31/08/2011 World Business Report

parliament building. Those are the headlines.

Now, it is time for World Business Report.

The headlines: Stricken car maker Saab's owner posts its latest

results. Can they avoid being driven to bankruptcy? Do you -- the

eurozone reports its latest inflation figures.

Japan's factory output expands less than expected due to the strong

currency and slowing overseas demand.

It is difficult to make money when your production lines are turned

off and gathering cobwebs, in your suppliers halt delivery and you are

threatened with bankruptcy. These are the issues that face Saab.

Effectively, the carmaker has run out of money, leaving its staff,

parts makers and the taxman are all unpaid. Management is set to be

optimistic about securing a new money but time is running out.

Swedish Automobile cannot make higher earnings while Saab does not

make vehicles. The last time this production line was busy was last

spring. For the third month running, staff at getting paid late. This is

not the future Swedish automobile had in mind when it bought Saab

from General Motors one year ago. Saab still employs 3,500 workers in

Sweden and 1,100 distributors around the world depends on the

company for their business. The situation is now critical. Trade

unions say that if Saab does not pay its workers this week, they

could go to court to apply to have the company wound up.

It does not even own the buildings or the land that it operates from.

It has sold off various parts of the company to different investors.

If this latest threat goes ahead, they will be running out of things

to sell off to make it through this crisis.

To restart production at Saab, Swedish Automobile has sold stakes

in the company to Chinese manufacturers. In return, those

companies can sell and make Saab cars in China. But the deal has not

yet been ratified. If they were going to be the white light, it

would have happened by now. The Chinese many factories have in the

past been very intelligent in getting the best deal, often by

drawing the process out. It is possible that they are waiting to

pick up Saab at the best price. opinion of the industry is that the

Chinese companies will step in to rescue Saab. But in the future,

Saab may be a brand made and bought almost exclusively in China.

After two interest rate rises, a slowdown in GDP growth and an

unemployment right -- rate just under 10%, is the eurozone

inflation starting to look less frightening? The latest figures are

to be published later this morning. The Consumer Price Index is

forecast to remain unchanged. But the chief of the central bank has

revealed that the ECB will reassess inflation's risks at a meeting next

week, leading to speculation there could be a long pause before the

next interest rate rise. Thank you for joining us.

Did the ECB get sidetracked in some way by the inflation risk? It was

not a core problem of the eurozone but as we know, the ECB has a very

large collection with German banks. They had very strong inflation. If

you look at the previous rate hikes from the ECB, such as in 2008, that

was because of inflation. Meanwhile, the Federal Reserve and the Bank of

England were cut in interest rates. It was only later that be ECB

decided to join in. High inflation and a heady prices have led to them

hiking rates. The inflation rate is still above

target. There could possibly be another interest rate rise, then?

Potentially, but in the meantime, ECB does not actually look at the

inflation rate. They look forward as well to see what inflation might

do over the next few months and quarters. If it turns out that

growth has got cooler over the last few months, the ECB might decide

that it would be more intelligent to hold off on interest rate rises.

The rate is 1.5%. He's that good news throughout the US and?

would be. The ECB will stay on hold for an extended period of time. I

do not think it is the cost of credit that is the problem for the

economy at the moment. Instead, it is a loss of confidence in the

ability of policy makers to deal with the eurozone crisis. The ECB

is staying on hold and is trying to shore up confidence. Thank you.

Japan's recovery from the earthquake and tsunami could be

running out of steam. Industrial production data from July showed a

month-on-month gain of just 0.6%. That is less than half of what

economists were forecasting and well below the 3.8% gain in June.

It also follows we go than-expected retail and unemployment numbers

earlier this week. -- weaker than expected. How much of this is a

result of the strong currency? is indeed one of the main reasons.

The other factor is a slowdown of overseas demand from Europe and the

US, both impacted from economic uncertainties. The Japanese yen has

been very strong this year, appreciating more than 6% against

the US dollar and that adds to the urgency of the new Prime Minister

to put in measures to reverse the appreciation process. Recent moves

from currency intervention to aid exporters and transparency measures

have only had a very short-term impact on the yen. It has advanced

to a post-war high against the greenback and has threatened the

livelihoods of exporters. They are now revising their earnings numbers.

Production was still positive, however. That includes the likes of

transportation equipment and general machinery.

A judge in New York has overruled objections to a bankruptcy plan,

paving the way for the bank's creditors to receive compensation.

They will be awarded 20 on average for every dollar they say they are

owed. Leman Brothers collapse just under three years ago after making

bad bets in the sub Prime mortgage markets. Brazil's central bank is

set to leave the cost of borrowing on hold after five consecutive

interest rate rises. It comes one day after a run of bad news. The

country's biggest airline scaled back its plans. And the steelmaking

industry has put its forecasts up by 8%.

Land Rover has relief to -- released the first images of its

flagship model. Production of the new vehicle is scheduled for 2015.

Eight redesign is necessary because the current model will reach the

EU's rules on engine emissions. Elsewhere, two of France's biggest

names report their first half earnings. Onrnings. Ona tricky

period and is expected to be down 30% at just $82 million. The

vending is having an easier time at its earnings have almost doubled.

The Italian government begins its auction of its 4th generation

mobile frequencies. At least three Format out of five disabled people

in the UK are worried that reductions in their benefits could

force them to cut back on essentials like food and transport.

A charity questioned more than 2,000 people about government plans

to replace Disability living Allowance with a new benefit from

2013. From tending the garden to holding

down a job, this man is proof that using a wheelchair does not stop

you from being independent. Some of that is down to willpower but his

living allowance is also important. It pays for carers and a specially

adapted vehicle. The government's plans to overhaul the benefit has

left him worried. I would possibly lose my mobility vehicle and my job.

That is not what the government wants to do, the government wants

as many people as possible in employment. A recent demonstrations

like this one shows that others are just as concerned. The government

wants to replace the allowance with a new benefit, the personal

independence payment, saving �2 billion per year in the process.

Ministers say the new system will be rigorous but there, with more

assessments of recipients insuring that help goes to where it is

needed. A survey out today says that does not reassure some

disabled people. More than three- quarters of those questioned

thought they were being treated unfairly and the majority feared

that benefit cuts would reduce their independence, or making food,

bills and transport unaffordable. The switch to personal payments

will not happen for two years and the Department for Work and

Pensions says it is too soon to judge who will be affected. But for

some people, that means continued uncertainty. The reform touch is

not just on their finances but also Coming up: Breakfast with all the

day's news, business and sport. The headlines: More details have

emerged of future UN involvement in Libya. It looks like the UN will

help in setting up a police force in the country and they also

provide assistance in organise the elections. Ban Ki-Moon wants the UN

to respond as quickly as possible to any such requests.

I cannot overstate the urgency of this moment. Time is of the essence.

The people of Libya are looking to the international community for

help. The transitional government will be outlining specific requests

in the coming days. Amnesty International says that

nearly 90 people - ten of them children - have died in detention

in Syria over the last five months following anti-government protests

against President al-Assad. The remnants of Tropical Storm

Irene are still causing havoc in the north-east of the United States.

It is the smaller communities being hit the hardest. Torrential rain

has caused severe flooding in several states.

Police in Chechnya say at least seven people have been killed in a