International -- Readers Report
The Myth of Britain's Economic Prowess
"Europe's new sick man?" on Britain's economy only touches the surface (European Business, Dec. 16). Depending on whom one believes, around 60% of present British gross domestic product is comprised of retailing--mainly of imported goods. The balance of trade deficit is huge and growing, month to month. The Bank of England is afraid to damp down out-of-control consumer borrowing by hiking interest rates since this would certainly cause the overheated residential-property market to implode.
Because the Confederation of British Industry and their ilk represent large corporations, they like low interest rates. Yet the spread between base rate and effective borrowing rate has never been greater for small and midsize enterprises, which create nearly 50% of both GDP and employment. The manufacturers screaming to join the EU are mainly foreign-owned and invariably "screwdriver" assembly plants, with the majority of value added abroad. It is high time that the myth of The Great British Economy is seen in its true light: spin without substance.
Michael C. Feltham
Shoeburyness, Britain
Why Japanese Carmakers Are Lagging in Europe
"Negotiating Europe's curves" (European Business, Dec. 16), about Japanese automobile companies, missed three points: First, Nissan Motor Co. is at a disadvantage in Europe because its cars are built in the sterling zone, which makes them more expensive than others built on the euro zone Continent. Second, Toyota Motor Corp. just opened a factory in Valenciennes, in the north of France, that is producing the Yaris for less than it would cost to ship it from Nagoya. That would explain [its popularity]. It's a good car at a good price.
Third, the Koreans are offering good models at even better prices than the Japanese, yet nothing is mentioned about them. Their "invasion" might be more painful for the European carmakers (Fiat in particular) than that of the Japanese because their costs are so much lower.
A final point: A lot of new factories are being built in the East, and costs are lower there as well. Skoda, owned by Volkswagen, is doing well in Central Europe. Audi builds the TT in Hungary. Even San Francisco buses have their shells assembled in Hungary before being shipped to Alabama for final assembly on a U.S.-made chassis.
J.J. Lasne
San Francisco
Who Gave Woodward Classified Information?
In his review of Bush at War ("Inside the White House after September 11," Books, Dec. 16), BusinessWeek's Stan Crock states that author Bob Woodward "obtained access to numerous top-secret intelligence memos and notes." Shouldn't this statement set off alarm bells? In recent years extreme damage has been done to our national security because of inadequate safeguards of classified information. One recurrent security problem appears to have been that officials at the top have not always followed the same rules for protecting classified information that are supposed to apply to everyone.
Obviously, overclassification is an abuse of the system that should be conscientiously and strictly avoided, but there is also a need to recognize the the necessity of protecting information essential to national security. There should be an inquiry to determine if security procedures were violated in providing such highly classified material to Woodward.
Yes, it is desirable to inform the public, and yes, the media can help achieve that aim, but providing classified information is not a permissible means to that legitimate end.
James H. De Cou
Le Vesinet, France
The EC Is Tightly Monitoring Europe's Boards
"Will overseas boards play by American rules?" on the Sarbanes-Oxley Act (American News, Dec. 16), was untypically narrow, particularly regarding European compliance. You were wrong to say that independent audit committees are almost unheard of. In Germany, the Supervisory Board has such a role.
In Britain, any audit committee should be composed entirely of independent directors (or reasons as to why not given in the annual report). Persistent noncompliance will deter equity and at its most serious can jeopardize listing status. Furthermore, the appointment of auditors [is] one of the boards' reserved powers.
In general, you make little of the implications of the Sarbanes-Oxley Act for EC-based businesses, appearing to overlook the response of the commission and the fact that two companies have already withdrawn listing applications with the New York Stock Exchange. Fundamentally, Europe believes in principle, and the U.S. has been driven to increased belief in form. These divergent approaches will cause greater problems than you forecast.
Richard Joyce
London
This Customer Has a Message for AOL
I had to laugh (or cry) when you rated AOL "good" for customer satisfaction ("AOL: Anatomy of a long shot," Information Technology, Dec. 16). You write: "AOL is using analytical tools to figure out why people leave and is quickly fixing things." We ex-CompuServers know different. After buying out CompuServe a while back, AOL decided this year to partially close it down. If you were at CS.com in Britain, tough. Sure, we could transfer to AOL. But, astonishingly, AOL offered no auto-forwarding of e-mail--unlike when they'd wheedled us to upgrade from the old CompuServe to CS. (Ironically, the old CompuServe in Britain has not been closed.) Do they explain? For the world's largest communications company, communicating is a skill they've yet to master. Result: massive and lasting ill will. Oh, and the best bit: When I bulk e-mailed all my contacts to tell them of this enforced change of address, AOL blocked me for spamming. Yours, amid 'aols of protest,
Aidan Foster-Carter
Shipley, Britain
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