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Top executives at Boeing Co. said Wednesday that the aerospace giant will shed 10,000 jobs this year in its commercial aircraft and defense businesses after reporting a fourth-quarter loss.

Boeing officials said that while the company’s St. Louis-based Integrated Defense Systems won’t be immune to job losses, the effect is expected to be minimal locally. No specific numbers were available.

Boeing, with headquarters in Hazelwood and production facilities in the St. Louis region, is the area’s second-largest employer with 16,000 workers.

Boeing announced a $56 million fourth-quarter loss on Wednesday, or 8 cents a share. By contrast, the company posted a profit of $1.03 billion during the same period last year.

It also reported revenue of $12.7 billion during that quarter, down 27 percent from $17.5 billion in the fourth quarter of 2007.

Describing 2008 as a challenging year, Boeing President and CEO Jim McNerney said the company was hit by a machinists’ strike, delays in key aircraft development programs and the swirling financial crisis.

"Fundamentally, this is a solid company with a strong growing core business," McNerney said Wednesday. "We are, of course, like all businesses today facing a very challenging business environment."

While the weakening global economy batters demand for air travel and financing, McNerney said, the company also expects "pressure on defense budgets" to mount around the world.

Boeing, he said, will seek to manage its costs through:

•reduced capital spending,

•elimination of unnecessary work,

•review of staffing levels payday loan online.

That will mean reducing positions through attrition, retirements and layoffs in certain areas of the company, including defense work, Boeing officials said. The company also will reduce the number of contract workers.

The 10,000 positions targeted for elimination this year include the 4,500 announced earlier this month in Boeing’s Commercial Airplanes business unit.

Boeing spokesman Todd Blecher in Chicago said company officials are reviewing their operating costs to determine how they will meet their business plans. Employees who face layoffs would first receive 60-day notices and will receive career transition services.

Boeing’s Integrated Defense Systems reported sales of $8 billion during the fourth quarter of 2008 versus $8.4 billion the same period in 2007. James Bell, Boeing’s corporate president and chief financial officer, said the defense unit continued to capture new business with sales of the P-8I reconnaissance aircraft to India and C-17 cargo jets to a NATO consortium.

Boeing spokesman Derrell Carter said that if there is an impact on staffing reductions in St. Louis, "it will be minimal."

Gordon King, president of the International Association of Machinists District 837, said Boeing is still hiring production workers in St. Louis. The union represents about 3,000 workers at Boeing’s St. Louis-area facilities.

"We haven’t heard anything," King said. "We’re in a hiring mode here."

kleiser@post-dispatch.com | 314-340-8215

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On the morning of Chinese New Year, the St. Louis region took another step in its bid to become China’s gateway to the Midwest.

Local business and government leaders met Monday with Chinese Ambassador Zhou Wenzhong in St. Louis and announced to a packed hotel conference room the creation of a Midwest China Hub Commission to steer development of an air cargo hub at Lambert-St. Louis International Airport.

"It presents, we believe, a transformational opportunity," said Richard Fleming, president of the Regional Chamber & Growth Association. "For St. Louis. For the Midwest. And for China to serve a massive U.S. market."

The hub has been the subject of high-level meetings between St. Louis leaders and Chinese authorities for nearly a year, and Monday was Zhou’s second trip to the region to discuss it. A group of local business leaders is planning a second trip to Beijing later this spring. Meanwhile, a study of demand for China-bound cargo from St. Louis and surrounding areas is nearly done.

The Chinese government, Zhou said, wants to deepen its trade ties in the Midwest and likes that St. Louis came to it with the idea for an air hub at Lambert. Now it will gauge interest in the deal within its own business community and study the environment for investment in the St. Louis area. Zhou was optimistic.

"I think it’s all there," he said.

The new commission will help guide that effort by funding experts and studies of the trade potential instant payday loan. Eight state and local governments and economic development groups have pledged at least $100,000 a year in funding.

The key to any deal, said Steve Perry, an expert on Chinese trade who has been working with the St. Louis group, is two-way trade. Today, 80 percent of air freight between the two countries comes east, but there’s a strong demand in China for food, farm equipment and other Midwest-made goods.

"You’ve got to make sure you can fill those planes," he said.

If they can, said Sen. Christopher "Kit" Bond, R-Mo., the project could be a huge one for the local economy, creating jobs that are sorely needed in a down economy. Zhou agreed, and said the two nations would gain more by working together than they would otherwise.

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"Basically, we’re in the same boat," he said. "We need each other."

tlogan@post-dispatch.com | 314-340-8291

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Xerox Corp () barely eked out a profit in the fourth quarter, hurt by a dramatic decline in demand from Russia and other emerging markets, and $349 million in restructuring costs, sending shares down 9 percent.

The lingering sting of higher manufacturing costs, due to the weaker Japanese yen, also caused the leading provider of digital printers and document management services to forecast a first-quarter profit that fell short of analysts’ targets.

Analyst Shannon Cross said that while Xerox’s strong annuity stream — its customers repeatedly buy high-margin supplies and services — remains solid, some distributors in the quarter scaled back purchases of toner and ink.

In addition, Xerox saw a startling 14 percent decline in revenue from high-growth regions, after these developing markets delivered 17 percent revenue growth through the first three quarters of 2008. Xerox cited soft currency exchange rates and the rapid weakening of Russian and eastern European economies.

“Where you really saw the weakness was in the developing markets,” Cross said. “Some of these areas, whether its Brazil, Argentina or Russia, were really on fire. Multinational companies are going to have a challenge dealing with currency this quarter and going into 2009.”

Xerox said fourth-quarter net income was $1 million, or nil per share. That is down from $382 million, or 41 cents a share, a year earlier.

Excluding special items, including litigation charges, profit was 32 cents a share, a penny below the average Wall Street forecast, according to Reuters Estimates paydayloans.

Late last year, Xerox announced a restructuring plan, including about 3,000 job cuts, aimed at saving $200 million in 2009. In the fourth quarter, restructuring charges were 27 cents a share.

Revenue fell 10 percent to $4.37 billion. Revenue from sales of supplies and services — known as “post-sale” revenue — fell 8 percent to $3.1 billion. Equipment sale revenue declined 15 percent to $1.3 billion, reflecting “weakened economic conditions around the world,” Xerox said.

TROUBLED DEVELOPING MARKETS

The Norwalk, Connecticut-based company, whose rivals include Oce NV (), Canon () and Ricoh (), has rebounded from fiscal troubles earlier this decade, spurred by solid profits and improved market share. However, efforts to boost revenue have been derailed as the recession has forced its customers to cut orders.

Because of the weak economy, some large clients have been hesitant about purchasing higher-end technology. Increased sales of lower-priced products have hurt gross margins.

In the fourth quarter, adjusted gross margin was 38.8 percent, down 1.7 points from a year earlier, Xerox said.

“This decline was almost entirely due to increased product costs driven by the rapid strengthening of the yen,” it said.

Xerox said it expects first-quarter earnings of 16 cents to 20 cents per share. Analysts, on average, had expected 24 cents. 

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Tracing Akio Toyoda’s 24-year career at Toyota Motor Corp () back to its genesis is to witness a carefully drafted roadmap for a climb to the top.

His appointment as president of his grandfather’s company comes at a time of crisis, with the world’s top car maker caught in the same downdraft from the global credit crunch that has sent car sales plunging globally and rivals queuing up for bail-outs.

Ambitious and studious, Toyoda has overseen a full range of automotive operations at the company founded in 1937 by his grandfather, Kiichiro, and run by his father, Shoichiro, for a decade in the 1980s.

Ranging from manufacturing to marketing to product development and much more, Akio’s roles have come to be seen as a test as to whether he was fit to steer the ship that many believed always belonged to the Toyoda clan, although it now holds just 2 percent of a the $115 billion company.

While few voice any doubt that the 52-year-old has proven his worth over the years to lead what has become the world’s biggest automaker, it wasn’t always smooth sailing.

Having joined Toyota mid-career after a brief stint overseas consulting in investment banking, Akio was in the minority among first-year workers, most of whom joined straight out of university.

Some dismissed Akio as a family scion for whom Toyota’s doors were wide open regardless of merit.

But any remaining doubt about a lofty future for Akio, who earned a master’s degree from Babson College in the United States, vanished when he joined the board of directors in 2000 after a relatively short 16 years at the company cheap payday advance.

Those who know him say he is outspoken in board meetings — a winning trait for a strong leader.

Having successfully spearheaded the gazoo.com sales and servicing website and led Toyota’s nascent Chinese operations, he quickly rose through the ranks to become senior managing director three years later and became one of eight executive vice presidents in 2005.

Katsuaki Watanabe, whom he will replace as president in June, took almost twice as long to occupy each of those posts. Akio will be the first Toyoda at the helm since 1995, when his uncle, Tatsuro, stepped down due to illness.

The name of the company was chosen because when written in Japanese alphabet, Toyota is eight strokes and Toyoda is 10, and eight is an auspicious number.

GREAT EXPECTATIONS

Company elders, including senior adviser and former president Hiroshi Okuda, have never pretended that Akio’s speedy climb was unrelated to his family name.

When Akio’s promotion to the vice presidency raised the question of whether he was next in line for the top post, Okuda answered point-blank that the Toyoda family played an important role as a flag-bearer and binding force for the carmaker. 

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President-elect Barack Obama has proposed an ambitious plan to rebuild the nation’s crumbling schools as a part of his economic stimulus package, aiming to help budget-constrained school districts make much needed repairs.

The current stimulus bill facing a House vote includes as much as $120 billion for public school systems, $14 billion of which would go to fix leaky roofs and boilers, install new windows and bring buildings up to a level of acceptable repair. A billion dollars would also go to modernize classrooms, providing students access to 21st century technology, like broadband Internet, computers and state-of-the-art lab facilities.

The aim: provide a positive educational environment for students and teachers and create new jobs. But it likely won’t be enough to achieve either goal.

The state of the country’s 97,000 public school buildings is dire. They are overcrowded, use outdated technology and are in great disrepair, especially in the nation’s poorest communities. Somewhere between $100 billion and $360 billion is needed to repair and modernize schools, according to various estimates.

"There is a huge backlog of public school repair projects," said Ross Eisenbrey, vice president of the Economic Policy Institute. "The need is gigantic and almost everywhere - few school districts don’t have a maintenance backlog."

Over the past few years, and especially in the more current challenging economic times, budgets have been strained and school districts have had to make cuts. As schools trim non-essential expenses, they have slashed their maintenance budgets from about 12% to 9% of their total expenses. The cutbacks were exacerbated, some say, by class-size reductions mandated in the No Child Left Behind laws.

"Class-size reduction had the biggest impact, because you need to fund the hiring of new teachers," said Mary Filardo, Executive Director of 21st Century School Fund. "Directed stimulus is really needed; otherwise school districts would continue to spend on in-house salaries, not on construction."

But experts worry that the plan tries to do too much with too little money, and will have only a small impact in the short-term. Obama wants to both fix schools and rapidly create jobs with stimulus, but most of the projects that can be started immediately are small repairs, not the larger modernization jobs that would have a more long-lasting impact on schools.

"Is the intent of this program to deal with schools’ issues or economic stimulus?" asked David Shreve, education policy analyst at the National Conference of State Legislatures. "By focusing on two purposes, they run the risk of diluting each one."

Furthermore, some analysts are concerned about how the money will distributed. Despite several attempts to pinpoint which schools need the most funds for repairs, Filardo said no good assessment exists.

To address that issue, the House has divided up the allocations: $13 billion to Title I, the proxy the government uses to determine the school districts with the highest need for academic improvement; $13 billion to the Individuals with Disabilities Education Act; $14 billion to a new school modernization and repair program, $1 billion to an education technology program, and as much as $79 billion to state legislatures online instant cash advance. Still, some say the government should simply focus on the poorest communities - which are in most need of school repair and jobs.

Though the need for school funding is greater than the$120 billion that the stimulus has pledged, some say as little as $10 billion would still get the ball rolling. Once the economy gets back in shape, experts say states and school districts will be able to continue the funding efforts that the federal government began.

"It will certainly serve its purpose: a stimulus to to get things going," said Bob Canavan, chairman of Rebuild America’s Schools Coalition.

Economists say as many as 150,000 jobs could be created from the proposed school building plan, since about 10,000 jobs could be created for every billion dollars spent on schools. Half of those jobs would probably be in construction. Sen. Charles Schumer, D-N.Y., a leading advocate of school and education stimulus, has said job-creation figures may be triple that level.

Obama said eliminating the backlog of infrastructure projects will do more than just create jobs; it will help the next generation of Americans succeed in the future.

"To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries," Obama said last week in a speech about stimulus.

The nation’s teachers began lobbying hard for school repair and modernization since Obama made his announcement last week, arguing that crumbling schools have had difficulty attracting and keeping teachers.

"Teachers can’t teach in overcrowded classrooms in which you have to wear a coat to stay warm," said Janet Bass, spokeswoman for the American Federation of Teachers. "We have to make schools conducive to teaching and learning, and we absolutely think that part of the economic stimulus package should go to building and modernizing schools."

Tim Magner, director of the U.S. Department of Education’s technology division, said providing students with new, advanced technology will allow schools to use more up-to-date and innovative teaching methods that will narrow America’s education gap with the rest of the world.

"By using efficient information-delivering technology at schools, students can learn problem-solving and collaboration - the kinds of skills that are difficult to export and are in high demand today," he said.

Analysts, policy makers and politicians agree that if the government gets it right, stimulus could help transform learning environments, giving American students a leg up in the years to come.

"We’ll provide new computers, new technology, and new training for teachers," Obama said, "so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future." 

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The dollar rose against major currencies Monday - hitting a one-month high against the euro - boosted by expectations that the European Central Bank will cut rates later this week.

The greenback also got a lift from a U.S. government report Friday that showed the number of jobs lost in December were slightly better than expected despite unemployment rising to 7.2%.

At 4:15 p.m. ET, the dollar was up 0.77% against the 15-nation euro, which was trading at $1.3373. Earlier in the euro was at $1.3476 - it’s highest level since Dec. 12.

The ECB meets Thursday and is expected to cut its key interest rate by 0.5 percentage points to 2%.

Last week, the euro was sharply higher against the dollar. Anticipation that the U.S. employment report would be much worse than predicted drove the euro higher, said Tom Benfer, director of foreign exchange at Bank of Montreal.

"This week, everyone’s focused on the ECB meeting," Benfer said. "It’s weighing on the euro because it reminds investors of the dire straits of the global economy."

The greenback rose 2.09% against the British pound, which fell to $1.4824. Meanwhile, the Japanese yen lost 1.15% against the dollar, falling to ¥89.11. The yen hit a one-month peak versus the euro.

The nonfarm payroll report released Friday showed the unemployment rate has risen to 7.2%, the highest in 16 years. The country lost 524,000 jobs in December, bringing 2008’s total job loss to 2.6 million. That’s the highest level since World War II.

Still, the losses were in line with forecasts saving acount payday loans. The median prediction of a survey by Bloomberg News was 525,000.

"Economists are more cautious (about data predictions) than the typical investor," said John Kicklighter, currency strategist at Forex Capital Markets. "When the numbers are in line with cautious people, it translates to ‘better-than-expected’ for the market."

November’s unemployment report had caught economists "completely caught off guard, driving the estimates higher for December," Kicklighter said.

In the short term, President-elect Obama’s stimulus plan will likely have a positive effect on the greenback, Kicklighter said.

But longer term, the currency market will probably begin a slow shift away from the dollar, Kicklighter said. The greenback is widely considered a safe haven, and traders have been risk averse in recent months, driving up the buck.

Kicklighter added that investors have also been flocking to ultra-safe Treasurys, which must be purchased in dollars.

But low interest rates mean low returns, and restless investors’ risk appetite will return when the economy recovers, Kicklighter said.

Investors tend to place their money in currencies of countries with a strong economy, and Kicklighter said he believes the U.S. is behind the euro zone and Japan on the road to recovery.

"That shift away from the dollar will be gradual, but the U.S. is not ahead on the recession curve," he said. 

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The chief executive of Sony Ericsson, a venture of Sony Corp and Ericsson, sees a tough cell phone market through the end of 2009, with unit sales down by about 5-6 percent as consumer demand slows in the weak global economy.

But Hideki Komiyama, who plans to release the company’s official 2009 estimates when it reports earnings later this month, said he believes Sony Ericsson “probably held” its 8 percent global market share in the fourth quarter.

“Others are falling apart but we are holding up,” he said referring to rivals such as Motorola Inc and LG Electronics in an interview with Reuters at the Consumer Electronics Show in Las Vegas.

However, even though Sony Ericsson overtook Motorola as the world’s No. 3 mobile phone maker in the third quarter, he noted that Motorola, LG and Sony Ericsson’s shipment volumes were not that different and put the change down to weaker performances by rivals than any big improvements at Sony Ericsson.

“We just happened to be number three in the third quarter. I’d like to be No. 3 by ourselves by 2011,” without depending on rivals faltering, he said.

Komiyama said it was difficult to forecast an outlook for the market but noted it was clear it would be a tough year.

“Right now it is not clear how the industry will be shaping up in 2009 or 2010. We know it is challenging.” he said, adding that the company was “preparing accordingly fast cash loan online.”

For example, it will look very carefully at its product portfolio and focus on more expensive, higher-margin products rather than cheaper, less profitable devices.

“We have to start analyzing products where we generate higher margins and eliminate the models where we have lower margins,” even if it means producing less products than originally planned, he said.

But in some markets the company still needs a mix of high-end and cheaper phones, he added.

Sony Ericsson has typically targeted profit margins in the low-double-digit percentage range, though it has failed to achieve those levels since 2007.

The company’s key devices including its popular Walkman music phones are facing stiff competition from rivals such as Apple Inc’s iPhone, particularly in the United States.

Even as the market shrinks Komiyama said it is important to keep the percentage of revenue it invests in research and development steady in order to be ready for a recovery.

He said the company was preparing for exciting new smartphone devices for 2010 but would not give any details.

“At this moment we’re under heavy rain. You have to look for shelter. But when you’re in the shelter you start preparing,” for a recovery, he said. 

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Bank of England Governor Mervyn King may abandon his reticence to shore up the financial system as the economy slides deeper into a recession.

With the central bank set to cut the U.K.’s key interest rate to the lowest in history this week, King may soon be forced to follow the Federal Reserve and pursue other ways to pump money into an economy contracting for the first time since 1991.

King’s first course of action will probably be to expand the 200 billion-pound ($290 billion) program that allows banks to swap illiquid securities for government debt, economists say. That would suggest he will be more aggressive in helping banks after criticism from executives and former policy makers that he was too focused on the dangers of reckless lending.

“The balance between moral hazard and doing what’s necessary to get the economy back on track is shifting,” said Nick Kounis, chief European economist at Fortis in Amsterdam and a former U.K. Treasury official. “King has made a big deal in the past about not being too generous, and it would be quite a big U-turn for him.”

King’s Monetary Policy Committee will on Jan. 8 reduce its main rate to 1.5 percent from 2 percent, according to the median of 50 forecasts in a Bloomberg News survey of economists.

That would be the lowest since the bank was founded in 1694 to finance King William III’s war against France. The European Central Bank’s benchmark stands at 2.5 percent. Rates in the U.S. and Japan are close to zero.

Blame

King has been under fire since the credit crisis started in 2007 for being too slow to help the banking system. Lawmakers criticized the Bank of England, along with the government and regulators, for not doing enough to soothe the market tensions that led to the collapse of Northern Rock Plc.

In September, King refused to extend the Special Liquidity Scheme beyond its original October deadline until the collapse of Lehman Brothers Holdings Inc. forced him to reverse his decision. The program now runs until Jan. 30.

King “must shoulder some of the blame” for the near- collapse of mortgage lender HBOS Plc in the subsequent market turmoil, Keith Skeoch, chief executive officer of Standard Life Investments Ltd., said in September. Former policy makers Charles Goodhart and Willem Buiter have said it was a mistake for King to put any deadline on the liquidity program.

“I would hope they’ll be more generous,” said Michael Saunders, chief Western European economist at Citigroup Inc. in London. “I would hope they’d realize the cost of the emphasis on moral hazard is to throw a lot of fairly blameless households and businesses to the recession cash advance no faxing.”

Recession

The Bank of England is now stepping up its response and joining Prime Minister Gordon Brown in encouraging banks to resume lending. British house prices lost almost a fifth of their value last year, HBOS said Jan. 2, and manufacturing contracted for an eighth month.

Brown said yesterday his government will create up to 100,000 jobs and push banks to extend more credit to companies.

U.K. officials cut their main rate by 1.50 percentage points in November, the most since 1992, and have reduced it by a total of 3.75 percentage points since December 2007.

The dilemma facing King and other central bankers is that near-zero interest rates and still-frozen credit markets mean monetary policy now packs less of a punch, forcing them to look for other methods to spur lending.

Rate Cuts

Fed Chairman Ben S. Bernanke on Dec. 16 cut the rate for overnight loans between banks to a target range of zero to 0.25 percent, and the Fed said it would buy unlimited quantities of securities. Three days later, the Bank of Japan lowered the overnight lending rate to 0.1 percent from 0.3 percent and decided to buy corporate debt for the first time.

Bank of England officials may not be far behind after last month identifying a need “for further measures to underpin lending growth.” One option is to loosen the Special Liquidity Scheme’s terms by reducing the fees banks pay to participate, said David Tinsley, an economist at National Australia Bank in London.

King could also widen the range of securities that can be swapped beyond those originated before 2008 or scrap the program in favor of a bigger arrangement.

“The bank has been quite sharp in trying to keep some kind of moral hazard considerations,” said Tinsley. “Cutting the fees and removing the deadline for origination would be a powerful way of boosting liquidity.”

King told lawmakers in November that the Bank of England would cooperate closely with the Treasury were rates to fall close to zero.

Greater willingness by King to step beyond conventional tools shows the change in his thinking, says Roger Bootle, founder of Capital Economics and a former adviser to the U.K. Treasury.

“King’s been on a remarkable intellectual journey over the last year or so,” he said. “He probably placed too much emphasis on moral hazard for too long. I don’t think you can accuse him of conservatism after what he’s been saying recently.”

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