News Archive


Oman Air says orders 20 Boeing 737s; to double fleet by 2020


SINGAPORE (Reuters) – Flag carrier Oman Air has ordered 20 Boeing Co (BA.N) 737 aircraft as part of a plan to double its fleet to 70 planes by 2020, Chief Executive Paul Gregorowitsch said on Monday.

The order includes both the current generation of 737s, which will be delivered from 2017, as well as the re-engined 737 Max planes that will come from 2019, he told Reuters at the launch event of the airline’s first direct flight to Singapore.

Ten of the planes will come directly from Boeing and the rest from leasing companies, he added. Oman Air plans to use these aircraft to grow its domestic network, as well as key regional markets like the Gulf and India, he said.

Oman Air has 36 aircraft, including 10 Airbus A330s and 21 737s. This year, it will also receive the first two of nine Boeing 787s it has on order as well as six more 737s.

It also plans to choose between the 787 and the A330neo, the re-engined variant of the Airbus widebody planes, for its medium and long haul requirements.

The airline will eventually have 25 narrowbody planes and 45 wide bodies by the end of the decade.

(Reporting by Siva Govindasamy; Editing by Miral Fahmy)

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Volvo Cars to build U.S. plant to spearhead sales recovery


PARIS (Reuters) – Volvo Cars will invest $500 million in its first U.S. assembly plant under plans announced on Monday, plugging a longstanding gap in the Swedish carmaker’s manufacturing base as it pursues a global comeback under Chinese ownership.

Volvo is in advanced talks with several U.S. states and will announce a location within weeks, Chief Executive Hakan Samuelsson said in embargoed comments made before the announcement. Production will begin in 2018.

Following its sale to Zhejiang Geely [GEELY.UL] by Ford (F.N) in 2010, Volvo has stepped up investment in new models and production, adding a pair of Chinese factories to its two older European plants.

North American manufacturing is “the last piece in establishing our global footprint”, Samuelsson told Reuters.

The plant will serve export markets as well as the United States, where Volvo is aiming for a return to annual sales of 100,000 vehicles. Reuters reported in January that a factory investment was being considered.

While the carmaker’s global deliveries rose 9 percent last year to almost 466,000, largely thanks to China, U.S. sales fell another 8 percent to 56,000 vehicles.

The choice of the United States over Mexico – where rivals such as BMW (BMWG.DE) have announced a series of plant investments – underlines Volvo’s determination to “rebuild the brand” among American consumers, the CEO said. “We want to give a clear signal that the U.S. is a home market for us.”

He declined to identify the shortlisted sites but said the decision would reflect the availability and cost of skilled workers and logistics including the export of finished cars.

Samuelsson said he was neutral on whether U.S. staff are represented by the United Auto Workers union – a politically divisive issue that has dogged plant decisions by Volkswagen (VOWG_p.DE) and others.

“It’s up to the people who work for us to choose how they want to be organized,” he said. “We have no opinion on that.”

Volvo said production capacity would be close to the 120,000 vehicles at its larger Chinese plant, with model plans still under wraps. The arrival of the new XC90 flagship SUV as an import is counted on to halt the U.S. sales slide this year.

Volvo may find the going tougher than in its U.S. heyday, which saw 2004 deliveries approach 140,000. Since then, BMW and its German rivals, VW’s Audi and Daimler’s (DAIGn.DE) Mercedes-Benz, have grabbed a bigger share of the luxury market.

Toyota’s (7201.T) Lexus brand is also gaining ground, and a product offensive by Ford’s Lincoln and General Motors’ (GM.N) Cadillac offers more non-German options to U.S. premium buyers.

Volvo’s plant investment nonetheless demonstrates confidence that it can claw its way back under newly appointed Americas chief Lex Kerssemakers.

“We’re going after a market share of 1 percent with a clear identity that we know is very attractive to some customer groups,” Samuelsson said. “It is a tough market – but I wouldn’t say it’s tougher than Europe or China.”

(Editing by Greg Mahlich)

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Juror in gender lawsuit sympathized with Pao, sided with Kleiner


SAN FRANCISCO (Reuters) – To some Silicon Valley watchers, the Kleiner Perkins Caufield Byers gender discrimination case became a referendum on the challenging state of women in technology. But for the lone woman in technology on the jury, an at times unfriendly workplace did not amount to gender discrimination at the powerful venture capital firm. 

The jury on Friday cleared Kleiner on all charges of gender bias and retaliation, leaving the technology community scouring the jurors for the thinking behind their decision and for clues on whether other gender discrimination cases can succeed.

For Erin Malone, 51, an alternate juror who sat through four weeks of testimony but did not end up deliberating on the verdict, it came down to the credibility of Ellen Pao, 45, the plaintiff who had worked as a partner at Kleiner until 2012.

Pao’s friendly demeanor crumbled somewhat under cross examination and her performance fell short, Malone said in an interview, echoing the comments of two other jurors interviewed by Reuters who were part of deliberations.

Deliberating jurors included six men and six women, with two men and Malone standing by as alternates. An alternate juror sits through the trial and may be called on as a replacement if an active juror drops out, for example due to illness.

Sympathetic to Pao in many areas, Malone, who designs technology allowing users to interact with apps and websites, said she herself felt she reached a “glass ceiling” when she worked at Yahoo Inc (YHOO.O) years ago. (Malone left Yahoo in 2008. Since then, the company has had two women chief executives including the present CEO, Marissa Mayer.)

Ultimately, what Malone saw as an environment that was sometimes difficult for women was not enough to sway her on the merits of Pao’s specific case against Kleiner. 

“The environment definitely is biased against women in technology, and venture capital is even worse,” said Malone, but “I didn’t find her as credible as she should have been.” 

Pao did not return a call seeking comment on Sunday. After the verdict on Friday, she said, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”

Kleiner spokeswoman Christina Lee said the firm would have no comment beyond its Friday statement, which expressed satisfaction with the jury’s verdict.

“BROGRAMMER” CULTURE

The case unfolded amid frustration with the macho “brogrammer” culture that prevails in Silicon Valley. Over the past year, big tech companies released statistics that showed only about 30 percent of the tech workforce are women.

Malone, who now runs her own user-experience firm, Tangible UX, said she identified with Pao on some levels. For example, Pao’s testimony about sitting through banter among male colleagues concerning porn stars reminded Malone about her own experience listening to colleagues discuss trips to strip clubs.

Her chief reservation with Pao’s case lay in her performance reviews, Malone said. That was also the view of the two other jurors interviewed by Reuters.

While Kleiner’s evaluators lauded Pao on some measures, such as writing and analysis, they repeatedly critiqued her on others, in particular her ability to collaborate with other partners.

“We encourage you to soften your style, to be more collaborative, supportive, particularly of those with whom you don’t easily work,” Kleiner partner John Doerr wrote in Pao’s 2007 review.

Pao’s legal team countered that not working collaboratively with others did not hold back some men.

Malone said Pao’s peers who earned black marks worked from year to year to eliminate their flaws, but Pao seemed to show less effort. She did not see signs that Pao tried harder to work collaboratively, whereas another Kleiner partner who was given feedback on the need to get more operating experience went out to get it.

Malone also said she found Pao clipped and stiff when it came to cross examination by the defendants’ lawyers.

“She was replaced by a robot,” Malone said, adding this made it “harder to believe all of her story.”

Still, Malone pointed to some evidence that worked in Pao’s favor. For instance, Doerr, 63, the firm’s de facto leader, had noted in writing whether female hires were married and had children but did not note the same details about men.

“He’s a product of his generation,” she said.

Malone said she believed Doerr genuinely wanted a gender diverse firm but “maybe doesn’t totally know how to fix it.”

(Reporting by Sarah McBride; Editing by Peter Henderson and Tiffany Wu)

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Western banks axed 59,000 jobs last year, more cuts to come in Europe


LONDON (Reuters) – Top European and U.S. banks axed 59,000 jobs last year as they restructured and cut costs, with headcount expected to shrink further in Europe as bosses strive to improve profitability that has been hit hard by tougher regulation.

Lenders have also sold or shut businesses to narrow their focus to avoid falling foul of regulators concerned that some have become too big and complex.

Analysts said that European banks, especially those in the euro zone, are likely to wield the knife again because they remain the most unprofitable in the world.

“The screws will stay tight on headcount,” said Aymen Saleh, managing director at Boston Consulting Group in London.

“A handful of banks globally have really looked at structural change and taken a big cut from their cost base. The majority have done some tactical and convenient belt-tightening to take out costs, but without really fundamentally changing how they operate or their business model.”

Eighteen of Europe’s biggest banks cut a combined 21,500 jobs last year, but that was less than half of the 56,100 jobs cut by the same banks in 2013, according to data compiled by Reuters.

Six of the biggest U.S. banks cut a total of 37,500 jobs last year, having shed 45,700 in 2013.

That means more than 160,000 jobs have been cut across the 24 banks in the past two years. The six U.S. banks shed 7.3 percent of staff in the period, against 4.1 percent for the Europeans, the data shows.

Boston Consulting’s Saleh said that the majority of banks that have not restructured much could have to cut more jobs, though those that moved early could be in a position to add staff in selected areas.

An IMF study last year of 300 large banks showed that only about 30 percent of euro zone lenders had a structure that was able to make a reasonable rate of return over time, compared with 80 percent of U.S. banks.

SECOND WAVE

Tens of thousands of staff were axed during and after the 2007/09 financial crisis, but a fresh wave of cuts swept through the banking industry in 2013 as trading income slumped and economic growth slowed.

“In a world where growth is harder to come by, I’m more convinced than ever that costs will remain the strategic battleground for our sector over the coming years,” Barclays Chief Executive Antony Jenkins said last week.

Barclays shed 7,300 jobs last year as part of Jenkins’ three-year plan to cut 19,000 staff, or one in seven employees, and save more than 2.4 billion pounds ($3.6 billion) a year.

The biggest cuts last year were made by banks in the United States, Britain, Italy and Spain. Royal Bank of Scotland shed 10,000 staff and more could follow as it sells overseas businesses and shrinks its investment bank further.

Some banks added staff last year after sharp cuts in 2013, including HSBC, Standard Chartered and BNP Paribas, the data showed.

U.S. banks with large consumer operations, such as JPMorgan and Bank of America, made substantial job cuts in the past two years as they worked through troubled mortgages left by the financial crisis and refinanced many loans at lower interest rates. Citigroup also eliminated jobs as it consolidated back offices and quit some international markets.

Banks are also closing branches and laying off staff as a growing number of customers shift to mobile and online banking.

The shift to digital banking and more efficient processing is expected to exert renewed pressure on staffing in the coming years.

Analysts at Citi last month estimated that 54 percent of financial services jobs were at “high risk” from the impact of digitization.

($1 = 0.6709 pounds)

(Additional reporting by David Henry in New York and Jesus Aguado in Madrid; Editing by David Goodman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bCDeJeAQV6E/story01.htm

Asia shares sluggish, oil drifts lower


SYDNEY (Reuters) – Asian markets got off to a sluggish start on Monday in a week book ended with Easter holidays across the globe and a U.S. jobs report that could impact the timing of the first hike in interest rates there.

MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.2 percent. Australia’s main index lost 0.8 percent amid weakness in commodity prices.

Federal Reserve Chair Janet Yellen on Friday reaffirmed that rates would likely start rising later this year but emphasized the pace of tightening would be gradual and data dependent.

The conditional outlook helped nudge longer-dated Treasury yields lower and left the dollar listless for the moment. It fetched 119.22 yen on Monday, just a whisker higher than at the end of last week and short of the near eight-year peak of 122.04 set early this month.

The euro was little changed at $1.0886, having in the last two weeks pulled up from a 12-year trough of $1.0457.

On Wall Street the Dow ended Friday up 0.19 percent, while the SP 500 gained 0.24 percent and the Nasdaq 0.57 percent.

Shares in Intel Corp jumped on reports it was in talks to buy rival Altera Corp, sending the PHLX semiconductor index up 2.8 percent.

Oil had retreated 5 percent on Friday as Yemen’s conflict looked less likely to disrupt Middle East crude shipments and investors turned their focus to talks for a potential Iran nuclear deal that could put more supply on the market.

Early Monday, U.S. crude was 54 cents lower at $48.33 a barrel. Brent eased 39 cents to $56.02 a barrel.

The data diary in Asia is bare on Monday with figures on German inflation, European confidence and U.S. personal income and spending due later in the session.

Flash inflation data for the euro zone are due Tuesday and manufacturing surveys on China are out the day after. Yet that should just be an appetizer for Friday’s U.S. payrolls report.

Economists polled by Reuters are forecasting a healthy 244,000 rise in non-farm payrolls in March. If confirmed, it would be the 13th straight month of job gains of over 200,000, a run not seen since 1994-95.

The market reaction will be complicated by holidays across much of the western world on Friday. Only some U.S. markets will be open and then only for shortened hours.

Investors will again have to keep a wary eye on Greece and its talks with international creditors where the parties are struggling to come up with a list of acceptable reforms.

Greece will run out of money by April 20 if it does not secure funding from its European partners, a source familiar with the matter told Reuters last week.

Rating agency Fitch cut Greece’s credit status on Friday due to uncertainty over the release of aid.

(Editing by Shri Navaratnam)

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ABN Amro IPO back in sight after executives concede on pay


AMSTERDAM (Reuters) – The Dutch government will reconsider selling off ABN Amro [ABRGPA.UL], Finance Minister Jeroen Dijsselbloem said, after senior managers agreed to give up a controversial pay rise that had stalled progress on the bank’s proposed share listing.

In the face of a widespread public outcry, the managers said they would give up raises of 100,000 euros ($110,000) each, which had been approved by the supervisory board for six members of the managing board, all but Chief Executive Gerrit Zalm.

Lawmakers, who must approve an initial public offering, had decried the raises as evidence that the bank’s management culture was still flawed. Dijsselbloem said on Friday he would delay privatization until questions over the increase were resolved.

Thousands of bank employees had lost their jobs after the bank’s 2008 nationalization, which cost taxpayers billions of euros. Last year the union representing workers at the bank agreed to a two-year freeze on salaries.

Zalm, who did not get a raise, said managers’ annual base salary was increased after a law had limited bonuses in the financial sector to 20 percent.

In a statement on Sunday, the managers said they were “putting the interests of the bank and the public first”.

“Now that our remuneration is the subject of discussion and threatens to affect the future of ABN Amro … (we) have decided to renounce the allowance,” the managers wrote.

Dijsselbloem quickly responded that he “welcomed the step”.

“After completing discussion with parliament, the cabinet will again discuss the launch of the proposed stock market listing,” he said.

ABN Amro’s finances have largely recovered since the crisis. On Feb. 20, it reported an underlying 2014 profit of 1.55 billion euros ($1.7 billion), with provisions for bad loans shrinking and the Dutch economy set to grow.

Its current book value amounts to around 14.9 billion euros, indicating that a stock market listing would be unlikely to raise enough to repay the roughly 24 billion euros that its nationalization cost taxpayers.

The IPO, which could take place as early as the second half of 2015, will be the largest to date on the Euronext exchange.

Zalm had said the managers were all hired after the bank’s nationalization.

Zalm’s base pay remains at 759,375 euros, and the other managers, including Chief Financial Officer Kees van Dijkhuizen, will remain at 607,500 euros, well below industry averages.

($1 = 0.9185 euros)

(Reporting By Toby Sterling; editing by Susan Thomas)

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Stanchart says committed to Islamic banking after head of unit exits


DUBAI (Reuters) – Standard Chartered remains committed to Islamic banking and expects growth in its core markets, a spokesman for the lender said on Sunday, after the head of its Islamic arm departed.

Afaq Khan left Standard Chartered Saadiq, the lender’s global Islamic banking business, after 12 years with the Asia-focused bank to take a career break, the spokesman said. A successor will be announced in due course, he added.

His departure follows the naming of the group’s new chief executive, Bill Winters, who is expected to oversee a shakeup when he takes over in June in a bid to reverse a two-year slump.

“Standard Chartered remains committed to our Islamic banking business, and we continue to position ourselves for further growth in the core markets where the largest Islamic banking opportunities exist,” the spokesman said.

The core markets include Bahrain, Malaysia, Bangladesh, Pakistan, Indonesia and the United Arab Emirates, where Standard Chartered offers personal banking services, the spokesman said.

The bank also offers structured finance for businesses in Bahrain, Jordan, Qatar, Turkey, the United States, Brunei, Malaysia, Saudi Arabia, the UAE, Indonesia, Pakistan, Singapore and the United Kingdom, according to the Standard Chartered Saadiq website.

The bank arranged $20 billion in Islamic financing for its customers in 2013, a rise of $3 billion from 2012, according to its 2013 annual report, the latest available.

But Standard Chartered is scaling down parts of its global business under a cost-cutting drive. In January, it announced plans to shut its global equities business and axe 4,000 jobs in retail banking.

Competition is intense in Islamic banking, especially in the Gulf where a number of cash-rich local lenders operate.

HSBC, another British bank, announced in 2012 that except for wholesale banking operations, it would no longer offer Islamic products in Britain, the UAE, Bahrain, Bangladesh, Singapore and Mauritius.

Khan is the second senior figure to depart from Standard Chartered Saadiq. Wasim Saifi, global head of Islamic retail clients, left the bank late last year. He was also the chief executive of Standard Chartered Saadiq, Malaysia.

(Additional reporting by Bernardo Vizcaino; editing by Jane Baird)

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British Airways says some frequent flyer accounts hacked


LONDON (Reuters) – British Airways said on Sunday tens of thousands of its frequent flyer accounts had been hacked and that it had frozen those affected to sort the problem out.

The airline said no personal information had been viewed or stolen, but warned customers that some fliers might not be able to temporarily use their air miles.

It said the problem concerned a small number of its millions of customers and that it expected the system to be back to normal in the next day or so.

“British Airways has become aware of some unauthorized activity in relation to a small number of frequent flyer executive club accounts,” a spokesman said.

“We would like to reassure customers that, at this stage we are not aware of any access to any subsequent information pages within accounts, including travel histories or payment card details.”

Hackers had launched their attack “via an automated process” using information obtained elsewhere on the internet, he explained, to try to gain access to some accounts.

“We are sorry for the concern and inconvenience this matter has caused,” said the spokesman.

(Reporting by Andrew Osborn; Editing by Raissa Kasolowsky)

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U.S. jobs to add heat to Fed lift-off debate


BRUSSELS (Reuters) – The state of the U.S. labor market in March will consume economists and investors in the week leading up to Easter, adding to the seesaw debate over when the Federal Reserve will spring its first interest rate hike.

Fed Chair Janet Yellen made it clear on Friday that the U.S. central bank is likely to start raising borrowing costs later this year, adding that continued improvement of the labor market would be an important factor in deciding when to move.

Labor market data are therefore likely to be the highlight of the economic week, providing a further signal to the Fed on the health of the U.S. economy and its capacity to withstand rate rises.

The ADP National Employment Report, which focuses only on the private sector and is due on Wednesday, may provide a foretaste of the big event — non-farm payroll numbers on Friday.

Economists polled by Reuters are forecasting a healthy 244,000 rise in non-farm payrolls in March. If confirmed, it would be the 13th straight month of job gains of over 200,000, matching a run in 1994-95.

In the post-war period only the runs of 14 months in 1976-77 and 15 in 1983-84 have been higher.

Yellen said a significant pickup in core inflation was not a precondition for the Fed to pull the trigger on rates. Nevertheless, inflation remains stubbornly low, although consumer prices did rebound in February as the cost of gasoline rose.

For many economists the focus on Friday is less the jobs figures than average earnings, which are seen picking up after a muted 3 cent per hour rise in February.

A spate of weak U.S. economic data at the start of the year, from retail sales to business spending, has prompted economists to scale down their growth views and push back to September their expectations of a first rate hike since 2006.

Bullish economists say a harsh winter, a now settled labor dispute at the country’s busy West Coast ports and a natural moderation from a strong middle of 2014 imply the slowdown is just a temporary ripple.

However, there are some that cite the lack of wage pressure as a sign that the recovery is not complete and a strong dollar as a future threat.

The euro briefly passed $1.10 last week, having dropped just below $1.05 before the Fed’s March meeting, when it downgraded its economic growth and inflation projections, pouring cold water on investor expectations of a June rate hike.

“I’m still in the June camp,” said UniCredit’s Chief U.S. economist Harm Bandholz. “But it’s been a weak Q1 and the Fed wants certainty that this it’s transitory and not related, for example, to the dollar.”

GREEK LIST, CHINESE EBB

In Europe, euro zone finance ministers will need to give their blessing to Greece’s long-awaited list of reforms if Athens is to secure further aid and stave off bankruptcy.

Rating agency Fitch cut Greece’s credit status on Friday due to uncertainty over the timing of the release of aid.

For the euro zone as a whole, the main data point will be March flash inflation due on Tuesday.

Since a record-equaling consumer price fall of 0.6 percent in January, the year-on-year inflation rate is seen pulling back to minus 0.1 percent in March.

Consumer and business sentiment figures on Monday should show the single currency bloc is steadily improving.

Indeed with low oil prices and a weak euro driving consumption and exports, there are some already questioning whether the European Central Bank will need the full 1 trillion euros ($1.09 trillion) of its bond buying program.

“If it’s not only euro zone activity firming up, but inflation troughing too, you’d have to ask if the ECB will continue until 2016,” said ING chief international economist Rob Carnell. “Inflation does matter. We might need a couple of months, but this could be the first step.”

Finally, the health of the Chinese economy should become clearer after official National Bureau of Statistics numbers on Wednesday and final HSBC/Markit purchasing managers’ index data on Wednesday and Friday.

Last week’s flash HSBC/Markit PMI showed activity in Chinese factories dipped to an 11 month low in March as orders shrank, signaling weakness in the world’s second-largest economy that will likely fuel calls for more easing of monetary policy. ($1 = 0.9185 euros)

(Editing by Toby Chopra)

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