NEw SARS-likE viRUS EMERGES iN MidEASt - Kuwait Times

FREEPORT: Protest signs hang on the fence outside a camp set up by Sensata
Technologies workers in Freeport, Illinois. —AFP
Workers beg Romney to
stop Bain outsourcing
FREEPORT: Being told to train his
replacement was humiliating and surreal,
but Tom Gaulrapp said the worst part
was when the plant’s US flag was taken
down before the Chinese engineers
arrived. Gaulrapp decided it was time to
take a stand against outsourcing and the
man he blames for the loss of his job:
Republican White House hopeful Mitt
Romney, who founded the private equity
firm that owns the Freeport, Illinois auto
parts plant.
Romney’s ties to Bain Capital have
burdened the Republican nominee’s
hopes of winning the November 6 election
as Democrats unfavorably paint him
as a corporate raider who pioneered the
outsourcing of US jobs to countries with
lower labor costs. Romney denies the
charge, but his claim to be a man who
could revive the economy and boost the
prospects of American workers rings hollow
here.
Gaulrapp thinks it would only take a
phone call from the candidate who’s
vowed to create 12 million jobs in the
United States to save the 170 jobs at
Sensata Technologies that are about to
leave this already economically
depressed town of 26,000. “What we’d
like is a miracle,” Gaulrapp, who has
worked at the plant for 33 years, said
with a sigh that acknowledged how
unlikely it is that his wish will be granted.
“We’d like Mitt Romney to come to
Freeport, see what this is doing to this
community, and contact his friends that
run Bain Capital and say ‘this is absolutely
the wrong thing to do’ and save our jobs.”
The Romney campaign declined to comment
on the situation at Sensata, but a
spokeswoman contacted by AFP noted
that the former Massachusetts governor
retired from Bain in 1999 and his investments
there are controlled by a blind
trust, effectively nullifying his links to the
firm. Romney’s campaign recently set up
a website-business.mittromney.comdefending
his record at Bain and the
“thousands” of jobs he saved or created
by “fixing companies that were broken
and giving new companies a shot at success.”
“A Taste of the Romney Economy”
But the situation in Freeport is a classic
example of how what’s best for a
company is not always what’s best for
American workers, said Freeport Mayor
George Gaulrapp, who is no relation to
Tom. “You can’t keep sending your jobs
offshore and still have a middle class,”
said the mayor.
Plant worker Pam Lampros, 53, is worried
she’s going to lose her home so
investors like Romney can make a bigger
profit. “It just hurts after so many years of
hard work and dedication,” said Lampros,
a 34-year veteran at the non-unionized
plant who had hoped to retire from
Seaport delay highlights shaky Vietnam economy
HANOI: All that remains of a plan by
Vietnam to build a major deep-water
port is 114 exposed pilings trailing
into the South China Sea and a barge
full of rusty machinery. Foreign
investors stayed away from the $3.6
billion project and the indebted stateowned
company overseeing it bungled
the job. Earlier this month, the
government accused the company of
“financial incompetence” and suspended
the project. The prospects for
ever reviving it are dim. The abandoned
port in Southern Vietnam
stands as a symbol of the inefficiency
of the country’s Communist rulers,
and the need to reform a massive web
of state-owned enterprises weighing
down a once-booming economy.
Critics say it also shows how
provincial governments and stateowned
companies are allowed to pursue
expensive, misguided and often
corruption-laced infrastructure projects
that result in riches for the few,
but not economic growth that would
benefit the country of 87 million people.
The government is asking foreign
and domestic investors to bankroll its
flagship Van Phong port now that the
there. “It’s for corporate greed, more or
less.” Sensata, which is majority-owned
by Bain Capital, purchased the automotive
sensors unit from Honeywell for
$140 million in cash in January 2011.
With annual revenues of $130 million
and valuable patents, the unit was a
good buy. But with 75 percent of the revenue
generated in Asia, it made sense to
ship production to Sensata’s facilities in
China, the Netherlands-based company
said. “It’s better to be closer to one’s customers,”
Sensata spokesman Jacob Sayer
told AFP, citing transportation and other
logistical advantages.
Sayer acknowledged that the decision
to shift production to China is “an unfortunately
event” for Freeport and said he
understands why it could be “difficult” for
the workers to train their replacements.
He has no idea why-or if-the US flag was
removed before the Chinese engineers
and technicians arrived. “We didn’t
request it. I can tell you that,” Sayer said,
adding that the company has been leasing
the facility from Honeywell and has
no involvement in grounds maintenance.
The workers have had nearly two
years to prepare for the plant closure.
Some have found new jobs and those
who remained were given retention
bonuses to help keep operations going
until the last pieces of equipment are
shipped elsewhere. They got riled up in
June when Romney visited nearby
Janesville, Wisconsin and talked about
how jobs were his top priority-at the
same time they were being told to train
their Chinese replacements. After
months of pursuing Romney’s campaign
with protests and petitions, the Sensata
workers set up camp in the fairgrounds
across the road from the plant on
September 12 in hopes of drawing more
attention to their cause.
In a nod to both the “Hoovervilles” of
unemployed workers that sprung up
during the Great Depression and the
Occupy Wall Street movement, about a
dozen people have since been sleeping
in tents staked into the cold, hard
ground. Mark Schreck, 36, a registered
Republican, even brought his children a
couple of times.
“This isn’t a Republican issue or a
Democrat issue, this is an American
issue,” he said, noting it is the second
time his job has been outsourced to
China, despite both operations being
profitable-just not profitable enough.
“We’re in trouble. I’m not that old and
when I grew up American industry and
technology was huge. My folks and my
uncles all worked in good jobs and
retired from them,” Schreck said as he sat
by a smoking campfire on the windy fairgrounds.
“It’s hard to grasp how bleak it
is out there. I’ve been looking for work
since last January and I’m not finding
any.” —AFP
Vietnam National Shipping Lines, or
Vinalines, is out of the picture. But
analysts say that’s unlikely because
the project, which was slated to have
37 wharves, isn’t near any important
manufacturing bases in the region
and was impractical from the start.
A better option, they said, would be
developing road and rail around ports
in greater Ho Chi Minh City and also
developing a deep-water port near the
northern city of Hai Phong. A proposed
large port near Hai Phong has spurred
controversy lately over escalating costs
and potential dredging problems. Vu
Tu Thanh, Vietnam representative for
the Washington-based US-ASEAN
Business Council, said Vietnam has lost
the reputation it enjoyed a few years
ago for being among the most attractive
destinations for investment in Asia.
Would-be investors, he said, want the
government to push through largescale
economic reforms that will weed
out the most inefficient state businesses.
“There’s nothing inherently
wrong about having state-owned
enterprises involved in big, capitalintensive
projects like ports,” said
Thanh, whose advocacy group repre-
23 BUSINESS
sents American companies in
Southeast Asia. “The problem is: Do
you have the right SOE there?”
“The typical answer in Vietnam is:
You don’t.” Vietnam has a coastline of
3,200 kilometers (1,988 miles) - longer
than American’s west coast and a
prime location on the South China
Sea, which includes some of the
world’s biggest shipping channels. But
its lack of linked-up infrastructure puts
its ports at a competitive disadvantage
compared with long established global
trade hubs such as Singapore,
Shanghai and Hong Kong.
As a result, manufacturers here are
often forced to first send containers
to those larger ports from where they
are then shipped to Europe and
North America. Businessmen and
observers say the port sector is a
good example of how political
patronage and entrenched corruption
are undermining the country’s
development.
Vietnam has about three dozen
seaports and several high-quality terminals
that welcome international
shipping lines, but no major port
with swift connections to efficient
roads and rail. “All the coastal
provinces want a deep-sea port,” said
Nguyen Xuan Thanh, director of public
policy programs at the US-funded
Fulbright Economics Teaching
Program in Ho Chi Minh City. “The
central government needs political
support from these provinces, so
they don’t say no to these proposals.”
“Everybody wants a piece of the
action,” he said. In 2010, state-owned
ship builder Vinashin came close to
collapse with debts of $4.5 billion,
leading to a sovereign credit rating
downgrade and sounding the alarm
on a major pressure point in Vietnam’s
economy.
Last month, police arrested two
former senior executives at one of the
country’s largest banks. The banking
industry has run up massive bad
debts in recent years, many of them
made to state-owned companies.
Vinalines has also come under
scrutiny. In March, police arrested several
of its executives and accused
them of mismanagement in the purchase
of a floating dock that resulted
in losses of about $5 million. In May,
government inspectors issued a
TUESDAY, SEPTEMBER 25, 2012
German business mood
worst since mid-2009
Economists warn of Q3 contraction
BERLIN: German business sentiment dropped
for a fifth straight month in September, raising
fears of recession as companies struggled
with what they said was the worst economic
outlook since mid-2009. Germany’s relative
resilience to the euro-zone debt crisis has
been steadily fraying as its firms see falling
demand for their products from European
partners and signs of a slowdown in other
markets. The European Central Bank’s plan for
potentially unlimited government bond-buying
has raised hopes on financial markets of
an end to the most acute phase of the crisis,
but that optimism has not spread to company
boardrooms.
The Munich-based Ifo institute’s monthly
sentiment index reached its lowest since early
2010 and Ifo economist Klaus Wohlrabe told
Reuters the outlook was the worst since May
2009. “Today’s Ifo index shows that German
companies remain sceptical about the economic
impact of (ECB president) Mario
Draghi’s magic,” ING Bank economist Carsten
Brzeski said. “Despite fears of a looming eurozone
break-up clearly fading away, German
businesses are downscaling their expectations.
The German economy could see a contraction
in the third quarter.”
Ifo said its business climate index, based on
a monthly survey of some 7,000 firms, fell to
101.4 in September from 102.3 in August,
defying expectations for a slight rise to 102.5
in a Reuters poll of 45 economists. In its
monthly report, the Bundesbank said the
domestic economy was robust, but added it
saw signs of “weaker dynamics” and “great
uncertainty”.
Foreign trade could be hit more strongly
than before by developments in the euro
area, the central bank added, also pointed to
the labour market, where the rise in employment
is slowing as companies become less
willing to hire. Dutch business confidence also
fell in September to -6.7 points from -4.6 in
August, other data showed yesterday, adding
to signs that the euro-zone’s stronger “core”
economies are succumbing to the downturn.
While they have not been punished by
debt markets like much of the euro’s southern
half, both Germany and the Netherlands have
slashed public spending to secure the future
of public finances. “The drop in Ifo business
confidence is a potent reminder that the outlook
for the German and euro-zone
economies still hangs in the balance,” said
Holger Schmieding, German economist at
investment bank Berenberg. “Further policy
steps to contain the euro crisis may be needed
for the euro-zone to turn the corner.”
Tough cuts
While the German economy steamed
ahead in the first three months of the year,
saving the euro-zone from recession by growing
0.5 percent, it lost momentum in the second
quarter, with growth slowing to 0.3 per-
cent. Dragging on the Ifo index in September
was a sharp decline in sentiment among manufacturers,
although companies in retailing
and wholesaling reported a slightly brighter
mood. Last week’s ZEW survey also showed
German analyst and investor morale picked
up in September.
Industrial group Bosch and steelmaker
ThyssenKrupp , have announced plans to
introduce “Kurzarbeit” or government-subsidised
short-time work at German plants. The
index would have fallen further had it not
been for a ruling by Germany’s constitutional
court on Sept 12 in favour of the ratification of
Europe’s permanent bailout fund. Half of the
responses in the survey came after the ruling.
The Finance Ministry warned in its monthly
report last Friday that data pointed to weaker
growth in the remainder of the year. Many
economists are now predicting a contraction
for the third and possibly the fourth quarters.
Another forward-looking indicator, the
Purchasing Managers Index (PMI), last week
showed Germany’s private sector shrank for a
fifth month, and a separate index for the eurozone
showed that the ECB’s bond-buying plan
had so far failed to inspire any major improvement
in business at ailing euro-zone companies.
However, economist Gerd Hassel said he
believed news of the ECB’s bond-buying plan
had yet to fully sink in. “I’m optimistic that the
Ifo climate index will rise again in the coming
months,” he said. —Reuters
Dreamliner brings jolt of excitement to flying
TOKYO: As the Boeing 787 Dreamliner
nosed upward into the clouds, the
engines purred rather than roared. The
recent All Nippon Airways domestic
flight was anything but a routine route
for many passengers. A year after ANA
launched the world’s first 787 flights,
Japanese travelers are still agog.
Passengers craned necks to glimpse the
big bird at Haneda Airport. And as they
boarded, many whipped out digital
cameras and iPhones and started shooting
pictures like paparazzi setting upon
Justin Bieber.
In an era when flying is more about
diminished expectations than adventure,
airlines like ANA hope the technologically
advanced midsize 787 will put
some of the thrill back into the air at
35,000 feet. So far, it seems to be working.
“Many, many people are excited,”
ANA flight attendant Shoko Yoshimura
said aboard the recent 787 flight from
Tokyo to Fukuoka on the island of
Kyushu. Silicon Valley travelers will get
their chance to board the Dreamliner
when ANA begins its five-day-a-week
787 route between Mineta San Jose
(Calif) International and Tokyo’s Narita
International airports on Jan 11. San
Francisco International spokesman
Michael McCarron said “two or three”
carriers he declined to identify expect to
start flying 787s out of that airport next
year. But an Oakland (Calif) International
Airport official who asked not to be
identified said none of its carriers has
indicated plans to use 787s in the near
future.
The 787’s high-ceiling cabin glows
with pastel colors. Its spacious interior,
increased cabin pressure and higher
humidity are aimed at making crossthe-world
journeys less taxing on bodies.
And its fuel-sipping technology and
ability to cover long distances allows airlines
to tear up old business models that
left smaller market airports like San Jose
out of their flight paths. It hasn’t been
profitable for airlines to try to fill larger
aircraft - such as a 368-passenger
Boeing 777-300 - flying into secondary
airports. ANA is outfitting its long-haul
787 with only 46 business-class and 112
economy seats. “It gave us the opportu-
nity to open up new markets - even secondary
markets,” said Kohei Tsuji, ANA’s
director of network planning. Once ANA
gets more 787s delivered - it has so far
received 13 of the initial order of 55 - the
airline plans to expand its San Jose-
Tokyo service to seven days a week, he
said. ANA anticipates having 20
Dreamliners by the end of March.
According to Bloomberg, ANA agreed
Friday to buy 11 more Dreamliners for
delivery beginning in 2018, bringing the
total of ordered planes to 66. The plane
has quickly become the envy of the
industry. In a spring survey by ANA of
800 passengers who had flown its 787
between Tokyo and Frankfurt, Germany,
98 percent said they wanted another
chance to fly the Dreamliner, no matter
what airline’s logo was on the plane. A
quarter of them said they’d go out of
their way to board the new aircraft
again.
“The 787 offers an emotional experience,”
said Robert Herbst, an aviation
industry consultant who operates
AirlineFinancials.com. “That’s something
passengers haven’t had for a very long
time.” It offers perks that even those
who sit in the back of the plane in economy
can enjoy. Passengers stepping
onto an ANA 787 are greeted by flight
attendants standing in the chamber-like
entrance with a high ceiling - creating a
sense of airy space rather than the feeling
of entering a cramped tube.
“It’s a very beautiful plane and very
comfortable to ride on,” said one passenger
on the Tokyo-Fukuoka flight,
who would only give his first name,
Takahiro. He was particularly taken with
the lavatory enhancements - toilets
equipped with bidet spray options. Two
bathrooms also have windows.
“The bathrooms are especially wonderful,”
the 29-year-old gushed. “The
FUKUOKA: With rainbow lighting on the ceiling, passengers
disembark from an ANA Airlines Boeing 787 Dreamliner. —MCT
ceilings are high. You feel so much air. It
feels good. And it’s environmentally
kind.” Overhead bins are so high that
steps are built into the base of seats so
flight attendants can reach the compartments
without the risk of falling
onto passengers. The plane boasts one
of the largest galleys in the sky.
The plane doesn’t have shock
absorbers to smooth out bumpy air and
you still have to fasten your seat belt.
But as the 787 lifts off, the rumble of
engines is muffled. The twin engines are
equipped with noise-reducing chevrons
- jagged edges on the nozzles of the
engines - that lower the sound of jet
blasts by controlling how air passes
through and around them.
“It was quiet. I was surprised,”
Gonzalo Guerri, a Chilean tourist visiting
Fukuoka, said after he gathered his luggage
from the 787 flight. He liked the
aircraft’s overall ambience and new features,
including the iPhone chargers
built into seats. “It’s much more comfortable
than other planes,” Guerri said. “And
there are no blinds on the windows. You
just push a button. It was pretty cool.”
Indeed, the electronic shades are
among the most talked-about attractions
of the 787, whose windows are at
least 20 percent larger than those on
other jetliners. With a touch of a pillowy
button, passengers can darken the windows
like giant sunglasses that change
hues _ soft sky blue to dark aqua.
The e-shades, Boeing says, are a feature
in specially designed windows
embedded with a gel sandwiched
between two thin sheets of plastic.
When a very low voltage is applied to
the gel, the windows change colors.
Airlines around the world, which have
ordered more than 800 of the new
planes, view the 787 as an industry
game-changer. Half of the plane is
made of lightweight composites - highstrength
fibers embedded in resin -
allowing it to be 20 percent more fuelefficient
than other jetliners. With the
cost of jet fuel soaring some 300 to 400
percent in the past decade, airlines are
desperate to get the new plane. Fuel
accounts for 35 to 45 percent of an airline’s
costs, consultant Herbst said.
Boeing’s 747 - once called the Queen
of the Skies - opened up long-haul travel
for the masses in the 1970s by lowering
per-seat costs. The fuel-guzzling
four-engine behemoth, though, now
weighs on airline profits. The new 787,
Herbst added, “will have an economic
impact that is greater than any other aircraft
in modern history.” Even pilots are
excited about the new plane, whose
cockpit is equipped with a one-piece
window that offers better views, ANA
network planning director Tsuji said. It
also comes with a dual heads-up display
- or HUD - a sheet of glass mounted in
front of pilots that allows them to simultaneously
read flight instruments and
scan the horizon. —MCT
report saying the company had five
defaulted loans worth $1.1 billion and
had bought 73 foreign vessels, many
of which had run up millions of dollars
in losses. Earlier this month, Vinalines’
former head, Duong Chi Dung, was
arrested in a neighboring country
after an international manhunt.
The problems at the banks and the
state-owned enterprises have played
a major role in Vietnam’s economy
slowing from 7 percent growth in
2010 to just over 4 percent in the first
half of this year. Foreign investment is
also down amid inflation and the
inability of the country to build the
roads, electrical grid and bridges businesses
need to prosper.
“It’s very important that the government
continues to put infrastructure
very high on the agenda,” said Peter
Smidt-Nielsen, general director for
Vietnam and Cambodia at global shipping
company Maersk Line. “If you
have growing trade and you don’t do
anything about the infrastructure,
you’ll have more and more delays and
congestion, and that all leads to added
costs for exporters and importers,” he
said. —AP