Top Business Stories
OPEC has trimmed its crude oil output towards next year's global requirement, the exporter group said on Tuesday, further whittling away at a supply surplus that could weigh on prices. "Signs of a recovery are already visible in rising global industrial production," OPEC said. The report kept unchanged forecasts which point to a smaller share of the world oil market for OPEC in 2014 due to increasing supply from the United States, in the midst of a shale energy boom, and other non-OPEC countries. OPEC expects demand for its oil in 2014 to average 29.57 million barrels per day (bpd), maintaining its previous estimate.
PARIS/BERLIN (Reuters) - Airbus parent EADS (EAD.PA) came under fire on Tuesday from shareholders France and Germany over plans to cut 5,800 jobs, but its chief executive said that ignoring weak defense and space markets would have put even more jobs at risk. EADS said a three-year reorganization of its defense and space activities would affect 4,500 jobs on its main payroll, of which 1,500 would be redeployed to commercial planemaker Airbus and helicopter unit Eurocopter. It issued figures showing that the largest burden of job reductions would fall in Germany, where 2,000 jobs would be cut compared with 1,260 in France, 557 in Spain and 450 in the UK. The plan calls for between 1,000 and 1,450 forced layoffs and EADS will not renew 1,300 temporary employment contracts.
U.S. small business sentiment bounced back from a seven-month low in November, with owners setting their sights on creating more jobs and expanding operations. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index edged up 0.9 point to 92.5 last month. Eight of the index's 10 components advanced, with decent gains in job creation plans and the share of business owners saying this is a good time to expand.
The euro reached a five-year peak against the yen and a six-week high against the dollar on Tuesday, as focus intensified on the dwindling level of spare cash in the euro zone's banking system and the ECB's apparent lack of concern. Stocks consolidated some of their gains of the last two days as caution also ticked-up before the Federal Reserve's meeting next week amid talk of a tentative scaling-back of its stimulus from some of its policymakers. Investors were poised for a busy day of data on some of the countries still struggling in the euro zone, as well as some interesting money market operations at the ECB where liquidity levels are now the tightest in two years. "It is hard to say the euro will weaken unless the ECB does something," said Laurent Fransolet, an interest rate strategist at Barclays in London.
The trial on corruption charges of businessman Victor Dahdaleh came to an abrupt halt on Tuesday when counsel for the Serious Fraud Office (SFO) told a London court there was no longer a realistic prospect of a conviction. The collapse of one of Britain's biggest bribery trials in years is a serious setback for the SFO and follows a series of blunders in other high-profile cases which had already damaged its reputation. "After careful consideration of all the circumstances of this case, the SFO has concluded that there is no longer a realistic prospect of conviction ... and accordingly we will offer no evidence," Philip Shears, lead counsel for the prosecution, told Southwark Crown Court.
Euro zone inflation is not undershooting the European Central Bank's target of just below 2 percent so much that it should use its heaviest artillery to try to boost prices, ECB Executive Board member Benoit Coeure said. Coeure told a journalist club on Monday night that the ECB was ready to act, but that the euro zone was not edging towards a dangerous fall in prices. The ECB cut its interest rates to a record low of 0.25 percent last month after October inflation fell to an alarmingly low 0.7 percent, increasing fears the currency bloc would see a spiral of persistently falling prices. "Inflation prospects are consistent with our objective, so I don't see need to use spectacular measures, such as U.S.-style large-scale asset purchases," Coeure said, adding that the ECB can buy government bonds as long as it does not do so for the purpose of financing governments.
The board of Telecom Italia is not considering any plan to break up the company's Brazilian wireless unit TIM Participacoes, CEO Marco Patuano said on Tuesday. "The board is not studying any break-up of TIM Brasil. I will never grow tired of repeating that it is for us a strategic company," he said on the sidelines of an event. A government source in Brazil said on Monday the country's antitrust watchdog had not ruled out a possible break-up of TIM Brasil into units to be bought by local rivals.
General Motors Co (GM), the world's second-biggest car maker, is trying to break the Japanese stranglehold of the popular family car market in Indonesia, where it sees the next auto boom after China, a senior executive said. Despite being in Indonesia for about 30 years longer than Japan's Toyota Motor Corp and its affiliates including Daihatsu Motor Co Ltd , the U.S. company is only a small player in Southeast Asia's biggest economy. The U.S. company has sold around 12,000 cars from January to October this year, whereas Toyota, the world's biggest car maker, has sold more than 350,000 units. General Motors is banking on multi-purpose vehicles, sport utility vehicles and compact cars to close the gap with its Japanese rivals, said Michael Dunne, who became president of the company's Indonesian operations in September.
Commercial jet buyers are set to turn to rapidly-expanding capital markets for more financing in 2014, as the value of jet sales rises by about 7.7 percent to $112 billion, Boeing Co (BA) forecast on Tuesday. Capital markets will account for about 22 percent of total jet financing, up from 14 percent this year and just 3 percent in 2009, Boeing said in an annual forecast. Commercial banks are likely to provide 25 percent of financing next year, compared to 28 percent this year, Boeing said.
The financial burden of running final salary pension schemes is hampering companies' ability to invest in expansion and development, according to UK research published on Tuesday. A survey of 226 chief executives and board members in companies carried out by UK business organization the CBI and insurer Standard Life (LSE:SL.) found more than two thirds reported the cost of so-called defined benefit pensions is stifling business investment. Defined benefit pensions pay out an income to scheme members on retirement amounting to a proportion of their final salary, depending on how long they paid into the scheme.
The top executives of Italy's Monte dei Paschi di Siena (BMPS.MI) are committed to strengthening the troubled lender, a spokesperson for the bank said on Tuesday when asked whether they may resign should a planned cash call be postponed. Italian daily Il Sole 24 Ore said on Tuesday Chairman Alessandro Profumo and Chief Executive Fabrizio Viola were ready to resign if the timing of the cash call were pushed out. (Corrects to make clear executives did not vow to stay on even if cash call postponed, adds spokesman quote)
Polish flagship carrier LOT (LOT.UL) said it had agreed with U.S. plane maker Boeing (BA) on compensation for the faults that grounded its 787 Dreamliner jets. "I can confirm that the agreement was signed yesterday, but we cannot reveal the details," LOT spokeswoman Barbara Pijanowska-Kuras said. There was no information on whether Boeing agreed to pay the compensation in cash or by lowering lease rates for the Dreamliners that LOT operates. LOT has five Dreamliners, according to its website.
Valiant Holding AG has become the first Swiss bank to say it would work with U.S. officials in a crackdown on wealthy Americans evading taxes through hidden offshore accounts. This decision does not endanger the distribution of an unchanged dividend," Valiant said in a statement published late on Monday. Valiant said an internal review showed it had never actively sought U.S. clients or visited Americans to drum up business. The bank began transferring business with wealthy Americans into an entity registered with the Securities and Exchange Commission in 2008, when the crackdown intensified.
Italy's struggling airline Alitalia has finally succeeded in netting the 300 million euros ($412 million) it needs to keep flying over Christmas after a long drawn-out capital raising, a source with knowledge of the operation said on Tuesday. The cash call is part of a government-engineered rescue package seen as a stop-gap measure to keep Alitalia in the air until it can find a new partner willing to invest in revamping its operations and making it more profitable. An Alitalia spokeswoman said the company would comment on the outcome of the capital increase in due course. The successful rights issue, which includes pledges from new investors such as Italian businessman Antonio Percassi, will likely allow Alitalia to keep flying throughout the key Christmas holiday season.
An ambitious trade pact between a dozen countries around the Pacific Rim will not be finalized this year as hoped, with no agreement on thorny issues like intellectual property, agricultural tariffs and state-owned enterprises. The U.S.-backed deal, which Washington wanted to conclude this year, aims to establish a free-trade bloc stretching from Vietnam to Chile and Japan, encompassing about 800 million people and almost 40 percent of the global economy. But differences over farm tariffs between the United States and Japan proved to be one of the major roadblocks. "None of us have agreed on anything," Tim Groser, New Zealand's trade minister, told a news conference in Singapore on Tuesday at the end of a four-day meeting of the Trans-Pacific Partnership (TPP).