Globe Drive

Today's top stories from Report on Business :

Toyota's troubles mount

The crisis surrounding Toyota Motor Corp. TM-N continued to mount today as the U.S. Transportation Department began a probe into brake troubles in the 2010 Prius and Transport Canada said it is investigating six complaints. Earlier today, Toyota acknowledged design problems related to the brakes on the popular hybrid, and one report from Japan said the auto maker was planning a recall, though Toyota officials in the United States had no confirmation of that. Toyota was already reeling from a recall of millions of vehicles to fix sticky gas pedals.

Toyota today also pegged the cost of the massive recall at up to ¥180-billion, or $2-billion (U.S.). More than $1-billion is for the cost of fixing the problem, and up to almost $900-million is a projected loss in sales. Toyota expects to lose about 100,000 sales because of the crisis, the bulk in North America. Its stock, meanwhile, has plunged more than 20 per cent since the crisis began, wiping away about $30-billion in market value.

Already badly bruised by the recall of several popular models because of stick gas pedals, and an unprecedented shutdown of production of those vehicles, Toyota today admitted to design problems with the brakes on its Prius, the world's best-selling hybrid vehicle.

Just as a senior Toyota executive said that “quality is our lifeline,” and the auto maker was scrambling to regain the trust of its customers, analysts were pondering the outlook for the company. “It's very unclear what the future will bring,” Tokai-Tokyo Securities analyst Mamoru Kato told The Associated Press. “I had calculated some forecasts before all this, but I can't use them any more.”

At the same time, Toyota posted a quarterly profit of ¥153-billion, or $1.7-billion, a turnaround from last year's loss, helped by scales of the Prius and other models. The auto maker also raised its global sales forecast for this financial year.

Read

Brakes on Toyota Prius probed

Despite recall woes, Toyota raises annual forecast

Toyota's safety concerns deepen

New York files civil charges against Bank of America

The New York Attorney General's office said today it filed civil charges against Bank of America Corp. BAC-N and its former CEO Ken Lewis, saying the bank misled investors about Merrill Lynch before it acquired the Wall Street bank in early 2009. Civil charges were also being filed against Joe Price, who was chief financial officer at the time of the deal and is now head of BofA's consumer banking division. At the same time Attorney General Andrew Cuomo's office was filing its civil charges, the Securities and Exchange Commission reached a settlement to resolve separate federal charges it brought against the bank over similar issues. Bank of America has been accused of failing to properly disclose losses at Merrill and bonuses paid to investment bank employees before the deal closed. Bank of America spokesman Robert Stickler said the charges are “totally without merit” while Mr. Lewis' lawyer said the decision was “badly misguided … without support in the facts or the law and Mr. Price's lawyers said the accusations were “flatly contrary to the evidence.” Read the story

Canada to win Buy American exemption

The Canadian and American governments are set to announce a major agreement to exempt Canadian firms from the Buy American provisions of the economic stimulus program. It was unclear whether the formal announcement was coming later Thursday or on Friday. But its provisions are understood to grant Canadian exporters immediate access to procurement opportunities in the 37 U.S. states that have signed the World Trade Organization Agreement on Government Procurement. As well, Canadian companies will be exempt from Buy American restrictions in seven programs under the American Recovery and Reinvestment Act. The agreement is to some extent symbolic, since many of the contracts associated with the American economic stimulus program have already been let. But the agreement sets several vitally important precedents. Read the story

Carney urges companies on investments

The Canadian economy is recuperating, though companies will need to make capital investments and find new markets as they emerge from the recession to a challenging new reality, Bank of Canada Governor Mark Carney said today in a speech to the Winnipeg Chamber of Commerce. “The thaw is coming,” he said.

But the central bank chief added that Canadian companies need to find new suppliers, open new markets, invest in technology and develop new strategies to operate in a more volatile environment, he said. “To recognize this reality is also to recognize the opportunities available to corporate Canada.” Read the story

Real estate market surging

Early signs indicate that Canada's hot real estate market surged again in January. Among the cities to report data, sales rose an average of more than 60 per cent, and prices more than 14 per cent, from a year earlier in Toronto, Calgary, Edmonton and Ottawa, BMO Nesbitt Burns said. In Toronto, sales jumped 87 per cent and prices 19 per cent. Earlier this week, the Real Estate Board of Greater Vancouver reported that, excluding apartment properties, sales rose 141 per cent in January from a year earlier, and prices 19.5 per cent.

Commercial construction picks up

Non-residential construction is picking up. Statistics Canada said today that contractors took out $6.2-billion in building permits in December, up 32.6 per cent from a year earlier and 2.4 per cent from November. The increase was due entirely to non-residential construction, the federal statistics gathering agency said. In the residential sector, the value of permits held steady. Of note is that over the past few months, the value of permits on the residential side has begun to approach the pre-recession peak. Read the story

BCE meets estimates

BCE Inc. BCE-T this morning reported strong fourth-quarter results largely in line with expectations. The telecommunications giant reported a profit of $350-million or 46 cents a share, compared to last year's loss of $48-million or 6 cents. Operating revenue rose 3.9 per cent to $4.65-billion. Read the story

Canaccord posts turnaround

Canaccord Financial Inc. CF-T , which is eyeing a takeover of Genuity Capital Markets, swung to a fourth-quarter profit of $15.1-million or 27 cents a share, compared with last year's loss of $62.4-million or $1.27 a share. Revenue surged to $173.2-million from $87.2-million. Canaccord did not comment today on a Globe and Mail report that it is in talks with Genuity on a potential deal that would unite Canada's biggest independent brokerage with the Bay Street upstart Genuity.

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Canaccord posts revenue growth

Canaccord in talks to buy Genuity

Shell profit plunges

Royal Dutch Shell PLC plans to sell or close 15 per cent of its refining business after posting a 75-per-cent drop in fourth quarter profit to $1.18-billion (U.S.). As Europe's second-largest energy company was hit by refining and natural gas troubles, its refining business lost $1.76-billion. Chief executive officer Peter Voser said he plans to trim $1-billion in costs this year, the focus being on refining.

Heinz to overhaul ketchup packets

H.J. Heinz Co. HNZ-N is overhauling those little ketchup packets that anyone who frequents burger joints knows are hard to open and messy. The company is unveiling the Heinz Dip & Squeeze, with a cup-like base for dipping and, for squeezing, an end that can be torn off. It holds more ketchup, too. “The packet has long been the bane of our consumers,” Heinz Ketchup vice-president Dave Diesinski told the Associated Press. “The biggest complaint is there is no way to dip and eat it on-the-go.” Read the story

From today's Report on Business

Gillespie to unveil Fairmont Pacific Rim

Energy giants battle over pipeline costs