US economy goes postal. The US Postal Service wants to cut its 6,346,000 strong work force by around a quarter by offering early retirement to 150,000 people and retrenching another 3000, plus closing a slew of offices and other facilities. It’s apparently one of the largest downsizings ever seen in the US.

The reason? Mail volumes in the US are now running at levels last seen in 1964, which the American population was around 192 million, compared with around 320 million now.

The service says in a statement that it’s facing a doubling (at least) of 2008’s loss of $US2.8 billion. The rise of independent mail and freight groups, such as Fed Ex and UPS, plus the internet and email, have played a big part, but so has the current economic downturn and political resistance over the years to cutting costs and surplus facilities: the opposition is strongest in the US Congress. Electronic bill paying is hurting as millions of Americans pay online and forgo dropping in at the post office to pay bills.

The USPS says it’s looking at ending its six-days-a-week delivery schedule and has frozen all hiring and the construction of new facilities.

It’s just not the US Postal Service that is feeling the pain: Fed Ex, its huge transportation rival, is also been buffeted by the recession and the continuing rise of the internet. Fed Ex moved into shipping spare parts and other business freight as email eroded its overnight document and parcel delivery service. Now the recession is cutting all freight volumes and the company last week reported a sharp fall in profit and sales and plans for its second round of cost cuts aimed at saving another $US1 billion. That will mean job cuts.

Xerox warning. The warning by Xerox about a sharp fall in first quarter earnings is also due to a slump in corporate spending on new technology in the US, and especially in Asia. In its own way, Xerox is like Fed Ex and the USPS in being an indicator of just how tough it’s becoming in the wider US economy and in Asia, where the company has a large presence in a joint venture with Fuji which handles sales in the region.

Xerox warned that revenue in January and February was 18% below year-ago levels, as well as the poor results from the JV with Fuji. The warning is in contrast to the positive comments last week by big banks like Bank of America, Citigroup, JPMorgan and Standard chartered about how well they had done in January and February.

With technology spending slumping, Xerox forecast its first-quarter earnings at 3 cents to 5 cents a share, compared with an earlier outlook of 16 cents to 20 cents and analysts’ estimates of 17 cents a share. Shows how much those analysts were on top of what is happening in the economy.

Passenger revenue falls. The US Air Transport Association says airline passenger revenue fell 19% in February from the same month in 2008, the fourth straight month of declines.

The number of travellers fell 12% and the amount paid to travel each mile dropped 8%.

The Association says air cargo fright levels are down: January saw a drop of 21% after falls of 17% in each of December and November. Transpacific cargo volume was down 32% because of the slump in exports from Japan, China, Taiwan, South Korea, Hong Kong, Vietnam and Singapore as technology equipment and product sales plunged (Mobile phones, laptops etc)

United, the third-biggest US airline on Friday warned that its first-quarter revenue may fall by more than 13% as the recession erodes travel demand. United said earlier this month its traffic, as measured in miles flown by paying passengers, fell 17% last month. Delta, the biggest, says its revenues are down nearly 9%.

Phone sales stall. Telecoms giant Sony Ericsson are suffering from a deepening slump in mobile phone sales. Sony Ericsson surprised investors with a bigger than expected loss warning for the first quarter. That in turn led parent company LM Ericsson to warn that it will post a loss in the first quarter.

Global mobile phone sales are expected to fall in 2009 after suffering a sharp 4th quarter slump in 2008. The fall this year will be the first decline for eight years. So we await more bad news from the likes of Nokia and Motorola, and Samsung of South Korea.

Sony Ericsson says it sees phone sales by all mobile makers to fall by at least 10% this year, double the 5% drop forecast in January. The company is looking at a massive 37% fall in its first quarter phone sales to around 37 million units.

The company blamed the poor sales performance on “weak consumer demand” and efforts by mobile phone retailers to sell existing stock rather than buy new handsets.

In January, Sony Ericsson reported a net loss of 73 million Euros in 2008, and said a profit was not expected this year.

Job losses at Nike: just do it. Sporting goods group Nike announced on Friday more details of its global restructuring that will see around 1400 jobs lost. The company says it will cut management and reorganise its Nike brand to focus on six geographic regions such as Western Europe and China instead of the current four, which lump together areas such as the single Europe, Middle East and Africa region. The review of its organisational structure will be completed by June.

The collapse of a regional US sports goods retailer is another reason why Nike is doing it tough. Bloomberg reported that Sportsman’s Warehouse went into Chapter 11 at the weekend owing debts of more than $US450 million on assets of $US436 million. The Utah-based stores offers a “one-stop supplier” of equipment, apparel and footwear related to fishing, camping, hunting and other outdoor activities. The company recently sold 15 stores and is in the process of closing 23 others. It operates 29 stores in the US. It couldn’t benefit from a sharp rise in US gun sales so far this year.

BMW gets a boost. BMW is in need of a friend, so it has found one in the Middle East with an Abu Dhabi company injecting $1.95 million Euros (or around $A4.2 billion) in a share placement. Aabar Investments, controlled by Abu Dhabi’s state owned oil company (now there’s a nice synergy, oil, cars and trucks), will become the largest shareholder in Daimler with 9.1%, making it Daimler’s largest shareholder, and larger than the Kuwait stake of 6.9%.

It means that two major Middle East oil producers will effectively control the fortunes of the world’s second largest luxury car group, and the largest truck maker.

Daimler did give an explanation for the surprise placement, but a loss of 1.53 billion Euros in the fourth quarter, because of falling car and truck sales and expenses related to its former control of Chrysler, no doubt played a major part.

In contrast, BMW, which lost money also in the 4th quarter, has a large cash hoard, low stocks and appears to be well placed to ride out the downturn.

Two minute noodles sales down in Sweden. Bloomberg reported at the weekend that sales of cheaper foods such as bacon, black pudding and instant noodles have soared in Sweden as people cut their spending on food by trading down from more expensive food to cheaper brands and types.

The Metro retailing chain said bacon sales have rise in Sweden by 50% and black pudding by 20% in the past five months, while sales of the traditional Swedish processed meat sausage have risen 22%. Sales of fillet of beef have fallen 7%, Metro said.