Business Leap Frontier

Telecom equipment manufacturer Nortel Networks announced on 19 June that it would sell its modern wireless technology to Nokia Siemens Networks for US$650 million. Additionally, it was getting progress in discussion to sell its some other businesses. Leading North American producer of telecommunications gear Nortel distorted into bankruptcy in January and it blamed the severe economic crisis for devastating a turnaround effort which started in 2005.

Joint venture of Nokia & Siemens, Nokia Siemens made an unsolicited proposal for parts of NA Nortel’s carrier network group. However, the worth and scope of the agreement had been unclear. The deal would allow Nokia Siemens to get bigger its presence in North America. The deal makes it also a top supplier of wireless infrastructure equipments in the region.

Motor giant General Motor (GM) desperately tries to cut cost and stave of bankruptcy, as for that the announced plans to close up 1100 of its dealership in US. It also plans to cut ties with 470 dealers of Saturn, Hummer and Saab. GM is also negotiating with the unions to reduce wage cost.

Meanwhile on Thursday, the rival of GM, Chrysler said that it would closing 789 US dealers as part of a massive restructuring program.

GM said that

the 1,100 underperforming and very small sales volume US dealers…will be advised that GM does not see them as part of its dealer network on a long-term basis.

Mark LaNeve, the vice president of North American sales for the carmaker explained

It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient,

GM now has 6246 dealers in US and they are planning to cut the number to 3605 by the end of next year. The car makers are hopping that the move will reduce cost. However, others argue that dealerships, as permits, are not a cost to the company and produce much needed revenue. Mr. LaNeve said that many of the dealers selling less than 35 vehicle annually.

Japanese electronics giant, Hitachi Ltd suffered its worst-ever yearly net loss for the financial year 2008 that finished in March.

The company said its gross loss for the third economic quarter totaled 4.14 billion dollar (371 billion yen), evaluated to a 12.5 billion total revenue a year earlier. Shares of Hitachi Ltd fall 17 per cent to their lowest in twenty-nine years after it shocked shareholders with a record 7.8 billion dollar yearly loss warning. Tuesday, in a statement Hitachi said,

The economic outlook also remains unpredictable against a backdrop of concerns about slowing economic growth in China and emerging markets, the yen’s run up and falling share prices.

The company offered a cost-cutting program that also failed to fill confidence for a quick recovery.  In January, Hitachi declared job cuts of up to seven thousands as part of its rehabilitation plan. The company said it looks for 200 billion yen in savings by closing unbeneficial businesses and reformation factories.

China Telecom, the biggest telecom company of China reported that with the global economic downturn its unique conquers of profit in telecom market is loosing day by day. It has seen that first quarter earnings fall 27.4 percent.

But the telecom company doesn’t blame the global economic downturn. Because the main reason is that, Chinese being to favor the expand draw on of mobile phones. So the country’s fixed line telephone services falling back. Now the leading china telecom is in tough contest from various mobile companies such as China Mobile, which is today’s mobile phone leader in the country. So, now China Telecom is trying to take some proper modern steps to get back users. Already they have brought in high-speed internet access as well as latest mobile services.