Foreign firms fear recession

Thursday, September 13, 2001

LONDON -- European and Asian companies struggled Wednesday to adjust to the impact of the terrorist attacks in the United States, while doing their best to conduct business as usual. Consumer confidence, and the heightened risk of a global recession, hang in the balance.

Many companies focused on learning the whereabouts of staff in the United States and said it was still too early to assess financial costs.

"We don't want to go into those kinds of discussions. We prefer to focus on the people," said Mats Madsen, a spokesman for Swedish mobile phone company LM Ericsson.

Ericsson evacuated and closed its office in downtown New York. All its employees, numbering fewer than 30, were safe, Madsen said.

Investment bank Morgan Stanley was trying to determine the fate of 3,500 employees who worked at the World Trade Center.

Key European stock markets ended the day higher after choppy trading. The Paris Stock exchange finished up 1.3 percent, Germany's Deutsche Boerse rose 1.4 percent, and the London closed 2.8 percent higher.

But share prices fell across Asia, with the key index for the Tokyo stock market closing down about 7 percent, a nearly 18-year low. Hong Kong's Hang Seng index closed 9 percent lower and Singapore's Straits Times Index was off 7.4 percent.

Among those companies directly affected by the terrorist assault were airlines, which grounded all flights to North America due to the closure of U.S. airports. Some, including Swissair and British Airways, went further, suspending service to Lebanon and Pakistan. Israel continued to bar all foreign commercial flights to its cities.

Midway Airlines, a U.S. carrier, cited the impact of Tuesday's attacks on its already precarious financial situation in announcing Wednesday it would suspend all operations, putting about 1,700 employees out of work.

Other industries were hampered by the virtual halt in business travel to North America.

Respond to this story

Posting a comment requires free registration: