Business this week 21st - 27th April 2001

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[IMAGE][IMAGE]=09[IMAGE]=09[IMAGE]=09[IMAGE]=09Business this week
=09=09=09=09Apr 26th 2001
=09=09=09=09From The Economist print edition=20
=09=09=09=09
=09=09=09=09
=09=09=09=09Bigger but slower
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09[IMAGE]
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=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09The IMF=01,s World Economic Outlook forecast that world economi=
c growth would=20
slow this year to 3.2%, down from 4.8% in 2000. All the big economies were=
=20
predicted to slow, but Europe less than America. The world economy is then=
=20
expected to recover a little in 2002, when output could grow by 3.9%.
=09=09=09=09
=09=09=09=09See article: The world economic outlookE+
=09=09=09=09
=09=09=09=09The World Competitiveness Yearbook, published by the Internatio=
nal Institute=20
for Management Development, once again showed America as the best place for=
=20
business competitiveness. Still second was Singapore, despite its poor rati=
ng=20
for democratic accountability. Finland, Luxembourg and the Netherlands=20
occupied the next three places.=20
=09=09=09=09
=09=09=09=09Small scotch
=09=09=09=09
=09=09=09=09Bank of Scotland, having failed in previous attempts to merge w=
ith two larger=20
British rivals, NatWest and Abbey National, began talks with Halifax, Brita=
in=01,
s biggest mortgage lender. Bank of Scotland=01,s latest attempt to woo a pa=
rtner=20
could encourage other bidders to enter the fray.
=09=09=09=09
=09=09=09=09See article: Bank mergersE+
=09=09=09=09
=09=09=09=09Morgan Stanley, an American investment bank, plans to show the =
door to 1,500=20
staff. Merrill Lynch also plans to get rid of up to 10% of its=20
investment-banking division, some 200 employees. More announcements of=20
bankers looking for alternative employment are expected soon.
=09=09=09=09
=09=09=09=09See article: Lay-offs on Wall Street
=09=09=09=09
=09=09=09=09UR sacked, : (
=09=09=09=09
=09=09=09=09Ericsson, a Swedish mobile-phone maker, responded to a drastic =
slide in=20
handset sales=01*41% down in the first quarter compared with a year ago=01*=
and big=20
losses. It said that it would shed 12,000 workers and also announced a join=
t=20
venture with Sony=01,s handset division to make and market new phones.
=09=09=09=09
=09=09=09=09See article: Mobile phone woes continueE+
=09=09=09=09
=09=09=09=09Motorola, America=01,s biggest handset maker, also reacted to f=
alling sales, by=20
closing a Scottish factory employing 3,100 people. The British government i=
s=20
trying to recoup o17m ($25m) paid in regional aid to the company since 1995=
.
=09=09=09=09
=09=09=09=09The prospects for third-generation mobile telephones suffered a=
setback.=20
After criticism of the high prices paid for licences to run 3G services cam=
e=20
news that technical problems would delay 3G=01,s launch in Japan until Octo=
ber.=20
NTT DoCoMo=01,s announcement means that 3G=01,s first roll-out may now be a=
chieved=20
by British Telecom in that hot-bed of technological advance, the Isle of Ma=
n.
=09=09=09=09
=09=09=09=09After months of pressure from disgruntled shareholders, Sir Iai=
n Vallance,=20
chairman of British Telecom, is to step down, to be replaced by Sir=20
Christopher Bland, chairman of the BBC.
=09=09=09=09
=09=09=09=09A consortium led by Sir Anthony O=01,Reilly, an Irish media tyc=
oon, and=20
including George Soros, a financier, was reported to be ready to bid euro2.=
6=20
billion ($2.3 billion) for Eircom, Ireland=01,s formerly state-owned teleco=
ms=20
operator. This would exceed a rival offer from a consortium headed by anoth=
er=20
Irish entrepreneur, Denis O=01,Brien.=20
=09=09=09=09
=09=09=09=09JDS Uniphase, a leading optical-equipment maker, said that it w=
ould lay off=20
5,000 staff, 20% of its workforce, in order to cut costs in response to=20
falling spending by telecoms firms.
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
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=09=09=09=09
=09=09=09=09[IMAGE]
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=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09Lucent, the world=01,s biggest telecoms-equipment company, repo=
rted losses for=20
the quarter to the end of March of over $5 billion. Yet improving revenues=
=20
and a planned restructuring cheered investors; the company=01,s shares rose=
by=20
more than 10%.
=09=09=09=09
=09=09=09=09Compaq Computer revealed profits for the first quarter of $200m=
, above the=20
forecasts of pessimistic analysts but still a third down on a year earlier.=
=20
But 3M, an American technology conglomerate, issued a profits warning for t=
he=20
next quarter and said that 5,000 jobs would go, around 7% of the total.
=09=09=09=09
=09=09=09=09Rupert Murdoch, the head of News Corporation, met top General M=
otors bosses=20
to present a bid for DirecTV, America=01,s leading satellite broadcaster, a=
nd=20
part of the car maker=01,s Hughes Electronics. Mr Murdoch has long coveted=
=20
DirecTV as a way of adding an American arm to his Sky Global Networks.
=09=09=09=09
=09=09=09=09An American government committee failed to clear a bid by ASM L=
ithography, a=20
Dutch semiconductor firm, for Silicon Valley Group, a maker of electronics=
=20
components that can be used in spy satellites. America=01,s Defence Departm=
ent=20
expressed concerns over the transfer of sensitive technology to =01&hostile=
=018=20
countries. President George Bush will now have to rule on the deal.
=09=09=09=09
=09=09=09=09Shell game
=09=09=09=09
=09=09=09=09A takeover bid of A$10 billion ($5.1 billion) for Woodside Petr=
oleum, an=20
Australia-based oil and gas company, by Royal Dutch/Shell, was surprisingly=
=20
blocked by the Australian government for being =01&contrary to the national=
=20
interest=018.
=09=09=09=09
=09=09=09=09See article: Shell rebuffed in AustraliaE+
=09=09=09=09
=09=09=09=09The dispute between Enron and the Indian state of Maharashtra o=
ver the=20
American energy company=01,s power plant worsened when Enron authorised its=
=20
local managers to terminate the contract.
=09=09=09=09
=09=09=09=09General Dynamics said it had agreed to buy Newport News Shipbui=
lding for $2.6=20
billion. If the bid is approved by the government, General Dynamics would=
=20
become the sole producer of aircraft carriers, destroyers and submarines fo=
r=20
the American navy.=20
=09=09=09=09
=09=09=09=09Britain=01,s Hilton Group gained another 154 hotels through the=
acquisition of=20
Scandic, a Swedish hotel company, for o612m ($881m). SAirGroup, owner of=20
Swissair, is selling its hotel company, Swiss"tel, to Raffles Holdings, a=
=20
Singapore-based hotel group, for SFr520m ($305m). SAirGroup is also plannin=
g=20
to change its name back to Swissair Group, and is considering selling two=
=20
loss-making French subsidiaries.
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09
=09=09=09=09SURVEY: SOFTWARE
=09=09=09=09
=09=09=09=09 Find thought-provoking articles about the future of software i=
n the=20
Economist's survey. This essential reading provides a history of open sourc=
e=20
software, details the growing trend towards software leased via the Interne=
t,=20
and explains the battle of operating system platforms. Click here to read=
=20
about the future of software. =20
=09=09=09=09
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