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16 Nov 08. Some of Europe’s largest companies are taking extraordinary measures to help out suppliers stricken by the credit crisis by offering cash to prop them up. Groups from Daimler in cars, EADS in aerospace to Safran in defence are worried that their own financial health could be affected by a collapse of a supplier and are considering using their own liquidity to support smaller companies. Paul Lester, chief executive of UK defence company VT Group, said he had told his top 100 suppliers that they should come to him for financial help. “If you get into financial difficulties don’t delay, but come and talk to us. You are probably better talking to us than banks because banks aren’t really doing their jobs right now and we can help,” he said. Daimler and BMW, the world’s two largest luxury carmakers, have both hinted they could buy suppliers if they get into difficulties. Dieter Zetsche, Daimler’s chief executive, said he was already helping some suppliers with cash and added “300,000 jobs were at risk in the industry” if banks continued to tighten credit. The supply chain for many large manufacturers is coming under increasing stress as their small and mid-sized suppliers see credit becoming more expensive or even withdrawn. Several small suppliers have gone bankrupt in recent weeks, including one to VT Group and several in the retail sector. That is forcing healthy manufacturers that have often been largely unaffected by the financial crisis to look at a range of options to keep supply chains intact.Safran, the French defence and aerospace company, has set up a “crisis cell” to monitor any difficulties at suppliers. Xavier Dessemond, its purchasing director, said that in “exceptional circumstances” Safran could help increase the capital at its suppliers or put them in touch with government agencies in France and Europe for cheap loans. In “extreme cases” it could change purchasing terms to enable suppliers to get their hands on cash earlier than usual. Volkswagen, Europe’s largest carmaker, has also set up a special team in its purchasing department for similar purposes. EADS last month helped Latécoère, one of its main suppliers, overcome liquidity difficulties by paying it in advance to compensate for delays in
aircraft projects. (Source: FT.com)

18 Nov 08. Dassault Aviation on Tuesday announced that it was in exclusive talks to take over the mantle of core French industrial shareholder at Thales, the defence electronics company, by acquiring the 20.8 per cent stake held by troubled telecoms equipment group Alcatel-Lucent. The civil jet and military aircraft group was offering to buy the stake at €38 a share, the companies said, compared with Thales’ closing price of €30.44 on Monday. (Source: FT.com)

19 Nov 08. Sales of semiconductors – the drivers of the digital age – are set to slump next year for the first time since the bust of 2001. The Semiconductor Industry Association (SIA) on Wednesday forecast a 5.6 per cent fall in annual sales for its members in 2009 in a clear indicator that the foundations of the computing and electronics industries are being shaken by recession. The decline will be most marked in shipments of chips for mobile phones – down 6.4 per cent, and PCs down 5 per cent. The two categories make up more than 60 per cent of sales of silicon chips. The forecast follows warnings from key manufacturers. Intel, Nokia and Cisco Systems among others have seen a rapid decline in demand in the fourth quarter and are predicting a slowdown next year. (Source: FT.com)

18 Nov 08. Pity poor Louis Gallois. He may be the highly regarded chief executive of EADS and the man who brought peace in the long-running battle between Franco-German shareholders of the aerospace group, but he is far from having a free hand over his company’s strategy. On Tuesday, he saw his dream of taking a key 20.8 per cent stake in French defence electronics group Thales dashed after rival Dassault Aviation re

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