Toyota makes it look easy -- automaker races back in the black

Well, maybe that's why it pays to hire a good accountant. Toyota Motor Corp. announced Monday that it is profitable again despite being accused of safety lapses, paying millions of dollars in fines and being forced to recall millions of cars around the world. Toyota, the world's largest automaker, reported a profit of $1.2 billion in the first quarter of 2010 after losing millions of dollars in 2008 and 2009. “After taking over amid a storm, I wanted to do anything to avoid a third straight year in the red,” said Akio Toyoda, Toyota's president, according to the New York Times. Toyoda said the automaker had made "tough and anguishing decisions" to return to profitability, including cost-cutting and layoffs in Japan and in other countries where Toyota cars and trucks are manufactured. The company said it expected to make more than $3 billion this year as its worldwide sales surged, particularly in the United States and China. The rebound surely is good news for slumping U.S. automakers General Motors, Ford and Chrysler, if it reflects worldwide trends. GM and Chrysler borrowed billions of dollars from the U.S. and Canada to stay afloat during the global recession. But Toyota's good news could not completely obscure problems looming in the near future for the automaker. The U.S. National Highway Traffic Safety Administration announced this week that it was investigating the company's handling of a steering defect in its popular Tacoma truck after denying it for a year. “We’re still in a storm — there’s been no change on that front,” Toyoda said. “But from the storm, we’ve begun to see glimpses of sunny but faraway skies. I feel that we’re starting to approach safer waters.” Toyota still faces lawsuits from car buyers claiming injuries causes by acceleration problems and a series of shareholder suits. U.S. regulators also are considering imposing additional fines on the automaker, which paid a $16.4 million fine -- the largest permitted under U.S. law -- to the Transportation Department in April.

Toyota agrees to pay $16 million fine to U.S. regulators

So, what's up with Toyota? News that the Japanese automaker had agreed to pay a $16.4 million fine to U.S. regulators over sticky gas pedals in millions of its cars is Toyota Motor Corp. appears almost outrageously integral and honest, but that only makes things even weirder. Can anyone remember another time when a large, multinational corporation did the selfless thing in favor of its customers? Then again, can anyone remember another high-profile industrial company that so quickly ruined a sterling reputation it had earned over the years with high-quality products? Maybe Toyota's decision to pay the fine and focus instead on fixing millions of its cars and compensating victims really is an act of corporate contrition, and not a calculated attempt to limit future liability like we've all come to expect from U.S. companies. Then again, Toyota's present liabilities are bad enough. Legal experts say Toyota already could be facing $10 billion in damage claims, according to the New York Times. The U.S. fine was imposed to punish Toyota for failing to inform federal safety regulators for months about the sticky accelerator problem, even though it already had enough reports about the problem from car owners in Europe and Canada to have started fixing vehicles there, the Times said. "We did not try to hide the defect to avoid dealing with a safety problem," Toyota said in a written statement, even though that appears to be exactly what happened. Toyota said it had made a "good faith" effort to fix the problems but agreed to pay the penalty anyway to avoid a long legal fight. U.S. Transportation Secretary Ray LaHood said Toyota had put consumers at risk by failing to report the defective accelerator pedal problem and that U.S. officials would continue with their investigation, the Times said.

Pope Benedict's apology for clergy abuses of children draws fire

OK, it's a virtually impossible situation for the guy. He's the head of the largest denomination of Christianity, the world's largest religion -- he's the head of state of his own country, the Vatican -- and now he's being forced to apologize for inexcusable misconduct committed by scores of his top officials. But having been forced into this clearly unenviable position, wouldn't you expect Pope Benedict XVI to try to answer the obvious questions and address the most grievous wrongdoing, so he won't be back here, apologizing again, in another six months? Yet the pope, in an eight-page apology letter to the people of Ireland, apologized for suffering caused by pedophile priests at Catholic dioceses and seminaries and called for an official inquiry, but failed to call on bishops to resign or address the still-unfolding abuse scandal in countries across Europe, according to the Reuters international news service. "You have suffered grievously and I am truly sorry ... I openly express the shame and remorse that we all feel," Benedict's letter said. "I can only share in the dismay and sense of betrayal that so many of you have experienced on learning of these sinful and criminal acts and the way the Church authorities in Ireland dealt with them." The letter is a response to an Irish government report on widespread abuse of children by priests in Ireland between 1979 and 2004, which said the church there had tried "obsessively" to conceal the truth, Reuters said. "Grave errors of judgment were made and failures of leadership occurred. All this has seriously undermined your credibility and effectiveness," Benedict's report said. "Only decisive action carried out with complete honesty and transparency will restore the respect and goodwill of the Irish people toward the Church." Abuse cases have also been reported in Germany, the pope's native country, Switzerland, Austria and the Netherlands, France, England and Poland in Europe, as well as earlier in the United States, Australia and Canada, Reuters said. Similar scandals in the United States did serious damage to the reputation of the Catholic Church, which paid $2 billion in settlements. "I had high hopes for this pastoral letter," San Bartley, president of Voice of the Faithful, a group formed in 2002 in response to abuse cases in Boston, told Reuters. "I see now the Church still refuses to hold accountable bishops who endanger children."

World's richest nations plan economic recovery

Maybe the worldwide recession actually is over. The world's eight richest nations ended two days of talks Saturday in Italy to plan for the expected worldwide economic recovery, according to the Reuters international news service. Or maybe the recession is about to be over for them. Meeting in Lecce, finance ministers of the world's eight richest nations began getting ready for the end of stimulus programs propping up their economies. "The force of the economic storm is receding," U.S. Treasury Secretary Timothy Geithner said as the Group of Eight meeting concluded. "There are encouraging signs of stabilization across many economies." Ministers agreed that the stimulus programs would not be ending anytime soon, however, and also agreed to ask the International Monetary Fund to help them figure out the best way to bring the programs to a conclusion. But there appeared to be sharp disagreement on how to roll back stimulus spending plans and how to stress-test each country's banks, Reuters said. In fact, Russian finance minister Alexei Kudrin called the meeting "stormy" since there were major arguments about what stage the crisis had reached. Conservative nations like Germany and Canada are pressuring other G8 nations to end stimulus programs to keep interest rates from rising too rapidly once the recovery takes hold. But Geithner said the United States would probably not be tightening monetary policy anytime soon. "It is too early to shift toward policy restraint," he told the ministers. Reuters said a G8 source who did not want to be named said the IMF report would likely be presented in October at the fund's annual meeting in Istanbul. Private sector economists do not expect tightening of fiscal and monetary policy before next year, Reuters said. The other G8 nations are Japan, Britain, France and Italy.

New era of capitalism deepens -- Chrysler sale OK'd by high court

The new post-financial system collapse era of American capitalism took off in earnest today when the U.S. Supreme Court lifted its stay and cleared the way for Chrysler Corp. to be acquired by its union and Fiat, the Italian automaker. According to Cable News Network (CNN), the high court voted to turn down an appeal by Indiana state pension funds that had challenged the complex deal, removing the last impediment to the White House-backed sale. The court had delayed the sale Monday, apparently to review last-minute filings from the parties. The ruling means Chrysler, for decades the third-largest U.S. automaker, will emerge from bankruptcy owned primarily (55 percent) by the United Auto Workers trust with minority ownership (20 percent) by Fiat. The governments of the United States and Canada also will own smaller stakes, CNN said. "We are delighted that the Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker," the White House said after the Supreme Court order, according to CNN. The quick action by the high court was vital to avoid Chrysler's liquidation, CNN said, because the automaker had shut down operations after its bankruptcy filing last month and was losing $100 million a day.

"Racism" conference is no place for democratic nations

Word from the U.S. State Department today that Washington will not participate in next week's U.N. conference on racism is a step forward, not backward, for settling international conflicts. On the surface, it would appear that more engagement would be the best thing. But Democratic nations that value honesty and integrity should have nothing to do with this meeting, which the United Nations is convening to try to repair the damage from the last racism conference in 2005 in Durban, South Africa, according to the Reuters international news service. "With regret, the United States will not join the review conference," State Department spokesman Robert Wood said today, putting an end to deliberations inside the new Obama administration about whether or not to attend the conference, known as Durban II. The United States and Israel walked out of the 2005 conference after Arab states proposed a declaration defining Zionism, the Jewish statehood movement that led to the creation of Israel, as racism. Months of negotiations over the wording of the first Durban II statement failed to get offending language removed, Reuters said, after Arab nations added language barring "defamation of religion," a reference to the 2006 controversy over cartoons about the Prophet Muhammad that were published in a Danish newspaper. Wood indicated that the United States saw the addition of that language as an effort to restrict free speech. But a draft statement that removed all references to Israel and to the cartoon controversy also was found wanting, Wood said, possibly because Iran's virulantly anti-Israel leader, Mahmoud Ahmedinejad, was scheduled as the conference's keynote speaker. Canada has also said it will boycott the conference to avoid a repeat of the "Israel-bashing" from the last conference, Reuters said. The European Union is still deliberating whether to attend, Reuters said.