Business this week

Feb 5th 2009
From The Economist print edition

Tim Geithner, America’s treasury secretary, declared that executive pay at companies that receive “exceptionalassistance” from the government will be capped at $500,000 and that any additional compensation would haveto be made in restricted stock that won’t vest until the public money is repaid. The policy, which does not applyto companies that have already received aid, comes as politicians step up their criticism of what they describeas executive excess at banks that have chalked up massive losses.

Getting the message?

Wells Fargo scrapped plans to hold a conference in Las Vegas, “in light of the current environment”. The bankreceived $25 billion in federal aid last year. Goldman Sachs also said that “in light of the current environment”it was rescheduling a hedge-fund managers’ conference that had been due to take place in March at a 300-acreluxury resort in Florida.

The Bank of England reduced interest rates by half a percentage point, to 1%.

Big oil companies reported mixed earnings. Despite a 33% fall in its net income in the fourth quarter comparedwith a year earlier, Exxon Mobil turned an annual profit of $45.2 billion in 2008, the biggest-ever for anAmerican company. Chevron’s quarterly profit of $4.9 billion was similar to a year ago. And BP said itsreplacement-cost profit was $25.6 billion for the year, though it made a net loss in the last quarter.

More Japanese electronics companies announced swingeing job cuts. Panasonic shed 15,000 employees, NECslashed its workforce by 20,000 and Hitachi said 7,000 jobs would go. The companies all posted big losses forthe fourth quarter, as consumers reined in their spending and the yen strengthened, hurting Japanese exports.

Dow Chemical’s troubles continued. America’s biggest chemical company made a quarterly net loss of $1.6billion as demand for its products fell among manufacturers. It was dealt an additional blow late last year whenKuwait pulled out of a multibillion-dollar investment venture, which in turn caused Dow to delay its takeover ofRohm & Haas. That company is suing Dow to complete the deal.

Roche launched a new bid for the 44% of shares it doesn’t already own in

Genentech, and took it directly tothe biotechnology company’s shareholders. A committee of independent directors at Genentech rejected aproposal from Roche last August.

Motorola released dismal quarterly earnings. The company suspended its dividend and said its chief financialofficer was leaving. Motorola’s share of the global mobile-phone market has fallen to 6.5%, from 23% just afew years ago.Shareholders approved a plan to buy out PCCW, Hong Kong’s main telecoms company. Richard Li, PCCW’schairman, has offered to take the company private following a slump in its share price. Some investors say theprice should be higher. PCCW had to ask regulators to suspend trading in its shares this week amid allegationsthat attempts had been made to rig the outcome of the vote.

Rio calls in Beijing

Rio Tinto confirmed that it was talking to Chinalco about the possibility of the state-owned Chinese aluminiumproducer making an investment in the company. The Anglo-Australian mining giant has accumulated debt ofsome $40 billion. See articleJanuary was the worst month for car sales in the United States for decades. Almost 657,000 cars and lighttrucks were sold; more vehicles were bought in China than America for the first time. General Motors’ salesplunged by 49% compared with January 2008, Ford’s by 40% and Chrysler’s by 55%. Toyota, the world’sbiggest carmaker, saw its American sales fall by 32%.Meanwhile, America’s car-parts suppliers asked the Treasury for $25.5 billion in state aid, which includescreating a fund that would reduce the time it takes carmakers to pay for parts.

Keep your motor running

Warren Buffett bought half of a $600m debt offering from Harley-Davidson. The motorcycle-maker is usingthe funds to shore up its loss making financing arm. The notes pay 15% annual interest to Mr Buffett, morethan twice the rate of a standard corporate bond.Mr Buffett also agreed to invest SFr3 billion ($2.6 billion) in Swiss Re. The reinsurer is boosting its capital afterbooking massive write-downs and making an annual net loss.America’s GDP decreased at an annual rate of 3.8% in the fourth quarter of 2008,according to the official first estimate. Had it not been for a sharp rise in thequarter of inventories, economic output would have fallen by just over 5%.

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发布日期:2009年02月07日  所属分类:今日读报
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目前评论:1   其中:访客  1   博主  0

  1. xiaoxiao 3

    看来现在经济形势真的不容乐观啊
    连日本都开始大量裁员了

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