Today's top stories from Report on Business :
Bank chiefs testify to crisis panel
Wall Street executives said today they underestimated the severity of the financial crisis and apologized for risky behaviour and poor decisions. They also defended their bonus and compensation practices to a skeptical commission investigating what caused the collapse. Americans are furious and "have a right to be" about the hefty bonuses banks paid out after getting billions of dollars in federal help, the commission's chairman told chief executives of four major banks, all survivors of the deepest and longest recession since the Depression. As the hearings opened before the Financial Crisis Inquiry Commission, chairman Phil Angelides pledged "a full and fair inquiry into what brought our financial system to its knees."
Obama to outline bank fee plan
U.S. President Barack Obama is now expected to announce his plans for a bank fee tomorrow morning. The administration has angered the financial sector with a proposal for a levy on major financial institutions that would raise up to $120-billion (U.S.).
Canadian businesses watch Haiti with anxiety
Canadian businesses with ties to Haiti watched with anxiety and sorrow as an earthquake devastated the country's capital city. "We are doing all we can to reach our workers and people in Port-au-Prince and in the northeast and we have been unsuccessful so far," said Jacqueline Monfourny, president of Montreal-based Somine SA, which has a copper-gold property in northeast Haiti and has six employees in Port-au-Prince and 15 altogether in the country, all of whom are Haitian.
Canadian businesses with operations in Haiti range from T-shirt maker Gildan Activewear Inc. to the Bank of Nova Scotia and several mining firms. Montreal-based Gildan, which uses Haitian workers to sew some of its fabrics, said Wednesday it is "concerned" for the well-being of the people in Haiti and wants to help provide humanitarian aid to the country. The Montreal-based company has no direct manufacturing facilities in Haiti, but uses third-party contractors to sew most of the fabric produced at its Dominican Republic textile facility. Read the story
Google wins support for China move
The threat by Google Inc. to shut down its China operations rippled around the world today, winning support from at least one of its rivals and raising questions about what the Internet search giant's stand may cost it in the long run. Yahoo Inc. said in a statement it supported Google, which warned Wednesday it could quit China after a hacking attack believed to have been aimed by the hackers at human rights activists.
Any decision by Google to get out of China would cost it in the long run, though it would, of course, be praised on the ethics front. A move by Google to actually cease operations in China, where it is not the leader among search engines, would give local competitors, and companies such as Microsoft Corp. a leg up as the Chinese market is surging. But some analysts think Google's announcement yesterday was really aimed at setting the stage for talks with the government. "We believe Google will probably stay as China is a vital market," one analyst said in a research note, according to Reuters. "Any China Internet veteran understands the need to work within the system and the Chinese preference for gradual change."
Magna expects sales growth
Magna International Inc. met analysts' estimates for its 2010 outlook of $19.5-billion (U.S.) to $20.5-billion in sales. The auto parts giant also projected that its average dollar content per vehicle, or CPV, a key measure, will be between $895 and $925 in North America and $545 to $570 in Europe. "We would highlight the high quality of the guidance underpinned by solid CPV," UBS Securities Canada analyst Fadi Chamoun, who yesterday raised the 12-month price target on Magna stock to $73, said in a research note this morning. "... Following extensive restructuring (primarily in North America), we believe Magna is well positioned to capitalize on the recovery in demand for light vehicles through higher CPV." Read the story
Cogeco, Cogeco Cable boost targets
Cogeco Inc. and Cogeco Cable Inc. have raised financial targets for the year. The main cable business today posted a strong first-quarter profit of $56.7-million or $1.16 a share, well up from $22.9-million or 47 cents a year earlier. Revenue jumped to $317-million from $299-million. Both profit and revenue were above analysts' projections. Cogeco Cable now projects 2010 profit of $125-million and revenue of $1.29-billion, better than the previous forecast of $80-million and $1.25-billion. Read the story
How Germany's economy slumped
It's all so last year at this point, but for the record: Germany's economy shrank by a record 5 per cent last year as exports slumped. Germany, Europe's biggest economy, is now well on its way to recovery, and a government official told the Reuters news agency the country will raise its 2010 growth forecast to about 1.5 per cent from 1.2 per cent. Read the story
New chief for JAL
Japan Airlines has a new chief executive officer who is likely to lead the embattled airline into an expected bankruptcy filing. Kazuo Inamori, who founded Kyocera Corp., is taking over the top spot at the airline, which is saddled with $16-billion (U.S.) in debt. Reports from Tokyo say JAL will probably file for bankruptcy as early as next week, with plans to thousands of jobs and several routes.
From today's Report on Business