BMW yesterday became the latest auto giant to feel the pain of the financial crisis, announcing production cuts and a huge drop in profits, as EU finance ministers gathered amid recession stormclouds.
As a string of leading companies revealed sinking profits, the luxury German car firm said its third-quarter net profit plunged 63 percent to 298 million euros (US$378 million) and would cut production by an additional 40,000 units this year.
Owing to the poor market climate and “uncertainties caused by the financial crisis, the profitability targets set for 2008 are no longer achievable,” it said in a statement. “The likely progress of business over the coming months cannot be forecast with any exactitude.”
Meanwhile, clothing-to-food retailer Marks and Spencer, seen as a barometer of consumer sentiment in Britain, said net profits sank by 43 percent to £223.2 million (US$352 million) in the first half of the year owing to tough trading conditions.
“Market conditions and consumer confidence declined through the half, leading to reduced profits year on year due to lower sales,” M&S chief executive Stuart Rose said in the earnings release.
There was similarly gloomy news from the world’s biggest temp agency Adecco which said its third-quarter net profit fell almost a quarter, with revenues in countries hard hit by the financial crisis showing the steepest declines.
It warned it would miss its business targets “in the quarters to come” due to “difficult market conditions leading to even more pronounced pressure on revenues in most countries.”
The results from such economic bellweathers were likely to darken the mood at a meeting of EU finance ministers in Brussels, being held a day after an official report forecast the 27-nation bloc was headed for recession.
“Investors have high expectations” for the next president to take action on the economy, said Sumitomo Trust Bank strategist Saburo Matsumoto.
The worsening outlook and weakening energy demand saw Brent crude oil price sink under US$59 per barrel, hitting the lowest point since February last year.
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
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