US automakers General Motors and Ford have moved up to No 1 and No 2 slot, respectively, on the Fortune Global 500 list of the worlds largest corporations, displacing the Japanese trading giants Mitsubishi and Mitsui, which have headed the list for the last two years.
According to a Fortune release, while there were few changes among the European companies on the Global 500 list, the number of entries from the fast-growing economies in Asia rose from 17 to 21.
The highest-flying newcomer was Hong Kong-based Peregrine Investments Holdings, which joined the list at the 142nd spot.
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For the first time, a Russian company, energy powerhouse - RAO Gazprom - ranks among the 500 biggest companies at the 146th slot. Chinas Sinochem, on 204nd position, becomes the third Chinese entry on the Global 500.
For the third year in a row, Royal Dutch/Shell leads the Global 500 in total profits, having earned a staggering $8.9 billion in 1996. At the same time, 31 of the 50 most profitable companies in the world are American, and seven of the top 10 are American. Overall, 1996 was a very profitable year for the Global 500, whose earnings rose by 25.1 per cent to $404.4 billion.
With earnings soaring, the new ranking clearly indicates that restructuring is still paying dividends for US and foreign companies, and that the focus is on return to shareholders.
By contrast, obsession with growing the business continues to take a back seat, as revenues among the worlds largest corporations rose a meagre 0.5 per cent to $11,434.8 billion, the smallest increase since Fortune began the Global 500 listing in 1990. The 500 biggest companies in the world employed 35,517,692 people in 1996 and had assets totaling $33,271 billion.
Although the surge in Global 500 earnings was led by US firms, as the restructuring trend takes hold across the Atlantic, more European companies will reap the benefits.
In the latter stages of this year, the US will be handling over its role as the driver of global growth to Europe, predicts Gary Dugan, European equity strategist at J P Morgan.
Despite an overall surge in profits last year, not everything was rosy for the Global 500. Among the 10 biggest money losers and their losses, in descending order were: Banco do Brasil, $8,012.9 million; SNCF, $3,426.3 million; Nippon Credit Bank, $3,344.6 million; Credit Suisse, $ 2,094.3 million; Swiss Bank Corp, $ 1,581.5 million; Dai-Ichi Kangyo Bank, $ 1,574.5 million; and Sumitomo, $ 1,292.8 million.