29 September 2006
Blog Home : September 2006 : Permalink
The magnificently dynamic European economy is hitting the odd speedbump as it roars to success. Yesterday the Taiwanese company BenQ announced that it was no longer interesting in paying for the high cost low productivity german workforce it bought for $250 million a year ago. Unfortunately it discovered that the $250M was the least of its costs: BenQ, which also produces projectors and digital music players, acquired the German mobile-phone operations in a bid to expand its global market share. It has since booked 600 million euros ($760 million) in losses from those operations.
and of course the Germans are just a tad peeved at how they get to lose 3000 jobs because there seems to be a total lack of dynamic startups kene to hire these top of the range technical wizards:The company will liquidate operations, which include two factories that employ 3,000 people, if insolvency administrators cannot restructure it. The Asian business will not be affected.
Still, the decision sparked an outcry in Germany.
Labor unions accuse BenQ of betraying employees who accepted wage cuts to help keep the business afloat. Labor leaders also blame Siemens, which they say mismanaged the company.
Siemens, one of Germany's biggest companies, said Friday it had expected BenQ's takeover to provide a "solid and long-term solution" to the business' problems.
"Under the current circumstances, Siemens will examine its legal situation in relation to BenQ," the company said.
Siemens is of course extremely embarassed not just because it has probably failed to live up to its billing as "national champion" but also because it has just flogged off more of itself to Nokia and if BenQ does this in a year what will Nokia do?PARIS (AFP) - The new Airbus chief executive has presented an audit of problems at the aircraft manufacturer as well as a vast recovery plan that could mean new delays for the A380 superjumbo airliner and job cuts.
Chief executive Christian Streiff was outlining results of the audit to the board of directors at EADS, the Airbus parent company, following problems with the A380 superjumbo project, a key part of the Airbus' battle to keep up with US arch-rival Boeing.
Airbus has a problem that Siemens/BenQ does not - namely the communist French trades union. Said trades union has been reported to be distinctly dischuffed with the whole thing and unwilling to accept that its members could be in any degree at fault:On Thursday, the CGT trade union had issued a statement that the joint head of EADS, Louis Gallois, had met unions "to announce the project for a vast programme of economies and reorganisation at Airbus following a new delay due to be announced for deliveries of the A380 (superjumo airliner)".
The CGT said that the new delay was being used as an "alibi for profound reorganisation and to accelerate the strategy by EADS of externalising internationally (moving activities abroad)".
Compare that attitude with the unions at yet another national champion - VW - where the German unions have figured out that they have a choice of work more for the same pay or see VW close its factories in Germany:HANOVER, Germany - Representatives from Volkswagen AG and Germany's biggest industrial union said Friday they had agreed to increase working hours at plants in western Germany by more than four hours a week to 33 hours without any increase in pay.
The agreement between VW and the IG Metall union fell short of the 35-hour week sought by the carmaker as part of efforts to drastically cut production costs for its vehicles such as its flagship Golf, which are selling strongly but bringing in little profit.
The deal, which applies to all six of VW's western German factories, also included guarantees of job security for all employees at the factories through 2011.
The union won a promise that VW will build the future model of its Golf compact mainstay as well as another unspecified high-volume model at its base factory in Wolfsburg, and that the Wolfsburg plant will be used to its full capacity of 460,000 vehicles per year. Currently the sprawling plant is not being fully used.
All in all though, despite the good news from VW, it hasn't been a particularly good week for large european firms.