Biz people

US 'probably' in recession

The head of Caterpillar Inc, the world's largest maker of earthmoving equipment, said the US economy is probably in a recession and is unlikely to start recovering until late this year.

Caterpillar Chairman and CEO Jim Owens said fiscal stimulus would help support an economy dogged by mortgage foreclosures, a steep drop-off in residential construction and financial market turmoil triggered by the subprime loan crisis.

"The US economy is probably in recession now but will likely have real growth this year of around 0.5 percent, so very very slow growth and probably a couple of quarters of negative growth," Owens said.

He made the comments at a news conference in Tokyo to announce plans to raise Caterpillar's stake in a Japanese joint venture with Mitsubishi Heavy Industries Ltd.

Airbus CEO's euro warning

The chief executive of Airbus parent company EADS, Louis Gallois (above right), warned in an interview published yesterday that the high value of the euro threatened European manufacturing.

The high value of the euro against the dollar "is in the process of suffocating a good portion of European industry by eating away at its export markets", he told the daily Le Figaro.

"If this continues export manufacturers will flee Europe," he warned.

Gallois has repeatedly warned about dangers to the company's position as the European currency has soared to record highs against the dollar, suggesting moving production abroad to get around the problem and even paying European suppliers in dollars.

The euro reached an all-time high of $1.5905 on March 17.

The EADS chief said the sliding dollar would over the long term force the company to "rebalance our activities between Airbus and our other business lines - defense, space and services - which are much less sensitive to the movement of the dollar".

However, Gallois said the slide of the dollar and the difficulties Airbus has experienced with its A380 super jumbo and A400M military transport "have weighed too much in my opinion on how the market values EADS".

AT&T chief's hiring woes

The head of the top US phone company AT&T Inc said on Wednesday it was having trouble finding enough skilled workers to fill all the 5,000 customer service jobs it promised to return to the United States from India.

"We're having trouble finding the numbers that we need with the skills that are required to do these jobs," AT&T Chief Executive Randall Stephenson (below right) told a business group in San Antonio, where the company's headquarters is located.

So far, only around 1,400 jobs have been returned to the United States of 5,000, a target it set in 2006, the company said, adding that it maintains the target.

Stephenson said he is especially distressed that in some US communities and among certain groups, the high school dropout rate is as high as 50 percent.

"If I had a business that half the product we turned out was defective or you couldn't put into the marketplace, I would shut that business down," he said.

Gone are the days when AT&T and other US companies had to hire locally, he said.

"We're able to do new product engineering in Bangalore as easily as we're able to do it in Austin, Texas," he said.

(China Daily 03/28/2008 page16)