Winners & Losers: Who's up, who's down

Film subsidies, the sale of Whistler, e-book pricing and more.

? Toyota

Toyota’s share price tanked in early February after two massive recalls (which included its bestselling vehicles) and growing safety concerns with its high-profile hybrids dented the company’s reputation for quality. Noting the automaker founded by his grandfather is “facing a crisis,” president Akio Toyoda apologized on Feb. 5 for speed control issues that affect at least eight million vehicles. Some need a new part to prevent gas pedals from sticking; others have floor mats that can keep pedals depressed. The Japanese automaker is working to address potential brake problems in its gas-electric products: there have been about 200 customer complaints about a temporary loss of braking ability when the popular Prius hybrid shifts between gas and electric power modes. Other Toyota hybrids use the same system. Meanwhile, safety advocates are also concerned with electronic throttle control systems deployed by Toyota and other car companies, an issue raised in several U.S. customer lawsuits. Toyoda is under fire for not dealing with reputation issues before they spun out of control; he plans to lead a special committee charged with beefing up quality control.

? Film industry

Still reeling from a brutal 2009, the North American film industry can take solace that British Columbia has upped the ante in a seemingly never-ending subsidy war. In early February, the province once again increased its labour tax credits in response to sweetened incentives offered by Ontario and other competing jurisdictions. This comes after extensive industry lobbying.

? Amazon
Book retail

Following Apple’s iBooks store announcement, Macmillan, one of U.S. publishing’s Big Six, demanded Amazon relax the rigid, loss-leader e-book pricing it uses to drive sales of its Kindle reader, and match Apple’s higher prices. The retailer refused, yanking Macmillan’s books from its store. But immediate industry-wide outrage forced them to back down in mere hours. Now, other publishers are following Macmillan’s lead in loosening Amazon’s grip on pricing, and the retailer’s stock has plummeted.

? Irene Rosenfeld

Kraft Foods CEO Irene Rosenfeld has ended her long quest to purchase British confectionery giant Cadbury. Rosenfeld’s initial US$16.7-billion offer last fall was spurned by Cadbury as too low. Other candy companies considered making a bid, threatening to steal Rosenfeld’s prize. Warren Buffett, Kraft’s largest shareholder, then complicated matters by arguing the U.S. food conglomerate was paying too much for the company. But Rosenfeld was undaunted, and Cadbury finally accepted Kraft’s increased bid of US$18.9 billion.

? Royal Caribbean
Luxury vacations

To vacation or not to vacation? The answer is clear to Royal Caribbean cruises as their ships continue to dock in Labadee, Haiti, 80 miles out of Port-au-Prince. The decision to continue scheduled stops has created a turbulent wake of moral outrage. To offset the negative publicity, Royal Caribbean is highlighting how Haiti, now more than ever, needs the tourist dollars, and the company has promised to donate US$1 million in humanitarian relief to the devastated island nation.

? Cinram
Media Manufacturing

Founded in 1969, the Toronto-based manufacturer survived several revolutions, shifting from making eight-tracks to videotapes to DVDs. But the advent of movie distribution on the Internet may kill the company, which employs 17,000 people. Warner Home Video, which represented 28% of Cinram’s $1.5-billion annual revenue, cancelled its contract in January, causing the company’s stock to plunge 60%.

? Ken Lewis

New York’s attorney general filed civil fraud charges on Feb. 4 against Bank of America and its former CEO Ken Lewis, claiming the bank misled investors when BoA acquired Merrill Lynch in early 2009. The U.S. Securities and Exchange Commission has already reached a settlement with the bank over similar claims.

? Venezuela

Move over, Canada. In late January, the U.S. Geological Survey declared that Venezuela’s Orinoco Oil Belt contains an estimated 513 billion barrels of recoverable oil – significantly more than previously thought, and the largest accumulation ever assessed by the agency. The announcement seemed to diminish the prestige of Canada’s declared 175 billion barrels of recoverable oil, nearly all of it contained within Alberta’s oilsands. Albertan critics scoffed at the announcement; some argued the calculation used to arrive at the two reserve estimates differ substantially, and pointed to Venezuela’s greater political instability.

? Saab

Spyker Cars, a small Dutch company that produces luxury sports cars, made a deal with GM to buy Sweden’s Saab for $74 million in cash, leaving GM $326 million worth of preferred shares. Spyker’s $584-million loan to make Saab profitable is guaranteed by the Swedish government, but must still be approved by the EU Commission.

? Iran

Industrial conglomerate Siemens has announced it will put a stop to business dealings with Iran later this year, over concerns surrounding the country’s uncertain nuclear activity. Several other firms, including Italy’s biggest oil and gas company ENI SPA, Deutsche Bank and Credit Suisse Group have followed suit. Siemens says it’s bowing to presure from the U.S. and Europe, as they push for stricter United Nations sanctions against Iran.

? Brian Hunter
Market trading

An administrative law judge with the U.S. Federal Energy Regulatory Commission has found Calgary trader Brian Hunter guilty of market manipulation. The ruling, which must still be accepted by FERC, involves trading at hedge fund Amaranth Advisors before government concerns over its natural gas trading led to the firm’s $9-billion implosion in 2006.

? Intrawest

On Feb. 19, Intrawest Holdings will be auctioning off its acclaimed Whistler ski resort as skiers in the men’s Olympic Super-G race make their way down the slopes. The sale comes after the company failed to make payments on its $1.7-billion loan. Intrawest says the plan to conduct the sale in the middle of the Games is a deliberate negotiating tactic.

? Whirpool
Home appliances

Though emerging markets provided many of the sales gains that boosted Q4 numbers for Whirlpool (maker of Maytag and Kitchenaid), analysts seized on the company’s 4% growth in North America – its first domestic sales uptick since the beginning of 2007 – as a sign that consumers are starting to make big-ticket appliance purchases again.