For the most part, you wouldn’t know an economic crisis is going on across the world. Sure, Statoil’s profits are way down, but unemployment and wage growth still look great compared to the rest of the world:
OSLO, Feb 16 (Reuters) – Norwegian wage growth is seen moderating in 2009 after years of brisk increases as the labour market weakens, economists said on Monday following a state commission’s estimate of the impact on 2009 wages from pay hikes last year.
Unemployment is rising in Norway because of the global economic downturn, but remains low by international standards. Registered joblessness rose to 2.6 percent of the workforce in January from 2.0 percent in December.
While I have heard people mention the economic crisis, it certainly hasn’t impacted the lives of most Norwegians. Although, perhaps there is a bit more to come if law firms are giving talks like this one.
The Norwegian government won’t save the the troubled car manufacturer. At least not directly.
"There are many companies that are in a demanding financial situation because of the financial crisis," Deputy Minister of Trade and Industry Rikke Lind told Reuters.
"The government cannot go in on the ownership side or provide loans to specific companies in today’s situation," she said.
But there is some hope for THINK:
The government has approved an increase in loan support for Innovasjon Norge, an organisation fostering small- and medium-sized companies, by 1 billion crowns to 2.5 billion, in effect from Jan. 1, 2009, from which Think could apply for loans.
It ain’t looking good, but there’s a small chance of survival.
The history of the Norwegian car industry is not particularly bright. Unlike most of the rest of the countries in Europe, the Norwegians never really made cars. The most famous attempt was the Troll, but only five ever made it off the assembly line. Interestingly enough, treaties protecting Norwegian fisheries basically killed the auto industry.
In the last decade or so, however, the industry has had a bit of a revival with electric cars. The most successful is the Buddy, a limited range car that is so tiny it can be parked perpendicular to the curb in parallel parking places. The factory has a production capacity of 500 cars a year and is available only in Norway, but sales seem to be on the upswing.
The most highly anticipated, however, is the TH!NK, a crash-tested and highway-certified electric car. It goes significantly faster than the Buddy and has up to 5 times its maximum range. Unfortunately, its plans for a worldwide rollout in 2009 look to be in lots of trouble:
Think Chief Executive Richard Canny told a news conference that the company was halting production and seeking state aid, warning that it would probably not survive without that assistance.
"We would not have taken these actions if it was not serious," he said on Monday, adding that the firm would need up to 200.0 million kronors in the short term through guarantees. The firm will lay off up to 70.0% of its staff and had hoped to restart production of its car, Think City, in the first quarter of next year.
Perhaps my headline is a bit pessimistic, but if I worked at the Buddy plant, I wouldn’t feel to comfortable with my job security. But it will be interesting to see if the government decides to give Think the money its asking for. In the current economic climate, it seems like a fairly high risk loan, yet the Norwegian government has proven that it is not adverse to owning significant stakes in Norwegian companies.
Just a follow-up on the last post. This website has a live, google maps-style piracy map. If you’re looking to get into the industry, be sure to pick an area without much competition.
Norwegian shipping group Odfjell will stop sailing through the Gulf of Aden to avoid pirates and will reroute its vessels around the Cape of Good Hope despite the higher costs, the company said on Monday.
“We will no longer expose our crew to the risk of being hijacked and held for ransom by pirates in the Gulf of Aden,” Odfjell Chief Executive Terje Storeng said in a statement.
“The re-routing will entail extra sailing days and later cargo deliveries,” he said. “This will incur significant extra cost, but we expect our customers’ support and contribution.”
Whenever I hear about piracy, I have mixed images, perhaps as a result of too many Halloweens in the US. I generally picture somebody looking like this:
as opposed to most modern day pirates, who look something more like this:
Either way, though, shipping is a huge industry in Norway and piracy has been a recurring problem with increasing flare-ups in recent years. The last line of the statement, about “significant extra costs,” will only increase the costs of goods and services worldwide, adding to the possibility of global recession.
Maybe it won’t be so cool to dress up as a pirate anymore.