GE AND
HONEYWELL TIE-UP OFF
Months of speculation over the proposed marriage between
General Electric and Honeywell have ended with the engagement being called
off. The tie-up, which would have led to the world’s biggest industrial
take-over, is not to be following a decision by the European Union to block
it. It was also rumored that GE previously was losing interest in the merger
plan.
Mario Monti, responsible for competition questions for the
15-member EU, said the $42 billion tie-up between GE and Honeywell would have
created an "unhealthy dominant aerospace giant." Monti said the
companies, who signed the merger agreement last October, had made too few
concessions and too late. A merged entity would have had an overwhelmingly
dominant position in the multi-billion dollar market for jet engines and
avionics which would have severely reduced competition, Monti said.
It is the first time that the EU has killed off a merger of
two American-based companies that had already been approved by the U.S.
authorities. GE Chairman Jack Welch, who had put off his retirement until the
end of the year to finalize the merger, said he is to step down in September.
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PARIS
AIR SHOW
BOOSTS EUROPEAN JOBS
The 44th Paris Air Show, which took place at the French
capital’s Le Bourget business airport in June, was one of the biggest ever
and could prove to be one of the most successful for European aerospace jobs.
Airbus, Boeing’s arch rival, signed firm contracts with five
customers for 155 aircraft and another 20 options altogether worth an
estimated $14 billion, including for the recently launched 555-seat double
decker A380 super jumbo. The firm orders it clinched at the Air Show more than
double
Airbus’ sales so far this year, with the company’s order
book just one short of 300 aircraft.
The Airbus Integrated Company, as it is now called, is owned
20 percent by BAE Systems (formerly British Aerospace) with the other
four-fifths belonging to EADS, a Europe-wide company involving France, Germany
and Spain. The new orders are expected to secure existing jobs and create new
employment opportunities in the European aircraft manufacturing industry as
well as among sub-contractors and equipment suppliers.
European employment opportunities will be further enhanced
following the signature by six European countries of a Memorandum of
Understanding to launch the A400M Airbus military transport aircraft. The six
countries committed themselves to order 193 aircraft. The official launch is
expected by the end of the year and possibly this fall.
Forty-three countries were represented at this year’s Paris
air show, two more than at the previous event in 1999. More than 1,800
exhibitors showed their wares, just under the number represented two years
ago, due mainly to the considerable number of mergers in the industry. The
U.S. had a major presence. Nearly 250 civil and military aircraft of all
shapes and sizes were on show, some making their debut.
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POLISH
PRESIDENT
ATTACKS UNION RIGHTS
Poland’s president has intervened in a controversial debate
over the Polish administration’s policy towards the union movement with a
call for changes to the country’s labor code and limits on the unions’
role in the fight against rising unemployment.
President Aleksander Kwasniewski said he supported more rights
for business, which is complaining that the unions have too much power.
Kwasniewski said he would like to see the position of businessmen strengthened
in the legal system and the unions’ role "rationalized."
The Polish congress is considering a package of measures to
combat unemployment, which in May rose to almost 16 percent of the workforce.
The draft provisions include changes to the labor code, which has strict
hiring and firing rules. But the bill faces strong opposition within congress
where about one quarter of representatives has been elected to represent
Solidarity and the OPZZ, the two labor federations.
In a bid to reduce unemployment, Congress last March reduced
the working week from 42 to 40 hours a week. This step was criticized by
business, which says the shorter working week will increase wage costs and
reduce profits.
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FRENCH
35 HOUR WEEK LAW
CAN 'CREATE UP TO 500,000 JOBS'
A leading French employment official says the country’s
35-hour week legislation will create up to half a million jobs and reduce the
unemployment rate by 1.5 percent.
Henri Rouilleault, the director of ANACT, France’s national
agency for the improvement of conditions at work who chairs an important
committee responsible for seeing through work time reductions, said the main
aim of the law was job creation and to reduce France’s high unemployment.
The jobless total has fallen to 8.6 percent from 12.6 percent in 1997 when the
Socialist-led five-party coalition won power from the conservatives.
The shorter working week legislation, which came into effect
in January 2000, concerns 6.9 million people in companies with more than 20
employees, accounting for about half the private sector. All but 800,000 of
the workers concerned are in full-time employment. Rouilleault estimated that
265,000 jobs had been created already through reducing the working week. The
law stipulates the shorter working week should be effected with no loss of
pay, but there have been some cases of loss in purchasing power and many
companies had either frozen salaries or awarded only very slight wage hikes.
Nearly 50,000 collective agreements have been signed to reduce
working time. which has been 39 hours a week since 1983. In return, employers
have seen a reduction in their social insurance contributions. From January
2002, the 35-hour week law will apply to companies with 20 or fewer employees
and to those working for central and local government.
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UE News - 7/01
