Greenspan: Recession Probably Still Coming
Former Federal Reserve Chairman Alan Greenspan says that the likelihood of a U.S. recession is still more than 50 percent. Some analysts have been backing off predictions of recession. A revised report on first-quarter U.S. economic growth is due Thursday. While Greenspan told the Financial Times that it's too soon to tell if the worst is over, he expects house prices to fall 10 percent more from February's levels before turning around. Greenspan said he sees a "tug of war" in the economy between strong corporate liquidity and the weak financial sector.
James Pethokoukis of U.S. News wrote about five ways the next president can fix the economy.
LG May Bid for GE Appliance Unit
South Korea's LG Electronics said it is considering buying General Electric's appliance unit. LG, South Korea's second-largest electronics company, is a major appliance manufacturer and cellphone maker. LG acquired the last major American TV maker, Zenith, in 1999 and is known for its affordable, European-designed washing machines. The company's CEO said fast-growing LG expects to achieve a 10 percent increase in sales growth, a 6 percent operating-profit margin, and a 20 percent return on invested capital by 2010.
Power Plant Construction Costs Soar, Study Says
A study to be released today says the cost of building power plants has more than doubled since 2000. The increase is bad news for both consumers and utilities as demand for electricity rises. The Massachusetts-based Cambridge Energy Research Associates conducted the study, which calculated the costs of building materials, labor, design, and other elements of construction. What would have cost $1 billion in 2000 now would cost $2.3 billion, CERA found. It said costs have jumped 19 percent from a year ago and 69 percent from 2005.
Marianne Lavelle explains why we still need power plants.
Vodaphone CEO to Step Down
Arun Sarin, chief executive of Vodaphone, said he is leaving the British cellphone company in July and will be replaced by Vittorio Colao, the current deputy chief executive and head of European operations. Sarin has led the world's largest mobile phone operator for five years. The resignation comes as Vodaphone reported a 14 percent increase in revenue for 2007-08, to $70 billion. Adjusted operating profit for the year ending March 31 was $19.9 billion.
David LaGesse wrote about how Americans are using their cellphones.
Siemens Bribes Trial Gets Underway
A former manager at Siemens, a European engineering company, testified Monday in a German court that he paid "commissions" to secure orders and set up slush funds. Investigators say they've identified $2.1 billion in possible bribes that could have been used to win contracts in several countries. Reinhard Seikaczek, who is cooperating with the prosecution, is accused of paying $39 million in bribes to win business. Seikaczek testified that the company kept off-the-record accounting books that were used to track bribes. He told the court he used Post-it notes to mark potentially incriminating documents so they could quickly remove the evidence of wrongdoing. Seikaczek worked for a mobile telephony division of Siemens that was folded into a joint venture with the Finnish mobile phone company Nokia.
Japanese Drug Maker Links Up With Alnylam
Japan's Takeda Pharmaceutical and the U.S. biotech company Alnylam announced a research partnership. Takeda said today it will pay $100 million to Cambridge, Mass.-based Alnylam, which would give it first dibs on negotiations to develop and market Alnylam programs in Asia. Takeda bought U.S. biotech company Millennium Pharmaceuticals for $8.8 billion in April, the second-largest acquisition made by a Japanese company in the United States, and Alnylam entered a $1 billion partnership last year with the Swiss drug maker Roche.
Corrected on 5/27/08: A previous version of this article incorrectly reported which company has a partnership with the Swiss drug maker Roche. Alnylam has the partnership.
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