Financial life in a big town

Toyota is recalling 740,000 vehicles sold in the United States because of potentially unsafe brakes, adding to the automaker’s 2010 recall woes.

Separately, the U.S. division of Honda said it is planning to announce the recall of an undisclosed number of vehicles for the same problem.

Toyota Motor Sales, the U.S. division of Toyota Motor Corp. (TM) in Japan, said the recall applies to Avalon models built from 2005 through 2006, non-hybrid Highlanders from 2004 through 2006, the Lexus RX330, and 2006 models of the Lexus GS300, IS250 and IS350.

Toyota said it’s recalling the vehicles because a small amount of brake fluid could leak from the brake master cylinder, causing the brake warning lamp to go on.

If the problem is left untreated, Toyota said driver will first notice a spongy or soft brake pedal feel, and that the brakes’ ability to slow the vehicle will gradually deteriorate.

Toyota said the problem stems from the use of non-Toyota brake fluid. Toyota-brand brake fluid contains lubricating polymers that prevent the problem, the company said.

The company said that Toyota and Lexus dealers will replace the brake master cylinder cup at no charge to vehicle owners.

Worldwide, Toyota is recalling 1.5 million vehicles because of the problem.

Meanwhile, Honda (HMC) spokeswoman Christina Ra confirmed that the automaker is preparing to alert U.S. safety regulators Thursday of an impending recall.

The recall will cover Acura RL and Honda Odyssey models from 2005, 2006 and 2007. Ra did not say how many vehicles will be recalled, but she did say the recall stems from problems similar to those behind the Toyota recall.

The new brake problem is the latest to affect Toyota, which has recalled millions of vehicles due to a variety of safety issues.

Since the second half of last year, Toyota has announced recalls of more than 8 million vehicles. The latest major recall was in August, affecting about 1.33 million Corolla and Matrix vehicles built from 2005 to 2008 and sold in the U.S. and Canada. The company said there was a risk of cracks forming at solder points or on electronic components used to protect circuits from excessive voltage.  

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News Corp. pulled the plug on Cablevision customers Saturday, blacking out more than 3 million households in the New York area over a programming fee dispute.

The blackout affects Fox 5 and My9, Charles Schueler, Cablevision’s vice president of communications, said in a statement.

"Cablevision is calling on News Corp. to immediately put Fox 5 and My9 back on Cablevision and submit to binding arbitration under a neutral third party to reach a fair agreement," he said.

Fox Networks is entangled in a financial dispute over programming with Cablevision.

Cablevision (CVC, Fortune 500) says that Fox, which is owned by News Corp. (NWS, Fortune 500), is demanding too much money.

"In a difficult economy, it is unfair and wrong for News Corp. to demand a huge fee increase from Cablevision customers for Fox’s Channel 5 and My9 — and then threaten to pull the plug if they don’t get want they want," Cablevision said in a statement.

But Fox says it deserves the money for quality programming.

"Our position in these negotiations is entirely reasonable — we are simply asking for fair compensation for the value Fox5 and My9 programming offers," Fox said.

Cablevision says it is paying more than $70 million annually for Fox programming, and says Fox wants to bump it to $150 million.

Fox would not confirm or deny the details of the finances.

Cablevision has been running ads in an attempt to appeal to subscribers caught in the middle. One of the ads depicts a woman saying, "Hey News Corp., don’t make me part of your latest drama."

Outside of this dispute, Fox is still caught up in its pay dispute with another network. Fox blocked 19 regional sports networks in a rate increase dispute with Dish Network at midnight on Sept. 30.

The Federal Communications Commission urged the companies to "engage in good faith negotiations" and resolve their differences.

"I am disappointed that Fox and Cablevision have not found a way to ensure that consumers could enjoy uninterrupted carriage of Fox broadcast stations on Cablevision systems," said Julius Genachowski, FCC chairman.

The companies should protect their audience’s interests, he said.

– CNN’s Rick Martin contributed to this report. 

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Hawaii’s average gasoline price increased 3 cents per gallon to $3.46 in the past week, according to the AAA Hawaii Weekend Gas Watch.

Honolulu’s average price for a gallon of regular unleaded was $3.35, an increase of 4 cents from last week and 20 cents more than the same week a year ago.

Hilo’s average price was $3.48, which is 10 cents higher than a week ago and 18 cents more than last year.

Wailuku’s average gas price rose to $3.82 per gallon, 3 cents more than last week and 20 cents more than the same week a year ago.

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Satterfield & Pontikes Construction has named Richard Cox as the vice president of operations of the company’s federal services division in San Antonio.

Cox will lead all federal procurement efforts and manage field operations, design build procurement and engineering services.

The company is currently involved in major construction work at Fort Sam Houston as part of the 2005 Base Realignment and Closure decision. The U.S. Department of Defense is spending more than $2 billion on various projects to renovate and expand government buildings at San Antonio military installations.

Earlier this year, the company completed work on the BRAC Primary Health Clinic at Fort Sam. The 132,000 square-foot-project cost $37 million to complete.

Houston-based Satterfield & Pontikes is a general contractor and construction management firm. Texas Construction named Satterfield & Pontikes as the No. 2 contractor of Government Services Buildings.

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The Oregon University System has reduced its budget by 12.4 percent, or $52.2 million, over the past three months.

The cuts come as the state works to fill a $577 million budget hole. The State Board of Higher Education, in a meeting Friday, also indicated that further shortfalls could mean further cuts to the system's budget.

The board also approved moving forward with an Oregon Sustainability Center design. The board earlier agreed to work with the city of Portland on the sustainability center’s design. Gerding Edlen Development Co. will perform the work. The city and the university system will split the center’s $900,000 design cost.

At Friday's meeting, the board also learned that full-time equivalent student numbers jumped by 6.6 percent last year.

While the board said higher enrollment has “helped campuses to some extent manage the cuts,” it may seek permission from the legislature’s Emergency Board to spend money collected from tuition increases. The Emergency Board next meets in December.

OUS needs lawmakers’ permission to spend any extra money collected through enrollment jumps and other new revenue sources.

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Accuray Inc. said Tuesday it received a $1 million Small Business Innovation Research grant by the U.S. Government to be used toward further development of a high-energy X-ray source for Homeland Security applications.

Sunnyvale-based Accuray (NASDAQ:ARAY) said the grant will fund the development of a next generation, compact X-ray source bundled with a high-energy linear accelerator.

Phase one of the project, which was also funded by an earlier SBIR grant, was completed in June 2010 and included the analysis and design of the major subsystems for the prototype pay day loans. Phase two will consist of the development of the prototype that is intended to be used as a critical part of cargo scanning systems by the Department of Homeland Security.

Click here to read the press release.

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Christmas is not coming early this year for the U.S. Postal Service, after regulators denied a request Thursday that would have raised the price of a first-class stamp by 2 cents, to 46 cents.

The Postal Service argued that it needed the hike in order to cover lost revenue from a decrease in mail volume, stemming from the economic recession.

While the Postal Regulatory Commission agreed with USPS’ argument, they denied the request, saying that the rate hike was an attempt to address long-term structural problems not caused by the recent recession.

The committee wrote in its unanimous decision that the "Postal Service has failed to meet its burden under the law, and the Commission is unanimous in denying its request for an exigent rate increase."

While USPS was able to demonstrate that the recession created the kind of "extraordinary or exceptional" circumstances that would merit the proposed 5.6% average increase on mail costs — the requested increase was due to retiree benefits.

"The documentation provided by the Postal Service demonstrated that the primary cause of the liquidity crisis was structural, and related to an overly ambitious requirement for the Postal Service to pre-fund its future retiree health benefit premiums," the committee said.

Postal rate hikes are usually capped at the rate of inflation. This is the first time USPS has requested a demand for a price increase, an action that is allowed under the 2006 Postal law.

But as the committee noted, the Postal Service reduced costs by $6 billion in 2009 — a sign that the price cap is forcing the organization to improve efficiency.

Postmaster General John E. Potter said the ruling was a disappointment, and that it would require more study.

"We are disappointed to learn that the Postal Regulatory Commission has denied our price filing. But we are encouraged by their acknowledgment and understanding of the larger financial risk we face, through the mandated pre-funding of Retiree Health Benefits," Potter said in a statement.

Meanwhile, business groups long opposed to the rate hike cheered the decision.

"The PRC today has helped countless businesses stay competitive and saved tens of thousands of jobs," said Affordable Mail Alliance spokesman Tony Conway. "The Commissioners recognized that imposing an additional tax on Postal Service customers is not the way to address its financial troubles." 

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