Business

PARIS — New car sales in France plunged over 50 per cent in May due to the impact of the coronavirus lockdown, industry figures showed on Monday, but automakers noted the first signs of a recovery in the industry.

All non-essential businesses, including auto dealers, were closed from March 17 to May 11, in a bid to slow the spread of COVID-19.

The measure pushed down auto sales 72 per cent in March and almost 90 per cent in April, reflecting a worldwide trend.

Renault announced on Friday it would cut nearly 15,000 jobs, including 4,600 at its core French operations, to try to steer out of a cash crunch exacerbated by the crisis.

But despite the 50.3 per cent fall in May, the first signs of a recovery have emerged, the French Auto Manufacturers’ Association (CCFA) said.

“We saw a clear recovery at the end of the month, that is to say that the entire distribution and delivery system as well as the orders were unblocked,” said CCFA spokesman Francois Roudier.

“The figure at the start of the month was very low, very close to the previous month, but progressively with the reopening of auto dealers, the deliveries, the distribution and also the orders have recovered,” he told AFP.

But the outlook remains “very unclear for the first time in years”, he said.

For the whole of 2020, the industry sees a drop of between 20 and 30 per cent, but these figures “are to be taken cautiously as we still lack a lot of information”, particularly concerning the recovery, Roudier said.

NEW YORK — Wall Street finished mostly higher on Friday as US President Donald Trump stopped short of threatening tariffs on China, though European stocks tumbled on concerns that mounting tensions between the world's two largest economies could spiral further.

      Trading in US stocks was choppy throughout the session, with major indices sinking into negative territory as a mid-afternoon White House speech by President Donald Trump began.

      Trump harshly criticised China's handling of the coronavirus. He announced new actions including an end to US funding for the World Health Organisation.

       He also ordered probes of Chinese companies listed on American financial markets.

      But Trump made no mention of the "phase one" trade agreement with China that walked back earlier trade tariffs, nor did he threaten new levies on US imports from the country.

      "When (Trump) first started talking, he sounded pretty hawkish, there was an initial knee-jerk selloff," said Briefing.com analyst Patrick O'Hare. "When it became clear he wasn't saying anything about tariffs, there was a snapback rally."

      While the Dow finished narrowly lower, both the S&P 500 and Nasdaq ended solidly higher.

      Many analysts expect Trump to continue to rail against China in the months ahead as he faces a challenging path to re-election in light of COVID-19 and the resulting economic slowdown.

      Gorilla Trades strategist Ken Berman cautioned that "the possible collapse of the 'phase one' (trade deal) poses a risk to the global economic recovery, especially since the exact damage of the virus is still uncertain."

      Earlier, bourses in Paris, Frankfurt and London retreated in anticipation of Trump's speech, which was delivered after European markets closed.

       Renault hits skids 

      Renault was the biggest loser in Paris, with shares crashing by more than seven per cent after the company revealed a radical restructuring plan to save two billion euros ($2.2 billion) over three years.

      The French carmaker plans to axe almost 15,000 jobs, including 4,600 at core operations in France as it seeks to steer out of a cash crunch exacerbated by the coronavirus crisis.

      At the other extreme, Williams-Sonoma surged 14.0 per cent as it reported a surprise profit despite having all its stores shuttered for more than half the quarter, fueled by surging sales of cooking equipment while much of the US was stuck at home under quarantine orders.

      But Williams-Sonoma withdrew its full-year profit forecast, saying that while current trends in its businesses are still strong, there was still uncertainty about the lasting macro-economic drag from coronavirus shutdowns.

NEW YORK — Boeing has resumed production of the 737 MAX at a "low" rate following two deadly crashes that led to the aircraft's global grounding by regulators, the company said on Wednesday.

      The jet hasn't flown commercially since March 2019 and is still a number of key steps away from being cleared for service by the US Federal Aviation Administration and other regulators.

      Boeing said work on the MAX had resumed at the company's Renton, Washington factory as it implements initiatives to enhance workplace safety and product quality.

      "We've been on a continuous journey to evolve our production system and make it even stronger," said Walt Odisho, vice president and general manager of the 737 program.

      The aerospace giant had shut production in January amid uncertainty over when regulators would clear the jet to fly again. 

      Even before the hit from the coronavirus, the MAX crisis had cost Boeing billions of dollars in compensation for airlines and production expenses, including the cost to store more than 400 planes that could not be delivered to customers. 

      Since that time, Boeing's troubles have deepened as its airline customers have been thrust into a fight for survival due to plunging travel demand from coronavirus shutdowns. 

      Earlier Tuesday, Boeing released details on a downsizing plan to cut total headcount by 10 percent, or roughly 16,000 employees in all.

      The company said it approved 5,520 US employees for voluntary layoffs and was notifying another 6,770 staff members that they would be involuntarily let go.

LONDON — Stock markets mostly rose and the dollar advanced on Thursday, gaining traction from optimism over reopening economies and a huge EU coronavirus recovery package, dealers said.

      Asia bounded higher, but Hong Kong failed to maintain early gains as investors fretted over a US decision to revoke the city's special status that could see it lose key privileges, bringing into doubt its future as a global financial hub.

      Meanwhile, another 2.12 million people filed for unemployment in the United States last week, pushing total layoffs since the start of the coronavirus crisis to more than 40 million, a level not seen since the Great Depression, the Labour Department said.

      The new filings, however, showed that the pace of the layoffs was subsiding as the US economy slowly begins to reopen.

      Wall Street stocks inched higher at the opening of trade.

      In European afternoon trading, London stocks climbed 1.4 per cent, with Paris following with a 1.3 per cent gain and Frankfurt with a 0.9 per cent increase.

      Oil markets recovered after slumping on news on Wednesday of a surprising jump in US stockpiles, denting hopes of a pick-up in energy demand in the world's biggest economy.

       Bullish sentiment grows 

      "Stock markets in Europe are showing decent gains ... as the optimism in relation to economies being reopened is doing the rounds," said CMC Markets analyst David Madden.

      "Everybody is painfully aware of the lockdowns, but as they are being loosened, the bullish sentiment keeps growing.

      "The various steps taken to try and return to normal life are small, but they are significant as any progress is welcomed."

      Europe's bourses had vaulted higher on Wednesday after EU leaders unveiled a vast 750-billion-euro ($825-billion) proposal to the European Parliament and member states.

      Markets extended gains on Thursday as investors also looked past building China-US tensions, though worries remain about the uncertain global outlook.

      Hong Kong stocks shed 0.7 per cent after China's parliament endorsed plans to impose a security law on the city, which would punish secession, subversion of state power, terrorism and acts that endanger national security.

      "Beijing has made it very clear that it is not afraid of the US and it is going to do what it thinks is right," noted ThinkMarkets analyst Naeem Aslam.

      "The geopolitical tensions have seriously anchored up, but market players are still not paying much attention to this."

      The US decision over Hong Kong's status is the latest volley in an increasingly acrimonious row between the world's two economic superpowers, with Donald Trump's accusations over Beijing's part in the coronavirus outbreak, Huawei and trade also causing friction.

      Despite the threat of another trade war, investors are focusing on the easing of lockdowns around the world, with communities from Asia to Europe to the US slowly coming out of hibernation.

      Adding to the upbeat mood was news that Disney plans to reopen its Florida theme parks. Trillions of dollars in stimulus and central bank support have also provided dealers with much-needed confidence, including the latest EU stimulus package.

      "This is Europe's moment," EU Commission chief Ursula Von der Leyen said, adding: "We either all go it alone, leaving countries, regions and people behind... or we walk that road together."

SAN FRANCISCO — Google's popular map service on Wednesday added more ways for people to engage with local businesses struggling to survive the economic hit of the coronavirus pandemic.

      The Google Maps enhancements were touted as part of an effort to help small shops and restaurants.

      They come a week after Facebook unveiled free tools for retailers to create online storefronts on the social network and Instagram.

      Google searches for "how to help small businesses" rocketed to an all-time high in March, according to Google Maps senior vice president Jen Fitzpatrick.

      "People across the world are looking for ways to continue supporting corner bookstores; local watering holes; beloved dance studios and other businesses that give their neighborhoods character -- even if it's from a distance," Fitzpatrick said in a blog post.

      New features at Maps include being able to check by name whether local businesses have donation or gift card links at their online profiles.

      In the weeks ahead, Maps will make it possible to use its search tool to find all nearby restaurants asking for financial help to endure the crisis, according to Fitzpatrick.

      Google has protocols to check whether businesses reaching out for support are legitimate operations, the Maps team said.

      In response to financial disruptions caused by the pandemic, Maps recently began allowing merchants in a half-dozen countries to add links to make donations or buy gift cards.

      Google on Wednesday added another 18 countries including Italy, Spain and Japan.

      Maps is also ramping up tools for customers to tune in to online sessions or appointments.

      "Merchants who normally provided in-person services are now pivoting to connect with their customers virtually -- from yoga studios offering online classes to salons hosting virtual hair styling classes," Fitzpatrick said.

      "We're making it easier for customers to discover online classes and book virtual appointments."

      Maps is also expanding the roster of restaurant meal delivery services and working on making it easier for eateries to specify which service they prefer be used, according to Fitzpatrick.

      Other new attributes -- such as whether curbside or "no-contact" pickup, or dining in, are options -- appear in restaurant descriptions in the free navigation service.

      "Today people are deciding where to grab food not only based on the menu, but also on how easy it is to pick up safely," Fitzpatrick said.

      "Some restaurants are even ditching dining areas for good."

      Since March, more than 3 million restaurants have added or edited their dining attributes, according to Fitzpatrick.

FRANKFURT AM MAIN — European Central Bank (ECB) chief Christine Lagarde said on Wednesday she was "not overly concerned" that the coronavirus pandemic could renew fears of the eurozone breaking up, after a report from the Frankfurt institution highlighted the danger on Tuesday.

      "I'm not overly concerned about it" although "policymakers will have to continue watching" mounting debt levels in the eurozone as governments borrow to cushion the coronavirus' effects, Lagarde said in a video stream addressed to the single currency bloc's young people.

      In a twice-yearly financial stability report, the ECB had warned on Tuesday that rising debt could increase perceptions of "redenomination risk" -- the danger of some countries quitting the euro or the single currency collapsing altogether.

      While Lagarde acknowledged that "some countries will be more affected than others", she issued a firm "no" when asked if the pandemic could renew the danger of the eurozone breaking up.

      "All countries around the world had to increase their debt" which was "the right thing to do," she said.

      She noted that historically low interest rates at present make the cost of servicing debt "remarkably low".

      "What it will be spent on is what really matters," Lagarde said, arguing investments to "transform our economies" towards digitalisation, productivity and combating climate change would pay off in the long run.

      Meanwhile, Lagarde predicted that the eurozone economy would contract by between eight and 12 per cent in 2020, saying that a "mild" five-per cent scenario discussed at policymakers' April meeting was already "out of date".

      "It's likely that we will be somewhere in between the medium and the severe scenario," she said.

      The exact severity of this year's blow to activity "is obviously going to be a factor of how quickly the lockdown measures are lifted, how suddenly, gradually the economy picks up again, what sectors of the activities will be damaged particularly," Lagarde said.

      Also on Wednesday, Lagarde's ECB executive board colleague Isabel Schnabel told the Financial Times that the institution "will be ready to expand" on more than one trillion euros ($1.1 trillion) of bond-buying already planned this year to cushion the virus' impact on the financial system.

      The "size but also the composition and duration" of a key component of the scheme, the 750-billion-euro "Pandemic Emergency Purchase Programme" (PEPP) could be increased, Schnabel said.

PARIS — Automakers Renault, Nissan and Mitsubishi unveiled on Wednesday a plan to deepen their alliance, a top global producer of cars, that only months ago seemed on the verge of breakup.

      The announcement comes as the industry faces an existential crisis from the coronavirus pandemic, which has caused sales to plunge as governments have forced citizens to stay at home to slow the spread of the virus.

      The three companies announced what amounts to a push towards an integrated entity, something that political sensitivities over job losses had previously made difficult.

      The carmakers said they will adopt a "leader-follower scheme to enhance efficiency and competitiveness" which involves each of them taking the lead in every region of the world.

      The alliance is to focus on one model per product segment, which would be developed by the leading company in that particular segment and adapted by the others.

      Production could be grouped together where appropriate.

      The plan "is expected to deliver model investment reductions of up to 40 per cent for vehicles fully under the scheme," they said, with nearly half of new cars to be jointly developed by 2025.

      Renault shares surged on the Paris bourse following the announcement, rising nearly 20 per cent in morning trading Wednesday from the previous day's levels. 

      Alliance the car key 

      Renault head Jean-Dominique Senard, who also leads their alliance, said the plan will "bring out the most of each company's assets and performing capabilities, while building on their respective cultures and legacies".

      It will increase "their respective competitiveness, sustainable profitability and social and environmental responsibility," he added

      The carmakers will also focus on their core regions, with Nissan becoming the reference for China, North America and Japan.

      Meanwhile, Renault will take the lead in Europe, Russia, South America and North Africa, and Mitsubishi Motors in ASEAN and Oceania countries.

      "The alliance is the key to our resilience and our competitiveness..." Senard said in a later press conference.

      Shift to competiveness 

      He said the emphasis was "on efficiency and competitiveness rather than volumes".

      This appears to be a major change from the strategy pursued under Carlos Ghosn, who led the industrial alliance into becoming the world's biggest car manufacturer by volume in 2017 and 2018 with sales of 10.6 million passenger cars and light commercial vehicles. 

      Ghosn built the alliance based on a series of cross shareholdings rather than a vertical ownership of brands. Integration of their operations has been limited.

      Ghosn was forced out as the head of the alliance after being arrested in Japan in 2018 on allegations of financial misconduct. He denied the accusations, fled trial in Japan and surfaced in Lebanon last year.

      Without Ghosn at the helm, relations between the automakers deteriorated as long-standing gripes about the relative weight of their respective stakes, and the French government's shareholding in Renault, increasingly came out into the open.

       Crisis response 

      But as the financial performance of all three automakers hit bumps, the three announced in January they would look to deepen their alliance as the way forward.

      With automakers now forced to drastically cut back production and jobs in any case, plans to further integrate operations may finally overcome opposition from workers and governments.

      Renault has been negotiating to get a 5-billion-euro state-backed loan, but the French government has made this conditional on guarantees for workers and production to remain in the country, and pushed the automaker to join a European initiative on batteries for electric cars.

      Both Nissan and Renault are set to unveil details on their restructuring plans in the coming days, while Mitsubishi is expected to follow suit in July or August.

      Thousands of jobs are likely to go and some factories shuttered as the automakers adjust to the huge drop in demand for cars.

      France also unveiled on Tuesday an 8 billion-euro plan to support the auto industry that including a cash-for-clunkers scheme.

NEW YORK — Wall Street stocks surged on Tuesday on optimism about coronavirus vaccines as the New York Stock Exchange (NYSE) resumed physical floor trading for the first time since late March.

About 30 minutes into trading, the Dow Jones Industrial Average was up 2.4 per cent at 25,038.94.

The broad-based S&P 500 gained 1.7 per cent to 3,007.76, while the tech-rich Nasdaq Composite Index advanced 1.2 per cent to 9,434.99.

Analysts pointed to announcements by a number of companies pursuing vaccines for coronavirus, including Merck, which said it would acquire privately-held vaccine company Themis and disclosed new research ventures with other companies.

The gains came after New York Governor Andrew Cuomo, wearing a mask, rang the opening bell to signal the start of the day for traders, also clad in masks and separated by plexiglas.

The NYSE, which closed on March 23 as coronavirus cases were soaring in New York, is ramping up slowly with only a fraction of the normal trading staff. 

Traders are required to wear masks and have their temperatures taken and must respect social distancing rules.

While many transactions now are executed through computers -- enabling the market to function even when physical trade was halted -- NYSE leaders say maintaining physical trading facilitates buy and sell orders particularly in the final moments of the day, or during first trades of a new company following an initial public offering.

The floor also has ceremonial benefit for companies to market IPOs and other corporate initiatives.

CAIRO — Egypt's cabinet has preliminarily approved a bill that taxes one per cent of citizens' salaries to cushion the impact of coronavirus on strained government finances, sparking online criticism.

      The draft law — due to come into effect as of July, pending parliamentary approval -- imposes the deductions across the public and private sectors on employees with monthly net incomes above 2,000 Egyptian pounds (around $125). 

      "All governments across the world give out money to their people except for Egypt" to help cushion the effects of coronavirus, said one Twitter user. Instead, the Egyptian government "reaches into the pockets of Egyptians to take 1 per cent." 

      The bill also stipulates a 0.5 per cent effective tax on state pensions to help "confront some of the economic repercussions resulting from the spread of coronavirus," the cabinet said in a statement this week.

      On Facebook, some citizens alleged that depriving pensioners of part of their income was "unconstitutional".

      The draft law provides for a possible exemption of those "working in sectors that were economically harmed due to the coronavirus spread," the statement said, without elaborating.

      The legislation has yet to be scrutinised by parliament and it will also require presidential assent to become law. 

      Egypt's economy, like elsewhere, has been hit hard by the COVID-19 illness which has so far officially killed 696 out of 15,003 confirmed cases in the country.

      Earlier this month, the International Monetary Fund approved a $2.8 billion aid package to help the country meet rising external imbalances.

      In a bid to support the economy, the Egyptian government has begun to ease some confinement measures, including relaxing curfew hours and partially reopening some hotels.