Key Metrics and Supply Alert
Staff -- Purchasing, 12/9/2004
- The tech recovery appears to be losing steam as corporate buyers are getting fewer dollars. Companies are squeezing more out of what they have on hand and buying cheaper technology: Growth in corporate technology spending slowed to 9% in the third quarter after rising 15% in the first half. Goldman Sachs's most recent survey of 100 big corporate tech buyers found that just 23% expected their tech spending to grow more than 5% this year. By next year, Precursor Group, a Washington-based research firm, expects annual growth in technology spending to slow to 8.5%.
- Visteon has offered workers a lump-sum buyout, seeking to stem mounting losses now that vehicle production cuts at Ford Motor, its largest customer and former parent, are taking their toll. The Dearborn, Mich.-based parts supplier sent an e-mail to 8,300 salaried U.S. employees outlining the details of the offer. Workers trading in their jobs will get 1.5 weeks of their base salary for each year at the company, with a minimum of 12 weeks and a maximum of 52 weeks.
- Alcoa plans to build a $300-million anode plant in Norway with local partner Elkem as a way for both companies to save costs in the aluminum-making process. The plant will supply a key component to an Alcoa smelter under construction in Iceland and to a Norwegian smelter jointly owned by the two firms. Anodes are electrodes that conduct current into a smelting pot as part of the aluminum-making process. The companies say that making their own anodes will be cheaper than buying ones made by other firms.
- Preussag North America Inc., the 15th largest metals service center company in North America, is on the sales block. The Atlanta firm's German parent plans to divest steel warehousing activities in 2005. "Divestment of the firm that runs Ferralloy, Delta Steel and Infra-Metals distribution firms was just a question of time after Preussag converted from a steel/energy group into TUI, a tourism company," says a spokeswoman.
- Keep your finger on the pulse of the steel marketplace with Tom Stundza's monthly Steel Flash Report. It's available only by subscription at www.purchasingdata.com. Here's some of the October report: "Steel supply has been improving because of higher service center inventories and rising imports, so spot steel prices have weakened. Proof: Purchasing's steel price index dipped for the first time in 16 months to 170.2 in October from September's record-high 170.8 (January 1994=100). But, market analysts and insiders aren't sure whether this is the start of a downward price trend or just a fourth quarter blip."
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