France fears triple-dip recession; Italy on the brink; Motorola Mobility cutting 1,200 jobs

1 France fears triple-dip recession (Phillip Inman in The Guardian) France appears to be heading for a triple dip recession amid concerns that political deadlock in Italy could drag the eurozone back into crisis. French industrial production dropped by 1.2% in January despite a strong rebound in German imports that some analysts believed might rescue some of its neighbours.

Official figures from Paris showed that a longstanding slump in car buying across much of the eurozone has undermined efforts to maintain a 0.9% rise in December. Car-making dropped by 13.5% in January after a revised 8.8% increase in December. Peugeot Citroen and Renault have suffered a steep fall in sales during the last year and cut production at many of their factories. Analysts said the drop in overall output was a further sign that France's €2tn economy could slip into recession after contracting 0.3% in the final quarter of 2012 and following a series of weak data this year.

Italy has proved a particular graveyard for car sellers, prompting the boss of Fiat to say production in Turin may stop if the slide continues for much longer. Fiat, which owns Chrysler, has expanded production in the US while restricting output in the eurozone. Rome was battling to maintain some stability after figures showed its recession is likely to run into 2014 even with a resolution to the electoral stalemate. One analyst said Italy posed a "near and present danger" for the eurozone.

2 Italy on the brink (Liz Alderman in The New York Times) Since a government austerity plan took hold last year, the Italian economy has tumbled into one of the worst recessions of any euro zone country. Businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year; especially hard hit among Italy’s estimated six million companies are the small and midsize companies that represent the backbone of Italy’s $2 trillion economy.

Economists worry that the pace of business closings may accelerate as long as the country lacks a functioning government. The departing prime minister, Mario Monti, was ousted by austerity-weary voters, but the election left Parliament gridlocked. With the European Union standing as America’s largest trading partner, the economic problems that plague Italy — and the rest of stagnating Europe — are felt across the Atlantic.

“This underscores the likelihood of Italy having a Japan-like decade with phenomenally slow growth,” said Kenneth S. Rogoff, a professor at Harvard and a former chief economist of the International Monetary Fund. “And it raises painful questions about the long-run stability of growth in the euro zone over all.” 

The afflictions of Italy’s economy, one of Europe’s largest, are not new, of course: a lumbering bureaucracy, stifling labor regulations and an eroding ability to compete in the global marketplace. As the economy of the 17 members of the European Union that use the euro as their currency was expanding at a weak average of 1% a year for much of the last decade, Italy grew at only half that rate, according to the International Monetary Fund. 

But Italy’s longstanding problems have grown worse in the last year as tax increases and spending cuts were pressed by Mr. Monti, who took over as prime minister in November 2011 after the euro crisis forced out Silvio Berlusconi. Last year the economy shrank 2.4%. One in two small companies cannot pay its employees on time, according to CGIA di Mestre, a research institute. With layoffs surging, unemployment rose to 11.7% in January. Youth unemployment has jumped to 38.7%. 

3 Motorola Mobility cuts 1,200 jobs (BBC) Google's Motorola Mobility Unit has said it is cutting 1,200 jobs, or more than 10% of its workforce. It follows a 4,000 jobs cut last August as Google aims to turn around the loss-making business it acquired last year for $12.5bn. The layoffs are expected to affect the US, China and India, according to a company email. The Motorola unit was bought for its Android-operating mobile devices and access to more than 17,000 patents.

"These cuts are a continuation of the reductions we announced last summer," Google spokeswoman Niki Fenwick said. An internal email published by the Wall Street Journal said: "Our costs are too high, we're operating in markets where we're not competitive and we're losing money." Motorola, which once dominated the mobile phone market, has fallen behind its competitors, including Apple and Samsung.

Motorola Mobility was created in 2011 when Motorola Inc split the company into a mobile devices unit and a government and public safety division known as Motorola Solutions.