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TODAY IN PERSONAL JOURNAL
Brian Harkin for The Wall Street Journal
Hold On, My Other Cell Is Ringing
PLUS The Best Seat in the House? At the Bar
WEDNESDAY, APRIL 2, 2014 ~ VOL. CCLXIII NO. 76
******
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Business & Finance
G
M’s Barra sought to separate the auto maker from
its past “cost culture” and
said it now focuses on safety,
as lawmakers questioned the
CEO over vehicle recalls. A1, A4
n U.S. manufacturing picked
up in March, but the gain was
short of many forecasts. A2
n Auto sales in the U.S. rose
last month. Fiat Chrysler led
the way with a 13% jump. B2
By Jay Solomon,
Nicholas Casey
and Joshua Mitnick
n U.S. stocks kicked off the
quarter with gains. The S&P
500 hit a record 1885.52. The
Dow rose 74.95 to 16532.61. C4
n Virtu delayed its IPO pitch by
at least a week amid a clamor
over high-frequency trading. C1
n Goldman is in talks to sell
a once-iconic trading business
for a fraction of what it paid. C3
n Samsung and Apple traded
barbs in opening statements in
a smartphone patent trial. B6
i
i
World-Wide
n An Obama administration
effort to forge a Mideast peace
deal appeared near collapse
despite a U.S. move to negotiate a spy’s release. Kerry
canceled a visit to Abbas. A1
n NATO foreign ministers
told military leaders to craft a
response to the Ukraine crisis
that could include moving
troops closer to Russia. A9
n Some 7.1 million people
have signed up for insurance
under the health-care law, setting the stage for Democrats to
move past a rocky rollout. A6
n Ryan released a plan designed to unify Republicans
behind an effort to balance the
federal budget in 10 years. A6
n A powerful earthquake
struck off the northern coast of
Chile, generating a tsunami and
prompting evacuations. A9
n Turkey’s opposition
charged that Prime Minister
Erdogan’s party rigged elections in some districts. A11
n A mammogram study
concluded that the screenings save relatively few lives
from breast cancer. A3
n Washington, D.C.’s mayor
lost to his top challenger in
the Democratic primary. A8
n A 2016 Olympic Games organizer plans to step down,
Rio city officials said. A10
n Died: Charles Keating, 90,
financier in thrift scandal. C2
CONTENTS
Corporate News... B2-4
Global Finance............ C3
Heard on the Street C14
Home & Digital...... D2,3
In the Markets........... C4
Leisure & Arts............ D5
Opinion.................. A15-17
Property Report C6-10
Sports.............................. D6
Technology................... B6
U.S. News................. A2-8
Weather Watch........ B8
World News......... A9-12
>
s Copyright 2014 Dow Jones & Company.
All Rights Reserved
BY JEFF BENNETT
AND SIOBHAN HUGHES
WASHINGTON—General Motors Co. Chief Executive Mary
Barra on Tuesday confronted
what is proving her biggest challenge running the nation’s largest auto maker: The troubled
legacy of the Old GM culture.
Lawmakers here prodded Ms.
Barra on why it took GM nearly
a decade to recall defective vehicles, presenting a 2005 memo in
Ham Hawks:
ChinaSays‘Oui’
To French Pigs
i
i
which GM managers ruled out
redesigning a flawed ignition
switch because the fix would
cost 90 cents a car, and return
only 10 cents to 15 cents in warranty-cost savings.
Ms. Barra called the decision
“not acceptable” as family members of some of the 13 people
killed in accidents blamed on the
switches looked on. “In the
past,” she told them, “we had
more of a cost culture, and now
we have a customer culture that
focuses on safety and quality.”
Her testimony on Capitol Hill
will continue on Wednesday.
How the public judges her responses and promises that she
runs a “new GM” will be critical
to the company’s efforts to recover from recalls of 6.3 million
vehicles during the past month.
Ms. Barra faced tough questions on what she and others
running GM knew about the decisions made as GM sought to
rebuild its sales of compact
Final Days Before Afghan Ballot
i
BY STACY MEICHTRY
AND CHRISTINA PASSARIELLO
PARIS—As French President
François Hollande prepared to
dine with his Chinese counterpart Xi Jinping inside the gilded
interiors of the Élysée Palace last
week, the two leaders were in a
celebratory mood over a historic
breakthrough: the end of a Cold
War on cold cuts.
No longer would the vast array of hams, sausages and other
meats that comprise France’s
proud culinary tradition of charcuterie be shut out of China.
Hours earlier, their governments
had signed a trade agreement finally allowing France’s pig meat
to grease the world’s biggest
market for all things pork.
“I have tasted the French specialties,” Mr. Xi declared. The
French president nodded approvingly.
The deal aims to help France
piggyback onto a good thing. For
decades, Italy and Spain have
battled it out as the two superpowers of ham that is cured,
rather than cooked, to perfection. Italy’s Prosciutto of Parma
and Spain’s Serrano Ham stole
the march on their French counPlease turn to page A14
PRESIDENTIAL VOTE: Girls prepared to perform at a Kabul rally for
vice presidential candidate Habiba Sarabi. Saturday’s election would be
Afghanistan’s first democratic power transfer. Photos: WSJ.com/World
Overdraft Fees at Banks
Hit High, Despite Curbs
BY ANNAMARIA ANDRIOTIS
Squeezed by falling revenue on
deposit accounts, banks are turning to a familiar source of income: overdraft fees.
Nearly four years after regulators tried to curb the fees, banks
are lifting them to new heights.
The median fee for withdrawing
more from a checking account
than a customer has on deposit
increased to an estimated $30 in
2013—a record—up from $29 in
2012 and $26 in 2009, based on a
survey of 2,890 banks and credit
unions by Moebs Services Inc., an
economic-research firm in Lake
Bluff, Ill.
“Banks have a revenue gap
IS BEAUTIFUL
cars. Many times on Tuesday,
she said she didn’t know why
GM officials had not recalled
Chevrolets, Saturns and Pontiacs
with faulty ignition switches,
saying the answers would come
from an internal probe.
But she also sought to separate the company from its past,
insisting cutting corners on
Please turn to page A4
 Tough reception for Barra....... A4
 Feinberg to advise GM.............. A4
Secretary of State John Kerry,
who was set to visit Palestinian
President Mahmoud Abbas in Ramallah on Wednesday, canceled
his trip, the State Department
said.
A formal breakdown in negotiations between Israel and the Palestinians, which the White House
stressed hasn’t occurred, would
throw into turmoil President Barack Obama’s second-term foreign-policy agenda, already reeling from rising tensions with
Russia and an inability to stop
the civil war in Syria.
Mr. Obama has said solving
the Mideast conflict is one of
three main international objectives of his second term. Republicans and Democrats on Tuesday
criticized his administration’s
last-minute discussions with Israeli Prime Minister Benjamin
Netanyahu to offer up the spy,
Jonathan Pollard, to persuade
the Israelis to make good on previous promises to release prisoners. They called it a sign of a
White House desperate for a major foreign-policy success.
“Releasing Pollard, in the conPlease turn to page A10
SHOWING ITS AGE
Trade Negotiations
Open Pork Pipeline;
Italy, Spain Squeal
Composite
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GM’s Troubled Legacy Weighs
On CEO in Capitol Hill Grilling
Paula Bronstein for The Wall Street Journal
n Investors pulled $3.1 billion from Pimco’s Total Return bond fund in March. C1
GM CEO Mary Barra, above on Tuesday, called the 2005 decision to allow the use of a defective ignition switch in some cars ‘very disturbing.’
that needs to be recouped,” said
Greg McBride, chief financial analyst at Bankrate.com, which
tracks overdraft fees and other
charges.
Banks’ fee revenue from
checking, savings and other deposit accounts has been sliding
since several regulations took effect. The Federal Reserve in
2010 stopped banks from automatically charging customers
overdraft fees on debit-card and
automated-teller-machine transactions. In addition, the DoddFrank financial-overhaul law included an amendment that went
into effect in 2011 lowering a
debit-card fee large financial inPlease turn to the next page
Southwest Air Faces
Grown-Up Woes
BY JACK NICAS AND SUSAN CAREY
CHICAGO—At Midway Airport
here on Jan. 2, Southwest Airlines Co. canceled a third of its
flights, lost 7,500 bags and, at
one point, had 66 aircraft on the
ground—about twice as many as
the carrier has gates. Passengers
were stuck on the tarmac late
into the night.
A severe snowstorm was the
main culprit, but Southwest
managers also blamed ramp
workers, suggesting that nearly
a third of them called in sick to
protest slow contract talks. The
spat boiled into a legal battle,
with the workers suing Southwest for requiring they provide
doctor’s notes. They say they are
chronically understaffed and are
being blamed for executives’
mismanagement of the storm.
Labor strife has long roiled
the airline industry, but not
Southwest. The carrier never has
laid off workers or cut their pay,
and has had only one strike in
its history, a six-day mechanics’
walkout in 1980.
But now Southwest is asking
for some of the biggest contract
changes ever from employees in
a bid to contain costs—and some
union leaders are furious. “We
built this airline,” says Randy
Barnes, a union representative
for Midway’s ramp workers.
Now, he says, management is
“tearing it down.”
The recent acrimony is one
way that Southwest is showing
its age. Once the industry’s
brassy upstart, the airline, which
took wing 43 years ago, has begun to resemble the mainstream
rivals it rebelled against in its
youth: carriers that were slowgrowing, complex and costly to
run.
First sketched out on the back
of a cocktail napkin in 1967,
Southwest was built on simplicity, thrift, labor harmony and
rapid expansion. For decades, it
was the fastest-growing and lowest-cost airline in the U.S., undercutting competitors’ fares in
new markets and sending traffic
skyward—a phenomenon known
in government and industry cirPlease turn to page A14
Bumpy Ride
Southwest Airlines' cost to fly per
seat, per mile, cumulative change
since 2000
80%
2013: 63%
60
40
20
0
’00
Source: FactSet
’05
’10
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P2JW092000-6-A00100-1--------XA
n Corporate bond sales last
quarter boomed. Highly rated
firms sold about $317 billion. C1
YEN 103.66
The Obama administration’s
campaign to forge a Middle East
peace agreement appeared near
collapse Tuesday, despite a U.S.
move to negotiate the release of
a convicted American spy in a
last-gasp effort to win more concessions from Israel.
n PG&E was charged over a
fatal pipeline blast in 2010 near
San Francisco, in a rare criminal case against a utility. B1
n Comcast shares have fallen
nearly 10% since the Time Warner Cable deal was announced,
complicating the offer. B1
EURO $1.3793
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Peace
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