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Woolies culls 1,000 in London as markets fall
Jonathan Prynn, Consumer Affairs Editor12 Dec 2008
THE COLLAPSE of Woolworths today claimed 1,000 London jobs less than a fortnight before Christmas.
Administrators said they had given up finding a buyer for its DVD, CD and games distribution arm Entertainment UK.
As a result 700 workers at its head office in Hayes were made immediately redundant today, with 375 remaining temporarily.
The job cull came on a day of renewed turmoil in the City after the collapse of a bail-out plan for America's near-bankrupt car industry.
Failure by US senators to agree a $14billion rescue for General Motors, Chrysler and Ford sent share prices plunging around the world after weeks of relative calm and put thousands of British car jobs at risk.
High street bank HBOS said it was having to write off an extra £2.8billion in bad debts because of "increasingly difficult market conditions".
The FTSE-100 was down 175.76 points, or four per cent to 4212.93, wiping £42 billion from the value of shares.
Royal Bank of Scotland was 12.5p down at 53.6p, leaving the taxpayer £2.8 billion worse off. HBOS was off 19.2p at 68.4p, Lloyds TSB was 27.1p lower at 130.9p and Barclays dropped 17.6p to 143.5p.
Analysts predicted Wall Street will nosedive when trading starts in New York this afternoon.
On the German stock market shares in General Motors were trading 48 per cent lower and Ford was 31 per cent down.
The pound fell for the fifth consecutive day against the euro to a record low of below 1.1191.
Bank of America, the owner of Merrill Lynch, said it was cutting 35,000 jobs - about 11per cent of its workforce. The move is likely to lead to about 1,000 redundancies in London.
The once-mighty car US car industry was today staring into the abyss after the bail-out fell apart in the senate.
The Bush administration said the £14billion plan had been the "best chance to avoid a disorderly bankruptcy" of America's "big three" car makers. The three firms had originally called for $34billion between them.
There is thought to be no hope of a deal before Barack Obama's swearing-in as president on 20 January. By then two of the "big three" - General Motors and Chrysler - are almost certain to have run out of money with the third, Ford, close behind. They will drag down an industry employing or supporting three million US workers.
Republican senator Bob Corker said the two sides had been "about three words from a deal", but that the United Auto Workers union's rejection of wage concessions before 2011, when its contract with the car makers expires, had kept them apart.
In Britain, a collapse of General Motors threatens 5,000 Vauxhall workers at plants in Luton and Ellesmere Port on Merseyside, as well as thousands more in the supply chain and allied industries.
UK new car sales fell an unprecedented 37 per cent last month.
