1 UK double-dip recession deepens (The Guardian) Britain's economic output collapsed by 0.7% in the second quarter of 2012 as the country's double-dip recession extended into a third quarter. Across-the-board weakness in manufacturing and construction coupled with the loss of output caused by the extra bank holiday to mark the Queen's diamond jubilee were responsible for the setback, according to data from the Office for National Statistics. Analysts had expected a 0.2% drop in gross domestic product in the three months to June and were stunned by the scale of the fall in activity. The decline followed the 0.3% fall in the first three months of 2012 and a 0.4% decline in the final quarter of 2011.
2 India factory strike reveals socio-economic issues (Amrit Raj & Shally Seth Mohile in Mint) While the identity of the individuals who brutalized a general manager in the Maruti plant and left him to die in a burning room isn’t known, what is becoming clear is a picture of a hard-nosed and cost-focused management; legions of temporary workers without the benefits enjoyed by their tenured colleagues who sometimes did the same work; low wages that couldn’t keep pace with soaring inflation; a trade union movement gone wrong; an ecosystem in which nearly everyone other than the temporary workers had a stake; and, of course, that usual suspect, India's antiquated labour laws.
The starting average salary for a so-called permanent worker at Maruti’s Manesar plant is Rs. 17,000 a month, according to the company (those at the Gurgaon plant earn around Rs. 20,000). A temporary worker earns a starting average salary of between Rs. 6,500 and Rs. 7,000 a month. India’s manufacturing engine is driven by these temporary workers. Maruti has 4,000 of them; its rival, Chennai-based South Korean car maker Hyundai Motor India Ltd has 5,000; and French-Japanese combine RenaultNissan’s Indian arm, 8,000. These workers do pretty much the same work as their "permanent" peers, but are paid a much lower salary.
The ideal use of temporary or contract workers is to manage spikes in demand, but manufacturing companies in India use them for an entirely different reason, said former labour secretary Chaturvedi. "Companies hire contract workers for exploitation rather than bringing any flexibility to their production just because they come cheap," he said. "By not giving them social security and proper working conditions, how do you expect them to be loyal to you?"
3 Unfamiliar problem in China: Unsold cars (The New York Times) Unsold cars are piling up on Chinese dealers’ lots as demand slows in the country’s car market, forcing companies that once commanded premium prices to offer discounts instead. A sharp slowdown in sales growth since last year has left a supply glut, hurting luxury brands as well as mainstream nameplates, both foreign and Chinese. Economic growth in China cooled to a three-year low of 7.6% in the second quarter.
4 'Social media could add $1.3tn to economy' (The New York Times) McKinsey Global Institute has just published a lengthy study on "unleashing value and productivity through social technologies." The short version is that things like improved communication and collaboration from social media in four major business sectors could add $900 billion to $1.3 trillion in value to the economy.
The value is mostly through added productivity. Improved consumer focus as well as better-functioning teams are two other benefits. "The industries with the highest percentage of interactions workers have the highest spread of profits per employee," said Michael Chui, one of the authors of the report. "It’s low in mining, but can vary by nine times in banking. If you can make these people more effective, you can make the biggest difference."
"These technologies are successful when influential people are role models, using them and explaining them," Mr. Chui said. Uh-oh: once again, no matter how good the machines, people still have to be good, too. And that remains no simple matter.
5 FarmVille maker Zynga's stock plunges (The New York Times) The social games developer Zynga is withering faster than neglected corn on its signature hit FarmVille. Weak second-quarter financial results and worse expectations for the rest of the year sent Zynga’s already faltering stock down by more than a third, to $3.18 a share. The unexpected news was seen as boding ill for Facebook, which is closely tied to Zynga.
Most Zynga games are free. The company makes money from a small core of dedicated users who buy virtual goods like tractors in FarmVille. Over the last year, the average daily amount of money Zynga took in from these core users dropped 10% even as the overall number of users expanded.
6 Toyota on top in first half (San Francisco Chronicle) Toyota Motor, rebounding from lost production from last year's natural disasters in Asia, sold the most cars and trucks worldwide for the year's first half, extending its lead over General Motors and Volkswagen. Toyota global sales rose to 4.97 million during the first half, said spokesman Javier Moreno. GM said it sold 4.67 million vehicles during the first six months. VW sold 4.45 million vehicles in 2012's first half, according to the company.
7 Newsweek's print future in doubt (San Francisco Chronicle) The head of the company that owns Newsweek says the publication is examining its future as a weekly print magazine. During a conference call with analysts, IAC/InterActiveCorp Chairman Barry Diller said that while Newsweek's "brand is good" around the world, producing a weekly news magazine in print form isn't easy. Diller said IAC is examining all options for Newsweek and will have a plan in the coming months. He said little about what those options were. Short of going Internet only, Newsweek could publish its print editions less frequently.
8 Lower outlook for 17 German banks (Straits Times) Moody's on Wednesday downgraded the outlook for 17 German banks after a similar move against the government's credit rating earlier this week. Moody's cut the outlook on a swathe of state-backed regional banks, known in Germany as landesbank, but also included IKB Deutsche Industriebank and Deutsche Postbank. Many of the landesbank have struggled since the 2008 financial crisis and amid Europe's ongoing economic crisis, which has seen growth slow. Moody's noted that several of the banks held debt that was guaranteed by the German central or regional governments.
9 A comic approach to India's problems (The Wall Street Journal) Children in the town of Muzaffarpur in the northeastern Indian state of Bihar were always taught a simple, age-old lesson: be seen, not heard. But that didn’t silence some of them on issues like child marriage, water shortages, and the relentless noise from construction sites.
Encouraged by a workshop run by an organization called World Comics India, the children took to drawing comic strips to highlight their concerns. Nothing changed overnight, but eventually the head of the community sanctioned two hand pumps to help address a water supply problem. This was in part prompted by the illustrations the children had drawn, says Sharad Sharma, the founder of WCI.
For Mr. Sharma, this was a fine example of the "comic" journalism he advocates through WCI. Founded in 1994, WCI describes itself as a grassroots comics campaign that promotes work not by professional artists but by the very people who want to bring about change to improve their lives.
10 International Herald Tribune cartoon on the Libor scandal, showing ordinary folks telling bankers, "You manipulated! You lied! You profited!", and bankers murmuring to each other, "People are beginning to better understand finance".
2 India factory strike reveals socio-economic issues (Amrit Raj & Shally Seth Mohile in Mint) While the identity of the individuals who brutalized a general manager in the Maruti plant and left him to die in a burning room isn’t known, what is becoming clear is a picture of a hard-nosed and cost-focused management; legions of temporary workers without the benefits enjoyed by their tenured colleagues who sometimes did the same work; low wages that couldn’t keep pace with soaring inflation; a trade union movement gone wrong; an ecosystem in which nearly everyone other than the temporary workers had a stake; and, of course, that usual suspect, India's antiquated labour laws.
The starting average salary for a so-called permanent worker at Maruti’s Manesar plant is Rs. 17,000 a month, according to the company (those at the Gurgaon plant earn around Rs. 20,000). A temporary worker earns a starting average salary of between Rs. 6,500 and Rs. 7,000 a month. India’s manufacturing engine is driven by these temporary workers. Maruti has 4,000 of them; its rival, Chennai-based South Korean car maker Hyundai Motor India Ltd has 5,000; and French-Japanese combine RenaultNissan’s Indian arm, 8,000. These workers do pretty much the same work as their "permanent" peers, but are paid a much lower salary.
The ideal use of temporary or contract workers is to manage spikes in demand, but manufacturing companies in India use them for an entirely different reason, said former labour secretary Chaturvedi. "Companies hire contract workers for exploitation rather than bringing any flexibility to their production just because they come cheap," he said. "By not giving them social security and proper working conditions, how do you expect them to be loyal to you?"
3 Unfamiliar problem in China: Unsold cars (The New York Times) Unsold cars are piling up on Chinese dealers’ lots as demand slows in the country’s car market, forcing companies that once commanded premium prices to offer discounts instead. A sharp slowdown in sales growth since last year has left a supply glut, hurting luxury brands as well as mainstream nameplates, both foreign and Chinese. Economic growth in China cooled to a three-year low of 7.6% in the second quarter.
4 'Social media could add $1.3tn to economy' (The New York Times) McKinsey Global Institute has just published a lengthy study on "unleashing value and productivity through social technologies." The short version is that things like improved communication and collaboration from social media in four major business sectors could add $900 billion to $1.3 trillion in value to the economy.
The value is mostly through added productivity. Improved consumer focus as well as better-functioning teams are two other benefits. "The industries with the highest percentage of interactions workers have the highest spread of profits per employee," said Michael Chui, one of the authors of the report. "It’s low in mining, but can vary by nine times in banking. If you can make these people more effective, you can make the biggest difference."
"These technologies are successful when influential people are role models, using them and explaining them," Mr. Chui said. Uh-oh: once again, no matter how good the machines, people still have to be good, too. And that remains no simple matter.
5 FarmVille maker Zynga's stock plunges (The New York Times) The social games developer Zynga is withering faster than neglected corn on its signature hit FarmVille. Weak second-quarter financial results and worse expectations for the rest of the year sent Zynga’s already faltering stock down by more than a third, to $3.18 a share. The unexpected news was seen as boding ill for Facebook, which is closely tied to Zynga.
Most Zynga games are free. The company makes money from a small core of dedicated users who buy virtual goods like tractors in FarmVille. Over the last year, the average daily amount of money Zynga took in from these core users dropped 10% even as the overall number of users expanded.
6 Toyota on top in first half (San Francisco Chronicle) Toyota Motor, rebounding from lost production from last year's natural disasters in Asia, sold the most cars and trucks worldwide for the year's first half, extending its lead over General Motors and Volkswagen. Toyota global sales rose to 4.97 million during the first half, said spokesman Javier Moreno. GM said it sold 4.67 million vehicles during the first six months. VW sold 4.45 million vehicles in 2012's first half, according to the company.
7 Newsweek's print future in doubt (San Francisco Chronicle) The head of the company that owns Newsweek says the publication is examining its future as a weekly print magazine. During a conference call with analysts, IAC/InterActiveCorp Chairman Barry Diller said that while Newsweek's "brand is good" around the world, producing a weekly news magazine in print form isn't easy. Diller said IAC is examining all options for Newsweek and will have a plan in the coming months. He said little about what those options were. Short of going Internet only, Newsweek could publish its print editions less frequently.
8 Lower outlook for 17 German banks (Straits Times) Moody's on Wednesday downgraded the outlook for 17 German banks after a similar move against the government's credit rating earlier this week. Moody's cut the outlook on a swathe of state-backed regional banks, known in Germany as landesbank, but also included IKB Deutsche Industriebank and Deutsche Postbank. Many of the landesbank have struggled since the 2008 financial crisis and amid Europe's ongoing economic crisis, which has seen growth slow. Moody's noted that several of the banks held debt that was guaranteed by the German central or regional governments.
9 A comic approach to India's problems (The Wall Street Journal) Children in the town of Muzaffarpur in the northeastern Indian state of Bihar were always taught a simple, age-old lesson: be seen, not heard. But that didn’t silence some of them on issues like child marriage, water shortages, and the relentless noise from construction sites.
Encouraged by a workshop run by an organization called World Comics India, the children took to drawing comic strips to highlight their concerns. Nothing changed overnight, but eventually the head of the community sanctioned two hand pumps to help address a water supply problem. This was in part prompted by the illustrations the children had drawn, says Sharad Sharma, the founder of WCI.
For Mr. Sharma, this was a fine example of the "comic" journalism he advocates through WCI. Founded in 1994, WCI describes itself as a grassroots comics campaign that promotes work not by professional artists but by the very people who want to bring about change to improve their lives.
10 International Herald Tribune cartoon on the Libor scandal, showing ordinary folks telling bankers, "You manipulated! You lied! You profited!", and bankers murmuring to each other, "People are beginning to better understand finance".
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