■ Bad loans
Japan expands cleanup
Japan's Council on Economic and Fiscal Policy agreed to postpone the target period for Japanese banks to finish cleaning up their bad loans by one year to the year ending March 31, 2005, the Nihon Keizai newspaper reported. The council also pushed back the target to overcome deflation from fiscal 2003 to fiscal 2005 or later, the paper said, citing the council. The changes will be included in a report that will be released in January, the paper said. During the bad loan cleanup period, gross domestic product is likely to be at 1 percent at most in real terms, with nominal gross domestic product even lower, the paper said. By fiscal 2005 and fiscal 2006, real gross domestic product will grow at least 1.5 percent, the paper reported.
■ US Airways
Pilots ratify agreement
US Airways Group Inc's pilots union approved an agreement aimed at cutting costs by US$100 million, part of the carrier's plan to win a US loan guarantee and emerge from bankruptcy. The Airline Pilots Association's Master Executive Council, representing more than 4,000 US Airways pilots, ratified changes to pay, pensions and benefits, the company said in a statement on PR Newswire. US Airways is still in talks with other unions on cost savings, it said. The seventh-largest US airline needs another US$100 million from flight attendants, baggage handlers and mechanics to gain a US$900 million federal guarantee. US Airways raised its cost-cutting target to US$1.6 billion from US$1.2 billion after low air fares and weak demand crimped revenue.
■ Beef Imports
Japanese tariffs may rise
Japan may raise its tariff on beef imports next year as shipments recover following a drop caused by the country's first case of mad-cow disease last year, the Mainichi newspaper said, without citing anyone. The tariff is automatically raised to 50 percent from 38.5 percent when quarterly imports rise more than 17 percent from a year ago, the report said. The volume between April and June next year will probably meet this requirement because imports in the same months this year fell about 40 percent, the report said. The higher tariff would cut the profits of operators of Japan's beef-and-rice dish restaurants by Japanese Yen 2 billion (US$16.6 million), the Mainichi said, citing a food service group.
■ Automakers
Suppliers cause concerns
Ford Motor Co, DaimlerChrysler AG and other carmakers in Europe are reconsidering how much they rely on suppliers to make certain they don't become overly dependent. Some 72 percent of the value of a car comes from suppliers instead of the manufacturers, an increase from 65 percent since 1990. That share is expected to rise to 80 percent by 2010, according to the Center for Automotive Research. Carmakers have asked suppliers to make complete systems instead of individual parts, or to manufacture niche models, so they don't have to spend money expanding manufacturing capacity. As supplier expertise increases, carmakers aim to protect their own abilities. "The pendulum has swung too far," said Paul Stokes, Ford's vice president for purchasing in Europe, speaking at a conference. "In some cases we've gone too far with full-service suppliers and we need to think about what we're doing."
Agencies
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