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Business

Business Briefs

Porsche tightens its belt; Postbank shuts down its smaller branches; Lufthansa chief predicts revival of the air and travel industries.

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Porsche is cutting costs after falling sales

Porsche Tightens its Belt

German sports car maker Porsche has announced a savings package intended to lower its unit costs by up to 10 percent. The move by the Stuttgart-based firm follows a period of falling sales and the firm says the measures are necessary if it is to make its models competitive again. "Porsche's research and development costs have risen dramatically in the last few years," Porsche Chairman of the Board Wendelin Wiedeking told Financial Times Deutschland. "This must be dealt with and we intend to look first at the cost structure for the Cayenne and then at our new generation of sports' cars," he said. In the first nine months of 2002, sales of Porsche Boxsters and Porsche 911's fell by 9.2 percent and Porsche 911 sales in the USA were down 40 percent in February this year. Shares in the company had halved in value to €251 by the beginning of March.

Postbank to Close 1200 Branches

Hot on the heels of other German retail banks who have been thinning out their network of branches, Postbank has announced it will close 1200 of its smaller outlets. From July 1, 2003 Germany's largest retail bank -- part of Germany's postal service Deutsche Post -- will close the branches housed in smaller Deutsche Post offices. A spokesperson for Postbank, which has 12,700 branches nationwide, said that the smaller branches were not used enough to justify their further existence.

TUI Chief Sees Tourism Upswing

TUI Chairman of the Board Michael Frenzel says he believes things are looking up for the beleaguered German travel industry. In the last six weeks, TUI's bookings shortfall fell by 10.7 percent compared to the same period last year. "Since the end of the Iraq war, there has been something of a catch-up period in out markets," Frenzel told shareholders at a meeting of Europe's largest travel concern in Hanover. "I am convinced that the positive developments in the last few weeks will continue," he went on. Frenzel added he expected to announce healthy annual results, despite a difficult first quarter. The markets reacted positively to the news. TUI shares were up 0.57 percent to 14.23 a share at midday on Wednesday. Outgoing Lufthansa Chief Predicts Revival

The outgoing Lufthansa CEO Jürgen Weber says he believes the worst may be over for the beleaguered airline industry. The Chief Executive of Germany's national carrier said that airline travel had now begun to revive after the end of the Iraq war and as fears over the spread of the SARS virus begin to subside. Frenzel also announced that Lufthansa, Europe's third largest airline, had found ways to generate an additional €1 billion by the end of 2004. Frenzel -- who has been in his post for 12 years and under whose leadership the company was privatised -- transformed Lufthansa from a struggling airline into one of the most profitable in the world. He now moves to a post on the supervisory board.