BUSINESS NEWS
20 Sep 07. A shareholder in BAE Systems has filed a lawsuit against the British defence company’s board and other individuals which seeks damages stemming from past arms deals with Saudi Arabia. BAE Chief Executive Mike Turner and former Saudi ambassador to the United States Prince Bandar bin Sultan are among those named in a suit filed on Wednesday at the U.S. District Court in Washington, law firm Coughlin Stoia Geller Rudman & Robbins LLP said. It alleges that BAE officials past and present failed to execute their duties. “It is alleged that this behaviour included making, or permitting to be made, improper and illegal bribes, kickbacks and other payments to Prince Bandar and others, totalling more than $2bn in order to win lucrative contracts,” the law firm said. A BAE spokesman said the company had been given no prior notice regarding the lawsuit nor had any proceedings been served upon the company. “The company intends vigorously to defend any such proceedings,” he said. (Source: Reuters)
Sep 07. China to set up new aviation conglomerate, with international collaboration. The Chinese government is to set up a third aviation conglomerate, to be called China Aviation Industry Corporation III (AVICIII). According to reports from the country’s state-run media on 19 September, China’s State Council approved the creation of the group – which will join the government’s other aviation corporations, AVICI and AVICII – in February 2007. The reports suggested that AVICIII will concentrate on developing and manufacturing large commercial aircraft similar to a Boeing 747 or Airbus A380
21 Sep 07. Airbus warned that the euro’s rise against the U.S. dollar could force the company to seek an extra $1.4bn in cost cuts or savings. Chief Operating Officer Fabrice Bregier, Airbus’ No. 2, said in a radio interview that the cost-saving plan launched earlier this year was based on a euro-dollar exchange rate of $1.35. “If the euro were to remain lastingly above $1.40, well obviously we’d have to adjust,” he said in an interview with BFM radio. The euro rose above $1.41 for the first time Friday, a record analysts said is likely to be broken again and again. Designed to make Airbus more competitive compared to its American rival Boeing Co., the restructuring program known as Power8 is supposed to recoup €2bn ($2.81bn) through the sale or closure of some of Airbus’s production facilities together with a headcount reduction of about 10,000. Bregier said the savings target would have to be €1bn larger if the exchange rate reaches $1.45.Bregier said Airbus’ competitive disadvantage from the exchange rate “is starting to be realized at the political level, and that’s very important.” Airbus will have to increase its purchasing from dollar-based suppliers, to the detriment of those in Europe, Bregier said. Another option would be to relocate production outside the euro zone, he said.At the moment, many of Airbus’ costs are in euros while it sells in dollars. Louis Gallois, chief executive of Airbus parent EADS, has said in the past that every 10-cent rise in the euro against the dollar costs the company €1bn ($1.4bn).
20 Sep 07. The upheaval in financial markets this summer has not yet had any effect on spending by the technology industry’s big corporate customers, according to Oracle’s most recent earnings. On Thursday the maker of database and other corporate software reported surprisingly strong growth in what is traditionally its weakest quarter of the year. Concerns that the credit crisis would dent corporate confidence and hit technology spending have led to greater volatility in tech stocks in recent weeks. A particular cause of unease has been demand from the financial services sector, one of Oracle’s biggest markets. Responding to a question from an analyst about whether the company expected market turbulence to lead to weaker demand, Safra Catz, co-president and chief financial officer, said: “Pipelines are extrem