Finance news. My opinion.

Ford Motor Co., after increasing its share of the U.S. light-vehicle market for the last two years, is falling short of its retail goal this year, which may put pressure on the automaker to offer larger discounts.

Ford in the first quarter had 13.6 percent of the U.S. retail auto market, which excludes sales to fleet buyers, according to researcher Edmunds.com. That trailed the 14.1 percent target Ford’s board set for executives to match or exceed this year, according to the automaker’s government filings.

Ford’s share slipped as General Motors Co. increased sales incentives 11 percent in the first three months of the year, according to Autodata Corp. Ford, which reduced discounts by 9.1 percent in the first quarter, saw its total U.S. market share fall to 16.2 percent from 16.8 percent a year earlier, Autodata said.

“We believe Ford’s management could be forced to become more aggressive with incentives to avoid additional market share loss,” Joseph Amaturo, an analyst with the Buckingham Research Group who rates Ford “neutral,” said Tuesday. “We are increasingly concerned about net-price erosion.”

Chief Executive Alan Mulally, who has emphasized profits over market share, said Ford will maintain pricing discipline.

“The most important thing about our plan is profitable growth, so that leads us to tremendous discipline on everything about the business,” Mulally said Wednesday.

“The number one thing is to match the production capacity to the real demand.”

Ford, which earned $6.56 billion last year, failed to achieve its market share targets globally and in the Americas, according to its proxy statement filed this month. Ford achieved 44 percent of its corporate market-share goal and 58 percent of its target for the Americas, it said.

Ford has said its market share in Europe fell to 7.6 percent last year from 8.9 percent in 2009 as it resisted matching competitors’ discounts.

The automaker said its retail market share in the U.S. last year was 14.1 percent, trailing the board’s 14.2 percent target.

Mulally said Ford will continue to avoid the heavy, profit-eroding discounts that U.S. automakers used in the past to keep factories running.

“We will always be very disciplined about our production and our pricing and have the pricing reflect the real demand and inherent value of the product,” he said.

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Whether it’s a promising biotech firm or a corner store, everyone feels good when a new small business opens. Capital is invested, jobs are created and empty real estate is filled.

Unfortunately, that doesn’t happen often enough in Missouri. Despite all of the hype generated by our business incubators and entrepreneur-education programs, the Show-Me State still ranks below average on most measures of small-business vibrancy.

In the past decade, Missouri hasn’t even generated enough new businesses to replace the ones that closed. From 2000 to 2009, the latest year for which statistics are available, the state had a net loss of 1,451 firms.

The loss was caused by recessions at the beginning and end of the decade, but even so, the statistic shows a shocking lack of business vibrancy. The nation as a whole had a net gain of 268,000 firms during the decade, despite heavy attrition in the recession years of 2008 and 2009.

Jerome Katz, who teaches entrepreneurship at St. Louis University, pointed out St. Louis’ paucity of new businesses during a recent speech. Katz has a generally sunny personality, but he didn’t smile much while presenting the numbers.

“Business formation here gets worse during difficult times, but even in our best times, our performance is trailing the rest of the country,” he says.

One ray of hope: Missouri moved up to 35th place last year, from 48th, in a Kauffman Foundation ranking of the rate at which a state’s residents start businesses.

That may be illusory. Katz says a high percentage of St. Louis’ recent startups seem to be necessity-based, representing laid-off executives who become consultants or laid-off reporters who become freelance writers.

Those one-person firms count as new businesses, but they’re unlikely to ever hire anyone. The entrepreneurs-by-necessity are likely to go back into paid employment if the job market improves. And even those with more ambitious plans may be starting on shaky ground.

“A lot of this latest class of firms, started by people who are unemployed, are undercapitalized, which means they are at risk of closing,” Katz says. “The rate of firm deaths will probably still be on the high side next year.”

In his speech, Katz ticked off other telling statistics about St. Louis’ small-business climate. The metro area has nearly 1 percent of the U.S. population, but attracts just 0.25 percent of the loans guaranteed by the Small Business Administration, and just 0.2 percent of the SBA’s Small Business Innovation Research grants.

That last number should be much higher, given the amount of cutting-edge research that goes on at local universities. “We’re not doing a good job of turning our research into technology,” Katz says.

He also blames public policies, especially a set of state business incentives that seem more oriented toward chasing smokestacks than nurturing entrepreneurs.

Luring an employer from out of state is a rare event, but Missourians start about a thousand businesses a month, even in these turbulent times. We need to roughly double that number to become as entrepreneurial as the rest of the country.

There are some ideas in Jefferson City that look promising. The proposed Missouri Science and Innovation Reinvestment Act, for example, would encourage the formation of technology-based firms.

One thing’s clear: As we pointed out in last year’s “Can St. Louis Compete?” series, the things the region is doing now aren’t working very well. If we can’t find a way to dramatically increase the rate of business startups here, we will be doomed to another decade of economic mediocrity.

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Staring down at the former chief executive of KV Pharmaceutical Co.

Beazer Homes USA Inc. says it lost money in its fiscal first quarter as the homebuilder reported a decline in closings and new orders. But the Atlanta company said Tuesday that it anticipates seasonal improvements in buyer demand. Beazer had a loss of $48.8 million, or 66 cents per share, for the three months ended Dec. 31. That compares with earnings of $48 million, or $1.17 a share, a year ago. Revenue fell 48 percent to $110.3 million from $213.1 million. The results were worse than expected. Analysts forecast a loss of 50 cents per share on revenue of $163.7 million. Total home closings dropped 43.6 percent to 527 homes, while new orders fell 23.9 percent to 540 homes. The cancellation rate rose to 31.2 percent from 27 percent.

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Prime Minister Nouri al-Maliki will not run for a third term in 2014, an adviser said Saturday, limiting himself in the name of democracy and with an eye on the popular anger directed at governments across the Middle East.

Al-Maliki narrowly held on to a second four-year term after his political bloc fell two seats short of its main rival in national elections last year. He will step down at a fragile time in Iraq’s history _ his successor will be the first Iraqi leader to run the nation without U.S. military help since Saddam Hussein.

Al-Maliki adviser Ali al-Moussawi said the premier also wants to change the Iraqi constitution before he leaves to limit all future prime ministers to two terms.

“Eight years is enough for him, in order to not convert to a dictatorship,” al-Moussawi told The Associated Press, as state TV announced al-Maliki’s decision. “This is the principle and the concept of democracy.”

Saturday’s stunning announcement follows al-Maliki’s decision a day earlier to return half of his annual salary to the government _ a move he said aimed to narrow the wide gap between rich and poor Iraqis.

Al-Maliki is not required to publicly report his pay, but he is believed to earn at least $360,000 annually poor credit personal loans.

The salary cut appeared calculated to insulate al-Maliki from the anti-government unrest spreading across the Middle East, as clerics and protesters warned him not to ignore public bitterness over Iraq’s sagging economy and electricity shortages. The U.S. government estimates that as many as 30 percent of Iraqis are unemployed.

Al-Maliki’s decision to announce he will step down after two terms _ a deadline more than three years away _ appeared fueled by the same desire to shield Iraq from uprisings in Egypt and Tunisia.

But it is particularly surprising, given his drawn-out fight last year to keep his job after his party failed to win the most seats in parliamentary elections last March.

Al-Maliki, a Shiite, remained prime minister only after pulling enough support from allies in closed-door negations and promising to share power with his rival Sunni-based political alliance.

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Ford Motor announced Monday it will add 7,000 new hourly and salaried jobs in the United States by the end of 2012.

The announcement, made on the opening day of the Detroit auto show, said Ford (F, Fortune 500) is adding nearly 4,000 hourly jobs at several of its U.S. plants this year, including 1,800 at the Louisville Assembly Plant, where it plans to start building the new design of the Ford Escape crossover SUV later in the year.

And the company plans to add another 2,500 factory jobs next year.

Ford also will add 750 salaried engineering jobs in product development and manufacturing. The engineers will specialize in batteries, system controls, software and energy storage to work on electric vehicles in Detroit and eight other cities: Boston; Chicago; Cincinnati; Columbus, Ohio; Milwaukee; Raleigh and Durham, N.C.; and San Jose, Calif.

The company has cut staff substantially since 2001. And the new workers will only replace a fraction of the employees lost to the recession. Ford had 61,000 U.S. employees at the end of 2010, according to a company spokeswoman. That’s down from 76,000 at the end of 2007, and 163,000 employees 10 years ago.

But Ford has been posting improved sales and U.S. market share in the last two years. Its U.S. sales were up 20% in 2010, enough to add 1.2 percentage points to its market share, according to Autodata.

And a survey of 200 top auto executives from around the globe by accounting firm KPMG is expecting Ford to add additional global market share over the next five years. 

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The Royal Canadian Air Farce

If you have a computer, there

NEW YORK, N.Y.

Australian credit unions and building societies can be a “strong competitive force” against banks, helping to cut borrowing costs, Treasurer Wayne Swan said in his weekly economic note.

The government wants a “new pillar,” in the industry, Swan said earlier in an interview yesterday with Channel Nine. Commonwealth Bank of Australia, Westpac Banking Corp., Australia & New Zealand Banking Group Ltd., and National Australia Bank Ltd., dubbed the four pillars after a law preventing takeovers among them, accounted for 87 percent of the home lending market in September, up from 76 percent three years ago.

“We know there is more work to be done to build up competition, and we are determined to do that,” Swan wrote in his note yesterday. “I’m also a really big believer in the capacity of our mutual credit unions and building societies to be a strong competitive force in the banking sector.”

Australia’s biggest banks have been criticized for raising borrowing costs by more than the central bank. Swan said his government’s package to encourage competition will be released next month. Opposition Shadow Treasurer Joe Hockey will call for a review of the banking industry today, he said in an interview with the Australian Broadcasting Corp yesterday.

The Greens Party on Nov. 15 introduced draft laws to place restraints on the ability of the big banks to increase mortgage rates. The proposals in the lower house of parliament would give the Australian Prudential Regulatory Authority powers to prevent banks from raising mortgage fees above their funding costs.

‘Silver Bullet’

Finance Minister Penny Wong ruled out regulation and said the government will instead focus on supporting competition, according to the transcript of a Sky News interview.

“We’re not pretending that there’s a silver bullet,” Wong said. “We’re not going to re-introduce regulatory regimes, which historically we know have made things worse for Australian consumers and people trying to get home loans.”

Swan urged borrowers to seek loans from credit unions, building societies and smaller banks, which offer more competitive rates. He said the nation’s biggest banks act in an “arrogant way.”

“The government is determined to see a new pillar in the banking system, particularly based on the mutual sector, particularly based on our credit unions and our building societies,” Swan told Channel Nine yesterday. “They are safe and they’re very competitive.”

Competitive Forces

The government has invested A$16 billion ($15.8 billion) in Triple-A rated residential mortgage-backed securities to support smaller lenders and lower the cost of funding, Swan said in his economic note.

Commonwealth Bank reported on Nov. 15 a first-quarter unaudited cash profit of about A$1.6 billion. Westpac, Australia’s second-largest bank, earlier this month posted second-half profit that almost tripled from a year earlier, while ANZ Bank said a week earlier that earnings in the period surged 69 percent to a record. National Australia, the biggest lender to companies, posted a cash profit gain of 32 percent in the second half.

All four raised their standard variable mortgage rates by more than the Nov. 2 quarter-percentage point move by the central bank.

Australia’s Senate voted last month to hold an inquiry into competition in the banking industry, including the fees they charge.

ANZ Chief Executive Officer Mike Smith said Oct. 31 that any attempt by lawmakers to control banks’ interest rates will take Australia back to an era “long since gone.”

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