Toyota disputes critic who blames electronics (AP)

Monday, March 8th, 2010 | Finance News

WASHINGTON – Toyota gave detailed evidence Monday that it says disproves claims that electronics may cause the unwanted acceleration that led to the recall of more than 8 million cars and trucks.

Toyota was attempting to counter tests by an Illinois engineering professor who said Toyota engines could rev without a driver pressing on the gas. The automaker says mechanical problems, not electronics, are to blame.

Chris Gerdes, director of Stanford University's Center for Automotive Research, and a consulting firm, Exponent Inc., said the professor had tampered with wiring to create electronic glitches that could never occur on the road.

The professor's work "could result in misguided policy and unwarranted fear," Gerdes said.

The work of David W. Gilbert, an automotive technology professor at Southern Illinois University-Carbondale, has been the basis of many doubts that Toyota's mechanical fixes for unwanted acceleration will truly solve the problem.

Gilbert told a congressional hearing Feb. 23 that he recreated sudden acceleration in a Toyota Tundra by short-circuiting the electronics behind the gas pedal — without triggering any trouble codes in the truck's computer.

"We do not believe that electronics are at the root of this issue," Mike Michels, a Toyota spokesman, said during a demonstration at the automaker's North American headquarters in Torrance, Calif.

Toyota says faulty gas pedals and floor mats, not electronics, are the cause. It is fixing millions of vehicles to correct those problems. But some drivers have reported continued problems in vehicles that have already been supposedly fixed.

Federal safety regulators are investigating complaints over Toyota's repairs. Michels said the automaker is also reviewing the complaints, and that some were the result of bad repairs or other factors.

Gilbert told Congress he made a "startling discovery" that showed the electronic throttle control system could have a problem without producing a trouble code. The code sends the computer into a failsafe mode that allows the brake to override the gas.

House lawmakers seized on the testimony as evidence Toyota engineers missed a potential problem with the electronics that could have caused the unwanted acceleration.

According to Exponent, Gilbert connected sensor wires from the pedal of a 2010 Toyota Avalon to an engineered circuit, revving the engine without using the pedal. Gilbert demonstrated the method in an ABC News story last month.

Exponent said it reproduced the test on the same model year Avalon and a 2007 Camry and was able to rev the engine. But it concluded the electronic throttle system would have to be tampered with significantly to create the right conditions.

"Dr. Gilbert's scenario amounts to connecting the accelerator pedal sensors to an engineered circuit that would be highly unlikely to occur naturally, and that can only be contrived in a laboratory," an Exponent report said.

For example, Exponent said, Gilbert stripped wires in Toyota gas pedal systems of their insulation and used circuits to connect wires that were too far apart to touch each other.

Exponent said it also revved the engine of some Toyota competitors' cars using the same technique, including a Subaru Outback and a Ford Fusion. The automaker stressed its tests did not show any flaws with those models or its own cars.

Toyota's event Monday is part of a broad campaign by the world's biggest automaker to discredit critics, repair its damaged reputation and begin restoring trust in its vehicles.

On Friday, a congressional committee questioned Toyota's efforts to find the causes of the problems. It also questioned whether the company had sufficiently investigated the issue of electronic defects.

Toyota executives also will address recall issues at its annual suppliers meeting in Kentucky on Tuesday.

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ABC returns to Cablevision, but talks go on (AP)

Monday, March 8th, 2010 | Finance News

NEW YORK – Cablevision and ABC were negotiating a deal Monday that tentatively ended a dispute over fees and restored millions of viewers' access to the Academy Awards telecast in New York, New Jersey and Connecticut shortly after the broadcast began.

The two sides, who had been hammering at each other for days in the media, said a deal had been reached Sunday night, nearly 15 minutes into the Oscar awards broadcast.

Neither side released details about the deal, and it was unclear how permanent it would be.

Rebecca Campbell, president and general manager of WABC-TV, said the companies had "reached an agreement in principle."

"Given this movement, we're pleased to announce that ABC7 will return to Cablevision households while we work to complete our negotiations," she said in a statement.

Cablevision Systems Corp. spokesman Charles Schueler welcomed ABC's programming back to the cable operator's lineup and seemed to praise the deal.

"It is a deal that is fair to our customers and in line with our other programming agreements," he said.

A stalemate in the dispute had led ABC's parent company, the Walt Disney Co., to pull its programming from the cable operator's subscribers at midnight Saturday. The move, which imperiled viewers' access to the highly rated Oscar show broadcast, marked the first time in a decade that a major broadcast station went dark in a dispute with a cable company.

The signal was switched on at 8:43 p.m. Sunday, Cablevision said. The awards show began at 8:30 p.m.

Disney Chief Executive Bob Iger was seen in the Oscar audience, about a minute after Cablevision announced it had reached a deal to get the telecast on the air.

The cable operator's subscribers had been scrambling to hook up antennas or find live TV on the Internet to watch the Academy Awards after the signal was switched off.

The companies traded blame for the stalemate ahead of one of the most-watched nights of television.

"Cablevision has once again betrayed its subscribers," said Disney spokeswoman Charissa Gilmore. "Cablevision pocketed almost $8 billion last year, and now customers aren't getting what they pay for ... again."

The dispute is another example of how networks are struggling to find profits as advertising revenue dwindles and programming costs grow. Networks are transmitted freely over the airwaves, but expensive event programming has led the companies behind them to increasingly demand fees from cable TV and satellite operators for retransmitting those signals.

Cablevision had argued that Disney was seeking an additional $40 million a year in new fees, even though the company pays more than $200 million a year to Disney.

Disney countered that Cablevision charges customers $18 per month for basic broadcast signals but does not pass on any payment for ABC to Disney.

The dispute is similar to a standoff at the end of last year between News Corp. and Time Warner Cable over how much Fox television station signals were worth. That tussle, which threatened the college football bowl season and new episodes of "The Simpsons," was resolved without a signal interruption.

Cablevision also feuded with Scripps Networks Interactive Inc. in a January dispute that temporarily forced the Food Network and HGTV off the service. Neither side provided terms of an agreement that restored the channels after three weeks.

Disney was asking Cablevision to pay about $1 per subscriber per month, the same amount that News Corp. demanded from Time Warner in their dispute. Some analysts think News Corp. eventually accepted about 50 cents per subscriber.

Derek Baine, a senior analyst at SNL Kagan, said that if all four networks charged $1, that would total $4 a month in new fees. Most cable companies couldn't absorb that cost increase and would have a hard time passing them onto consumers, he said.

"That's a lot of money," Baine said. "They're just playing chicken here."

Disney's previous contract with Cablevision expired more than two years ago, but it was extended month by month as talks continued. Under previous arrangements, Disney gave away its ABC broadcast signal for free, a situation that most broadcasters are now trying to change.

WABC-TV is the most-watched TV station in the country, said Disney, which is based in Burbank, Calif.

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Contributing to this report were AP Business Writer Ryan Nakashima in Los Angeles and Associated Press writers Cristian Salazar in New York and Christopher S. Rugaber in Washington, D.C.

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World stocks up as US job data lift recovery hopes (AP)

Monday, March 8th, 2010 | Finance News

HONG KONG – World stock markets gained Monday as a better-than-expected report about the U.S. job market lifted confidence in the economic recovery.

Major Asian bourses added as much as 2 percent in the region's second day higher. The euro got a boost after France voiced support for debt-laden Greece, while oil prices pushed past $82 a barrel.

As in the U.S., investors in Asia welcomed Friday's news the U.S. economy shed fewer jobs than expected last month. Employers slashed 36,000 jobs last month, better than the 50,000 cuts predicted.

While still up from the 26,000 lost in January, the figures provided evidence the labor market, one of the most-watched gauges of economic health, was on the mend. The unemployment rate was unchanged at 9.7 percent.

"Employment is now very close to stabilizing, although eight months after the recession ended that is hardly a cause for celebration," researchers at Capital Economics said in note.

Investors were also encouraged after French President Nicolas Sarkozy promised European support for Greece through a debt crisis that has jeopardized all 16 nations in the common currency.

In Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were up by about 0.2 percent each. Wall Street futures pointed to a slightly higher open in the U.S. Monday.

Japan's Nikkei 225 stock average rose 216.96 points, or 2.1 percent, to 10,585.92 and Hong Kong's Hang Seng jumped 408.90 points, or 2 percent, to 21,196.87.

South Korea's Kospi added 1.6 percent. Elsewhere, Australia's market was up 0.9 percent, Shanghai shares gained 0.7 percent and Indian stocks were 0.6 percent higher.

In oil, benchmark crude for April delivery rose 53 cents to $82.03 a barrel. The contract rose $1.29 to settle at $81.50 on Friday.

The dollar was lower at 90.24 yen from 90.44 yen. The euro rose to $1.3676 from $1.3629.

Friday on Wall Street, the Dow rose 122.06, or 1.2 percent, to 10,566.20, its highest close since Jan. 20. It was the Dow's best point and percentage gain since Feb. 16.

The Standard & Poor's 500 index rose for a sixth straight day, rising 15.73, or 1.4 percent, to 1,138.70. The Nasdaq composite index added 34.04, or 1.5 percent, to 2,326.35.

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