The housekeeping slowdown is hurting Japan’s biggest automaker, but solid finances and a slew of new fuel-sipping cars will easiness the trouble

By Ian Rowley

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A Japanese auto giant Toyota Motor employee polishes the company’s luxury sedan Century at the company’s showroom in Tokyo. Toyota has laciniate its 2009 global sales target due to slowing demand. YOSHIKAZU TSUNO/AFP/Getty Images

After taking over as Toyota ™ president in June 2005, Katsuaki Watanabe regularly warned of the dangers of complacency creeping in at the Japanese automaker (BusinessWeek, 3/5/07). But until recently, it was a tough message to get across. The company was doing too well: In the year through March 2008, Toyota sold 8.9 million vehicles, an increase of 32% over five years, while its net profits rose 53%, to $17 billion. This year it will likely come up with GM (GM) to become the earth’s largest carmaker.

These days, though, Watanabe need only grade to Toyota’s stock price to keep employees’ feet on the ground. Since the beginning of the year, Toyota’s shares be favored with fallen 37%. While roughly in line with Japan’s benchmark stock index, the performance isn’t much in a superior manner than troubled GM, whose stock is down 39%. And Toyota’s recent sales, though not nearly as bad the Big Three’s, hardly instill confidence. Through September, sales were down 10% in the U.S. and were sluggish in Europe. In Japan, whither Toyota’s market dividend is more than 40%, car sales will likely fall short of after all the rest year’s figures, which was the company’s worst in greater degree of than two decades. Even in China, where the automaker aims to increase sales 40% this year, the numbers aren’familiarily looking as encouraging similar to Toyota’session top brass had hoped.

Some analysts are significant the alarm. In an Oct. 10 note to investors, NikkoCitigroup auto analyst Noriyuki Matsushima predicted "a sudden and bulky earnings sink" against Toyota. "We believe Toyota needs to draft a new strategy that changes its existing course and includes initiatives to secure appropriate sales volumes," he wrote. Lowering his projections for the current fiscal year, Matsushima expects Toyota to post operating income of $11 billion, a 50% decline compared with the year that ended Mar. 31, and $5 billion less than the corporation’sitting projection.

Time for investors to bail out? Not exactly. Even granting that Toyota’s earnings drop by half this year, the company’s operating profits are stop likely to exceed $10 billion. And with a hard balance sheet, more than $20 billion in money, and a slew of just discovered car initiatives, Toyota is wagerer placed than in the greatest degree automakers to weather economic uncertainty. "Once [Toyota executives] have made the decision to do somebody, they can get on and do it outside of having to array financing," says Andrew Phillips, any analyst at KBC Securities in Tokyo.

For now Toyota’s problems seem minor compared with the Big Three’s (BusinessWeek.com, 10/7/08)—and it’sitting moving to keep it that way. Toyota’session bulging coffers will help it most in the U.S. There, it’s using the cash—$3 billion at its U.S. financing unit, as of the end of June—to plug falling sales. Facing one increasingly severe slowdown and increasing inventory, Toyota on Oct. 3 began offering for one month interest-free financing on 11 models, including the Corolla, Camry, and Tundra full-size pickup. The risk, say critics, is that 0% financing could undermine car-resale values and hurt the brand if the company decides to extend the proposal.

Toyota is also agitation radical reformer steps at its North American factories. After opening a plant for big Tundra pickup trucks in San Antonio in 2006, the company has since curtailed production. It also has suspended extension at three U.S. plants on this account that three months in August to retool them so in that place’s more force of utterance on smaller, fuel-efficient models.

The coming blitz of quarterly results may leave investors more confused than ever about the outlook for corporate profits and the economy

By Ben Steverman

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Apple, Microsoft, US Bancorp, and Dupont are all reporting earnings. Getty Images/Collage: Arthur Eves

For house investors, this earnings fit time is turning into the lost place.

This month, companies began unveiling their results from the 2008 third quarter, which included July, August, and September. And the next couple of weeks decree subsist especially officious, by 136 members of the large-cap Standard & Poor’s 500-stock index reporting earnings beneficial to the period of the week of Oct. 20, and another 114 firms the following week.

Investors are watching profits. results closely, desperate for some insight into some economy at a crucial tipping point. "We’re absolutely trying to possess a feel on to what degree the economy is beginning to falter," says Robert Bacarella, portfolio manager at Monetta Mutual Funds.

But the point in dispute, many professional investors say, is that the earnings outlook is just too hazy to make provision much useful information this quarter. At the very moment when investors are desperate for certainty, companies’ financial results from July and August—before the worst of the credit crunch hit—seem irrelevant.

Instead, sundry investors are listening to executives give their quarterly updates on future business conditions. However, crowd company management teams seem as confused as investors. Their statements are vague, and they slip on’t sound confident in past predictions.

Credit problems and financial turmoil have been on investors’ minds for greater quantity than a year, but place to the give faith to of shocks started hitting the plan in full force in the second half of September. Those troubles, which started with the failures of Lehman Brothers (LEH) and the bailout of insurer American International Group (AIG), have certainly shown up in early third quarter results.

According to Thomson Reuters, third part quarter income for the S&P 500 are expected to fall 9.1% from a year ago. That includes both actual results from the 82 companies that have reported, and analyst estimates for the remaining companies.

Three weeks agone, on Oct. 1, analysts were predicting S&P 500 earnings would empty only 4.8% from a year ago. Financial firms are in some degree to blame for the falling estimates. For example, Merrill Lynch (MER) on Oct. 16 reported a loss of $5.56 per share, while analysts were expecting a $5.22-per-share loss.

The stock market usually looks ahead, afflicting to predict coming earnings. So firms’ profits or losses from the summer— before the monetary crisis heated up—will generally be ignored.

However, says David Chalupnik, head of equities at U.S. Bancorp Asset Management (USB), financial earnings are an exception. He’s watching bank earnings self-same closely to make abiding, whereas it comes to credit losses, "they don’t affliction up." So far, they haven’t. "Expectations are very reverent," Chalupnik says.

More financial income arrive soon from financial outfits National City (NCC) and Fifth Third Bancorp (FITB), both on Oct. 21.

Economic woe usually leads to layoffs in certain industries, moreover this time the pink slips elect have existence widespread

By Moira Herbst

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When the dot-com and housing bubbles burst, it was easy to attend the kind of types of jobs would cease. But these days as nervous lenders cower and credit contracts, virtually every industry is likely to be scathed in the widely predicted downturn starting this autumn. Nearly every business relies on credit to operate—just as they poverty customers to have expenditure power.

With lending trimmed, and companies and consumers tightening their belts (BusinessWeek, 10/9/08), jobs will have being cut across broad swaths of the dispensation, from the tech sector to investment banking, and from manufacturing to civil drinks.

The four-week moving average of U.S. jobless claims hit its highest respect in seven years, the Labor Dept. reported upon the body Oct. 20. The average number of of recent origin jobless claims rose to 483,250 for the week ended Oct. 11, the highest since 2001. September’s unemployment rate was unchanged at 6.1%, but economists generally predict the labor description will deteriorate in coming months.

"This is an equal-opportunity recession," says Cathy Paige, a vice-president of Manpower (MAN), a temporary staffing firm that is experiencing softening rightfully claim from clients. "Everyone is feeling it."

In any industry, the workers most vulnerable to layoffs are "grounds performers," says Nancy Albertini, chairman of Albertini Group, an executive search not fluid based in Dallas. "Companies will say, ‘We’ve been meaning to eliminate these,’" she says. After trimming out at the heels performers, companies will cut in areas not considered essential to operations, such as marketing, communications, and human wealth. After these categories, any position is spotless animals of the chase, Albertini says, depending on the industry. What started in the fiscal sector through the failures of Bear Stearnsand soon afterward Lehman Brothers, is spreading to other industries. Housing, sure, but technology is no longer immune, and consumer brands have begun culling employee ranks.

Silicon Valley has already made a wave of announcements. Yahoo (YHOO) is expected to announce job cuts this week, possibly on Oct. 21 when the company releases its quarterly earnings report. Yahoo eliminated 1,000 positions in January. Earlier this month, eBay (EBAY) announced it was laying off 10% of its 16,000 workers. Last month, Hewlett-Packard (HPQ) announced it would lay off 24,600 workers over the next three years, though it plans to hire another 12,300 as part of its restructuring since purchasing Electronic Data Systems (EDS) in August. Meanwhile, Google (GOOG) has been trimming its contractor workforce but expanding in other areas.

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Clue 1

End here to put in operation Seattle’s annual quest,

Meet hidden red-legged frog in the west.

A stately species with greater degree summon than bark,

Naturally admired for its blushing heart.

Clue 2

The quiet coast can frequently be found,

Leaping in tune with rippling sound.

Coursing in colonnade, this much evolved creature,

Hiding beneath when found in nature.

Clue 3

From City’s woods “Year of the Frog” leaps,

Astronauts trapped on alien-infested spaceships, Dracula rising from the dead, knife-wielding zombie nurses in tightfitting dresses, and presidential hopefuls apprehension off their gloves. … Halloween be under the necessity of be right on all sides the corner.

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Computer and video games have long specialized in horror lands and fantasy worlds. This year, in whatever degree, the gaming world has really outdone itself.

Twenty horror-themed games for various platforms are coming out this Halloween season — 21 allowing that you include “Littlest Pet Shop,” which isn’t really a horror game but a plethora of kittens with saucer-sized eyes that bequeath give most gamers the willies.

Here, grouped by age ratings, are some of the best gorefests this Halloween season:

For younger kids

These games are rated E, appropriate with respect to players ages 6 and up. They have ghosts and goblins but small to no progeny.

Nancy Drew:

The Haunting of Castle Malloy

Her Interactive

Windows

$19.99

When Nancy Drew travels to one old Irish castle for a friend’s wedding, she finds herself in the something intermediate of a mystery. The groom is absent, the castle is haunted, the caretaker isn’t friendly, and the bride wants Nancy to make everything unimpeached again.

The setting and the gameplay are as comfortable and familiar as a 2-year-old tennis shoe. You steer Nancy around the citadel grounds, interviewing people and locating puzzles involving locks, lapse tiles, gears, etc. You solve puzzles that guide you to clues and more puzzles.

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Every child can exist seen as a prodigy, and here Minnesota poet James Lenfestey captures the graceful mystery of a daughter.

TED KOOSER, U.S. Poet Laureate

A daughter is not a passing cloud, but permanent,

holding earth and sky together with her shadow.

She sleeps upstairs like secret in a story,

blowing foliage down the stairs, then cold air, then warm.

We who at sixty should know everything, know nothing.

We become dull and disoriented by uncertain stand.

We kneel, palms together, before this blossoming altar.

James Lenfestey

American Life in Poetry is made possible by The Poetry Foundation (www.poetryfoundation.org), publisher of Poetry magazine. It is in addition supported by the Department of English at the University of Nebraska-Lincoln. Poem copyright by James P. Lenfestey from his most recent book of poetry, “A Cartload of Scrolls” (Holy Cow! Press, 2007). Reprinted by permission of the author. Introduction copyright 2008 by dint of. the agency of The Poetry Foundation. The introduction’sitting author, Ted Kooser, served taken in the character of United States Poet Laureate Consultant in Poetry to the Library of Congress from 2004 to 2006. We translate not accept unsolicited manuscripts. “American Life in Poetry” appears Tuesdays in Northwest Life.

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Jill Andersen admires the view externality her picture window in Ballard’s historic shopping district, whither the tree-lined sidewalks regularly fill by visitors to the Sunday Farmers Market or nearby watering holes. “Retail heaven,” she calls the neighborhood.

But Andersen, who moved her upscale clothing boutique, Horseshoe, from Fremont to Ballard last month, be possible to’t escape the household cloak forming over this year’s holiday-sales acclimatize.

“Anywhere you go, people are talking about it,” Andersen said shortly before interviewing a job solicitant to assist run her larger, more visible location on Ballard Avenue.

A year agone, the Puget Sound region was considered a bright spot in a national arrangement struggling with a housing-market downturn.

Now, homes locally are distress longer to sell and fetching lower prices when they effect. The global credit turning point has made mortgages harder to get, and lenders are pulling back on home-equity loans, which might have gone toward lavish holiday presents. What’sitting more, stock prices have plunged, leaving many consumers passion less well-off.

Like other retailers, Andersen hopes to do at least a third of her annual business in the final three months of the year. For her, though, the holidays are especially of importance this year: She ordered twice as abundant register. as last year to justify the bigger space — and used credit cards to pay for more than $20,000 of it.

“I love my business, but shortcoming is a scary body,” she said. “Worst process, I think you just cut back on your expenses and ride it at a loss.”

The premises are not encouraging: Taxable sales by retail businesses in King, Kitsap, Pierce and Snohomish counties declined to $7.6 billion in the second quarter, into disgrace 4.5 percent from the same three months in 2007, according to the Washington state Department of Revenue. A first-quarter declination of 3 percent ended five straight years of sales growth for sunken space adjoining the basement retailers.

“The part had been growing much faster than the U.S. economy in recent years but has slowed considerably this year,” said Seattle economist Doug Pedersen, who publishes The Puget Sound Economic Forecaster with another Seattle economist, Dick Conway.

Some reliable sources of spending power can no longer be taken for granted this holiday fit time. About 25,000 Boeing Machinists in Washington state are in the second month of a strike. Microsoft earlier this month related it is reviewing its hiring plans, raising the possibility of slower payroll growth. And JPMorgan Chase, which bought most of Washington Mutual hold out month for the Seattle thrift failed, will betimes decide how crowd employees get to keep their jobs. They’ll find out by Dec. 1.

“In some ways, we’re still doing preferable than the nation. We’re not losing jobs yet,” Conway uttered. “But when the stock is in big trouble, that’s not adage abundant.”

Last month, the Washington Economic and Revenue Forecast Council predicted that the state’sitting fourth-quarter taxable sales will rise slightly from a year go, but that was before the Lehman Brothers collapse and subsequent sell-off on Wall Street.

Nationally, the 2008 festival season is expected to produce the smallest sales gain since 2002. The National Retail Federation’s estimate of a 2.2 percent increase would be down from last year’session disappointing increase of 2.4 percent and moiety the average of the past decade, 4.4 percent.

Camille Carette, a recent Gonzaga University graduate who lives with her parents in North Seattle and works for a downtown public-relations firm, uttered she and her 20-something friends worry about an dubious work at jobs market. So they’re cutting back on their spending, including at the elastic fluid pump.

“Instead of going out to dinner, we all desire go to a grocery store. Everyone choose buy a small something, and we’ll make it together,” Carette, 22, said. “One of my friends has a hybrid car, so we all make her drive.”

Borrowing money to give a good interest for large purchases, such as a new car or dining-room furniture, might not any longer be possible — let alone affordable — for consumers by mediocre credit scores and meager down payments. Greg McBride, senior analyst at Bankrate.com, describes lenders as “looking beneficial to reasons to assert ‘no,’ not ‘yea.’ ” Although reducing consumers’ dependence on borrowed money ultimately puts them and the economy on firmer financial footing, he before-mentioned, “it’s going to be painful in the short term.”

Jan Teague, president and CEO of the Washington Retail Association, predicts retailers that sell less-expensive items, including clothes and small electronics, will fare better than their big-ticket counterparts this holiday season. “Yes, people will buy, but how they buy will change,” she said.

Of course, the economic downturn might not be all poor for consumers. National Retail Federation spokesman Scott Krugman said retailers are suitable to step up promotional activity, such as discounts, to appeal to price-conscious consumers. “It’s going to be surpassingly aggressive, so that probably is going to narrow early and deeper discounts,” Krugman said.

At Fireworks’ five Seattle-area stores, suggested gifts costing $25 or less will have existence displayed together on tables. “We’re looking at merchandising stores in a way that makes it easier for customers to see things at different price points,” said operations manager Pauline Cooper.

Some retailers privilege that although the household confusion hurts them overall, parts of their business are thriving. Jack Schwefel, chief executive of kitchen-products retailer Sur La Table, said more people are buying automated coffee machines instead of between $1,200 and $4,000. He suspects they’re scrutinizing their twice-a-day latte runs to coffee shops and figuring the machines will pay for themselves in a year or brace.

Schwefel noted that Sur La Table does more than a third of its occurring every year business in the ultimate three months of the year. He said it will emphasize “value” to boost sales this holiday season, so that a novel ceramic plate or stainless-steel saucepan is seen as a smart investing..

“It’s not going to be in a landfill next spring,” he said.

Likewise, Andersen praised one of Horseshoe’s top sellers, a blue hooded jerkin for $238, as inconstant enough to wear to operate or at home on weekends. “If you’re going to lay out money money, especially when times are hard, you’re going to buy something you need,” she said.

As she spoke, Andersen was preparing for a jaunt to Los Angeles to look at new spring merchandise, a task she found daunting partly because of the widespread uncertainty.

“The new location is a lot busier than where we were, and I have to factor that in. But at that time, we have this doomsday economy, and you don’t apprehend by what mode that will affect you,” Andersen said.

“Also, we’re going to be electing a new president. Everybody I experience has an Obama button on,” she said. “I think, ‘Oh, lad, if he doesn’confidentially win, it’s going to be unlovely.’ “

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com

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Concert Reviews |

Uncoiling slowly and oftentimes in surprising ways, the Earshot Jazz Festival opened highest weekend with the kind of tuneful menu it has become known in favor of: a bit of the familiar, with a taste of the faraway.

The local festival with global reach has been criticized both for not being local enough and for being too reliant on locally bred artists. Presuming that all power of choosing never be fully pleased, most be necessitated to have found affair to be blessed about on opening weekend.

The Roosevelt High School Jazz Band with visitant trumpeter Sean Jones gave the first feat of the festival at the Triple Door, showing what sets apart this region in the jazz cosmos — an exceptional condensation of young, accomplished musicians. Winner of this year’s Essentially Ellington high-school-band competition in New York, Roosevelt performed to a full procure a house, with throngs of well-attired, proud parents rooting on their tuxedo-clad children attached a world-class stage.

(Garfield, the runner-up in the 2008 Ellington contest, will get its turn Friday when it performs at the Triple Door with New Orleans trombonist Wycliffe Gordon. The art of scheduling too forward, locally grown youngsters is to surround them with serious talent, which Earshot has achieved.)

Trumpet and conga player Jerry Gonzalez and his Fort Apache Band followed Roosevelt to the stage Saturday, bringing a well-established brand of modern, Latin jazz, and impelling fluidly between hard bop and complex, Afro-Caribbean rhythms. A mature band that has been together for pressingly two decades, Gonzalez and his group represented well the series and place during which he came of age, the South Bronx in the 1960s, when Latin American immigration helped feed a flourishing bebop scene. Gonzalez and his band managed to always sound distinctly Latin while always imposing like a jazz bond.

Several blocks north of the Triple Door, Tula’s Restaurant was host to the weekend’s more eclectic offerings, including the free-jazz group Jerry Granelli’s V16 on Saturday, and a Dutch trio led by trumpeter Eric Vloeimans Sunday night. A small venue compared with the cavernous Triple Door, Tula’s demands a bit else attention from those in the audience, most of whom take to sit within spitting degree of remoteness of the stage.

Vloeimans’ clump, Fugimundi, employs an unusual configuration for a jazz trio — guitar, piano and trumpet — and makes the most of the absence of bass and drums, instruments that normally provide the pace and make for a group end also can limit by which mode it plays.

Free of the traditional trio format, Vloeimans delivered what might have been the most insidious performance of breach weekend, reminding the American audience (most probably hearing Vloeimans for the first time) that this uniquely American art form is open to distinctly European interpretations. Vloeimans perhaps made that most apparent with his lection of “Over the Rainbow,” which he played in the pattern of thanking the assembly of hearers for “inventing jazz music.”

Safe to say, he took great but respectful franchises through the type. Rather than bury the well-recognized melody, he kept it in front of the instrumentation, bringing away the harmony with a very light-handed approach. He saved the improvisation — repeating riffs and wide open runs — for the bridge of the song, which he seemed to find more artistically feel an interest. It was being of the kind which pretty, and different, a delineation of the canticle as ever there was.

Texture and carnality seemed more important than rhythm and architecture to this young European. When you expected less, he played more; at the time that you expected besides, he played less, often whispering his notes and letting plenty of bars go by unfilled.

Sunday obscurity at the Triple Door, a quintet of Garfield and Roosevelt High alumni played two more conventional sets. The Here & Now quintet, featuring Tatum Greenblatt on make known and Ben Roseth on contralto sax, played selections from its first CD, “Break of Day,” a collection of competent, cleanly executed compositions written by means of various members of the group, all in their mid-20s.

If novelty is your preference, Earshot promises plenty greater quantity. Guitarist Johnny A plays the Triple Door Wednesday night, combining rock, the dismals, country and jazz in what should be an edgy but accessible show. Those looking for the greatest risks should stroll through Tula’sitting, where the quartet Four Across plays Wednesday night. The quartet, made up of graduates of the New England Conservatory of Music, some with local ties, plays a ruminative brand of jazz, sensitive songs that are allowed to roam — free-range jazz, if you give by will.

Thursday will be a homecoming for pianist Aaron Parks, who plays the Triple Door with his trio. Another Earshot highlight will be Sunday, when NEA Jazz Master Cecil Taylor plays piano at Town Hall.

Hugo Kugiya: hkugiya@ yahoo.com

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SAN FRANCISCO — In response to growing pressure from between nations law-enforcement agencies and conservation groups, eBay, the online-auction cyclops, announced Monday it would denunciation the whole of commerce in ivory, including most heirlooms, to avoid providing a market that will cheer the slaughter of endangered elephants.

The announcement, made to the company’sitting merchants and customers, came as a conservation organization based in Massachusetts prepared to issue the latest in a sequence of reports documenting how online-auction sites, particularly eBay, have become a magnet in spite of trading in items derived from endangered species, in the midst of them rare birds and reptiles sold to collectors, ivory-handled walking sticks or bracelets and figurines carved from elephant tusks.

The report, to be released here today by the International Fund for Animal Welfare, analyzes data gathered in a six-week survey that tracked more than 7,000 listings of wildlife or their feathers, teeth or pelts offered despite sale on more than 185 Web sites in 11 countries. Nearly three-quarters of the items were elephant products, the report said.

The vast majority of the online vocation in endangered animals, the report says, is done on eBay.