DECEMBER 5, 2008
More bad news from F1 sponsors
The economic crisis that has engulfed the western world is hitting companies in many different fields. Williams sponsor AT&T, for example, has just announced 12,000 job cuts (4% of its workforce) in an effort to significantly reduce costs. The Texan company said that the cuts are necessary because of the changing financial environment. Another Williams backer, Philips, has warned that it will be making less money because of the economic downturn and there have been similar profit warnings from its rivals Sony and Toyota sponsor Panasonic.
Even the oil companies, which were booming a few months ago, are now under pressure with oil prices tumbling to four-year lows, with crude oil hitting $43.96 a barrel, the lowest level since the start of 2005. A barrel was selling at $147 in July. And there may be worse to come. Merrull Lynch has published a new report suggesting that oil prices could fall to $25 a barrel next year if the global recession continues. Japan's top oil refiner, Nippon Oil has announced that it is merging with smaller rival Nippon Mining Holding in an attempt to survive the weak demand. Gulf Oil chief executive Joe Petrowski said that he believes oil will go to $20 a barrel.
Banks around the world have been cutting their interest rates in an effort to stimulate cash flow but retailers are reporting that business is slow as they go into the most important period of selling in the year in the run up to Christmas.