Business

MILAN — Workers at Amazon’s main distribution hub in Italy are planning their first ever strike for Friday, trade unions said, while they are also striking at six warehouses in Germany, threatening to disrupt one of the year’s busiest shopping days.

Like the rest of Europe, Italians in recent years have embraced the US tradition of Black Friday, a day of heavy discounting by retailers on the day after Thanksgiving.

Unions said in a statement more than 500 Amazon workers at the Piacenza site in northern Italy had agreed to strike following a failure to negotiate bonuses with the company. 

Workers have also decided not to do any overtime until December 31, covering the peak season for the online retailer which hires temporary workers during this period.

Amazon employs around 1,600 people on a permanent basis at the Piacenza site, the first it built in the country after launching its Italian website in 2010.

The Verdi trade union in Germany said Amazon employees would also strike on Friday at six distribution centres in the country as part of a long-running dispute over pay and conditions.

“The world’s biggest online retailer wants to achieve record sales on this day, but employees have to produce record performance not only on this day so that everything runs how Amazon wants it,” said Verdi board member Stefanie Nutzenberger.

Amazon in Italy said in a statement it remained focused on trying to guarantee scheduled deliveries for its customers on Black Friday and in the following days.

The company said salaries paid to its workers were among the highest in the logistic sector, and that it also provided some benefits such as private medical insurance or money to pay for training programmes.

E-commerce is growing fast in Italy where online sales account only for 10 per cent of overall retail sales, according to consultancy EY, half the European average.

The US government on Tuesday urged businesses to act on an Intel Corp. alert about security flaws in widely used computer chips, as industry researchers scrambled to understand the impact of the newly disclosed vulnerability.

Homeland Security gave the guidance a day after Intel said it had identified security vulnerabilities in remote-management software known as “Management Engine” that shipped with eight types of processors used in business computers sold by Dell Technologies Inc., Lenovo Group Ltd., HP Inc. , Hewlett Packard Enterprise Co. and other manufacturers. 

Security experts said that it was not clear how difficult it would be to exploit the vulnerabilities to launch attacks, though they found the disclosure troubling because the affected chips were widely used. 

“These vulnerabilities affect essentially every business computer and server with an Intel processor released in the last two years,” said Jay Little, a security engineer with cyber consulting firm Trail of Bits.

For a remote attack to succeed, a vulnerable machine would need to be configured to allow remote access, and a hacker would need to know the administrator’s user name and password, Little said. Attackers could break in without those credentials if they have physical access to the computer, he said.

Intel said that it knew of no cases where hackers had exploited the vulnerability in a cyber attack.

Homeland Security advised computer users to review the warning from Intel, which includes a software tool that checks whether a computer has a vulnerable chip. It also urged them to contact computer makers to obtain software updates and advice on strategies for mitigating the threat. 

Intel spokeswoman Agnes Kwan said the company had provided software patches to fix the issue to all major computer manufacturers, though it was up to them to distribute patches to computers users. Dell’s support website offered patches for servers, but not laptop or desktop computers, as of midday Tuesday. Lenovo offered fixes for some servers, laptops and tablets and said more updates would be available on Friday. An HP representative said the company would soon post fixes on its support site.

Security experts noted that it could take time to fix vulnerable systems because installing patches on computer chips is a difficult process. 

“Patching software is hard. Patching hardware is even harder,” said Ben Johnson, co-founder of cyber startup Obsidian Security.

BRUSSELS — The European Union has agreed a plan obliging online retailers operating in the bloc to make electrical goods, concert tickets or car rental available to all EU consumers regardless of where they live.

Putting an end to “geoblocking”, whereby consumers in one EU country can not buy a good or service sold online in another, has been a priority for the EU as it tries to create a digital single market with 24 legislative proposals.

The agreement late on Monday between the European Parliament, the EU’s 28 member states and the Commission will allow EU consumers to buy products and services online from any EU country. The agreement applies to e-commerce sites including Amazon and eBay.

Companies will no longer be able to re-direct consumers to a country-specific website without their consent. However, consumers will still have to organise how to pick up a product if the company does not offer cross-border delivery.

Commission Vice President Andrus Ansip, responsible for the digital single market, said the proposal would put an end to unjustified discrimination for online shoppers.

“With the new rules, Europeans will be able to choose which website they want to buy from, without being blocked or re-routed. This will be a reality by Christmas next year,” Ansip said in a statement.

The proposal does not extend to copyright-protected content, which includes music streaming services such as Spotify and Apple’s iTunes, electronic books, television series and movies.

The Parliament had hoped to include these services, but music industries successfully argued this could lead to price increases in countries where such services are cheaper.

The European Consumer Organisation  argued that, by not including copyright-protected materials, consumer choice would be limited for people living or studying abroad.

“It is especially frustrating for consumers who belong to a linguistic minority and would like to watch series or films in their own language,” Monique Goyens, the director general of BEUC, said in a statement.

The European Parliament and member states are expected to approve the new legislation early next year. It is seen entering force by the end of 2018.

AMMAN — Trade delegates from the Republic of Korea held meetings on Monday with their Jordanian counterparts in a bid to build new trade partnerships between the two countries, according to a statement of the Korea Business Centre in Amman.

The visiting delegates, representing manufacturers and exporters of several products, came from the Korean city of Daegu.

The meetings were attended by the Ambassador of the Republic of Korea to Jordan Lee Bom-yon and Jordanian businessmen who have interest in the Korean industries, according to the statement. 

TOKYO — Embattled Japanese conglomerate Toshiba said on Sunday it plans to raise $5.3 billion by issuing new shares, a move aimed at avoiding delisting from the Tokyo bourse.

A board meeting on Sunday decided on the move, it said.

Toshiba will issue 2.28 billion new shares to raise a total of 600 billion yen ($5.3 billion), with financing expected to close on December 5.

The new shares will be allotted to 60 overseas investment funds. Each will be priced at 262.8 yen, a 10 per cent discount from Friday’s closing price.

The number of new shares is roughly half the number of currently listed shares.

“This of course poses a concern of dilution of the value of shares but... we believe this measure will enable us to clear obligations and focus on core business, which will ultimately contribute to the value of shares,” a Toshiba spokeswoman said.

Toshiba is on the ropes after the disastrous acquisition of US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection.

Those losses came to light as the group was still reeling from revelations that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.

In order to survive and avoid delisting, the cash-strapped group has decided on the multibillion-dollar sale of its prized chip business to a consortium led by Bain Capital. 

The chip unit brought in around a quarter of Toshiba’s total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.

But the sale has been delayed due to legal disputes with a production partner, US chipmaker Western Digital.

The Tokyo-based conglomerate logged a net loss of $436 million for the April-September fiscal first half.

Toshiba said proceeds from the new share issuance would be used for full payment of parent company guarantees related to Westinghouse.

After Toshiba settles its obligations to Westinghouse creditors, it will be able to demand reimbursement from Westinghouse itself.

Toshiba intends to sell the claims against Westinghouse to a third party, thus focusing more on its own rehabilitation.

Tesla Inc. may have to ask creditors and shareholders for more capital to fund development of an electric semi truck, a new roadster and accelerated production of a high-volume electric sedan, analysts said on Friday.

Tesla CEO Elon Musk  unveiled one flashy strategy for generating cash during the launch event on Thursday for the Semi truck, surprising the audience with a prototype of a new generation of the Tesla Roadster. Musk promised the Roadster will be the fastest production car available. The first 1,000 cars will cost $250,000 each, paid in full upfront, with later models starting at $200,000.

Those deposits would put $250 million into Tesla’s cash drawer today for a car that is likely to go into production in 2020.

Musk did not offer details about how Tesla would generate additional funds to deliver the semi truck and the roadster, and overcome production problems that have hobbled production of the company’s high-volume sedan, the Model 3.

Tesla spent $1.1 billion on its auto business in the third quarter, and expects expenses of $1 billion in the current one. It had about $3.5 billion in cash and cash equivalents as of September 30.

At the current cash-burn rate, it would likely be down to about $1 billion in cash by the end of the first quarter.

“In essence, all last night’s event did was add to Elon Musk’s shopping list of things he needs to spend money on at a time when the company is having difficulty making its base vehicle [Model 3],” said Cowen analyst Jeffrey Osborne.

Despite such concerns, Tesla shares were up about 1.4 per cent at mid-day. While the shares are up more than 40 per cent this year, they have fallen 20 per cent from record highs in mid-September.

Shares in heavy truck diesel engine maker Cummins Inc. fell 4.7 per cent, and shares in Class-8 truck makers Paccar Inc. and Navistar International Corp. also fell.

Tesla this month pushed back its target for volume production on the Model 3 sedan — widely seen as crucial to the company’s long-term future — by about three months to fix production bottlenecks. 

Osborne said Tesla’s cumulative capex announcements now exceed $15 billion to $20 billion over the next few years.

Some analysts fear the trucks will be an expensive distraction for the company, which has never posted an annual profit and is in self-described “manufacturing hell” related to the $35,000 Model 3 sedan.

Jefferies analyst Philippe Houchois estimated that Tesla would need to raise $2.5 billion to $3 billion to keep production running smoothly.

“Longer term, we continue to think the capital intensity of the business model will keep returns below best-in-class auto [makers],” Houchois said in a research note.

Tesla’s last debt sale in August was well-received in a hot bond market, allowing the company to increase the offering to $1.8 billion from $1.5 billion. But the bond has underperformed in the secondary market, suggesting it could be more challenging for Tesla to tap the high-yield debt market again so soon.

“They are losing $1.5 billion a quarter and the bond is unsecured so it is not of interest to me,” said Jim Brilliant, chief investment officer at Century Management.

TOKYO — Tokyo stocks opened marginally lower on Thursday as the yen picked up against the dollar on concerns about a possible delay to US tax reform.

The benchmark Nikkei 225 index slipped 0.17 per cent, or 36.89 points, to 21,991.43 in early trade while the broader Topix was down 0.28 per cent, or 4.88 points, at 1,739.13.

The indices later moved into positive territory as investors picked up bargains.

The Japanese stock market will likely be kept under pressure on Thursday by lower US stock prices and the yen’s appreciation, Okasan Online Securities said.

“However, the Nikkei index is in the middle of a new uptrend over the mid- and long term,” it said. 

Investors “may as well buy on drops without being swayed by an ambiguous market mood”, the brokerage said in a client note.

The key market gauge hit a quarter-century high last week but fell for a sixth straight day to Wednesday.

Wall Street also dropped on Wednesday as weak oil prices and fears of a delay in US tax reforms hurt investor sentiment.

The dollar has also faced selling.

The greenback was changing hands at 112.97 yen early Thursday, slightly up from 112.85 in New York on Wednesday afternoon but still down from 113.21 yen in Tokyo earlier in the day. 

A stronger yen is usually a drag on the Tokyo stock market as it erodes the profitability of Japanese exporters.

SoftBank rose 1.60 per cent to 9,490 yen after Bloomberg News reported the high-tech giant planned to invest as much as $25 billion in Saudi Arabia over the next three to four years.

Energy stocks continued to fall, with oil explorer Inpex off 1.98 per cent at 1,256.5 yen.

DUBAI — Boeing on Wednesday announced an order from Gulf airline flydubai for 225 medium-haul 737 MAX aircraft with a list price of $27 billion, hailing it as the “largest-ever single-aisle jet order” from a Middle East carrier.

The announcement, made at the Dubai Air Show, came just hours after rival Airbus said it had secured the biggest-ever order in its history to supply 430 medium-haul A320s to US investment firm Indigo Partners at a catalogue price of $49.5 billion.

The rival US and European manufacturers are engaged in a fierce battle for the medium-haul market, the world’s largest by volume, both offering reengined versions of their top-selling models that promise a 15 per cent reduction in fuel production.

Currently, Airbus still has a slight edge with a 55 per cent share of the market.

The European manufacturer boasts orders for more than 5,500 aircraft since it launched the A320neo in 2010. 

Boeing boasts more than 4,000 for the various models of the 737 MAX.

The agreement with flydubai consists of a commitment for 175 MAX aircraft, and purchase rights for 50 additional MAXs.

More than 50 of the first 175 aircraft will be 737 MAX 10s. The rest of the initial order will be made up of the MAX 8 and MAX 9.

No-frills airline flydubai, which serves 95 destinations in 44 countries, is an all-Boeing carrier.

It placed its first order for 50 Next-Generation 737-800s in 2008. To date, it has taken delivery of 63 737-800s and three 737 MAX 8 aircraft.

The new deal surpasses its previous record order of 75 MAXs and 11 Next-Generation 737-800s which was signed at the 2013 Dubai Air Show.

LONDON — Tesco won provisional approval for its £3.7 billion ($4.9 billion) takeover of wholesaler Booker from the UK competition regulator on Tuesday, moving Britain’s biggest retailer closer to securing a new avenue of growth.

The Competition and Markets Authority (CMA) said it had conducted an in-depth review and provisionally concluded that Tesco’s purchase of Booker does not raise competition concerns.

The provisional unconditional clearance will come as a major relief to Tesco. Most analysts had expected that Tesco would have to agree store disposals to gain clearance.

Both Tesco and Booker, the country’s biggest grocery wholesaler, welcomed the CMA announcement. Tesco said it expected to complete the deal, which also requires shareholder approvals, in early 2018.

Shares in Tesco and Booker were up 4.8 per cent and 5.1 per cent respectively at (09:05 GMT).

Bernstein analysts said they expect some uncertainty to remain, with the focus shifting to whether investors will approve the deal.

Their analysis indicates that Tesco will achieve the required 50 per cent shareholder approval and that the focus will be on Booker, where the threshold is 75 per cent.

“With a higher shareholder hurdle and the Tesco share price below the level when the bid was made [about £2], Booker shareholders may argue for a higher share price,” the broker’s analysts said.

For each Booker share, Tesco is offering 0.861 new Tesco shares and 42.6 pence in cash.

Strong competition 

The CMA said it found that Tesco as a retailer and Booker as a wholesaler supplying caterers and independent retailers Premier, Londis, Budgens and Family Shopper do not compete head-to-head in most of their activities. 

In particular, it found that Tesco does not supply the catering sector that accounts for more than 30 per cent of Booker’s sales.

“Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers,” said Simon Polito, chair of the CMA’s inquiry group.

The CMA is now inviting further comment and evidence before making its final decision by the end of December.

The proposed deal is Tesco Chief Executive Dave Lewis’s boldest move yet. He believes it will provide a new source of growth by giving the group access to the fast-growing “out of home” food market, given Booker’s role as a distributor to the catering industry.

Some Tesco shareholders have criticised the bid, saying Tesco is overpaying and that it will distract from the company’s turnaround plan. 

Rival wholesale groups have also called for the takeover to be blocked.