European Business News (96-07-01)

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated July 1 15:20 CET

CONTENTS

[01] French car sales plunge 32 percent

[02] UK manufacturing activity picks up in June

[03] Northwest Airlines to buy back stock from KLM

[04] Yeltsin health worries ahead of wednesday's second round of elections

[05] Ireland assumes presidency of EU

[06] Lockheed Martin to cut £150m from Nimrod pact bid

[07] Lonhro decides against spinoff

[08] China won't get involved in European jumbo 747

[01] French car sales plunge 32 percent

PSA Peugeot Citroen's June car sales fell 36.3 percent to 42,800, including a 34.9 percent fall at the Citroen unit and a 37.5 percent fall at the Peugeot unit. Renault SA's sales fell 42.9 percent to 35,800.

Overall, sales slumped by 31.9 percent to 134,800 vehicles. Citroen sold 19,000 cars and Peugeot sold 23,800 cars in June.

France's soaring unemployment rate, which hit 12.4 percent last month, may have affected sales, the CCFA said. But it stressed that the June figures were in line with sales in 1991-1994, and the group predicted sales of 2 million cars by year's end.

Foreign carmakers also saw sales drop in June, by 17.4 percent overall to 52,600 cars. GM Europe sales fell 29.4 percent to 11,100 and Ford Europe fell 27.2 percent to 9,700. Fiat sales were off 5.7 percent to 11,100 while Volvo sales fell 28.4 percent to 300, BMW-Rover sales fell 34.6 percent to 2,300 and Japanese brand car sales fell 6.7 percent to 4,700 cars.

Bucking the trend was Mercedes, whose sales were up 5.4 percent to 900.

[02] UK manufacturing activity picks up in June

The index registered its first monthly increase in the manufacturing industry this year.

May's figure was previously reported at 47.1%.

The purchasing managers' prices index fell to 39.6% in June from a revised 44.6% in May. That brought the index to its lowest level since the survey began in mid-1991, CIPS said.

May's index was previously reported at 44.2%

[03] Northwest Airlines to buy back stock from KLM

The carriers, which have a longstanding operating alliance underpinned by U.S. antitrust immunity, have been at war since late last year over issues of control and corporate governance. This transaction, announced over the weekend, appears to be strictly financial and unrelated to their disagreements.

[04] Yeltsin health worries ahead of wednesday's second round of elections

Asked if the 65-year-old president had a heart attack, Chernomyrdin said he ''didn't notice any attacks.''

Chernomyrdin and Yeltsin met briefly at the president's residence outside Moscow.

''I didn't notice any attacks,'' Chernomyrdin said. ''As soon as the president shook my hand, any doubts I had disappeared. He nearly tore it off.''

''He has got a cold, and lost his voice,'' Chernomyrdin said. ''I don't see any particular problem here.''

Yeltsin, looking tired but speaking firmly, made his first significant public appearance in days, urging Russians in a televised speech to vote in the presidential runoff two days away.

Yeltsin, who last year was hospitalized twice for serious heart trouble, kept up a heavy campaign schedule all spring.

[05] Ireland assumes presidency of EU

Prime Minister John Bruton has identified four priorities: a European crusade against drugs, finding jobs for the EU's 18 million unemployed, rewriting the EU's founding treaty to prepare the group for letting in East European nations and finalizing plans for an EU currency to be launched in 1999.

[06] Lockheed Martin to cut £150m from Nimrod pact bid

The contract to replace the existing Nimrod airplane is heavily contested, with Lockheed Martin offering a new design incorporating GEC-Marconi electronics.

British Aerospace has offered a lower-cost partial rebuild of the Nimrod.

Lockheed Martin and GEC have asked the Ministry Of Defence for a 90-day grace period to prepare a lower bid in an effort to compete with British Aerospace's refurbishment cost.

Lockheed Martin says it can offer a reduced bid because it will use an existing management team from its recently acquired Loral unit. Lockheed also said U.K. contractors have given their assurances to cut costs in an effort to secure the order.

[07] Lonhro decides against spinoff

Announcing a 15% rise in pretax profit for the six months through March, Lonrho said it is considering other options, including the flotation of its non-mining businesses.

The company also announced plans to buy out the one-third stake in its U.K. Metropole Hotel chain held by Libyan Arab Foreign Investment Co. for $389 million.

[08] China won't get involved in European jumbo 747

Moreover, China must concentrate on development of a 100-seat regional jet after South Korea's withdrawal from the project, said unidentified analysts cited by the official newspaper.

As reported, Airbus Industrie SA recently said it viewed China as a potential partner and customer in the European consortium's proposed 550- seat commercial jet project.

Page last updated July 1 15:20 CET

However, China won't 'run the high commercial risk of involvement in such a project since production of its existing priority 100-seat airliner has not yet begun,' the analysts are quoted as saying.

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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