Part 1 Unit 1 Section 2 INDUSTRIES AND SECTORS
The International Herald Tribune
July 2011
ADDITIONAL TEXT
The Auto Industry, Stuck in the Slow Lane
Many of those grasping for a sign of economic optimism these days have pointed to the auto industry. The argument is that as supply chains come back on line following the Japanese earthquake and tsunami, more automobileswill be available for sale to consumers who have been waiting for cars to arrive.
But don’t expect a roaring comeback yet. A report released on Wednesday by AlixPartners, a business consulting firm, projectsmodest sales growth for the foreseeable future. The report forecasts that United States auto sales will reach 12.7 million units this year, up from the 11.5 million of 2010, but still far below the 16-million-plus that the industry regularly posted in the mid-2000s. AlixPartners forecasts 13.6 million sales in 2013, and does not project that the industry will get back to its peak before the recession “in this current cycle.”
According to the report, several factors are restraining growth in car sales. Unemployment remains high and housing values are depressed, making1) it difficult for families to tap housing wealth for car purchases. Historically, the report found, one in five vehicles sold2)has been financed by an appreciation ina car buyer’s home value.
And in a survey of 1,000 Americans by AlixPartners, 83 percent said they had delayed the purchase of a vehicle or planned to wait another year before buying a car.
John Hoffecker, managing director at AlixPartners, said the level of sales before the recession was unsustainable.
“Many people were thinking that was the norm,” Mr. Hoffecker said. “And our view was that it was not actual demand.”
Instead, he said, sales were buoyed by easy financing by carmakers and rapidly appreciating home and stock values.3) What is more, he said, automakers did not pay enough attention to their cost structures4) when selling cars, sometimes at a loss.
On the positive side, said Mr. Hoffecker, American automakers have already regained their profits. And future sales will be fueled by population growth in the United States as well as growing demand in developing markets.
The bad news is that the depressed level of auto sales will not help all the laid-off autoworkers get back to work. While engineers and sales representativeshave been rehired to levels before the recession, Mr. Hoffecker said, production labor “is not going to come back any time soon.”
Notes:
1)/2) См. Раздел “Грамматические трансформации в переводе” п.6.1 стр.417 “Причастие в различных функциях”
3)/4) См. Раздел “Грамматические трансформации в переводе” п. “Аттрибутивные конструкции”
Part 1 Unit 1 Section 3 RESTRUCTURING
The International Herald Tribune
July 27, 2011
ADDITIONAL TEXT
G.M. Says Opel Unit Not for Sale
DETROIT — General Motors is not interested in selling its European unit, Adam Opel, the carmaker’schief executive said Wednesday, countering widespread speculation.
“I will say this: Opel is not for sale,” the executive, Daniel F. Akerson, said.
Two weeks ago, G.M. lashed out at the chief executive of Volkswagen, Martin Winterkorn, accusing him of fanning rumors about an Opel sale. A German newspaper quoted Mr. Winterkorn as saying a Chinese carmaker, rather than the Hyundai Motor Company, would probably be interested in buying Opel. Two German magazines also published reports in June that G.M. might be looking to sell Opel, possibly to Volkswagen.
“Opel has been part of the G.M. family since 1928 and remains important to the company,” G.M. said in the statement July 13 that criticized Volkswagen. “G.M. is pleased with Opel’s solid progress over the last year in turning around its business, and the company continues to invest in outstanding products for the European market.”
But the statement stopped short of saying that Opel, which has struggled during the downturn in Europe’s economy, was not on the market, allowing talk of a potential sale to linger.
G.M. made a deal in 2009 to sell Opel to a consortium headed by the Canadian parts supplier Magna, but the board, installed after it emerged from bankruptcy protection, canceled the sale, which had been backed by the German government and labor unions. The deal to sell Opel was reached at a time when G.M. was streamlining its operations and selling or shutting divisions that were losing money or not critical to its core business.
Since then, G.M. has been following an ambitious overhaul at Opel, aimed at making the division profitable in 2012 through a 20 percent reduction in capacity and the elimination of 8,300 jobs.
G.M. is introducing an Opel version of the Chevrolet Volt plug-in hybrid car1), called the Ampera, in Europe this summer as part of its effort to rejuvenate the division.
Note:
1) A plug-in hybrid electric vehicle (PHEV), plug-in hybrid vehicle (PHV), or plug-in hybrid is a hybrid vehicle which utilizes rechargeable batteries, or another energy storage device, that can be restored to full charge by connecting a plug to an external electric power source (usually a normal electric wall socket). A PHEV shares the characteristics of both a conventional hybrid electric vehicle, having an electric motor and an internal combustion engine (ICE); and of an all-electric vehicle, having a plug to connect to the electrical grid. Most PHEVs on the road today are passenger cars, but there are also PHEV versions of commercial vehicles and vans, utility trucks, buses, trains, motorcycles, scooters, and military vehicles=гибридныйавтомобильсподзарядкойотэлектросети
Part 1 Unit 1 Section 4 MERGERS AND ACQUISITIONS
The International Herald Tribune
July 2011
Li Ka-shing Wins British Utility for $3.9 Billion
Li Ka-shing, the Hong Kong billionaire, has won the backing of the board of the Northumbrian WaterGroup1) for an acquisition that values the British utilityat £2.4 billion ($3.9 billion).
Mr. Li’s company, Cheung Kong Infrastructure Holdings, has bid 465 pence for each Northumbrian share, in what would be the largest takeover of a listed British company this year.
The bid is 9.1 percent above Northumbrian’s closing price before the approach was announced last month and 26.4 percent above where it was trading before rumors of the deal commenced in June. Including the assumption of debt, the deal is worth $7.6 billion.
Cheung Kong sold Cambridge Water to HSBC in order to appease competition regulators. Still, the Northumbrian acquisition will extend Mr. Li’s reach in Britain, where he led a group to purchaseEDF’s2) British energy arm for £5.8 billion last year.
Mr. Li, Hong Kong’s richest man, has accumulated utilities, energy and infrastructure assets throughout the developed world, with assets in Commonwealth countries like Australia, Canada and New Zealand, as well as mainland China.
For the year ended March 31, Northumbrian reportedprofit of £178.4 million, up 45 percent from the previous year. Its shareholders will receive a final dividend3) of 9.57 pence in addition to the 465 pence ashare from Cheung Kong.
Ontario Teachers’ Pension Plan Board, the Canadian pension fund that owns 26.8 percent of Northumbrian, has committed to voting for the offer and abstaining from any rival bid. The minorityshareholders J.P. Morgan Asset Management and Artemis Investment Management, which own 3.8 percent and 2.9 percent respectively, have sent nonbinding letters of support as well, Northumbrian said.
The Hong Kong company said it would retain the utility’s present management, led by the chief executive, Heidi Mottram.
Northumbrian will be subsumed under a new entity owned by Cheung Kong called U.K. Water.
Cheung Kong hired Royal Bank of Canada and HSBC as its financial advisers, while Northumbrian hired Deutsche Bank.
Notes:
1) Northumbrian Water Group plc (NWG) is the holding company for several companies in the water supply, sewerage and waste water industries. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. NWG's largest subsidiary is Northumbrian Water Limited (NWL), which is one of ten companies in England and Wales that are regulated water supply and sewerage utilities. NWL is the principal water supplier in the north-east of England, where it trades as Northumbrian Water, and also supplies water to part of eastern England, as Essex & Suffolk Water.
2)Électricité de France (EDF; Electricity of France) is the second largest electric utility company in the world headquartered in Paris, France.EDF Energy is an energy company in the UK, which is wholly owned by Électricité de France.
3) Final Dividend is the end of year dividend. In the UK, companies normally pay dividends twice per year, an interim and a final dividend, the latter normally being the larger of the two. The final dividend is announced by the company with the full-year results after the directors are aware of the company’s profitability and its financial health. At the annual general meeting, shareholders have the option of voting to accept the dividend or to reduce it, but they cannot increase it.
Part 1 Unit 2 Section 1 PRODUCING THE GOODS
The International Herald Tribune
July 27, 2011
Ford to Increase its Plant Capacity in India
NEW DELHI — The Ford Motor Company plans to invest almost $1 billion in northwest India, building factories to make nearly a quarter of a million cars a year, company executives said on Wednesday.
The investment is Ford’s latest push into fast-growing markets in Asia and Africa, where it lags other big automakers.
The company’s chief executive, Alan R. Mulally, said this year that Ford aimed to get a third of its sales from these two regions. Ford has been adding factories, rollingout new models and opening dealerships in countries including South Africa and Thailand.
India, where passenger car sales grew 29 percent in the last fiscal year, to 2.5 million, is expected to become1) a critical market over the next decade, Ford executives said Wednesday. Ford expects a “dramatic spike up in India” by the middle of the decadeasincomesincrease2), said Joe Hinrichs, president of Ford Asia Pacific and Africa, during a meeting with reporters in Delhi.
Ford is investing in the state of Gujarat, because of its probusiness environment and because it has ports, which could allow the company to export from India in the future and to diversify from its existing Indian operations in the south.
Ford plans to build two new factories in Sanand, Gujarat, by 2014 that will employ 5,000 and have the capacityto assemble 240,000 cars and build 270,000 engines. Ford already has operations in the southeastern state of Tamil Nadu that employ 5,000 in manufacturing and 5,000 in back-office work and information technology.
Ford’s performance in India has lagged its performance in other markets. The company sells only 3 percent of all passenger cars in India, compared, for example, with 10 percent of Brazil’s cars.
Ford was the only Detroit automaker to emerge3) from the 2009 recession without going into bankruptcy. And on Tuesday it reported its ninth consecutive quarterly profit, although its rebound was showing signs of slowing.
“Because we came out of the crisis much stronger financially, we now can make long-term investments, and that is what we are doing,” Mr. Hinrichs said.
Notes:
1) См. Раздел “Грамматические трансформации в переводе” п 4.2 стр.408 “Инфинитивные конструкции”
2) См. Раздел “Грамматические трансформации в переводе” п.9.7 стр.422 “Служебные слова “as”
3) См. Раздел “Грамматические трансформации в переводе” п 4.1 стр.407 “Инфинитив в различных функциях”
Part 1 Unit 2 Section 3 SALES. THE BOTTOM LINE ON MARGINS
The International Herald Tribune
July 28, 2011
Sony Slashes Annual Profit Forecast After Posting Quarterly Loss
TOKYO — Sony slashed its annual profit forecast after sinking to a 15.5 billion yen, or $199 million, quarterly loss Thursday, as lingering effects of the Tohoku earthquake, a punishingly strong yen and lackluster TV saleswiped out its bottom line.1)
The electronics and entertainment company, which is based in Tokyo, said in a statement that it now expected net incomeof 60 billion yen for the fiscal yearthat ends March 31, 2012, revising an 80 billion yen projection it made just two months ago.
Sony also cutprojected sales for the year to 7.2 trillion yen from a previous forecast of 7.5 trillion yen.
The company said that its net loss for the April-June quarter came to 15.5 billion yen, compared with a profit of 25.7 billion yen for the same quarter a year earlier. The loss was significantly higher than a 2.5 billion yen loss estimate in a Bloomberg survey of three analysts.
Sony said that quake and tsunami damage to factories in the Tohoku area came to about 5.3 billion yen for the quarter, though some of that cost would be offsetby insurance. It also said the recovery from the March 11 quake was progressing “faster than anticipated.”
Meanwhile, Sony has been battling slow demand for its high-end Bravia TVs amid growing globaleconomic woes and heightened price competition.
Though Sony saw brisk sales in Japan before the country’s switch earlier this month from analog to digital broadcasting, sales in the United States and Europe were sluggish, the company said.
Slower personal computer and video camera sales helped to bring sales of Sony’s consumer products division to 732.3 billion yen, down 17.9 percent from the same period the previous year.
A strong yen — about 13 percent stronger against the dollar in the latest quarter, compared to the previous year — further hurt Sony profits. A strong Japanese currency makes Sony products more expensive, and therefore less competitive, overseas. It also erodes the company’s overseas earnings when they are repatriated.
Sony also suffered a series of hacker attacks on its Web sites and online services, including its popular PlayStation Network, which the company was forced to shut down in April. The network was fully restored earlier this month, but not without damaging the reputation of Sony’s online business.
Sony Ericsson, Sony’s long-suffering mobile phone joint venture with the Swedish
telecommunications giant, posted a dismal quarter, with sales down 32.1 percent from the same period last year. Sony blamed the poor performance to a lack of criticalcomponents in the wake of the earthquake and a fallin shipments of cellphones as consumers shifted to more advanced smartphones.
Sony’s movie division was a bright spot, with sales up 9.3 percent in the quarter from the previous year to 144.4 billion yen on home entertainment releases of titles like “The Green Hornet.”
Sales at Sony’s music divisionfell 0.6 percent to 109.6 billion yen, however, despite a new release from Beyoncé and albums tied to the hit American TV show “Glee.”
Still, Sony has two products in its pipeline that it hopes will lift sales. The company has said it will soon sell its first tablet computer2), following a flurry of companies trying to recreate the runaway success of Apple’s iPad. Sonyis also set to introduce3) its next-generation portable videogame player, the PlayStation Vita, later this year.
Shares in Sony fell 1.1 percent to 2,013 yen in Tokyo trading before the earningsannouncement. Sony shares have fallen 30 percent this year, farunderperforming Japan’s benchmarkNikkei 225 Stock Average, which has fallen just over 3 percent.
Notes:
1) См. Раздел “Грамматические трансформации в переводе” п.9.7 стр.422 “Служебные слова “as”
2) Tabletcomputer=компьютер-планшетник
3) См. Раздел “Грамматические трансформации в переводе” п 4.2 стр.408 “Инфинитивные конструкции”
Part 1 Unit 2 Section 3 SALES. THE BOTTOM LINE ON MARGINS
The International Herald Tribune
July 28, 2011
Exxon Earnings Rise 41%
NEW YORK (AP) — Exxon Mobil Corp. said Thursday that higher oil prices and improved refining marginsboostedits second-quarter profits 41 percent.
The largest publicly traded oil companyreportedearnings of $10.68 billion, or $2.18 per share, for the three months ended June 30. That compares with $7.56 billion, or $1.60 per share, for the same part of 2010. Revenuegrew 36 percent to $125.5 billion.
It's the highest profit for Exxon since it set a corporate earnings record of $14.8 billion in the third quarter of 2008. But the results fell short of Wall Streetestimates of $2.30 per share. Revenue topped projections of $119.2 billion.
Higher oil prices also boosted earnings for Exxon's European rivals BP and Royal Dutch Shell PLC in the second quarter.
Oil and natural gas prices rose during the quarter, and Exxon took advantage of those increases by cranking up production 10 percent. Its production businessincreased earnings 60 percent to $8.5 billion.
Much of that added production was in natural gas, however. Natural gas prices rose less than 1 percent to $4.38 per 1,000 cubic feet during the quarter, while benchmark oil prices rose 31 percent to $102.34 per barrel.
Profits dropped, however, for Exxon's international refineries. Profits also dropped 3 percent to $1.3 billion for Exxon's chemicals operation because of lower sales volumes and higher taxes.
Sharesfell $1.71, about 2 percent, to $81.60 in premarket trading.1)
Notes:
1) Premarket trading=a period of trading activity that occurs before the regular market session. The pre-market trading session typically occurs between 8:00 - 9:30 A.M. EST each trading day. Many investors and traders watch the pre-market trading activity to judge the strength and direction of the market in anticipation for the regular trading session=осуществлениесделоксценнымибумагамидоначалабиржевойсессии
Part 1 Unit 3 Section 1 KEY ECONOMIC INDICATORS
Reuters
August 26, 2011
U.S. Economy Grew Slower in Spring Than Previously Reported
WASHINGTON (AP) — The nation’s economy grew at an annual rate of 1 percent this spring, slower than previously estimated, the Commerce Department said Friday. The downward revision is stoking fears that the economy is at risk of anotherrecession.
Fewer exports and weaker growth inbusiness stockpiles led the government to lower its growth estimate for the April-June quarter from the initial 1.3 percent rate.
The economy expanded only 0.7 percent in the first six months of the year, the agency said.
Nine of the last 11 recessions since World War II have been preceded by a period of growth of 1 percent or less, economists note.
“The economy is teetering on the edge of a renewed recession,” said James Marple, an economist at TD Securities. “Any renewed shock could1) push the economy over the edge.”
Economists said the revision had not changed their growth forecasts. Most expect slightly better growth — roughly 1.5 to 2 percent — in the second half of the year.