Business Briefs
February 20, 2003
Chrysler turns corner into profitability
The Chrysler Group reached its goal of breaking even in 2002, laeving its losses behind, parent company DaimlerChrysler reported from Stuttgart on Thursday. But the company said operating profits reached €1.32 billion ($1.42 billion) excluding one-time charges. In 2001, the company reported a loss of €2.18 billion. The Mercedes Car Group also boosted its operating profit last year to €3.02 billion from €2.96 billion, an increase of 2 percent.
Construction employment drops 8 percent
The number of workers in Germany's battered construction industry fell by around 8 percent, continuing a trend that began in 1996, the German Statistics Office reported on Thursday. The construction industry is one reason for the country's rising unemployment rate. Last month, the rate rose by 1 percentage point to 11.1 percent. In all, more than 4.6 million people were out of work last month.
Economic institute lowers German growth forecast
With the likelihood of a war against Iraq increasing, a major German economic think tank on Thursday reduced its forecast for economic growth in Germany. The new figure is lower than the one forecast by the federal government in Berlin. "We're reducing our growth forecast to 0.9 percent because the old forecast was created under the presumption there would not be a war in Iraq," said Hans-Werner Sinn, head of the Munich-based Institute for Economic Research. "We're now assuming there will be a brief war." Several other German economic institutes have also reduced their forecasts for growth beneath Berlin's 1 percent figure in recent days.
International group buys German pay TV giant
A consortium of international investors said on Thursday it would acquire a majority stake in Premiere, Germany's largest pay TV service. The Permira consortium said it would infuse at least €220 million ($236.9 million) into the financially beleaguered company as part of the deal. Though Premiere has over two million subscribers in Germany, it has suffered horrendous losses for years. Premiere's future has been uncertain in recent months following the spectacular bankruptcy of its parent company, Kirch Group. Permira said it hoped to increase the number of Premiere subscribers to 2.9 million by the end of the year and to take the company to profitability by mid-2004.
Lufthansa Cuts Capacity and Spending
Lufthansa is planning drastic cutbacks aimed at saving on operating costs. The German airline said on Thursday it would pull 10 aircraft from its operations, bringing the total number of planes in its fleet grounded due to the current slowdown in travel to 31. Lufthansa has also put a freeze on hiring new workers and says it will spend less by cutting capital expenditures by €300 million ($323 million).