Today's other stories in brief
Japan seeks urgent action at G20 summit
Japan yesterday threw its weight behind US efforts to ensure next month's G20 summit focuses on the need for immediate co-ordinated action to support the world economy rather than long-term efforts to improve financial sector regulation.
In an interview with the Financial Timesthat highlighted the growing rift in the G20 ahead of today's pre-summit meeting of finance ministers, Kaoru Yosano, Japan's finance minister, said he understood the European-led push to focus on tightening financial regulation. But he suggested such issues appeared cosmetic compared to more pressing economic problems.
“We all agree but I personally feel: are these actions necessary at a time of crisis? What we ask at this moment is to save the life of the world economy, not to comment about its beard,” said Mr Yosano, who is also Japan’s minister for economic and fiscal policy.
His comments come amid a lively transatlantic debate about what the G20’s priorities should be at its April 2nd summit and the degree to which individual countries should commit to aggressive stimulus action.
Tim Geithner, US treasury secretary, on Wednesday called for the world’s biggest industrialised countries to commit to spending 2 per cent of their gross domestic product this year and next to stimulate the global economy.
European leaders, however, argue they have done their part and the debate should move forward. At a meeting with Angela Merkel, the German chancellor, President Nicolas Sarkozy of France said Europe had “already invested a lot for the recovery”. – (Financial Times service)
' Shareholder value' put in doubt
Jack Welch, the executive regarded as the father of the “shareholder value” movement, has said that the obsession with short-term profits and share-price gains that has dominated the corporate world for more than 20 years was “a dumb idea”.
The former General Electric chief said the emphasis that executives and investors had put on shareholder value since he spelt it out in an 1981 speech was misplaced.
Mr Welch, whose record at GE helped make shareholder value popular, said that it was wrong for managers and investors to set consistent earnings growth and steady share price increases as their overarching goal.
“On the face of it, shareholder value is the dumbest idea in the world,” he said. “Shareholder value is a result, not a strategy. . . Your main constituencies are your employees, your customers and your products.” Mr Welch spoke before yesterday’s news that GE, which he left in 2001, had lost its triple A rating from Standard Poor’s. – (Financial Times service)
Nortel aims to sell off divisions
Ailing telecom equipment maker Nortel Networks, which filed for bankruptcy protection earlier this year, is looking to break itself up by selling off major divisions, Toronto’s Globe and Mail newspaper reported yesterday. Instead of trying to rebuild itself under bankruptcy protection, the newspaper reported the company is considering offers from potential buyers who are interested in buying its wireless-gear business, as well as a separate division that manufactures office telecom equipment.
Nortel employs more than 500 people at its Monkstown facility just outside Belfast and approximately 300 in Galway.
