Implications of President Obama`s Warning on GM Bankruptcy
GM's financial structure has precipitously deteriorated evidenced by corporate deficits that have been generated for four straight years -- a $30.8 billion deficit last year alone -- and a debt excess of near $86 billion. Even amid plunged sales and accumulated deficits after the corporate credit rating degradation to the level of speculation grade, no endeavors have been made on a structural reformation with both managements and labor unions only seeking their own profits, resulting in the current condition in the end.
Considering a possible collapse of GM, boasting a 101-year history and the world's largest vehicle production volume, domestic automakers should also be fully prepared for probable worst case scenarios.
A possible liquidation of GM or Chrysler was also reflected in President Lee Myung-bak's mentioning of a necessity on 'an epoch-making improvement' during last week's government release on the auto industry support plans. Vice Minister Lim Chae-min of Knowledge Economy's belated remark, saying that ' a 70 percent vehicle tax deduction cannot be supported without the enhancement in illegal wage and salary practices? should be also implemented in substance.
[Translated by Eun-jung Kim / JYJ]
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[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Real Economic Decline Slows in February
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February industrial production slightly receded and the leading composite index swung to an uptrend in 14 months.
Though it is early to bring up an economic recovery, some are voicing that the worst ever economic decline began to decelerate from its peak pace.
According to 'Industrial Activities during February 2009' disclosed by the National Statistical Office(NSO) on March 31, mining and manufacturing output fell 10.3 percent year-on-year. Taking into account operating days and Lunar New Year holiday, the figure saw a 15.5 percent year-on-year drop.
Services production each illustrated a 0.1 percent year-on-year and 1.2 percent month-on-month accretion.
Consumption goods sales contracted 6.2 percent year-on-year, but expanded 5.0 percent month-on-month. February capacity utilization in the manufacturing industry came in 66.7 percent on average, 5.3 percentage points higher against January.
In particular, the leading composite index designed to forecast the future economic situation climbed 0.5 percentage points from the figure recorded in January.
However, facility investment, a key to an economic rocovery, failed in avoiding sluggishness plunging 21.2 percent year-on-year with reduced investment in machinery including semiconductor equipment, while domestic machinery orders, a leading index of facility investment, diminished 28.8 percent year-on-year.
Meanwhile, March manufacturing business confidence was found to have considerably improved.
[Eun-jung Kim / JYJ]
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http://news.mk.co.kr/newsRead.php?year=2009&no=198390
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Laptops poised to outsell desktops in 2009
Companies are expected to sell 2.2 trillion won ($1.57 billion) worth of notebook PCs in Korea this year, a 3.3 percent increase from last year`s 1.9 trillion won, the Korean unit of market research firm IDC said.
Conversely, sales of desktops are expected to decline 5.3 percent to 1.9 trillion won this year, according to IDC Korea.
In terms of sales volume, desktop shipments are expected to be eclipsed by laptop shipments for the first time in 2013.
Laptop shipments are expected to grow by an annual average of 5.6 percent to reach 2.2 million units in 2013. At the same time, desktop shipments are forecast to drop at an annual rate of 3.4 percent to reach 2.2 million units. In 2007, laptop shipments reached 1.7 million units compared with desktop sales of 2.6 million units.
The rise of laptops came as notebook PCs have been gaining market share with home PC buyers.
In the home PC market, 1.2 million laptops were sold, 100,000 more than the number of desktop PCs.
Still, desktop PCs will remain the mainstay of businesses, public and educational organizations.
"It is a worldwide trend that laptops are replacing desktops as the functions of notebooks are improved," an official of IDC Korea said.
The official added that desktops were expected to maintain a higher share of the PC market in Korea than in other countries, due to the widespread use of desktops at PC cafes and military bases.
The local PC market is expected to fall to 4,360 billion won in terms of revenue this year, from 4,370 billion won last year. But revenue is expected to grow in the long term by 0.8 percent per year to reach 4.5 trillion won in 2013.
PC sales volume is also expected to slip to 4.3 million units in 2009, from 4.5 million units in 2008. PC sales volume is expected to grow by an annual average of 0.7 percent to reach 4.6 million units in 2013.
By Jin Hyun-joo
(hjjin@heraldm.com)
Sale of baseball equipment surges at retail stores
Even though the Korean national team lost to the Japanese in the final round of the World Baseball Classic yesterday, baseball fever is likely to continue with the number of people looking for equipment rapidly growing, they said.
According to E-Mart, its sales of baseball equipment in January-March increased 170 percent from the same period a year ago. In particular, between March 7-22, when Korean TV stations broadcast WBC games, sales surged 310 percent higher than during the same period last year, the nation`s largest discount retail chain said.
The popularity of baseball equipment in its stores has surpassed that of soccer products, making it the best selling sports equipment for the first time in years, it added.
Until this year, baseball equipment ranked fifth on the list of sports items` sales in stores, E-Mart said.
The nation`s second-largest discount retailer Homeplus reported a 287 percent increase in the sale of baseball gear during the last two weeks. A majority of customers looked for gloves and balls, it added.
During the past two weeks of competition, the sales of beer and light snacks have also surged, the discount chain said.
The sale of beer increased 18 percent from a year ago while fried chicken showed a sales growth of 94 percent compared to the same period last year. The sale of peanuts grew 7 percent.
The retailer plans to promote the sales of baseball items next month when the new Korean Baseball League season begins.
"Thanks to the explosive popularity of the Korean baseball team, the number of customers looking for baseball items is rapidly increasing. We are going to run many promotional events on baseball products in April to satisfy the customers` interest in the sports," an executive of the retailer was quoted by Yonhap News agency as saying.
Lotte Mart, operated by Lotte Shopping Co., said the sale of baseball products surged sevenfold in the last two weeks. The discount retail chain saw a 313 percent increase in the sale of gloves and 270 percent in the sale of balls from a year ago.
By Cho Chung-un
(christory@heraldm.com)
POSCO awards TJ Park Prizes
The foundation, named after POSCO founder Park Tae-joon, awards the annual prize for outstanding achievement in the fields of science, education and social services since 2006. The TJ Park Prize comes with a cash endowment of 200 million won ($145,000).
This year`s education prize went to former principal of Sunrin Internet High School Cheon Kwang-ho for his contributions to transforming the school into a specialized high school, the foundation said.
The TJ Park Foundation also praised Cheon for establishing an environment that allows students to realize their potential.
The science prize went to Pohang University of Science and Technology`s professor of plant molecular biology and genetics Nam Hong-gil.
The foundation said that Nam was chosen for the prize for his work concerning the genetic causes of aging in plants that was published in international journals including the Science, Cell and Nature.
The social service prize was awarded to Abdul sattar Edhi for his work in Pakistan. Edhi began offering free medical services in Pakistan in 1949 and currently operates nine free hospitals in the former capital Karachi. Edhi also operates projects helping educate and house women and facilities for the disabled. He has also been discussed as a candidate for the Nobel Prize six times for helping 50,000 orphans.
The ceremony was attended by 200 dignitaries, including former National Assembly Speaker Park Kwan-yong, Sohn Kyung-shik, chairman of the Korea Chamber of Commerce and Industry and foreign diplomats including Indian Ambassador to Korea Skand Ranjan Tayal.
By Choi He-suk
(cheesuk@heraldm.com)
