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European Business News (EBN), 97-01-02European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updatedJanuary 2 1830 CETCONTENTS
[01] NAPM reports a pick up in US manufacturing growthManufacturing growth picked up in December according to the National Association of Purchasing Management (NAPM), which reported a rise in its composite index to 54.0% from November's 52.7%.The increase was a surprise, since economists had generally been looking for a modest drop in the index. Economists surveyed by Dow Jones News Services had on average looked for a 51.5% reading in December. The NAPM index is a diffusion index with a reading over 50% indicating expansion in the manufacturing sector, while a reading below 50% suggests contraction. NAPM's Production Index remained at 58.6%. NAPM's New Orders Index gained 2.9 percentage points to 58.3%. Backlog of Orders grew for the first time in six months during December with the index moving to 51.0%. The Supplier Deliveries Index in December moved up to 51.6%, indicating continued slowing of delivery performance from November's 51.5%. NAPM's Employment Index marked the 23rd consecutive month of manufacturing employment reduction. The index rose to 47.7% in December from 47.5% in November. NAPM's Price Index in December jumped to 51.5%, indicating increased prices after two months of decline. [02] UK manufactuing growth slows in DecemberBritain's purchasing managers' index, or PMI, fell to 52.5 in December from 54.2 in November, which was revised downward, as the index for prices alone fell to 42.2 from 42.5, which was revised upward.The Chartered Institute of Purchasing and Supply, which publishes the index, said the softer PMI was largely due to leading to weaker growth in exports for the second month in a row and increased deliberate destocking aimed at meeting year-end inventory targets. Nevertheless, the overall PMI still indicated an expansion in manufacturing for the seventh month in a row as both output and employment rose to meet further improvements in order books. ''Although order levels rose on the whole, driven by an acceleration in the rate of growth of demand for both consumer goods and capital goods, the PMI was weakened by a modest deceleration in the overall rate of growth of order books,'' the institute said. Prices paid have fallen continually for 14 successive months. ''Some upward price pressures have been reported in recent months as demand has hardened and suppliers have become busier.'' ''However, these upward pressures were more than offset by the deflationary effect of sterling strength as manufacturers benefited from cheaper imported inputs lengthened fell sharply,'' the institute added. [03] EU to investigate $20 billion MCI/BT mergerThe European Commission says it is to open a routine investigation into the planned $20 billion merger between British Telecom and MCI Communications.In an official EU statement the Commission said that the deal falls under the EU's merger regulation banning alliances that create or strengthen dominant positions. The two companies announced in November they were pooling their operations into a new company called Concert Plc. [04] US unemployment rises in last week of Decemberis slightly higher against the Deutsche mark and the yen Thursday after the 1330 GMT release of U.S. jobless claims for the week of December 28 showed a greater-than-expected rise.The Labor Department said jobless claims surged 22,000 to a level of 366, 000 in the week ended Dec. 28, the highest claims level since July 13. The four-week moving average for claims also rose to levels not seen since July 13. The closely-watched barometer of labor markets trends jumped 9,000 in the Dec. 28 week to 352,500. The latest data are good news for the financial markets and Federal Reserve policy makers. The markets and Fed officials have worried in recent months that labor conditions would tighten further in the fourth quarter. But recent data, including Thursday's jobless claims data, haven't validated those concerns. [05] Danka completes its $700 million purchase of Kodak unitDanka Business Systems says it has completed its $688 million purchase of the sales, marketing and equipment-services operations of Eastman Kodak Co.'s copier business.Danka, a British supplier of automated office equipment, services and supplies, said integrating the new operations will lower earnings for the quarter ended Dec. 31 by $25 million to $35 million. [06] Morton buys into European salt marketMorton International, the U.S's leading salt producer, said it will pay $290 million to acquire France's Cie. des Salins du Midi et des Salines de l'Est. It cited a 'one-time opportunity' to grab a share of Europe's salt market.The U.S. producer of salt and specialty chemicals said it definitively agreed to pay $195 million for about two-thirds of Salins du Midi that is now owned by a holding company and other interests. In addition, Morton will launch a 614-franc-a-share tender offer for the minority of Salins du Midi shares that are in public hands. That offer represents a substantial premium to the 440 francs at which Salins du Midi shares last traded on the Paris Bourse. Trading in the stock was suspended Dec. 23, after Cie. de Suez - the Paris company that owns a controlling 50.8% stake in the salt concern - disclosed it was negotiating a possible sale. Morton, long the premier salt producer in the U.S. and Canada, called its salt unit's first international acquisition 'a unique chance to duplicate the success we have enjoyed in North America.' [07] GM to contest tax demandsGeneral Motors will challenge a request from the Internal Revenue Service that it pay more than $335 million in taxes for 1985.According to GM, the IRS is charging that the auto maker had taxable income of $4.96 billion in 1985, rather than the $3.78 billion that it claimed, and as a result should have paid $1.05 billion in taxes instead of $714.8 million. The government claims the difference in GM's taxable income for 1985 stems from a complicated financing program under which GM's financial arm, General Motors Acceptance Corp., reimbursed dealers for offering customers financing rates lower than any other lender. GM would then reimburse GMAC, claiming that the money was 'retail rate support payments,' a type of tax deductible sales incentive. But the IRS charges that the payments were taxable income to GMAC. IRS officials wouldn't comment. GM's move was reported by the Detroit News. This is the first time GM has challenged a federal tax return in U.S. tax court, a GM spokeswoman said, adding that the No. 1 auto maker believes the IRS demand has no merit. 'We're confident that this is the proper way to treat these expenses and that our position will be upheld in the tax court, ' she said. While the petition pertains only to 1985, the spokeswoman didn't rule out the possibility that the IRS could make similar requests for returns filed in other years, because the financing practice in question was used over several years. 'We won't know the scope until we have a court decision,' she said. 'It could affect other years.' GM expects the court to rule sometime over the next two years. [08] Dutch say South Korea rules out Fokker takeoverThe Dutch government today said the South Korean government has ruled out a takeover of the bankrupt Dutch plane maker NV Fokker by a consortium led by Samsung Aerospace Industries.Samsung Aerospace, part of the Samsung Group conglomerate, lost its latest hope of a Fokker bid when three other South Korean companies - units of Hyundai Group, Hanjin Group and Daewoo Group - notified the South Korean government that they wouldn't join a Samsung consortium in a Fokker bid. Several weeks ago, the court-appointed receivers of Fokker failed to reach agreement with Samsung on a takeover, but the South Korean firm had hoped that as a consortium, it might be able to reopen talks. The Dutch government had indicated that it might provide fresh capital for a new Fokker and invest in the development of a new 125-seat regional jet, but Samsung was said to have balked at demands for long-term job guarantees. Fokker declared bankruptcy for its plane-making units last March, a month after majority shareholder Daimler-Benz Aerospace AG of Germany withdrew further financial support. [09] AT&T seals NCR spin-offAT&T, hoping to become more nimble by streamlining itself, completed its three-way split with the spin-off of computer marker NCR Corp.AT&T said that it completed its restructuring with the distribution of 101 million shares of NCR common stock to AT&T shareholders. Anyone holding shares of the world's biggest long-distance company on December 13 received one share of NCR for each 16 shares of AT&T they hold. NCR was acquired by AT&T in 1991. Then, in an effort to improve its agility in an increasingly competitive telecommunications market, AT&T announced in September 1995 it would divide itself. First, it spun off its equipment business into a company called Lucent Technologies. Then, it decided to make NCR - AT&T's attempt to make become a player in computer manufacturing - a separate entity on December 31. AT&T also sold a majority position in AT&T to a consortium of investors. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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