July 2019

Markross121_ July 18, 2019 No Comments

Amazon faces EU antitrust probe over use of merchant data

Amazon , the world’s largest online retailer, could face an EU antitrust investigation within days over its use of merchants’ data, a person familiar with the matter said on Wednesday.

The European Commission has been seeking feedback from retailers and manufacturers since September last year, one of several competition enforcers taking a deeper look into Amazon’s business practices amidst calls by some for its break-up.

European Competition Commissioner Margrethe Vestager has said the issue is about a company hosting merchants on its site and at the same time competing with those same retailers by using their data for its own sales.

Merchants have complained about harm caused by Amazon copies of their products.

Politico first reported the investigation last week.

The Commission had been struggling to define the market in which Amazon operates in order to identify where the competitive harm could have been, other sources said. They said the issue was whether to look at Amazon in the overall retail market or in its own niche.

The EU competition enforcer, which can fine companies up to 10 percent of their global turnover, did not immediately respond to a request for comment.

This would not be Amazon’s first run-in with the Commission. Two years ago, it was told to pay back taxes of about 250 million euros (226 million pounds) to Luxembourg because of illegal tax benefits. That same year it settled with the regulator over its distribution deals with e-book publishers in Europe.

Separately, Amazon reached a deal with Germany’s antitrust authority on Wednesday to overhaul its terms of service for third-party merchants, who had complained of unfair treatment when selling through the world’s biggest online retailer.

Activist investor Elliott buys stake in troubled insurer Saga

Saga has seen its shares surge after activist investor Elliott bought a 5% stake in the troubled insurance firm.

Shares jumped 7% in early trading, as investors gave a thumbs-up to the entrance of the US shareholder.

The insurance group, which specialises in products for the over-50s, has had a troubled year which saw it warn over profits in April amid an overhaul to return to growth.

It said it was launching a “fundamental” strategy rethink of tactics in the insurance business to address “increasing challenges” in its markets.

Elliott is known for shaking up businesses, including resources company BHP and investment group Alliance Trust.

The activist group, founded by billionaire Paul Singer, is best known in the UK for its ownership of book shop chain Waterstones, which it snapped up last April.

Russ Mould, investment director at AJ Bell, said: “Saga’s dramatic fall from grace has seen its share price fall to such low levels that an activist investor has popped up on the shareholder register.

“Saga is currently searching for a new chief executive and so Elliott may want to have a say in who is hired, although one would suggest it will need a bigger stake in the business to have any influence on strategic decisions.”

Shares in Saga have more than halved since the start of the year, with the profit warning and boardroom changes weighing down on shareholder sentiment.

Last month, chief executive Lance Batchelor announced plans to quit at the end of the financial year following six years with the business.

Saga said a search is currently under way to find a successor.

The news of Mr Batchelor’s departure came amid a major boardroom shake-up which had already seen Patrick O’Sullivan join as company chairman, while James Quin was recruited as chief financial officer in January.

Shares in Saga increased by 7.8% to 46.2p in early trading on Wednesday.

Asos shares crash 20% on third profit warning since December

Shares in Asos crashed over 20% on Thursday after the online fashion retailer warned profits would be lower than forecast.

Asos said that “operational issues” related to upgrading its warehouses had hit sales in the US and Europe.

As a result of the teething problems, Asos said on Thursday that profits were likely to be between £30 million and £35 million this year. It had previously said they would be £55 million. Asos also cut its full-year sales growth forecast from 15% to 12%.

It represents the third profit warning in less than a year. The company also warned on profits in December and March.

CEO Nick Beighton said: “Whilst we are making good progress in improving customer engagement, our recent performance in the EU and US was held back by operational issues associated with our transformational warehouse programmes.

“Embedding the change from the major overhaul of infrastructure and technology in our US and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions.”

Wall’s sausages maker Kerry Foods to shut down Staffordshire factory – 900 jobs at risk

WALL’S sausages maker Kerry Foods has unveiled plans to shut down a factory in Staffordshire with 900 jobs at risk of being axed after Tesco changed supplier.

The food manufacturer has earmarked a site in Burton-upon-Trent for closure after the company lost a contract to supply ready-made meals to the supermarket giant. Trades union Unite estimated “90 percent of the work” at the factory came from production for Tesco, who had been working with Kerry Foods for 19 years. The food company failed to secure another contract with the supermarket after Tesco decided to use another supplier in October 2018. Unite will meet with Kerry Foods this Friday to discuss the proposed closure, which would see the factory shut in September.

Kerry Foods said its priority is to “support all employees” as Unite described the plan as “a crushing blow for the regional economy”.

Unite’s regional officer Rick Coyle said: “This is a calamity for Burton as Kerry Foods is the town’s biggest employer.

“It is heartbreaking for the workforce, their families and, more widely, a crushing blow for the regional economy.

Mr Coyle said he had been in touch with brewer Molson Coors, the town’s second largest employer, to discuss employment opportunities for those affected.

He continued: “The problem going forward is that there are not that many well-paid jobs in Burton and the vicinity to replace those that will be lost at the end of August.

“We have been in touch with Molson Coors to explore employment opportunities there.

“Also, we will help arrange a jobs fair at the site and assist our members with their CVs and advice on updating their skills.”

Bombardier: is Northern Ireland sale linked to Brexit?

Canadian aerospace firm’s sudden decision comes at a sensitive time for UK and Northern Irish politics

The Canadian aerospace firm Bombardier is putting its wing-making operation in Northern Ireland up for sale, sparking concern among trade unions and MPs about the impact on highly-skilled jobs and fuelling fears that uncertainty around Brexit is holding back the economy.

The company plans to sell factories in Northern Ireland and Morocco as part of a strategy to consolidate “all aerospace assets into a single, streamlined and fully integrated business” in North America.

The “decision will be seen by unions and political leaders in the North as a massive blow for the economy and will cast serious doubts over the future security of the 4,000 jobs at Bombardier and thousands more in their extensive supply chain in the North”, says The Irish Times.

A spokesman for the prime minister said the government did not expect jobs to be affected but the trade union Unite said it was seeking stronger assurances from the government and the company.

“Bombardier is Northern Ireland’s largest employer and a focus of intense political interest,” says the Daily Telegraph. Two years ago Theresa May personally intervened when the US threatened 300% trade tariffs on Bombardier’s C-Series airliners, asking President Trump to veto the levies, which had been demanded by US rival Boeing in response to what it claimed were state subsidies given to Bombardier.

The sale “comes at a sensitive time for the UK”, says Financial Times, “which is grappling with the impact Brexit will have on Northern Ireland”.

The company had previously warned of “serious consequences” from a hard Brexit for its operations in Belfast.

“Although Bombardier made no reference to Brexit in its statement, efforts to find a buyer for the plant could be hampered by uncertainty about tariffs and customs arrangements between the UK and the EU,” says The Guardian. “Airbus, which might have been seen as a potential buyer of the site, has voiced grave concern about the impact of Brexit on its investment in the UK.”

The Business Secretary, Greg Clark, who has been monitoring the situation closely all week, is said to be optimistic that a buyer can be found.

However, “arriving on the same day as the local elections in Northern Ireland, the announcement comes as a blow for the region’s Democratic Unionist party”, says the FT.

The Guardian says Bombardier’s decision “will add more pressure on Northern Ireland’s politicians to restore the power-sharing executive and assembly at Stormont which collapsed in 2017 amid acrimony between Sinn Fein and the DUP”.

The assembly had discussed a plan to lower corporate tax to attract and retain industries before its collapse says University of Liverpool politics professor Jon Tonge. “The fact there is no fiscal autonomy in place – that’s where some of the blame may fall,” he said.

Is Thomas Cook about to collapse?

A leading analyst has cast doubt over whether Thomas Cook’s £750m rescue plan, announced at the end of last week, will work.

Citigroup’s James Ainley suggested the package, which would put Chinese conglomerate Fosun in control of the 178-year-old tour operator, could be blocked by its bondholders.

So how has it come to this and should holidaymakers be concerned?

What has happened to Thomas Cook?

The travel company, which employs 21,000 staff around the world and operates more than 560 stores in the UK, has “suffered as customers shifted from the high street to the internet, threatening its ability to service a £1.6bn debt pile”, says the Financial Times. It came close to collapse eight years ago and took on large loans to survive.

“Tough trading conditions have been exacerbated by Brexit uncertainty,” adds the FT.

Last Friday, the embattled company confirmed that it was in “advanced discussions” to secure new funding from its banks and Fosun, which owns the holiday resort chain Club Med. The £750m deal would hand control of its package holiday business to the Shanghai-based investor in return for a cash injection. Meanwhile, banks and bondholders would take a majority stake in its airline and a minority stake in the holiday unit.

The extra cash “is designed to see the company through the winter, when holiday bookings are at their lowest, affording it time to cut costs and raise money by selling its airline division”, explains The Guardian.

Will the deal go ahead?

Citigroup analyst James Ainley, described by The Daily Telegraph as “one of Thomas Cook’s most vocal critics”, has calculated that shares would be worth just 3p if the plan goes ahead.

“The uncertainties are significant and the risk of the process stalling seems high,” said Ainley, who sent shares in the company plunging in May by downgrading its stock to zero pence.

For the package to work, Thomas Cook needs a “strong turnaround plan, about which little detail has yet been given”, he added.

A spokesman for Thomas Cook said: “The board is clear in its view that it is in the best interests of all the group’s stakeholders, including bondholders, to pursue a full re-capitalisation supported by new investment into the business. It is a pragmatic and responsible solution which provides the means to secure the future of Thomas Cook.”

Should holidaymakers be worried?

On Friday, Peter Fankhauser, Thomas Cook’s chief executive, said there would be “no impact from today’s announcement on our holidays or our flights”.

Meanwhile, holidays booked through Thomas Cook are Atol-protected, meaning any customer would be entitled to a full refund or replacement holiday should the tour operator collapse before their scheduled departure time.

The Civil Aviation Authority would also protect package holidays and cover arrangements to return customers if the operator collapsed while they were on holiday.

However, some holidaymakers could be caught out if they have booked on Thomas Cook’s airline, which is separate from the tour operator, and sells flight-only trips, some of which are not Atol-protected.

UK workers who lose jobs to AI will be retrained

Workers whose jobs might become obsolete as a result of automation are to receive help in retraining from a new national government scheme.

Up to 20 million manufacturing jobs around the world could be replaced by robots by 2030, according to analysis firm Oxford Economics.

The scheme will support workers by helping them find a new career or gain more skills, should their jobs change.

The programme will be trialed initially in Liverpool.

“Technologies like AI and automation are transforming the way we live and work and bringing huge benefits to our economy,” said Education Secretary Damian Hinds.

“But it also means that jobs are evolving and some roles will soon become a thing of the past.

“The National Retraining Scheme will be pivotal in helping adults across the country, whose jobs are at risk of changing, to gain new skills and get on the path to a new, more rewarding career.

“This is a big and complex challenge, which is why we are starting small, learning as we go, and releasing each part of the scheme only when it’s ready to benefit its users.”

According to Oxford Economics, people whose jobs become obsolete because of industrial robots and computer programs are likely to find that comparable roles in the services sector have also been squeezed by automation.

On average, each additional robot installed in lower-skilled regions could lead to nearly twice as many job losses as those in higher-skilled regions of the same country, exacerbating economic inequality and political polarisation, which is growing already, the analysis firm found.

Prof Alan Woodward, a computer expert from the University of Surrey says that although automation will lead to the loss of some jobs, this is “inevitable”, because it is now far cheaper to manufacture products in other countries.

“Automation is not here to put people out of work, it’s here to free them up,” he told the BBC. “We’re better off using people’s brains, not their hands – things that machines can’t do. That’s what we should be heading towards.”

TechUK, the body representing the UK tech industry said it welcomed the government’s move.

“It is right that the government is starting small to ensure lessons are learnt, and adaptations are made along the way, but the ambition to scale so that this becomes a truly national retraining scheme cannot be lost,” techUK’s head of policy, Vinous Ali, told the BBC.

“Whilst the focus is on job displacement, the fact is no job is likely to remain untouched by the fourth Industrial Revolution, so we will all need to learn new skills.

“This means we need to be making significant investments in lifelong learning and helping people to navigate a pathway through this change.”

Markross121_ July 4, 2019 No Comments

Boeing pledges $100m to help families affected by deadly plane crashes

The aeroplane maker’s boss said he hoped the financial support would help bring “comfort” to those affected by the crashes.

Boeing has set up a $100m (£79.5m) fund to help families and communities affected by two deadly crashes involving its 737 MAX aircraft.

The crashes in Indonesia and Ethiopia killed a total of 346 people and prompted the company’s entire 737 MAX fleet to be grounded.

Boeing said the money would be paid over several years towards living expenses and to cover hardship suffered by the families of the passengers who died, as well as for community programmes and economic development in affected areas.

Chief executive Dennis Muilenburg said: “We at Boeing are sorry for the tragic loss of lives in both of these accidents and these lives lost will continue to weigh heavily on our hearts and on our minds for years to come.

“The families and loved ones of those on board have our deepest sympathies, and we hope this initial outreach can help bring them comfort.”

‘Grave concern’ for car industry as hybrid sales hit reverse gear

The SMMT says it is crucial that incentives are in place if its work to deliver a zero-emission future are to meet expectations.

Sales of alternatively-fuelled cars have fallen in the UK for the first time in 26 months as the industry works towards an electric car future.

The Society of Motor Manufacturers and Traders (SMMT) said total sales of new cars continued to decline, for the fourth consecutive month, in June.

It reported falling demand in all sectors – with a 4.8% drop in consumers picking up a new model. Business registrations fell 37%.

It meant, the body said, that overall year-on-year demand was down by almost 5% in the month, with just 223,421 cars being ordered.

The weak performance meant sales were 3.4% down in the first half of the year compared to the same period in 2018.

The SMMT blamed continuing “confusion over low emission zones and diesel, the removal of key ultra low emission vehicle incentives and an overall decline in buyer confidence”.

It pointed to growth in June for petrol and battery-powered vehicles.

William Hill to shut 700 shops placing 4,500 jobs at risk

Gambling firm William Hill has confirmed plans to shut 700 betting shops, placing 4,500 jobs at risk.

The bookmaker had threatened such a move before a crackdown on controversial fixed-odds betting terminal (FOBT) stakes was implemented on 1 April.

William Hill said in a statement: “Since then the company has seen a significant fall in gaming machine revenues, in line with the guidance given when the government’s decision was announced in May 2018.”

It warned that a “large number of redundancies” was anticipated among the staff affected.

It said: “the group will look to apply voluntary redundancy and redeployment measures extensively and will be providing support to all colleagues throughout the process.

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