In this issue:

Brazil Auto Workers 'Prepare for War' vs. Industry Layoffs

Beijing-Shanghai Maglev Still in the Running


From Volume 2, Issue Number 31 of Electronic Intelligence Weekly, Published Aug. 5, 2003

World Economic News

Brazil Auto Workers 'Prepare for War' vs. Industry Layoffs

Brazilian Volkswagen workers will strike against job cuts, after the company announced plans to lay off 3,933 workers at its Sao Bernardo and Taubete plants, Folha de Sao Paulo reported July 23. The workers voted to "prepare themselves for war" at a July 22 meeting of the Metalworkers' ABC union, charging that the company is violating job stability contracts that are supposed to remain in effect until 2006.

In Sao Jose dos Campos, meanwhile, General Motors has laid off 450 workers, but many expect that figure to go higher. Auto companies say they have huge inventories, and must fire "surplus" workers, because there is no demand for new cars. Industry Minister Luiz Furlan has spoken of the need for emergency measures to help auto firms reduce their inventories (tax reductions on cars, for example), but indicated that any program of this type would have to be approved by Finance Minister Antonio Palocci, who is known to oppose them. Renault also recently announced that it is "losing a lot of money" in Brazil, and that at present, "sees no way out" of the situation.

Beijing-Shanghai Maglev Still in the Running

The Transrapid Beijing-Shanghai Maglev project still has a good chance of going ahead, the German daily Die Welt reported July 29. The report noted that the German maglev was supported by former Prime Minister Zhu Rongji, who was also the former Mayor of Shanghai. Since Zhu left office in spring 2003, the Transrapid has been criticized by supporters of traditional railway systems within the Chinese Railway Ministry. This culminated in the announcement by the Ministry in early July that a decision on the technology—either Transrapid maglev, or high-speed rail like Japan's Shinkansen, or France's TGV—for the 1,300-km Beijing-Shanghai route would most likely be made before September, and that there was a 90% chance that China would opt for the Japanese Shinkansen.

The reaction, however, was a storm of protest inside China, clearly mixed with anti-Japanese sentiments. On July 10, the Chinese government announced that there would be no near-term decision. Nevertheless, an Internet-based initiative called "10,000 signatures against the use of the Shinkansen on the high-speed railway line from Shanghai to Beijing" was formed, and now has attracted more than 80,000 participants. The web page was named after the date of the Japanese invasion (www.1931-9-18.org).

Meanwhile, delegations from Tokyo are arriving in Beijing, trying to convince the Chinese government to use the Shinkansen. But Chinese Prime Minister Wen Jiabao has, for the first time, has directly intervened in the debate, saying there is no need for an immediate decision. Instead, he called on all the relevant institutions "to collect assessments from all sides, to make scientific comparisons, to draw conclusions, and to come up with detailed plans."

And influential government advisers, like scientists He Zuoxiu and Yan Luguang in Beijing, are backing the widespread use of maglev technology for the giant project of building a nationwide high-speed rail network. "We are thinking in terms of 50-year development," stated He Zuoxio. Therefore, he said, we should carefully think through our policies and not rush to immediate decisions. "The Transrapid is not at all obsolete," he said.

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