BUSINESS BRIEFS
Japan's economy shrinks, plunges into recession
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TOKYO — Japan's economy slid into a recession for the first time since 2001, the government said today, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis.
The world's second-largest economy contracted at an annual pace of 0.4 percent in the July-September period after declining an annualized 3.7 percent in the second quarter.
That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction.
The result was worse than expected. Economists surveyed by Kyodo News agency had predicted an annualized 0.1 percent rise in the third quarter.
Japan's Economy Minister Kaoru Yosano said following the data's release that "the economy is in a recessionary phase," according to Kyodo.
But the worst may be yet to come in the wake of the global financial crisis, especially with dramatic declines in demand from consumers overseas for Japan's autos and electronics gadgets. Hurt also by a strengthening yen, a growing number of exporters big and small are slashing their profit, sales and spending projections for the full fiscal year through March.
AUTO INDUSTRY CALLED A 'DINOSAUR'
WASHINGTON — Hardline opponents of an auto industry bailout branded the industry a "dinosaur" whose "day of reckoning" is near, while Democrats pledged yesterday to do their best to get Detroit a slice of the $700 billion Wall Street rescue in this week's lame-duck session of Congress.
The companies are seeking $25 billion from the financial industry bailout for emergency loans, though supporters of the aid for General Motors Corp., Ford Motor Co. and Chrysler LLC have offered to reduce the size of the rescue to win backing in Congress.
Senate Democrats intended to introduce legislation today attaching an auto bailout to a House-passed bill extending unemployment benefits; a vote was expected as early as Wednesday.
A White House alternative would let the car companies take $25 billion in loans previously approved to develop fuel-efficient vehicles and use the money for more immediate needs. Congressional Democrats oppose the White House plan as shortsighted.
JPMORGAN PLANS WORLDWIDE CUTS
NEW YORK — JPMorgan Chase & Co. will likely start cutting thousands of jobs worldwide beginning next year, Britain's Sunday Telegraph newspaper reported.
The report, which cited people close to JPMorgan, said the bank has begun consulting on job cuts, and the cutbacks will likely be on a comparable scale to those of JPMorgan's rivals. Citigroup and Goldman Sachs have cut about 10 percent of their workforces.
A JPMorgan Chase spokesman declined to comment on the report.
The bank already has been eliminating jobs due to big profit hits from the financial crisis, and redundancies following the buyouts of failed thrift bank Washington Mutual Inc. and investment bank Bear Stearns Cos.
GOLDMAN EXECS DECLINE BONUSES
NEW YORK — Goldman Sachs Group Inc. CEO Lloyd Blankfein and six other top executives at the bank will not be receiving cash or stock bonuses for 2008, a spokesman said yester-day.
The decision was made by the seven executives themselves, said spokesman Lucas Van Praag, and approved yesterday by the Wall Street firm's compensation committee. The executives made the decision "because they think it's the right thing to do," Van Praag said.
Last year Blankfein received total compensation of $54 million, according to calculations by The Associated Press — making him the sixth-highest paid CEO at a Standard & Poor's 500 company in 2007. His salary that year was $600,000.
Goldman Sachs, like other financial institutions, has been struggling this year with the soaring mortgage defaults and the seize-up of the credit markets.
