Archive for March, 2010

Obama to sign student loan legislation in Virginia (AP)

Tuesday, March 30th, 2010 | Finance News

WASHINGTON – President Barack Obama prepared Tuesday to sign the piece of his sweeping health care overhaul that makes the government the primary lender to students and strips banks of that power.

Obama's hard-fought legislative victory packaged two of his domestic priorities. Obama already signed the bulk of the health care legislation, but a final set of tweaks provided a route for the education package, the largest rewrite of federal college assistance programs in four decades.

The legislation has a wide reach. About half of undergraduates receive federal student aid and about 8.5 million students are going to college with the help of Pell Grants.

Under the measure, private banks would no longer get fees for acting as middlemen in federal student loans. The government would use the savings to boost Pell Grants and make it easier for some workers to repay their student loans. In addition, some borrowers could see lower interest rates and higher approval rates on student loans.

Obama has touted the changes as a way to make college more affordable for students and their debt load more manageable after graduation. He used his weekend radio and Internet address to cite expected benefits for young people: more student lending, caps on those repayments and more money for minority colleges and universities.

"This reform of the federal student loan programs will save taxpayers $68 billion over the next decade," Obama said in his weekly address. "And with this legislation, we're putting that money to use achieving a goal I set for America: By the end of this decade, we will once again have the highest proportion of college graduates in the world."

The plan caps student loan repayment at 10 percent of a graduate's income when the law takes effect in 2014.


Toyota promises quicker response on quality issues (AP)

Monday, March 29th, 2010 | Finance News

TOYOTA, Japan – Toyota promised Tuesday to respond faster to customer complaints as it held its first meeting of a committee of quality experts set up to help salvage a reputation battered by massive recalls and reports of runaway vehicles.

Toyota Motor Corp. appointed chief quality officers in key regions — including North America — where the biggest problems have surfaced to convey customer complaints quickly to its headquarters. It promised to include outside experts in evaluating quality measures.

"Listening to consumer voices is most important in regaining credibility from our customers," said Toyota President Akio Toyoda at a news conference after the quality committee met. "We are setting up a system to respond more quickly to complaints."

The quality committee meeting brought together 70 executives and autoworkers from Toyota's global operations at the automaker's headquarters in central Japan.

At the news conference, Toyoda said the company needs to listen more carefully to proposals for better quality, including what drivers are saying.

The company said the quality committee will issue its first report in June and will meet regularly to exchange insight and tackle safety issues.

Also Tuesday, Toyota said it will add a brake override — a system that allows the brakes to work if they are pressed together with the accelerator — to new models starting this year. That follows reports in the United States of vehicles speeding up on their own.

Under an effort to beef up quality checks, Toyota said it will set up four additional facilities to train employees in quality controls — in North America, China, Europe and Southeast Asia — modeled after the training center it already has in Japan.

The company said it will expand the use of "black box" data recorders that can help analyze the causes of accidents and speed up communication among quality control teams to make faster decisions on recalls.

Toyota has recalled more than 8 million vehicles around the world since October for defective gas pedals, faulty floor mats and braking software glitches. Most of them have been in the U.S., where Toyota sales fell 9 percent in February, according to Autodata Corp.

Toyota showed reporters its facilities at headquarters, which are designed to check on possible defects in vehicles and parts targeted in consumer complaints.

Among the tests were an X-ray machine that presented three-dimensional computer imagery, an area that simulated heavy rains with water squirting from 400 nozzles, and a room that got both freezing cold and steaming hot to check how vehicles react under extreme weather conditions.

The media tour was intended to illustrate the hard work at the automaker to ensure quality control and respond to driver complaints. Toyoda has acknowledged that the company may have failed to be as quick or responsive as consumers would have liked about defects, especially overseas.

Toyota's North American sales appear to be recovering this month. Toyota, which generally does not offer big incentives, has begun offering zero-percent financing deals on some models in the U.S. to bring customers back into showrooms.

Toyota's bottom line is expected to suffer, perhaps by billions of dollars, from a spate of lawsuits being filed by consumers, including some who say they suffered damages from defective Toyota vehicles.

Toyota's reputation has suffered from reports in the U.S. of vehicles speeding up on their own.

After the crash of a Prius hybrid in New York this month, police said the driver, not the car, was to blame. Officials are investigating another Prius that reportedly accelerated on its own in California.


Asia stocks gain after US consumer spending report (AP)

Monday, March 29th, 2010 | Finance News

HONG KONG – Asian stock markets gained modestly early Tuesday after a report showing U.S. consumers continued to spend last month buoyed optimism about growth in the world's largest economy.

The dollar slipped against the yen and was little changed against the euro, and oil prices hovered above $82 a barrel.

Helping sentiment were overnight gains in the U.S., where Wall Street was boosted by news that consumer spending rose for a fifth straight month in February. Consumers' spending is by far the biggest source of economic activity in the U.S. and drives Asian export demand, and the 0.3 percent rise added to hopes they are regaining confidence.

Japan's Nikkei 225 stock average rose 51.61 points, or 0.5 percent, to 11,038.08, and South Korea's Kospi was up 8.54 points, or 0.5 percent, at 1,700.53. Hong Kong's Hang Seng index rose 122.55, or 0.6 percent, to 21,357.21.

Elsewhere, markets in Taiwan and Singapore rose. Shanghai was off 0.1 percent.

In currencies, the dollar was trading at 92.30 yen from 92.51 yen. The euro was flat at $1.3477.

The benchmark oil contract was flat at $82.17 a barrel.

Investors were also keeping watch over Greece's debt crisis, with the good news of a bailout plan offset by caution about the details.

The debt-strapped Greek government raised $6.74 billion Monday by issuing seven-year bonds. The country's ability to borrow is an important sign of confidence after European leaders and the International Monetary Fund last week agreed to provide a financial safety net for Greece and other countries that use the euro if they couldn't issue debt.

In the U.S. on Monday, the Dow rose 45.50, or 0.4 percent, to 10,895.86. The index is at its highest level since September 2008 and closer to the psychological threshold of 11,000.

The broader Standard & Poor's 500 index rose 6.63, or 0.6 percent, to 1,173.22, and the Nasdaq composite index rose 9.23, or 0.4 percent, to 2,404.36.