Tag: trade (Page 3 of 6)

Airbus Sees Airlines Seeking to Defer or Cancel Orders

March 24, 2020 / WIL BALDWIN

PARIS (Reuters) – Airbus <EADSY> said in a stock market filing on Monday that customers could seek to cancel or postpone delivery of airliners and helicopters as the coronavirus crisis continues to escalate.

It issued the warning in an annual reference document ahead of its upcoming Amsterdam shareholder meeting, for which it urged participants to vote by proxy rather than attend in person due to widespread measures to slow the spread of the disease.

Airbus Chief Executive Guillaume Faury said earlier that several airlines had asked to defer deliveries, but that most were continuing to pay their deposits.

“Weaker market and economic conditions in China and their knock-on effects in other markets could result in requests by customers to postpone delivery or cancel existing orders for aircraft (including helicopters),” the filing said, though Faury said earlier there were some signs of recovery in China.

Airbus also detailed steps to improve compliance practices after paying a 3.6-billion-euro fine last month to settle a four-year multinational bribery probe.

But it warned that possible further investigations in other jurisdictions could trigger claims against it by shareholders, impact its ability to raise finance or limit its eligibility for public contracts, as well as harm future commercial sales.

Malaysian authorities last week cleared AirAsia Group <5099.KL> after Britain’s Serious Fraud Office faulted a sponsorship deal between former Airbus parent EADS and a motor racing team owned by the airline’s co-founders.

But the SFO probe, supported by Airbus’s own lawyers, caused a severe rift between AirAsia and its sole supplier, adding to doubts over whether long-haul unit AirAsiaX will take delivery of A330neo jets on order, three people close to the matter said.

AirAsia officials could not be reached for comment. Airbus declined comment.

Loss-making AirAsiaX has said only that it wants to defer delivery of A330neo jets due to the coronavirus crisis.

Deliveries of the wide-body aircraft have also been hit by the impact of U.S. tariffs on Airbus aircraft under a long-running trade dispute, as well as concerns about overcapacity.

Airbus trimmed A330 output in January from about four a month in 2019, Reuters reported earlier this month.

In Monday’s filing, Airbus said it would maintain production of the A330neo at 3.5 aircraft a month.

(Reporting by Tim Hepher; Editing by Mark Potter, William Maclean)

thyssenkrupp Sells Elevator Technology Business for €17.2 Billion

March 16, 2020 / WIL BALDWIN

Consortium of bidders led by Advent, Cinven and RAG foundation

Sales proceeds pave the way for further transformation of thyssenkrupp

Cash inflow remains within the company

Buyers give far-reaching site and employment guarantees for tk Elevator

Closing and purchase price payment expected by the end of the current fiscal year

Martina Merz: “With the sale of Elevator, thyssenkrupp can pick up speed again. We will reduce the company’s debt as far as is necessary and at the same time invest as much as is reasonable in its further development.”

thyssenkrupp sells its Elevator Technology business entirely to a consortium led by Advent, Cinven and RAG foundation. The respective Executive Board decision was approved on Thursday evening by the Supervisory Board of thyssenkrupp AG. The purchase agreement has been signed. Closing of the transaction is expected by the end of the current fiscal year. The purchase price is €17.2 billion. thyssenkrupp will reinvest part of the purchase price^[1] (€1.25 billion) in a stake in the elevator business. The transaction is subject to merger control approvals, although thyssenkrupp does not expect the competent authorities to have any reservations. The proceeds from the transaction will remain within the company and are to be used to the extent necessary to strengthen the balance sheet. Alongside this, the proceeds shall be used to advance the development of the remaining businesses and the portfolio. As announced at the Annual General Meeting at the end of January, thyssenkrupp is proceeding the analysis phase so that a decision on the concrete use of funds can be taken in May.

Martina Merz, CEO of thyssenkrupp AG: “With the sale, we are paving the way for thyssenkrupp to become successful. Not only have we obtained a very good selling price, we will also be able to complete the transaction quickly. It is now crucial for us to find the best possible balance for the use of the funds. We will reduce thyssenkrupp’s debt as far as is necessary and at the same time invest as much as is reasonable in developing the company. With this, thyssenkrupp can pick up speed again.”

The sale of Elevator is a favorable solution not only for the company, its shareholders, customers and employees, but also for the elevator business itself. In the consortium, thyssenkrupp has found new owners for the elevator business who have extensive industrial expertise and offer the workforce a high degree of security. The buyers have a strong track record in profitably growing and nurturing companies to become global champions.

In negotiations with employee representatives and the IG Metall trade union, the buyers have committed to far-reaching site and employment guarantees. In addition, it was agreed that the buyers will continue to manage thyssenkrupp Elevator as a global group. The company will also remain based in Germany and employee co-determination will continue. That means the solution is in line with thyssenkrupp’s understanding of corporate and social responsibility.

“We are not pleased to part with our employees and the elevator business. Nevertheless, today is a good day for everyone involved. With this step, we are opening up real prospects for the future: for the elevator business as an independent company and, with the financial solidity we have gained, also for all other areas of thyssenkrupp,” Martina Merz added.

New Technology Creates Hyper Elevators That Can Go Sideways

U.S. Weighs Blocking GE Engine Sales for China’s New Airplane

February 16, 2020 / WIL BALDWIN

FILE PHOTO: A traffic light is seen in front of a logo of General Electric at the company’s plant in Birr

(Reuters) – The U.S. government is considering whether to stop General Electric Co from continuing to supply engines for a new Chinese passenger jet, according to people familiar with the matter, casting uncertainty over China’s efforts to enter the civil aviation market.

The potential restriction on the engine sales – possibly along with limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International Inc – is the latest move in the battle between the world’s two largest economies over trade and technology.

The issue is expected to come up at an interagency meeting about how strictly to limit exports of U.S. technology to China on Thursday and at another meeting with members of President Donald Trump’s Cabinet set for Feb. 28, sources said.

The White House and the U.S. Commerce Department, which issues licenses for such exports, declined to comment, as did a GE spokeswoman. The departments of Defense, State, Energy and Treasury did not respond to requests for comment.

For years, the United States has supported American companies’ business with China’s budding civil aviation industry.

The government has provided licenses that allow those companies to sell engines, flight control systems and other components for China’s first large commercial aircraft, the COMAC C919. The narrow-body jet has already engaged in test flights and is expected to go into service next year. COMAC is an acronym for Commercial Aircraft Corp of China Ltd.

But the Trump administration is weighing whether to deny GE’s latest license request to provide the CFM LEAP-1C engine for the C919, people familiar with the matter said, though GE has received licenses for the LEAP engines since 2014 and was last granted one in March 2019.

The CFM LEAP engine is a joint venture between GE and France’s Safran Aircraft Engines. The proposal to halt the deliveries of the engines was also reported on Saturday by the Wall Street Journal.

Safran did not immediately respond to a request for comment, and French government officials could not be reached for comment.

Aside from aircraft engines, flight control systems are up for discussion at the February meetings. Honeywell International has received licenses to export flight control systems to COMAC for the C919 for about a decade, and one was approved in early 2020, according to a person familiar with the matter.

But future permission for such sales for COMAC’s passenger aircrafts may be up for debate. Honeywell also has been seeking a license for flight control technology to participate in the development of the C929, China’s planned wide-body jet venture with Russia, the person said.

The flight control system operates moving mechanical parts, such as the wing flaps, from the cockpit.

A spokeswoman for Honeywell declined to comment.

An aerospace trade group official said his organization would like to weigh in on any policy shifts.

“If there are any changes, we would hope they would engage with us, as they’ve done before,” said Remy Nathan, vice president for international affairs at the Aerospace Industries Association.

At the heart of the debate over a possible crackdown on the sale of U.S. parts to China’s nascent aircraft industry is whether such shipments would fuel the rise of a serious competitor to U.S.-based Boeing Co or boost China’s military capabilities.

People familiar with the matter said some administration officials are concerned the Chinese could reverse engineer some items, though others say an abundance of LEAP engines in China has not brought that about to date.

If the United States were to move ahead with the measure, one person familiar with the matter said, China could retaliate by ordering more planes from Airbus SE , rather than crisis-hit Boeing, which relies on China for a fourth its deliveries.

The Trump administration’s meetings about technology issues also are set to include a discussion of whether to impose further restrictions on suppliers to Huawei Technologies, the world’s largest telecommunications equipment maker, which is on a U.S. trade blacklist.

(Reporting by Karen Freifeld and Alexandra Alper; additional reporting by Tim Hepher in Paris; editing by Jonathan Oatis)

FILE PHOTO: China’s home-grown C919 passenger jet taxis after landing on its maiden flight at the Pudong International Airport in Shanghai

Airbus Says Higher U.S. Tariffs on EU Planes Will Harm U.S. Airlines, Consumers

February 14, 2020 / WIL BALDWIN

WASHINGTON (Reuters) – The U.S. government’s decision to raise tariffs on European-built aircraft will hit U.S. airlines already facing a shortage of aircraft and complicate efforts to reach a negotiated settlement with the European Union, Airbus <AIR.PA> said.

The European planemaker said it would continue discussions with its U.S. customers to “mitigate effects of tariffs insofar as possible” and hoped the U.S. Trade Representative’s office would change its position.

“USTR’s decision ignores the many submissions made by U.S. airlines, highlighting the fact that they – and the U.S. flying public – ultimately have to pay these tariffs,” the company said in a statement.

(Reporting by Andrea Shalal; Editing by Daniel Wallis)

Competition Heats Up In The Turboprop Market

February 14, 2020 / WIL BALDWIN

SINGAPORE (Reuters) – Competition is cranking up in the world of turboprops.

For years turboprops were an ignored corner of the aircraft industry, accounting for about 120 aircraft a year compared with the more than 1,000 jets made by giants Airbus and Boeing.

But growing rivalries in the turboprop business cut through a Singapore Airshow depleted by coronavirus this week.

While intercontinental jet travel is vulnerable to trade wars and disruptions such as epidemics, regional development in archipelago nations like Indonesia is favouring the turboprop.

The market has been dominated for years by Europe’s ATR, jointly owned by Airbus and Italy’s Leonardo, which enjoys a relatively undisturbed lion’s share of the market with a small slice also held by the Canadian-owned De Havilland Dash 8.

But the commercial arm of Brazil’s Embraer is sharpening a pitch to return to the market and Chief Executive John Slattery told Reuters he expected a decision by the end of the year.

“We should be positioned in the mid-to-late fourth quarter to bring a business case with a recommendation to our board,” he said in an interview.

In a sign that the development is accelerating, Slattery said he had held talks with three potential engine suppliers – Rolls-Royce, General Electric and Pratt & Whitney Canada, part of the engine unit of United Technologies.

“We are fully engaged with engine manufacturers now and meeting here at the air show…We are excited by where we are.”

Until now, planemakers have found it difficult to justify the estimated $2-4 billion investment needed to develop a new turboprop, despite its efficiency on relatively short flights.

The market has been stagnant at about 120 deliveries a year and demand for the planes is dependent on volatile oil prices, with turboprops displacing small jets when prices are high.

The thrumming noise of the propellor-driven turboprop also puts some passengers off, travel experts say, even though many in the industry say that reputation is already out of date.

Slattery said quiet new engine technology and advances in passenger comfort would stimulate demand.

“We believe the market opportunity going forward is significantly different to what past decades have shown.”

COMPETITION BOOST

China has already entered the fray with its planned MA700.

At ATR’s bright-red stand inside Singapore’s exhibition hall, Chief Executive Stefano Bortoli shrugged off the threat of a comeback by Embraer which already makes smaller turboprops.

“I think once Embraer will let us know their decision you will have our comments. At this point in time it is simply commenting on opinions. Not that we will stand still,” he said.

The fundamental shape of the two-aircraft ATR family seating 40-78 people has not changed in about 30 years, but the aircraft was modernised with the -600 variant around a decade ago.

ATR recently launched a freighter and a version designed for use on short runways, which has opened opportunities in markets such as Japan and Papua New Guinea, where PNG Air emerged as a launch customer this week.

“The approach we’ve taken…is let’s consolidate the platform that we have…and when the right time comes and there are solid options available, let’s go for that,” Bortoli said.

ATR shareholders have clashed in the past about whether to launch a bigger new 90-seater, with Toulouse-based Airbus blocking the investment. But industry analysts say ATR would have to consider responding to a new plane from Embraer.

The prospect of greater competition in turboprop adds zest to efforts by Embraer to complete a tie up with Boeing, which has agreed to acquire control of its commercial division.

The European Commission has extended its scrutiny of the $4 billion deal, fearing that it would narrow options for airlines.

Slattery reiterated Embraer would only have the appetite to invest in a new turboprop in the context of the Boeing venture.

He declined to elaborate but industry experts say it is a signal to Europe that the Boeing deal would improve choice for airlines by prompting ATR to come up with its own new product.

One European source said it remained doubtful whether Boeing would support a new turboprop once it gained control of Embraer, but analysts note the U.S. planemaker has not yet ruled it out.

(Reporting by Tim Hepher, Jamie Freed; editing by David Evans)

FILE PHOTO: Groundcrew prepare a Liat airlines ATR 42 plane on the tarmac at Barbados’ Grantley Adams International Airport

Mitsubishi Postpones SpaceJet Delivery Again, Books $4.5 Billion Special Loss

February 6, 2020 / WIL BALDWIN

TOKYO (Reuters) – Japan’s Mitsubishi Heavy Industries said on Thursday it will book a 496.4 billion yen ($4.5 billion) special loss after its aircraft unit delayed the delivery of its SpaceJet regional jet for at least another year until after March 2021.

The sixth delay announced by Mitsubishi Aircraft is a fresh blow to Japan’s commercial jet ambitions and could stretch Mitsubishi Heavy Industries’ finances.

The company cited the special loss as one reason for wiping out a forecast for operating profit of 220 billion yen in the business year ending March 31.

The new postponement also means an aircraft that Mitsubishi Heavy had planned to bring to market in 2013, will have to compete against a new generation of regional jets built by Brazil’s Embraer SA <ERJ>.

Japan’s biggest airline by revenue, ANA Holdings Inc., is now to take the first delivery of the jet sometime after March 2021.

Mitsubishi Heavy, which builds products ranging from nuclear reactors and ships to rockets and industrial machinery, has traditionally relied on stronger units to support weaker businesses.

“We use cashflow and borrowing to finance our projects and going forward the SpaceJet development will require further funds,” a spokesman for Mitsubishi Heavy said. The company, he added, had no plan at the moment to raise capital for aircraft development.

Government funding would not be an option for Japan’s biggest heavy machinery maker even though the SpaceJet is backed by the government because doing so would contravene World Trade Organization (WTO) rules banning taxpayer subsidies.

A spokeswoman for Mitsubishi Aircraft declined to say how much development of the SpaceJet has cost so far.

The company on Thursday said it had appointed Takaoki Niwa, the head of its U.S. operations, as its new president, replacing Hisakazu Mizutani, who will become chairman.

(Reporting by Tim Kelly; Editing by Kim Coghill and Christopher Cushing)

Some Exhibitors Drop Out of Singapore Airshow Due to Coronavirus

February 2, 2020 / WIL BALDWIN

Textron, Gulfstream no longer attending
Organisers expect reduction in exhibitors, visitors
South Korea’s air force reviewing participation

By Jamie Freed and Allison Lampert

SYDNEY/MONTREAL, Feb 3 (Reuters) – Some aerospace companies including business jet manufacturers Textron Inc and General Dynamics Corp’s Gulfstream division said they no longer planned to attend the Singapore Airshow due to the new coronavirus epidemic.

The trade portion of Asia’s biggest airshow, held every two years, is set to begin on Feb. 11 under the shadow of the fast-spreading virus that has prompted Singapore to deny entry to any non-resident with a recent history of travel to China, where the virus originated.

The death toll from the coronavirus has risen to 361 in China, bringing the number of confirmed infections to 17,205 in the country. The flu-like virus, which can be transmitted from person to person, has spread to more than two dozen other nations and regions.

Experia Events, the organiser of the Singapore Airshow, said last week the show would continue as planned, but the government measures meant it would “undoubtedly see a reduction in terms of the number of expected exhibitors and visitors this year”.

The organiser said there would be doctors and medics on standby to attend to visitors who were feeling unwell.

In 2018, there were 54,000 trade attendees from 147 countries and 1,062 participating companies who come to network, examine products and sign deals covering commercial aviation, defence, maintenance and repair operations and business jets.

Typically, it is not a major show for commercial plane orders but talks during the show can set the stage for deals that are completed later in the year.

Boeing, Airbus and Lockheed Martin Corp , among the biggest exhibitors, said they still planned to attend the show.

Textron and Gulfstream said their decision to not attend was a precautionary measure to protect the health of employees.

Russian aerospace group Rostec plans to send a reduced delegation to the show, Russian media reported. Rostec did not respond immediately to a request for comment.

A spokesman for South Korea’s Air Force said on Monday it was reviewing whether to participate in the Singapore Airshow, but it had not made a final decision.

The deputy administrator of the Civil Aviation Administration of China, Li Jian, is no longer listed as a speaker at a pre-show leadership conference on Feb. 10.

Commercial Aircraft Corp of China (COMAC), which is developing the C919 narrowbody jet, had been due to attend the show before the travel ban was announced.

COMAC did not respond immediately to a request for comment.

(Reporting by Jamie Freed in Sydney and Allison Lampert in Montreal; additional reporting by Anshuman Daga in Singapore, Joyce Lee in Seoul and Brenda Goh in Shanghai; Editing by Himani Sarkar)

Toyota to Move Tacoma Truck Production to Mexico from U.S.

January 17, 2020 / WIL BALDWIN

WASHINGTON (Reuters) – Toyota Motor Corp <TM> said on Friday it will move production of its mid-size Tacoma pick-up truck from the United States to Mexico as it adjusts production around North America.

The largest Japanese automaker also said it will end production of the Toyota Sequoia in Indiana by 2022 as that facility focuses on mid-size SUV’s and minivans.

Toyota will shift production of the Sequoia in 2022 to Texas and that plant will end production of the Tacoma by late 2021.

Toyota has been building Tacoma trucks at its Baja California plant in Mexico since 2004. Last month, Toyota’s Guanajuato plant began assembly of the Tacoma.

Toyota said its production capacity for the Tacoma in Mexico will be about 266,000 per year. Last year, the automaker sold nearly 249,000 Tacoma pickup trucks in the United States, up 1.3%.

Toyota said the product moves were to “improve the operational speed, competitiveness and transformation at its North American vehicle assembly plants based on platforms and common architectures.”

The new North American trade agreement approved by the U.S. Senate on Thursday ensures that automakers will still be able to build pickup trucks in Mexico without facing new punitive tariffs.

In February, Fiat Chrysler Automobiles NV <FCAU> said it was reversing plans to shift production of heavy-duty trucks from Mexico to Michigan in 2020, freeing a Michigan facility to produce Jeeps.

Toyota said Friday it completed a $1.3 billion modernization investment in its Indiana operations to add 550 jobs. Toyota said there would be no reduction to direct jobs at any of Toyota’s facilities across North America as a result of the vehicle moves.

(Reporting by David Shepardson; Editing by Chris Reese)

Toyota to Build Prototype City of the Future in Japan

January 6, 2020 / WIL BALDWIN

Akio Toyoda, president of Toyota Motor Corporation, speaks at a news conference, where he announced Toyota’s plans to build a prototype city of the future on a 175-acre site at the base of Mt. Fuji in Japan, during the 2020 CES in Las Vegas

LAS VEGAS (Reuters) – Toyota Motor Corp <TM> said on Monday it plans to build a prototype “city of the future” at the base of Japan’s Mt. Fuji, powered by hydrogen fuel cells and functioning as a laboratory for autonomous cars, “smart homes,” artificial intelligence and other technologies.

Toyota unveiled the plan at CES, the big technology industry show. The development, to be built at the site of a factory that is planned to be closed, will be called “Woven City” – a reference to Toyota’s start as a loom manufacturing company – and will serve as a home to full-time residents and researchers.

Toyota did not disclose costs for the project.

Executives at many major automakers have talked about how cities of the future could be designed to cut climate-changing emissions from vehicles and buildings, reduce congestion and apply internet technology to everyday life. But Toyota’s plan to build a futuristic community on 175 acres (71 hectares)near Mt. Fuji is a big step beyond what rivals have proposed.

The proposal highlights not only Toyota Chief Executive Akio Toyoda’s ambition, but also the financial and political resources Toyota can bring to bear, especially in its home country.

Toyota expects 2,000 people will live at the city initially, with construction slated to start next year. Toyoda called the project “my personal ‘field of dreams.’

“You know if you build it, they will come.”

Toyota said it has commissioned Danish architect Bjarke Ingels to design the community. Ingels’ firm designed the 2 World Trade Center building in New York and Google’s offices in Silicon Valley and London.

Toyota said it is open to partnerships with other companies that want to use the project as a testing ground for technology.

(Reporting by Jane Lanhee Lee and David Shepardson; Writing by Joe White; Editing by Dan Grebler)

Watch the 30 second Woven City YouTube video by clicking HERE!

Daimler, Volvo Mull Combustion Engine Cooperation

January 5, 2020 / WIL BALDWIN

BERLIN (Reuters) – Luxury German carmaker Daimler <DDAIF> and Volvo Cars, owned by China’s Geely, are considering cooperating to cut the costs of developing combustion engines, a magazine reported on Sunday, citing unnamed company sources.

The Automobilwoche weekly cited a Volvo manager as saying there were initial talks with Daimler, but no concrete plans, while a company spokesman said it was too early to talk about firm projects, although it was not excluding anybody.

A Daimler spokesman said the company’s cooperation with Geely, which owns a 10% stake in the German carmaker, was developing in a positive way, but declined to comment further.

Global tariffs, accelerated by a trade war between China and the United States, as well as higher investment requirements for electric and autonomous vehicles, are forcing carmakers to seek new ways to cut and share costs.

In October, Volvo said it would merge its engine development and manufacturing assets with those of Geely, creating a division to supply in-house brands and also potentially others with next-generation combustion and hybrid engines.

The Automobilwoche said this new division would start operating by the end of March, which could be a possible starting point for cooperation with Daimler, while a further step could be a partnership to develop electric power trains.

Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture and the two companies are also cooperating on a premium ride-hailing service in China.

Geely bought Volvo Cars in 2010 from Ford Motor Co <F.N>, allowing the Swedish brand to operate on an arms-length basis. But in recent years, it has deepened cooperation between the two brands.

Volvo already supplies engines to some Geely-branded vehicles, sharing technology through Geely’s Lynk brand. Both companies share and develop common vehicle platforms.

(Reporting by Emma Thomasson and Georg Merziger; editing by Jason Neely)

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