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WAYNE — Workers at the "Big Three" auto manufacturers went on strike Friday in a first-ever coordinated action to demand pay raises, winning strong support from President Joe Biden whose pro-union stand is crucial to his 2024 re-election hopes.

A dramatic walkout — observed outside a Detroit-area Ford plant with rowdy honking and cheers at the arrival of the United Auto Workers' (UAW) leader — followed a failed last-minute push by General Motors, Ford and Stellantis to produce an agreement before the deadline late Thursday.

Only about 12,700 of the 150,000 workers represented by the UAW are on strike. However, the decision by the rival companies' employees to coordinate sent a powerful message in their battle for pay increases of 40 per cent.

The disruption in the crucial sector, involving iconic brands like Jeep, threatens the US economy in a period of strong growth and inflationary pressure.

According to the Alliance for Automotive Innovation, the auto sector and its supporting industries contribute a trillion dollars to the US economy each year, or about five per cent of the GDP, and employ some 10 million people.

But Biden, who has cast himself as a major trade unions supporter, gave his backing to the strikers, saying he understood their "frustration".

Speaking on live TV from the White House, Biden said workers had not been able to benefit from enormous corporate profits, which exceeded $20 billion for the three giants in just the first half of 2023.

"Those record profits have not been shared fairly," Biden said.

"The companies have made some significant offers but I believe they should go further to ensure that record corporate profits mean record contracts for the UAW."

He said he was sending two representatives to Detroit to help with negotiations.

The powerful UAW has so far refrained from joining other leading unions in endorsing Biden's 2024 reelection bid.

Threat to expand strike 

UAW President Shawn Fain said shortly before the strike took effect that "tonight, for the first time in our history, we will strike all three of the Big Three at once".

Fain said the union would strike at one plant at each company: a GM factory in Wentzville, Missouri; a Stellantis facility in Toledo, Ohio; and a Ford plant in Wayne, Michigan, but only in the final assembly and paint operations.

"Tomorrow, we expect to be at the bargaining table. All three companies have received a comprehensive counteroffer from our union, and we await their response," Fain said.

"They're starting it off right," said Rachel Judd, who joined the post-midnight rally in Wayne. Judd works at Ford's neighbouring facility in Livonia.

"If negotiations don't keep moving forward, more plants will be added," she said.

Seeking big pay rise 

Many hourly workers say the auto giants must produce significantly better packages to make up for what they call meager wages and benefit cuts after the 2008 financial crisis, when both GM and Chrysler, now part of Stellantis, underwent bankruptcy reorganisations.

"This company has been making money off of us for years," said Paul Sievert, who has worked at Ford's Wayne plant for 29 years. "I think it's time that we got back."

Sticking points also include raising pay and benefits for junior employees to match the level of more seasoned workers, who currently make a top rate of around $32 an hour.

General Motors upped its offer on Thursday, lifting a proposed wage increase to 20 per cent. The company had previously proposed an 18 per cent rise, according to the UAW.

In a statement Friday, GM said it would "continue to bargain in good faith with the union to reach an agreement as quickly as possible".

On the picket line outside the Ford plant in Wayne, Michigan, Sofus Nielson, who has worked there for 15 years, said starting salaries were no longer viable.

"There's no future for people that are starting families or young kids or people that have one kid that come in here, starting off $16 an hour," he said.

FRANKFURT — The European Central Bank hiked a key interest rate to a record high Thursday as it battles soaring inflation, defying calls for a pause to take pressure off the faltering eurozone economy.

The central bank said rates had now reached levels that would help bring inflation back to target, and some analysts said it signalled the current hiking cycle was at an end.

Policymakers raised rates by another quarter point, taking the closely watched deposit rate to 4 per cent — its highest level since the introduction of the euro in 1999.

It marked the 10th straight increase since the central bank launched the most aggressive hiking cycle in its history in July last year after prices surged following Russia's invasion of Ukraine.

Ahead of the meeting, analysts had been sharply divided over whether the ECB would lift rates again or finally take a pause due to mounting signs of the economic strain on the 20 countries that use the euro.

But ultimately, continued inflation pressures persuaded the central bank's governing council it needed to hike again.

"Inflation continues to decline but is still expected to remain too high for too long," the ECB said in a statement, announcing its rate decision. 

"The governing council is determined to ensure that inflation returns to its two percent medium-term target in a timely manner." 

The central also added that "the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target".

ING economist Carsten Brzeski said he believed the central bank had made its final hike of the current campaign. 

"The ECB's communication is clear: today was the last hike in the current cycle," he said. 

Highlighting the continued difficulties in bringing consumer prices under control, the ECB raised its forecast for inflation this year and next.

They lowered it slightly for 2025 to 2.1 per cent, close to the ECB target.

But it also slashed its forecasts for eurozone growth over the next three years, pointing to the impact of "tightening on domestic demand and the weakening international trade environment".

However, the tighter financing conditions brought about by rate hikes were also "dampening demand, which is an important factor in bringing inflation back to target".

Worsening outlook 

Other recent signs have pointed to a worsening outlook in the eurozone.

Recent data showed second-quarter growth reached just 0.1 per cent, lower than previously estimated, and the EU on Monday slashed its 2023 and 2024 GDP forecasts for the single currency area — pointing in particular to weakness in Germany.

Europe's top economy is struggling to get back on its feet after sliding into recession around the turn of the year, hit by an industrial slowdown, high energy costs, and slowing exports to key partners such as China.

The weak data had fuelled calls for the ECB to pause its hiking cycle for fear it could deepen a downturn.

But despite the rapid increase in borrowing costs since last year, inflation has proved remarkably stubborn, coming in unchanged at 5.3 per cent in August. 

Price rises have slowed since peaks seen last year, in particular due to falling energy costs, but officials are now worried that other factors are keeping the pressure up — particularly wage increases in a tight labour market.

The Federal Reserve — which did pause its rate hikes in June, but then lifted borrowing costs again in July — and the Bank of England are due to hold their own meetings next week.

ECB officials had insisted their decision would depend on incoming data, and were cagey about what would happen in the run-up to the meeting.

This is a contrast to other recent meetings, where the decision had usually been well telegraphed in advance.

STRASBOURG — Brussels will investigate Chinese state subsidies for electric cars, the EU chief said on Wednesday, vowing to defend Europe's industry from unfair competition.

The move is a victory for France which has expressed concerns that Europe will fall behind during the green transition if it is not more assertive when confronted with China's alleged protectionism.

But some EU member states, including Germany, are wary of angering Beijing, since they rely on trade relations with China, although Berlin welcomed the probe Wednesday.

European Commission president Ursula von der Leyen announced the anti-subsidy investigation, vowing to defend Europe's manufacturers.

"Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies," von der Leyen said, during a speech at the European Parliament in Strasbourg.

The probe could lead the European Union to impose duties on those cars that it believes are unfairly sold at a lower price, thereby undercutting European competitors.

"Europe is open for competition but not for a race to the bottom," the European Commission president said.

A Chinese official accused the EU of "protectionism" in a social media post.

Pointing to information from the European Automobile Manufacturers Association (ACEA), Wang Lutong, director general of the Chinese foreign ministry's department of European affairs, said "many EU members subsidise their electric vehicle industries".

"In what position is the commission to launch anti-subsidy investigation into electric vehicles from China? This is nothing but sheer protectionism," he said.

French Finance Minister Bruno Le Maire said the probe was a "very good decision" during a visit to Berlin. Germany's Economy Minister Robert Habeck said it showed the "right attitude" and was about tackling "unfair competition".

Paris has already announced measures that would provide subsidies for new electric cars based on the manufacturers' emissions output. This would be more difficult for Chinese cars since their production often relies on coal-powered electricity.

'Distorted competition' 

European car makers also hailed the EU's investigation as a "positive signal".

"The European Commission is recognising the increasingly asymmetric situation our industry is faced with, and is giving urgent consideration to distorted competition in our sector," said Sigrid de Vries, director general of the ACEA.

There are growing concerns across Europe about how much the continent relies on Chinese products, especially those needed for the EU's focus on clean energy.

The EU's internal market chief Thierry Breton last week warned about a trend emerging where Europe was "being relegated to net imports of electric vehicles or solar panels".

China could overtake Japan to become the world's largest car manufacturer this year, according to some experts.

But European manufacturers have also to contend with state subsidies for electric vehicles across the Atlantic.

The US Inflation Reduction Act directs some $370 billion in subsidies towards America's energy transition, including tax breaks for US-made electric vehicles and batteries. 

As she made the announcement, von der Leyen harked back to the bitter dispute with China over solar panel imports a decade ago.

"We have not forgotten how China's unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidised Chinese competitors," she said.

The EU imposed anti-dumping duties in 2013 after European panel manufacturers complained they were being forced out of business by underpriced Chinese imports.

The restrictions were scrapped five years later.

'Vital' dialogue 

Von der Leyen has called on the EU to define its own approach to Beijing, although some of Europe's larger powers want to be cautious to avoid severing business ties.

Despite her strong comments, von der Leyen said it was "vital" for Europe to maintain "communication and dialogue with China".

"Because there are also topics, where we can and have to cooperate. De-risk, not decouple — this will be my approach with the Chinese leadership at the EU-China Summit later this year," she added.

The EU's trade commissioner Valdis Dombrovskis will head to China next week, he said in a social media post, "to engage on trade and economic opportunities/challenges".

SINGAPORE — The world's third-largest contract chip maker GlobalFoundries opened a $4 billion manufacturing plant in Singapore on Tuesday as part of a global expansion to help ease an industry supply crunch.

The semiconductor sector is recovering from disruptions caused by the pandemic, high inflation and sluggish global economic growth caused in part by geopolitical tensions.

The facility will produce an additional 450,000 wafers annually at full capacity by 2025 to 2026, the US company's Singapore general manager Tan Yew Kong told reporters, raising the city-state's overall capacity to 1.5 million wafers each year.

The chips, usually used in smartphones and other mobile devices, are also increasingly in demand by automakers, especially for electric vehicles, adding to the pressure to raise production.

Shutdowns during the pandemic fuelled a chip shortage, which was exacerbated by rising prices and an economic slowdown.

However analysts and industry officials say a demand recovery is in sight.

"The key megatrends of our industry — digitalisation, connectivity, cloud computing — are all driving acceleration to a more connected and data-centric world," Global Foundries President and Chief Executive Thomas Caulfield said at the launch.

"It demonstrates how central and critical the industry is to the world economy and how pervasive semiconductors are in enabling and enhancing all aspects of human life."

Caulfield said despite current economic headwinds, the company estimates the industry will double in the next decade.

"The catalyst for this growth will be AI [artificial intelligence]," he said.

The firm's 23,000 square metre Singapore facility, which broke ground in 2021, will boost the global footprint of the company, which already has plants in the United States and Europe.

Singapore's chip output currently makes up 11 per cent of the global semiconductor market.

The global semiconductor market is predicted to experience a downturn of 10.3 per cent this year but recover in 2024 and grow 11.8 per cent, according to estimates by industry monitor World Semiconductor Trade Statistics.

LONDON — German car giant BMW on Monday said it would invest more than £600 million ($751 million) in its UK plants making the Mini, with the Oxford site producing only electric vehicles from 2030.

British media said the UK government will invest £75 million, helping to safeguard 4,000 jobs.

"BMW's investment is another shining example of how the UK is the best place to build cars of the future," Prime Minister Rishi Sunak said in a statement. 

"By backing our car manufacturing industry, we are securing thousands of jobs and growing our economy right across the country."

The first generation of the iconic British vehicle's electric model was launched at the Oxford plant in 2019.

BMW said production of two new electrified models — Mini Cooper3-door and Mini Aceman — would start in the UK in 2026.

"BMW Group has announced today a new investment of more than £600 million in the Mini factories at Oxford and Swindon," the statement said. 

"With this new investment we will develop the Oxford plant for production of the new generation of electric Minis and set the path for purely electric car manufacturing in the future," added Milan Nedeljkovic, member of the board of management of BMW responsible for production.

Business and Trade Secretary Kemi Badenoch called the BMW investment "a big vote of confidence in the UK economy". 

She added: "We are proud to be able to support BMW Group's investment, which will secure high-quality jobs, strengthen our supply chains and boost Britain's economic growth."

Britain plans to ban the sale of new high-polluting diesel and petrol cars from 2030, forcing its largely foreign-owned manufacturers to switch to electric models — and sparking investment in battery production.

Indian conglomerate Tata Group in July said it would build a gigafactory in Britain to manufacture batteries, as nations accelerate away from fossil fuel vehicles.

The £4 billion plant in Somerset would be Tata's first gigafactory outside India.

CAIRO — Annual inflation in Egypt hit 39.7 per cent in August, official figures showed Sunday, an all-time high as the Arab world's most populous country grapples with a punishing economic crisis.

It comes after a previous record of 38.2 per cent in July and amid an unrelenting downturn that has seen the currency shed half its value against the US dollar since early last year.

Food and drink prices alone rose 71.9 per cent year-on-year, said the state statistics agency CAPMAS.

The economic crisis in the import-dependent country was catalysed by Russia's invasion of Ukraine last year, which destabilised crucial food supplies and unsettled global markets.

Investors pulled billions out of Cairo's foreign reserves, which remain buoyed by deposits from wealthy Gulf allies, whose promises to purchase Egyptian state assets have however fallen short of government targets.

Even before the current crisis, 30 per cent of Egyptians were living below the poverty line, according to the World Bank, with another 30 per cent considered vulnerable to also falling into poverty.

Egypt, with more than 105 million people, has been dependent on bailouts in recent years, from both oil-rich Gulf allies and the International Monetary Fund (IMF).

According to ministry of planning figures, the country's external debt bill has tripled over the past decade, rising to a record high of $165.4 billion this year.

Researcher Robert Springborg of the Italian Institute of International Affairs has blamed Egypt's economic model, in which the military plays a key role, arguing it is based on "profligate borrowing for prestige projects with limited economic benefits".

The crowning jewel of the government's projects is the $58 billion New Administrative Capital that experts have called "a vanity project".

Delayed IMF programme 

Last year, the IMF approved a $3 billion loan for Egypt conditioned on "a permanent shift to a flexible exchange rate regime".

The smaller-than-expected loan was intended to unlock other sources of funding, namely from regional allies.

But Egypt has failed to raise its target funding, and the IMF has not issued its first review of the programme or the second tranche of the loan. Both were originally expected in March.

The IMF and Gulf capitals have demanded a fully flexible exchange rate, economic reforms and an end to the notoriously obscure business dealings of the military. 

But despite repeated rumours of a fresh devaluation, authorities have kept the pound pegged at around 31 EGP to the dollar since January.

Consumer prices have continued to steadily rise, adding to the burden of families who are struggling to make ends meet.

Severe foreign currency shortages have also heavily impacted the economy, limiting imports and causing a parallel currency market to surge up to 25 per cent higher than bank rates.

Remittances from Egyptians abroad, the country's biggest source of foreign revenue, have been falling since the crisis began, as people turn to the parallel market to send money home.

Between July 2022 and March 2023, the central bank reported a 26.1 per cent fall in remittances — one of several "volatile, vulnerable" sources of foreign currency Egypt relies on, according to Springborg.

Cairo's foreign reserves have slowly inched upwards since the crisis began, reaching $34.9 billion in August, according to the central bank — still $7 billion less than before the Ukraine war.

Around $29 billion of those are deposits from wealthy Gulf allies, according to the central bank.

NEW DELHI — Major G20 partners will unveil ambitious plans Saturday to bolster trade between India, the Middle East and Europe, a modern-day Spice Route to bind regions that account for about a third of the global economy.

Washington, Saudi Arabia, the EU, the United Arab Emirates and others will sign an agreement on the sidelines of the G20 summit in New Delhi, presenting an alternative to China's wide-ranging strategic infrastructure investments.

Officials told AFP the plan would include a slew of data, rail, electricity and hydrogen pipeline projects.

One proposed project would link railway and port facilities across the Middle East — including the United Arab Emirates, Saudi Arabia, Jordan and Israel — potentially speeding trade between India and Europe by up to 40 per cent.

"The India — Middle East — Europe economic corridor" is "nothing less than historic" European Union leaders are expected to say when the details of the plans are unveiled later Saturday. 

The agreement would boost trade but is also seen as another significant step towards Arab Gulf states normalising relations with Israel.

Washington is actively prodding Riyadh — a major oil producer and security partner — to normalise ties with Israel after decades of conflict and closed borders.

The initiative "has enormous potential", according to Jon Finer, US deputy national security adviser.

He said the public announcement would come after "months of careful diplomacy, quiet, careful diplomacy, bilaterally and in multilateral settings".

The Europe-to-India project is still in the early stages, with participants studying how best to link India's vast 1.4 billion population and quick-growing economy with markets to the west.

According to details seen by AFP, the India — Middle East — Europe economic corridor would also develop infrastructure to enable the production and transport of "green hydrogen".

It would also strengthen telecommunications and data transfers through a new undersea cable connecting the region.

Michael Kugelman, South Asia Institute director at The Wilson Centre, said the plan could be a significant response to China's much-vaunted Belt and Road Initiative (BRI).

The so-called BRI has spread Chinese influence, investments and commerce across Europe, Africa, Asia and Latin America.

"If finalised, it would be a game changer that strengthens connectivity between India and the Middle East and would aim to counter BRI," Kugelman posted on X, formerly known as Twitter.

COPENHAGEN — Massive demand for diabetes and weight loss drugs made by Danish pharmaceutical group Novo Nordisk have turned it into Europe's most valuable company, giving Denmark's economy a major makeover.

"If it wasn't for Novo Nordisk there wouldn't have been any growth" in the first six months of the year, Danske Bank chief economist Las Olsen told AFP.

The company's earnings have ballooned thanks to two in-demand prescription medications: type 2 diabetes drug Ozempic — made famous by US celebrities for its weight loss side effects — and obesity drug Wegovy.

In the first half of 2023, Denmark's economy grew by 1.7 per cent year-on-year, official data showed.

Excluding the pharma industry, it shrank by 0.3 per cent.

"We've never seen anything like it, it's changing the picture of the economy," said Statistics Denmark analyst Jonas Petersen.

Industrial production in Denmark "is up 40 per cent compared to pre-pandemic levels", noted Palle Sorensen, chief economist at Nykredit bank.

By comparison, "in the eurozone in general and in the US it's pretty much at the same level as before the pandemic", he said.

That "also means that the recovery from the pandemic has been stronger".

The Novo Nordisk effect is seen in the state's coffers — the company is the country's biggest taxpayer — as well as in Denmark's trade balance and employment figures.

Ramping up production 

Already the world's biggest insulin maker, Novo Nordisk saw sales of its obesity treatments soar by 157 per cent in the first half of the year.

The World Health Organization says more than a billion people suffer from obesity. More than 530 million have diabetes, according to the International Diabetes Federation.

On the back of its strong first-half sales, the company raised its full-year forecast and now expects 2023 sales to grow by 30 per cent from last year's 177 billion kroner ($25.5 billion).

Novo Nordisk's market capitalisation has soared to 2.98 trillion kroner, dethroning French luxury goods maker LVMH to become Europe's biggest listed company on September 1.

Denmark's gross domestic product reached 2.83 trillion kroner in 2022 and is expected to grow by 1.2 per cent this year.

The injectable drug Ozempic has grown hugely popular for its weight loss properties, though it is officially only prescribed for diabetes.

Wegovy, an anti-obesity treatment launched in the United States two years ago and now also available in Denmark, Germany, Norway and the UK, saw its sales soar by 344 per cent in the first half of the year.

"We are serving more patients than ever before," Chief Executive Lars Fruergaard Jorgensen said when the company released its earnings report in August.

The drugmaker is currently unable to meet the surge in demand and plans to build a new plant in Denmark to ramp up production.

Stabilising effect 

Experts warned that the company's success should not overshadow difficulties in the Danish economy.

"Other industrial firms in Denmark have a similar path to those of the rest of Europe and the US," Palle Sorensen said.

The Confederation of Danish Industry says the country's economy is "heavily influenced by a few select companies".

In 2022, another Danish titan, global shipping leader Maersk, posted record profits on the back of soaring freight prices.

"Denmark's total industrial production has increased by 11 per cent over the past year, but if we disregard the pharmaceutical industry, industrial production has fallen by 11 per cent," the Confederation's chief economist Allan Sorensen said.

Analysts say Novo Nordisk's rapid growth poses few risks and will likely have a stabilising effect on the economy.

"When the Danish economy becomes more dependent on pharmaceuticals, we are actually less exposed to the global business cycle because demand is quite steady over the business cycle," Palle Sorensen said.

"So that stabilises the Danish economy."

The company's success has also led to large foreign currency flows.

"There is a very large currency inflow coming from Novo Nordisk selling all this medicine outside of the country, but there's also a currency off-flow from the surpluses that Novo Nordisk is making, because the vast majority of the shareholders are in other countries," Olsen said.

To prevent the euro-pegged Danish krone from soaring too high, the central bank has kept its key interest rate below that of the European Central Bank, currently at 3.35 per cent compared to the ECB's 3.75 per cent.

MADRID — Spain said on Wednesday it would keep watch to ensure the "strategic autonomy" of Telefonica after Saudi Telecom (STC) acquired a significant stake in the Spanish telco giant, becoming its largest shareholder. 

In an announcement late Tuesday, STC said it had paid 2.1 billion euros ($2.25 billion) for a 9.9 percent share in Telefonica which has a strong presence in Latin America and the United Kingdom. 

"Telefonica is not just a flagship company but a strategic operator and the government is going to be vigilant to ensure Spain's strategic autonomy," government spokeswoman Isabel Rodriguez said. 

Speaking to reporters in Brussels, Economy Minister Nadia Calvino said the government had in recent years "strengthened" the mechanisms to protect its "strategic sectors" and pledged to apply "all necessary measures" to defend its interests. 

STC said the move would allow it to benefit from the "potential" offered by Telefonica's "unique portfolio of best-in-class infrastructure assets" while insisting it did "not intend to acquire control or a majority stake" in the company. 

Any foreign investor seeking to acquire a stake of 10 per cent or more in a strategic Spanish company must first seek Madrid's approval in a measure approved in 2020 to protect struggling firms during the pandemic. 

"Preserving our strategic autonomy is essential," wrote Labour Minister Yolanda Díaz on X, formerly known as Twitter, calling for "better regulation and protection to avoid" takeovers in companies considered strategically sensitive. 

In a statement, Telefonica characterised as "friendly" the acquisition by STC which is 64 per cent owned by Saudi's PIF sovereign wealth fund and has operations in Kuwait, Bahrain and Malaysia.

Telefonica, which has a strong presence in Brazil, Germany and the UK, posted a net profit of 2 billion euros last year although it has struggled with heavy debt levels.