The German carmaker Volkswagen is planning to shut at least three factories in Germany, lay off thousands of workers and cut pay by 10%, the company’s union has revealed.
Daniella Cavallo, the head of Volkswagen’s workers council, told workers at VW’s headquarters in Wolfsburg today that the company is planning even deeper cuts than expected.
This would be the first closure of domestic plants in Volkswagen’s 87-year history.
Cavallo told staff that VW’s management have a “clear intention” to cut tens of thousands of jobs, Reuters reports, to shrink German factories that remain open.
Cavallo said:
Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round.
This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany.
At the start of September, Volkswagen told staff it was planning to close at least one larger vehicle manufacturing plant and one component factory in Germany.
The company has been struggling to manage the transition away from fossil fuel cars to electric vehicles, where it is facing tough competition from Chinese manufacturers
The City of London is in broad agreement that the Bank of England will cut interest rates next week, but there’s less certainty about December’s meeting.
Reuters has polled 72 economists, and each one predicted the BoE will cut rates by a quarter of one percentage point a week on Thursday, to 4.75%.
It feels like a safe call, as inflation has now fallen below the Bank’s target, and BoE governor Andrew Bailey told the Guardian the Bank could become “a bit more activist” in its approach to cutting interest rates, if inflation stayed low.
Looking beyond the November meeting, around two-thirds of economists predicted the BoE would leave rates on hold in December., while the remainder expect a second quarter-point cut.
Retail sales volumes fell at a modest pace in October, after slight growth last month, according to the latest CBI Distributive Trades Survey.
Worryingly, retailers reported that sales were weak for the time of year.
The survey found that some retailers see consumers holding back on their spending due to uncertainty surrounding the budget on Wednesday.
UK green power supplier Good Energy have received a possible takeover offer from Dubai-based Esyasoft Holding.
Good Energy says it is evaluating the “unsolicited indicative, non-binding proposal”.
Its shares have jumped by 25% so far today, raising its market value from £53m to £67m.
News of Esyasoft’s approach came as Good Energy announced its own deal; it has bought solar power installation company Empower for up to £8m.
An official report into UK parcel delivery firms has found that Evri and Yodel are the worst parcel firms at helping their customers.
Ofcom, the UK’s communication regulator, found that Evri, once again, has the lowest levels of satisfaction, with just 32% of customers satisfied with its service, and 39% unhappy.
Yodel wasn’t much better, registering a satisfaction score of 38%.
At the top of the table, though, Amazon (56%) and DHL (55%) were the best performers, followed by FedEx (52%).
Ofcom also reports that customers are slightly more satisfied with the process of contacting the parcel company to discuss an issue, after it strengthened regulations.
The regulator adds:
Parcel operators have made a number of improvements to complaints handling, including better information on their websites; improvements to phone lines and live chat; and introducing options for customers to request an email or call back.
We expect further, sustained and continued improvement. We remain particularly concerned that disabled consumers and those with limiting conditions are still more likely to encounter difficulties with the delivery process (71%) compared to other people (63%).
Another troubled company, Boeing, is also making news today.
Boeing has announced it will issue 90 million new shares to bolster its balance sheet. At a current share price of $155, that would raise almost $14bn for the firm whose production is currently stymied by strikes by its workers.
In addition, Boeing will issue $5bn of depositary shares, meaning it will raise a total of $19bn.
Two weeks ago, Boeing said it planned to raise up to $25bn through a stock and debt offering. It has also lined up a $10bn credit agreement with a consortium of banks, to give it more access to liquidity.
Last week, Boeing’s staff rejected their latest pay offer, meaning the industrial action continues….
Back in the UK, chancellor Rachel Reeves has announced a £240m package to help people back into work.
The cash injection will accelerate the rollout of local services to help people out of economic inactivity.
Get Britain Working “trailblazers” in local areas will bring together and streamline work, health, and skills support to disabled people and those who are long term sick, the Treasury says.
Reeves says:
Due to years of economic neglect, the benefits bill is ballooning. We will build a Britain where people who can work, will work, turning the page on the recent rise in economic inactivity and decline and towards a future where people have good jobs and our benefits bill is under control.
Official data shows that more than 9.2 million people are economically inactive – neither working, nor looking for work – often because of illness, or caring responsibilities.
My colleague Richard Partington wrote last weekend about the efforts to reduce inactivity in Barnsley, one of the areas with the highest rates of economic inactivity:
A spokesperson for the German government has said that Berlin is aware of the difficulties at Volkswagen, and in close contact with the carmaker and its unions.
The spokesperson told a news conference today:
“It is well known that Volkswagen is in a difficult situation.
There is also a constant dialogue with both the employer and employee sides at Volkswagen.”
Today’s comments from VW’s works council warning of factory closures, job reductions and pay cuts will escalate the conflict between the carmaker’s workers and its management.
Daniela Cavallo told workers that the two sides agreed about the problems facing VW, if not the solutions, saying:
“We are not far apart when it comes to analysing the problems. But we are miles apart on the answers to them.”
Cavallo also told workers today that the Berlin government needs to urgently come up with a masterplan for German industry to ensure it does not “go down the drain”.
Here’s AFP’s take:
Ailing auto giant Volkswagen plans to close at least three factories in Germany and cut “tens of thousands of jobs” at its namesake brand as part of a drastic cost-savings plan, workers’ representatives said Monday.
The plan laid out by management also includes downsizing remaining plants in the country and a proposed 10-percent pay cut for all VW brand employees, the company’s powerful works council said in an update to staff, vowing to put up resistance.
Daniella Cavallo also appeared to hint that the unions could call strike action over the closures.
According to the Financial Times, she told workers:
Chief executive Oliver Blume was “playing with the massive risk that . . . we will break off the talks and do what a workforce has to do when it fears for its existence”.
The German carmaker Volkswagen is planning to shut at least three factories in Germany, lay off thousands of workers and cut pay by 10%, the company’s union has revealed.
Daniella Cavallo, the head of Volkswagen’s workers council, told workers at VW’s headquarters in Wolfsburg today that the company is planning even deeper cuts than expected.
This would be the first closure of domestic plants in Volkswagen’s 87-year history.
Cavallo told staff that VW’s management have a “clear intention” to cut tens of thousands of jobs, Reuters reports, to shrink German factories that remain open.
Cavallo said:
Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round.
This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany.
At the start of September, Volkswagen told staff it was planning to close at least one larger vehicle manufacturing plant and one component factory in Germany.
The company has been struggling to manage the transition away from fossil fuel cars to electric vehicles, where it is facing tough competition from Chinese manufacturers
Shares in Georgian banks listed in London have dropped sharply, after the ruling, Russia-aligned Georgian Dream (GD) party won a contested election last weekend.
Tbilisi-based TBC Bank’s shares tumbled 10%, making it the biggest faller on the UK’s FTSE 250 index, followed by Bank Of Georgia whose shares are down 7.5%.
GD’s victory is a blow to the country’s aspirations to join the European Union, and there are accusations of intimidation and coercion of voters.
The pro-western opposition are accusing GD of a “constitutional coup”, while the. country’s pro-EU president, Salome Zourabichvili, has called for protests against the result this evening.
The oil price is sinking lower, with Brent crude now down over 5% at $71.95 per barrel.
That means oil has now dropped by $10/barrel over the last three weeks, and is now at a fresh four-week low.
As flagged in the introduction, traders are optimistic that tensions in the Middle East may ease now that Israel has retaliated against Iran – without hitting its energy infrastructure.
Antonio Ernesto Di Giacomo, senior market analyst atXS.com, says:
Despite the tensions generated by this event, the impact was less severe than anticipated, immediately affecting the crude market.
The Israeli attack, which avoided vital facilities such as nuclear and oil sites in Iran, significantly reduced the uncertainty that had reigned in the previous weeks.
Despite Iran’s threat to retaliate, the fact that the attack avoided critical facilities managed to moderate concerns about a possible significant escalation in the conflict. In recent months, oil prices have seen a considerable increase due to the growing tension between Israel and Iran, exacerbated by ongoing operations against factions like Hamas and Hezbollah. However, this episode seems to have reduced the likelihood of a larger-scale confrontation, at least in the short term.
That remains to be seen, of course. Earlier today, Iranian foreign ministry spokesperson Esmaeil Baghaei said Tehran will “use all available tools” to respond to Israel’s attack.
Dutch medical devices maker Philips has been hit by a slowdown in demand from Chinese customers, forcing it to slash its sales forecast for this year.
Philips reported that it saw a deterioration in demand in China in the last quarter, leading to flat group sales over the July-September period. Comparable orders fell by 2%, due to the decline in China.
Roy Jakobs, CEO of Royal Philips, says:
In the quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions. We have adjusted our full-year sales outlook to reflect the continued impact from China.
Philips now expects its comparable sales to grow by only 0.5% to 1.5% in 2024, down from a previous forecast of 3% to 5%.
Shares in Philips have dropped by almost 17% in early trading.
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