Business

PARIS — Tyre maker Michelin said on Thursday it would close a French-based factory with 619 employees next year as competition from cheaper Asian manufacturers knocks its profit margin. 

Two weeks ago, the French company announced the closure of a factory in Germany with 858 employees by 2021, and last year said it would shutter a plant with 845 employees in Scotland.

Regarding the closure of its plant at La Roche-sur-Yon in western France, Michelin promised a "support plan" for affected employees, and said it would offer everyone a chance to remain in the company in France.

It would also seek out "a major public-private project" in a bid to relaunch the failing site.

Michelin said 74 people who work at a factory in nearby Maine-et-Loiret, manufacturing rubber for the site in La Roche-sur-Yon, will also be affected.

Michelin has been hit hard by the lacklustre performance of the auto industry. 

Its CEO Florent Menegaux said last month that a 70-million-euro ($77-million) investment had been unable to save the site at La Roche-sur-Yon.

He blamed "difficulties in the market for high-end heavy-duty tyres both in Europe and abroad", coupled with "increased competition".

By the end of last year, Michelin employed about 110,000 people in different countries, including 20,000 in France.

LONDON — Britain kicked off Wednesday the dismantling of Thomas Cook, with the sale of all 555 UK stores to a smaller rival of the collapsed holiday giant.

Household name Thomas Cook, which went bankrupt overnight last month, was the biggest holiday company in Britain with both a tour operator and airline division.

Travel agent Hays Travel, which is mostly based in northern England, announced in statement that it has acquired the branch portfolio from the official liquidator for an undisclosed sum.

Thomas Cook brought down the shutters late last month after it failed to secure a funding lifeline.

The official receiver added Wednesday that Hays has already recruited 421 former Thomas Cook staff.

Hays added in a separate release that it could potentially save up to 2,500 jobs — and would seek to reopen some shops as soon as Thursday.

And it also expects to create another 100 jobs at its headquarters in the city of Sunderland, northeastern England, as a result of the transaction.

The independent travel firm was formed 40 years ago by husband and wife team Irene and John Hays.

It has since expanded to 190 branches and employs 1,900 staff with annual sales of more than £1 billion ($1.2 billion, 1.1 billion euros).

"We are looking to employ as many Thomas Cook staff as possible and we are reaching out to them," said John Hays.

He also confirmed the Thomas Cook brand would disappear from the British high street and will be replaced by Hays.

"Thomas Cook was a much-loved brand employing talented people. We look forward to working with many of them," said the independent travel agent's founders in a statement.

"The agreement will see Hays Travel acquire a total of 555 stores around the UK, providing re-employment opportunities for a significant number of former employees of Thomas Cook's retail operations who were made redundant," the statement added.

Wednesday's announcement was welcomed by the British government and travel industry trade union the Transport Salaried Staffs Association.

And it offers hope to the 9,000 UK staff who were made unemployed overnight when the group collapsed in acrimony.

David Chapman, director of the Official Receiver, remarked that the sale "represents an important step in the liquidation process, as we seek to realise the company's assets".

Jim Tucker, partner at administrator KPMG, also added that the Hays deal "provides re-employment opportunities for a significant number of former Thomas Cook employees, and secures the future of retail sites up and down the UK high street".

The Official Liquidator, when asked by AFP about the outlook for the sale of Thomas Cook's remaining assets, declined to comment — but added they would be sold "in the best interests" of its creditors.

The collapsed company's notable assets include 100 aircraft at its airline division, and 200 hotels and hotels clubs that are based around the world.

UK airline Easyjet has hinted that it could be interested in some of Thomas Cook's air operations, as the low-cost carrier already serves some of its destinations.

Britain's government on Monday completed the country's biggest peacetime repatriation, returning 140,000 UK-based Thomas Cook customers stranded abroad by the company's bankruptcy.

In total, around 600,000 customers were left stranded following the collapse of the 178 year-old company less than three weeks ago, including around 140,000 who had been due to return to Germany.

The company's demise sparked 22,000 job losses worldwide.

The debt-plagued travel titan struggled against fierce online competition for years and blamed Brexit uncertainty for a drop in bookings.

It declared bankruptcy on September 23 after failing to secure fresh funds. Its biggest shareholder was China's Fosun Group.

SEOUL — Samsung Electronics said on Tuesday it expected operating profit to drop more than 50 per cent in the third quarter as it struggles with a long-running slump in the global chip market.

Operating profit for July to September was forecast to reach 7.7 trillion won ($6.4 billion), down 56.2 per cent from a year earlier, the world's largest maker of smartphones and memory chips said in a statement.

It marks the fourth consecutive quarter in which the South Korean tech company has recorded a profit drop in the face of falling semiconductor prices and weakened demand for its mobile devices.

Sales for the third quarter were expected to reach around 62 trillion won, down 5.3 per cent from the same period last year.

Samsung withholds net profit and sector-by-sector business performance until it releases its final earnings report, which is expected later this month.

Samsung shares closed up 2.4 per cent in Seoul as the operating profit forecast beat expectations.

The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and crucial to South Korea's economic health.

Analysts voiced optimism for the coming months, noting that falling inventory levels for semi-conductors — which account for more than half of Samsung's profit — will help stabilise chip prices after double-digit drops this year.

 'Competitor in crisis' 

The estimates for the third quarter showed a slight rise from the April to June period, which analysts attributed mainly to improvements in the mobile business.

The firm rolled out its flagship Note 10 devices that connect to superfast 5G network in August that analysts say have sold far better than its previous models to give Samsung a much-needed boost.

"The Note device is usually released in August or September and sells well until December, so I expect the demand to continue until the fourth quarter," said Tom Kang, research director at Counterpoint Research.

Samsung appealed to high-end users with the launch of its first foldable smartphone last month after faulty screens forced an embarrassing delay in April.

The premium smartphone market has grown fiercely competitive and overall sales have cooled as a lack of major innovation has caused people to wait longer before upgrading to new models.

The South Korean tech titan leads the global smartphone market with a 23 per cent share of the sector, trailed by Chinese competitors Huawei and Oppo, with Apple in fourth place, according to sales tracker IHS Markit.

Samsung also took advantage of the US trade ban against Huawei, "replacing a strong competitor in crisis" with its mid-to-low tier Galaxy A handsets, said Sujeong Lim, an analyst at Counterpoint Research.

Increased demand for Samsung's OLED display panels used in handsets by competitors — including Apple's new iPhone 11 — is also expected to help improve the company's quarterly profit.

Samsung has been caught up in a trade war between Japan and South Korea stemming from World War II disputes.

The row saw Tokyo impose tough restrictions on exports crucial to South Korean tech giants in July, and Samsung Vice Chairman Lee Jae-yong — who called the situation a "crisis" — has visited Tokyo to secure materials.

LONDON — The British pound dived on Tuesday after German Chancellor Angela Merkel reportedly warned that a Brexit deal was "overwhelmingly unlikely", further stoking fears of a disorderly and costly departure from the EU.

Merkel told British Prime Minister Boris Johnson that a deal was doomed to fail unless London agreed to keep British-run Northern Ireland that borders EU-member Ireland in the bloc's customs union, a Downing Street source said.

The host of next week's European summit, EU Council president Donald Tusk, in turn accused British Prime Minister Boris Johnson of trying to shift blame for the failure of the Brexit talks.

"Markets are having to focus on the various potential outcomes which are now imminent," Interactive Investor analyst Rebecca O'Keeffe told AFP.

"A deal looks very unlikely unless the EU blinks first."

'Greater chance of no-deal' 

She added: "For many, the word of the PM is government policy, hence the global market is moving towards pricing in an ever greater chance of a no-deal." 

Losses were exacerbated by official data showing that British productivity tumbled at its fastest rate in five years in the second quarter of 2019.

Stock markets on both sides of the Atlantic, meanwhile, posted losses on growing investor doubts over chances of success in this week's China-US trade talks.

Losses for London stocks were limited thanks to the weak pound, which boosts multinationals earning in stronger currencies. 

Other European markets were nearly one per cent lower in the mid-afternoon, while on Wall Street the Dow Jones index was also down at the opening bell.

There had been a general feeling in recent weeks that a solution to the long-running US-China tariffs saga may be found, providing some much-needed support to equities in the face of worsening economic data.

HONG KONG — Most markets rose in Asia on Monday after a mixed US jobs report eased worries about a recession in the world's top economy but maintained expectations the Federal Reserve (Fed) will press ahead with more interest rate cuts.

However, there was some nervousness after reports said China had cut back on the number of areas it is willing to discuss at this week's top-level trade talks with the US, rekindling concerns about the chances of any agreement between the two.

After a string of below-par data last week that highlighted the impact of Donald Trump's trade war on the key manufacturing and services sectors, Friday's much-anticipated non-farm payrolls figures showed unemployment at a 50-year low in September.

But the pace of job creation was the slowest in four months, wages fell and the manufacturing workforce also shrank for the second time this year.

All three main indexes on Wall Street rallied more than one per cent as dealers breathed a sigh of relief that the jobs figures did not miss badly, with most still expecting another Fed rate cut at its next meeting this month.

"As the US unemployment rate dropped to its lowest level in 50 years, worries over US recession eased, but at the same time expectations for further rate cuts remain untouched," Hideyuki Ishiguro, senior strategist at Daiwa Securities, said in a commentary.

Most Asian markets followed the lead from New York.

Sydney rose 0.7 per cent and Singapore added 0.6 per cent with Seoul gaining 0.1 per cent, while Wellington jumped 0.8 per cent and Taipei put on 0.4 per cent. Mumbai and Bangkok also rose.

Tokyo closed 0.2 per cent down as the yen strengthened on bets for another Fed cut, while there were also losses in Manila and Jakarta. Hong Kong and Shanghai were closed for a public holiday.

In early trade, London fell 0.3 per cent, Paris lost 0.4 per cent and Frankfurt was off 0.2 per cent.

China's 'calculation' 

Focus turns this week to the resumption of high-level trade talks between China and the United States in Washington.

However, while there has been a broad expectation the two sides are coming together in some areas owing to their economies stuttering, reports said Beijing was looking to narrow the remit of any deal.

Bloomberg News reported that top negotiator Vice Premier Liu He had said he would not put on the table reforms to Chinese industrial policy or government subsidies, a key source of anger within the White House.

The story said Beijing had felt its hand had been strengthened by the beginning of impeachment proceedings against Trump as well as signs of slowing in the US manufacturing sector, which could hurt the president ahead of next year's election.

Chinese officials "are interpreting the impeachment discussion as a weakening of Trump's position, or certainly a distraction", said Jude Blanchette, at the Centre for Strategic and International Studies. "Their calculation is that Trump needs a win" and could be open to some compromises, he added.

Stephen Innes, Asia-Pacific market strategist at AxiTrader, said the news came as a surprise to traders.

"With the US economy taking a decisive turn for the worse, China may be borrowing a page out of the Trump trade policy book, which sees China now turning the screws on the US," he noted. 

"However, at this stage, the market is still waiting for clarification, and if China walks down these innuendos."

Unease about the trade talks and long-running concerns about the global economy were keeping oil prices subdued, with both main contracts flat on Monday.

AMMAN — Jordan’s IPP3, located on a green field site at Al Manakher, 30km from the Jordanian, is the world’s biggest tri-fuel power plant, with an installed capacity of 573MW. As part of its social responsibility to support the surrounding Jordanian community, The CSR activities have been conducted by the owner of the plant AAEPC(Amman Asia Electric Power Company) and by O&M operator of KEPCO KPS in one of the disabled schools based in Sahab (Al Manar Center for Intellectual Development) exclusively dedicated to the Jordanian's society.

The CSR activities were conducted in Amman - Sahab on September 26 and concentrated on providing physiotherapy materials, stationery, school bags, desks and tables, 

In the course of CSR activities, IPP3 also carried out many maintenance works such as painting the classrooms, fixing the air conditioners and fixing the water system in the school.

IPP3 CSR activities included paint the classrooms as part of the main activities, dancing with students and The IPP3 crew shared a lunch with all students in order to bring joy to the hearts of students and to show that they are not less than any natural person in this universe in order to explore their potentials and discover their self-esteem.

At the end of the event, AAEPC CEO and KEPCO KPS Plant Manager have emphasized their continued support to the center and the Jordanian community and they will do what it takes to support this school to be sufficiently equipped to provide the necessary services to the students.

DUBAI — With the highest tower in the world, grand commercial centres and artificial islands, Dubai projects an image of prosperity, even as the city-state races to court investors to bolster it economy.

Despite boasting the most diverse economy in the Gulf region, the emirate's vital property, tourism and trade sectors have weakened in recent years.

Real estate deals plunged 21.5 per cent to $60.7 billion in 2018, according to government data, while the number of tourists visiting Dubai remained stagnant at around 16 million in the past two years.

"Dubai's economic growth has been lacklustre... following a weak real estate market and subdued consumer spending," M.R. Raghu, head of research at Kuwait Financial Centre (Markaz), told AFP.

The emirate's economy grew by just 1.94 per cent last year — almost half of its 2017 growth and just a notch above the 1.9 per cent in 2010, when Dubai was still recovering from a recession due to the global financial crisis and its own debt problems.

Incentive measures 

But Raed Safadi, chief economic adviser to Dubai Economy, the government agency responsible for promoting development, downplayed reports about the slowdown.

"We are still growing. Yes, it is not at 4.5 per cent — the average between 2012 and 2016 — but given all the conditions around the world, it is healthy," Safadi told AFP.

He expects growth to pick up to 2.1 per cent in 2019 and rebound to as high as 3.8 per cent next year.

This prediction relies heavily on the Expo 2020 global trade fair that Dubai hopes will deliver an economic windfall and some 300,000 new jobs.

Safadi said Expo 2020 is expected to add some $35 billion to the economy over the subsequent decade.

But with the region's most open market, Dubai is exposed to global trade tensions, regional slowdown and the economic downturn in Iran under tough US sanctions, according to the London-based Capital Economics.

"All of this will weigh on Dubai's key logistics, tourism and manufacturing sectors," said James Swanston, an economist at Capital Economics.

To preserve Dubai's image as an economic hub, the city-state has implemented a raft of incentives.

Months ago, the government started granting permanent residencies to big investors and allowed foreigners to have full ownership of businesses throughout the emirate, including outside free zones.

Authorities also began offering long-term visas for foreign investors, students and talent, while revising fees on hundreds of services, freezing school fees and setting up a high-level committee to rebalance the property market.

With a population of 3.3 million — over 90 per cent of them expats — Dubai draws 70 per cent of its revenue from fees on various transactions and around 24 per cent from taxes and government company profits.

Just six per cent of its revenue comes from oil.

Public debt

Fahad Al Gergawi, CEO of Dubai Foreign Direct Investment (FDI), a public body, said reports of the downturn were exaggerated.

"The economic slowdown is not new to Dubai... but certain media reports highlight particular issues to show that Dubai is struggling," he told AFP on the sidelines of Dubai Investment Week held last week.

"We have passed through similar economic cycles in the past."

Gergawi said Dubai has been among the top 10 cities in the world for attracting new investment in the past five years and among the top three cities for FDI.

The government announced on Sunday that in the first half of 2019, the emirate received $12.7 billion in FDI, an increase of 135 per cent from the same period last year, surpassing even the $10.5 billion it received in 2018.

"In the medium term, spending related to hosting Dubai Expo 2020 and monetary easing measures would support growth. Furthermore, Dubai has been actively undertaking reform measures to boost the economy," Raghu said.

But Dubai, one of seven emirates that make up the United Arab Emirates, still faces high public debt of around $123 billion, or 110 per cent of GDP, divided almost equally between the government and state-linked companies.

About two-thirds of the debt of state-linked companies will mature by the end of 2023.

But Swanston said a "total debt default" is unlikely as oil-rich Abu Dhabi, the wealthiest emirate in the federation, "would come to the rescue" as it did when Dubai defaulted on its debt in 2009.

PARIS — European countries scrambled on Thursday to prepare a response to new US tariffs on billions of dollars' worth of EU goods after Washington got the go-ahead from the World Trade Organisation (WTO) to strike back over state subsidies for planemaker Airbus.

But officials also indicated they still hoped to find common ground to avoid escalating trade tensions that risk battering economies across the globe.

"We've been arguing for a trade deal for months. Our hand is extended," French Finance Minister Bruno Le Maire said.

"I hope the United States will listen to this voice, which to my mind is the voice of reason," Le Maire told journalists in Paris, calling Washington's move to tax $7.5 billion of EU imports a "serious economic mistake".

US President Donald Trump has already imposed tariffs on steel and aluminium imports, saying America has gotten a raw trade deal from its partners.

The Airbus ruling on Wednesday marked the first time the WTO has cleared the United States to impose countermeasures on EU products under international trade law.

"A nice victory!" Trump wrote on Twitter, saying the EU "has for many years treated the USA very badly on Trade due to Tariffs, Trade Barriers, and more".

However, the EU has also filed a WTO suit claiming illegal aid for Airbus's US rival Boeing, with a decision expected in the coming months.

In the meantime, the bloc has warned it will retaliate in kind.

"If the American administration refuses to accept the hand extended by France and the EU, we are ready to respond with sanctions approved within the WTO framework," Le Maire said.

 'Hit US consumers' 

In the immediate line of fire are civilian aircraft from Britain, France, Germany and Spain — the countries which formed Airbus — which will cost 10 per cent more when imported to the US from October 18.

According to US data, the country imported about $3.5 billion in aircraft from the EU in 2018.

But the tariffs also target consumer products like French wine, which Trump had vowed to take aim at in recent months. Bottles from France, Spain and Germany will now face 25 per cent tariffs.

Different kinds of cheese from across Europe will also cost 25 per cent more for American consumers, as will "Made in England" suits, cashmere sweaters and pyjamas.

Italian farmers breathed a sigh of relief, since Italian favourites such as tomatoes, olive oil and wine will not be taxed.

The Coldiretti agriculture body said the US tariffs would impact 500 million euros' (almost $550 million's) worth of the roughly four billion euros of Italian food exports to the United States.

The EU, meanwhile, warned on Thursday the tariffs would only end up hurting Americans' wallets.

"This is a move that will first and foremost hit US consumers and companies, and will make efforts towards a negotiated settlement more complicated," Commission spokesman Daniel Rosario said in Brussels.

US Trade Representative Robert Lighthizer said on Wednesday he expected to begin talks with Brussels soon to try and resolve the dispute.

The EU and United States have reached such settlements in the past.

But European officials had already offered in July to call a truce on subsidies for airplane makers, in which both sides would admit fault and agree to curtail state aid — to no avail.

SAN FRANCISCO — Several features on Twitter were down on Wednesday, the platform said, with users from Japan to the USA reporting they were unable to log in, use the mobile app or see direct messages.

“We’ve been experiencing outages across Twitter and TweetDeck,” the social media giant said in a statement, without giving a reason for the disruption. 

“You might have had trouble Tweeting, getting notifications, or viewing DMs. We’re currently working on a fix, and should be back to normal soon.”

Monitoring site outage.report said it had received more than 3,200 complaints from across six continents as of Wednesday, with users in the US, UK and India among those particularly badly hit.

Almost half of those reporting outages said the mobile app was not working, with around a quarter saying the whole website was down.

The site’s TweetDeck dashboard function allows users to monitor multiple accounts simultaneously and is particularly popular with journalists. 

Some users posted alongside the hashtag #twitterdown, although the site’s trending section was working only intermittently.

The multibillion-dollar platform’s popularity has soared in recent years.

But it has also come in for criticism, with its CEO Jack Dorsey admitting to US lawmakers last year that Twitter had been “unprepared and ill-equipped” for the vast campaigns of manipulation that affected social media.

In August hackers briefly took over Dorsey’s account and posted a series of racist and offensive tweets. 

Twitter on Tuesday also reported a minor outage in displaying user analytics.