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Letter
from the Chief Editor
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Thomson
- Reuters reports that the Geneva based
IATA, announced that the world's
airlines lost USD 3 billion in the
first quarter this fiscal. BA and
Air India are in big trouble and
casket cases. Air India has asked for
INR 150 billion (USD 3.25 billion
approximately) bailout package. Bailing out such
inefficient and ineffective organizations with tax
payers money will be unwise. Best is to
sell them out and merge with suitable
partners at the best possible prices.
The primary aim of the governments must
be to make organizations commercially
and economically viable in such
situations. If the organizations can't
sustain themselves, better they do not
exist. The very thought of public money
being used to prop up badly managed organizations is not
acceptable and tenable. Loss of jobs
cannot be an excuse and a reason. Since Singapore Airlines is looking for
acquisitions in India, why not talk to them to
takeover Air India's operations ? SA
is the top, most well managed and
respected airline in the world. There is no cultural mismatch
as it is an Asian airline. With price of oil hovering
around USD 72 per barrel, many airlines
do not have much of a chance to survive
independently. Sir Richard Branson said
that the easiest way to become a millionaire
is to start as a billionaire and open
an airline. Unfortunately, people in
the industry often forget that.
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Free
business news summary - Comment of the Week
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The sale of 'Hummer' brand owned by GM
to a Chinese company may not be approved by the top
economic planning agency of China known as NDRC -
National Development Reform Commission. Other local
agencies are also involved for approval of overseas
investments by Chinese companies. Another news
regarding GM is that the takeover of its German unit
'Opel' by Magna is getting delayed because an
improved offer from RHJ International of Belgium
is under consideration. GMs application to sell
itself in a new avatar to a New GM is awaiting
bankruptcy court's approval. The company
faces objections from its creditors, dissenting
bondholders, those with liability and asbestos
claims, unions and dealerships.
GM, resolved a key legal objection confirming that New GM
would accept Old GM's product liability in future, as
and when they arise. This is crucial in case of
accidents arising out of product failures. GM must
sell its assets to the new avatar before July 10,
2009 deadline fixed by USG, as otherwise it will
have to go into liquidation.
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Acquisition
or Buying an existing business
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In modern
business management parlance, buying an
existing business is known as an
acquisition. After the business is
bought, the process of integrating the
business with that of the acquirer is
known as a merger. Businesses need to
grow as otherwise they will perish.
There are two ways of growth: internal
or organic and acquisitions.
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