Intercultural Business News

Japan Airlines (JAL), which may have only enough cash to fund ten more days of operation, could be allowed to go bankrupt if a rescue package does not emerge quickly, the Government hinted yesterday.

The scramble to secure a viable future for JAL is primed to trigger turmoil throughout the global airline industry as rival alliances lunge for its extensive collection of international routes. For carriers in the United States, JAL’s crisis represents a rare opportunity to extend their foothold in the Asian market.

An American Buyout Poses Threat To One World

Two cash-injection offers, each worth more than $1 billion (£596 million), are now on the table for JAL as American Airlines and Delta Airlines vie to buy the critical partnership. If Delta could lure JAL to the SkyTeam alliance, analysts said that the move would deal a heavy blow to British Airways and other members of the OneWorld grouping.

Despite the offers, however, the market remained focused on the risk of bankruptcy. Yesterday’s surprise change of position by the Japanese Transport Minister could herald something most Japanese thought they would never live to witness: the Government allowing a national flag carrier to fail, exactly 22 years since it was privatised amid a great fanfare.

Read More>Times Online

Toyota, the world’s biggest carmaker, has unexpectedly clawed its way back to profit after a summer of scrappage incentive schemes in the US and Europe and a round of ferocious cost cutting. But the company was swift to quash any premature optimism over the state of the American car market, where it said conditions were still “very severe” and the company is battling to limit the damage of a 3 million-vehicle recall.

The company is also mulling over plans to significantly bolster its research and development presence in China – a market that it has failed to exploit with anything like the efficiency it has penetrated Europe and the US. The local R&D base would supposedly allow the Japanese company to better tailor its vehicles to the local market.

Toyota Boosted By Scrappage Scheme

Toyota’s return to profit followed the announcement on Wednesday that it would leave Formula One racing before the 2010 season begins – a move that may save the company about $300 million (£181 million) a year, but which will cause an estimated $200 million of international brand exposure to vanish overnight. The company’s tearful public withdrawal from the sport, said analysts, portends further aggressive cost-cutting.

The glimpse of Y21.8 billion (£146 million) of black ink at the end of the July to August quarter was a welcome surprise for investors, but is unlikely to prevent the carmaker from logging its first full year of losses since Toyota switched from making sewing looms to cars 60 years ago.

Read More>Times Online

McDonalds has announced that the three McDonalds outlets in Iceland are shutting down due to the island nation’s continuing financial crisis with no plans to return.

The decision was taken because business has become too expensive to operate. McDonalds have blamed the crisis on the “unique operational complexity” of doing business in an isolated country with a population of a mere 300,000.
(Source: gair rhydd)

McDonalds To Exit Iceland

The costs have doubled over the past year and even though sales have never been better the margin is so low that they feel they cannot sustain the business.

Read More>4Hoteliers

Google has won its highest-profile customer in its battle with Microsoft to provide e-mail and other internet services to businesses.

Los Angeles City Council has approved a multimillion-dollar proposal to use Google’s range of office products for its 30,000 workers.

The deal could be a landmark for the search giant as it seeks to wrest market share for office software from Microsoft and IBM. It introduced Google Apps, which includes e-mail, word processing and spreadsheet tools, three years ago.

Google Apps

The technology is positioned as a rival to Microsoft’s dominant Office suite of software, which helped to deliver $2.9 billion (£1.8 billion) in revenue for the company’s business division in the last quarter.

The city council voted unanimously for the $7.2 million deal to replace many of its computer systems with the Google Apps services, choosing this offer over competing bids from Microsoft and more than a dozen other technology firms eager to win America’s second-largest city as a client.

The vote came amid a push by Google to market its “cloud computing” Apps services — applications that run remotely on the company’s own servers, instead of users’ desktop machines — to governments and large, security-conscious corporations.

Read More>Times Online

SINCE it was unveiled in 2007 Amazon’s Kindle has dominated the fledgling market for devices that let users download and read electronic books. Now it faces a formidable challenge. On August 25th Sony unveiled a new, expensive electronic-book reader for the American market that will compete with Amazon’s offerings. Both firms are betting that demand for devices dedicated to displaying electronic text will grow explosively. They could be disappointed.

Although Sony has sold e-book readers in America for several years, the Japanese firm allowed Amazon to gain the upper hand with the Kindle, which offers users the novel ability to download books wirelessly from Amazon’s online store. Now Sony is trying to reassert its technological supremacy with its new device, dubbed the “Daily Edition”, which will be available in December for a hefty $399. This boasts not only a wireless link, but also a touchscreen interface that is much slicker than the Kindle’s clunky buttons.

The Sony "Daily Edition"

 Yet Amazon still retains one big advantage: its vast online book emporium. To level the playing field, Sony has struck a deal with Google that gives users free access to more than a million books scanned by the internet firm. It has also embraced an open electronic standard that lets customers buying e-books from Sony read them on other devices running the software. And it has inked deals with public libraries so users can borrow electronic books that disappear automatically when the loan period expires.

Read More>Economist.com