s “not easy” to say when the yuan could become convertible, Kostin said.
The currency could become a global reserve currency in about 10 years should the country make it convertible, Russian Finance Minister Alexei Kudrin said on Oct. 24.
While the yuan cannot be freely exchanged, making it impossible to use it for reserves at present, a change in policy would make the currency a “notable and weighty” global reserve currency given China’s trade volumes with others, Kudrin said.
Russia’s reserves, the world’s third largest holdings, are made up of 47 percent dollars, 41 percent euros, 10 percent pounds and 2 percent yen, Ulyukayev said on Nov. 2.
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