Turmoil Causes Global Suffering

From banks to brewers and telecommunications giants to petrochemical concerns, companies around the globe are suffering because of the Asian financial crisis.

Just like their U.S. competitors, European, Latin American, Canadian and Australian companies heavily involved in Asian countries are seeing earnings pinched.

Big name multinationals like Royal Dutch-Shell, Germany’s Deutsche Bank, Dutch beer maker Heineken and Canada’s Seagram are already reporting lower earnings or predicting them for the months ahead. Smaller companies, ranging from Chilean copper producers to Danish clothing makers and Mexican glass manufacturers, also are being hurt.

“It’s a global phenomenon,” said economist David Hale at Zurich-Kemper Investments in Chicago.

“Any multinationals who … have seen a large part of their growth in revenues in recent years coming from sales to Asia will be hit because of the drop-offs in demand,” said economist Devi Aurora at Standard & Poor’s DRI in Lexington, Mass.

Analysts are expecting a wide range of global companies to feel the squeeze, from banks and financial services companies to exporters of chemicals, autos, steel, ships, computers and agricultural products. Airlines and tourism companies, too, are seeing a dropoff in business in the region.

European banks are particularly vulnerable.

Standard & Poor’s, the credit rating agency, recently estimated European banks had rung up as much as $130 billion in loans to banks, government agencies and businesses in Thailand, South Korea, Malaysia and Indonesia. Of that, it calculated the banks stand to lose up to $20 billion in bad loans.