Wednesday, January 23, 2013

India minister to Europe: Get your act together; IMF sees global recovery 'weakening'; Competitors at Apple's heels; Share of US workers in union at 97-year low; Lloyds job cuts reach 38,000


1 India minister to Europe: Get your act together (Natasha Brereton-Fukui & PR Venkat in The Wall Street Journal) India's finance minister criticized euro-zone members for not being on the same page on tackling the region's debt crisis, saying that they need to "get their act together" to stop inflicting pain on the world. The euro-zone countries should move fast "because the world's economy is dependent to a large degree on the health of the European and US economies," P. Chidambaram told The Wall Street Journal.

Each euro-zone country should follow the US' lead and deal with its issues "seriously," Mr. Chidambaram stressed in an interview on the Singapore leg of a roadshow to raise investment interest in India. Asked whether he sees a risk of the euro-zone crisis flaring up again this year, he said: "I hope not. If there is a deterioration this year like last year, it will cause immense pain to a large number of countries, including developing countries." His interest in Europe comes partly because the region accounts for 18.69% of India's total exports.

The global economic crisis has hit India hard, with economic growth slowing to its worst in nearly a decade and exports of goods and services to Europe and the US slipping sharply and adding to the country's trade deficit. Latest government figures show that exports to Europe in the April-November period of 2012 fell 10.5% to $34.9 billion from $38.8 billion a year earlier.

2 IMF sees global recovery ‘weakening’ (BBC) The International Monetary Fund has warned again of a weakening global economic recovery despite government efforts to stimulate growth. The global economy is likely to grow at a slower rate than previously forecast over the next two years, the organisation said in its latest report. It said it now expected the eurozone to remain in recession in 2013, having previously predicted growth. 

The UK's growth forecasts have also been revised down. The IMF said continued problems in the eurozone were weighing on the global economy. "The euro area continues to pose a large downside risk to the global outlook," the IMF report said.  "In particular, risks of prolonged stagnation in the euro area as a whole will rise if the momentum for reform is not maintained." The eurozone's economy is now forecast to shrink by 0.1% this year. Just three months ago the IMF had forecast 0.2% growth. 

3 Competitors at Apple’s heels (Caleb Garling in San Francisco Chronicle) Competitors like Samsung and Google are fighting - with success - to dislodge Apple as the mobile device king. Since 2003, Apple's profit has jumped more than 10% in all quarters except one. Yet an analysis by Bloomberg estimates that the company's net income for the latest quarter will fall 2% to $12.8 billion ($13.48 per share). Apple has exceeded analysts' estimates for earnings in all but three quarters since 2006.

Research firm IDC noted that in the third quarter of 2012, Samsung accounted for 21.8% of "connected" devices - phones, tablets, PCs - compared with Apple's 15.1%. In 2011, the two companies were tied at about 15%. Lenovo, HP and Sony rounded out the list of rivals in the space. While Apple depends on revenue from the sale of Macbooks, iMacs, iPods and iPads, iPhones are the heart of the company's business. In the final quarter of its fiscal year, the company sold 26.9 million iPhones, accounting for roughly half its revenue. But since the release of the iPhone five years ago, competitors have crowded the mobile market. 

Analysts have begun to worry that Apple has lost that innovative flair and been content to sit on its laurels. "Far more concerning is the company's uninspired business model," said Jeff Macke, an analyst. "Making the same basic product in different sizes and colors isn't new." Apple's global share of the tablet market will slip to 53.8% in 2012, down from 56.3% in 2011, according to December data from IDC, and Android products will grow to 42.7% from 39.8%.

4 Share of US workers in union at 97-year low (Steven Greenhouse in The New York Times) The Bureau of Labor Statistics said the total number of union members fell by 400,000 last year, to 14.3 million, even though the nation’s overall employment rose by 2.4 million. The percentage of workers in unions fell to 11.3%, down from 11.8% in 2011, the bureau found in its annual report on union membership. That brought unionization to its lowest level since 1916, when it was 11.2%, according to a study by two Rutgers economists, Leo Troy and Neil Sheflin.

Labor specialists cited several reasons for the steep one-year decline in union membership. Among the factors were new laws that rolled back the power of unions in Wisconsin, Indiana and other states, the continued expansion by manufacturers like Boeing and Volkswagen in nonunion states and the growth of sectors like retail and restaurants, where unions have little presence.

“These numbers are very discouraging for labor unions,” said Gary N. Chaison, a professor of industrial relations at Clark University in Worcester, Mass. “It’s a time for unions to stop being clever about excuses for why membership is declining, and it’s time to figure out how to devise appeals to the workers out there.”

The figures announced by the bureau point to grave problems for the future of organized labor. The portion of private sector workers in unions fell to just 6.6% last year, from 6.9% in 2011, causing some labor specialists to question whether private sector unions were sinking toward irrelevance. Private sector union membership peaked at around 35% in the 1950s. The report showed particular drops in union membership in two groups where unions have long been strong: local government employees and manufacturing workers.

5 Lloyds job cuts reach 38,000 (Jill Treanor in The Guardian) The job toll at Lloyds Banking Group since the rescue of HBOS has reached 38,000 after another 940 cuts were announced. "This is a bleak start to the year for hard-working Lloyds employees and bad news for the UK economy on a day when the small fall in the numbers unemployed was supposed to be good news," Ged Nichols, general secretary of the Accord union, said.

The bailed out bank said the latest cuts would take place across the group in operations as diverse as insurance, retail, wealth, international and commercial, with the highest concentration in Scotland where 230 roles will be lost. Nichols was also angry that 200 positions were being taken offshore to India, and said the bank should "think of the public interest" before taking such decisions. Barclays is also moving roles to India as part of the restructuring of its investment bank.

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