Tag: Beijing (Page 2 of 5)

American Airlines Pilots Union Sues to Stop China Flights

January 30, 2020 / WIL BALDWIN

WASHINGTON/PARIS/SINGAPORE (Reuters) – A pilots union filed a lawsuit on Thursday seeking to immediately halt American Airlines U.S.-China service, as cabin crews worldwide voiced unease about exposure to the rapidly-spreading coronavirus which has killed more than 170 people in China.

Sri Lankan Airlines staff wear masks at Bandaranaike International Airport after Sri Lanka confirmed the first case of coronavirus in the country, in Katunayake

The Allied Pilots Association, which represents American Airlines pilots, cited “serious, and in many ways still unknown, health threats posed by the coronavirus.”

American, the largest U.S. carrier, did not immediately comment on the suit, filed in a Texas court. The Fort Worth, Texas-based airline announced on Wednesday it would next month suspend flights from Los Angeles to Beijing and Shanghai, but continue flights from Dallas.

The World Health Organization on Thursday declared the coronavirus outbreak in China a global emergency as cases spread to 18 countries.

The lawsuit came as an increasing number of airlines stopped their flights to China. Air France-KLM, for example, suspended its Beijing and Shanghai flights after cabin crews demanded an immediate halt.

Others that have dropped mainland Chinese destinations besides Wuhan, the outbreak’s center, include British Airways and Germany’s Lufthansa. Wuhan is closed to commercial air traffic.

Virgin Atlantic also said on Thursday it would suspend its daily operations to Shanghai from Sunday for two weeks because of the safety of customers and staff and a declining demand for tickets, but would continue flights to Hong Kong.

Other major carriers have kept flying to China, but protective masks and shorter layovers designed to reduce exposure have done little to reassure crews.

Thai Airways is hosing its cabins with disinfectant spray between China flights and allowing crew to wear masks and gloves.

“I don’t think it’s safe at all even with gloves and masks, because you catch it so many ways, like your eyes,” said one flight attendant, who spoke on condition of anonymity.

“My friends also feel unsafe and don’t want to fly,” she said. “When we fly, we don’t sleep a lot.”

Delta Air Lines and United Airlines are operating fewer China flights, with Delta offering food deliveries so crew can stay in their hotels.

Korean Air Lines Co Ltd and Singapore Airlines are sending additional crew to fly each plane straight back, avoiding overnight stays.

The South Korean carrier also said it was loading hazmat suits for flight attendants who might need to take care of suspected coronavirus cases in the air.

The outbreak poses the biggest epidemic threat to the airline industry since the 2003 SARS crisis, which led to a 45% plunge in passenger demand in Asia at its peak in April of that year, analysts said.

(Reporting by Laurence Frost, Aradhana Aravindan, Chayut Setboonsarng, David Shepardson and Tracy Rucinski Additional reporting by Caroline Pailliez in Paris, Josephine Mason in London, John Geddie in Singapore, Panu Wongcha-um in Bangkok, Jamie Freed in Sydney and Joyce Lee in Seoul; Writing by Jamie Freed and Tracy Rucinski; Editing by Marguerita Choy)

FILE PHOTO: An American Airlines Airbus A321 plane takes off from Los Angeles International airport

United Airlines Suspends Some Flights to China as Demand Drops Over Virus Fears

January 28, 2020 / WIL BALDWIN

CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> said on Tuesday it was suspending some flights between the United States and Beijing, Hong Kong and Shanghai between Feb. 1 and Feb. 8 due to a “significant decline in demand” as the new coronavirus spreads.

“We will continue to monitor the situation as it develops and will adjust our schedule as needed,” United said in a statement.

The coronavirus that originated in Wuhan, China has killed 106 people in the Asian country and spread across the world, rattling financial markets.

United’s suspension affects a total of 24 flights.

The other two U.S. airlines that fly to China, Delta Air Lines Inc <DAL> and American Airlines Group Inc <AAL>, said they had not reduced their flights at this time but were closely monitoring the situation.

(Reporting by Tracy Rucinski; Editing by Chris Reese and Bill Berkrot)

Volkswagen to Buy 20% of Chinese battery maker Guoxuan

January 16, 2020 / WIL BALDWIN

Volkswagen logo is seen on a Teramont X SUV displayed at the second media day for the Shanghai auto show in Shanghai

HONG KONG/BEIJING (Reuters) – Volkswagen AG <VWAGY> is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.

The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.

The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $2.8 billion, a 20% stake in the company at present is worth about $560 million.

The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.

After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.

Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL and BYD. It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor, one of a number of its Chinese joint venture partners.

A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.

Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment.

To achieve its NEV sales goal in China, Volkswagen has built a new $2.5 billion electric vehicle plant with partner SAIC Motor that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.

Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.

“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”

Volkswagen’s rivals in China include Tesla, which earlier this month began delivering cars from its $2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.

China has been a keen supporter of NEV – pure battery electric, hybrid and plug-in hybrids – and has started implementing NEV sales quota requirements for automakers.

However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.

(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Zhang Yan and Zhang Xiaochong in Beijing; Editing by Brenda Goh and Richard Pullin)

China’s Bid to Challenge Boeing and Airbus Falters

January 9, 2020 / WIL BALDWIN

BEIJING/PARIS (Reuters) – Development of China’s C919 single-aisle plane, already at least five years behind schedule, is going slower than expected, a dozen people familiar with the programme told Reuters, as the state-owned Commercial Aircraft Corporation (COMAC) struggles with a range of technical issues that have severely restricted test flights.

Delays are common in complex aerospace programmes, but the especially slow progress is a potential embarrassment for China, which has invested heavily in its first serious attempt to break the hold of Boeing and Airbus on the global jet market.

The most recent problem came down to a mathematical error, according to four people with knowledge of the matter.

COMAC engineers miscalculated the forces that would be placed on the plane’s twin engines in flight – known in the industry as loads – and sent inaccurate data to the engine manufacturer, CFM International, four people familiar with the matter told Reuters. As a result, the engine and its housing may both have to be reinforced, the people said, most likely at COMAC’s expense – though another source denied any modification.That and other technical and structural glitches meant that by early December, after more than two and a half years of flight testing, COMAC had completed less than a fifth of the 4,200 hours in the air that it needs for final approval by the Civil Aviation Administration of China (CAAC), two people close to the project told Reuters.

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China’s Sixth Prototype C919 Jet Completes First Test Flight

December 27, 2019 / WIL BALDWIN

BEIJING (Reuters) – The sixth prototype of China’s home-built C919 narrowbody passenger plane completed its first test flight on Friday, marking a milestone in the programme’s testing schedule as China races to compete with Airbus SE and Boeing Co.

The sixth prototype is the last test plane its manufacturer, the Commercial Aircraft Corp of China Ltd (COMAC), has planned for the programme and was scheduled to fly before the year-end. Currently, there are five test planes that are conducting test flights elsewhere in the country.

The maiden flight on Friday from Shanghai lasted two hours and five minutes, COMAC said in a press release, adding that the jet will be conducting more test flights with a focus on cabin, lighting and external noises.

COMAC has already started production of aircraft parts which will be used for the first batch of aircraft deliveries, it said.

The state manufacturer is aiming to obtain Chinese certification for the C919 in 2021, but the date was subject to regulatory approval and the aircraft’s safety remains a top priority, according to COMAC officials.

He Dongfeng, the Communist Party boss of COMAC, wrote in a state-owned newspaper in December that aircraft safety is key to the survival of COMAC.

Designed to compete directly with the Airbus 320 and the Boeing 737 families in the market for jets with around 150 seats, the C919 is the speartip of China’s efforts to break a powerful decades-old Western duopoly.

The Boeing 737 MAX remains globally grounded following two fatal crashes that killed a total of 346 people.

(Reporting by Stella Qiu and Brenda Goh; Editing by Muralikumar Anantharaman)

China Southern Air Holding Sets Up One Billion Yuan Cargo Company

December 26, 2019 / WIL BALDWIN

China Southern Airlines Airbus commercial passenger aircraft is pictured in Colomiers near Toulouse

BEIJING (Reuters) – China Southern Air Holding, the parent of China Southern Airlines <ZNH>, has set up a cargo company with registered capital of 1 billion yuan ($143 million), as it looks to consolidate its air cargo assets through state-led reforms.

The move from December 24 was disclosed by a filing approved on the National Enterprise Credit Information Publicity System and comes as China prioritizes implementing mixed ownership reforms to revamp its bloated, debt-ridden state sector.

China Southern is among 96 centrally owned companies supervised by the state assets regulator, the State-owned Assets Supervision and Administration Commission (SASAC).

As such, China Southern Airlines would offload its old freight unit to the newly registered company, according to a statement from SASAC in October. The cargo company would also take over other air cargo assets under the parent company such as belly cargo services, cargo terminals and international logistics.

The cargo business would be managed in a market-oriented way and would become a major source of profits, said the SASAC.

The air cargo market, an economic bellwether linked to global trade, saw its traffic decline by 3.3% in 2019, the International Air Transport Association (IATA) said, driven by a tariff war between the United States and China.

In 2017, China Eastern Air Holding <CEA> sold almost half of its freight unit to four firms, while Air China <AIRYY> last year offloaded a majority stake in its cargo arm in face of market uncertainties.

($1 = 7.0016 Chinese yuan renminbi)

(Reporting by Stella Qiu and Brenda Goh; Editing by Gareth Jones)

Daimler to Ax at Least 10,000 Jobs in Latest Car Industry Cuts

November 30, 2019 / WIL BALDWIN

FRANKFURT (Reuters) – Daimler said on Friday it will cut at least 10,000 jobs worldwide over the next three years, following others in the industry as they cut costs to invest in electric vehicles while grappling with weakening sales.

It marks the third announcement on cost cuts this week by a major German car company as automakers seek to fund huge investments into cleaner and self-driving technologies while demand in China, their biggest market, is falling and a trade war between Washington and Beijing is curbing economic growth.

“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in a statement.

Daimler, the owner of Mercedes-Benz, revealed the 3% cut in its workforce after reaching an agreement on its plans with labor unions.

They have agreed on a variety of measures to cut costs and jobs, including expanding part-time retirement and a severance program to be offered in Germany. The company is also cutting 10% of worldwide management positions.

Staff reductions would be in the low five-digits, or at least 10,000 people, according to Wilfried Porth, a board member in charge of human resources. The company employed 304,680 staff at the end of the third quarter.

Plans laid out by Daimler in November showed the company aimed to cut staff costs by around 1.4 billion euros ($1.54 billion) by the end of 2022.

The announcement comes days after Volkswagen’s <VOWG_p.DE> luxury car unit Audi said it would cut up to 9,500 jobs or one in ten staff by 2025, freeing up billions of euros to fund its shift toward electric vehicle production.

Also this week, BMW said that its management and labor had reached an agreement on measures to reduce bonus and other pay schemes for staff to cut costs.

Car suppliers Continental and Osram have also announced staff and cost cuts.

Daimler has repeatedly cut its profit outlook over recent months, partly to cover a regulatory crackdown on diesel emissions but also because of a slowing auto market.

Group operating profit will be “significantly lower” than a year ago, the company said last month.

Other measures to reduce staffing costs include offering shorter working weeks.

Agreements in place to prevent forced redundancies in Germany until 2029 will remain in place, Daimler said.

The workforce needs a clear strategy for the future, said Michael Brecht, chairman of Daimler’s works council. “A reduction in capacity must not be carried out on the backs of the employees,” he said.

(Editing by Elaine Hardcastle)

The Daimler logo is seen before the Daimler annual shareholder meeting in Berlin

China’s BAIC Willing to Increase Daimler Holding after 5% Stake Buy

November 25, 2019 / WIL BALDWIN

FILE PHOTO: BAIC Group automobile maker at the IEEV New Energy Vehicles Exhibition in Beijing

BEIJING/FRANKFURT (Reuters) – Daimler’s <DDAIF> main Chinese joint venture partner BAIC Group has signalled its intention to increase its stake in the German luxury car manufacturer, sources briefed on the matter said, after it built up a 5% Daimler holding in July.

Officials at BAIC’s listed company, BAIC Motor Corp Ltd, said at investor conferences in mid-October that “both sides are willing to increase stakes in the other”, responding to questions about future relationship between BAIC Group and Daimler, the sources said.

Daimler said in a regulatory filing on Friday that HSBC held 5.23% in Daimler’s voting rights directly as well as through instruments such as equity swaps as of Nov 15. BAIC has used HSBC to help it build its initial 5% stake.

Sources declined to be named as they are not allowed to speak to media.

A Daimler spokesman on Monday said, that the company had received notification from HSBC that the voting stake of 5% has been exceeded.

While the spokesman would not say whether BAIC played a role in the transaction, he added that Daimler welcomed long-term shareholders such as BAIC, who support the carmaker’s strategies.

“Daimler AG appreciates BAIC as long-standing partner and long-term investor,” the spokesman said in a written statement.

“Such shareholders help us to further safeguard and strengthen the capitalization of our company,” the statement continued.

BAIC was not immediately available for comment.

Geely, Daimler’s biggest shareholder with a 9.7% stake, said: “We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy.”

BAIC (Beijing Automobile Group Co Ltd) has been Daimler’s main partner in China for years and operates Mercedes-Benz factories in Beijing through Beijing Benz Automotive.

Two months before its July stake deal was announced, sources told Reuters that BAIC wanted to invest in Daimler to secure its investment in Beijing Benz Automotive.

In March, sources told Reuters Daimler had asked Goldman Sachs <GS> to help it explore increasing its stake in BAIC’s Hong Kong-listed company.

The partners also planned to revamp manufacturing facilities to make Mercedes Benz-branded trucks via their commercial vehicle joint venture Foton Daimler Automotive (BFDA), Reuters reported in August citing a document and sources familiar with matter.

The companies also said Daimler and BAIC’s new energy vehicle unit BluePark have jointly developed a battery research lab in Beijing.

State-owned BAIC built its stake after Li Shufu, chairman of rival private automaker Zhejiang Geely Holding Group, built a 9.69% stake in Stuttgart-based Daimler in early 2018.

By using Hong Kong shell companies, derivatives, bank financing and structured share options, Li kept the plan under wraps until he was able, at a stroke, to become Daimler’s single largest shareholder.

Since the investment, Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture.

Zhejiang-based Geely owns Volvo while BAIC in addition to Daimler has a partnership with South Korea’s Hyundai Motor <HYMTF>.

Daimler said it had collaborated with BAIC in areas such as production, research and development and sales since 2003.

(Reporting by Yilei Sun and Edward Taylor; additional reporting by Arno Schuetze and Ludwig Burger; editing by Brenda Goh, Jason Neely and Louise Heavens)

China’s BAIC willing to increase Daimler holding after 5% stake buy – sources
FILE PHOTO: Ola Kaellenius, Chairman of the Board of Management of Daimler AG, speaks at a media event during the Guangzhou auto show in Guangzhou

China Out in Force at Frankfurt Car Show

September 11, 2019 / WIL BALDWIN

FILE PHOTO: Supercar Hongqi S9 is unveiled next to FAW Group Chairman Xu Liuping at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany. September 10, 2019. REUTERS/Wolfgang Rattay/File Photo

FRANKFURT (Reuters) – Chinese suppliers and manufacturers have stepped up their presence at the Frankfurt auto show, capitalizing on a strong position in electric technologies forced on European carmakers by regulators seeking to curb pollution.

Though the number of exhibitors has fallen to 800 in 2019 from 994 in 2017, Chinese automakers and suppliers now make up the biggest foreign contingent, with 79 companies, up from 73.

Several European and Japanese carmakers including Fiat , Alfa Romeo, Nissan and Toyota have skipped the show as the industry cuts costs.

Europe’s automakers face multibillion-euro investments to develop electric and autonomous cars, forcing them to rely on Chinese companies for key technologies such as lithium ion battery cell production, an area where Asian suppliers dominate.

German firms are striking major deals with Chinese suppliers to help them meet stringent EU anti-pollution rules, which were introduced in the wake of Volkswagen’s 2015 emissions cheating scandal.

“All carmakers face the challenge that they will have to fulfill fleet consumption targets,” Matthias Zentgraf, regional president for Europe at China’s Contemporary Amperex Technology, told Reuters.

Zentgraf said he expected further supply deals to be struck in Europe this year following agreements with BMW and Volkswagen.

Daimler on Wednesday said it had chosen China-backed Farasis Energy to supply battery cells for its Mercedes-Benz electrification push.

Farasis is building a 600 million euro ($663 million) factory in east Germany, close to where Chinese rival CATL is erecting a 1.8 billion euro battery plant.

SVOLT Energy Technology, which was carved out of China’s Great Wall Motor Co, told Reuters it would start building battery cells in Europe at a new 2 billion euro plant in 2023.

TIPPING POINT

Chinese companies are also giving Europe more attention since the United States and China embarked on a global trade war, which has resulted in tariffs.

“We put Europe up in priority,” said Daniel Kirchert, chief executive of Chinese electric car maker Byton.

“We are at a tipping point” for acceptance of electric vehicles in Europe, Kirchert, a former BMW executive, added.

Byton has taken its prototype vehicles on road shows in Europe, and received expressions of interest from 20,000 customers, he said. In electric vehicle hot spots, such as Norway and the Netherlands, “we see a very positive response.”

Byton plans to export vehicles from its factory in Nanjing, to Europe in 2021, Kirchert said, adding that exporting to the United States would be a challenge if Washington and Beijing did not resolve their trade war.

He said Byton still hoped to launch in the United States in 2021, but tariffs would threaten the company’s goal of selling vehicles at a starting price of about $45,000.

“We decided no matter what” Byton will launch in the United States, even at a higher price, he said.

China’s Great Wall Motor may consider building car manufacturing facilities in the European Union once its sales there hit 50,000 units a year, its chairman told Reuters at the show.

German carmakers have been forced to accelerate electrification plans after the EU imposed a 37.5% cut in carbon dioxide emissions between 2021 and 2030 in addition to a 40% cut in emissions between 2007 and 2021.

PSA Group Chief Executive Carlos Tavares used the show to step up criticism of Europe’s aggressive approach toward emissions limits.

“The word dialogue has become meaningless in Europe,” he said, referring to the requirements placed on the auto industry.

“Politicians can decide rules without any discussion with industry,” he told journalists on the sidelines of the show.

Electric cars made up only 1.5% of global sales last year, or 1.26 million of the 86 million passenger vehicles sold, JATO Dynamics said.

If carmakers fail to meet the 2021 targets they could face a combined 33 billion euros in fines, analysts at Evercore ISI have estimated.

They also estimate it will cost the auto industry an aggregate 15.3 billion euros to comply, assuming a 60 euro cost per gram to reduce CO2 emissions for premium carmakers and 40 euros per gram of CO2 reduction for volume manufacturers.

(Writing by Edward Taylor; Editing by Mark Potter)

A woman cleans the prototype of a Chinese car at the IAA Auto Show in Frankfurt, Germany, Monday, Sept. 9, 2019. The IAA officially starts with media days on Tuesday and Wednesday. (AP Photo/Michael Probst)

New Macau Leader Backed by Beijing

August 25, 2019 / WIL BALDWIN

HONG KONG, Aug 25 (Reuters) – The Chinese territory of Macau elected former legislature head Ho Iat Seng as its leader on Sunday – the sole approved candidate.

Ho, who has deep ties to China, is expected to cement Beijing’s control over the special administrative region and distance it from protests in neighbouring Hong Kong.

He secured 392 votes from a 400-member pro-Beijing committee to lead the world’s largest gambling hub for at least the next five years, public broadcaster TDM reported.

The 62-year-old’s highly scripted appointment comes as the former Portuguese colony tries to position itself as a beacon of stability and model for the Chinese government’s “one country, two systems” formula through which Beijing administers Macau and Hong Kong.

Although anti-government protests have roiled the former British colony of Hong Kong for nearly three months, Macau has seen little dissent to Beijing’s rule.

Ho said local youth could resist the influence of Hong Kong’s protesters and support measures to boost patriotism in Macau.

(Reporting by Farah Master; Editing by Raju Gopalakrishnan)

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