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PepsiCo to Cut Salt, Fat, Sugar Content

admin — Mon, 22 Mar 2010 18:41:48 +0000

PepsiCo Inc. plans to cut the sodium found in each serving of its key brands by one-fourth in five years, the company announced Monday, as the industry deals with pressure from the government and health-conscious shoppers who want more options.

The maker of Frito-Lay chips and Pepsi drinks announced several nutrition goals Monday at the start of a two-day investor conference.

The company also set two goals for the next 10 years: to cut the average added sugar per serving by 25 percent and saturated fat per serving by 15 percent, in addition to adding more whole grains, fruits, vegetables and low-fat dairy into its array of products.

An array of food makers have announced similar goals recently as they come under more pressure from government and consumers. Last week Kraft Foods Inc. pledged to cut salt in its products sold in North America by an average of 10 percent over the next two years. ConAgra Foods Inc. and Campbell Soup Co. have also announced sodium cuts.

Many health leaders have urged food makers to reformulate their products to reduce salt. First Lady Michelle Obama has made the fight against childhood obesity a top priority. Last week she asked the nation’s largest food makers at a meeting of the Grocery Manufacturers Association to “step it up” and put less fat, salt and sugar in foods.

Michelle Obama to Food Giants: Cut the Fat

PepsiCo CEO Indra Nooyi told investors Monday that shoppers are focusing more on value amid the recession and on improving their health. She said governments around the world are exerting pressure to improve nutrition, but the company isn’t waiting for mandates.

“So we’re off doing our thing because the consumer is shifting,” she said at the event at Yankee Stadium.

Last week the company announced it would remove full-calorie, sweetened drinks from schools worldwide by 2012. Both PepsiCo, the world’s second-biggest soft drink maker, and No. 1 player Coca-Cola Co. adopted guidelines to stop selling sugary drinks in U.S. schools in 2006.

Future Uncertain for Fannie and Freddie

admin — Mon, 22 Mar 2010 18:22:36 +0000

Over the past 18 months, Washington has taken extraordinary steps to keep home loans available and affordable. That caused a tentative housing recovery last year. Home sales reversed their four-year descent, while prices stabilized.

One big reason: The government seized control of Fannie Mae and Freddie Mac, massive companies that purchase home loans, package them into investments and guarantee them against default. The price tag has been huge – $126 billion and growing.

Now comes the hard part: figuring out what to do next.

With the Obama administration largely mute on the issue, Congress will hold its first hearing Tuesday about how to restructure the mortgage system in the wake of the financial crisis.

Working out a new system is likely to take years. For the time being, the market is still resting on three government pillars: Fannie, Freddie and the Federal Housing Administration.

There has been plenty of talk in recent months about how to scale back reliance on those behemoths, which own or guarantee half of all mortgages.

Fannie and Freddie were effectively nationalized by regulators in September 2008, and their role in the marketplace has only grown since. Last year, they backed about 70 percent of all home loans, according to Inside Mortgage Finance, a trade publication. The duo also manage the Obama administration’s $75 billion loan modification program.

But the housing recovery remains too fragile and feeble for the government to step away. Even staunch free-market advocates who want to get rid of Fannie and Freddie in the long run don’t see that happening anytime soon.

“The first priority is we have to keep financing homes, and we don’t have a way to do that without Fannie and Freddie,” said Peter Wallison, a senior fellow at the conservative American Enterprise Institute. “We have to deal with the realities of where we are today.”

Since the government took over Fannie and Freddie, Obama officials have given few details on their long-term thinking, apart from saying that they want to delay a legislative proposal until next year.

“If we rushed it, the risk is we would not achieve enough and not get consensus on something sweeping enough,” Treasury Secretary Timothy Geithner told lawmakers recently.

Geithner, in testimony prepared for Tuesday’s hearing held by the House Financial Services Committee, added that such action should wait until “a time of greater market stability.” Obama officials also plan to seek public comment on a list of questions to be published next month.

The administration is “loath to talk about drastic reform to the system until there’s more evidence that the housing markets are not going to experience a severe double-dip,” said David Min, associate director for financial markets policy at the Center for American Progress, a liberal think tank. “If you talk about drastic changes, you’ll spook investors.”

On Capitol Hill, however, Republicans are impatient. They argue that the government’s push to expand homeownership through Fannie and Freddie was the main cause of the financial crisis. They are proposing to phase out Fannie and Freddie within four years.

“Something has to be done sooner rather than later, while there is some political will,” said Rep. Scott Garrett, a Republican.

If lawmakers wait too long to tackle Fannie and Freddie, he said, “we will have forgotten the problems that they caused.”

But powerful interests don’t want to rock the boat too hard. The National Association of Realtors is pushing to preserve Fannie and Freddie, but as nonprofit government authorities without private shareholders.

“The disruption in the marketplace by doing something too radical would be harmful” to the housing market and the economy, said Vince Malta, a San Francisco Realtor who is testifying at Tuesday’s hearing.

And those who want to eliminate Fannie and Freddie face another hurdle – investors are still nervous. They don’t want to buy mortgage securities that don’t carry a government guarantee – whether explicitly in the case of FHA or implicitly in the case of Fannie and Freddie.

In a recent speech, David Stevens, the FHA’s commissioner, recalled meeting a group of international bankers who “peppered me with questions – very difficult questions” about what the U.S. government was doing to bring back their trust.

They all have been burned, he noted, after buying mortgage securities with triple-A ratings that turned out to be junk.

“We are at the point right now,” Stevens said, “where no one trusts the American housing finance system.”

As Ford Sputtered, CEO Mulally Made $17.9M

admin — Mon, 22 Mar 2010 14:17:30 +0000

Ford Motor Co. President and CEO Alan Mulally made $17.9 million last year, about 1 percent more than the year before, as the company struggled through the worst U.S. auto sales market in decades, according to a calculation by The Associated Press based on government filings.

Mulally took a 30 percent pay cut last February, dropping his salary to $1.4 million, and he got no bonus for the second year in a row. But the value of his stock options and stock awards rose by 9 percent to more than $16 million as the market improved and Ford’s shares climbed later in the year.

Ford shares rose to a five-year high last week after Moody’s Investors Service upgraded the automaker’s debt and said Ford has the potential to improve its finances even further. Ford shares dropped 13 cents to $13.16 in early trading Monday.

Mulally’s compensation included $127,699 for use of a private jet. Ford spent $752,203 for Mulally’s air travel on corporate jets the year before, but it began the process of selling its corporate jets in 2009. Ford was unable to sell all five jets for a fair value, spokesman Mark Truby said, so it leased three to a charter service and still has two up for sale. Ford also paid $43,447 for Mulally’s security.

Mulally’s 30 percent salary cut also will be in effect this year. Ford Chairman Bill Ford Jr. is forgoing any salary or bonus until the company’s auto sector achieves full-year profitability, but he did receive $16.8 million in stock-based compensation for 2009.

Ford’s fortunes rose in 2009 even as U.S. industry sales slumped to a 26-year low. The automaker earned $2.7 billion in 2009, its first annual profit in four years. Unlike General Motors Co. and Chrysler Group, Ford avoided bankruptcy court and didn’t take government loans. As a result, Ford reaped goodwill from buyers and ended the year with its first U.S. market share increase since 1995.

Ford’s revenues fell by 14 percent in 2009, but the company benefited from $5.1 billion in cuts to manufacturing, engineering and advertising.

Mulally said 2009 was “pivotal” in Ford’s transformation, but that the company has significant work to do. The automaker, which took out big loans in 2006 to fund its restructuring, ended 2009 with $34.3 billion in debt. That puts Ford at a disadvantage to GM and Chrysler, which were able to shed debt in bankruptcy court.

Mulally’s salary has been a sticking point for the company’s factory workers, who rejected a new round of wage concessions in October. Many cited Mulally’s appearance before Congress in late 2008, when he told lawmakers he wouldn’t work for $1 a year as a symbolic gesture.

In late 2009, United Auto Workers members were further outraged when the company said it would restore merit raises and 401-K matches to white-collar workers, benefits that were cut when the company was in the midst of a financial crisis.

Ford also announced that it will hold its annual shareholders meeting on May 13 in Wilmington, Del.

The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year.

It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.

China’s State-Run Media Chastise Google

admin — Mon, 22 Mar 2010 14:16:22 +0000

China’s state-controlled media intensified criticism of Google on Monday, accusing the U.S. company of playing politics by threatening to shut down its China-based search engine.

Chinese news reports say Google Inc. is on the verge of making good on a threat to shutter its China site, Google.cn, because Beijing forces the Internet giant to censor search results.

Commentaries carried by Xinhua News Agency, the China Daily newspaper and other state media accused Google of harboring a political agenda and said the company must comply with local laws.

“Business is business. But when it involves political tricks, business will come to an end soon,” the China Daily wrote.

Editorial: “The Biggest Loser” (China Daily, 3.22.10)

Other recent commentaries also have skewered Google while skating over the censorship issue that rankles many Chinese, and the critical tone and timing of the editorial onslaught bore the hallmarks of a coordinated government campaign.

Duncan Clark, managing director of BDA China Ltd., a technology market research firm, said he was told by an official in the Shanghai government that Chinese newspaper editors were ordered last week to get on message. He declined to identify the official.

“The key for the government is to have their line reach the public and to placate the public on this,” Clark said. “So that’s what they’re doing with the editorials.”

The Internet, while heavily monitored, is the most freewheeling part of China’s tightly regulated media world. Google has said it would shutter the Chinese search engine unless the government allow the company to operate a relatively uncensored search engine – a demand that in essence would mean tearing down the so-called “Great Firewall” that the government uses to keep its citizens from finding politically sensitive information and images.

Since Google announced it was considering the shutdown in January, many Chinese have watched with dismay, disbelieving that Google would quit the lucrative China market over censorship yet at the same time unhappy about being reminded of the government’s continued heavy policing of the Internet.

The China Daily’s editorial, titled “The Biggest Loser,” said that Google and not China will suffer most if it goes – a good-riddance theme that ran through most of the editorials.

“Google’s curtain is falling. But in China’s progressing, booming search market of 350 million Web users, a fantastic play has just started,” the English-language Global Times newspaper said. “No one can afford to miss it.”

Popular Chinese blogger Wen Yunchao said the critiques were a sign that negotiations had broken down and that the government had no interest in finding a way to retain Google.cn.

He also said the opinions in the newspapers were shared by some ordinary Chinese who distrust Google’s explanation for wanting to leave.

“I don’t know the ratio but I am sure a lot of people will agree with these editorials,” said Wen. “I know plenty of people who felt this way before the editorials, particularly businesspeople who questioned Google’s explanation that this was a moral decision. They believe it was because Google had business problems.”

Wall Street Retreats on Greece Concerns

admin — Mon, 22 Mar 2010 13:22:20 +0000

Stock prices fell in early trading Monday as investors worry about Greece’s ability to repay debt and the potential consequences for the global economic recovery.

Reaction to the U.S. government’s passage of sweeping health care reform over the weekend will also be closely watched. The reform could have a far-reaching impact ranging from health insurers and drug makers to companies that provide employees with health benefits.

Overseas markets are falling because of concerns that Greece might not get the outside financial support it needs to help control its debt problems. India’s surprising decision to raise a key interest rate to fight inflation is also dragging down global markets.

The dollar strengthened against the euro and other currencies.

The decline Monday follows a drop Friday after the Greek debt worries returned to the forefront. Greece’s debt problems have dragged down the market off and on for nearly two months as the country tries to cut its budget and is looking for outside support.

Germany’s chancellor on Sunday said a bailout for Greece won’t be discussed at a European summit this week. Greece has said in recent days if other European countries do not provide support, it might turn to the International Monetary Fund for help.

Investors are worried that Greece and other European nations that use the euro, like Spain and Portugal, could struggle to recover as they try to pay down steep debt. That could upend a global economic recovery.

In early morning trading, the Dow Jones industrial average fell 28.41, or 0.3 percent, to 10,713.57. The Standard & Poor’s 500 index dropped 5.49, or 0.5 percent, to 1,154.41, while the Nasdaq composite index fell 10.07, or 0.4 percent, at 2,364.34.

There is also uncertainty surrounding the health care sector after the House of Representatives passed a contentious bill reforming the industry. The bill will now be sent to President Barack Obama to be approved in the coming days.

The sweeping reform will create near-universal medical coverage, extending benefits to 32 million uninsured Americans. However, many of the key points of the bill will not go into effect for several years.

Major stock indexes dropped Friday because of renewed concerns about Greece. The Dow fell 0.3 percent, while the S&P 500 dropped 0.5 percent.

Stocks had been rising steadily in recent weeks as investors grew more confident in an economic rebound following a string of economic reports that showed mild improvement.

There are no economic reports due out Monday that could provide a lift to the market. Reports on home sales, durable goods orders and weekly jobless claims are due out later in the week. The government will also provide its final reading on the nation’s gross domestic product from the fourth quarter.

Study: TV, Online Multitasking Up Sharply

admin — Mon, 22 Mar 2010 09:09:39 +0000

The amount of time people spend on the computer while watching TV is going up sharply.

The Nielsen Co. said Monday that people who multitask this way spent an average of three and a half hours doing so in December. That’s up sharply from the two hours, 29 minutes that Nielsen reported only six months earlier.

The percentage of TV viewers who do this isn’t going up that fast. That increased by 57 percent to 59 percent during the same period. But those who are doing it spend much more time at it.

Television executives have pointed to this trend to help explain why big events like the Oscars, Grammys and pro football playoffs have been doing so well in the ratings – people watching and making comments to their friends through social Web sites like Twitter and Facebook.

Nielsen attributed the continued rise in TV viewing to many factors: more convenience (such as DVR), a higher quality experience (high-def and flat-screen TVs) and the prevalence of digital delivery.

According to the study, most TV viewing continues to occur in primetime hours (8 – 11 p.m.) while most online video viewing lasts from about noon to 6 p.m., peaking at 4 p.m.

According to the study, in the fourth quarter of 2009:

-People over the age of 65 spent the most time watching traditional TV, with that demographic watching 47 hours a week.

-People aged 35-49 were the heaviest Internet users, going online six and a half hours a week. However, people aged 18-24 spent the most time watching video on the Internet: 39 minutes per week.

-People aged 12-17 spent the most time watching video on a mobile phone: 21 minutes per week.

As Ford Sputtered, CEO Mulally Made $17.9M

admin — Mon, 22 Mar 2010 09:07:05 +0000

Pay Czar to Check Firms for Undue Bonuses

admin — Mon, 22 Mar 2010 08:21:12 +0000

The Obama administration’s pay czar is launching a review of compensation for 25 top executives at all financial firms that received federal bailout money, according to three people familiar with the plan.

Kenneth Feinberg can seek to renegotiate any pay deemed not in the public’s interest but can’t forcibly recoup funds, government and banking industry officials told The Associated Press on Monday. Feinberg is to announce the review Tuesday, according to the officials, who requested anonymity because they weren’t authorized to discuss the plan publicly.

The review is required under the federal law that created Feinberg’s position. It will mainly focus on the 2008 pay awarded to five senior executives and the next 20 highest paid employees at 419 firms that benefited from the $700 billion Troubled Asset Relief Program. The companies will be asked to turn over compensation data paid to those employees through Feb. 17, 2009, according to the officials.

CEOs at many large banks gave up bonuses in 2008 amid sharp criticism of outsized Wall Street pay packages. Feinberg’s review will seek to determine whether other employees received pay deemed excessive or contrary to the public’s best interest.

But his authority will be far more limited than the power he had over seven companies deemed to have received what the government extraordinary taxpayer assistance. Since Citigroup Inc. and Bank of America Corp. repaid their bailouts, Feinberg now has direct oversight of GMAC, American International Group Inc., General Motors Co., Chrysler and Chrysler Financial.

Feinberg is also expected to announce 2010 pay packages for those companies on Tuesday.

Last month, Feinberg criticized as “outrageous” bonus payments totaling $100 million to AIG employees from the same unit that nearly toppled the firm. Feinberg was unable to stop the so-called retention bonuses, which were contractual obligations agreed upon before the insurer received a $180 billion federal rescue at the height of the financial crisis in late 2008.

In October, Feinberg ruled that the top 25 executives at companies receiving exceptional assistance from the bailout fund would have their pay capped in most cases at $500,000 for 2009. They were required to receive additional compensation in the form of company stock paid out over three years, to try to tie their performance to the fate of their companies.

Even before Feinberg’s decision, banks that had received billions in government aid to cope with the worst financial crisis since the Great Depression had been scrambling to repay the government so they could escape the TARP restrictions.

Still, the banks have been responding to criticism of their pay practices, paying more in stock that cannot be immediately sold rather than in cash.

More on Big Bonuses

“Pay Czar” to Probe Some Bonuses at Bailed Out Firms
Wall Street Doled $20B in Bonuses in 2009
Ken Feinberg on Holding the Purse Strings
Goldman CEO Blankfein Gets $9M Stock Bonus
New York AG Goes After Bank of America
AIG Bonuses Deemed “Outrageous” but Legal

Police: Driver Error Caused NY Prius Crash

admin — Mon, 22 Mar 2010 08:17:23 +0000

Police agree with regulators that driver error caused the crash of a Toyota Prius in the New York suburbs.

Capt. Anthony Marraccini said Monday there was no mechanical or electrical failure in the car.

He said Monday that the gas pedal was depressed all the way at the point of impact and that there was no sign of any application of the brake.

The finding concurs with U.S. safety regulators who said last week that the car’s computers showed the throttle was open and the brakes were not applied.

A 56-year-old housekeeper driving the 2005 Prius in Harrison on March 9 reported that it sped up on its own down a driveway despite her braking. It slammed into a stone wall, but she was not seriously hurt.

A recent spate of accidents involving Toyota’s Prius model has exacerbated scrutiny on the automaker, which has recalled more than 8 million cars since last fall because their gas pedals could become stuck or be held down by floor mats. The Prius hasn’t been recalled for sticky accelerators.

The Harrison investigation follows Toyota’s probe into the claims of a California driver who said he was unable to stop his runaway Prius on a freeway last week until a state trooper helped him. The company held a news conference Monday and said the driver’s account was substantially different from its findings.

Toyota said tests on James Sikes’ car showed its gas pedal, backup safety system and electronics were working fine. It was unable to replicate the stuck gas pedal that Sikes reported.

The automaker said Monday that it found owner James Sikes rapidly pressed the gas and brakes back and forth 250 times, the maximum amount of data that the car’s self-diagnostic system can collect. That account appears to contradict Sikes’ statements – backed by the California Highway Patrol – that he slammed the brakes, even lifting his buttocks off the seat.

Toyota officials said they believed Sikes hit the pedals lightly, which would have prevented a brake-override system from kicking in. Under the Prius design, engine power is cut if the brake pedal is pressed with moderate force.

Toyota stopped short of saying that Sikes fabricated his story.

“We have no opinion on his account, what he’s been saying, other than the scenario is not consistent with the technical findings,” Michels said at a news conference.

More on Toyota’s Troubles:

Complaints Over Fixed Toyotas Jump to 105
Toyota: Prius in NY Crash Yielding Data
Toyota Recall Spending Ranges in Billions
Toyota: Data Refutes Runaway Prius Story
NHTSA: We Can’t Explain Runaway Prius
Doubts Persist on Runaway Prius Story
Calif. Prius Driver’s Story Stirs Skeptics
Calif. Prosecutor Sues Toyota Over Defects

Dems Push Wall St. Overhaul to Full Vote

admin — Mon, 22 Mar 2010 07:27:09 +0000

The Senate Banking Committee has approved Democratic legislation overhauling Wall Street regulations on a party-line vote. The bill now goes to the Senate, where its prospects remain in doubt.

The committee vote Monday was 13-10.

The bill was written by Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut. It would give the government unprecedented powers to split up firms considered a threat to the economy, put together a council of regulators to watch for risks in the financial system and create an independent consumer watchdog.

Sen. Richard Shelby, the committee’s top Republican, said Republicans decided not to seek changes to the bill in committee. He said such an effort would not have been productive.