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International business briefs

Published:Wednesday | March 3, 2010 | 12:00 AM

Bank of Canada leaves key rate unchanged

Canada's central bank is holding its key interest rate at a record-low 0.25 per cent and is reaffirming that it expects it will keep the rate there until the middle of this year.

The Bank of Canada said Tuesday the 5.0 per cent economic growth Canada saw in the fourth quarter was slightly higher than expected.

But the bank said the persistent strength of the Canadian dollar and weak United States demand continue to act as significant drags on economic activity in Canada.

The rate decision had been expected.

GM to recall 1.3M compacts

General Motors Company said Monday it will recall 1.3 million Chevrolet and Pontiac compact cars sold in the United States, Canada and Mexico to fix power steering motors that can fail.

The recall affects 2005 to 2010 Chevrolet Cobalts, 2007 to 2010 Pontiac G5s, 2005 and 2006 Pontiac Pursuits sold in Canada, and 2005 and 2006 Pontiac G4s sold in Mexico.

The automaker said the vehicles are still safe to drive and never lose their steering, but it may be harder to steer them when travelling under 15 mph (24 kph).

GM spokesman Alan Adler said it will take time for the automaker to get 1.3 million new power steering motors from the supplier, JTEKT Corp, and GM will notify car owners when the parts are available.

Rare failures

Adler said the failures are rare and the cars can still be driven until motors can be replaced by dealers. Drivers will see a warning light and hear a chime if the power steering fails, but they could be surprised when the steering becomes more difficult.

GM told the National Highway Traffic Safety Administration (NHTSA) about the recall on Monday.

NHTSA began an investigation into 905,000 of the models on January 27 after getting 1,100 complaints that the cars lost their power steering assist. The complaints included 14 crashes and one injury.

The automaker will fix older models first because it usually takes 20,000 to 30,000 miles (32,000 to 48,000 kilometres) of driving for the condition to deve-lop, Adler said. GM also will have to repair thousands of vehicles on dealer lots before they can be sold, he said.

"Recalling these vehicles is the right thing to do for our customers' peace of mind," Jamie Hresko, GM's vice-president of quality, said in a statement.

Adler said if the power steering assist fails, it usually comes back for a time after the car is shut off and restarted.

The recall comes at a time of heightened interest in auto safety after sudden acceleration problems experienced in some Toyota Motor Corp vehicles.

BP unveils profit boosting plans

BP PLC said Tuesday that plans to boost efficiency and reduce costs could lift annual pre-tax profits by more than US$3 billion over the next two to three years.

The company also extended its medium-term oil and gas production outlook at its annual strategy presentation for analysts.

BP projected that annual output would rise by 1-2 per cent a year on average to 2015, at US$60 per barrel from a 2008 base, and expressed increased confidence in further production growth out to 2020.

It plans to reach its target of boosting pretax profits by cutting costs in its refining business and through the creation of a new unit to manage development of all major new projects and increase technological standardisation.

Chief executive officer Tony Hayward said the company had established strong momentum in its core businesses and had made progress in reducing costs and improving absolute and relative financial performance in the past two years.

Hayward said the company had a strong portfolio in relation to the energy sector, but acknowledged that its "financial performance has some catching up to do".

Europeans flock to cheaper airlines

Budget airlines in Europe gained 13 million more passengers last year, with cheaper prices pulling in customers amid an overall drop in air travel.

The European Low Fares Airline Association, which includes Ryanair and easyJet, said an 8.7 per cent increase in passenger numbers in 2009 allowed their industry to expand and hire 3,000 more workers.

Airports say, overall, passenger numbers dropped 5.0 per cent in Europe last year.

Major carriers were worst affected. The Association of European Airlines said members lost 20 million passengers last year - down 5.8 per cent to 325.9 million - as a result of the economic downturn that has cut into business and vacation travel.

The low-fare airlines' group says its members carried 162.5 million passengers last year and their flights now account for over a third of scheduled services within Europe.

Irish-based Ryanair Holdings Plc is the biggest of these airlines, ferrying some 65.3 million people last year.

EasyJet was second with 46.1 million passengers.

EU socialists call for eurozone bailout fund

European socialists are calling for a eurozone economy rescue fund to be set up that would be financed by selling bonds at rates well below the premiums that Greece and others are currently paying to finance their debt.

The Party of European Socialists says this would protect the 16 nations that use the euro "against speculative attacks on sovereign debt and the single currency".

European Union governments have been reluctant to say how they would rescue a eurozone country that is heading for bankruptcy.

Sweden to build 2,000 wind turbines by 2020

Sweden is planning to build 2,000 new wind turbines in the next 10 years to expand its total power production by 25 terrawatt hours from alternative energy sources.

The increase is equivalent to about half of the power generated by the country's nuclear reactors in 2009. Nuclear power currently accounts for about 50 per cent of Sweden's electricity production.

The government said Tuesday it would present parliament on Thursday with its proposal for increasing wind power by 10 terrawatt hours.

Sweden last year announced plans to reduce greenhouse gas emissions 40 per cent from 1990 levels by making renewable energy account for about half of the nation's energy by 2020.

Apple suing HTC Corp over iPhone patents

Apple is suing Taiwan's HTC, saying the handset maker has violated patents related to the iPhone.

HTC Corp was the first company to manufacture cell phone based on Google Inc's Android operating system, which has emerged as a significant com-petitor for the iPhone. It is also making the Nexus One phone that Google is selling directly to consumers.

Apple Inc says HTC has infringed on 20 of its patents, covering aspects of the iPhone's user interface and hardware.

In a statement Tuesday, Apple CEO Steve Jobs said, "We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it."

Dubai firm's profit drops, unpaid bills pile up

Dubai's biggest construction company says its profit dropped by nearly half last year, as it set aside $80 million to cover debts it fears might not be repaid.

Arabtec Holding said Tuesday 2009 earnings fell 48 per cent to 494.9 million dirhams (US$134.9 million).

Lower sales were partly to blame, as was a 293.9-million dirham (US$80 million) charge Arabtec labeled an "allowance for doubtful debts" that might not be recovered.

Many foreign and domestic contractors, including Arabtec, have complained of long-delayed payments for completed work in the debt-saddled emirate.

Arabtec's CEO told reporters last week that the company stopped work on a project led by Dubai state-run developer Nakheel because it had not been paid.

100 million Microsoft users to choose browser

Some 100 million Europeans using Microsoft software will be asked to choose among rival Web browsers by mid-May under a deal the company struck to settle antitrust action, the European Union said Tuesday.

Microsoft Corp is starting this month to send updates to Windows computers in Europe so that when computer users log on, they will see a pop-up screen asking them to pick one or more of 12 free web browsers to download and install, including Microsoft's Internet Explorer.

The EU's executive commission said giving consumers the chance to try an alternative to Explorer, which comes with the widely used Windows operating system, would "bring more competition and innovation in this important area".

EU antitrust regulators in December dropped their last pending antitrust case against Microsoft after the company offered to let users choose between its browser and others. This ended more than a decade of legal trouble that racked up ?1.7 billion in fines for Microsoft.

Rivals had complained that attaching Internet Explorer to Windows was an unfair way for Microsoft to put its web software on most of the world's computers.

The top five browsers - Microsoft's Internet Explorer, Mozilla's Firefox, Google Inc's Chrome, Apple Inc's Safari and Opera, will be given prominent placement on the pop-up choice screen.

The selections will rotate from computer to computer, so none of the these five browsers will always be first.

Far smaller competitors such as Avant Browser, Flock, Green Browser, K-Meleon, Maxthon, Sleipnir and Slim Browser also will be displayed, if the user scrolls sideways.

The EU said greater browser choice also would boost the use of open Web standards - a set of guidelines on how Web sites are designed.

Rivals claim that Microsoft has not always followed these standards closely, forcing Web designers to make sites compatible with Internet Explorer - the leading browser - instead of working smoothly with other Web software.

Google Inc spokesman Al Verney said the browser "is probably the most important piece of software on your computer today."

"Research shows many users don't know what a browser is. We believe anything that raises awareness around browsers and increases choice is great for users and the Web," he said.

Microsoft's browser-choice screen will be used for five years in the 27-nation European Union plus Norway, Iceland and Liechtenstein.

Microsoft could be fined 10 per cent of its annual revenue if it doesn't stick to its commitment to distribute the browser screen as agreed and to avoid any retaliation against computer manufacturers who install other browsers as a default on the computers they sell.

Users in the US and elsewhere won't see any change.

- AP