• Construction company Carillion is to restructure its engineering business with the loss of 900 jobs. The UK company, which demerged from Tarmac last July, said poor performance in its Crown House Engineering (CHE) division had caused the cutbacks. A number of CHE contracts which were initially thought profitable have had losses incurred against them. Carillion said it was refocusing the division on larger contracts for key customers and its successful voice and data communications business. The changes will reduce annual turnover by about a third to £15m. Chairman Sir Neville Simms said, “We did not know the contracts would make a loss at the beginning – they were all taken on the assumption they would make a profit.” The announcement came just three weeks after CHE announced a £90m contract to build the Government’s new GCHQ spy centre. Ft.com
Web site blamed for toy firm’s profits slump
• Retailer Toys R Us has blamed a 75 per cent profits slump on its ailing Internet operations. The toy giant said its net profit in the second quarter of this year fell to just under £2m – sharply down from around £8m last year. But the company claimed its net profit during the quarter totalled just over £10m when losses from its Internet subsidiary were excluded. Toys R Us and its toysrus.com web site had problems with delivery, especially in the run up to Christmas 1999. Thousands of US customers did not receive their orders on time and the Federal Trade Commission fined the company £232,000. Competition from web competitors like eToys also contributed to the company’s losses. BBC.co.uk
Honda’s Civic move lifts British car industry
• British-made Honda cars are to be exported to Japan for the first time as most of the production of its Civic model is switched to Swindon. Export will start after the launch of the new Civic range in September, throwing a lifeline to the UK’s ailing car industry. But Honda will also buy less car components from UK suppliers, choosing European rivals instead. The announcement comes after car makers like Toyota, Nissan and Matsushita warned they may move production to the continent if Britain does not join the single currency.
Honda has been using only 70 per cent of the Swindon plant’s 150,000 annual production capacity because of the strong pound. But commentators have pointed out that Honda had no alternative but to focus on its UK production base because Swindon is its only European factory. BBC.co.uk
More overseas businesses attracted to the UK
• The number of foreign-owned businesses operating in the UK has risen 11.5 per cent in the past 12 months. Figures from business information group Dun & Bradstreet confirm the UK as an attractive option for inward investment. The study found there are now 28,777 foreign-owned companies in Britain compared with 25,802 last July.
But while the number of French-owned companies is up nearly a third, figures for Japanese-owned companies show a drop of 9 per cent. Experts attribute the reduction to the widespread unhappiness at the strength of the pound among Japanese investors. Ft.com