Voting on Economic Visions
Economic issues dominate elections in Japan and Germany. Reformist Prime Minister Junichiro Koizumi seeks a fresh mandate from Japanese voters today after parliament's rejection of his plan to privatize the giant but inefficient postal savings bank system. And next weekend, in a crucial test of European liberalization, German voters will choose between Chancellor Gerhard Schroeder's modest reforms and a bolder program, including a possible "flat tax," offered by Angela Merkel's center-right coalition.
The Justice Department charged the National Association of Realtors with trying to prevent price competition by denying discount brokers access to its members' online listings. After a two-year investigation and months of negotiations, the Realtors thought they had satisfied government objections by preventing brokers from selectively denying listings to certain agents. But the government claimed in a lawsuit that even the more general "opt-out" policy could be used to thwart competition from discounters.
Bad Days at Boeing
Not a good week for Boeing. There was no progress in resolving a strike by more than 18,000 machinists who demand a big increase in pension benefits. The company lost a big order from China Southern Airlines to rival Airbus. Lead outside director Lew Platt, a former chairman of Hewlett-Packard, died suddenly of a brain aneurysm. And the Wall Street Journal reported that the defense giant may pay as much as $500 million to avoid criminal charges over a revolving-door scandal and theft of a competitor's proprietary information.
E.U.'s Textile Breakthrough
With 80 million shirts and trousers collecting in warehouses and retailers warning that they could soon run out of bras, Europe struck a revised agreement with China on import quotas. The new agreement will allow European importers to borrow from next year's quotas. Meanwhile, similar negotiations between the United States and China reached a stalemate, with the United States threatening to impose unilateral limits on import growth. Talks are set to resume later this month.
Carlyle Taking Stakes
A busy week for the Carlyle Group. The Washington-based private equity firm is one of three buyers for Ford's Hertz unit in a deal valued at $5.5 billion, plus assumption of debt. After months of on-again, off-again negotiations, Carlyle also agreed to invest $400 million for a 24.9 percent stake in government-controlled China Pacific Life Insurance. Carlyle also announced it would buy the leading publisher of job placement magazines in Japan for an undisclosed sum, and a British maker of child auto seats for about $400 million.