G.O.O.D

Source:  WKBN/WYFX

The unemployment claims systems in Ohio and at least two other states buckled this week under an onslaught of telephone calls and Web site hits from people who lost their jobs at the end of 2008.

The Ohio Department of Job and Family Services said its telephone hot line generally receives about 7,500 calls a day, but has been getting about 80,000 each of the past two days.

Spokesman Dennis Evans says the hot line was up and running normally after a crush of callers and technical problems made it difficult to get through beginning Monday. He said the section of the state’s Web site that enables people to make claims online remained down.

Officials are backdating claims to the beginning of the week due to difficulties claimants may have accessing the system by deadlines.

Unemployment claims systems in New York and North Carolina were experiencing similar problems due to a surge in callers.

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Source: WSJ.com

Acknowledging that earlier cost-cutting moves are insufficient due to the sustained economic downturn, aluminum maker Alcoa Inc. announced deeper work-force cuts, more plant closures and a 50% reduction in capital expenditures.

By the end of this year, there will be 15,000 fewer positions at the company, or roughly 14.5% of its current employees and contractors, Alcoa said Tuesday.

The moves raise the question as to whether other companies, which have instituted cost-cutting measures to conserve cash, will likewise find their efforts inadequate. Alcoa, which announced a round of cost cutting in the fall when demand for commodities and availability of credit began to drop, said the sustained economic downturn was forcing even more drastic moves.

“We will continue to monitor the dynamic market situation to ensure that we adjust capacity to meet any future changes in demand and seize new opportunities that emerge. These are extraordinary times requiring extraordinary actions,” said Alcoa Chief Executive Klaus Kleinfeld.

Alcoa said is instituting widespread salary and hiring freezes. Capital expenditures will be reduced by 50% in 2009 and the company’s aluminum smelting operation curtailments will be further reduced by another 135,000 tons to a total of 750,000 tons, representing about 18% of the company’s production.

Alcoa said that it was going to sell its electric systems business, automotive wheels business, global foil and transportation products business based in Europe.

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Technorati Tags: Alcoa, unemployment

Source: Reuters

Japan’s Sony Corp is likely to announce closures of Japanese factories and major divisions early next month, the Times of London said on Monday, but the company denied any such plan existed.

The maker of Bravia flat TVs and PlayStation video game consoles faces halting sales and mounting piles of inventory in the wake of the financial crisis, even as a stronger yen bites into earnings.

Sony, whose empire encompasses semiconductors, movies and insurance, is braced for a series of measures that would abolish some of its domestic operations and transform the electronic giant’s business, the Times said, citing company sources. “We do not plan to announce additional restructuring measures at this time,” spokesman Atsuo Omagari said, in response to the report. “We don’t have any such plan.”

Sony announced a $1.1 billion savings plan in its electronics division in December, but it needs further and bigger restructuring measures to secure growth, analysts have said.

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Source: The Associated Press

U.S. car parts maker Delphi Corp. has suspended work at a factory in Suzhou due to shrinking demand amid the global economic slump, a media report and a staff member said Monday.

The factory west of Shanghai in the city of Suzhou makes compressors for General Motors Corp. Calls to the plant rang unanswered Monday.

“The sudden and unprecedented decline in (car) sales globally has resulted in our only customer, General Motors North America, announcing plant closures and plant stoppages,” the Hong Kong newspaper South China Morning Post quoted a Delphi internal document as saying.

“Unfortunately our only customer in 2009 is GMNA, and this has placed the Suzhou compressor plant in a very dangerous position,” it said.

A staffer on duty at Delphi’s Shanghai office, which was closed this week for the New Year holiday, confirmed that the facility had temporarily suspended work due to the slowdown in demand as GM cuts back on output.

The staffer gave only his surname, Zhao, as is common with many media-shy Chinese.

Troy, Michigan-based Delphi is a former subsidiary of General Motors that filed for protection from bankruptcy in October 2005. It has more than $500 million in mainland Chinese assets, the Post report said.

China’s own once-booming auto market is seeing sales fall from double-digit growth rates as demand cools.

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Source: FT.com

Japanese industry suffered a record fall in output in November as unemployment continued to rise and household spending kept sliding, the latest set of gloomy figures from the world’s second-largest economy showed on Friday.

November’s 8.1 per cent month-on-month decline in industrial output, which followed a long series of bad news from Japanese government statisticians, was “particularly striking”, Kaoru Yosano, minister for economic and fiscal policy, told a news conference.

The data will increase pressure on authorities to do more to stimulate the economy, in spite of the government’s record Y88,548bn ($976bn) budget for the fiscal year beginning April 1 and the Bank of Japan’s recent cut in its policy rate to just 0.1 per cent.

The industrial output fall was the most rapid since the current index was introduced in 1953 and the Ministry of Economy, Trade and Industry said its survey showed manufacturers expected another 8 per cent decline this month.

Japan’s economy as a whole contracted in the second and third quarters of 2008 and many economists say a return to growth is unlikely until there is a recovery in demand from export markets, including the US, Europe and China.

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Technorati Tags: Japan , unemployment , household spending

Source: Reuters

WASHINGTON (Reuters) - U.S. consumers cut spending for a fifth straight month during November and their incomes shrank, according to a government report on Wednesday that pointed to deepening recessionary pressures.

The Commerce Department said spending contracted by 0.6 percent after falling even more steeply by 1 percent in October. Incomes contracted by 0.2 percent after a slight 0.1 percent gain in October, reflecting the strain that rising unemployment is putting on Americans’ ability to spend.

Wall Street economists surveyed by Reuters had expected an even steeper 0.7 percent fall in spending last month but had forecast that incomes would be flat rather than that they would shrink.

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