The restructuring of the world’s troubled multinationals continues. The trend has been particularly evident in industries like big pharma, where sales have fallen too fast to maintain expense levels. The most recent victim of poor sales, Nokia (NYSE: NOK), will cut 4,000 jobs and move manufacturing to Asia. Nokia has learned something from rivals Apple (NASDAQ: AAPL) and HTC. The cost of goods for smartphones is so low in places like China that profit margin pressures can be partially relieved.
Four Yahoo! (NASDAQ: YHOO) directors will leave the battered internet portal company. Those departing include chairman Roy Bostock, who has been blamed for Yahoo!’s inability to get a good CEO and to set a strategy for the firm to recover from a weak internet advertising market. Yahoo! added two independent directors, Alfred Amoroso and Maynard Webb. Amoroso served as president and CEO of Rovi Corp. (NASDAQ: ROVI) until December 2011. Webb, the chairman of LiveOps, served as that company’s CEO until July 2011. Neither has particularly impressive credentials. But, even if either did, Yahoo! set no policy to solve its most immediate problems. It still has not disposed of its ownership positions in Yahoo! Japan or China e-commerce firm Alibaba. Neither stake does anything to help Yahoo!’s business operations. The disposal of the shares would add substantially to the firm’s balance sheet.
No Greek Fix
All of the participants in the resolution of the Greek sovereign debt crisis continue to refuse to act in a way that would bring the problem to a head. The European Central Bank apparently is willing to exchange some of its debt for new paper, the result of which would be to cut that southern European country’s debt load. Private investors have mostly agreed to terms to cut the value of their debts. Most Greek leaders have buckled to pressure to cut more government costs. Some of Greece’s unions continue to march in the streets to protest wage cuts. And, day after day, nothing is resolved.
Airbus and Boeing Woes
Two of the world’s newest commercial aircraft continue to have mechanical problems. The Sydney Morning Herald reported that a Qantas Airbus 380 super-jumbo has wing cracks. It is not the first of the planes to have the problem. Airbus has suggested an inspection of the model. In the meantime, some remain grounded. Some of Boeing’s (NYSE: BA) new Dreamliner 787 will not make it to airlines on schedule. Support structures in the aft fuselage of the plane have developed gaps. That could cause a series of inspections and a probable slowdown in factory production.
Douglas A. McIntyre