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DETROIT–Ford Motor Co. posted a smaller-than-expected first-quarter loss Friday amid the auto sector downturn and said it was on track to at least break even in 2011 and did not expect to seek U.S. government loans.

The company also said it had burned through $3.7 billion of automotive cash in the first quarter, a sharp drop from the second half of last year, and ended March with $21.3 billion in gross cash, sending its shares up nearly 18 per cent in premarket trading.

Ford posted a net loss of $1.43 billion, or 60 cents per share, for the first quarter, compared with net income of $70 million, or 3 cents per share, a year earlier.

The loss from continuing operations and excluding one-time items came to 75 cents per share. Analysts on average expected a loss of $1.23 on that basis, according to Reuters Estimates.

"Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world," Chief Executive Alan Mulally said in a statement.

Still, Chief Financial Officer Lewis Booth called the results encouraging and said the automaker expected the first quarter to have the worst cash burn of the year payday loan help.

Rather than the quarterly results, investors are more focused on Ford’s liquidity, its full-year outlook for U.S. auto industry sales and its ability to navigate the economic downturn. The struggles of rivals General Motors Corp (GM.N) and Chrysler are at the center of Wall Street’s attention.

Ford has not sought U.S. government aid, setting it apart from GM and Chrysler, which are operating on $17.4 billion of federal loans and have sought more to stave off bankruptcy.

Ford posted a 2008 net loss of $14.7 billion, a company record, and has reported losses of about $30 billion over the past three years.

Ford shares were up 17.6 per cent at $5.28 in trading before the market opened. They have risen from a 27-year-low of $1.02 in November, when automakers were in the process of appealing for emergency loans.

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Fiat SpA Chief Executive Sergio Marchionne, with time running out to forge a partnership with Chrysler LLC, may be forced to do what he opposed from the start: invest money to help save the U.S. automaker.

With Fiat’s net debt piling up to an estimated $8.4 billion and its bonds cut to junk last month by Standard & Poor’s, Marchionne may have to back away from his pledge and put up cash to reach a deal with Chrysler by the U.S.-government imposed deadline of April 30, analysts say.

Fiat, Italy’s largest carmaker, is likely to report today its first quarterly loss since 2004 in what Marchionne has described as a "tough" first three months of the year.

Chrysler, surviving with $4 billion in U.S. loans, must win concessions from banks and unions to reach the deal with Fiat. Its lenders asked Fiat to make a cash contribution to its proposed alliance as part of their proposal to the U easy payday loans.S. Treasury, people familiar with the negotiations said Tuesday. The lenders want Fiat to invest $1 billion in the U.S. automaker, the Washington Post reported Tuesday.

In a statement late Tuesday, Fiat said no agreement had yet been reached in talks between Chrysler and its U.S. and Canadian unions, and that it was "impossible to predict the timing and the final outcome" of the discussions.

If Chrysler, the third-largest U.S. automaker, is forced to declare bankruptcy, Fiat, along with rivals and industry players, may consider buying assets, Marchionne said April 15.

Chairman Luca Cordero di Montezemolo said earlier this week that Fiat was looking at alternatives to a Chrysler partnership and would review Chrysler talks in today’s board meeting.

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If you haven’t tried McDonald’s coffee in recent years, John Betts is hoping you’ll give it another shot.

In a bold move that promises to heat up the morning coffee wars, McDonald’s is offering customers a free morning coffee every day for the next two weeks – a savings of about $1.22, including tax, on a 10-ounce cup.

That might not sound like much.

But with Canadians drinking 36 million fewer cups of coffee in the last 12 months, the battle for a larger share of a declining coffee market is heating up.

"Our coffee sales are up so far this year," said Betts, president of McDonald’s Restaurants of Canada. "We sold 4 million more cups of coffee in the first quarter."

That represents a double-digit increase over the previous year, a spokesperson said later, a considerable gain at someone’s expense as the overall market declined.

Sipping on a premium roast Arabica coffee – a notch above the watery brew McDonald’s used to sell before switching to Mother Parkers as its supplier – Betts says he’s hoping the freebie will prompt even more consumers to give the brew a try.

The promotion is clearly aimed at turning up the heat on market share leader Tim Hortons Inc., Perry Caicco, a financial analyst with CIBC World Markets, wrote in a note to clients.

Given that 60 per cent of Tim Hortons’ sales occur in the morning, and more than 50 per cent of those are coffee, the rival giveaway could hurt its performance this quarter, Caicco cautioned investors instant faxless payday loans.

Tim Hortons, which has 2,917 restaurants across Canada, twice as many as McDonald’s, saw its share price slide 32 cents yesterday to close at $30.47 on the Toronto Stock Exchange.

For Canadians, coffee is the most popular restaurant menu item, accounting for 30 per cent of all sales, according to the market research firm NPD Group Canada Inc.

But even the daily java habit isn’t immune from the recession.

Canadians bought a staggering 1.8 billion cups of coffee from restaurants last year, NPD data shows. That was down 2 per cent – or 36 million cups – to the end of February when compared to the previous 12-month period.

Defying the "trading down" trend seen in the U.S., most of the softening in Canadian sales occurred in plain old brewed coffee as consumers cut costs by skipping the second cup mid-morning but continuing to treat themselves to a mid-afternoon latte, according to NPD. "There’s a lot of talk about trading down in the U.S. In Canada, it just doesn’t happen in our restaurant market. I’ve never seen it in our data," NPD’s Robert Carter said.

On the same day McDonald’s kicked off its promotion, owners of the Second Cup chain said sales in the last three months fell 3 per cent at restaurants open more than a year, bad news for investors in Second Cup Royalty Income Fund, which announced an 18 per cent cut in its monthly payout to unit holders.

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Package holiday-seller Conquest Vacations has suddenly ceased operations amid the economic downturn, blaming a competitive market and "unreasonable demands" by some of its creditors.

The 37-year-old company, based in Toronto, notified its customers today on its website that it will no longer be providing flights or package holidays.

"Conquest Vacations regrets the inconvenience caused to the passengers due to cessation of its operations," Conquest said.

"Unfortunately, this has been a result of overcapacity and price war among the major tour operators, unrealistic and unreasonable demands by the credit card processing companies, credit squeeze and economic turmoil in recent months."

Customers who booked directly with Conquest will be contacted or can email the company with their booking reference number, the company said. Those who paid using cash or cheque were instructed to contact their travel agents for a refund or claim.

Jacques Kavafian, an analyst at Research Capital, said its doubtful that many travellers would be stranded as a result of Conquest’s abrupt shutdown because today marks the end of the busy winter travel season, which runs from Nov easy cash. 15 to April 15.

"It’s always been one of the weakest links in the industry," said Kavafian of Conquest.

He estimated it held about 7 per cent of the Canadian packaged holiday market and posted sales of about $200 million annually.

While the economic downturn is wreaking havoc with the airline sector, Kavafian said it had been a relatively strong year for the Canadian packaged holiday market.

"It was a record year in volume," he said.

Conquest was founded by Robbie Goldberg in 1972. It competes with Transat AT Inc., Sunwing Vacations, Sunquest Vacations and the packaged holiday arms of Air Canada and WestJet, among others.

If you have been affected by this, please give the Toronto Star newsroom a call at 416-869-4301 or email us at citydesk@thestar.ca.

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The pain from a punishing 2008 has lingered this year if you have a well-diversified portfolio: The Standard & Poor’s 500 index is down 5 percent.

But look at the year-to-date numbers for three tech titans: Apple Inc. has surged more than 40 percent, and IBM Corp. and Google Inc. are up 21 percent.

And the tech sector broadly? So far this year, tech-based mutual funds are the top performing domestic stock fund category, up nearly 10 percent, according to Morningstar. On the other end of the spectrum, financial services funds lost nearly 16 percent; real estate funds were down 25 percent.

What’s going on? If the market has hit bottom, it’s the tech stocks that are leading a comeback — a reversal from the last time a recession set in, when the dot-com bust sent the broader market reeling.

Many industry analysts are confident tech’s recent gains have plenty of staying power. They point to strengths that will help tech companies endure, even prosper, amid the recession.

Most are insulated from the slowly easing credit crunch because they have clean balance sheets and little or no debt. They’re also used to making cuts to stay afloat in an industry known for its dizzying pace of product upgrades, price reductions and efficiency improvements.

And while the dot-com bust forced tech companies to hone their strategies so they could ride out the next recession, banks were seemingly operating in a different environment.

"The tech companies have a playbook for how to get through a recession," said Andrew Silverberg, a portfolio manager whose Alger Large Cap Growth fund (ALGAX).

Alger’s fund is up about 3 percent this year, thanks in part to gains for two of its top five holdings: Apple and Google.

Those stocks also are among the top five at the Jacob Internet fund (JAMFX), which has gained nearly 15 percent so far this year.

The fund’s manager, Ryan Jacob, said Apple and Google are so strong in their niches that they can expand even when a recession cuts into their specialty markets. "In advertising, Google continues to take a larger piece of the advertising pie, even when advertising has been contracting on a whole," Jacob said cash til payday loan.

In normal times, such companies might enjoy revenue growth of as much as 30 percent per year. "Now, even in a declining economy, they can still grow in the double-digits," Jacob said.

Another enticement for tech investors is the stash of cash that many tech companies are holding. Eventually, Jacob said, many tech firms will resume buying back their own shares, which should drive tech share prices up further.

A big hurdle for tech companies is their corporate clients’ reluctance to spend cash amid the credit crunch. Nevertheless, tech consultants like IBM have fared well lately because their clients are typically able to afford paying for tech services on an as-needed basis, despite the credit troubles, said Andrew Bartels, a Forrester Research technology analyst.

That’s in contrast to capital spending on computer hardware like servers or laptops. Hardware purchases can often be put off until the economy turns around, and typically carry big upfront costs that may not pay off for years to come. These days, companies are more inclined to rent equipment to limit short-term expenses.

That has hurt tech hardware vendors like Hewlett-Packard Co., whose stock is down about 5 percent this year, and Dell Inc., up a modest 5 percent.

But once the economy turns around, tech as a whole appears set to broadly prosper.

"Corporate tech clients will realize, ‘Hey, we’re sitting on a ton of cash here,’" said Bartels. "So they will turn around and invest in tech, because that is going to give them a better return than having cash sit in the bank and earn 1 percent." This year, Bartels said, "is really going to set the stage for a strong recovery in 2010, when tech is going to grow significantly faster than the broad economy."

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The province is not abandoning pensioners and will continue to work with the Canadian Auto Workers as fears grow General Motors may file for bankruptcy - but there is only so much Ontario can do, Finance Minister Dwight Duncan told reporters this morning.

A provincial government alone cannot simply assume the legacy costs of one automaker if it goes under, Duncan said.

"The government of Ontario will continue to be there, working with the government of Canada, General Motors and or its successor as well as with the … United States," he said. "But we needed to just tell people this pension benefit guarantee fund isn’t adequate, in the case of not just General Motors but anything else that comes down the road."

Since 1980, Ontario’s Pension Benefit Guarantee Fund, worth about $100 million, has provided the province’s retirees with up to $1,000 a month in the event a pension plan fails to provide its full benefit, or any at all.

Earlier this year, experts warned the unique safety net could disappear if a large company, like General Motors, were to go bankrupt.

On Wednesday, Premier Dalton McGuinty said there is not enough money in Ontario’s pension plan safety net to support GM pensioners if the company does not survive.

McGuinty called the fund "very modest" and cautioned it could not meet the liabilities from the auto sector should GM or Chrysler fail, or, the liabilities of the failure of large businesses from other sectors free online credit report. Yet, he said, Ontario has a moral responsibility to its pensioners.

For thirty years, the pension fund has not been properly funded, Duncan said.

"We have to have an honest discussion among ourselves about those issues, both in the context of GM and the broader context," he said.

Duncan added he received a letter from CAW union president Ken Lewenza today, and, Lewenza indicated his ongoing willingness to work with the federal and provincial governments, Washington, as well as the union and the companies or successor companies.

New Democratic Leader Andrea Horwath accused the Liberals of abandoning GM pensioners in their time of need during Question Period this morning.

"At precisely the time that the Ontario auto workers are most in need of protection, this government is turning its back on them by making it illegal for Ontario’s pension backup fund to run a deficit," she said. "Why is this government moving to cut the support net for pensioners when they need it the most?"

Duncan responded that they are not cutting the pension fund and that "all of us in this Legislature need to be honest with the people of Ontario that for 30 years, the pension benefits guarantee fund has not been funded."

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Chinese exports in March were down by double digits from a year earlier, but the decline was smaller than in February, a newspaper linked to the Ministry of Commerce reported on Wednesday.

The Chinese-language International Business Daily cited an unnamed ministry official for its information.

Exports in February fell 25.7 percent from a year earlier. Economists polled by Reuters expect a 21.5 percent fall in March.

If the report is borne out when the trade figures are released in coming days, it would be the latest piece of tentative evidence that the economy could be over the worst of a slump induced by the global credit crunch.

The sub-index for new orders in this month’s purchasing managers’ indexes for China improved — although both remained firmly in negative territory — while the year-on-year rate of decline in power generation slowed in March to 0.71 percent from 3.7 percent in the first two months.

Paul Cavey, China economist at Macquarie Securities in Hong Kong, on Wednesday raised his forecast for 2009 gross domestic product growth by a percentage point to 7.5-8.0 percent based on stronger-than-expected capital spending.

Infrastructure investment is rising in response to the government’s 4 trillion yuan ($585 billion) stimulus — excavator sales are up 50 percent — while the bounce so far this year in property building is believable given the surge in bank loans and working capital, Cavey said in a report.

Chinese banks extended a record 1.87 trillion yuan in new loans in March, two state newspapers reported on Tuesday faxless payday loans.

TUG OF WAR

Helen Qiao and Yu Song at Goldman Sachs agreed that the economy was gaining strength, due in part to rapid loan growth, and said a further relaxation of fiscal or monetary policy would probably prove to be unnecessary.

Although Qiao and Song see upside risks to domestic demand growth, Goldman is gloomy about the export outlook and has not changed its 2009 GDP growth forecast of 6.0 percent.

“We believe the trough of sequential growth is already behind us,” they said in a note to clients.

“In our view, the foreseeable growth rebound in the first quarter of 2009 is strong, especially relative to the rest of the world, but it is unlikely to be sufficient to push GDP growth back to the government’s target of 8 percent this year,” they added.

The Chinese Academy of Social Sciences (CASS), the government’s top think-tank, also sounded a cautious note.

With the world economy in trouble, exports were unlikely to recover any time soon and this would spell difficulties for export-oriented companies in China’s coastal provinces, CASS said in a report.

Pressure on corporate earnings would in turn weigh on growth in incomes and consumption. The depressed property sector, which will find it difficult to recover in 2009, is also a handicap for consumer spending and the broader economy, the think-tank said. 

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STOCKHOLM – Saab Automobile, the troubled Swedish unit of General Motors Corp., is in contact with around 20 potential buyers, with a sale planned to be completed in June, the car maker's lawyer said Monday.

Lawyer Guy Lofalk, who is in charge of restructuring Saab, said a sale of the company is a "crucial prerequisite for a successful reconstruction."

"So far, a short presentation of Saab has been sent out and extensive contacts have occurred with interested parties," he said in a court document presented on Monday to creditors in the Vanersborg District Court.

Saab went into bankruptcy protection on Feb. 20 in an effort by GM to spin off or sell the unit. The danger of a collapse still hovers over the ailing brand because neither GM nor the Swedish government appears ready to provide enough money to keep it going as a freestanding entity.

Monday's court hearing gave creditors an opportunity to challenge the reconstruction process. However, all creditors agreed to a continuation of the process, and the court ruled the bankruptcy protection can continue until May 20.

Saab said it intends to apply for an extension of the protection period health insurance quote.

As part of his presentation, Lofalk said Saab plans to start negotiations with creditors in June to write down all non-prioritized debt by around 75 per cent. Saab then expects to pay the remaining 25 per cent of that debt within a year.

By improving efficiency and concentrating production to the site in Trollhattan in western Sweden, the company aims to reach break-even at a production of just below 130,000 cars, he said. The planned launch of three new models in 2009 and 2010 is expected to help increase production.

"Saab counts on a positive cash flow already 2011 as well as a good return with a production of 150,000 cars," Lofalk said.

In 2008, Saab produced 93,000 cars.

Lofalk said Saab needs financing of around $1 billion, of which $600 million is expected to come from the European Investment Bank. The remaining $400 million is expected to be paid by GM, partly through writing down debt and partly by supplying tools for the manufacturing of Saab's new car models.

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Two prominent technology news blogs clashed on Friday morning over a report one of them issued that said Google Inc may try to buy Internet start-up Twitter.

TechCrunch proprietor Michael Arrington, citing three unnamed sources, said on Thursday night that Google would pay for Twitter in cash, stock or a combination of the two.

The companies are also considering working together on a Google real-time search engine, he wrote.

Hours after Arrington’s blog entry, Kara Swisher reported on her Boomtown blog said the story was inaccurate, citing “a number of sources.”

“In fact, Twitter and Google have simply been engaged in ’some product-related discussions,’ according to one source,” Swisher wrote.

Arrington could not be immediately reached for comment. TechCrunch stands by its story, said Robin Wauters, a blogger for the site who answered an e-mail directed at Arrington.

Twitter is a service that allows people to send short text messages to a network of friends car insurance. Its popularity is growing, particularly among journalists looking for new ways to get people to read their news and commentary.

The San Francisco, California-based company has yet to make any money. That has not stopped the technology world from speculating on who will scoop up the company, though co-founder Biz Stone told Reuters in March that it is not considering a merger or a buyout.

A Google spokeswoman declined to comment. Twitter could not be reached for comment.

Boomtown is a blog on the website All Things Digital, which is owned by Wall Street Journal Dow Jones & Co. That company, in turn, is owned by Rupert Murdoch’s News Corp.

(Reporting by Robert MacMillan in New York and Vikram S Subhedar in Bangalore)

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India’s inflation held near the slowest pace in at least two decades as commodity prices cooled and demand slowed, increasing the chance of an interest-rate cut by the central bank this month.

Wholesale prices rose 0.31 percent in the week to March 21 from a year earlier after gaining 0.27 percent the previous week, the commerce ministry said in New Delhi today. The previous week’s inflation rate was the lowest on record, according to Bloomberg data going back to January 1990. Economists expected an increase of 0.19 percent.

Cooling inflation has enabled Reserve Bank of India Governor Duvvuri Subbarao to slash the key repurchase rate to an all-time low of 5 percent to boost slowing economic growth. The central bank, which has cut borrowing costs five times since early October, is scheduled to review rates on April 21.

Lower levels of inflation “undoubtedly provide the Reserve Bank with more legroom to cut interest rates,” said Dharmakirti Joshi, an economist at Crisil Ltd. in Mumbai, the local unit of Standard & Poor’s. “There is no fear of deflation in India.”

The deepening global recession has caused energy and commodity costs to drop, slowing inflation across Asia. Consumer prices in China fell 1.6 percent in February from a year earlier, the first decline since 2002, and prices in Japan failed to rise for a second month business cards.

Prime Minister Manmohan Singh said last week low inflation rates provide room for “further moderation in interest rates.” India’s $1.2 trillion economy may have grown less than the 7.1 percent estimated by the government for the year ended March 31, Planning Commission Deputy Chairman Montek Singh Ahluwalia said March 21.

Consumer Prices

India’s weekly wholesale prices may decline for some weeks, Joshi of Crisil said. Still, consumer prices as measured by other indices remain high, he said.

Consumer prices paid by industrial workers rose to 9.63 percent in February from a year earlier, after gaining 10.45 percent the previous month. Consumer-price inflation for farm workers was 10.79 percent.

Governor Subbarao has dismissed concerns that India is slipping into a period of deflation, saying last week “there is no concern of our getting into a deep deflationary cycle.”

Today’s wholesale inflation rate may be revised in two months, after the government receives additional price data. The commerce ministry today revised the rate for the week to Jan. 24 to 4.7 percent from 5.07 percent.

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