PLANYC 2030

 

Australia’s competition watchdog has approved 7-Eleven Pty. Ltd.’s proposed takeover of Exxon Mobil Corp’s Australian filling stations, conditional on the divestment of a few individual stations.

Privately-owned 7-Eleven recently agreed to buy Exxon Mobil’s 295 stations for an undisclosed sum after the regulator blocked an agreement to sell them to Caltex Australia Ltd. for around A$300 million.

7-Eleven, which has a license to operate and franchise stores in Australia from U.S.-based 7-Eleven Inc., doesn’t have a presence in South Australia state and will on-sell Exxon Mobil’s filling stations there to private company Peregrine Corp.

The Australian Competition and Consumer Commission said it has competition concerns at one site in New South Wales state, two in Queensland and one in South Australia.

The ACCC said it has received confirmation from 7-Eleven that it will divest three sites, and also from Peregrine that it will divest one site.

The financial regulation law signed by President Obama on Wednesday will arguably affect no federal agency more than it does the Securities and Exchange Commission.

The SEC is required to issue 95 new regulations governing a wide swath of the financial sector, dozens more than the Federal Reserve, the new Consumer Financial Protection Bureau or other federal agencies. The SEC is also slated to complete 17 one-time studies and five new ongoing reports, according to a tally by the law firm Davis Polk & Wardwell.

The SEC will serve on the new Financial Stability Oversight Council, a new interagency body meant to spot emerging risks to the overall financial system. It will have to write rules to supervise the multibillion-dollar market of derivatives linked to stocks and bonds. It will begin examining the activities of hedge funds and private equity firms and tighten oversight of credit-rating agencies. And it will do studies of short selling and whether brokerage and investment firms must meet higher standards.

Perhaps only the Office of Thrift Supervision can compete with the SEC in terms of the new law’s impact. But in contrast to the SEC, which is gaining so many new responsibilities, OTS, which regulated home lenders, is being abolished.

Indeed, the SEC is coming out of the financial regulatory overhaul far stronger than many observers of the agency might have anticipated. The SEC was the object of much criticism — on Capitol Hill, Wall Street and elsewhere — for multiple regulatory failures, from oversight of investment banks to the Ponzi scheme orchestrated by Bernard Madoff.

“There was a point in time when things were not looking good for the SEC. People were asking whether it should be merged with another agency,” said Marc S. Gerber, a securities lawyer at Skadden Arps. “But with the leadership led by Mary Schapiro, they were able to right the ship and get the SEC on course and improve their standing in Congress, so they were able to get these new responsibilities.”

More tasks for agency

Before the financial reform law, the SEC already had a full plate. It is working to implement or finalize nearly 20 new regulations covering areas ranging from money market funds to high-speed electronic trading. It is also conducting numerous investigations growing out of the financial crisis and is in the early stages of implementing many internal reforms in its enforcement and examination divisions.

The agency’s new tasks are just as onerous. Schapiro said at a congressional hearing Tuesday that the SEC will have to hire 800 new employees.

“The act requires the SEC to promulgate a large number of new rules, create five new offices, and conduct multiple studies, many within one year,” Schapiro told Congress in prepared testimony. “The importance and complexity of the rules coupled both with their timing and high volume and the rule writing agenda currently pending will make the upcoming rule writing process both logistically challenging and extremely labor intensive.”

SEC officials say they will look to write rules and conduct studies as fast as they can with the schedule largely dictated by the new law.

Some of the new rules the SEC will implement on its own. Others will require coordination with other agencies. For example, the SEC must work with the Commodity Futures Trading Commission to write rules for derivatives. The agency must work with the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. to write rules requiring that banks that issue securities to the secondary market hold 5 percent of the investment on their own balance sheets — a “risk retention” measure.

While the new law imposes many new responsibilities on the SEC, it also makes the agency’s job easier in several ways. One is offering more explicit support for some of the more controversial rulemaking efforts the SEC had already launched.

For example, the SEC has proposed rules that would make it easier for shareholders to join together to nominate directors to sit on the boards of public companies. But business interests generally oppose “proxy access” and have threatened to sue if the SEC implements the rules.

The legislation, which makes clear that the agency has the power to write rules granting this power to shareholders, makes the threat of lawsuit less ominous. “For a number of years people have questioned whether the SEC has the authority to adopt proxy access,” Gerber said. “That question has been answered.”

New enforcement powers

The law also gives the agency’s enforcement division new powers to conduct investigations and bring lawsuits against companies and people accused of committing financial wrongdoing. It will be easier for the SEC to serve lawsuits and subpoenas and to bring cases in a more favorable and less expensive regulatory court. The agency will also have a new ability to reward whistleblowers who provide information that’s essential to a case.

The law gives the agency plenty of new financial support — but not as much as the agency wanted. It doubles the agency’s budget over five years and also creates a reserve fund the agency can use to plan long-term expenditures such as technology. But the agency wasn’t given the power to fund itself through industry fees, as it had wanted.

 

In 1895, after John Lincoln was laid off from his manufacturing job, he decided to start his own company. The sting of a layoff hit home.

The company Lincoln founded doesn’t do layoffs, no matter how bad things get. Lincoln Electric sometimes cuts hours or salaries or suspends its yearly bonus — which in 2008 was more than $28,000 per employee. But for the past 60 years, the Cleveland, Ohio, company hasn’t laid off a worker. The company has existed through many changes in the welding industry, and has seen such innovations as welding gas regulators.

A maker of welding equipment, Lincoln was featured this week in an episode of “Religion & Ethics Newsweekly” on PBS. Lincoln is the worst nightmare of organized labor: It’s a non-union manufacturer that doesn’t offer paid sick leave, among other atypical practices.

Lincoln is the antithesis of behemoth manufacturers such as General Motors, which have so succumbed to union pressure that they have trouble competing. When GM’s Oklahoma City assembly plant was closed, its dislodged workers were basically paid to do nothing for 18 months. Such a notorious “jobs bank” doesn’t exist in most of America. It certainly doesn’t exist at Lincoln Electric. But then Lincoln doesn’t lay off workers, either.

In 1934, in the midst of a depression, Lincoln began a profit-sharing program. The company has been profitable ever since. Last year, Lincoln had to temporarily reduce its work week to 32 hours and cut wages across the board. Ten percent of the work force took an early retirement buyout. But those who stayed helped Lincoln earn yet another annual profit — and employees got yearend bonuses averaging $17,000 each.

 

AMR Corp ., parent of American Airlines Inc., said Wednesday that it lost $10.7 million in the second quarter – the 10th time in 11 quarters that it has posted a loss.

The Fort Worth-based company also announced that chief financial officer Tom Horton, 49, will step up to become president of AMR and American today, assuming those jobs from chairman and chief executive Gerard Arpey.

AMR also announced that it has ordered 35 Boeing 737-800s to replace its aging and less fuel-efficient McDonnell Douglas MD-80s.

While AMR’s $11 million loss is a sharp turnaround from its $390 million loss in second quarter 2009, the results probably will make AMR the only major U.S. carrier to lose money for the three months that ended on June 30.

American’s two largest U.S. rivals have posted huge profits for the quarter, the highest in at least 10 years for both. Delta Air Lines Inc. earned $467 million; United Airlines Inc.’s parent earned $273 million.

Smaller AirTran Holdings Inc . and US Airways Group also were profitable.

Despite the loss, Arpey and Horton tried to spread a message of hope as they talked Wednesday to analysts. Horton noted that AMR’s operating income of $196 million was its first operating profit in three years, despite the net loss.

On a net basis, AMR lost $10.7 million, or 3 cents a share, only a fraction of the $390 million, or $1.39 a share, it lost a year earlier.

Its revenue rose 16 percent to $5.67 billion from $4.89 billion in the 2009 quarter.

AMR shares fell 23 cents Wednesday to $6.62 in regular trading and lost a penny more in after-hours trading.

“Of course, we are far from satisfied with these results. Losing money is not acceptable,” Horton told analysts.

“But we believe the improvement we’re seeing indicates that we’re headed in the right direction, and we’re determined to build on our progress and return to solid profitability.”

They pointed to American’s strategy of focusing on five major airports and its network to improve its fortunes, helped tremendously by antitrust immunity with its partners across the Atlantic, just approved by regulators; its planned business venture with Japan Airlines, undergoing review now; and its new partnership with JetBlue in Boston and New York.

With Horton’s promotion as Arpey’s heir apparent, AMR and American have only one remaining executive vice president, Bob Reding, EVP of operations.

Dan Garton, who had been EVP of marketing, moved last month to be president and CEO of AMR’s regional operations, American Eagle. Horton said Garton’s former duties will be spread among a variety of executives, including a number who received promotions Wednesday.

Horton’s replacement as CFO will be Bella Goren, who will keep her title as senior vice president.

When the 35 new 737-800s are delivered in 2011 and 2012, American will fly 195 Boeing 737-800s. And 11 already ordered are scheduled to arrive between 2013 and 2016.

American also said that it won’t receive its first Boeing 787-9s until 2014, two years after the original schedule. The delay had been expected after Boeing has had to postpone the new aircraft a number of times.

 

PHOENIX (Reuters) – Nicaraguan mother Lorena Aguilar hawks a television set and a few clothes on the baking sidewalk outside her west Phoenix apartment block.

A few paces up the street, her undocumented Mexican neighbour Wendi Villasenor touts a kitchen table, some chairs and a few dishes as her family scrambles to get out of Arizona ahead of a looming crackdown on illegal immigrants.

“Everyone is selling up the little they have and leaving,” said Villasenor, 31, who is headed for Pennsylvania. “We have no alternative. They have us cornered.”

The two women are among scores of illegal immigrant families across Phoenix hauling the contents of their homes into the yard this weekend as they rush to sell up and get out before the state law takes effect on Thursday.

The law, the toughest imposed by any U.S. state to curb illegal immigration, seeks to drive more than 400,000 undocumented day labourers, landscapers, house cleaners, chambermaids and other workers out of Arizona, which borders Mexico.

It makes being an illegal immigrant a state crime and requires state and local police, during lawful contact, to investigate the status of anyone they reasonably suspect of being an illegal immigrant.

The U.S. government estimates 100,000 unauthorized migrants left Arizona after the state passed an employer sanctions law three years ago requiring companies to verify workers’ status using a federal computer system. There are no figures for the number who have left since the new law passed in April.

Some are heading back to Mexico or to neighbouring states. Others are staying put and taking their chances.

In a sign of a gathering exodus, Mexican businesses from grocers and butcher shops to diners and beauty salons have shut their doors in recent weeks as their owners and clients leave.

On Saturday and Sunday, Reuters counted dozens of impromptu yard sales in Latino neighbourhoods in central and west Phoenix/

“They wanted to drive Hispanics out of Arizona and they have succeeded even before the law even comes into effect,” said Aguilar, 28, a mother of three young children who was also offering a few cherished pictures and a stereo at one of five sales on the same block.

She said she had taken in just $20 as “everyone is selling and nobody wants to buy.”

LEGAL RESIDENTS FLEE

Arizona straddles the principal highway for human and drug smugglers heading into the United States from Mexico.

The state’s Republican governor, Jan Brewer, signed the law in April in a bid to curb violence and cut crime stemming from illegal immigration.

Polls show the measure is backed by a solid majority of Americans and by 65 percent of Arizona voters in this election year for some state governors, all of the U.S. House of Representatives and about a third of the 100-seat Senate.

Opponents say the law is unconstitutional and a recipe for racial profiling. It is being challenged in seven lawsuits, including one filed by President Barack Obama’s administration, which wants a preliminary injunction to block the law.

A federal judge heard arguments from the lawyers for the Justice Department and Arizona on Thursday and could rule at any time.

The fight over the Arizona law has complicated the White House’s effort to break the deadlock with Republicans in Congress to pass a comprehensive immigration law, an already difficult task before November’s elections.

While the law targets undocumented migrants, legal residents and their U.S.-born children are getting caught up in the rush to leave Arizona.

Mexican housewife Gabriela Jaquez, 37, said she is selling up and leaving for New Mexico with her husband, who is a legal resident, and two children born in Phoenix.

“Under the law, if you transport an illegal immigrant, you are committing a crime,” she said as she sold children’s clothes at a yard sale with three other families. “They could arrest him for driving me to the shops.”

Lunaly Bustillos, a legal resident from Mexico, hoped to sell some clothes, dumbbells and an ornamental statue on Sunday before her family heads for Albuquerque, New Mexico, on Monday.

“It makes me sad and angry too because I feel I have the right to be here,” said Bustillos, 17, who recently graduated from high school in Phoenix.

 

When Mike Nugent flies, nothing annoys him more than settling into his seat, the plane taking off, and the passenger in front reclining into his lap. So he’s come up with a solution.

“I put my knee right in the middle of the back of the seat,” Nugent, 66, says. “They think it’s broken. They try (to recline) two or three times, then they give it up.”

Nugent, a hospital laundry consultant who’s on the road most days of the year, has another way to sidestep the irritation that can accompany flying. “I’ve started to drive as often as I can,” he says.

Long gone are the days when air travel was an elegant experience. Many road warriors say that courtesy, at the airport or on the plane, is becoming about as rare as a free, hot in-flight meal. They grouse that inconsiderate, or downright rude, behavior is more common and that it’s spurred by an increasing discomfort with all aspects of flying, from security rules to bare-bones service, that put travelers on edge.

And behavior is unlikely to get better, some involved in the travel industry say, because irritants such as extra airline fees and more crowded planes aren’t going away soon.

“The flying experience is terrible,” says Anne Banas, executive editor of SmarterTravel.com. “You’re getting less legroom. People fight over things like capacity in overhead bins. Airlines are charging bag fees. … Airlines are doing things that are making it more difficult and uncomfortable for the passenger, and the customer service isn’t getting that much better. You compound those factors, and you have a lot of frustration in the air.”

Frustration can lead to bad manners.

“So much of etiquette is based on knowing what to expect from someone else,” says Lizzie Post, spokeswoman for the Emily Post Institute, which was founded by manners maven Emily Post and is dedicated to the promotion of etiquette.

Passengers, she says, “don’t know how long that security line is going to be. They don’t know if they have anything in their bag that will meet regulations in this airport but not that airport. The nerves get up, and that’s when we lose our awareness of the other people around us.”

Frustrations add up

Complaints abound. Road warriors fret about parents who won’t quiet screeching toddlers, the guy who had garlic for lunch and won’t stop talking, and supersized seatmates who intrude on their space. They speak of dirty planes, testy flight attendants and loud passengers who won’t turn off their cellphones.

There’s the lady trying to stuff a steamer trunk into an overhead bin in the front of the cabin when her seat is in the back, and the passengers who give you whiplash dragging your seat down to pull themselves up.

And there can be a healthy dose of aggravation before you even board the plane, frequent fliers say, such as security screening rules that vary depending on the airport and flights canceled at the last minute with little explanation.

“I don’t care whether it’s a Big Mac or a Subway sandwich, the food smells gross in a confined place,” Margaret Bowles, a lawyer in Tampa, complained in an e-mail. “If you are going to eat a sandwich, get one that isn’t cooked and doesn’t have onions or peppers.”

“There needs to be a flying etiquette pamphlet handed out to anyone who takes less than three trips per year,” writes frequent flier Faith Varwig.

Sometimes, behavior goes from merely discourteous to disruptive, and flights are diverted.

On July 10, a Southwest flight heading to Islip, N.Y., from Orlando was diverted to Raleigh, N.C., when a passenger began using foul language and became verbally abusive to the flight crew, says Paul Flaningan, a Southwest spokesman. In another incident this month, a Southwest flight from Chicago to Salt Lake City was diverted to Denver when a passenger began to act erratically and refused to sit down.

Travelers aren’t just finding fault with the behavior of fellow passengers. A national Consumer Reports survey released in May found airline passengers were most annoyed by ubiquitous fees airlines charge to check a bag. On a scale of 1 to 10, with 10 being the most vexing, bag charges scored an 8.4. Other fees, for such items as blankets, scored 8.1, while unhelpful airline workers got a 7.7.

More stressful flying

A decline in manners can be tied in part to a flying experience that’s more stressful as security has intensified after the terror attacks of Sept. 11. And many airlines have cut service and added fees to make ends meet, some industry observers say.

Flying may get more stressful as people who’d put travel on hold during the economic downturn return to the air and find smaller planes and fewer available flights.

“Planes are flying more passengers,” says Corey Caldwell, spokeswoman for the Association of Flight Attendants. “There’s less available seats … in a stressful environment and a very close environment. A lot of times there are disruptions that do occur.”

Unruly behavior on the part of passengers “has heightened since 9/11, and we often see spikes when there’s a new implementation of a rule or policy or procedure,” Caldwell says. “(It’s) really because these passengers are being exposed to more and more stressors.”

Attendants are under more pressure, she says.

“Flight attendants are having to be vigilant on a lot more fronts than they have before, and so after a 14- or 16-hour day, I think anyone is a little more stressed,” she says.

Paul DeStefano, who travels two or three times a week, has a couple of peeves. One is flatulence.

“It is something that just infuriates me,” says DeStefano, 43, of Bridgewater, N.J. “We’re all human, but you’re stuck in a tube with somebody for four hours and they have the audacity to think it’s OK to let it loose.”

DeStefano, who runs the sales force of a consumer products business, says he’s also bothered by the sight of men who won’t help elderly women or mothers who are struggling with their bags.

“You should fly as though your mother’s with you,” he says. “Would she expect you to pass gas? No. Would she expect you to get the bag? Yes.”

Larry Stocker, a frequent flier, has a list of retorts at the ready.

For the fellow passenger who hasn’t bathed, “I’ll just say. ‘Do you use a deodorant?’ ” For the guy yelling into a cellphone, “I say, ‘This is a really interesting conversation. Could you tone it down because I’m trying to take a nap.’ “

Stocker, 58, who is president of his own company, says he wasn’t always so forward. But boorish behavior by fellow passengers is “so much more prevalent today … you can almost feel like you’re forced to take some action on your own behalf.”

New nuisances

Some irritants, such as the kid constantly kicking the back of your seat, have long been traveling pitfalls. But the digital age has ushered in new nuisances.

Peter Juhren, 52, who travels 175,000 miles a year for his job, says he’s had to ask passengers to more gently tap the console on the back of his seat. “Sometimes you get somebody behind you, especially when they’re playing a game … and they’re just pounding away,” says Juhren, a corporate service manager for a construction equipment business, who lives in Salem, Ore.

Pauline Weaver says she once had to admonish a fellow flier who kept texting long after passengers were told to stop.

“I tapped her on the shoulder, and I said, ‘You’ve got to turn it off or I’m going to tell the flight attendant,’ ” says Weaver, 61, a lawyer based in Hayward, Calif. “I don’t know from a hill of beans whether (the portable device) would have impacted the plane, but I don’t really care. You’re just not supposed to do it. … If you want to fly, you have to follow the rules. If you don’t want to, take a train.”

Industry observers and etiquette experts say there are some behaviors that you just have to make your peace with when you’re sharing a cramped, public space.

But there are ways to deal.

“People ask us all the time how do you combat the rudeness,” Lizzie Post says. “I go out there, and I’m one less rude person. You consider things. I’m not going to bring my really smelly fish leftovers on the plane. I’m going to bring a turkey sandwich.”

Travel experts say that you can ask the person behind you if it’s OK to recline your seat, recline only halfway or for part of the flight.

Bring along headphones to block out noise, and it’s fine to politely inform a seatmate that you’re not in the mood to chat.

Airlines, on the other hand, should look at courtesy and customer service as a matter of dollars and cents, says Stuart Greif, vice president and general manager for global travel and hospitality for J.D. Power and Associates.

A J.D. Power survey released last month found that passenger satisfaction with North American airlines was up but still below the levels that existed before the widespread implementation of fees. And Greif says satisfaction continues to lag behind other industries, such as autos or insurance.

“Ultimately, those that make their customers happy and feel valued … are the ones that are going to earn more revenue and be here in the long term,” Greif says of airlines.

Despite all the frustrations that can crop up, frequent flier DeStefano says he still manages to see the bright side.

“I still get a little kick in the pants every time the airplane gets off the runway,” he says. “You’re taking a plane full of … people at 500-plus miles an hour, going a time zone away.

“The fact that it works as well as it does is amazing.”

 

 

Apple Inc. is boosting efforts to appeal to a new type of customer: small businesses.

The consumer electronics giant responsible for the iPhone is seeking to hire engineers in as many as a dozen U.S. retail stores to put together Apple-based computer systems for small businesses, according to recent job postings on Apple’s website. The employees would implement computer systems for clients and are expected to be proficient in networking hardware and server platforms.

“Thousands of businesses run on Apple products,” the posting reads. “Many more would like to, and that’s where you come in.”

The new positions mark the latest development in Apple’s evolving strategy, which has historically focused on the consumer market and niche businesses, like design and media firms. Now, Apple wants to leverage its popular iPhone and iPad devices, using their appeal as a selling point for more expensive products, including its line of Macintosh computers and servers. (See related article on C10.)

Apple is targeting smaller, local businesses that it can reach through its chain of nearly 300 retail stores, according to two Apple employees familiar with the company’s strategy. The new jobs could pay up to $80,000 a year, one of them said.

Each of Apple’s stores already has at least one salesman dedicated to managing accounts with local businesses, the employees said. Recently, Apple also began recruiting from within the sales staff to create a specialized team that negotiates leasing and pricing terms for business customers, one of the people said. Some stores have seen revenue more than double after implementing the program, the person added.

An Apple spokeswoman declined to comment.

The focus on smaller businesses is unlikely to push Apple into further competition with big computer makers like Hewlett-Packard Co. and Dell Inc., though it could upset its network of authorized consultants, who often serve local businesses.

Targeting smaller businesses could prove lucrative. North American businesses with fewer than 1,000 employees are expected to spend $310.8 billion on information technology this year, according to industry tracker Gartner. The figure is seen rising roughly 6% to $328.3 billion next year. Capturing part of those sales could boost Apple’s annual revenue, which is expected to grow 46% to $62.6 billion this year, according to consensus estimates from Thomson Reuters. “They’re well aware of the opportunities in business,” said Gleacher & Co. analyst Brian Marshall. “This is something they’re focusing on even if they’re not talking about it publicly.”

Apple has had mixed results trying to crack the business market in the past. Its computers are generally more expensive than comparable PCs, prompting cost-conscious companies to look for cheaper alternatives.

Apple’s retail staff historically hasn’t provided the hand-holding and on-site support that many businesses expect. Instead, it has cultivated a network of authorized consultants, many of whose customers are referrals from Apple’s retail employees.

“Almost half of our new customers come from the Apple Store,” said Allen Cleaton, owner of Virginia-based MacPro Solutions. He said local businesses often come to him because Apple’s staff generally don’t have the level of technical expertise needed to set up and maintain a businesses computer network.However, Mr. Cleaton said that if Apple starts providing a higher level of service, it could threaten local companies like his own.

The Apple employees familiar with the new position said it was a natural progression of recent initiatives. Apple maintains a team at its headquarters to handle big companies and government agencies, but it has increasingly handed responsibility for small and mid-sized business accounts to its retail stores, the people said.

Apple has put an incentive program in place to manage the growth of these new business initiatives, they said, assigning new business sales staff based on revenue targets for each store.

Apple also has designed specialized conference rooms in its newer retail stores, like those in Minneapolis and Shanghai, which are specifically meant for meetings between sales staff and high-level business executives.

 

Wal-Mart Stores Inc. plans to roll out sophisticated electronic ID tags to track individual pairs of jeans and underwear, the first step in a system that advocates say better controls inventory but some critics say raises privacy concerns.

Starting next month, the retailer will place removable “smart tags” on individual garments that can be read by a hand-held scanner. Wal-Mart workers will be able to quickly learn, for instance, which size of Wrangler jeans is missing, with the aim of ensuring shelves are optimally stocked and inventory tightly watched. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart’s more than 3,750 U.S. stores.

“This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business,” said Raul Vazquez, the executive in charge of Wal-Mart stores in the western U.S.

Before now, retailers including Wal-Mart have primarily used RFID tags, which store unique numerical identification codes that can be scanned from a distance, to track pallets of merchandise traveling through their supply chains.

Wal-Mart’s broad adoption would be the largest in the world, and proponents predict it would lead other retailers to start using the electronic product codes, which remain costly. Wal-Mart has climbed to the top of the retailing world by continuously squeezing costs out of its operations and then passing on the savings to shoppers at the checkout counter. Its methods are widely adopted by its suppliers and in turn become standard practice at other retail chains.

But the company’s latest attempt to use its influence—executives call it the start of a “next-generation Wal-Mart”—has privacy advocates raising questions.

While the tags can be removed from clothing and packages, they can’t be turned off, and they are trackable. Some privacy advocates hypothesize that unscrupulous marketers or criminals will be able to drive by consumers’ homes and scan their garbage to discover what they have recently bought.

They also worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge. Several states, including Washington and New York, have begun issuing enhanced driver’s licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person’s identity the next time they stepped into the store.

“There are two things you really don’t want to tag, clothing and identity documents, and ironically that’s where we are seeing adoption,” said Katherine Albrecht, founder of a group called Consumers Against Supermarket Privacy Invasion and Numbering and author of a book called “Spychips” that argues against RFID technology. “The inventory guys may be in the dark about this, but there are a lot of corporate marketers who are interested in tracking people as they walk sales floors.”

Smart-tag experts dismiss Big Brother concerns as breathless conjecture, but activists have pressured companies. Ms. Albrecht and others launched a boycott of Benetton Group SpA last decade after an RFID maker announced it was planning to supply the company with 15 million RFID chips.

Benetton later clarified that it was just evaluating the technology and never embedded a single sensor in clothing.

Wal-Mart is demanding that suppliers add the tags to removable labels or packaging instead of embedding them in clothes, to minimize fears that they could be used to track people’s movements. It also is posting signs informing customers about the tags.

“Concerns about privacy are valid, but in this instance, the benefits far outweigh any concerns,” says Sanjay Sarma, a professor at the Massachusetts Institute of Technology. “The tags don’t have any personal information. They are essentially barcodes with serial numbers attached. And you can easily remove them.”

In Europe some retailers put the smart labels on hang tags, which are then removed at checkout. That still provides the inventory-control benefit of RFID, but it takes away other important potential uses that retailers and suppliers like, such as being able to track the item all the way back to the point of manufacture in case of a recall, or making sure it isn’t counterfeit.

Wal-Mart won’t say how much it expects to benefit from the endeavor. But a similar pilot program at American Apparel Inc. in 2007 found that stores with the technology saw sales rise 14.3% compared to stores without the technology, according to Avery Dennison Corp., a maker of RFID equipment.

And while the tags wouldn’t replace bulkier shoplifting sensors, Wal-Mart expects they’ll cut down on employee theft because it will be easier to see if something’s gone missing from the back room.

Several other U.S. retailers, including J.C. Penney and Bloomingdale’s, have begun experimenting with smart ID tags on clothing to better ensure shelves remain stocked with sizes and colors customers want, and numerous European retailers, notably Germany’s Metro AG, have already embraced the technology.

Robert Carpenter, chief executive of GS1 U.S., a nonprofit group that helped develop universal product-code standards four decades ago and is now doing the same for electronic product codes, said the sensors have dropped to as little as seven to 10 cents from 50 cents just a few years ago. He predicts that Wal-Mart’s “tipping point” will drive prices lower.

“There are definitely costs. Some labels had to be modified,” said Mark Gatehouse, director of replenishment for Wrangler jeans maker VF Corp., adding that while Wal-Mart is subsidizing the costs of the actual sensors, suppliers have had to invest in new equipment. “But we view this as an investment in where things are going. Everyone is watching closely because no one wants to be at a competitive disadvantage, and this could really lift sales.”

Wal-Mart won’t disclose what it’s spending on the effort, but it confirms that it is subsidizing some of the costs for suppliers.

Proponents, meanwhile, have high hopes for expanded use in the future. Beyond more-efficient recalls and loss prevention, RFID tags could get rid of checkout lines.

“We are going to see contactless checkouts with mobile phones or kiosks, and we will see new ways to interact, such as being able to find out whether other sizes and colors are available while trying something on in a dressing room,” said Bill Hardgrave, head of the RFID Research Center at the University of Arkansas, which is funded in part by Wal-Mart. “That is where the magic is going to happen. But that’s all years away.”

 

UPS isn’t expecting U.S. consumers to significantly increase spending anytime soon. Instead, it’s counting on businesses to push the economy — and UPS’ domestic business — slowly forward with overdue purchases of computers and other electronics.

UPS on Thursday expressed confidence that the “slow pace” of economic recovery in the U.S. can be overcome by increased prices and strong international shipments. UPS raised its full-year outlook for the second time since January.

The results from the world’s largest shipping company confirm that U.S. consumers and businesses aren’t spending beyond the necessities — except when it comes to technology.

Consumers are gobbling up iPhones, iPads and other new gadgets that are shipped from Asia, Chief Financial Officer Kurt Kuehn said in an interview with The Associated Press. Technology purchases are countering sluggish spending in other areas for businesses, too — especially those that put off upgrades or new computer purchases during the recession.

“Tech has really been leading from Asia, with China leading the charge,” Kuehn said. A growing portion of UPS’ business is international.

Consumers and business customers also want their goods more quickly, increasingly using next-day air service instead of cheaper truck delivery. That bodes well for UPS’ ability to fetch more money per package.

The Atlanta company said Thursday it expects adjusted earnings of $3.35 to $3.47 per share this year, up from a previous prediction of $3.05 to $3.30. Analysts’ currently expect $3.27.

Shares of UPS jumped 6.5 percent to $63.93 in midday trading.

UPS Inc. said Thursday that earnings for the second quarter nearly doubled to $845 million, or 84 cents per share, compared with 445 million, or 44 cents per share a year ago. Revenue rose 13 percent to $12.2 billion.

Thomson Reuters says analysts forecast 77 cents per share on $11.98 billion in revenue.

“UPS fired on all cylinders in the second quarter even in the face of a mixed global economic environment,” said CEO Scott Davis.

UPS’ international business continues to be the key growth area. Package volume jumped 24 percent, while revenue per package rose about 2 percent because customers used cheaper modes of shipping. International exports rose 15 percent in the quarter, led by shipments out of Asia, which were up more than 40 percent.

In the U.S., average daily package volume rose just 1 percent. But UPS took in 6 percent more revenue per package, mostly by charging higher prices and passing along fuel costs to customers.

Even as business improves, UPS isn’t eager to hire anytime soon. Instead, it’s looking for ways to take on more shipments without adding costs.

For the quarter that ended in May, UPS’ smaller rival FedEx earned $419 million, or $1.33 per share. It said last month that economists are being too pessimistic about the pace of global recovery.

 

German Finance Minister Wolfgang Schaeuble defied doctors in March after an operation, traveling to Brussels for a European Union debt crisis meeting. The EU was preparing a financial package to avert a Greek default as traders placed bets against the euro.

Wheelchair-bound Schaeuble, 67, and his peers from the other 15 euro countries crafted an emergency loan bailout in case Greece’s efforts for tax increases and wage cuts failed. The rescue plans, opposed by more than half of Germans, were hatched before Chancellor Angela Merkel endorsed the initiative.

“He came right out of the hospital to the meeting and was a very active member in our discussions,” Luxembourg Finance Minister Luc Frieden said in an interview. “He showed his commitment to public service in a way that maybe others wouldn’t have done.”

Fighting for the EU has been a cornerstone of Schaeuble’s politics during his four decades in parliament. His path has been made more difficult by his relationship with Merkel, 56, who twice denied him the chance to lead Germany.

“We are the country in the middle of Europe,” Schaeuble said in a July 8 interview with Bloomberg News. “Germany has always been at the center of every major war in Europe, but our interest is not to be isolated.”

Less than a week after Schaeuble left his hospital bed, Merkel told reporters that EU leaders should discuss allowing the International Monetary Fund to aid Greece, publicly disagreeing with Schaeuble. She told Deutschlandfunk radio that a March 25 summit was unlikely to produce an aid package for Greece and that the EU shouldn’t create “illusions.”

Cost Burden

European governments said on April 11 that they were prepared to lend at least 30 billion euros ($39 billion) to Greece, complementing IMF aid. The total bailout package was raised May 2 to 110 billion euros over three years, with Germany shouldering more than 25 percent of the euro countries’ cost.

“His goal has always been for Germany to be recognized and anchored in Europe, with less national political responsibility, and an acceptance of Germany paying the EU’s bills,” said Carl Graf von Hohenthal, a management adviser at public-relations firm Brunswick Group Inc. in Berlin. Merkel is “pro-EU, but she wants a bigger political voice for Germany in Europe and she doesn’t want to pay all the bills anymore,” he said.

Schaeuble, a lawyer, has served in Germany’s Bundestag, parliament’s lower house, since 1972. He gained a reputation as a troubleshooter after five years as then-Chancellor Helmut Kohl’s chief of staff and minister for special affairs from 1984 to 1989, the year the Berlin Wall fell. He also held the post of interior minister twice before becoming Merkel’s choice of finance minister in October.

Inside and Out

“Schaeuble knows the EU inside and out because he did the heavy lifting on Europe for Chancellor Kohl in the 1980s and 1990s,” said Ulrich Deupmann, the author of a Schaeuble biography and director of Berlin-based political advisory company Ideas.ag. “He’s been helping construct the EU since his time as Kohl’s chief of staff and in his role in getting the euro approved.”

His relationship with Merkel is complex because of her role in undermining him as Christian Democratic Union leader during a party financing scandal in the late 1990s. Schaeuble admitted taking a donation of 100,000 deutsche marks ($66,000) from an arms dealer who later fled the country before being convicted of tax evasion and sentenced to eight years in prison.

Schaeuble resigned as CDU chairman in 2000, meaning he would never become chancellor. His departure paved the way for Merkel’s ascent. Merkel blocked Schaeuble’s path again in 2004 by ruling against his candidacy for the mainly ceremonial office of German president.

‘Wealth of Experience’

Merkel appointed Schaeuble as her finance minister on Oct. 24. After debates over who would serve in her cabinet ended at 2 a.m., Merkel cited Schaeuble’s “wealth of experience” and said he had her confidence.

“Schaeuble is the person everybody assumes would have been a great chancellor,” said Gary Smith, executive director of the American Academy in Berlin. “Merkel can’t not have him. He’s the figure in the cabinet who gives her gravitas.”

It was Schaeuble who negotiated the unification treaty that brought East and West Germany together in 1990. That was when he first encountered Robert B. Zoellick, then chief U.S. negotiator in international talks that led to German reunification, and now World Bank president.

“Schaeuble served Germans and all the rest of us so well with his steadiness,” Zoellick said in an e-mail.

University Days

Hans-Peter Repnik, a former parliamentarian and a friend from university days, said Schaeuble has always used his “sharp intellect” to convince others of his views.

“If he feels he has to throw a stone very far into the water, he lets the waves ripple for a bit and in the end he mostly reaches his goals,” Repnik said in an interview.

He doesn’t always act multilaterally. The finance minister caused ripples in markets in May with a surprise ban on naked short-selling, which involves investors speculating on declines in companies that they don’t own. Frankfurt-based Deutsche Bank AG, Germany’s biggest bank, dropped as much as 3.7 percent the day after Schaeuble’s May 18 announcement and the euro slid to a four-year low.

Three weeks later, French President Nicolas Sarkozy lent his voice to the German campaign in a joint letter with Merkel to the EU, urging faster curbs in the 27-nation bloc on financial speculation. In response, the European Commission said it would accelerate proposals to regulate short selling and credit-default-swaps.

‘It Works’

“Sometimes one has to go ahead at a unilateral level and others will follow,” Schaeuble said in the interview in Berlin. “You see, it works.”

The minister grew up in Freiburg, a southwestern German city in the wine-growing region that borders France and Switzerland. It was this experience that honed his vision of an integrated Europe with Germany firmly anchored at its core, Repnik said.

“The Franco-German tension from the past was omnipresent until the great mood of optimism and reconciliation with France came about in the 1950s and 1960s,” Repnik said. “German unity and Europe. These are the two topics that have kept Wolfgang Schaeuble busy as long as I’ve known him.”

After an assassination attempt by a deranged man in 1990 left him paralyzed from the chest down, he returned to work within three months. Schaeuble, a chess player and music lover who used to play the violin, is regularly seen around Berlin exercising on a hand bike. Married with four children, he carries a battered 10-year-old briefcase to work.

Directing by Phone

The March EU session wasn’t the only time Schaeuble jeopardized his health for the EU. During a May 9 crisis meeting, the minister was rushed to the hospital in Brussels after reacting to medication. From his bed, he directed negotiations by phone, the Finance Ministry said, helping the EU craft an unprecedented $1 trillion loan package and bond purchases.

His rapport with U.S. Treasury Secretary Timothy F. Geithner, who offered advice in a phone call the day before, helped Schaeuble convince European finance ministers that the EU had to make a show of force on Greece, the ministry said.

He has earned the respect of Geithner, who refers to Schaeuble as one of the “adults” at the policy table.

Urged on by Schaeuble, the German parliament backed loan guarantees of 22.4 billion euros for Greece, more than a quarter of the euro region’s contribution of 80 billion euros, complemented by 30 billion euros from the IMF. German guarantees for the euro rescue package, totaling 750 billion euros, amount to as much as 147.6 billion euros.

No Specialist

He “makes no pretense of being a financial specialist, but he nevertheless cuts to the core of issues in common sense terms,” Zoellick said. “His words carry great weight with his colleagues.”

Schaeuble’s approach to the EU differs from that of Merkel, who grew up in communist East Germany and speaks some English and fluent Russian after study trips to the then-Soviet Union.

It was Schaeuble, who is comfortable in French and English, who floated the idea of a European Monetary Fund, modeled after the IMF to lend to troubled euro members states in return for a say in their budgetary affairs. Merkel adopted the idea, highlighting the envisaged expulsion of euro zone members as a measure of last resort.