Business and Finance

LaGuardia Airport is the smallest of the three major airports in the New York area, with just two main runways. Planes often sit in long lines on the tarmac, waiting their turn to take off.

So why would Southwest Airlines, a carrier that boasts about its on-time prowess, want to go there? In many ways, because it has to.

Southwest prospered by offering low fares to leisure travelers whose only other affordable option was a car trip. It flew primarily to America’s secondary airports where costs are low and productivity is high because incoming planes can land, drop off passengers, take on the next group and get back in the air quickly.

Today, Southwest starts service at LaGuardia, one of the nation’s most congested airports. This should bring cheaper ticket prices to New York area vacationers flying to Chicago, Baltimore and beyond. But the move is also part of a risky transition to win the loyalty of business travelers who increasingly will dictate Southwest’s future prospects for success.

Southwest started flying in 1971 with three planes. Herb Kelleher, the garrulous, chain-smoking co-founder, fought in court and in the air against bigger airlines that tried to run him out of business.

Southwest didn’t offer the amenities found on other airlines, but it outlived early rivals by sticking to a core philosophy: Give people low fares and great service.

The Dallas-based carrier still sees itself as an underdog today, even as it serves 65 cities, including St. Louis, and carries more than 100 million U.S. passengers per year, more than any other airline.

There are still no first-class cabins and no assigned seats on Southwest, giving it the air of a carrier for penny-pinching vacationers.

"We’re very dependent on business travelers, so we’re not a leisure airline like some of our smaller competitors are," CEO Gary C. Kelly countered in an interview. He says company surveys show that in normal times at least 40 percent of his customers are traveling on business.

Airlines covet business travelers because they make repeat trips and often pay higher fares for booking at the last minute low cost car insurance.

Southwest needs that revenue now. The airline has been profitable for 36 straight years but has been in the red since last fall. Traffic is down and costs are rising.

While it’s cutting flights across its system, Southwest is also entering New York and three other big cities, including Boston’s Logan Airport.

Kelly has been fine-tuning the Southwest model since becoming CEO in 2004. In pursuit of business travelers, he bent the traditional "first come, first serve" seating rules with "Business Select." Passengers pay a few bucks more to get a spot at the front of the boarding line, an extra frequent-flier award and a free drink. He also pushed Southwest into the kind of huge airports it once spurned, such as Denver and Philadelphia.

Now it needs the big Eastern cities to buttress its service at Chicago’s Midway Airport, Southwest’s second-busiest hub, with more than 200 daily flights.

Despite the notorious delays in New York, Southwest officials believe they can turn around incoming planes in 30 minutes, close to its nationwide average. That’s important because Southwest keeps costs down by getting the most use out of its planes — on average, they make six flights and spend 12 hours in the air each day.

The New York-Chicago route pits Southwest against long-standing rivals American and United, which have many more daily flights between the two cities.

Southwest officials brag about forcing competitors to cut fares. In 1993, government analysts called this phenomenon "The Southwest Effect." Fare experts say Southwest still strongly influences ticket prices in markets it enters.

Rick Seaney, chief executive of FareCompare.com, studied fares in Denver before and after Southwest returned to the market in January 2006. He said United, then the dominant carrier there, cut its average cheapest round-trip fare out of Denver by one-third in the first year after Southwest said it would serve the same airport.

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The Federal Reserve Bank of St. Louis named Christopher J. Waller senior vice president and director of research and Robert H. Rasch executive vice president and senior policy adviser.

Sachs Electric promoted Joseph T. Barnard to vice president, Sachs Select.

The Vandiver Group added Mike Amelung as Web developer and Kanna Taylor as a team member.

Evans & Dixon hired Eric Kukowski as of counsel in the workers’ compensation practice group.

Consolidated Design & Construction added Jessica Williams as a designer.

John R. Shivers III joined Pulaski Bank as assistant vice president and business development officer in the Florissant office.

The Sisters of Mercy Health System named Judy Akins vice president of marketing and Barb Meyer vice president of corporate communications.

Jay Wolfe Toyota hired Gerry Hogan as new-car sales manager.

Fitness Showcase promoted Rick Vemmer to president, Tammy Hauk to secretary-treasurer and Shawn Hannagan to director of sales.

Glik’s added Ashley Smith as senior assistant buyer of junior tops and dresses.

Gorman & Gorman Home Loans appointed Michelle Kuehn as processor/closer payday loans lenders.

Marketicity added Stacey Rynders as communications strategist.

Heartland Bank hired Melissa R. Wilson as senior vice president, wealth management/retail services.

Briarcrest added Theresa Rein as regional sales leader for Holiday Retirement’s Midwest operations.

Husch Blackwell Sanders added Brett D. Siglin as an associate in the banking and finance department.

Spencer Fane Britt & Browne named Thomas E. Osterholt, Jr. managing partner in St. Louis.

Weekends Only promoted David Lay as assistant manager of its Affton store.

Mark Steiner was appointed as an account executive for Eastern Missouri for Tension Envelope.

Clean The Uniform Co. named Lisa Hawthorne as customer service representative.

Compiled by Matt Fernandes

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Dr. John P. Lynch was named vice-president and chief medical officer at Barnes-Jewish Hospital. He will assume his new post on July 1.

Lynch, a faculty member of Washington University School of Medicine, has been on staff at Barnes-Jewish Hospital since 1995.

Lynch is board certified in internal medicine, pulmonary medicine and critical care medicine, as well as being a Fellow of the American College of Physicians quick payday loan.

Lynch received his medical degree from Georgetown University. He completed his residency at the former Barnes Hospital and a fellowship in pulmonary and critical care medicine at Washington University School of Medicine.

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Many Ontario residents will pay the lowest natural gas prices in nine years this summer.

Regulated utility Enbridge Gas Distribution will charge 14.68 cents per cubic metre for gas supplies during the three months starting July 1, down from 17.38 cents.

The Ontario Energy Board has just approved a further 3.14 cent reduction in the base gas rate to 20.4 cents per cubic metre, plus a refund equivalent to 5 affordable medicare health insurance.72 cents a cubic metre over nine months.

The average Enbridge customer would pay about $1,050 for gas, delivery and service charges over the year if rates held steady versus $1,790 if charges had not declined from those approved a year ago.

James Daw

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Stunned silence, groans of recognition and occasional laughter greeted the disappointing data and frank talk yesterday about women and the glass ceiling on Bay Street.

While Canada’s banks have made progress promoting women in their other lines of business, in the rough-and-tumble world of stock and bond trading and private wealth management, they have made "virtually no gains," a study shows.

Part of the problem is the industry’s lingering image as dominated by a "cigar-chomping group of men" where everyone works 15-hour days, Lynn Kennedy, managing director of foreign exchange for BMO Capital Markets, told a blue-chip luncheon at the King Edward Hotel, where the report was released yesterday.

The idea women need to network after office hours to get ahead is probably overrated, Kennedy added. "In those networks, I think we think a lot more goes on than actually does," she said to a burst of laughter. "I like to think I’m recognized for what I do during the day."

Still, stunned silence greeted the revelation that the latest study by Catalyst Canada found women have made no progress even as employment in capital markets at the management level grew 12 per cent to 16,300 during an eight-year period ending in April 2008.

Despite the stated support of senior bank executives, women remained stuck at 17 per cent of all senior managers, those with jobs that lead to a shot at the corner office, the study found. They made up 21 per cent of all middle managers. Even when support staff are taken into account, women make up just 40 per cent of employees.

"To say we are reporting progress would be overstating the data and before you blame the recession, the data was collected before it began," said Catalyst Canada vice-president Deborah Gillis cash advance lenders.

"The truth is women have made virtually no gains," she added, sparking audible groans from an audience of 250 men and women who work in the capital markets industry. "There is still no one holding the title of chairman, president or chief executive officer."

Indeed, women may have lost ground since the credit crunch that began in the United States sparked a global financial meltdown and sweeping layoffs in the investment industry, the study’s main client said in an earlier interview.

"We don’t even know the impact of the enormous financial crisis. It’s a huge concern for me," said Martha Fell, chief executive officer of Women in Capital Markets.

There is debate in some circles that more women at the top would have prevented the kind of testosterone-fuelled risk-taking that caused the financial crisis, Fell added. "I’m not saying I agree with that, but it makes you stop and think."

Catalyst Canada has long argued that presenting the data would lead to change and Fell said she is personally convinced that’s the case.

However, she acknowledged in an interview the fact that four highly publicized studies of women in capital markets in eight years have produced little change raises disturbing questions.

"How the heck is this possible? Everything we’re doing suggests we should have moved the dial by now," said Fell, whose non-profit advocacy group works with women to help them get ahead.

At least one bank, TD Financial Group, defended its record, saying women had made good progress in its other lines of business.

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NEW YORK–A number of executives of banks that received bailout money from the U.S. government have continued to use corporate jets for personal use despite controversy over such perks, according to a report yesterday.

The Wall Street Journal said flight records show that executives at Regions Financial Corp., Bank of America Corp., Morgan Stanley and Citigroup Inc. had used corporate jets for personal use throughout the financial crisis. The Journal reviewed Federal Aviation Administration flight records of 14 federally aided banks that register planes in their own names.

Bank of America spokesman Scott Silvestri said the Charlotte, N.C.-based bank is currently implementing a new policy under which personal use of corporate aircraft will not be permitted.

Citigroup’s policy restricts personal use of company-owned planes to a limited number of executives, "who are encouraged to fly commercial whenever possible to reduce expenses," spokesman Stephen Cohen said.

Calls to Regions Financial and Morgan Stanley were not returned business cards printing.

The use of corporate jets has become controversial during the credit crisis as critics question the cost of owning and operating the aircraft, especially for businesses receiving government help.

In November, executives of automakers Ford Motor Co., General Motors Corp. and Chrysler LLC were sharply criticized for flying on corporate jets to Washington to ask Congress for federal bailout money.

Earlier this year, the administration of President Barack Obama expressed displeasure over Citigroup’s plans to buy a new corporate jet after receiving $45 billion (U.S.) in bailout money, and the bank cancelled the order.

The Journal noted other banks have curbed or halted the use of company planes for personal use, including Marshall & Ilsley Corp. and Synovus Financial Corp.

Associated Press

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NEW YORK — Children across the country were left crying for their cookie dough Friday after Nestle recalled all of its Toll House refrigerated cookie dough products. The recall comes after dozens of people were sicked by consuming the dough the way many kiddies — and some adults — like to eat it, raw.

The federal Centers for Disease Control said its preliminary investigation shows "a strong association" between eating raw refrigerated cookie dough made by Nestle and the illnesses of 65 people in 29 states whose lab results have turned up E. coli bacteria since March.

About 25 of those people have been hospitalized, but no one has died online payday loans. E. coli is a potentially deadly bacterium that can cause bloody diarrhea, dehydration and, in the most severe cases, kidney failure.

Nestle USA voluntarily recalled all of its Toll House refrigerated cookie dough products after the Food and Drug Administration advised consumers to throw away any Nestle Toll House cookie dough products in their homes and asked retailers, restaurateurs and other food-service operations not to sell or serve any of the refrigerated cookie dough products.

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Chief executives of some banks that received federal money, including Bank of America Corp, Morgan Stanley and Regions Financial Corp, used company jets for their personal use, the Wall Street Journal reported on its website.

Flight records showed many occasions when banks receiving federal money flew their planes to destinations near resorts or executives’ vacation homes in Europe, Mexico, the Caribbean, south Florida and Aspen, according to the paper.

“We are implementing a new policy in 2009, under which personal use of aircraft will not be permitted,” a Bank of America spokesman told the paper, but declined to comment on specific trips.

In some cases, it was clear that bank executives were traveling for personal reasons; for other flights, many of which were over weekends or holidays, the passengers and purpose couldn’t be established, the paper added cash loans.

A spokesman for Morgan Stanley declined to comment to the paper on individual flights, but said its policy was to allow CEO John Mack personal use of corporate jets, with the cost “fully disclosed” in annual proxy filings.

A Regions spokesman also declined to comment to the paper on the trip or the cost estimate, but said all travel on company jets “either for personal or business was within our policy.”

The banks could not be immediately reached for comment by Reuters.

(Reporting by Chakradhar Adusumilli in Bangalore, Editing by Ian Geoghegan)

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The good news — that some workers at Granite City Works would return this week — came swiftly and unexpectedly. Almost as suddenly as news of the steel mill’s idling did six months ago.

An improvement in demand, only in recent weeks, indicates the worst may be over for the domestic steel industry, which has undergone plant idlings, mass layoffs and dramatic uncertainty since late last year. But analysts say it will take years to rebound to last year’s production levels.

"This is not going to be a rapid start-up" for the industry, said John Anton, a Washington-based steel analyst for IHS Global Insight.

That also means no rapid start-up at United States Steel Corp., one of the country’s largest steelmakers and the owner of Granite City Works.

On Friday, U.S. Steel told local union officials that orders looked strong enough to restart an iron-making furnace and some coil-making operations.

About 100 steelworkers will return to the plant this week, according to Dave Dowling, a local subdistrict director for the United Steelworkers. More are expected to return in following weeks.

But the good news was tempered by the fact that U.S. Steel temporarily idled most of its Fairfield Works steel mill in Birmingham, Ala., last month. Analysts didn’t know why U.S. Steel chose to restart operations at Granite City versus Fairfield or other idled mills, though one suggested product mix as a possible reason.

Despite the recent bout of uncertainty, the steel industry will soon need to make more steel, analysts say.

Steelmakers cut production when manufacturers cut orders and instead relied on pent-up inventory to meet demand. Now that inventory has dwindled to the point where it "can’t go down any more," Anton said.

"Part of what you’re having is a recovery toward equilibrium," he said.

CUTS AND COMEBACKS

Granite City Works, one of Granite City’s largest employers, makes steel used in construction, automobiles and other industries. When the recession and tough credit conditions hurt those industries, demand for steel plummeted.

U.S. Steel and other steel companies idled plants, laid off workers and slashed production. At Granite City Works, U.S. Steel halted its steel-making operations in December and laid off about 1,600 workers.

An additional 390 union and nonunion workers were laid off in February. That’s when U.S. Steel temporarily stopped production of coke, a key steel-making ingredient that it had been stockpiling.

In recent months, a crew of fewer than 200 workers has worked at the plant.

Other plants — not only those owned by U.S. Steel but also its competitors — have been idled, too. Capacity utilization, or how much the industry actually produces versus what it has the ability to produce, has been around 48 percent in recent weeks, according to data from the American Iron and Steel Institute in Washington.

It hovered around 90 percent in June 2008.

U.S. Steel now is taking the first steps toward restarting the local mill.

At Granite City Works this week, workers will prepare a blast furnace to go back online.

The blast furnace is an important part of the steel-making process. Huge ovens heat coal to make coke, which is then fed into the furnace to extract iron, the basic ingredient for steel, from iron ore creditreport.

The restart of the furnace indicates other production preparations will follow, said Michael Locker, president of Locker Associates, a New York-based consulting firm that specializes in steel.

"It’s expensive and it’s hard to take down (the furnace) once you put it back up," he said. "You don’t start a blast furnace up unless you’re going to start the whole thing up."

Some electrical and mechanical workers will return to work throughout the next two weeks in the "hot strip mill," where coil is made, union officials said. In following weeks, even more steelworkers are expected to be recalled.

But union officials, analysts and U.S. Steel declined to speculate on when the entire mill will operate normally and the bulk of the work force will return.

Meanwhile, U.S. Steel has not yet recalled coke-making workers at the Granite City Works. Instead, the coke might be shipped from a U.S. Steel mill in the Hamilton, Ontario.

Rolf Gerstenberger — president of USW Local 1005, which represents Hamilton’s hourly workers — said the steelmaker told him last week that some of his laid-off members will be recalled to make the coke and ship it to Granite City.

However, a local union official disputed that assertion, saying that wasn’t the case. He didn’t know when coke-making workers might be recalled.

U.S. Steel spokeswoman Erin DiPietro declined to comment, saying the company does not provide details on its operations.

Meanwhile, Sunoco Inc. continues construction of a new coke-making facility in Granite City that will start supplying the steel mill in the fourth quarter. A Sunoco spokesman said U.S. Steel has informed the company that it will be ready to accept coke upon start-up.

WORRIED FUTURE

On Tuesday, several USW officials — including Local 1899 President Dan Simmons, who represents most of the Granite City Works workers — testified at a congressional steel caucus hearing in Washington.

The officials lobbied for, among several points, the reformation of health care and the enforcement of trade laws to protect U.S. companies against foreign steel imports.

"Although it’s great news for us in Granite City to be pouring steel again, the problems facing steel manufacturing in the U.S. remain," Simmons said, according to his written testimony.

Analysts say the industry has likely hit the bottom, but recovery will take time. IHS Global Insight predicts steel production this year is expected to be nearly half of the 100.7 million short tons produced in 2008.

Getting financing will continue to be difficult, Anton said. Because of the oversupply of housing, residential construction will continue to be slow. And automakers won’t make as many vehicles in the next few years.

Analysts, including Anton, estimated a recovery to 2008 levels won’t come until at least 2012.

"When you fall in the Grand Canyon, it takes a lot to get out of it," Anton said.

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The Toronto stock market closed lower for a third session today, led by another slide in commodity stocks as oil and metal prices fell back on a lack of conviction about the strength of an economic revival.

The S&P/TSX composite index, up more than 150 points during the morning, fell 87.38 points to 10,307.4 as investors continue to wonder if a sharp runup in prices since early March was justified.

The negative performance comes at a time when the main Toronto index is up almost 40 per cent since the spring rally started March 9, amid hopes that an economic upturn will be in place by the end of the year.

But some analysts think investors are quite right to be cautious at this stage.

"We have come a little far much too quickly and I'd be a little cautious around these ranges," said Fred Ketchen, manager of equity trading at Scotia Capital.

"I just think that worldwide economic activity is certainly not in my mind something to foster this kind of a move. I think we need to get back to a reality situation where we realize that things have not totally repaired themselves. We have got a lot of challenges economically."

The TSX energy sector was down 2.4 per cent. For instance, giant EnCana Corp. (TSX: ECA) declined $1.35 to $58.99.

The July crude contract in New York finished the session down 15 cents at US$70.47 a barrel after going as high as US$72.77 in early morning trading.

The Canadian dollar moved down 0.17 of a cent to 88.14 cents US.

The TSX Venture Exchange moved 6.24 points higher to 1,139.19.

New York markets also added to Monday's steep losses amid mixed economic data.

The Dow Jones industrial average moved 107.46 points lower to 8,504.67 on top of Monday's 187-point slide.

The Nasdaq composite index stepped back 20.2 points to 1,796.18 while the S&P 500 index slipped 11.75 points to 911.97 as the Commerce Department reported that construction of homes and apartments jumped a better than expected 17.2 per cent last month to a seasonally adjusted annual rate of 532,000 units.

But other data showed that U.S. industrial production tumbled by a more than expected 1.1 per cent during May as the recession crimped demand for a wide range of manufactured goods including cars, machinery and household appliances. Production has declined for seven straight months.

Investors were also discouraged with earnings news from Best Buy Co., the biggest consumer electronics retailer in the United States. It said today its first-quarter profit fell 15 per cent even as its biggest competitor exited the market bad credit payday loans. Best Buy beat earnings estimates but its shares fell $2.82 to US$35.84.

Elsewhere on the TSX, the base metals sector came down from a strong rise to move down 2.65 per cent as the July copper contract in New York fell 2.95 cents to US$2.2555 a pound. Teck Resources (TSX: TCK.B) fell $1.13 to $18.27.

But the gold sector rose 1.75 per cent with the August bullion contract in New York ahead $4.70 to US$932.20 an ounce. Goldcorp Inc. (TSX: G) improved 86 cents to $39.18.

Meanwhile, Newfoundland and Labrador Premier Danny Williams has announced a tentative deal to develop Hibernia South, an offshore project estimated to contain 223 million barrels of oil. Williams says the provincial government will acquire a 10 per cent equity stake under the deal.

The development application was submitted in 2006 by the Hibernia Management and Development Corp., which includes ExxonMobil, Chevron, Petro-Canada (TSX: PCA), Norsk Hydro, Murphy Oil and Canada Hibernia Holding.

In other corporate news, Bombardier Aerospace (TSX: BBD.B) has lined up another 17 suppliers for the CSeries aircraft, which is expected to enter service in 2013. One supplier, CAE of Montreal (TSX: CAE), will provide engineering services and simulation to support the design, testing and certification of the aircraft.

Bombardier shares were down 11 cents at $3.31 while CAE lost seven cents to $7.02.

CAE has also sold two additional full-flight simulators for training crews of Airbus commercial jets and a suite of support services to the Bahrain Mumtalakat Holding Co., an arm of the kingdom's government. The total list price value of the contract is above C$50 million.

Air Canada (TSX: AC.B) shares ran ahead 13 cents to $1.62 after it announced has tentative deals with all five of its unions on a restructuring plan.

The tentative contracts include a pension funding holiday and equity restructuring.

The announcement comes on the heels of reports that the airline is planning to seek about $600 million in financing, in part from government agencies, as part of its broad out-of-court restructuring.

SNC-Lavalin (TSX: SNC) said work will begin immediately on a C$1.2-billion contract from Algeria's national oil company, which has chosen the Montreal-based engineering company to build a natural gas processing facility. Its shares rose 29 cents to $42.55.

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