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RIM, Saudis reportedly reach deal Research In Motion Ltd. has reportedly reached a deal with Saudi Arabia related to security issues with BlackBerry Messenger, a U.S. official said today. The Saudi telecom regulator had been threatening to shut down Messenger, citing, as other countries have, its concern over lack of access to encrypted data. "There are reports of an agreement between RIM and Saudi Arabia," Philip Crowley, the spokesman for the U.S. State Department, told reporters, saying officials of his department would meet today with RIM officials.
As the BlackBerry saga was still playing out today, there were new, though different, concerns raised in Germany over both the BlackBerry and the iPhone from Apple Inc. , according to reports. A spokesman for the Interior Ministry told reporters in Berlin that it is recommending German government departments avoid using those devices because of security risks. His ministry has cited an increase in cyberattacks on the government's networks, Bloomberg News reported. Germany government ministries have begun using Simko 2, a phone developed by a unit of Deutsche Telekom, since last year, the news agency quoted the spokesman as saying.
HP stock sinks amid scandal Hewlett-Packard Co. stock tumbled about 8 per cent today, closing at $42.60 (U.S.), in the wake of the stunning resignation Friday of chief executive officer Mark Hurd. Mr. Hurd, seen as a strong hand on the tiller of the computer giant he turned around, quit after allegations of improper expense claims filed amid an undisclosed relationship with a former contractor. The probe of Mr. Hurd by the company began with accusations from the contractor of sexual harassment and ended with the company determining Mr. Hurd didn't violate its sexual harassment policy but broke its rules of conduct and irreparably harmed his credibility and integrity.
The former contractor, Jodie Fisher, came forward on the weekend in a statement from her lawyer, saying she was "surprised and saddened that Mark lost his job over this" and that "that was never my intention." Like Mr. Hurd, Ms. Fisher, 50, a one-time reality TV contestant who became a marketing consultant for HP, said there was no sexual relationship between the two. According to The New York Times, HP has said Mr. Hurd approved paying her $1,000 to $10,000 per event at summits. These events at times included customers, and Mr. Hurd would speak. Other reports said she was paid up to $5,000 to greet executives attending HP events she helped organize.
"At HP, I was under contract to work at high-level customer and executive summit events held around the country and abroad," Ms. Fisher said in the statement. "I prepared for those events, worked very hard and enjoyed working for HP."
It was after the company stopped such events that Ms. Fisher claimed sexual harassment, the newspaper said. Mr. Hurd, according to one of the newspaper's sources, had no romantic involvement with Ms. Fisher but enjoyed her company.
Mr. Hurd, says the business expenses were legitimate, but said in a statement Friday that "as the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career."
There are big questions now because there's no succession plan, given the nature of Mr. Hurd's departure, and the company is searing for a new CEO. Interim CEO Cathie Lesjak said yesterday that HP is "moving through the transition period as quickly as possible."
- Woman in HP scandal 'saddened' by CEO's ouster
- New York Times: Boss's stumble may also trip Hewlett-Packard
- HP CEO Mark Hurd resigns
Skype to go public Skype SA, the internet phone company sold off last year by eBay Inc. , has now filed plans for an initial public offering estimated at $100-million (U.S.). Skype expects a listing on the Nasdaq Stock Market, but did not specify today when its shares would be sold. A consortium including the Canada Pension Plan Investment Board, Silver Lake and Andreesen Horowitz owns 56 per cent of Skype, whose registered users now number 560 million, a 41-per-cent increase from a year earlier.
Chrysler narrows its losses Chrylser Group LLC narrowed its losses in the second quarter of the year, and posted a better operating profit, yet another sign Detroit is bouncing back from the slump that put two of the three major auto makers into bankruptcy protection. Chrylser, still seen as lagging its rival, also said today it expects to boost its outlook for the year when it announces its third-quarter results. "The second-quarter operating profit confirms that Chrysler Group is on track to achieve its goals, yet an extaordinary amount of work still lies ahead," said Sergio Marchionne, chief of both Chrysler and its parent Fiat.
Chrysler's loss narrowed to $172-million (U.S.) in the second quarter from $197-million in the first, and operating income jumped 28 per cent to $183-million. Revenue climbed more than 8.2 per cent to $10.5-billion as vehicle sales jumped to 407,000 from 334,000. Because of its troubles a year ago, the second quarter of last year is not really comparable. The auto maker is also now hiring workers and boosting production.
Detroit has gradually been rebounding from the recession. Ford Motor Co. , for example, the only one of the three not to sink into bankruptcy protection, posted a second-quarter profit of $2.6-billion, while General Motors Co., which also slipped into Chapter 11 during the slump, is expected to post a profit later this week. And on Friday, Magna International Inc. , the auto parts giant whose fortunes ride on those of the world's big car manufacturers, posted an exceptionally strong quarter and boosted its dividend.
- Growing sales help Chrysler narrow loss
- GM, Chrysler sales surge in Canada
- Detroit's mounting a comeback - believe it
- Ford beats Street with $2.6-billion profit
- Magna soars on strong earnings
German exports climb Europe's biggest economy continues to show signs of a solid recovery. Germany, the world's second-larger exporter, said today its exports climbed 3.8 per cent in June from a month earlier to the strongest level since the depths of the global slump in the fall of 2008. On a year-over-year basis, exports rose almost 29 per cent. Imports also rose, up 1.9 per cent, also a sign that the economy is bouncing back.
Will jobs report change Bank of Canada's thinking? There's suddenly some speculation in the markets that Friday's jobs report from Statistics Canada could halt the Bank of Canada's gradual tightening of monetary policy. Central Bank Governor Mark Carney has boosted his benchmark lending rate twice now since the recession ended, and the general belief was that this would continue. But Friday's employment report showed job creation in Canada halted suddenly in July, with the loss of 139,000 full-time jobs, which was partly offset by the creation of part-time positions.
Some economists, though, believe the overall picture was skewed by 65,000 job losses in the educational services sector given that the sector posts hefty job losses every July.
"One bad jobs report and suddenly the market chatter is leaning toward doubting that the BoC will keep hiking," said Scotia Capital economists Gorica Djeric and Derek Holt. "Throw out the jobs report is our advice, and stick to the overall plot of a central bank that has every reason in the world to keep on hiking. We don't trust that so many jobs were created as reported in the second quarter, and certainly don't believe that the July report was any better in terms of its reliability, but smooth out the trend and Canada remains among a select few global leaders in the job growth tally.
"As for the July report, since when did teachers face above average job risk as to motivate a 65,000 reduction in education sector employment in one month? No, this was mostly due to the ongoing problems Statscan is having in adjusting for a shift to temporary contracts and concomitant problems in applying proper seasonal adjustments. The steep decline of 30,000 jobs in the finance, insurance and real estate services component is also tough to swallow."
- Canada's job machine goes in reverse
- Weak hiring shows U.S. recovery on ropes
- Market View: What to make of those payrolls
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Please, sir, I want some more Freddie Mac, the U.S. mortgage company seized during the crisis by the U.S. government, wants a further $1.8-billion (U.S.) in help from the Treasury Department. The company also said today it lost $4.71-billion in the second quarter, compared to a small profit a year earlier. Credit loss provisions fell to $5.03-billion from $5.67-billion. Its rival Fannie Mae lost $1.2-billion for the quarter. Including the latest request for aid, the two have now sought almost $150-billion from the government since April 2009, Bloomberg News noted.
"We recognize that high unemployment and other factors still pose very real challenges for the housing market, and with that in mind, we continue to focus on the quality of the new business we are adding to our book to be responsible stewards of taxpayer funds as we support the nation's housing market," said Freddie chief executive officer Charles Haldeman Jr.
Simmons to buy Menu Foods Menu Foods Income Fund, the Toronto pet food company with the cute ticker symbol MEW.UN, is selling its operating business to Simmons Foods Inc. of Arkansas. Menu Foods said today Simmons will acquire Menu Foods Ltd. for about $239-million, including debt, or $4.80 a unit in cash. Menu Foods was the company involved in a huge recall of pet food several years ago, when it was forced to recall tens of millions of cans.
Gordon Gekko heads to Asia One of Asia's major independent brokerages is treating its clients to Gordon Gekko, that symbol of greed born again in the wake of the financial meltdown. Michael Douglas, who portrayed Gekko in Wall Street in the late 1980s and who is reprising the role in Wall Street: Money Never Sleeps, will speak at a mid-September investors' forum organized by CLSA, the brokerage said today. Mr. Douglas, who won an Oscar for the role, will speak about filmmaking, nuclear abolition and prevention of small arms proliferation, CLSA said. It also noted that it will host the Asia premiere and first international screening of the movie.
From today's Report on Business
- The U.S. and Japan: Land of the falling price
- Focus shifts from drilling ban to 'virtual moratorium'
- There's a 'menaissance' in the ad world
- At the Top: Still trying to break the mould
- London takes gamble on Olympics to revitalize community
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