WINNIPEG - One of Canada’s largest mutual fund companies says it will reduce the management fees charged on many of its products, starting in July. Investors Group, which is part of IGM Financial (TSX: IGM) and the Power group of companies, says the reductions will affect about two-thirds of its funds.
WASHINGTON • Negotiations aimed at regulating repair of rental vehicles with defects have bogged down, dimming hopes of passing legislation that has become the focus of a nationwide Internet campaign.
Clayton-based Enterprise Holdings Inc., a key player in the talks, is being accused by consumer advocates of seeking loopholes that would let companies rent and sell cars under recall for safety reasons without getting them fixed.
The advocacy group Consumers for Auto Reliability and Safety contended in a letter to Enterprise last week that provisions the companies want “would radically weaken consumer protections.”
Enterprise paints a different picture. The company says it has joined with all major rental firms — except Hertz Corp. — in supporting legislation that would, for the first time, give the government authority over rental company policies for recalled autos.
Hertz has embraced a compromise with consumer advocates that is stricter than what corporate rivals, such as Enterprise, will accept.
Enterprise contends that the legislation it wants is “pretty similar” to a version drafted by consumer groups and — with limited exceptions — would prohibit renting or selling recalled vehicles.
In a statement, the company said it is seeking “a responsible and practical approach that reinforces the policies and practices that rental car companies already use to ensure that our customers rent cars that are safe to drive.”
Until earlier this year, privately held Enterprise, which owns the National and Alamo rental companies, had insisted that any legislation was unnecessary.
But in February, Enterprise relented after becoming the target of an Internet protest pressing the company to support a regulatory bill in Congress. As of this week, more than 160,000 people had signed the Enterprise Rent-a-Car petition at Change.org.
The online protest was organized by Carol Houck, the mother of two California sisters who died in a fiery crash eight years ago while driving a vehicle rented from Enterprise. A jury awarded the Houck family $15 million two years ago after testimony that the vehicle, a PT Cruiser, had a power steering fluid leak that had gone unrepaired.
Last year, manufacturers and the National Highway Traffic Safety Administration together recalled 15.5 million vehicles for various reasons.
Typically, manufacturers cover the cost of repairs to recalled cars. The measures currently under consideration wouldn’t change that. But while the government has authority over how auto manufacturers and dealers handle recalls, the safety agency lacks power to dictate what rental companies must do with recalled vehicles.
Often, recalled vehicles can be found in rental fleets. Hertz, for instance, has grounded more than 100,000 of its vehicles over the past three years after recalls that ranged from serious safety concerns to minor problems.
Richard Broome, the company’s senior vice president for corporate affairs, said Hertz was reluctant at first to endorse national legislation but decided that it would be in the best interest of his company and the industry in general to join consumer advocates in a compromise.
“We were very happy to be on board,” he said. “We think consumers should know they aren’t driving a car that has been recalled or, if it has, that it has been repaired.”
Pamela Gilbert, chief negotiator for the consumer groups, said that the likely next step is fighting out the issue in Congress. She expects a Senate hearing to be held soon. But given limited successes this election year in the polarized Congress, the lack of compromise diminishes the prospect of rental companies getting regulated any time soon.
Gilbert, a former executive director of the U.S. Consumer Product Safety Commission, said she is most disturbed at a proposal from Enterprise and its allies that would allow unrepaired, recalled vehicles to be rented if consumers were notified of the defect. She described that provision as a significant change from recall systems for any products.
“The point is to get a remedy, a replacement or a repair,” she said.
Gilbert said consumer groups also object to a rental companies’ proposal that would allow unrepaired vehicles to be sold by rental companies on a wholesale basis. “If recalled cars don’t get fixed by the rental companies, they probably don’t get fixed,” she said.
Enterprise defends those provisions. The company says that it would rent a recalled vehicle “to avoid turning away customers who show up at their locations when their desired vehicle is subject to a recall which the manufacturer deems appropriate for disclosure rather than grounding.” A company spokeswoman used the example of a defective seat belt chime, in which the seat belts themselves and warning lights still worked. In such cases, she wrote, “a disclosure served the same purpose as the chime itself.”
With regard to automobile sales, Enterprise says that unlike all other dealers in used cars, rental companies would be unfairly singled out if forced to repair recalled vehicles sold on a wholesale basis.
Meanwhile, Houck said she had hoped to see the legislation named after her daughters, Raechel, 24, and Jacqueline, 20, who died in the 2004 accident, but thinks that is unlikely given the flagging negotiations. She said she has not heard from Enterprise even though the company said in its February statement that “we hope for the opportunity to work with” her.
“All we want is for them to fix recalled cars and not rent them. It’s so simple,” she said.
Sales of new homes probably increased in March for the first time in three months, indicating the market is struggling to stabilize, economists said before a report today.
Purchases rose to a 318,000 annual rate, up 1.6 percent from 313,000 in February, according to the median estimate in a Bloomberg News survey of 77 economists. Other reports may show consumer confidence dropped for a second month and home prices decreased at a slower pace.
Residential real estate remains a soft spot in the economy, challenged by stricter lending standards and more foreclosures, which depress property values. At the same time, an improved labor market and mortgage rates near historic lows may help prevent the market from slipping further.
Japan has failed to create a revamped nuclear regulatory agency by the promised date _ April 1 _ amid political infighting, raising questions about its commitment to bolstering oversight after last year’s nuclear crisis.
Authorities have been accused of lax supervision of Japan’s 54 nuclear reactors after a massive earthquake and tsunami led to a meltdown of three reactors at the Fukushima Dai-ichi plant in the world’s worst nuclear disaster since Chernobyl.
Prime Minister Yoshihiko Noda’s Cabinet has endorsed a bill to create a more powerful and independent regulatory body that would unify various nuclear safety and regulatory agencies.
But progress has been slowed by disagreements over how much independence it should have and by other disputes.
The stock market is ending a tumultuous year right where it started.
The Standard & Poor’s 500 index closed 2011 a fraction of a point below where it started the year. The S&P closed at 1,257.60, up 5.42 points or 0.4 percent. It ended 2010 at nearly the exact same level, at 1,257.64. Its loss for the year is 0.04 point.
The Dow Jones industrial average lost 69 points, or 0.6 percent, at 12,218. The Dow is up 5.5 percent for the year. The Nasdaq composite index fell 9 points, or 0.3 percent, to 2,605. It lost 1.8 percent for the year.
McDonald’s Corp. was the biggest winner in the Dow this year with a gain of 31 percent. Bank of America Corp. was the worst, down 58 percent.
The conventional wisdom is the more risk, the greater the potential rewards. But the opposite is proving true this year: Investors playing it safe have gained the most.
The most dull and conservative of stocks _ utilities _ gained 15 percent, the largest gain of the ten industry sectors in the S&P 500 index. Other winning groups are consumer staples and health care companies, up 11 percent and 10 percent in 2011 respectively.
In Europe, many of the biggest markets ended down for the year. Britain’s FTSE 100 lost 5.6 percent, Germany’s DAX 14.7 percent.
Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average pay day loans. Markets will be closed Monday in observance of New Year’s Day.
Better news on the job market and home sales lifted stocks Thursday, pushing the Dow up 135 points. On Friday Ford reported that its sales topped 2 million this year for the first time since 2007. Ford fell 0.1 percent.
Rising and falling stocks were about even on the New York Stock Exchange. Volume was just 2.2 billion shares, about half of the recent daily average.
In other corporate news:
_ Sears Holdings Corp. fell 3 percent to $31.78 after Fitch Ratings downgraded the company’s credit rating to “junk.” Sears has plunged 30 percent this week after disclosing that it would close more than 100 Sears and Kmart stores because of weak holiday sales.
_ Diamond Foods Inc. jumped 2.4 percent to $32.27. Rumors have been circulating that the hedge fund manager David Einhorn has acquired a stake in the food company that makes Emerald Nuts.
_ AMR Corp., the parent company of American Airlines, fell 17 cents to 35 cents. The company filed for bankruptcy protection last month. Late Thursday the company said its stock would be delisted from the New York Stock Exchange next week.
India’s industrial production slid 5.1 percent in October, the first fall in over two years and one more sign of a reversal of fortunes for Asia’s third largest economy.
The decline from a year earlier was driven by mining and manufacturing, as well as waning consumer demand and lackluster investment, according to government figures released Monday.
Industrial output hasn’t fallen in India since June 2009.
Despite global headwinds, many economists say India’s troubles are largely homegrown, as the effects of 13 consecutive interest rate hikes begin to ripple through the economy. Political paralysis has also made it difficult to kickstart growth and investment in the face of a plunging rupee and two years of near double-digit inflation.
“This slowdown is clearly continuing and it may be intensifying,” HSBC chief economist for India, Leif Eskesen, said from Singapore. “What’s driving it is the lagged effect of monetary tightening and the high level of inflation that are causing uncertainty about the macroeconomic outlook. That hurts incentives to invest and spend.”
He said policy paralysis was also contributing to India’s woes.
With little scope for stimulus spending, India needs to enact difficult but crucial reforms to kickstart the economy and reassure investors, who are jittery from the dark global economic outlook, economists and businesspeople say.
The government’s humiliating U-turn on its decision to allow greater foreign investment in retail, however, suggests that the ruling Congress Party _ fractured by internal divisions and facing a revolt by opposition parties and coalition allies _ no longer has the leverage to push its reformist agenda.
Parliament has yet to address a slew of issues, which could help spur investment and kickstart growth, which slipped to 6.9 percent in the September quarter, the lowest in over two years.
On the table are a land acquisition bill, which advocates say would ease contentious land transfer policies and speed investment, as well as tax reform, new mining regulations and measures to allow greater foreign investment in defense and aviation.
Last October, industrial production grew by over 11 percent.
The fall was much sharper than expected and puts pressure on the central bank to arrest or start reversing a series of interest rate hikes when it meets this week.
A CNBC-TV18 poll of economists had forecast industrial production to contract 1.6 percent.
Mining activity shrank by 7.2 percent in October, constrained by bureaucratic bottlenecks. Manufacturing slid by 6.0 percent.
Consumer goods production dropped 0.8 percent, while capital goods output plunged 25.5 percent _ a sign of waning investment.
Headline inflation has averaged 9.6 percent since January 2010.
India’s benchmark Sensex index is down over 22 percent this calendar year, making it one of the worst performing in the region. The rupee is down about 14 percent this year and recently hit a lifetime low.
The Ministry of Finance last week trimmed its growth projection for the fiscal year through March to around 7.5 percent, down from an earlier forecast of 9 percent.
They were lined up 300 deep before the store opened at 8 a.m.
Fans of Maple Leaf Gardens and Loblaws came to see how Canada
Fresh clashes between security forces and Egyptian protesters demanding the military step down broke out Saturday in front of the Cabinet building, leaving one man dead, as violence threatened to overshadow next week’s parliamentary elections.
Meanwhile, Field Marshal Hussein Tantawi, the head of the ruling military council that took power after Hosni Mubarak was ousted in February, met separately with opposition leader and Nobel Peace laureate Mohamed ElBaradei and presidential hopeful Amr Moussa, who was the former head of the Arab League. Egyptian state TV reported the meetings but gave no details.
The new prime minister, whose appointment by the military on Friday touched off a wave of anger among protesters accusing the army of trying to perpetuate the old regime, also held a series of meetings trying to sway youth groups to his side.
State TV said Prime Minister Kamal el-Ganzouri, who is unpopular in part because he served under Mubarak, offered Cabinet positions and is pondering the formation of an advisory council to be composed of leading democracy advocates and presidential hopefuls.
The suggestion however failed to disperse the protesters, with nearly 10,000 packing into Cairo’s central Tahrir Square as organizers called for another mass rally on Sunday.
Twenty-four protest groups, including two political parties, have announced they are creating their own “national salvation” government to be headed by ElBaradei with deputies from across the political spectrum to which they demanded the military hand over power.
ElBaradei said in a statement that he would be willing to form a such a government to manage the country’s transition, and that if he were officially asked to put a government together, he would give up the idea of running for president in order to focus on the current phase of transition.
Outside the Cabinet building, hundreds of protesters set up camp, spending the night in blankets and tents to prevent the 78-year-old el-Ganzouri from entering to take up his new post. Early Saturday, they clashed with security forces who allegedly tried to disperse them.
An Associated Press cameraman saw three police troop carriers and an armored vehicle firing tear gas as they were being chased from the site by rock-throwing protesters.
The man who was killed was run over by one of the vehicles, but there were conflicting accounts about the circumstances surrounding the death.
The Interior Ministry expressed regret for the death of the protester, identified as Ahmed Serour, and said it was an accident. Police didn’t intend to storm the sit-in but were merely heading to the Interior Ministry headquarters, located behind the Cabinet building, when they came under attack by angry protesters throwing firebombs, it said in a statement. The ministry claimed security forces were injured and the driver of one of the vehicles panicked and ran over the protester.
One of the demonstrators, Mohammed Zaghloul, 21, said he saw six security vehicles heading to their site.
“It became very tense, rock throwing started and the police cars were driving like crazy,” he said. “Police threw one tear gas canister and all of a sudden we saw our people carrying the body of a man who was bleeding really badly.”
Officials say more than 40 people have been killed across the country since Nov. 19, when the unrest began after a small sit-in by protesters injured during the 18-day uprising that ousted Mubarak was violently broken up by security forces. That sparked days of clashes, which ended with a truce on Thursday. It wasn’t clear whether the melee on Saturday was an isolated incident or part of fresh violence by security forces trying to clear the way for the new prime minister, and protesters frustrated by what they believe are the military’s efforts to perpetuate the old regime.
“El-Ganzouri was pulled out of his grave. He was a dead man,” said a 39-year-old employee Ahmad Anas as chants against the head of the military council filled the air outside the Cabinet building: “Tantawi and el-Ganzouri are choking me.” A banner hanging over the building gates read: “closed until execution of field marshal.”
El-Ganzouri served as prime minister under Mubarak between 1996 and 1999. His name has been associated with failed mega projects including Toshka, an ambitious and expensive scheme to divert Nile water at the southern tip of Egypt to create a second Nile Valley. The project has cost billions and barely gotten off the ground.
The military’s appointment of el-Ganzouri, along with its apology for the death of protesters and a series of partial concessions in the past two days suggest that the generals are struggling to overcome the most serious challenge to their nine-month rule, with fewer options now available to them.
Hala al-Kousy, a 37-year-protester, vowed that protesters will not leave the square until the Supreme Council of the Armed Forces, the formal name of the military’s ruling council, gives up power.
“They are willing to wait and so are we,” al-Kousy said.
Egypt’s first parliamentary elections since Mubarak was replaced by the military council are slated to begin Monday. The vote, which the generals say will be held on schedule despite the unrest, is now seen by many activists and protesters to be serving the military’s efforts to project an image of itself as the nation’s saviors and true democrats.
However, boycotting elections is a hard choice for many youth groups who rose up against Mubarak’s autocratic regime in hopes of ushering in democracy, fair and free elections. Others have been engaged in awareness campaigns or are fielding candidates. Many said that even if they vote, they will continue their sit-in.
Mohammed el-Qassas, one of the founders of The Egyptian Current party, which was born out of the revolution, described the general atmosphere, as “saddening,” but said he will vote just to “put my voice in the ballot.”
A member of another youth group, Injy Hamdi, 27, said “we will all go to the ballot boxes, vote and then come back to the square.”
Mohammed Abdel-Moneim, 38, said the protesters would not allow any election tampering, allegedly widespread during the past regime.
“We protect the ballot boxes with our bodies and lives if we have to. We fought hard for this right to vote,” he said.
The next parliament is expected to be dominated by the country’s most organized political force, the Muslim Brotherhood. The group decided to boycott the ongoing protests to keep from doing anything that could derail the election. However, the outcome of the vote is likely to be seen as flawed given the growing unrest and the suspension by many candidates of their campaigns in solidarity with the protesters.
Anti-Wall Street protesters exulted Friday after beating back a plan to clear them from the park they have occupied for the past month, saying the victory will embolden the movement across the U.S. and beyond.
“We are going to piggy-back off the success of today, and it’s going to be bigger than we ever imagined,” said protester Daniel Zetah.
The showdown in New York came as tensions were rising in several U.S. cities over the spreading protests.
The owners of Zuccotti Park in lower Manhattan had announced plans to temporarily evict the hundreds of protesters at 7 a.m. Friday so that the grounds could be power-washed. But the protesters feared it was a pretext to break up the demonstration, and they vowed to stand their ground, raising the prospect of clashes with police.
Just minutes before the appointed hour, the word came down that the park’s owners, Brookfield Office Properties, had postponed the cleanup. A boisterous cheer went up among the demonstrators, whose numbers had swelled to about 2,000 before daybreak in response to a call for help in fending off the police.
In a statement, Brookfield said it decided to delay the cleaning “for a short period of time” at the request of “a number of local political leaders.” It gave no details.
Brookfield said it would negotiate with protesters about how the park should be used. But it was unclear when those discussions would occur.
Over the past month, the protest against corporate greed and economic inequality has spread to cities across the U.S. and around the world. Several demonstrations are planned this weekend in the U.S., Canada and Europe, as well as in Asia and Africa.
In Denver, police in riot gear herded hundreds of protesters away from the Colorado state Capitol early Friday, arresting about two dozen people and dismantling their encampment. In Trenton, N.J., protesters were ordered to remove tents near a war memorial.
Organizers in Des Moines, Iowa, warned of a possible “big conflict” Friday night after the state denied their permit to continue overnight protests at the Capitol. Demonstrators in San Diego formed a human chain around a tent in a downtown plaza and ignored police orders to take it down.
In New York City, police arrested 15 people, including protesters who obstructed traffic by standing or sitting in the street, and others who turned over trash baskets, knocked over a police scooter and hurled bottles. A deputy inspector was sprayed in the face with an unknown liquid.
In one case, a defense attorney marching with the group refused to move off the street for police and his foot was run over by an officer’s scooter. He fell to the ground screaming and writhing and kicked over the scooter to free his foot before police flipped him over and arrested him.
Though the park is privately owned, it is required to be open to the public 24 hours per day.
Brookfield, a publicly traded real estate firm, had announced plans to power-wash the plaza section by section over 12 hours and then allow the protesters to return. But it said it would begin enforcing the park’s rules against tents, tarps and sleeping bags, complaining the grounds had become unsanitary and unsafe.
The New York Police Department had said it would make arrests if Brookfield requested it and laws were broken.
As the morning deadline drew near, some protesters rushed to scrub and sweep the park and pick up trash in hopes of preventing a crackdown.
Mayor Michael Bloomberg, whose girlfriend is on Brookfield’s board of directors, said his staff was under strict orders not to pressure the company one way or the other. He noted that Brookfield can still go ahead with the cleanup at some point.
“My understanding is that Brookfield got lots of calls from many elected officials threatening them and saying, … `We’re going to make your life more difficult,’” he said on his weekly radio show.
In Philadelphia, protester Matt Monk, a freelance writer, was cheered by the news out of New York.
“That means at the very least, the powers-that-be, wherever they are, know that they have to contend with us in a less heavy-handed way,” he said.
Forecasters say Tropical Storm Ophelia has weakened further and its strongest winds are expected to remain offshore as it races toward the Avalon Peninsula of Newfoundland, Canada.
The National Hurricane Center in Miami said early Monday that Ophelia’s top sustained winds weakened to about 60 mph (95 kph). The storm was moving northeast at 35 mph (56 kph).
Ophelia was centered about 65 miles (100 kilometers) west-northwest of Cape Race, Newfoundland, and a tropical storm watch was in effect for Newfoundland’s Avalon Peninsula easy payday loans. The center says Ophelia is expected to continue to weaken, but still pack powerful winds.
Meanwhile, Tropical Storm Philippe was moving over the central Atlantic and is not expected to affect land.