Biz Watch

Building the Lip Service Sector
Do France and Germany really want to build world-class companies? Last week Jacques Chirac and Gerhard Schröder swore they did, pledging to team up to develop "the industrial champions that Europe needs," in the words of the French President. A top-level delegation of French ministers will head to Berlin in late May to trade ideas with their German counterparts. But watch what they do, not what they say: officials on both sides say the move is largely an attempt to patch up bad feelings in Germany over recent French market interventions.

Berlin was openly critical of France 's active support for Sanofi-Synthélabo's takeover of Franco-German drug firm Aventis. And as it seeks to bail out ailing engineering company Alstom , France so far is blocking Germany 's Siemens from acquiring divisions

INDICATORS Asian Strategy Stalls Germany 's DaimlerChrysler announced it would sell its 10.5% stake in South Korea 's Hyundai Motor Co., just a month after DaimlerChrysler refused to bailout Japan 's Mitsubishi Motors, in which it holds a 37% stake. Great Barrier Relief The E.U. welcomed the U.S. Senate's vote to repeal $4 billion worth of illegal export subsidies. Brussels says it will lift its own retaliatory tariffs on U.S. goods — in place since March — once the legislation becomes law. Departure Lounge Passenger dies on a long-haul flight? No problem. Singapore Airlines' new fleet of Airbus planes comes fitted with a closet for corpses.

it wants. One area where the two countries do see eye to eye is corporate taxes: both are worried about competition from the new, low-tax Eastern European E.U. members. But their plans to push for E.U.-wide tax harmonization are fiercely opposed in Brussels by Britain , Ireland and others. It may be a while before anyone's singing We Are the Champions.

U.K. Becomes A Statin Island
I n the fight against heart disease, drugmakers last week hailed a British government decision to green-light over-the-counter-sales of the cholesterol-lowering drugs known as statins, the first such approval in the world. Starting in July, Zocor — made by U.S. pharmaceutical firm Merck, but marketed in Britain by Johnson & Johnson — will be available without prescription. A health boon? Perhaps, but with statins the most widely prescribed drugs in the U.K. — draining $1.2 billion from the National Health Service each year — the measure appears "motivated more by cost than clinical reasons," says Daniel Reynolds, spokesman at the King's Fund, a British health foundation. Still, for companies in the $26 billion global statin market, there's no looking back. By year's end, Johnson & Johnson and Merck say, they'll appeal to the U.S. Food and Drug Administration to allow over-the-counter statins in the U.S. Can the Continent be far behind? — By Adam Smith

Mixed Fortunes
U.S. biotech firm Monsanto shelved plans to introduce the world's first genetically modified wheat, after U.S. farmers claimed there was no market for the crop abroad. Meanwhile, the E.U. said it would approve the sale of GM corn in the region this week.

The Bottom Line
	If you had enlightened management who thought about compliance in a real way, these issues wouldn't exist
		ANNE GUST, chief compliance officer at Gap, on its candid report into labor conditions at its contract factories worldwide