Archive for the ‘industry’ Category

Obama’s Biggest Challenge of All: China

November 29, 2008

The single most important challenge for the new administration—one with the potential to shape the 21st century—is China. As goes China, so go 1.3 billion men, women and children—one out of every five people on the planet.

China’s economy is now roughly half the size of America’s; in three decades, the two are likely to be about equal. What the Chinese eat, how much (or whether) they drive, where and how they choose to live, work and play: all will have an enormous impact on the availability and price of energy, the temperature of the planet and the prosperity of mankind.

By Richard Haass
Newsweek

Beijing’s foreign policy is no less important. A cooperative China could help stem the spread of nuclear materials and weapons, maintain an open global trading and financial system, secure energy supplies, frustrate terrorists, prevent pandemics and slow climate change. A hostile or simply noncooperative China, on the other hand, would make it that much more difficult for the United States and its allies to tame the most dangerous facets of globalization. But the emergence of a cooperative China is anything but inevitable. That is why Washington needs a new approach to Beijing. Think of it as “integration.”

In this March 31, 2008 file photo, a worker on a boat clears ... 
A  worker on a boat clears garbage from the Yellow River in Lanzhou in northwest China’s Gansu province. Newly released survey results show water quality along one third of China’s famed Yellow River has fallen below the lowest levels measured due to massive pollution. China’s second-longest river has seen its water quality deteriorate rapidly in the last few years, as discharge from factories increases and water levels drop due to diversion for booming cities.(AP Photo/File)

Integration should be for this era what containment was for the previous one. Our goal should be to make China a pillar of a globalized world, too deeply invested to disrupt its smooth functioning. The aim is ambitious, even optimistic, but not unrealistic. The United States and China need each other. Neither wants to go to war over Taiwan, to see another conflict on the Korean Peninsula or to see world oil prices quadruple as a result of a military strike on Iran. Even more than that, China needs access to the U.S. market for its exports in order to maintain economic growth and domestic political stability. Americans, in addition to benefiting from low-cost Chinese imports, need Beijing to manage its large dollar reserves responsibly.

Americans must accept China’s rise. There’s no guarantee we could prevent it anyway, and the attempt would only worsen the rivalry. We should not exaggerate China’s strength or the threat it poses. China’s military, for all its improvements, is still a generation behind America’s. And we should resist any calls to block China’s access to the U.S. market. Trade and investment aren’t just beneficial on their own terms; they also contribute to the web of ties that would bind China into an orderly world order.

Read the rest:
http://www.newsweek.com/id/171259

Chinese People's Liberation Army troops stand in their formation ... 
Chinese People’s Liberation Army troops stand in their formation at a parade ground during the annual rotation of military personnel in Hong Kong November 25, 2008.REUTERS/Alex Hoffard/Pool (CHINA)

U.S. Industry, Economy: No sympathy for Detroit at a Kia plant in Georgia

November 29, 2008
The residents of this town are learning to enjoy Korean barbecue, and are wary of bailing out American automakers. ‘The foreign cars took the lead, and they deserve it,’ says one.
By Richard Fausset
The Los Angeles Times
Reporting from West Point, Ga. — This attractive old mill town along the Chattahoochee River, with its brick downtown and streets of cozy, unpretentious homes, could be the backdrop for a patriotic American car commercial — lacking only the plaintive croak of a Bob Seger or John Mellencamp.

But America’s Big Three automakers, which are teetering at a financial abyss, shouldn’t expect much sympathy here.

Read the rest:
http://www.latimes.com/news/nationworld/
nation/la-na-newdetroit29-2008nov29,0,
3633459.story

Mitt Romney Says: Let Detroit Go Bankrupt

November 19, 2008

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

Published by The New York Times
November 19, 2008

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

Read the rest:
http://www.nytimes.com/2008/11/19/opinion/
19romney.html?_r=1&hp

Auto Maker Bailout “Doubtful”

November 14, 2008

A senior Democratic senator raised doubts on Thursday that an attempt to bail out U.S. automakers had enough support to clear Congress this year. 

As Republicans amplified their concerns about a bailout, Senate Banking Committee Chairman Christopher Dodd raised the biggest red flag for fellow Democrats trying to craft a $25 billion rescue and pass it during a post-election session set to start next week.
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By John Crawley and Rachelle Younglai, Reuters 

“Right now, I don’t think there are the votes,” Dodd of Connecticut told reporters about prospects in the Senate. “I want to be careful of bringing up a proposition that might fail,” he said.

Although Dodd said “we ought to do something” and personally backed using money from the ongoing $700 billion financial services rescue program to help Detroit, he was skeptical that enough Republicans would support a bailout.

Senate Majority Leader Harry Reid, a Nevada Democrat, also cautioned that success of a bailout rests with Senate Republicans and the White House. With their slim majority, Democrats cannot force a measure through the Senate or trump a White House veto.

The White House opposes the approach being taken by congressional Democrats but has not threatened to block any bailout. Bush administration officials have said they would consider other steps Congress can take to help General Motors Corp, Ford Motor Co and Chrysler LLC.

Dodd said there have been “legitimate issues raised” about how to help.

Read the rest:
http://www.reuters.com/article/marketsNews/idINN1339
368420081114?rpc=44

Chances Dwindle on Bailout Plan for Automakers

November 14, 2008

The prospects of a government rescue for the foundering American automakers dwindled Thursday as Democratic Congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck session next week.

By David M. Herszenhorn  
The New York Times
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At the same time, hope among many Democrats on Capitol Hill for an aggressive economic stimulus measure all but evaporated. Democratic leaders have been calling for a package that would include help for the auto companies as well as new spending on public works projects, an extension of jobless benefits, increased food stamps and aid to states for rising Medicaid expenses.

But while Democrats said the stimulus measure would wait until President-elect Barack Obama takes office in January, some industry experts fear that one of the Big Three automakers will collapse before then, with potentially devastating consequences.

Despite hardening opposition at the White House and among Republicans on Capitol Hill, the Democrats said they would press ahead with efforts to provide $25 billion in emergency aid for the automakers. But they said the bill would need to be approved first in the Senate, which some Democrats said was highly unlikely.

Read the rest:
http://www.nytimes.com/2008/11/14/business/
14auto.html?_r=1&hp=&adxnnl=1&oref=slogin&a
dxnnlx=1226649694-VV22vNLQxrIE1qxIf8tqEQ

A Lemon of a Bailout

November 14, 2008

When you get gemons, “make lemonaide” the saying goes.  But when spending taxpayer billions for a fiscal and economic recovery plan or “bailout” that almost nobody likes, a lemon can get in the way….

By Charles Krauthammer
The Washington Post
Friday, November 14, 2008; Page A19

Finally, the outlines of a coherent debate on the federal bailout. This comes as welcome relief from a campaign season that gave us the House Republicans’ know-nothing rejectionism, John McCain‘s mindless railing against “greed and corruption,” and Barack Obama‘s detached enunciation of vacuous bailout “principles” that allowed him to be all things to all people.

Now clarity is emerging. The fault line is the auto industry bailout. The Democrats are pushing hard for it. The White House is resisting.

Underlying the policy differences is a philosophical divide. The Bush administration sees the $700 billion rescue as an emergency measure to save the financial sector on the grounds that finance is a utility. No government would let the electric companies go under and leave the country without power. By the same token, government must save the financial sector lest credit dry up and strangle the rest of the economy.

Treasury Secretary Henry Paulson is willing to stretch the meaning of “bank” by extending protection to such entities as American Express. But fundamentally, he sees government as saving institutions that deal in money, not other stuff.

Democrats have a larger canvas, with government intervening in other sectors of the economy to prevent the cascade effect of mass unemployment leading to more mortgage defaults and business failures (as consumer spending plummets), in turn dragging down more businesses and financial institutions, producing more unemployment, etc. — the death spiral of the 1930s.

Read the rest:
 http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/13
/AR2008111303348.html?hpid=opinionsbox1

Cocaine Blocks Free Trade

November 13, 2008

The expanding cocaine trade in Colombia is undermining President George W. Bush’s effort to push through a free-trade agreement with his southern neighbor.  Despite opposition from Democracts, Bush is trying to seal a deal before he leaves office in January by hitching it to a bailout for U.S. automakers. Álvaro Uribe, the Colombian president, has argued that free trade would produce jobs in Colombia that would provide alternatives to the illegal drug trade. With the global economy in the cellar, that argument has lost much of its luster.

Now it appears the cocaine business is stronger than previously thought. As the United States was pouring $5 billion into Colombia to fight drugs over the past eight years, particularly cocaine, the country’s drug cartels were finding new routes through West Africa and shipping their wares to expanding markets in Europe, Africa, and South America. The U.S. General Accounting Office reported last week that instead of reducing the cultivation and production of drugs by 50 percent, the stated goal of the U.S.-funded Plan Colombia, Uribe has presided over an increase in coca cultivation of 15 percent and an increase in cocaine production of 4 percent. 

The report was ordered by Vice President-elect Joseph Biden, meaning President-elect Barack Obama, one of the main barriers to the free trade deal, probably took note.

Colombia's President Alvaro Uribe, center, gestures, during ... 

Colombia’s President Alvaro Uribe, center, gestures, during a graduation ceremony for new police officers in Bogota, Wednesday, Nov. 12, 2008. At left is Colombia’s Defense Minister Juan Manuel Santos, at right, the commander of Army Forces Gen. Freddy Padilla.(AP Photo/Fernando Vergara)

From Newsweek

Read it all:
http://www.blog.newsweek.com/blogs/ov/archive/
2008/11/11/coccaine-a-thriving-industry.aspx

Russia’s Defense Industry Hit by Credit Crunch, Ivanov Says

November 11, 2008

Russia’s defense industry is facing difficulties in meeting orders from the state because of the global credit crunch, Deputy Prime Minister Sergei Ivanov said.

Sergei Ivanov
Sergei Ivanov

Many companies are suffering from cash-flow problems, Ivanov said in remarks carried on state television. The financial crisis is “hitting some defense companies quite hard,” and the situation could prove “troublesome” for the industry, he said.

This video grab from Russian NTV channel shows the Russian nuclear ... 
AFP/Ntv
Above: This Russian submarine had an on board non nuclear accident that killed 20 this week.  She was on sea trials and scheduled to be tranferred to India.  She is now emblematic of Russia’s failing defense industry.


By Sebastian Alison, Bloomberg

Banks in which the state holds a large stake, including OAO Sberbank, Russia’s biggest bank, VTB Group, the second largest, and state development bank Vnesheconombank, should consider lending to defense contractors, he said.

Ivanov was speaking today at a meeting in Moscow of a government commission on strategic enterprises and the defense industry.

“We’re talking about an industry with a lot of expenses and not too much revenue,” said Masha Lipman, an analyst at the Moscow Carnegie Center. She noted that Russia has recently made major arms sales to countries like Venezuela on credit with no repayments due for years.

Lipman said Russia’s Defense Ministry has been sending out mixed signals, for example by announcing cuts in military staffing numbers. This will produce tens of thousands of unemployed officers and the cost of retraining them for civilian jobs will be high, she said.

“Probably we will see that no such cuts will be made, because if you cut expenses in one place, you create them in another place,” she said.

Georgia War

Russia approved 344 billion rubles ($13 billion) in new defense spending last month following its five-day war with Georgia in August, Ivanov said on Oct. 16.

“Additional funds will be spent on purchases of modern weaponry, especially aircraft,” Ivanov, a former defense minister, said during a meeting with President Dmitry Medvedev.

At the same time, Russian state revenue may slump as the price of oil, its biggest export, plunges and capital flight accelerates on concern the global economy is entering a recession.

Read the rest:
http://www.bloomberg.com/apps/new
s?pid=20601095&sid=adH6D0VFaSVY

China flexes military hardware muscle

November 6, 2008

China‘s unprecedented display of military hardware at the country’s primary airshow was a warning to industry rivals of its global ambitions as a defence manufacturer, analysts said.

By Guy Newey, AFP

A visitor passes advertising for a Chinese-made attack aircraft ... 
A visitor passes advertising for a Chinese-made attack aircraft at the China Airshow 2008 in the southern Chinese city of Zhuhai on November 5. The country’s unprecedented display of military hardware at its key airshow has served as a warning to industry rivals of its global ambitions as a defence manufacturer, analysts have said.(AFP/File/Mike Clarke)

As a pair of its fourth-generation J-10 fighter planes made a first public appearance, buzzing past eager crowds at Airshow China 2008, the trade stands hummed with talk of the new missile systems and other equipment on display.

Some analysts believe China’s ability to copy overseas technology, witnessed in countless industries over the past 20 years, could soon be powering its defence complex.

“Ten years ago they did not have any modern aircraft industry at all, now they have started to produce copies of our plane,” said one Russian defence official, who would only speak on condition of anonymity.

“They will do exactly the same they have done with textiles and toys — learn how to make it, make it cheaper and then undercut the market.”

He said China was possibly 10 years away from developing its own military aircraft engine — it currently uses engines made by Russian defence giant Sukhoi — but once it had, it would stop purchasing overseas technology.

“They will stop buying anything from abroad and push cheap Chinese fighters to the third world countries,” the official added.

While the European Union and the United States continue to have sanctions on the export of military equipment to many of the world’s countries — including China — Chinese manufacturers face few such restrictions.

Read the rest:
http://news.yahoo.com/s/afp/20081106/bs_afp/china
russiaasiaaerospacemilitary_081106065648

China’s Big Airshow This Week is About Aviation’s Future

November 3, 2008

The giants of the aerospace industry will jet in to China‘s only international airshow starting Tuesday hoping the country’s aviation sector can provide shelter from the global financial crisis.

by Guy Newey, AFP

US manufacturer Boeing and Europe’s Airbus will head the line-up of 600 civil and military manufacturers and parts suppliers from 35 countries at the 2008 China Airshow, an annual event in the southern city of Zhuhai.

And as airlines across the world report a drop-off in first and business class travel due to the economic turbulence, the firms will be looking to China to provide crucial growth in the next few years.

“China is going to be the fastest-growing market in the world,” Wang Yukui, the spokesman for Boeing in China, told AFP.

An Air China plane lands at Beijing's international airport. ... 
An Air China plane lands at Beijing’s international airport. The giants of the aerospace industry are set to jet in to China’s only international airshow hoping the country’s aviation sector can provide shelter from the global financial crisis.(AFP/File/Peter Parks)

Research released last week by the US giant found China will need 3,710 new commercial planes worth 390 billion dollars over the next 20 years.

The demand will represent 41 percent of the entire Asia-Pacific market, and only the United States will be a bigger buyer, Boeing said.

In addition, Chinese carriers will add about 370 freight-carrying planes by 2027, quadrupling their total freighter fleet, the Boeing research found.

Airbus chief executive officer Tom Enders also said recently it was expecting a “large order” from Chinese airlines by early 2009, on top of existing memorandums of understanding with Chinese carriers for 280 aircraft.

The company’s giant superjumbo, the A380, will be on display at the China Airshow, as the company tries to take a bigger slice of the thriving market.

In 2007, China’s air traffic soared 16.8 percent to 387.6 million passenger trips, on the back of 16.7 percent growth in 2006, state media reported.

The demand has sparked a similar boom in airport construction, with around 100 new airports planned by 2020, previous reports said.

Nevertheless, China’s aviation sector starting to feel the impact of the global economic turmoil, according to Tom Ballantyne, chief correspondent of industry magazine Orient Aviation.

“Although we are not talking about a cessation of growth, we are talking about a slowdown in growth,” he told AFP.

Read the rest:
http://news.yahoo.com/s/afp/20081103/bs_afp/finance
economychinaaviation_081103072219