Archive for January, 2010

Oregon voters OK tax hikes on wealthy, businesses (AP)

Tuesday, January 26th, 2010 | Finance News

PORTLAND, Ore. – Oregon voters approved two measures raising taxes on businesses and the wealthy Tuesday, averting budget cuts legislators said would have meant larger classes in the schools and less help for the poor and the elderly.

Both Measure 66, which raises rates on people earning well above six figures, and Measure 67, which increases business taxes had 54 percent approval. More than 80 percent of the vote had been counted.

It was a victory for public employee unions and the Democratic majorities in the Legislature that imposed the taxes last year, arguing that deep cuts in school aid and social services were the alternative.

It was a defeat for business groups who sponsored a referendum drive to put the taxes to a statewide vote, saying they would cost a state with 11 percent unemployment even more jobs.

The revenue from the new taxes, $727 million, is expected to account for about 5.5 percent of the general fund in the next two-year budget.

"We know now that Oregonians heard the message of what these measures were about — supporting the most vulnerable," said Elana Guiney, a spokeswoman for the pro-tax group Vote Yes for Oregon.

The most recent reports had labor outspending business in one of the state's most expensive issue campaigns. Common Cause of Oregon said Guiney's group raised $6.85 million to the $4.55 million raised by Oregonians Against Job-Killing Taxes.

"The bottom line is the unions bought the election," said State Republican Chairman Bob Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."

Passage of the measures spares the Legislature a month of budget-cutting when it starts a four-week session Monday.

"Even with this result, we still have some challenges before us," Gov. Ted Kulongoski said in a statement. "It is going to be a slow growth recovery from this recession for Oregon and the entire nation."

Approval of the two tax increases ran counter to the state's history of turning down tax increases.

But Democrats who have commanding majorities in the Legislature said they were careful to target the upper 2 percent of individual taxpayers and the businesses with the biggest sales, many headquartered out of state. The increases will be reflected in returns filed this year.

The state's top income tax of 9 percent rises to 10.8 percent on taxable income above 125,000 for single filers, $250,000 for joint filers, and to 11 percent for those with twice those amounts in taxable income.

Prominent among the business tax increases is one that affects many companies: The annual minimum $10 — unchanged since it was created in the 1930s — goes up to $150.

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Toyota halts US sales of Camry, 7 other models (AP)

Tuesday, January 26th, 2010 | Finance News

WASHINGTON – Toyota suspended U.S. sales of some of its most popular vehicles — including the best-selling car in America, the Camry — to fix sticking gas pedals that could make the cars accelerate without warning.

In another blow to the world's No. 1 automaker, Toyota Motor Corp. said Tuesday it would halt some production at six assembly plants beginning the week of Feb. 1 "to assess and coordinate activities."

The company said it would stop selling eight models of cars and trucks, a significant portion of its fleet. The suspension comes after a recall of the same models last week involving 2.3 million vehicles.

Toyota has said it was unaware of any accidents or injuries due to the pedal problems associated with the recall, but could not rule them out for sure.

"This action is necessary until a remedy is finalized," said Bob Carter, Toyota's group vice president and general manager.

The Japanese automaker said the sales suspension includes the following models: the 2009-2010 RAV4, the 2009-2010 Corolla, the 2007-2010 Camry, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.

Some dealers suggested taking vehicles to dealerships for inspections if people have safety concerns.

Aaron Bragman, an auto analyst for the consulting firm IHS Global Insight in Troy, Mich., said Toyota typically sells about 65,000 Camrys and Corollas a month, and the frozen sales could strike at the company's bottom line and reputation for quality.

"That's huge if they can't sell these and they don't have a fix identified. They need to go and get a solution to this fast," Bragman said.

Toyota sold more than 34,000 Camrys in December, making the midsize sedan America's best-selling car. It commands 3.4 percent of the U.S. market and sales rose 38 percent from a year earlier. Sales of the Corolla and Matrix, a small sedan and a hatchback, totaled 34,220 last month, making up 3.3 percent of the market and sales up nearly 55 percent from December of 2008.

Toyota spokesman Mike Michels said production would be suspended on the affected vehicle lines this week and it was unclear exactly when it would resume. In an e-mail to employees, company officials said, "we don't know yet how long this pause will last but we will make every effort to resume production soon."

Michels said engineers were trying to develop a fix as quickly as possible but he did not have a firm timeline on when the vehicle sales could resume.

Toyota shares were down 2.3 percent in early Tokyo trading at 3,780 yen.

The automaker said the move would affect plants in Princeton, Ind., Lafayette, Ind., Georgetown, Ky., San Antonio, Texas, and Cambridge, Ontario, and Woodstock, Ontario, in Canada.

Toyota spokesman Mike Goss said most workers were expected to be at their jobs during the assembly line shutdown. Workers will receive additional training or work on improvements to their assembly processes, but can also take vacation or unpaid leave, he said.

About 300 workers who build V8 engines at a Toyota plant in Huntsville, Ala., will be affected, said Stephanie Deemer, a spokeswoman for the plant. Goss said the shutdowns will also affect engine plants in Georgetown, Ky., and Buffalo, W.Va.

Toyota said no other North American Toyota facility would be affected by the decision.

Toyota dealers said they were concerned the move would hamper sales and were hopeful parts to fix the problem could be distributed quickly.

"They're going the extra mile to reassure people that they really care about the customers," said Earl Stewart, owner of a Toyota dealership in North Palm Beach, Fla. "It is something that's going to be at least a short-term hardship on the dealers, and especially on Toyota."

The auto company said the sales suspension wouldn't affect Lexus or Scion vehicles. Toyota said the Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, would remain for sale.

The announcement follows a larger recall months earlier of 4.2 million vehicles because of problems with gas pedals becoming trapped under floor mats, causing sudden acceleration. That problem was the cause of several crashes, including some fatalities.

About 1.7 million vehicles fall under both recalls.

Owners with questions can call the Toyota Customer Experience Center at (800) 331-4331.

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AP Auto Writer Tom Krisher in Detroit contributed to this report.

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Toyota halts US sales of 8 recalled vehicle models (AP)

Tuesday, January 26th, 2010 | Finance News

WASHINGTON – Toyota Motor Co. said Tuesday it was suspending U.S. sales of eight recalled vehicle models to fix accelerator pedals that stick, the latest quality problem to confront the world's No. 1 automaker.

As part of the plan, Toyota said it was halting production at five manufacturing facilities for the week of Feb. 1 "to assess and coordinate activities." There are 2.3 million vehicles involved in the recall, which was announced last week.

"This action is necessary until a remedy is finalized," said Bob Carter, Toyota's group vice president and general manager.

The Japanese automaker says the sales suspension includes the 2009-2010 RAV4, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.

It was unclear how long Toyota would suspend production of the vehicles. In an e-mail to employees, company officials said, "we don't know yet how long this pause will last but we will make every effort to resume production soon." Toyota officials did not immediately return phone messages.

Toyota said the company would stop producing vehicles at plants in Indiana, Kentucky, Texas and Canada. They said no other North American Toyota facility would be affected by the decision.

The auto company said the sales suspension would not affect Lexus or Scion vehicles. Toyota said the Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, would remain for sale.

Toyota said last week it was recalling 2.3 million vehicles in the U.S. to fix accelerator pedals with mechanical problems that could cause them to become stuck.

That announcement followed a larger recall months earlier of 4.2 million vehicles because of problems with gas pedals becoming trapped under floor mats, causing sudden acceleration. That problem was the cause of several crashes, including some fatalities.

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