Closing post
Time to recap…
German carmaker Volkswagen is planning to shut at least three factories in its home country, lay off thousands of workers and cut pay by 10%, according to the company’s union.
The deeper-than-expected cuts come as the company faces weak sales and slow expansion in the electric vehicle (EV) sector amid tough competition from Chinese manufacturers.
“The board wants to close at least three factories in Germany,” the works council chief, Daniela Cavallo, told employees at VW’s headquarters in Wolfsburg. Its remaining manufacturing sites will reduce capacity, she said, citing information provided by management.
Boeing has announced plans for $19bn of share sales, to shore up its finances amid a costly worker strike and an ongoing crisis about the safety of its aeroplanes.
The oil price has tumbled, on relief that Israel’s attack on Iran last weekend did not hit oil production or nuclear facilities.
Brent crude is now down 5.3% today at $72.06 per barrel.
Ricardo Evangelista, senior analyst at ActivTrades, says:
“WTI oil prices dropped as markets opened after the weekend, hitting their lowest level in over three weeks. This decline comes as tensions in the Middle East appear to ease.”
“Concerns of an all-out war between Israel and Iran had loomed over the region for the past month, with markets bracing for Israel’s potential retaliation following Iran’s missile strike on October 1.”
“However, the response was measured, and for now, the worst fears have subsided. With reduced geopolitical risks to supply, traders have shifted their focus back to market fundamentals, which currently include a demand slowdown—especially from China, the world’s top crude importer—and an upcoming OPEC+ production increase set for December. In this context, the risk to oil prices appears skewed to the downside.”
The budget continues to dominate the economy, with just two days to wait for Rachel Reeves’s fiscal statement.
New data shows that the UK’s Alternative Investment Market (Aim) has shrunk to its smallest size in 23 years as business owners and investors anticipate an abolition of inheritance tax relief.
Pubs and restaurants are warning of closures and a tough Christmas ahead if Rachel Reeves’s budget this week raises taxes and ends a Covid-era relief on business rates.
There are also fears that Reeves could cut funding for nuclear sites including Sellafield.
While bosses are cross that they are losing staff working time because of waits for healthcare or caring duties due to underfunded public service
Meanwhile, the government has announced that the budget will include £240m of funding to help people currently economically inactive to get into work.
While Oxfam has reported that the high carbon emissions of the world’s richest 1% are worsening hunger, poverty and excess deaths.
Updated
Volkswagen’s brand chief Thomas Schaefer has warned that the company simply isn’t productive enough, especially with costs increasing.
Schaefer explained (via Reuters):
“We are not earning enough money with our cars currently. At the same time, our costs for energy, materials and personnel have continued to rise. This calculation cannot work in the long term.
“So we have to get to the root of the problem: we are not productive enough at our German sites and our factory costs are currently 25-50% higher than we had planned. This means that individual German plants are twice as expensive as the competition.
“In addition, we at Volkswagen are still processing many tasks internally that the competition has already outsourced more cost effectively. This means that we cannot continue as before.
We must quickly find a joint and sustainable solution for the future of our company.”
