Asian-crisis spillover effect on European increasing
Asian-crisis spillover effect on European increasing
PARIS (AFP): The Asian economic crisis is having an increasing effect on European businesses as Asian companies scale down their ambitions in Europe and because many firms fear increased competition from Asian exports.
U.S. auto giant General Motors was the latest to blow the whistle this week, warning of job cuts of up to 30 percent in its European workforce over the next five years to cope with a flagging European auto market and the prospect of cheaper Japanese and South Korean exports because of the fall of the yen and the won.
South Korean industrial giants Samsung, Daewoo and Hyundai have meanwhile delayed or scaled down expansion plans in Europe until the situation at home improves, disappointing hopes of new jobs in a region already suffering from historically high levels of unemployment.
European officials insist that the Asian crisis will not hinder the successful introduction of the European Union single currency, the euro, in just a year's time, but it is still far from clear how severe an effect the continuing Asian turmoil will have on European economies and business this year.
Daewoo has put all its announced investment plans for Europe "on standby," a spokesman for the company said.
Work on a new factory to make glass for television tubes in Thionville in Lorraine, northeast France which was to have been operational by the end of 1998, creating 700 jobs, has been delayed, and a decision on the project is expected in the spring, the spokesman said.
The announced extension of the Daewoo-Orion television plant at Mont-Saint-Martin in Lorraine depends on the decision on Thionville, and a planned new refrigerator factory at Verdun to employ 230 people has also been delayed, with no date for a decision.
Daewoo Electronics had more than 4,000 employees in Europe at the end of 1996, and its announced expansion plans would have brought some 1,000 new jobs in France alone by the turn of the century.
The Samsung Group has meanwhile shelved plans for a 756- million-dollar expansion of its plant in Teeside, northeast England, which produces microwave ovens, computer monitors and color televisions.
However, a spokesman in London said that plans announced on Tuesday for a cut in overseas production of up to 40 percent this year would not directly affect Europe.
"This is not affecting Europe at all," the spokesman said. "Anything with Samsung on it is safe" in Europe.
The production cuts will apply to China and other Southeast Asian countries, he said.