Friday, July 18, 2008

Qantas Airways to cut 1,500 Jobs Worldwide

Qantas Airways Ltd., Australia's flagship carrier, said Friday it will slash 1,500 jobs worldwide and abandon plans to create 1,200 more as it tries to deal with skyrocketing fuel costs.

Chief executive Geoff Dixon said the cuts represent 4 percent of the airline's total work force and include closing call centers in Tucson, Arizona and London, causing the loss of 99 jobs. About 1,300 jobs will be lost in Australia and the rest overseas.

Qantas is also scrapping plans to increase its capacity by 8 percent in the 12 months to mid-2009, with no growth now expected in that period, Dixon said. Also, 22 older planes in Qantas' 228-strong fleet will be retired.

Qantas' budget subsidiary Jetstar will also be hit by the cuts, with its hiring program suspended, including pilots. A Jetstar cabin crew and pilot base in the southern city of Adelaide will be shut by September.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go," Dixon told reporters. "Over 20 per cent of our management and head office support jobs will be cut."

Dixon said the cuts were necessary to ensure that Qantas survives what he described as a crisis in the aviation industry caused by big rises in the price of fuel. Other major airlines have announced job and capacity cuts while raising fares and fees to offset higher spending on fuel.

Fuel accounts for about 35 percent of Qantas' expenses, and rising fuel costs are expected to add more than $1.95 billion to the company's fuel bills to the year ending mid-2009.

The first step in the job shedding plan would be to ask for voluntary redundancies, Dixon said.

Tuesday, July 15, 2008

Asian Stocks Tumble on US Financial woes

Asian stock markets fell sharply Tuesday as investor confidence in the U.S. financial system eroded even further despite a government-backed plan to help beleaguered mortgage financiers Fannie May and Freddie Mac.

Every major index suffered declines, with Hong Kong's Hang Seng Index dropping more than 4 percent and Taiwan's benchmark losing over 4.5 percent.

In Tokyo, the Nikkei 225 index dropped nearly 2 percent to close at 12,754.56.

While losses spread across most sectors, banks were hit particularly hard as investors worried that trouble in the U.S. financial markets would spillover to Asia. Japanese traders, for instance, were rattled by a local business newspaper report that the country's top three banks hold a combined 4.7 trillion yen ($44 billion) in Fannie May and Freddie Mac debt.

Those two government-chartered companies received a boost Sunday when the U.S. central bank and Treasury Department promised to step in with short-term funding and other aid should mortgage losses mount. Together, the companies hold or back about half the outstanding mortgages in the United States.

A sell-off of regional banks overnight on Wall Street, as well as fears that other American banks might face difficulties ahead, only added to the unease. On Monday, the Dow Jones industrial average fell 45.35, or 0.41 percent, to 11,055.19 after spiking nearly 140 points in early trading.

"Investors are quite concerned we could be heading toward a meltdown in the equities market if there's no rebuilding in confidence, especially in the U.S.," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong.

In Japan, banking giant Mizuho Financial Group Inc.'s shares dipped 3.5 percent in afternoon trade and Mitsubishi UFJ Financial Group Inc. was down nearly 4 percent.

Meanwhile, China's biggest lender, ICBC, dropped almost 5.2 percent in Hong Kong trading. China Construction Bank was off 5.4 percent.

China's most-watched index in Shanghai was off 3.4 percent. Elsewhere, South Korea's benchmark slid 3.2 percent, India's Sensex lost 3.7 percent and Australia's main index slipped 2.1 percent.

In currency trading, the dollar declined against the yen to 105.59. The greenback was flat against the euro.

Monday, July 7, 2008

Coca-Cola Agrees to $137.5 mln Settlement in Case

Coca-Cola Co., agreed to pay $137.5 million to settle a shareholder lawsuit that claimed the world's largest soft drink maker artificially inflated sales to boost its stock price, according to court documents.

The lawsuit, filed in October 2000, claimed that in 1999 Coca-Cola had forced some bottlers to purchase hundreds of millions of dollars of unnecessary beverage concentrate in an effort to make its sales seem higher.

Bottlers use the beverage concentrate to make soft drinks.

Institutional investors, led by Carpenters Health & Welface Fund of Philadelphia & Vicinity, said the practice, known as "channel stuffing," artificially inflated Coca-Cola's results and gave investors a false picture of the company's health.

The investors claimed that Coca-Cola had failed to disclose material facts about its business and these omissions and misrepresentations harmed investors.

Without admitting any wrongdoing, Coca-Cola agreed to the settlement on June 26, according to court documents obtained by Reuters. The settlement was filed with the court on July 3.

Coca-Cola had previously denied any wrongdoing or liability, but agreed to settle the case to avoid lengthy and uncertain litigation, the settlement said.

The settlement applies to anyone who acquired Coca-Cola common stock from Oct 21, 1999 through March 6, 2000, according to the settlement agreement, which was filed with the U.S. District Court for the Northern District of Georgia.

In 2005, Coca-Cola settled a similar issue over the sale of excess beverage concentrate to bottlers in Japan between 1997 and 1999.

"Coca-Cola misled investors by failing to disclose end-of-period practices that impacted the company's likely future operating results," the U.S. Securities and Exchange Commission said at the time.

Coca-Cola admitted no wrongdoing and paid no fines in that settlement pact, but agreed to cease and desist from future securities violations and maintain tight internal controls on sales to bottlers and customers. The U.S. Department of Justice had closed an investigation without filing charges against the company.

Thursday, July 3, 2008

Siemens Reportedly to cut 17,200 Jobs

Mostly white-collar and administrative positions being let go

Conglomerate Siemens AG, wracked by a wide-ranging corruption scandal, will cut up to 4 percent of its work force worldwide, or about 17,200 jobs, a pair of newspapers reported Saturday.

The Sueddeutsche Zeitung reported that the Munich-based company was set to shed the jobs — mostly white-collar and administrative — without citing any sources. The Wall Street Journal also reported a similar figure, citing a person who was familiar with the matter.

Siemens did not comment on either report, only to say that it did not comment on market rumors.

The German paper said that of the cuts to the company's global work force of approximately 435,000 staffers, some 6,400 could come in Germany, where it employs around 136,000 people.

Both papers said the company cited the rough economic conditions worldwide as one reason for the cuts, but Siemens CEO Peter Loescher warned earlier this year that the company faced a bumpy road.

In March, Siemens issued a profit warning saying that weaker-than-expected performance in its major business projects this quarter was going to pull earnings down by approximately $1.41 billion.

The warning was a surprise for the conglomerate, whose diverse products include trams, turbines and telecommunications equipment, given that it had said in January that sales were expected to double the pace of the global economy.

It had a second-quarter profit of $648.82 million in the January-March period, down 67 percent compared with a year earlier.

In February, Siemens said it would reorganize its corporate telecom unit as it prepares to get out of the business, eliminating 3,800 jobs while another 3,000 will be transferred to partners or other units — its biggest cuts in years.

The new figures reported Saturday were on top of the previously disclosed cuts.

Shares of Siemens were down 0.17 percent to close at $111.64 in Frankfurt trading Friday.

Monday, June 30, 2008

Oil near $143 on Israel-Iran Tensions

Oil rose more than $2 a barrel on Monday towards a new record high of $143, propelled by heightened tensions between Israel and Iran over Tehran's nuclear program.

A fall in the U.S. dollar to three-week lows versus the euro helped boost the market.

U.S. light crude was up $2.42 at $142.63 a barrel by 5:29 a.m. EDT, within reach of the record $142.99 struck on Friday.

London Brent crude was up $2.39 cents to $142.70.

"The U.S. dollar is down and there are many high-level geopolitical news items, particularly in the Middle East, that are pushing prices up," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand (ANZ) Bank in Melbourne.

Iran's Revolutionary Guards have said Iran would impose controls on shipping in the Persian Gulf and Strait of Hormuz if it were attacked.

The Strait of Hormuz, a narrow waterway separating Iran from the Arabian Peninsula, accounts for roughly 40 percent of the world's traded oil flows.

Iran's foreign minister said on Sunday he did not believe Israel was in a position to attack his country over its nuclear program.

Oil prices have jumped more than 40 percent this year, extending a six-year rally, in response to Middle East tensions, plus expectations that supply will struggle to keep pace with rising demand from emerging economies such as China and India.

The market is sensitive to any supply disruptions.

A succession of militant attacks on Nigeria's oil facilities that have shut a fifth of the country's output since early 2006 has helped drive the market higher.

A flood of cash from investors moving into commodities away from sagging global equity markets and to hedge against inflation and the weak dollar has also contributed to oil's rise.

Some blame these "speculators" for the market's rapid climb since the start of this year, others say it is more to do with supply/demand fundamentals.

Tony Hayward, chief executive of international oil company BP Plc (BP.L) said: "This is a fundamental signal, this is not about speculation."

The market will watch U.S. economic indicators due later on Monday as well as the European Central Bank's interest rates decision on Thursday for further guidance on the U.S. dollar.

Thursday, June 26, 2008

Stocks Tumble as More Bad Economic News Piles up

Wall Street has suffered a huge loss, with the Dow Jones industrials plunging more than 350 points as investors contended with a barrage of bad news. A surge in oil prices past $140 a barrel and warnings of trouble in the key financial, automotive and high-tech industries created a gloomy mood across the market.

The day's news included analysts' negative comments about brokerages and General Motors Corp. It made clear to investors how much U.S. companies stand to be hurt from the fallout of the prolonged housing slump, the nearly year-old credit crisis and the soaring price of oil.

All the major indexes dropped around 3 percent. The Dow is at its lowest point in nearly two years.

Wednesday, June 25, 2008

Architect Hopes New Skyscraper Keeps us Spinning

An Italian architect said he is poised to start construction on a new skyscraper in Dubai that will be "the world's first building in motion," an 80-story tower with revolving floors that give it an ever-shifting shape.

The spinning floors, hung like rings around an immobile cement core, would offer residents a constantly changing view of the Persian Gulf and the city's futuristic skyline.

A few penthouse villas would spin on command using a voice-activated computer. The motion of the rest of the building would be choreographed in patterns that could be altered over time.

Speaking at a news conference in New York on Tuesday, the building's designer, David Fisher, declared that his tower will revolutionize the way skyscrapers are made — a claim that might strike some as excessively bold.

Fisher acknowledges that he is not well known, has never built a skyscraper before and hasn't practiced architecture regularly in decades.

But he insisted his lack of experience wouldn't stop him from completing the project, which has attracted top design talent, including Leslie E. Robertson, the structural engineer for the World Trade Center and the Shanghai World Financial Center.

"I did not design skyscrapers, but I feel ready to do so," Fisher said.

Twisting floors are just one of several futuristic features in the building, the first of several Fisher hopes to build with a similar design.

Giant wind turbines installed between every floor, he said, will generate enough electricity to power the entire building, and lifts will allow penthouse residents to park their cars right at their apartments.

A second version of the tower, to be built in Moscow, would have a retractable helicopter pad. Both structures, at over 1,300 feet, would be taller than the Empire State Building.

Even the method of construction would be unorthodox.

Fisher said each floor will be prefabricated in an Italian factory, then shipped to the site to be attached to the core. Assembling a building in this fashion, he said, will require only 80 technicians and take only 20 months, saving tens of millions of dollars, for a total cost of $700 million to build.

On its face, the project seems to pose a number of complicated engineering puzzles.

How would the plumbing hookups work in an apartment that is constantly moving? Fisher said the pipes will connect to the core via attachments similar to the ones used by military aircraft for in-flight refueling.

Wouldn't people get dizzy? No, says Fisher. The rotations will be slow enough that no one will notice.

With so many moving parts, wouldn't the building be a maintenance nightmare? Fisher said the building's modular construction will allow easy access to parts that need to be replaced.

Robertson, who attended Tuesday's news conference, said that the skyscraper might be unusual, but is "absolutely" buildable.

"You can build anything," he said, smiling.

Fisher declined to say exactly where in Dubai the tower will be built or when site work might begin. He insisted, however, that factory production is set to start within weeks and that the tower, which will contain office space, a luxury hotel and apartments, will be complete by 2010.

Sales of individual apartments will begin in September, with asking prices of around $3,000 per square foot. The smallest, at 1,330 square feet, would cost about $4 million and the largest, a 12,900-square-foot villa, $38.7 million.

Skeptics might question Fisher's credentials to pull off the job.

In a biography he had been distributing for months, he said he graduated from the University of Florence in 1976, came to New York in the mid-1980s and later developed hotels and ran a company that specialized in stone and prefabricated construction materials.

The biography also said he received an honorary doctorate from "The Prodeo Institute at Columbia University in New York." No such institution exists, however, and Columbia said it had never awarded Fisher an honorary degree.

Asked to explain the discrepancy, Fisher said, through his New York publicists, that he had been awarded the degree by the Catholic University of Rome during a ceremony in 1994 held at the Cathedral Church of St. John the Divine, which is near Columbia's campus.

Asked again to clarify the name of the school that conferred the degree, Fisher's publicists said in an e-mail that the information has been removed from his bio "because he wants to be entirely accurate and cannot be with this information."