News & Current Affairs

October 2, 2008

Toyota eyes European growth

Toyota eyes European growth

Toyota Avensis

The launch of the Avensis was a low-key affair

Given its significance, the Monday night preview of Toyota’s new Avensis was a remarkably low-key affair.

A few dozen journalists and company executives witnessed the car’s unveiling at the event at the Pavillon Gabriel in Paris.

Tadashi Arashima, president and chief executive of Toyota Motor Europe, started out by bemoaning the “current business situation”.

By the time he got around to talk about the Avensis – a model that is not only designed for and built by Europeans but also kick-starts a frantic launch period as Toyota aims to bring 18 new models to market by the end of 2009 – any celebratory mood had been replaced by earnest concern.

However, Toyota’s new models will include a few attention-grabbing cars. These include the next generation Prius, which will have its global premiere at the Detroit motor show in January, and Paris premieres of the iQ mini-car and the Urban Cruiser.

We expect to grow our market share month by month in 2009
Tadashi Arashima, chief executive, Toyota Motor Europe

“We have a lot of new products that are meeting the current market conditions,” says Mr Arashima, pointing to how cars developed to meet stricter emission regulations in Europe are also delivering the fuel economy currently demanded by frugal consumers.

So does this mean the Japanese carmaker is set to take advantage of the economic downturn by boosting its market share in Europe?

When BBC News posed the question during a pre-launch briefing, Mr Arashima responded with a modest smile.

“Maybe by accident,” he said. “We didn’t really expect the market to go down so quickly.”

Bouncing back

In Toyota’s case, sales have slipped 15% so far this year in Western Europe, though a 25% rise in sales in Russia helped to compensate for the slump.

Nevertheless, its European market share has shrunk to 5.3% during the year to date, down from 5.6% a year ago.

Mr Arashima acknowledges that in 2008 it will be “tricky” to match the sales seen in 2007, when Toyota hit its 11th consecutive sales record in Europe.

However, he insists the tables will turn come the New Year.

“I am fully convinced there is no better time for our new line-up to hit Europe,” Mr Arashima says.

“We expect to grow our market share month by month in 2009.”

Shrinking markets

Globally, Toyota hopes to add 200,000 sales to its books during 2009, to 9.7 million cars and other vehicles.

Western Europe is definitely going to go down
Thierry Dombreval, chief operating officer, Toyota Motor Europe

That would be no mean feat at a time when pretty much all its rivals are cutting back.

In Western Europe, total car sales by the industry as a whole are set to fall 10% in 2009, according to Toyota’s own internal forecast.

“Western Europe is definitely going to go down,” Thierry Dombreval, executive vice president and chief operating officer of Toyota Motor Europe, told journalists during a briefing.

“Spain is now down 32% in September, and the UK is very fragile.”

In Russia, Europe’s fastest-growing market, growth is set to slow to 5% next year, from some 25-30% growth so far this year, Mr Dombreval added.

This latest prediction is much lower than Toyota’s previous forecast of 15% sales growth in the Russian car market during 2009.

Long-term growth

Toyota’s optimism is not limited to its growth in market share in 2009. Over time, regardless of whether or not the current economic downturn is lengthy or not, the company predicts that global demand for cars will grow fast.

“Cars are indispensable anywhere in the world for people to move, and the current financial situation does not change that,” says Mitsuo Kinoshita, executive vice president, Toyota.

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September 21, 2008

Massive diamond found in Lesotho

Filed under: Business News, Latest, Politics News — Tags: , , , , , — expressyoureself @ 11:59 pm

Massive diamond found in Lesotho

Miners in Lesotho have discovered a huge gem stone

The stone would dwarf the Koh-i-Noor diamond in the British Crown Jewels

Miners in Lesotho have discovered a huge gem stone which may become the largest ever polished diamond.

The stone weighs 478 carats and is the 20th largest rough diamond ever found, said Gem Diamonds.

The company said the uncut rock was recovered recently from the Letseng mine, owned by the company in Lesotho.

The diamond, which is as yet unnamed, has the potential to yield a 150 carat cut stone, and could sell for tens of millions of dollars, the company said.

Clarity

“Preliminary examination of this remarkable diamond indicates it will yield a record-breaking polished stone of the very best colour and clarity,” said the company’s chief executive Clifford Elphick.

It would be bigger than the 105 carat round-cut Koh-i-Noor diamond, which is part of the British Crown Jewels.

It would still be dwarfed by the Cullinan diamond discovered in 1905, which was 3,106 carats uncut and yielded a teardrop shaped diamond of 530 carats called the Great Star of Africa.

The Letseng mine is owned by a mining company of which Gem Diamonds controls 70% and the Lesotho government 30%.

September 18, 2008

India drug firm turns to Giuliani

India drug firm turns to Giuliani

Rudolph Giuliani

Mr Giuliani’s firm will advise on compliance

Indian drug firm Ranbaxy has hired ex-New York City Mayor Rudolph Giuliani as an adviser, the company says.

The move comes a day after the US Food and Drug Administration (FDA) banned the import of more than 30 generic drugs made by the drug firm.

The FDA said it imposed the ban after it found manufacturing quality problems at two Ranbaxy factories in India.

Ranbaxy said Mr Giuliani’s consulting and investment firm will advise it and look into compliance issues.

Ranbaxy has said it is “very disappointed” with the decision of US drug authorities.

The import ban affects some popular generic versions of antibiotics and cholesterol medicines.

Key documents

In July, US prosecutors had alleged that Ranbaxy, India’s largest pharmaceutical company, deliberately lied about the quality of its low-cost drugs, including those for HIV.

The US Department of Justice wanted the firm to hand over key documents relating to drug testing procedures.

The firm was paid millions of dollars by the US government to provide low-cost HIV drugs for President Bush’s emergency plan for Aids relief, which was set up to help Aids patients in 120 countries around the globe.

Defending the reliability of its drugs, Ranbaxy had said the US Food and Drugs Administration had tested over 200 random samples of its products and found them “complying with all the specifications”.

In June the Japanese pharmaceutical company Daiichi Sankyo agreed to pay more than $4bn (£2bn) for a controlling stake in the firm.

The US government has been investigating Ranbaxy since February 2006 when the FDA issued a warning letter over what it said were manufacturing violations found at a Ranbaxy factory in India.

Since then Ranbaxy has been trying to resolve the issue with US regulators.

Last year, US officials seized documents from Ranbaxy’s US headquarters in New Jersey.

In July, Justice Department prosecutors alleged that the company had systematically lied about the makeup of its generic drugs, which include a cheaper version of US drug maker Merck’s cholesterol pill Zocor.

Ranbaxy has denied any wrongdoing, saying the allegations were baseless.

The FDA will only approve cheaper generic drugs if they can be shown to be equivalent to the original drug.

US investigators had also alleged that Ranbaxy has used unapproved ingredients in its drugs.

September 17, 2008

Bitter taste over China baby milk

Bitter taste over China baby milk

Hebei People"s Hospital in Shijiazhuang

Parents are queuing at hospitals for check-ups for their children

China’s growing scandal involving milk powder suggests the country is still not able to protect its citizens from tainted food products.

Despite many other recent cases involving sub-standard food, inspectors failed to prevent toxic milk powder being fed to children.

Strict laws but poor enforcement appears to be part of the problem. China also seems to have a number of unscrupulous suppliers.

Chinese consumers are only too aware of the problems, as they have shown by buying more trusted foreign brands of milk powder.

Kidney failure

At the center of this current scandal is the Sanlu Group, a company based in the city of Shijiazhuang in Hebei province.

It has been selling milk powder tainted with the toxic chemical melamine, used in industry to make such things as plastics.

This chemical makes the milk powder appear to contain more protein than is actually the case.

So far, three children have died and more than 6,000 have been taken ill after drinking the powdered milk. Nearly 160 have experienced acute kidney failure.

All the children who became seriously ill drank milk made with powder produced by Sanlu, according to Chinese health minister Chen Zhu.

Wang Wenli
If there is a problem with the milk powder then there is likely to be a problem with fresh milk too
Wang Wenli, mother

But the scandal is not limited to just one company.

In a development that will surely worry the government, inspectors have found melamine in milk powder produced by 22 companies – one out of every five suppliers.

China’s laws do not seem to be the main problem, according to a senior employee at a foreign firm that produces baby products in China.

“There are laws and the laws are very strict. When we want to launch a product, there are so many things we have to do,” said the employee, who did not want to be identified.

Chinese central government officials often complain that these good laws are not heeded, a claim backed up by the industry insider.

“There is a lot of corruption, and Chinese companies can often find ways to carry on producing,” she said.

In order to avoid the problems now facing Sanlu, this foreign firm sends its own inspectors to check products bought from Chinese suppliers.

Rules bent

As well as being prepared to bend the rules, some Chinese suppliers also seem willing to knowingly supply tainted food products.

In this current case, melamine appears to have been added to fresh milk at milk collection stations, before being passed on to Sanlu.

According to the state-run China Daily, one man arrested over the scandal confessed that he had added melamine to milk, despite knowing it was a health risk.

He added that his family never drank the contaminated milk.

As a senior official put it at a press conference on Wednesday, China does not test for melamine because it does not expect anyone to add it to milk powder.

Tian Guangcai

Tian Guangcai only feeds his grandchild imported formula milk

“There are no special requirements on the inspection of toxic chemicals… because these kinds of chemicals are not allowed to be added to food,” said Li Changjiang, head of the country’s quality watchdog.

Perhaps the most damning indictment of the system comes from Chinese consumers, who have to eat and drink the products bought in markets, shops and supermarkets.

“It’s outrageous, nobody can eat anything any more,” said Tian Guangcai, who looks after his four-month-old grandchild.

Mr Tian said the child – like many other Chinese children – only drinks milk powder made by foreign companies.

Those foreign brands are now flying off the shelves.

Wang Wenli, whose three-year-old son stopped drinking milk powder last year, is now even reluctant to let him drink fresh milk.

“Think about it, if there’s a problem with the milk powder then there is likely to be a problem with fresh milk too,” she said.

The government’s reaction to a baby milk scare in 2004 shows just how difficult it is for consumers to judge what is safe to consume.

At that time, parents were told they should select one of 30 approved brands.

This latest check has revealed that products from some of those approved firms contained melamine.

September 14, 2008

Talks over sale of Lehman resume

Talks over sale of Lehman resume

Lehman Brothers headquarters

Lehman is the fourth largest US investment bank

Negotiations have restarted to find a buyer for troubled US investment bank Lehman Brothers, before a Sunday evening deadline.

Bank of America and UK lender Barclays are said to be the main candidates to buy all or part of the company.

Lehman is up for sale after it reported a $3.9bn (£2.2bn) quarterly loss last week amid concerns over its long term financial viability.

The firm’s share price has plummeted as fears over its future have mounted.

‘Rescue package’

The talks to sell Lehman are being led by senior officials from the US Treasury Department and the Federal Reserve.

Graph

It is understood that the US government wishes to arrange a bailout package under which other US investment banks – such as Citigroup, JPMorgan Chase, Morgan Stanley and Goldman Sachs – would contribute funds to a rescue deal which would see Lehman’s balance sheet cleaned up before its sale.

Although this is expected to cost the banks many millions, the alternative would likely be a sharp fall in their share prices if Lehman was to fail.

A number of sources report that US Treasury Secretary Henry Paulson is determined that no tax payers’ money will be used to help Lehman.

‘Difficult decision’

Former Federal Reserve boss Alan Greenspan said the US government faces “very difficult decisions” over Lehman if it cannot secure a rescue deal that does not involve public funds.

” “They [will then] have to make a very difficult decision as to whether or not they allow it to liquidate or they support it,” he said.

Yet Mr Greenspan said it would be “unsustainable” for the government to bail-out every US bank that got itself into difficulty.

Predicting that Lehman would not be the last to require rescuing, Mr Greenspan added that this would not necessarily pose a problem.

“The ordinary course of financial change has winners and losers,” he said.

Bad mortgage woes

Lehman could be sold off as one company, or else broken up into parts and sold separately.

While the firm got itself into financial difficulty due to extensive bad mortgage debts, its fund management business is in relatively good shape, analysts say.

Neither Bank of America or Barclays have made any comment.

Lehman’s shares lost 80% of their value last week, and its quarterly loss was the largest in its history.

The firm is the fourth-largest US investment bank.

Concerns over the fate of Lehman follow the bail-out last weekend of mortgage giants Freddie Mac and Fannie Mae.

The lenders were thrown into financial difficulty after the collapse of the US sub-prime mortgage market.

September 6, 2008

US Boeing workers set to strike

US Boeing workers set to strike

Boeing worker at picket in Seattle on 3 September

The union says its members have gone without a pay rise for four years

Production at the world’s biggest aircraft manufacturer, Boeing, is to stop in the US after 27,000 workers at the company called a strike over pay.

Members of the Machinists Union, mainly based in Seattle, will down tools after last minute negotiations failed.

Boeing says it has offered more than $34,000 (£17,000) per employee in pay and benefits.

Analysts say the stoppage cause further delays in the delivery of the new Dreamliner aircraft.

The union says with that with Boeing’s record profits and its members going without a pay rise for the last four years, the offer is not good enough.

Dreamliner delays

The Machinists Union is Boeing’s biggest labour group, and the company has said it will not try to assemble aircraft during the strike.

Analysts say that the stoppage could cost Boeing at least $100m each day in lost revenues, as well as delays in the delivery of the Dreamliner aircraft.

Boeing hopes that its latest lightweight passenger jet – which is already two years late – will help it compete with rival manufacturer, Airbus.

Most of the striking workers are based around Seattle in Washington State.

Boeing is so important to the local economy that the state governor has repeatedly called on both sides to find a solution to the dispute.

September 4, 2008

Seven killed in Dubai air crash

Seven killed in Dubai air crash

Keppel Corporation website]

The helicopter crashed on the Maersk Resilient

Seven people were killed when a helicopter crashed into an oil rig off the coast of Dubai, officials say.

The victims were a Briton, an American, a Filipino, a Venezuelan, a Pakistani and two Indian nationals, the country’s Civil Aviation Authority said.

The helicopter crashed into the deck of the rig during take-off, Petrofac, the operator of Dubai government’s offshore oilfields, said in a statement.

An investigation is under way into the cause of the crash.

The incident happened on at 2020 (1720 GMT) on Wednesday.

The Aerogulf Bell 212 helicopter, carrying two crew members and five passengers, was on a routine flight from the Rashid oil field, 70 kilometres (43.5 miles) from Dubai, Aberdeen-based company Petrofac said.

“During take-off the helicopter crashed onto the deck of the Resilient, the Maersk jack-up drilling rig,” it said.

“The aircraft then broke up and fell into the sea.”

Map

The helicopter accident happened off the coast of Dubai

The company added: “Immediately following the incident, a fire broke out on the main deck of the drilling rig which was quickly contained and extinguished.”

The company said there were no survivors on board.

There were no additional casualties on either the drilling rig or the platform.

All operations on the Rashid field have been suspended and the platform and drilling rig have been secured, Petrofac said.

The company confirmed that the victims were foreign contractors and said that their relatives were being informed.

August 26, 2008

Bank customer data sold on eBay

Bank customer data sold on eBay

EBay sign

eBay was first launched as Auction Web in 1995

An investigation is under way into how a computer containing bank customers’ personal data was sold on an internet auction site.

The PC, which was reportedly sold for £35 on eBay, had sensitive information on the hard drive.

The Royal Bank of Scotland (RBS) and its subsidiary, Natwest, have confirmed their customers’ details were involved.

RBS says an archiving firm told it the PC had apparently been “inappropriately sold on via a third party”.

It said historical information relating to credit card applications for their bank and others had been on the machine.

The information is said to include account details and in some cases customers’ signatures, mobile phone numbers and mothers’ maiden names.

RBS and Natwest – two of the three businesses involved – said they are taking the issue very seriously and are working to resolve it “as a matter of urgency”.

A spokeswoman for data processing company Mail Source, which is part of the archiving firm Graphic Data, said it was investigating how the computer equipment had been removed from a secure location.

“The IT equipment that appeared on eBay was neither planned nor instructed by the company to be disposed.”

Clearly such details should never have been included in the hard drive of the computer offered for sale on eBay
eBay spokesman

When financial data goes missing

She said the incident was extremely regrettable and the firm was “taking every possible step” to retrieve the data and ensure it was an isolated incident.

It is thought the problem came to light when Andrew Chapman, an IT manager from Oxford, bought the computer, noticed the data and raised the alarm.

The Daily Mail said the computer, containing a million bank customers’ personal data, had been sold for £35.

A spokesman for eBay said they were currently looking into what had happened.

“Clearly such details should never have been included in the hard drive of the computer offered for sale on eBay. We fully expect Mr Chapman to hand it back to Graphic Data as soon as possible. We will of course work with Graphic Data to establish how it came to be available for sale on our site.”

Banks have an obligation under the Data Protection Act to keep all personal information secure.

Last year the Financial Services Authority fined the Nationwide Building Society £980,000 for a security breach, after a laptop containing customer data was stolen from an employee’s home.

August 9, 2008

Fannie Mae unveils loss of $2.3bn

Fannie Mae unveils loss of $2.3bn

Courtesy BBC

Problems in the US housing market have pushed mortgage finance company Fannie Mae into the red.

The group sank to a net loss of $2.3bn in the three months to 30 June, against a profit of $1.97bn last year.

It comes days after its sister company Freddie Mac posted worse-than-expected results and its top executive warned house price falls are not over yet.

Both government sponsored firms own, or guarantee, nearly half of the nation’s mortgage debt.

Shares in Fannie Mae sank in the wake of the announcement, falling 9.8% to $8.98.

Difficult market

As mortgage guarantors, Fannie Mae and Freddie Mac, must pay out when people default on their loans.

But as a result of recent woes in the US housing market and subsequent sub-prime crisis the pair have run into severe difficulty.

Fannie Mae says it has the capital to weather the storm, but its looking more and more stormy by the day
John Raines,
Exclusive Analysis

Fannie Mae said that the current housing crisis had added to its woes to the tune of $5.3bn in credit expenses.

The latest losses at the firm – which came in at more than three times analysts’ estimates – followed a $2.2bn loss for the first three months of the year.

“Our second-quarter results reflect challenging conditions in the housing and mortgage markets that began in 2006 and have deepened through 2007 and 2008,” said Daniel H Mudd, president and chief executive officer of Fannie Mae.

Cost cutting

He added that the firm had also taken steps to raise an additional $7bn to help it tackle the “most difficult US housing market in more than 70 years”.

As part of the plan Fannie Mae is slashing its dividend by more than 85% to 0.05 cents, raising its fees and has taken steps to cut its costs by 10%.

The group also said it would stop purchasing ‘Alt-A’ loans – loans made to borrowers with good credit but little proof of their income, or people who either put down a small deposit, or no deposit, for their loan.

But there was little to offer hope in near-term future with Fannie Mae warning that increased volatility in capital markets and deteriorating credit conditions meant that it would face more losses.

Bail-out

Last month, the federal government offered a financial lifeline to the two beleaguered companies offering to extend their line of credit.

However, the financial aid may leave the taxpayer facing a bill of $25bn over the next two years.

“The taxpayer is stuck if they have to be bailed out,” John Raines, deputy director of political risk for Exclusive Analysis told the BBC.

He added that reports had suggested the actual cost could end up being anywhere in the region of between $10bn to $100bn.

“Right now, Fannie Mae says it has the capital to weather the storm, but its looking more and more stormy by the day.”

August 8, 2008

India court okays UK mine project

India court okays UK mine project

Dhongria girl

The tribals say the mines will destroy their livelihoods

The Indian Supreme Court has allowed the British company Vedanta Resources to go ahead with a controversial bauxite mining project in Orissa state.

But, the court said, the company will have to pay for the development of the region out of its profits.

The region is considered sacred by tribes who live in the area and is protected by the constitution.

The Supreme Court has also allowed South Korean steel firm Posco to build a $12 billion plant in the same state.

Environmental and tribal activists have opposed Vedanta’s plans saying the mines will force people from their homes and destroy their livelihoods.

The tribes have said they would “fight to the death rather than leave their sacred home” in the Niyamgiri mountains.

The company has an agreement with the state government to set up a bauxite refinery in the Niyamgiri mountains.

In India, both the state and central government back the Vedanta plan as part of efforts to industrialise and exploit the mineral resources of underdeveloped eastern India.

The Supreme Court told the Indian unit of Vedanta, Sterlite Industries, that it will have to pay 10% of its profits or 100m rupees (whichever is more) for the development of the region.

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