Read the Bulletin of New Terminology for the Greek Language (by the Academy of Athens) Read the Convention Relating to the Regime of the Straits (24 July 1923) Read the Convention Relating to the Regime of the Straits (24 July 1923)
HR-Net - Hellenic Resources Network Compact version
Today's Suggestion
Read The "Macedonian Question" (by Maria Nystazopoulou-Pelekidou)
HomeAbout HR-NetNewsWeb SitesDocumentsOnline HelpUsage InformationContact us
Thursday, 28 March 2024
 
News
  Latest News (All)
     From Greece
     From Cyprus
     From Europe
     From Balkans
     From Turkey
     From USA
  Announcements
  World Press
  News Archives
Web Sites
  Hosted
  Mirrored
  Interesting Nodes
Documents
  Special Topics
  Treaties, Conventions
  Constitutions
  U.S. Agencies
  Cyprus Problem
  Other
Services
  Personal NewsPaper
  Greek Fonts
  Tools
  F.A.Q.
 

European Business News (EBN), 96-11-28

European Business News (EBN) Directory - Previous Article - Next Article

From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated November 28 1630 CET


CONTENTS

  • [01] Lopez offers to quit post at VW
  • [02] Philips' employees protest at plans to trim half its European television workforce
  • [03] French mediator ends trucker talks after wage deal is struck
  • [04] OPEC agrees six-month rollover of current output ceiling
  • [05] British Gas losses deepen sharply in the third quarter
  • [06] Lufthansa posts 14% drop in earnings
  • [07] Bank of France official supports weaker
  • [08] French economy expands at strong 0.9% rate
  • [09] Olivetti may delay plans to sell assets, warns probe may force company to close
  • [10] Paris fires Bonnaud as head of GAN
  • [11] Negotiations slowdown between Italy's ENI & the UK's BT
  • [12] Banking and insurance group Fortis posts 20% rise in earnings in first nine month

  • [01] Lopez offers to quit post at VW

    Volkswagen's supervisory board will consider tomorrow whether to accept the offered resignation of purchasing manager, Jose Ignacio Lopez, a VW supervisory board source said.

    Asked whether Lopez' resignation will be a topic at Friday's supervisory board meeting, the board member confirmed Lopez' offer 'is on the agenda.'

    The VW official spoke to Dow Jones News Services on the condition of anonymity. The supervisory board approves major strategic decisions and the hiring and firing of management board members.

    Separately, a VW spokeswoman confirmed the company plans to hold a news conference around 1630 CET Friday, following the board meeting. The official topic of the presentation is the company's plans for the world exposition Expo 2000.

    But speculation is mounting that the company may also make a statement on Lopez or its legal battle with General Motors of the U.S.

    Lopez is at the centre of that legal battle with GM and its Opel unit. The companies accuse him of taking company secrets when he moved to VW from GM in 1993.

    On Wednesday, VW rejected a demand by Opel that Lopez be sacked before it would consider an out-of-court settlement.

    Separately the European Union (E.U.) Commission said it has sent a 'statement of objections' to Volkswagen, its subsidiary Audi, and its Italian unit Autogerma listing complaints regarding parallel imports of VW cars in Italy.

    Commission officials raided various VW and Audi dealerships in October 1995 following complaints from Austrian consumers that they were being prohibited from buying VW cars in the Italian market.

    The Commission also received complaints from German and French consumers. Such practices are outlawed under E.U. single market law. If the allegations prove conclusive, VW stands to lose anti-trust exemptions granted to the E.U. car industry.

    [02] Philips' employees protest at plans to trim half its European television workforce

    Workers at Dutch electronics company Philips' Belgian television plant in Bruges are in protest against proposed job cuts, a spokesman for the company confirmed.

    'Workers are occupying the building,' Philips's Belgian spokesman Julien Michiels said. The occupation comes after Philips Thursday announced it's cutting 1,400 jobs in its television activities, 433 of which will be lost at the Bruges plant. The planned restructuring of its European television operations involves cutting about half the division's work force.

    The company also said that more reductions can be expected as the company continues a restructuring programme it announced in July. Philips has taken a pretax charge of 800 million guilders ($467.8 million) to cover the restructuring.

    When Philips announced the extra charge in July it said 6,000 jobs would be cut from the Sound & Vision division. A spokesman described today's changes as an 'update' on the progress of its restructuring.

    Philips said 'the Sound & Vision improvement process is on schedule,' and that more cuts will be announced as the 6,000 figure has not yet been reached.

    Bert Siebrand, an analyst with Bank Suez Nederland said the news was reassuring.

    'It will definitely help earnings and reduce losses in consumer electronics. It should bring results to a structurally higher level,' said Siebrand, who has Philips on a 'buy.'

    He also said the way news is being released is bound to support Philips' share price.

    'They could have waited and come up with one big plan. But it's more effective to announce it piecemeal and show the world they are working on it,' Siebrand said.

    Philips has been criticised for manufacturing consumer electronics in high wage European countries especially since local consumer spending has been so sluggish in recent years.

    The slump in spending has put price pressure on Philips products. The company says prices of its consumer electronics products are slipping by between 5% and 6% a year.

    Philips said it will use its plant in Bruges, Belgium to develop high-end colour televisions for the global market and that some production will also take place.

    Philips' factory in Dreux, France, will be the final assembly centre for Western Europe with some capacity to adapt global products to the local market.

    As of mid-1997, Philips will stop developing and manufacturing televisions in Monza, Italy.

    When Cor Boonstra took over as president from Jan Timmer on October 1, he made it clear that the company still needs to slash jobs even after the Centurion restructuring of the early nineties when some 50,000 jobs were cut.

    Philips, which plans to shift television production to lower wage countries such as Poland, did not say how much money it will save from the reduction of 1,400 jobs.

    [03] French mediator ends trucker talks after wage deal is struck

    A government mediator trying to end a crippling strike by French truckers announced a partial accord and ended the talks. But labor leaders said the strike would continue.

    The unions said they were not satisfied with the wage proposals, and vowed to continue the strike that has paralyzed France and spilled into other parts of Europe.

    Mediator Robert Cros announced the partial agreement shortly after midnight, saying it would be signed Friday. He did not release details.

    But a union representative said the truck companies' offer of a 1% pay increase and a one-time bonus of $300 was not enough.

    'There is deep disagreement on the wage problem,' Roger Poletti of the Workers Force union said.

    Poletti had earlier claimed Cros had quit, but Cros later said that he remained as mediator, that his mission had been completed and that he was reporting back to the Labor Ministry.

    The standoff has pitted truckers demanding higher pay, better hours and early retirement against company owners under pressure from an increasingly competitive European economy.

    During a marathon session ending earlier Wednesday after almost 20 hours, the truckers won a key victory in their demand for earlier retirement. Under the agreement, truckers who have worked for 25 years can quit at 55 and collect 75% of their pay.

    More and more, the strike was being felt elsewhere in Europe. Foreign truckers were having trouble getting into France and even worse, some were unable to get out of France.

    The strike has caused a new headache for British and French companies accustomed to shipping their goods through the Channel Tunnel. The 'Chunnel' has been closed since a fire last week, leaving shippers with only ferry or air service.

    German automaker Volkswagen said the strike had disrupted deliveries of parts from Spain for its main factory in Wolfsburg. German radio quoted VW officials as saying work shifts may have to be shortened next week.

    In Portugal, about 100 National Republican Guards, many with dogs, were patrolling a border crossing where Portuguese truckers were trying to prevent French trucks from crossing in both directions.

    Spain's Agriculture Ministry said the country was losing $16 million a day because it was unable to transport its products. Some 500 Spanish truckers were stranded on French highways, the ministry said.

    [04] OPEC agrees six-month rollover of current output ceiling

    The Organization of Petroleum Exporting Countries (OPEC) has agreed to roll over its current output ceiling of 25.033 million barrels a day for six months.

    OPEC president Abdalla Salem El-Badri said the just-concluded ministerial meeting was 'a good outcome.'

    He confirmed that OPEC has discussed overproduction. When asked how OPEC would deal with and police overproduction, he siad 'we are trying to develop a new method over the next six months.' He said OPEC needs to have 'a stand-by mechanism to monitor the production of individual countries.' Questioned as to how it would be possible to monitor overproduction if some members don't provide official production figures, he said 'everyone will provide his figures.'

    OPEC's Secretary-General Rilwanu Lukman confirmed that the organization will be reviewing over the next six months its means of monitoring overproduction by members. Lukman said he expects oil prices to remain 'reasonably firm' for the next three to six months.

    Lukman said the oil markets are poised for the return of limited Iraqi oil sales possibly by the end of the year and added that the market can absorb this oil. He said current oil 'prices are not so high to worry us.'

    OPEC ministers say demand for oil is strong enough right now to cushion any shock from Iraq's return after a six-year absence. The United Nations banned Iraqi crude exports after Iraq's 1990 invasion of Kuwait, but a limited resumption is now being negotiated and Iraq has said it could be back in business within weeks.

    OPEC has exceeded its target price of dlrs 21 a barrel since September, and now is getting between dlrs 22 and dlrs 23 a barrel. Oil producers welcome the higher prices, but consumers in large industrial nations are being pinched as they head into winter. But traders aren't expecting any dramatic drops.

    [05] British Gas losses deepen sharply in the third quarter

    British Gas's losses on a current-cost basis sharply expanded in the third quarter to £617 million ($1.03 billion) primarily on a charge to reflect weak gas prices.

    British gas said it took an exceptional charge of £294 to reflect expected losses on the difference between the cost at which the company is obliged to purchase gas, and the price at which it can sell it.

    The company, which is undergoing a Monopolies and Mergers Commission inquiry into the regulatory price formula for its TransCo gas pipeline unit, said weak gas prices had increased losses in its industrial and commercial gas supply business.

    Chairman Giordano said plans for the company's demerger into the TransCo International gas distribution unit and the British Gas Energy trading company are progressing well, and more details will be announced 'in due course.'

    British Gas said problems with new gas billing and customer service systems had slowed its cost reduction programme, and said these problems would require it to spend an extra £80 million this year.

    Richard Giordano said that in South West England, where a pilot scheme for competition in the domestic gas supply market is currently being operated, some 80,000 customers from the region's 500,000 total have switched to other suppliers since tests began at the end of April.

    Other regions of Southern England will take part in the second phase of competitive trials beginning in the early months of 1997.

    'British Gas has voiced its concerns with regard to the advancement of these trials to the winter period when the supply system operating under the new network code will be under the greatest strain and before the lessons of the first pilot have been fully assimilated,' Giordano said.

    He said that during the third quarter, many customers suffered from poor service after new billing and telecommunication systems were installed. He said £80 million will be invested over the next 12 months in an effort to improve services.

    He said the company is currently assessing the impact of a cut in capital allowances on long life equipment in the wake of the new U.K. budget.

    [06] Lufthansa posts 14% drop in earnings

    Lufthansa posted a 14% drop in nine-month earnings and warned that profit for the year would be at least 10% below 1995. Pretax profit for the nine months fell to 434 million Deutsche marks ($284 million), despite a 6.6% rise in sales to 15.19 billion marks.

    The 35% state-owned airline said it expects to close the final quarter of the year with a profit, but warned that 'at the moment we are expecting that the profit for 1996 as a whole will be less than last year.'

    Lufthansa said that whether the profit for the last quarter of the year matched that of the last quarter of 1995 depended partly on the outcome of its pay dispute with trade union DAG.

    Fuel costs also burdened the company's Condor charter division, though Lufthansa expects a satisfactory fourth quarter and a profit for the year just under last year's level.

    Regarding the anticipated privatization of the remaining 35.7% of the company still in government hands, Lufthansa said the timing is still under discussion, but a decision will be made soon.

    [07] Bank of France official supports weaker

    A member of the Bank of France's monetary policy council has raised serious concerns over German monetary policy in relation to the single European currency.

    In an interview published in the daily newspaper 'Le Monde,' Jean-Pierre Gerard also reaffirmed the view of government officials and some other Bank of France council members that , which stood at 5.2020 against the dollar in this morning's trade.

    Gerard, observing that the economic structures of France and Germany are quite different, claimed 'We are suffering much more than them from the undervaluation of the dollar, and a more realistic parity for us would be around 6 francs,'. On that basis, and assuming an unchanged French franc- Deutsche mark central parity of 3.35 francs, the Deutsche mark should be trading at around 1.87 to the dollar. But Germany is happy with a dollar- Deutsche mark rate of 1.53 marks, or about 5.13 francs per mark, Gerard said.

    At the present time, he noted, the French franc's central rate against the Deutsche mark inside Europe's Exchange Rate Mechanism is not problematic. `But what's dramatic,' he said, 'is the undervaluation of the dollar.'

    `I have the feeling that the Germans don't take sufficiently into account the problems that their monetary policy can cause to the creation of the single European currency,' said Gerard. `There is a real imbalance and there has to be a negotiation with (the Germans) on this.'.

    Gerard also remarked that criticism levied against former president Valery Giscard d'Estaing, who recently made a controversial proposal for a unilateral depreciation of the French franc, is 'unjustified.' He said Giscard d'Estaing was right to initiate a public debate on the right currency level of the franc. 'It's normal to be concerned about the future of our country. When you talk about the parity between the franc and the mark and between the franc and the dollar, that's what you're really talking about.'

    The Bank of France official said there will inevitably have to be a 'frank discussion' with Germany and that 'we have to say clearly how things stand in a constructive and not necessarily critical way.'

    [08] French economy expands at strong 0.9% rate

    France's gross national product expanded at a robust 0.9% rate in the third quarter, primarily because of a state subsidy on the purchase of new cars.

    That programmed, aimed at stimulating the car industry, has since ended. GDP fell 0.2% in the second quarter, revised from an initial 0.4% estimate. The economy had been expected to grow between 0.8% and 1.2% in the quarter.

    The government statistical agency Insee said an increased number of working days during the quarter also helped account for the sharp gain.

    If French economic activity continues on the present growth path over the rest of this year, the score for the whole year will be a growth rate of 1.2%. The French government expects a GDP growth rate of 1.3% for 1996.

    The government said domestic demand rose 0.6% in the third quarter following a 0.3% increase in the previous three months. Household consumption increased 1% in the third quarter, making a positive contribution of 0.6% to GDP.

    Fixed investment rose 1% in the three months through September after a 0.2% decline in the previous quarter, while foreign trade made a 0.3% contribution to GDP thanks to a 3.1% rise in exports, compared to an increase of only 2.1% in imports.

    Noteworthy was a 4.3 billion franc ($832 million) decline in inventories that made a negative contribution of 0.3 percentage point to GDP in the third quarter.

    Manufacturing output increased by 1.7% in the quarter, compared with a rise of only 0.4% in the previous quarter - a figure that was revised from a previously estimated 0.2% decline.

    [09] Olivetti may delay plans to sell assets, warns probe may force company to close

    Olivetti Chief Executive Roberto Colaninno said he isn't certain the company will be able to sell its personal computers division by the end of 1996, as the company has planned.

    Moreover, he said, a proposed parliamentary investigation into the company's finances could lead to Olivetti's closure.

    Colaninno, who was speaking to a House of Deputies commission, reconfirmed, however, the company's intention to sell the operation.

    'We have some talks already in progress - some very advanced, others less so - (but) I don't know if we will be able to close a deal by the end of the year,' the CEO said.

    Colaninno also said the company won't 'ever' give up its controlling stake in Omnitel Pronto Italia, the Italian cellular phone operator.

    Additionally, Olivetti is rethinking its planned sale of unit Tecnost, he said, giving no specifics.

    Colaninno also said he isn't currently in a position to give a prediction on the company's 1996 results, given the changes that might occur by the end of the year.

    Colaninno also appealed for the lower house of parliament not to start an investigation as proposed by some members. 'If an inquiry committee -- the most important judicial process -- was to be started, Olivetti would lose all its clients the next day,' he told the commission.

    In that case, he feared the information technology group would be forced to close.

    Loss-making Olivetti is already the subject of judicial investigations in the northwestern city of Turin and nearby Ivrea where it has its headquarters.

    Italian bourse regulator Consob opened its own investigation after a manager resigned saying he did not agree with all the figures published in Olivetti's first half accounts for 1996.

    Parliamentary deputies have asked for an inquiry following the accounting disagreement and in the wake of suggestions of insider trading in Olivetti shares on the Italian stock market.

    Colaninno said as Consob and Italian tax police were both in the process of investigating the company, 'an inquiry committee would just be a duplication.'

    Separately, Italian news weekly Panorama will publish an article in its Friday edition saying that Olivetti has agreed to sell its PC division to U.S. company Centenary.

    A letter of intent was signed by the Centenary company, a U.S. company specializing in the buying of distressed companies in order to restructure them, the Panorama article will report.

    As is its policy, Olivetti declined to comment.

    Colaninno would like to announce the deal before the end of the year, once the Centenary company has done due diligence on the PC division accounts and after an attempt to find an Italian partner for the U.S. company, Panorama reported.

    [10] Paris fires Bonnaud as head of GAN

    The French government unceremoniously fired the chairman of state- controlled insurer Groupe des Assurances Nationales two weeks after it embarrassingly backed away from privatising GAN's banking unit.

    The government officially fired Jean-Jacques Bonnaud and named Didier Pfeiffer, the number two executive at UAP, to head GAN, which the government is struggling to sell.

    His firing prompted Bonnaud to blast the government for treating him as a ''regular government prefect.''

    Bonnaud, in an interview with AP-Dow Jones News Services, also said there ''appeared to be no strategic reason for this change'' and that GAN would once again be run with the ''logic of state rather than the logic of a publicly traded company.''

    The government's decision comes two weeks after it cancelled the privatisation of GAN-controlled bank CIC in the face of opposition from CIC's regional bank presidents and its 21,600 employees. Government officials complained that Bonnaud hadn't rallied behind its efforts to sell CIC or quell the regional bank presidents' complaints.

    In addition, finance minister Jean Arthuis had sharply reprimanded Bonnaud earlier this month after the departing GAN chairman sent a letter to the country's independent privatisation committee without first clearing the letter with Arthuis.

    Bonnaud also ruffled Prime Minister Alain Juppe's feathers early this year when he opposed the nomination of a close Juppe aide to head CIC. 'That's probably what really got the government upset,' said one insurance analyst in Paris, who requested anonymity. 'There's some political logic, after the CIC sale cancellation, to try to blame Bonnaud and fire him, but there's little real reason other than sour grapes.'

    Bonnaud last February got his way and named Bernard Yoncourt to head CIC, but Pfeiffer has been asked to replace Yoncourt with Philippe Pontet, sources told AP-Dow Jones.

    Pontet formerly headed Banque La Henin before it was eventually liquidated last year. He is also a former aide to former president Valery Giscard D'Estaing when he was finance minister between 1972 and 1974.

    Bonnaud said his decision to oppose Juppe's choice was for business reasons only. Foreign investors who were interested in CIC, which GAN said it would sell back in December 1995, didn't want a government man running CIC. 'It wasn't possible to sell CIC with a government man,' Bonnaud said. 'I didn't have a conflict of power or prestige with the prime minister, I had a professional conflict.'

    Bonnaud, who has been head of GAN since 1994 and with the insurer since 1979, said he hadn't been told why he was being fired.

    [11] Negotiations slowdown between Italy's ENI & the UK's BT

    Italian energy giant Ente Nazionale Idrocarburi (ENI) is still in talks with British Telecom, but the negotiations are being slowed by the lack of regulatory norms on alternative networks in Italy, said ENI's managing director Thursday.

    ENI has been in talks with BT since last February on a possible accord that would allow BT to manage the energy company's worldwide telecommunications network.

    Franco Bernabe said the negotiations have been impeded because Italy lacks an adequate normative framework for alternative telecommunications networks.

    'Alternative networks are like UFOs,' said Bernabe. 'They don't have any juridical definition and this leaves us in the worst of all possible worlds.'

    He added that ENI is working to close an accord soon with BT, but 'the lack of precise regulations has blocked us from moving forward as fast as necessary.'

    The agreement would concern only ENI's voice communications network, not its data transmission system. ENI's telecommunications network is one of the largest internal systems in Italy.

    [12] Banking and insurance group Fortis posts 20% rise in earnings in first nine month

    Belgian-Dutch banking and insurance group Fortis said that its net profit in the first nine months of 1996 totaled 554 million European Currency Units, up from 469 million ECU in the same period of 1995.

    The group also reiterated that it expects full-year 1996 earnings per share to be at least 10% above last year's level.

    The news prompted a quick spike in the price of Belgian arm Fortis to an intraday high of 4,900 Belgian francs a share, but it has since moderated to 4,870 francs, still up 30 francs from Wednesday's close.

    Fortis also announced that Dutch unit Fortis AMEV posted nine-month profit of 605 million Dutch guilders. A comparable figure for the third quarter of 1995 wasn't immediately available.

    The parent company's 18% profit rise for the first nine months of the year was slightly better than the 14-15% gain predicted by stock analysts who follow the banking and insurance group.


    From the European Business News (EBN) Server at http://www.ebn.co.uk/


    European Business News (EBN) Directory - Previous Article - Next Article
    Back to Top
    Copyright © 1995-2023 HR-Net (Hellenic Resources Network). An HRI Project.
    All Rights Reserved.

    HTML by the HR-Net Group / Hellenic Resources Institute, Inc.
    ebn2html v1.00 run on Thursday, 28 November 1996 - 13:20:50