February 1, 2001 (PLANSPONSOR.com) - General
Electric is reportedly planning huge job cuts that may
eliminate up to 75,000 jobs, or 15% of the workforce, over
the next two years, according to Business Week.
Those numbers are in addition to the 28,000 jobs that
were eliminated when Montgomery Ward, a GE subsidiary,
closed in winter 2000.
The magazine said the job cuts are primarily due to the
addition of 120,000 employees from the upcoming merger with
Honeywell International. That deal should be finalized in
the next few weeks.
After that occurs, sources said Honeywell should lose
50,000 jobs, (42% of its workforce) while GE may add to
that total by cutting 10,000 positions from its divisions
which are dependent on a robust economy. Business
Week said CEO Jack Welch spoke recently of “significant”
reductions in the GE workforce.
January 31, 2001 (PLANSPONSOR.COM) - Plan sponsors
considering some southern exposure for their private equity
investments should consider Brazil or Mexico.
You’re likely to find yourself in good company,
according to the PricewaterhouseCoopers Latin American
Business Center’s just released results of countries that
should have positive economic performance in 2001. Survey
participants include some of the nation’s largest private
equity funds.
About 44% of investors said Brazil would rank in the
plus column in terms of economic progress, while 22%
favored Mexico.
Survey respondents also noted that they were generally
satisfied (67%) with Latin America’s return on investment.
Problems noted by the remaining respondents include:
economic changes
post-deal integration
competition
About 29% of respondents said the best performing
sectors in 2001 are expected to be entertainment, media,
communications, and information technology. Financial
services (25%) should be the second most active sector for
investors, followed by:
energy (8%)
retail (4%)
consumer products (4%).
The U.S. private investors surveyed said they would like
to sell to a strategic buyer when they exit their current
or future Latin American investments. More than half,
(60%), ranked selling to strategic buyers as the preferred
exit strategy. About 40% said they want to sell to a
domestic strategic buyer. International IPOs were preferred
over domestic IPOs by the survey respondents.
When considering investing in a particular country,
respondents focused on:
economic stability
political stability
quality of the workforce
These factors were slightly different from those
surveyed in 2000, who said foreign investor treatment, not
the labor market, was a critical issue.
When analyzing a company for investment, the most
important issues were:
quality of management
viability of business proposition and strategy
quality of and accessibility to information
Price expectation is the number one impediment to
closing a deal, with absence of a strong management team,
acceptability of business practices and the seller’s desire
for majority control also high on the list of
obstacles.