FP Posted

Industry Minister sits down for consumers on text messaging charges

David George-Cosh — Fri, 08 Aug 2008 18:38:00 GMT

In July, Industry Minister Jim Prentice quickly condemned moves by BCE Inc. and Telus Corp. to charge 15¢ for incoming text message plans, threatening to regulate the industry if consumers needed to be protected

Today, Mr. Prentice announced he will not interfere with BCE and Telus to initiate the text messaging charges.

However, it is peculiar why Industry Canada's press release came with the title "Minister of Industry Stands Up for Consumers on Text Messaging Fees" when no action will take place.

Instead, he encourages Canadians to seek alternatives and that the Canadian telecommunication market is "dynamic - choice is available," although he does not provide any examples of what alternatives could be used (iPhone IM applications are one example that comes to mind).

Mr. Prentice also said he has instructed his officials to "monitor market activity and work with third-party experts to study trends and costs in the wireless market."

All rhetoric and grandstanding aside, Bell is set to introduce the text messaging rate today while Telus will launch it on Aug. 22. Telus has said they initiated the charges as a measure to reduce load on its wireless network, but industry experts debunked the company's claims.

David George-Cosh

Drive a white car? You're fastidious

Nicolas Van Praet — Fri, 08 Aug 2008 18:31:00 GMT

The colour of a car speaks volumes, says Leatrice Eiseman, executive director of the Pantone Color Institute and the author of six books on the subject. Here are the basic messages she says each colour conveys:

Black: Empowered, not easily manipulated, loves elegance, appreciates the classics.

White: Fastidious.

Deep Blue-Red: Some of the same qualities of vibrant red - sexy, speedy, high-energy and dynamic - but far less obvious about it.

Light to medium blue: Cool, calm, quiet.

Dark Blue: Credible, confident and dependable.

Silver: Elegant, cool, futuristic.

Boeing, Airbus face shortage of seats, toilets, espresso machines

Scott Deveau — Fri, 08 Aug 2008 13:04:00 GMT

Boeing and Airbus have both had their fair share of troubles in recent years, but yet another problem has arisen on the production lines of both manufacturers - a shortage of seats, toilets, espresso machines, and rice makers to complete their interiors, according to the Wall Street Journal [subscription required].

The newspaper reports that suppliers of these more mundane components have overcommited and failed to ramp up production adequately to meet the current upswing in aerospace production.

The result is that both manufacturers are not able to deliver their planes when they originally planned, and because most of the revenue is received on delivery, it is leading to earnings misses.

"The newly delayed planes -- such as the Boeing 777 and the Airbus A330 -- have sold for years and their assembly lines had been running smoothly until a few months ago," the WSJ reports.

Boeing missed its second-quarter earnings projections because three aircraft couldn't be delivered on time due to the unfinished interiors. Airbus has seen roughly 8% of its deliveries delayed because the problem, according to the report.

Scott Deveau

Chart of the day: Olympic profits

DrewHasselback — Fri, 08 Aug 2008 12:11:00 GMT

The Ice Caper continues

DrewHasselback — Thu, 07 Aug 2008 18:55:00 GMT

U.S. officials do not appear to have warm, fuzzy feelings about the bagged ice business.

U.S. federal prosecutors have recently expanded an on-going probe into North America's US$1.8-billion market for packaged ice. Recent media reports claim the FBI has wiretap evidence of the conspiracy.

A Canadian company, Winnipeg-based Arctic Glacier, was served with a subpoena earlier this year. A Financial Post story from last March said that Arctic Glacier was cooperating with U.S. authorities. It has not been charged with anything.

The fun expands beyond a mere government probe. The ice business has also attracted the attention of some U.S. tort lawyers who are trying to mount a class action anti-trust suit.

Drew Hasselback

Housing headed south: Merrill Lynch

Jamie Sturgeon — Thu, 07 Aug 2008 18:41:00 GMT

Canadians can expect a sustained downturn in the housing market from a combination of oversupply and overvalued home prices, says a new report from Merrill Lynch economist David Wolf released Thursday.

"The broad brush of indicators is consistent with a market entering a sustained cyclical downturn," Mr. Wolf said in the report, title Peaked: Canada's market in-depth. (for more on why, see here.)

The effect of the slowdown will be "broadly flat" appreciation in home prices ahead, with western Canada "most vulnerable to outright declines." In response, Mr. Wolf said homebuilding will pull back substantially over the medium term.

As a whole, home prices new and old alike haven't been this expensive in over 17 years — 1991, the report said. "We estimate that housing markets in Regina, Saskatoon, Vancouver, Victoria, Calgary, Edmonton, Sudbury and Montreal are all more than 10% overvalued," Mr. Wolf said.

"We don’t think we’re facing an outright bust, with Canada not having shared the worst of the credit excesses that set up crashes elsewhere, notably in the U.S.," the report said. "But it does look like Canadian houses finally got too expensive, and builders too aggressive, for the underlying demand environment."

The seizing up of both pricing and production will knock back economic growth as well as inflation, Mr. Wolf said. Softer residential investment could reduce annual growth domestic product by 0.6% by the end of next year, while cutting inflation by 0.5%.

Jamie Sturgeon

Chart of the day: Richest athletes

DrewHasselback — Thu, 07 Aug 2008 18:14:00 GMT

Remember when Olympic athletes were supposed to be amateurs? Not any more.

Farewell Frank and Gordon: Bell rebrands

Jamie Sturgeon — Thu, 07 Aug 2008 15:52:00 GMT

Frank and Gordon, the lovable spokesbeavers for Bell since the last Olympic Games in Turin, Italy, will not be making a return engagement in Beijing.

BCE Inc. will officially retire the furry duo on Friday when it launches a broad rebranding campaign that coincides with the opening ceremonies of the Beijing Olympic Games.

Armed with a completely redesigned logo and tagline — "Today just got better" — Bell is hoping the new campaign will position it as Canada's one-stop wireless, Internet and cable television shop.

"The new Bell brand underlines that we are moving forward as a company and as a service provider, with new services, a new strategy and a new goal," George Cope, BCE's chief executive said in a statement on Thursday. "It's a straightforward and customer-focused brand that directly supports the Bell team's goal: To be recognized by customers as Canada's leading communications company."

Gone too is Bell ExpressVu, which will be rebranded as Bell TV. The company's Web service, Bell Symptico will be replaced with Bell Internet, while Bell Residential becomes Bell Home Phone.

The campaign was hatched by Toronto-based ad agency Zulu Alpha Kilo, whose previous clients include BMW and Nike Inc.

Jamie Sturgeon

Barrick contest down to sweet 16

Peter Koven — Thu, 07 Aug 2008 15:15:00 GMT

Will anyone unlock the value for Barrick Gold Corp.? We don't know yet, but the field has narrowed considerably.

Barrick launched its "Unlock the Value" contest last fall. The company is having trouble extracting silver ore from its Veladero mine in Argentina (it is encased in silica), and it invited the scientific community to make proposals that could do the trick. The winners get $10-million.

Barrick received a whopping 238 submissions for its contest. The company said Thursday that contestants suggested using a wide variety of technologies, including microwave, laser, ultrasonics, electromagnetic, inorganic and organic chemistry, bioleaching and mechanics.

Of the 238 submissions, Barrick has selected 16 to move on to phase two of the program. The chosen few will now have to submit a "detailed, viable plan" to develop the concepts in their proposals. They have until September 30 to submit the plan. If Barrick thinks they still have potential, the remaining contestants will go to phase three, which is actual concept testing. Barrick will fund the research and development, and the process is expected to take two years or longer.

Peter Koven

TD's vice-chair of credit steps down

BarbaraShecter — Thu, 07 Aug 2008 14:58:00 GMT

John Gisborne, vice-chairmain of the credit products group at TD Securities, has left the investment banking arm of Toronto Dominion Bank.

"John has made a personal decision to step down from his position," Simone Philogene, a spokesperson for the bank, said on Thursday.

Mr. Gisborne, who joined TD Securities in 1998, was also on the investment bank's management committee.

Last month, TD, which had been relatively unscathed in the credit crisis, told investors it had "regrettably" discovered incorrectly priced financial instruments in its UK office that led to a pre-tax charge of $96-million.

A trader whose activities were associated with the error was let go at the time.

"Our company has a strong risk management culture and we deeply regret this incident," TD's chief executive Ed Clark said in a statement on July 4. "We take this very seriously and will make every effort to ensure that this doesn't happen again."

When asked whether Mr. Gisborne's departure was related to the UK incident, Ms. Philogene stressed that it was a personal decision, and said Mr. Gisborne will assist the bank "as we transition his responsibilities to a committee structure."

Barbara Shecter

Chart of the day: Brazil's bear market

DrewHasselback — Thu, 07 Aug 2008 10:39:00 GMT

Alaska Airlines, Horizon Air warn passengers of credit card scam

Scott Deveau — Wed, 06 Aug 2008 17:03:00 GMT

Alaska Airlines and Horizon Air notified roughly 1,500 of their customers Wednesday that their credit cards may have been misused by a former call centre employee.

The former employee is alleged to have taken the card information provided from some of the airlines' customers to pay for reservation changes.

Rather than process the payment on behalf of the airlines, the individual is alleged to have diverted the funds to their personal account.

The incidents are alleged to have occured between August 2006 and June 2008, and customers are not being held responsible for any repayments, the airlines said.

Scott Deveau

Bankruptcy protection for Mr. Bubble's maker

DrewHasselback — Wed, 06 Aug 2008 15:29:00 GMT

The bubble has burst for the maker of Mr. Bubble brand bubble bath.

Hamilton, N.J.-based Ascendia Brands has filed for Chapter 11 bankruptcy protection in the United States. The firm is clearly underwater, listing assets of about US$195-million with debts of about US$279-million.

Ascendia sells a range of health and beauty products, including Mr. Bubble. Court documents show that about 76% of the company's sales come from the United States. About 17% of the company's revenue comes from Canada, where Ascendia has a plant in Toronto and operates a subsidiary called Ascendia Brands (Canada) Ltd. The Canadian operations are not included by the Chapter 11 filing.

Sales from two brands, the healing garden and Calgon, have failed to live up to expectations, according to an affidavit sworn by Ascendia's chief restructuring officer, Douglas Booth: "Further, the Debtors' sales have been negatively impacted by general economic conditions, the highly competitive nature of the business sector in which the Debtors compete, rising raw material prices and the under-utllization of the Debtors' Binghamton and Toronto Plants."

The case is In re Ascendia Brands Inc, 08-11787, U.S. Bankruptcy Court, District of Delaware.

Xstrata takes a run at Lonmin

Peter Koven — Wed, 06 Aug 2008 15:05:00 GMT

Here we go again. Serial dealmaker Xstrata PLC (owner of Falconbridge Ltd.) has launched another major hostile takeover bid. This time the miner's target is Lonmin PLC, a producer of platinum and palladium in South Africa. The stock has performed poorly lately amid falling platinum prices, and Xstrata saw an opportunity and jumped in.

Xstrata plans to offer approximately US$10-billion for its London-based rival. While that would be a company-transforming deal for most miners, it ranks as little more than a bolt-on today for Xstrata, which has grown from nothing into a US$70-billion monster in just a handful of years through acquisitions.

Investors will be watching closely to see if Xstrata's gamble prompts a rival bid. There are two other platinum-producing giants working in South Africa, Anglo Platinum Ltd. and Impala Platinum, and either one could be interested in Lonmin. Russia's Norilsk Nickel is also a big platinum producer and may have some interest. While Xstrata is an acquisition machine, it is also very disciplined and has backed out of bidding wars before.

Lonmin called the Xstrata bid "entirely unwelcome." The shares jumped 45% Wednesday, rising slightly above Xstrata's offer price.

Peter Koven

Chart of the day: Betting on the Chinese banks

DrewHasselback — Wed, 06 Aug 2008 10:38:00 GMT