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[IMAGE][IMAGE]	[IMAGE]	[IMAGE]	[IMAGE]	Business this week
				Apr 26th 2001
				From The Economist print edition 
				
				
				Bigger but slower
				
				
				
				
				
				
				
				
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				The IMF,s World Economic Outlook forecast that world economic growth would 
slow this year to 3.2%, down from 4.8% in 2000. All the big economies were 
predicted to slow, but Europe less than America. The world economy is then 
expected to recover a little in 2002, when output could grow by 3.9%.
				
				See article: The world economic outlookE+
				
				The World Competitiveness Yearbook, published by the International Institute 
for Management Development, once again showed America as the best place for 
business competitiveness. Still second was Singapore, despite its poor rating 
for democratic accountability. Finland, Luxembourg and the Netherlands 
occupied the next three places. 
				
				Small scotch
				
				Bank of Scotland, having failed in previous attempts to merge with two larger 
British rivals, NatWest and Abbey National, began talks with Halifax, Britain,
s biggest mortgage lender. Bank of Scotland,s latest attempt to woo a partner 
could encourage other bidders to enter the fray.
				
				See article: Bank mergersE+
				
				Morgan Stanley, an American investment bank, plans to show the door to 1,500 
staff. Merrill Lynch also plans to get rid of up to 10% of its 
investment-banking division, some 200 employees. More announcements of 
bankers looking for alternative employment are expected soon.
				
				See article: Lay-offs on Wall Street
				
				UR sacked, : (
				
				Ericsson, a Swedish mobile-phone maker, responded to a drastic slide in 
handset sales*41% down in the first quarter compared with a year ago*and big 
losses. It said that it would shed 12,000 workers and also announced a joint 
venture with Sony,s handset division to make and market new phones.
				
				See article: Mobile phone woes continueE+
				
				Motorola, America,s biggest handset maker, also reacted to falling sales, by 
closing a Scottish factory employing 3,100 people. The British government is 
trying to recoup o17m ($25m) paid in regional aid to the company since 1995.
				
				The prospects for third-generation mobile telephones suffered a setback. 
After criticism of the high prices paid for licences to run 3G services came 
news that technical problems would delay 3G,s launch in Japan until October. 
NTT DoCoMo,s announcement means that 3G,s first roll-out may now be achieved 
by British Telecom in that hot-bed of technological advance, the Isle of Man.
				
				After months of pressure from disgruntled shareholders, Sir Iain Vallance, 
chairman of British Telecom, is to step down, to be replaced by Sir 
Christopher Bland, chairman of the BBC.
				
				A consortium led by Sir Anthony O,Reilly, an Irish media tycoon, and 
including George Soros, a financier, was reported to be ready to bid euro2.6 
billion ($2.3 billion) for Eircom, Ireland,s formerly state-owned telecoms 
operator. This would exceed a rival offer from a consortium headed by another 
Irish entrepreneur, Denis O,Brien. 
				
				JDS Uniphase, a leading optical-equipment maker, said that it would lay off 
5,000 staff, 20% of its workforce, in order to cut costs in response to 
falling spending by telecoms firms.
				
				
				
				
				
				
				
				
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				Lucent, the world,s biggest telecoms-equipment company, reported losses for 
the quarter to the end of March of over $5 billion. Yet improving revenues 
and a planned restructuring cheered investors; the company,s shares rose by 
more than 10%.
				
				Compaq Computer revealed profits for the first quarter of $200m, above the 
forecasts of pessimistic analysts but still a third down on a year earlier. 
But 3M, an American technology conglomerate, issued a profits warning for the 
next quarter and said that 5,000 jobs would go, around 7% of the total.
				
				Rupert Murdoch, the head of News Corporation, met top General Motors bosses 
to present a bid for DirecTV, America,s leading satellite broadcaster, and 
part of the car maker,s Hughes Electronics. Mr Murdoch has long coveted 
DirecTV as a way of adding an American arm to his Sky Global Networks.
				
				An American government committee failed to clear a bid by ASM Lithography, a 
Dutch semiconductor firm, for Silicon Valley Group, a maker of electronics 
components that can be used in spy satellites. America,s Defence Department 
expressed concerns over the transfer of sensitive technology to &hostile8 
countries. President George Bush will now have to rule on the deal.
				
				Shell game
				
				A takeover bid of A$10 billion ($5.1 billion) for Woodside Petroleum, an 
Australia-based oil and gas company, by Royal Dutch/Shell, was surprisingly 
blocked by the Australian government for being &contrary to the national 
interest8.
				
				See article: Shell rebuffed in AustraliaE+
				
				The dispute between Enron and the Indian state of Maharashtra over the 
American energy company,s power plant worsened when Enron authorised its 
local managers to terminate the contract.
				
				General Dynamics said it had agreed to buy Newport News Shipbuilding for $2.6 
billion. If the bid is approved by the government, General Dynamics would 
become the sole producer of aircraft carriers, destroyers and submarines for 
the American navy. 
				
				Britain,s Hilton Group gained another 154 hotels through the acquisition of 
Scandic, a Swedish hotel company, for o612m ($881m). SAirGroup, owner of 
Swissair, is selling its hotel company, Swiss"tel, to Raffles Holdings, a 
Singapore-based hotel group, for SFr520m ($305m). SAirGroup is also planning 
to change its name back to Swissair Group, and is considering selling two 
loss-making French subsidiaries.
				
				
				
				
				
				SURVEY: SOFTWARE
				
				 Find thought-provoking articles about the future of software in the 
Economist's survey. This essential reading provides a history of open source 
software, details the growing trend towards software leased via the Internet, 
and explains the battle of operating system platforms. Click here to read 
about the future of software.  
				
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