Unit 6.

The different sectors of the Economy

LISTENING 1:
Interviewer: Mr Sullivan can you tell us first what exactly credit agencies do?
S: Well, basically, we offer a range of services in two main areas: information and insurance. Some
of our clients are interested in information to help them manage credit risk, and others come to us
for insurance. But many companies, like Eisenhart Games, need both information and insurance.
I: What sort of information can you provide?
S: We have details of over 50 million businesses in countries all over the world. So, for example,
we can help Daryl by telling him how businesses and countries in the Middle East are doing
financially, we can tell him if his prospective customers pay, and how quickly they pay; and, in
particular, we can warn him if one of his customers gets into financial difficulty.
I: And you give each company a rating which indicates how reliable they are?
S: Yes, companies - and also countries - are given a rating. This gives us a quick guide to how
safely you can do business with a particular company or in a particular country. Actually, there's
much more than just the rating. Clients like Daryl receive detailed credit reports which help them
decide if and how to work with different companies.
I: I see. Now, what about credit insurance? Is that something new?
S: Well, it's relatively new over here in the States, but not in Europe. European companies have
been using it for a long time. Seventy per cent of European companies use credit insurance,
whereas in the States the figure is below 5%.
I: Why is that? S: Essentially because European firms have to export, because their internal markets
are too small. Until now, the majority of American firms have done most of their business in
America, so they didn't need credit insurance unless the customer was very risky. Nowadays,
companies like Eisenhart need to export, so they're discovering the advantages of credit insurance.
For example, it means that in Saudi Arabia, Daryl can trade on open account, with no need for
letters of credit, which take a lot of time and are relatively expensive.
I: I see. Talking of expense, what does credit insurance cost? S: Well, of course, it depends on the
contract. The more risk the insurer takes on, the higher the premium will be. But, on average, I
would say, for international credit insurance, between a quarter and 1% of sales.
LISTENING 2:
Paul: Oh, Jenny, did you pick up my tickets?
Jenny: No, I'm picking them up this evening. I have to be there before six, so I'll be able to drop
them off here by 6.30.
P: That's great! What time's the flight?
J: It's at 23.10. But it's OK - check-in doesn't open until 21.15. You've got plenty of time.
P: Hmm ... I've got the finance committee tonight. That usually goes on until at least half seven.
I'll only just have time to go home and pick up my suitcase. I probably won't see the kids for a
week now. They'll be in bed by quarter to eight. When do I get back from the States again?
J: On Sunday morning. You've got six meetings between tomorrow morning and Friday. That
leaves you a day to visit New York, and you fly back late on Saturday evening.
P: Well, I don't think I'll have much time to visit New York. I've got the Merosom pitch to prepare
for next Monday. I'm going to be jet-lagged on Sunday, so I'll have to do it before flying back.
J: Oh, yes, that's right. When do you expect Merosom to announce their decision?
P: Well, they said within three weeks. By the way, have you got the files for the New York
meetings?
J: Yes, they're all ready. Do want to look at them now?
P: No, I've got another meeting!
J: Well, you'll have to read them during the flight, then.
P: Hmm ... I suppose so.
J: OK. Well, I'll get on, then, unless you've got any other questions?
P: Er, yes, just one. When am I going to sleep?
LISTENING 3:
Frederick: Good evening, Riaz!
Riaz: Oh, hello Frederick. Everything OK?
F: Yes, fine, thanks. I just wanted to give you these applications, if you've got a moment?
R: Yes, of course. Have a seat.
F: Thanks.
R: OK, so what have we got here?
F: Well, first of all, there's Ms Koepple in room 406. She's with Cool Breeze. It's a record label
based in Buenos Aires. Now, know you don't like record companies, but ...
R: Yes, Frederick, and you know very well why I don't like record companies and those vulgar
rock groups they send us, always causing damage and disturbing the other guests. Argentina, you
say?
F: Yes. But Ms Koepple says they want to organize a big conference for their executives. There
won't be any rock groups or that kind of thing, just corporate executives. So,
they're applying for our credit card.
R: Well, it's true we need to develop in the conference market. It's good business, and it often
brings in more business by word of mouth. But Argentina ... OK, leave it with me and I'll look into
it. How big is Ms Koepple's bill?
F: Well, she's been here for four nights. Leaving on Saturday. She's spending a lot of money -
maybe six thousand dollars so far. But she's very nice, very friendly. I'm sure she won't leave
without paying.
R: Hmm ... She's applying for a credit limit of twenty thousand. Let's keep an eye on her, anyway.
Let me know if her account goes over ten thousand dollars, OK?
F: Sure.
R: What else have you got there?
F: The next one is Mr Kobayashi from Tokyo. Remember him?
R: Oh, yes. The second-hand car salesman?
F: Yes. He's a really difficult customer. We've had to move him to a different room three times
this week because he didn't like the view, or it was too far from the restaurant ...
R: Well, he may be difficult, but his credit's good. He seems to have built himself quite an empire
over there. Kobayashi Auto Sales is doing very well. We've never had any problem with his people.
F: Well, I wouldn't buy a car from him. He never looks you in the eye, never smiles, never says
thank you. He wants us to raise his credit limit, but I don't trust him.
R: Let me see. From fifty up to a hundred thousand, eh? All right, I'll think about it.
F: Right. And this last one is our old friend Mrs Saman and her team from Egypt.
R: Oh, no. Are they still coming here? I thought we stopped their credit last year.
F: No, the company paid up in the end, remember?
R: Yes, I do now. Charming lady, of course, but that company - what's it called? Black Nile, that's
it. They invented the concept of the slow payer! I think it took 18 months to get them to pay their
last invoice. What does she want now?
F: Well, she wants us to raise their credit limit to a hundred thousand, too.
R: Oh, no way!
F: But there are ten of them this time, and she's such a wonderful little old lady!
R: I should really suspend their credit and insist on cash in advance. They're on, let's see ... thirty
thousand dollars. It's just too big a risk. Have you seen the latest cash-flow figures? Our customers
are taking longer and longer to pay, and uncollectibles have gone over 3%! I'm getting a lot of
pressure from management to take firm action.
F: Well, be careful: Mrs Saman told me yesterday that her brother is a very senior government
official. And remember, we have a lot of guests from Egypt now. We don't want to upset them.
R: Yes, that's true. You never know who Mrs Saman might talk to. She's a very influential old
lady. All right, leave it with me, Frederick. I'll let you know what I decide tomorrow.
LISTENING 4: Same as above
LISTENING 5:
1 World oil prices have continued to fall today, with US sweet light crude dropping more than $3
to $63.20. Several members of OPEC, the 13-nation producers' group, which is responsible for
producing about 40% of the world's total supply, want to cut output by at least one million barrels
a day to increase prices.
2 US software giant Microsoft has posted profits and sales figures well above analysts'
expectations. The company made a $4.37 billion profit during the first three months of its financial
year, up from $4.29 billion a year ago, while turnover rose 9% to $15.06 billion.
3 In South Korea, Hyundai Motor Company has reported a 38% fall in third-quarter net profit,
which was slightly better than expected, in a difficult year. Hyundai say that although global auto
demand is shrinking, demand for smaller cars is rising. German car maker Daimler has reported a
€213 million profit for the quarter, a dramatic turnaround from the €1.5 billion loss it made in the
same period a year ago.
4 Although the service sector represents threequarters of the British economy, a report published
today by an American consulting company suggests that British manufacturers are still doing well.
The UK is currently the world's sixth-largest manufacturer, but the country appears set to remain
in the top ten for the next 15 years. Even though it is expected to slip to ninth place by then, its
share of global manufacturing value added is forecast to dip by just one percentage point.
5 Mixed news from the airline sector today. While figures from the Association of European
Airlines show that airline traffic has fallen for the first time in 25 years, because of the economic
slowdown, Airbus has published its latest Global Market Forecast, which foresees a demand for
some 24,300 new passenger and freight aircraft valued at US$ 2.8 trillion between now and 2026.
This will create an average annual delivery of some 1,215 aircraft. The current decrease in traffic
is expected to be temporary, and the long-term forecast for passenger traffic is that it is expected
to grow at an average rate of 4.9% per year.
6 In another study published today, it is predicted that the rapidly growing biofuel market,
involving cereals, sugar, oilseeds and vegetable oils, will keep farm commodity prices high over
the next decade. The study, co-written by the Organization for Economic Cooperation and
Development and the UN Food and Agriculture Organization, predicts prices will rise by between
20% and 50% in the next ten years.