World financial news

1. Purolator Courier

Canada’s largest courier company has taken a lead in trying to reduce its carbon footprint, having purchased 105 hybrid-electric delivery trucks and experimented with other technologies. Purolator has ordered another 50 hybrid vehicles.

2. Mountain Equipment Co-Op

This retailer of outdoor gear embraces green-building practices for its 12 stores and head office, and was the first national retailer to introduce compostable bags and donate the 5 cents it collects from them to environmental causes.

3. Enbridge Gas Distribution

The natural gas distributor is placing more emphasis lately on energy conservation and alternatives, such as solar, thermal, wind and fuel-cell technologies. It has begun capturing pipeline waste energy to generate low-emission electricity.

4. Loblaws

Canada’s largest grocery chain was the first to experiment with bag-free stores, is promoting local foods and has committed to sourcing only sustainable seafood products by 2013.

5. TD Bank Financial Group

The bank says it will be carbon-neutral by 2010 young persons carinsurance. Efforts to achieve this include the purchase of "green" electricity from Bullfrog Power for its national bank-machine network.

6. Toronto Hydro

It wants to build a wind farm in Lake Ontario, plans to turn the waste water processed at Ashbridge’s Bay into heat and electricity, and runs its entire fleet on biodiesel or electricity.

7. Cascades

This Quebec-based maker of packaging and tissue products is the largest user of recycled fibres in Canada. In fact, 77 per cent of the raw material it uses comes from recycled content.

8. Magna International

Can a maker of automotive parts be green? Yes, if you consider the effort this Aurora-based company has made to reduce the weight of its parts using advanced materials. Lower-weight cars mean less fuel consumption, meaning lower emissions.

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Monsanto Co. and Dole Food Co. said they’ll work together to develop new varieties of vegetables with the goal of giving consumers more choices when they shop for groceries.

The companies entered a five-year agreement to focus on developing more nutritious, better tasting vegetables through plant breeding, they said in a joint statement. Initially, their efforts will focus on four key vegetables — broccoli, cauliflower, lettuce and spinach.

Any new products would be commercialized by Dole, based in Westlake Village, Calif., the companies said.

Additional terms of the agreement weren’t disclosed.
The venture pairs Monsanto’s expertise in plant research and breeding and Dole’s position as the world’s largest producer and marketer of fresh fruit and vegetables affordable health insurance for children.

Monsanto, better known as a seller of genetically modified row crops such as corn, soybeans, cotton and canola, jumped into the vegetable business four years ago with its acquisition of vegetable seed giant Seminis Inc. for $1.4 billion.

Last year, the company spent $860 million to acquire Netherlands-based De Ruiter Seeds Group BV, one of the world’s largest sellers of seeds for vegetables grown in protected environments, such as greenhouses.

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some rays of hope for the unemployed. Can the recovery last? Most important: Where are the jobs?

Get the answers when Anderson Cooper and Ali Velshi host our panel of experts and check in on virtual town halls across the country.

Thursday, June 18 at 8p.m. ET

–>

Which of these recent economic initiatives should be the Obama administration’s main focus?

• Fixing health care

• Reforming financial sector

• Stabilizing banks

• Helping homeowners

View results

FIXING HEALTH CARE

• Health debate: A little clarity, please
• Can’t afford health care? Barter for it
• How health reform may help … or hurt
• House GOP outlines health care bill
• The fear factor in health care costs
• The death of the corner pharmacy

NEW YORK (CNNMoney.com) — Americans are being told daily that health reform isn’t just the right thing to do — it will also help save the economy.

"Health care reform is not part of the problem when it comes to our fiscal future, it is a fundamental part of the solution," President Obama said in a recent address.

The crux of the problem: The United States spends far more on health care than do other developed countries, but it often gets far less bang for its buck. Meanwhile, a large number of Americans either can’t afford insurance or have insurance that doesn’t adequately cover their medical costs.

The kicker, of course, is that rising costs are making the country’s long-term fiscal picture very, very ugly.

For many, the Washington debate over the mind-bending details of different options obscures the issue of what’s at stake. What is the threat to the economy if no action is taken? What happens if a health system overhaul succeeds … and what are the economic perils if it fails?

The economy without health reform

For 40 years, health care costs have grown faster than inflation and wages.

Today, the United States — including the government, employers and individuals — spends more than 16% of its gross domestic product on health care, or $7,421 per person, according to the Kaiser Foundation.

If health care costs grow unabated, the country is on track to spend more than 20% of its GDP on health by 2018.

In other words, 20% of the value of goods and services Americans produce will be spent on health care alone.

The more we spend on health, the less we’ll have to spend on other things. That can hamper economic growth and means there will be less and less money available to support education, defense and other priorities.

Meanwhile, the country’s already record high debt is set to swell to unsustainable heights due largely to rising health care costs, which expand federal spending on Medicare and Medicaid.

By 2035, the Government Accountability Office estimates that all federal revenue — taxes and fees paid by individuals and businesses — will be consumed by Medicare, Medicaid and interest on the public debt.

"Virtually all of our long-term fiscal challenge is attributable to the rapid growth in health care costs. And unless we get them under control, our budget is doomed," said Robert Reischauer, former director of the Congressional Budget Office (CBO) who is now president of the Urban Institute.

Lawmakers note that higher health care costs put U no fax cash advances.S. businesses at a competitive disadvantage because they have to pay so much more to insure their employees than do their foreign competitors.

Indeed, among developed countries, the United States is the biggest spender. It spends 52% more on heath per person than the country ranked second, which is Switzerland. Despite that, the United States does not necessarily do better in terms of health care access, quality or outcomes.

Meanwhile, the Commonwealth Fund estimates that currently 46 million people have no insurance, while another 25 million working-age adults are underinsured.

In a letter to lawmakers, the CBO made plain the consequences of letting health costs grow unrestrained.

"The country faces difficult and fundamental tradeoffs between limiting the growth of Medicare and Medicaid … accepting a continuing increase in taxes … and reducing other spending … possibly to levels not experienced in this country in more than 40 years."

If health reform works

Arguably, there are three measures by which to judge whether health reform is successful from an economic standpoint. It would have to pay for itself over time; reduce health spending without compromising quality; and provide affordable, accessible care for everyone.

The CBO told lawmakers that a 1% reduction in the growth of federal health care spending each year for the next 20 years would pay for the cost of expanding coverage in the first decade and then provide savings that "exceed that cost in the next decade."

The desired end result of reform is less money spent for the same or better care and with better outcomes.

"If we do it right, it allows us to have a more efficient health care system … and we can use the additional savings to invest in something, educate someone or pursue some other national goal," said Douglas Holtz-Eakin, a former CBO director.

Obama economic adviser Christina Romer estimates that if the annual growth rate in health care costs slows by 1.5 percentage points a year — which she concedes is a high bar — real GDP could increase by more than 2% in 2020 and by nearly 8% in 2030.

But GDP isn’t the only measure of well-being.

"If people get better access to health care those people are better off," said Robert Book, a senior research fellow in health economics at the Heritage Foundation.

But the physical dividends pay off economically as well. That’s because it’s easier to generate income when you’re healthy. And it’s easier to stimulate the economy with your income when you’re not bankrupted by a medical crisis.

If health reform fails

One reason health reform hasn’t happened yet: It is painfully hard to figure out how to do it right.

And economically, there are serious risks if health reform is done wrong.

For Book, reform will have failed if everyone gets covered but has to wait for essential care. "People will be sick, less productive and not get what they paid for," he said.

He believes taxing a portion of workers’ health care benefits could lead to a more efficient use of health services. But, he said, using other tax increases to fund reform could place a drag on GDP.

If that happens, that will "mak[e] it far more difficult to escape the debt trap," wrote Harvard economist Kenneth Rogoff in a Financial Times op-ed.

To Holtz-Eakin, who advised John McCain in last year’s presidential race, failed health reform would mean that "everyone gets coverage but we don’t change the underlying cost dynamics. Health care spending goes up and we haven’t solved our deficit problem."

In that scenario, health reform would make the deficit worse — which "could prove the straw that breaks the camel’s back," Rogoff wrote.

And the deficit could get worse even if lawmakers pass measures that can pay for health reform in full.

Here’s why: some of the biggest savings from reform might not be realized for at least a decade because they will require key changes in how medicine works. In the interim, however, there is a risk that lawmakers will undermine those savings by tweaking reform policies — such as succumbing to political pressure to defer scheduled payment cuts for providers.

If lawmakers are really serious about putting the federal budget on a sustainable path, the CBO said, that just won’t do. 

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MINNEAPOLIS — Fed up with airline fees? Well, brace for more.

As if charging $15 to check a bag weren’t enough, US Airways and United beginning this summer are asking passengers for $5 more if they pay their baggage fees at the check-in counter. (You can avoid the $5 fee if you pay your baggage fee from home. The airlines call it the "online discount.")

Rather than raise ticket fares in the middle of a recession, airlines are piling on fees to make money — fees for bags, fees to get through the line faster, even fees for certain seats.

United Airlines alone expects to rake in more than $1 billion this year in fees ranging from baggage to accelerated frequent-flier awards. That’s more than 5 percent of its revenue.

That revenue stream is causing airlines to become more creative, each watching the other to determine whether passengers accept the fees or revolt business cards printing.

As recently as last year, most fliers came across a fee only if they checked three bags or sent a minor child across the country. Most people, most of the time, traveled fee-free.

But that began to change last spring. Spiking jet fuel prices and passenger resistances to higher fares started airlines looking around the cabin for things they could charge extra for.

Passengers are finding it’s a lot easier for the airlines to add the fees than to take them away.

"They’re going to keep nudging them up until they run into market resistance," said Ed Perkins, a contributing editor at the website Smarter Travel.

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European Union leaders warned of continued weakness in the banking system and pledged to “stay alert” to the possible need for further government support, according to the draft of a statement to be approved later today at a Brussels summit.

“The operating environment of the financial institutions remains challenging and credit flows continue to be constrained,” the heads of state and government said in the draft obtained by Bloomberg News. “Governments must therefore stay alert to possible further measures which may be needed to recapitalize or to clean up balance sheets.” profitability.”

European governments have approved $5.3 trillion of aid to banks, including debt guarantees and equity injections, since the onset of the financial crisis, according to a separate EU document obtained by Bloomberg. Regulators in the 27 EU nations will assess risks in the banking industry and report the results to finance ministers, the Committee of European Banking Supervisors in London said last month payday loans for bad credit.

“The ongoing EU-wide stress-testing exercise will help to better assess the financial system’s resilience, contribute to enhancing confidence of financial markets and facilitate coordinated policy measures at EU level,” the EU leaders said in today’s draft statement.

The worldwide financial crisis, which started with the collapse of the U.S. property market in 2007, has led to more than $1.46 trillion of writedowns and credit losses at other financial institutions, according to data compiled by Bloomberg, and sent the global economy into its first recession in more than six decades.

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European Union leaders warned of continued weakness in the banking system and pledged to “stay alert” to the possible need for further government support, according to the draft of a statement to be approved later today at a Brussels summit.

“The operating environment of the financial institutions remains challenging and credit flows continue to be constrained,” the heads of state and government said in the draft obtained by Bloomberg News. “Governments must therefore stay alert to possible further measures which may be needed to recapitalize or to clean up balance sheets.” profitability.”

European governments have approved $5.3 trillion of aid to banks, including debt guarantees and equity injections, since the onset of the financial crisis, according to a separate EU document obtained by Bloomberg. Regulators in the 27 EU nations will assess risks in the banking industry and report the results to finance ministers, the Committee of European Banking Supervisors in London said last month no fax cash advance.

“The ongoing EU-wide stress-testing exercise will help to better assess the financial system’s resilience, contribute to enhancing confidence of financial markets and facilitate coordinated policy measures at EU level,” the EU leaders said in today’s draft statement.

The worldwide financial crisis, which started with the collapse of the U.S. property market in 2007, has led to more than $1.46 trillion of writedowns and credit losses at other financial institutions, according to data compiled by Bloomberg, and sent the global economy into its first recession in more than six decades.

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British Airways is asking thousands of its staff to work for free for up to four weeks, spokeswoman Kirsten Millard said Tuesday.

In an e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave — but with the option to work during this period. British Airways employs just more than 40,000 people in the United Kingdom.

Last month, the company posted a record annual loss of £400 million ($656 million).

Its chief executive declared at the time there were "absolutely no signs of recovery" in the industry.

"I’m 30 years in this business and I’ve never seen anything like this. This is by far the biggest crisis the industry has ever faced," said Willie Walsh, British Airways’ chief executive.

A spokesman for one of Britain’s biggest unions said its workers could not afford to work for free for a month.

"It’s all well and good for Willie Walsh to say he’s prepared to work for free when he earns four times in a month what they do in a year," said Ciaran Naidoo, a spokesman for Unite.

He pointed out that the airline was not ordering staff to work without pay.

"It’s a request — you can take unpaid leave or you can work for free, and the chances of people working for free are very unlikely, but there might be some people who want to take unpaid leave credit scores."

Demand for the airline’s passenger seats and cargo holds fell during the last financial year, while its fuel bill rocketed to almost £3 billion ($4.7 billion).

Walsh said British Airways’ woes were inextricably linked to the downturn in the global economy and that there had been no sign of any "green shoots" of recovery.

Like its premium-class competitors, British Airways is losing customers to cheaper rivals.

The airline’s premium passenger numbers fell 13% in the second half of last year, in line with the industry average.

Total traffic fell 3.4% and while the airline carried 33.1 million passengers last year, it was a drop of 4.3% on the previous year.

The dip in demand for British Airways’ flights has forced a switch in strategy at the airline.

From the end of last year, it has been trying to tempt passengers with lower fares, sacrificing profit per seat for "bums on seats."

It plans to reduce capacity by 4% next winter by parking up to 16 aircraft.

–CNN’s Alysen Miller contributed to this report. 

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As Chrysler morphs into a new company and as General Motors moves ahead with its bankruptcy process, injured plaintiffs are getting left behind.

Hundreds of plaintiffs have pending lawsuits against the automakers that are worth nearly $2 billion. They blame automotive defaults for their injuries, which in many cases are severe and crippling.

But their lawyers have doubts as to whether they’ll ever see any money because the plaintiffs are considered unsecured creditors in the bankruptcies. Therefore, they’re at the bottom of the repayment pool - if there’s even money left.

"We want all the people who have suffered injury, who have a lawsuit, to have their day in court," said Larry Coben, chairman of the Committee of Consumer Victims of General Motors and founder of law firm Coben & Associates in Scottsdale, Ariz. "[They] shouldn’t be lost in the shuffle here."

Coben, and his colleague Barry Bressler, are among a team of lawyers representing 170 injured plaintiffs in the bankruptcy proceeding who have sued Chrysler for claims worth $600 million and 300 injured plaintiffs who sued GM for claims worth $1.25 billion.

Bressler, a partner with the Philadelphia firm Schnader, Harrison, Segal & Lewis, has a client who was a passenger in a GM vehicle and was paralyzed when it crashed, allegedly because of a faulty seatbelt.

"The seatbelt snapped and broke her neck and she’s now quadriplegic," said Bressler. Bressler said that some of his clients are too disabled to care for themselves and they shouldn’t be abandoned by the bankruptcy court. "It’s really a shame what’s happening to these folks," he said.

Still, they know they could face a tough fight if anything is to be learned from Chrysler’s bankruptcy.

The Chrysler case

Bankruptcy Court Judge Arthur Gonzalez approved the transfer of Chrysler’s best-performing assets, including factories and dealership contracts, to the newly formed Chrysler Group LLC. Some factories, dealerships and creditors were left behind in the bankruptcy process, including pension funds from Indiana teachers and state police, as well as a "Major Moves" construction fund.

Indiana Treasurer Richard Mourdock appealed — first to the Court of Appeals, 2nd Circuit, and then to the U.S. Supreme Court — that the pension funds, as secured creditors, should have higher status than unsecured creditors.

But the Supreme Court gave the Chrysler bankruptcy a green light; Mourdock’s appeal succeeded only in delaying the process by a few days.

That does not bode well for the injured plaintiffs, whose open lawsuits against Chrysler are unsecured, meaning that they have lower priority than the Indiana pension funds online payday loans.

"If you have a judgment or a settlement you move to the front of the line," said Chrysler spokesman Mike Palese to CNNMoney.com. "But the filing of a liability lawsuit is not proof that there is a default with the vehicle."

Injured plaintiffs can try to lay claim to the Chrysler assets left behind in the bankruptcy process, but there won’t be much left, according to Bressler.

"There are probably going to be some assets left in old Chrysler and some claims to be decided," said Bressler. "[But] when you get all done liquidating that, you’re probably no more than half a cent on the dollar, and more likely zero."

Coben is concerned about the future impact because, he said, plaintiffs injured by defects in Chrysler vehicles made before the bankruptcy won’t be able to sue the new Chrysler.

"If you’re driving down the road and the wheel falls off and you roll over and get paralyzed from the neck down, they’ll replace your wheel [because it’s covered by warranty], but you can’t sue them for your injury," he said.

As a result, Coben said he will argue for "successor liability" in the GM case, where the open claims would be carried over to a newly formed company.

"We’re trying to get those folks who are representing GM, and that really means the Treasury, to allow successor liability for GM," he said. "If we can’t do that, we will certainly file objections to the proposed sale. You shouldn’t be allowed to do away with successor liability."

But Coben admitted it’s a long shot, unless he can convince the Treasury to intervene.

"Treasury was not involved in this decision, which the company made consistent with conventional bankruptcy practice," said Treasury spokeswoman Meg Reilly in an e-mail. "While unfortunate, the outcome would have been far worse had the government not intervened in the restructuring and Chrysler had liquidated."

But the prospects are much better for injured plaintiffs who have settled on a case. If the judge has awarded them damages prior to the bankruptcy filing, then they should still be able to receive their payments, according to GM spokesman Tom Wilkinson.

"Anything that is settled prior to the bankruptcy filing is settled," said Wilkinson. 

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