PURCHASING HOTLINE

News and analysis for purchasing/supply chain management professionals

By -- Purchasing, 2/8/2001

Check out generators and microturbines to keep your office or facility running in an electrical blackout. Microturbines cost $30,000 to $50,000, about 50% more than diesel generators. Electricity produced by microturbines isn't cheap either at about 12¢to 15¢/kWh. It could be a bargain in California, however, where prices are spiking and supplies are lagging. Some experts say New York may also see spot blackouts this year. One option: Powe'r Gard Generators which are available up to 150 kW and made in Oshkosh, Wis.

Business travel costs slow. High fuel and labor costs, skittish stock markets, and warnings of a weaker economy ahead are having no discernible impact on demand-or prices-for business travel this winter. Travel Industry Association of America believes that levels of business expenditures will set another record in 2001, rising 6.5% this year (after increasing 7.3% last year). Costs are seen moving up 4.1%, after rising 6% last year.

Keep an eye on financial stability of suppliers. Loan defaults by U.S. companies could jump by nearly 50% in 2001 from last year, according to analysts at Salomon Smith Barney.

Consolidation in the global truck industry will continue this year, according to analysts at Merrill Lynch. The merger between Volvo and Renault is just another step along the road to a complete restructuring of the global truck business. DaimlerChrysler, Volvo-Renault and Paccar have formed a super-league of truck makers. Their capacity expansions, made larger through mergers, all have been driven by economies of scale, rationalized purchasing and overcapacity.

ExxonMobil Chemical is expanding output of oriented polypropylene at its manufacturing plant in Shawnee, Okla. The facility will add more than 30 million lb/year of capacity by late 2002. It also will have a new orienter, high-tech equipment that converts polypropylene plastic into the thin, continuous rolls of film used in automated packaging equipment.

U.S. unemployment rate is holding steady at 4%, according to Labor, but a wave of job cuts is washing across the Internet. An estimated 41,515 Internet employees have lost their jobs from 426 companies since December 1999, according to outplacement firm Challenger, Gray and Christmas.

Study strategic purchasing in the chemical process industries. Purchasing's Sourcing Strategies in the CPI is full of sourcing ideas on a variety of chemicals and services. To order a copy, send $34.50 plus $2.50 for shipping and handling to PURCHASING Magazine, P.O. Box 497, New Town Branch, Boston, MA 02456. For credit card orders, call (617) 558-4348. Or check out our bookstore at www. Purchasing.com.

Look for discounts of 10%-20% on personal computers. Producers are fighting for market share in the weaker economy. Best buys: laptops and handheld units.