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Peugeot-Opel deal promises Big Bang in small cars: sources

PARIS French carmaker PSA Group (PEUP.PA) is planning an engineering blitz to redevelop Opel’s core models with its own technology if it succeeds in buying General Motors’ (GM.N) European arm, company sources and advisers told Reuters.

The Peugeot maker, which is in talks with GM on an Opel deal, wants to build the next Corsa mini on the same architecture as its Peugeot 208 and Citroen C3 models, several sources said.

This presents a tough challenge as the new GM model is due for an update in two years, leaving little time for a major reworking of its design. PSA’s alternative, however, would be to wait until around 2025 – the end of its next model cycle – to tap cost savings in the best-selling vehicle category.

Chief Executive Carlos Tavares outlined the plan at a PSA board meeting on Wednesday, one source said. The aim would be to fuse the small car categories that PSA and GM failed to combine under a looser 2012 alliance that missed key targets.

Tavares refused on Thursday to comment on the details of possible PSA-Opel vehicle programs as he presented record PSA earnings to reporters and analysts, stressing that the acquisition had yet to be agreed with GM.

But he said the combined company would aim to sell more than 5 million vehicles annually within “a few years”, confirming an earlier Reuters report. PSA and GM Europe delivered 4.3 million vehicles between them last year.

“When you look at the product plan you see that you can, in a quite speedy way, implement significant synergies,” Tavares said.

The next Corsa and related Mokka X mini-SUV are among a wave of small Opel cars already in development for launch in 2019. The two models represent 40 percent of GM’s European sales, according to LMC Automotive data.

PSA wants the Opel deal to yield cost synergies of between 1.5 billion and 2 billion euros ($1.6-2.1 billion), sources close to the talks have said.

PSA and GM have tried before to combine their small cars – the failed centerpiece of a “global strategic alliance” unveiled in 2012 and rapidly scaled back to three shared projects from 40 initially considered.

Gilles Le Borgne, the PSA engineering chief, told Reuters the earlier small car plans had foundered because GM chose instead to develop the Corsa on its own architecture, pursuing economies of scale between its Opel and Chevrolet brands.

“It’s completely different now,” Le Borgne said on Thursday, adding that engineering teams were ready to move fast. “It would be stupid to miss another cycle,” he said, adding that it normally takes more than three years to develop a new model.


A swift convergence of small car design and production may deepen concern over possible job losses, especially in Germany – home to about half the 38,000-strong GM Europe workforce.

The competing PSA and Opel small car and SUV line-ups are currently spread among no fewer than five European plants: Opel Eisenach, Germany, and Zaragoza, Spain; and PSA Poissy and Mulhouse, France, and Trnava, Slovakia.

Tavares has promised to honor existing GM plant and job guarantees, but many of those expire in 2018-2020 – around the time the first jointly-developed products would be arriving.

“Given the massive overlap of the two businesses, there should be no illusion as to what will need to happen,” Evercore ISI analyst Arndt Ellinghorst said in a recent note.

“It’s about hard restructuring in Germany, the UK and Spain resulting in at least 5,000 manufacturing job cuts,” he predicted. Evercore expects three plants to close by 2021.

While PSA will honor past deals, the company insists no new plant or job commitments are on the table. “We’d discuss those at a later stage,” a spokesman said, declining further comment.

The proposed deal would create a “European champion” and offer lifeline to Opel after 16 consecutive years of losses, CEO Tavares said on Thursday. “This company needs help.”

It would also tap future technologies such as PSA electric and plug-in hybrid transmissions due in two years, he said.

Joint engineering teams are already working well on vehicles developed under the 2012 cooperation deal, Tavares added, a point of view shared by one of that agreement’s architects.

“Opel’s been losing money for ever, it’s sub-critical mass and there’s no interesting technology,” said the executive, who helped draw up the original alliance plan. “But on the upside, a lot of the technical work is already done.”

($1 = 0.9475 euros)

(Additional reporting by Edward Taylor and Arno Schuetze in Frankfurt, and Pamela Barbaglia in London; editing by David Stamp)

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Jobless claims up, four-week average lowest since 1973

WASHINGTON The number of Americans filing for unemployment benefits rose slightly last week but the four-week average of such claims, considered a better gauge, fell to a 43-1/2-year low in a sign of a strengthening labor market.

Other data on Thursday showed house prices increasing solidly in December amid strong demand for housing even as mortgage rates rose. The reports highlighted strength in the economy that could allow the Federal Reserve to raise interest rates in the near-term.

“All indications are that job creation remains solid, underscoring the resiliency of the nearly eight-year economic recovery,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. “A March (rate) hike cannot be ruled out.”

Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 244,000 for the week ended Feb. 18, the Labor Department said. It was the 103th straight week that claims remained below 300,000, a threshold associated with a healthy labor market.

That is the longest stretch since 1970, when the labor market was much smaller. The labor market is at or close to full employment, with the unemployment rate at 4.8 percent.

Economists had forecast new claims for unemployment benefits rising to 241,000 in the latest week. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 241,000 last week, the lowest reading since July 1973.

The dollar was trading lower against a basket of currencies, while prices for U.S. government debt rose. Stocks on Wall Street touched record intraday highs, in part driven by higher oil prices.

Minutes of the Federal Reserve’s Jan 31-Feb 1 monetary policy meeting published on Wednesday showed that many policymakers believed another interest rate hike might be appropriate “fairly soon” if labor market and inflation data meet or beat expectations.

The U.S. central bank raised its benchmark overnight interest rate last December. It has forecast three rate increases this year.


Last week’s claims report covered the survey period for the Labor Department’s nonfarm payrolls data for February. The four-week average of claims fell 6,500 between the January and February payrolls survey weeks. This suggests another month of strong job gains after payrolls increased 227,000 in January.

“The message of this report remains that layoffs rates are extremely subdued,” said John Ryding, chief economist at RDQ Economics in New York. “We view subdued layoffs as a sign of labor market tightness with employers retaining the labor they have amid elevated job openings and a lack of available workers.”

The tightening labor market is helping to underpin demand for housing. In a report on Thursday, the Federal Housing Finance Agency (FHFA) said its house price index rose a seasonally adjusted 6.2 percent in December from a year ago.

That followed a 6.1 percent gain in November. The FHFA’s index is calculated by using purchase prices of houses financed with mortgages sold to or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac.

The higher home prices largely reflect tight housing inventories against the backdrop of strong demand.

This is despite the 30-year fixed mortgage rate rising more than 50 basis points since November to above 4.0 percent. But with the home price increases outpacing wage growth, economists expect demand for housing to slow this year.

“While appreciation has remained strong lately, we look for some moderation in price increases over time along with some broader cooling in the housing data,” said Daniel Silver, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

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S&P, Dow hit record highs as oil prices rally

The SP 500 and the Dow Jones Industrial Average hit record intraday highs on Thursday as a rally in oil prices added to optimism about U.S. President Donald Trump’s proposed tax reforms.

Oil prices surged 2 percent on Thursday after data showed a surprise decline in U.S. inventories, suggesting a global oversupply maybe be ending. [O/R]

The SP 500 energy index .SPNY jumped 0.9 percent, led by gains in Exxon (XOM.N) and Chevron (CVX.N). The sector also provided the biggest boost to the broader index.

U.S. stocks have been on a record-setting rally in the past two weeks after Trump said his administration would make a major tax announcement in the coming weeks.

Treasury Secretary Steven Mnuchin told CNBC on Thursday that he expected a “very significant” tax reform to be enacted by Congress’ August recess.

“There is an incremental buy on the market everyday,” said Drew Forman, co-head of sales and trading equity at Macro Risk Advisors in New York.

“However, people are getting complacent … and we’re going to need to see some results from the president and the government on some of these policies before we see a huge breakout.”

The SP 500 has not moved more than 1 percent in either direction since Dec. 7.

At 9:33 a.m. ET, the Dow Jones Industrial Average .DJI was up 38.11 points, or 0.18 percent, at 20,813.71. The index has hit record highs in nine of the past 10 sessions.

The SP 500 .SPX was up 4.94 points, or 0.21 percent, at 2,367.76 and the Nasdaq Composite .IXIC was up 2.30 points, or 0.04 percent, at 5,862.93.

All of the 11 major SP 500 sectors were higher, with industrials .SPLRCI and technology .SPLRCT bringing up the rear.

A Labor Department report showed the number of Americans applying for unemployment benefit rose slightly more than expected last week, but the four-week average of claims fell to its lowest level since 1973, pointing to strengthening labor market conditions.

Shares of HP Inc (HPQ.N) rose 4.5 percent to $16.92 after the computer hardware maker reported a rise in quarterly revenue.

Boston Scientific (BSX.N) slumped 6.7 percent after the company recalled its Lotus Valve heart devices, citing reports of problems with the locking mechanism. Shares of rival Edwards Lifesciences (EW.N) rose 7 percent and were the biggest gainers on the SP.

Carter’s (CRI.N) rose 6 percent after the company agreed to buy baby and parenting products maker Skip Hop for $140 million.

L Brands (LB.N) dropped 14 percent after reporting weakening demand at its Victoria’s Secret business.

Nvidia (NVDA.O) slipped 5.8 percent and was the biggest drag on the Nasdaq after Instinet downgraded the stock to “reduce” from “buy”.

Advancing issues outnumbered decliners on the NYSE by 1,979 to 536. On the Nasdaq, 1,277 issues rose and 819 fell.

The SP 500 index showed 35 new 52-week highs and one new low, while the Nasdaq recorded 56 new highs and four new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza and Saumyadeb Chakrabarty)

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Kohl’s quarterly profit beats on higher margins

Department store operator Kohl’s Corp (KSS.N) followed larger rival Macy’s Inc (M.N) in reporting a better-than-expected quarterly profit, helped by higher margins despite a drop in sales during the crucial holiday selling season.

Shares of Kohl’s were up about 2 percent at $42.55 in premarket trading.

Both Macy’s and Kohl’s reported weak sales for November and December as they struggle to overcome stiff competition from Inc (AMZN.O) and weak demand for clothes and accessories.

However, Kohl’s likely had to discount less in the fourth quarter than rivals as it entered the holiday season with low inventories, analysts had said.

“We saw improvement in merchandise margin, and our team continued to manage inventory and expenses extremely well,” Kohl’s Chief Executive Kevin Mansell said in a statement.

Gross margin rose to 33.4 percent from 33.1 percent in the quarter, and inventories were down 6 percent.

Macy’s reported a higher-than-expected quarterly profit on Tuesday, helped by the sale of some of its stores and lower costs and taxes but said it would post another year of sales declines.

Kohl’s said on Thursday that its full-year sales could fall 1.3 percent or grow 0.7 percent, which translates to sales of $18.44 billion-$18.82 billion. This came in largely below the average analyst estimate of $18.70 billion.

Sales at Kohl’s stores open at least a year fell 2.2 percent, in line with analysts’ average estimate from

research firm Consensus Metrix.

Net income fell about 15 percent to $252 million, or $1.44 per share, in the quarter ended Jan. 28, from a year earlier.

Analysts on average had expected earnings of $1.33 per share, according to Thomson Reuters I/B/E/S.

Net sales dropped 2.8 percent to $6.21 billion, falling for the fourth straight quarter. Analysts had expected revenue of $6.22 billion.

The company forecast earnings of $3.50-$3.80 per share for the year ending January, the midpoint of which topped analysts’ estimate of $3.64 by a cent.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta, Martina D’Couto and Maju Samuel)

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Norwegian Air steps up transatlantic pressure with $65 fares

Norwegian Air Shuttle ASA (NWC.OL) on Thursday announced plans to offer transatlantic flights on 10 new routes between the United States and Europe starting at $65, ramping up pressure on U.S. and European rivals.

Norwegian is expanding its network of flights to the United States from mid-June after receiving long-awaited approval late last year for its Irish subsidiary to operate routes across the Atlantic.

Efforts by Norwegian and Icelandic rival Wow Air to offer cut-price tickets across the Atlantic have long been protested by established U.S. carriers that have been forced to consider offering cheaper fares with more restrictions and redesigning cabins to win budget-conscious travelers.

Norwegian’s $65 fares will be for one-way tickets to UK and Irish destinations from New York, Providence and Hartford in the United States.

“I pay for what I want, you pay for what you want. We don’t pay for what everybody else on the plane wants,” Norwegian Air spokesman Anders Lindström said of its fares.

The burgeoning competition on transatlantic routes has also prompted action by more established European airlines.

British Airways-owner IAG (ICAG.L) is planning to start low-cost transatlantic flights from Barcelona this year and CEO Willie Walsh said this month that the Norwegian carrier’s model had pushed IAG to look at new ways to operate. IAG reports annual results on Friday.

Meanwhile, Air France, part of Franco-Dutch group Air France-KLM (AIRF.PA), is also pushing forward plans for a new low-cost unit, in a project dubbed Boost, while Lufthansa (LHAG.DE) is expanding long-haul budget flying through its Eurowings business.

Norwegian Air’s expansion strategy has helped it to more than double revenue since 2012. Last year revenue rose 16 percent to 26 billion Norwegian crowns ($3.12 billion) and the company has placed orders for 260 aircraft from Boeing (BA.N) and Airbus (AIR.PA), which it will receive over a period of several years.

The company said that thousands of one-way tickets will be offered at $65, with fares on the next pricing tier starting at $99.

By comparison, prices for a one-way ticket from New York to Dublin in mid-June with other airlines range from about $655 to $2,755 on the Expedia travel website.

To keep costs low, Norwegian said it will fly from smaller U.S. airports with lower fees, using narrow-body Boeing 737-MAX aircraft, which are due to be delivered later this year.

The planned U.S. destinations are Stewart International Airport in Orange County, New York, T.F. Green Airport in Providence, Rhode Island, and Bradley International Airport in Hartford, Connecticut

Norwegian will continue to fly wide-body Boeing 787 Dreamliners to larger U.S. airports, the company said.

($1 = 8.3293 Norwegian crowns)

(Reporting by Alana Wise in Washington and Jeffrey Dastin in San Francisco; Additional reporting by Victoria Bryan in Munich and Terje Solsvik in Oslo; Editing by Himani Sarkar and David Goodman)

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Tech breakthroughs take a backseat in upcoming Apple iPhone launch

SAN FRANCISCO When Apple Inc (AAPL.O) launches its much-anticipated 10th anniversary iPhone this fall, it will offer an unwitting lesson in how much the smartphone industry it pioneered has matured.

The new iPhone is expected to include new features such as high-resolution displays, wireless charging and 3-D sensors. Rather than representing major breakthroughs, however, most of the innovations have been available in competing phones for several years.

Apple’s relatively slow adoption of new features both reflects and reinforces the fact smartphone customers are holding onto their phones longer. Timothy Arcuri, an analyst at Cowen Co, believes upwards of 40 percent of iPhones on the market are more than two years old, a historical high.

That is a big reason why investors have driven Apple shares to an all-time high. There is pent-up demand for a new iPhone, even if it does not offer breakthrough technologies.

It is not clear whether Apple deliberately held off on packing some of the new features into the current iPhone 7, which has been criticized for a lack of differentiation from its predecessor. Apple declined to comment on the upcoming product.

Still, the development and roll-out of the anniversary iPhone suggest Apple’s product strategy is driven less by technological innovation than by consumer upgrade cycles and Apple’s own business and marketing needs.

“When a market gets saturated, the growth is all about refresh,” said Bob O’Donnell of Technalysis Research. “This is exactly what happened to PCs. It’s exactly what happened to tablets. It’s starting to happen to smartphones.”

Apple is close-mouthed about upcoming product features, but analysts and reports from Asian component suppliers and others indicate that high-resolution displays based on OLED technology — possibly with curved edges — are likely to be part of the anniversary phone. A radical new design is not expected, according to analysts.

Some of the anticipated new technologies, notably wireless charging, remain messy. Samsung Electronics Co Ltd (005930.KS) phones, for example, feature wireless charging but support two different sets of standards, one called Qi and the other AirFuel.

Apple recently joined the group backing Qi. But there are still at least five different groups working on wireless charging technology within Apple, according to a person with knowledge of the matter.

As to 3-D sensors, there is already one hiding in the iPhone 7. The front camera features what is known as a time-of-flight sensor, which helps it autofocus and is used in numerous phones including the Blackberry, according to TechInsights, a firm that examines the chips inside tech devices.

That sensor could be upgraded to a higher-resolution version that could handle 3-D mapping for facial recognition, said Jim Morrison, vice president at TechInsights.

Some analysts also speculate the company could remove the phone’s home button, placing it and a fingerprint sensor beneath the front display glass, based on patents the company has filed.


Global smartphone sales were up only 2.3 percent to 1.47 billion units in 2016, according to IDC. Many carriers in the United States have stopped subsidizing phones, causing phone buyers to think harder about their next purchase.

Apple will likely make a heavy marketing push around the phone’s 10th anniversary. “IPhone set the standard for mobile computing in its first decade and we are just getting started. The best is yet to come,” Chief Executive Officer Tim Cook said in a statement Jan. 8, the date the iPhone was announced by then-CEO Steve Jobs in 2007.

In 2015, the last year it disclosed the figure, Apple spent $1.8 billion on advertising, up 50 percent from the year before and nearly four times the $467 million it spent in 2007 when it first released the iPhone.

And the company continues to excel at selling higher-priced phones. Chief Financial Officer Luca Maestri attributed the most recent quarter’s record-setting 78.3 million iPhones sold to the iPhone 7 Plus, which for the first time included a new dual camera feature not found in other models.

The iPhone 7 Plus tops out at $969 with memory upgrades and a jet black finish. O’Donnell of Technalysis Research believes that with the next iPhone, Apple might even introduce a $1,000-plus “ultra-premium device for the real Apple-crazed folks out there who want to stand out.”

(Reporting by Stephen Nellis; Editing by Jonathan Weber and Lisa Shumaker)

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Asia stocks ease, dollar steadies after Fed-led losses

SINGAPORE Asian stocks eased from a 19-month high on Thursday, while the dollar made an uneven recovery from losses suffered after Federal Reserve minutes indicated a cautious approach to raising U.S. interest rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down almost 0.1 percent having jumped to its highest level on Wednesday since July 2015.

Japan’s Nikkei slipped 0.35 percent, while Australian shares retreated 0.2 percent.

South Korean shares were flat after the central bank kept interest rates unchanged, at 1.25 percent, as expected, for an eighth straight month.

Overnight on Wall Street, the Dow Jones Industrial Average ended up almost 0.2 percent, its ninth straight record-close.

That optimism however, didn’t flow through to other indexes, with the SP 500 and the Nasdaq both closing about 0.1 percent lower.

The dollar edged higher as investors parsed the Fed’s January meeting minutes, which said that it may be appropriate to raise rates again “fairly soon” should jobs and inflation data be in line with expectations.

Nonetheless, markets also took account of policymakers’ uncertainty over a lack of clarity on President Donald Trump’s economic program. Voting members generally saw only a “modest risk” of inflation increasing significantly and believed the Fed would have “ample time” to respond if it did.

“A look at the market’s reaction would suggest that the perception of the minutes was a relatively dovish one,” Jingyi Pan, market strategist at IG in Singapore, wrote in a note. “”This is in comparison to hawkish expectations following Fed chair Janet Yellen’s address last week.”

“Indeed, the discussion on fiscal policy did suggest that a portion of Fed members believe that the uncertainty could put the Fed off course for an early hike,” she added.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, added 0.15 percent to 101.37.

By late morning in Asia, the dollar stood at 113.19 yen, just 0.1 percent firmer having lost some of its early bounce following Wednesday’s 0.7 percent tumble.

U.S. 10-year Treasury yields slipped to 2.4129 percent on Thursday from 2.418 percent at Wednesday’s close. They touched a near-two-week low of 2.391 on Wednesday.

The euro was slightly lower $1.05535. On Wednesday, it fell below $1.05 for the first time in six weeks on concern anti-European Union candidate Marine Le Pen could win France’s presidential election in May.

Those political worries abated somewhat after veteran centrist Francois Bayrou offered an alliance that could boost o independent candidate Emmanuel Macron in the election.

In commodities, oil prices gained following American Petroleum Institute data showing a surprise drop in U.S. crude stocks last week. Official data from the U.S. Department of Energy’s Energy Information Administration is expected on Thursday.

U.S. crude added 0.9 percent to $54.08.

Global benchmark Brent crude also rose 0.9 percent to $56.33.

Despite the dollar’s rise, the pullback in risk appetite allowed gold to retain Wednesday’s modest gains. The precious metal was steady at $1,236.86 an ounce.

(Reporting by Nichola Saminather; Editing by Simon Cameron-Moore)

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Trump to seek jobs advice from firms that offshore U.S. work

WASHINGTON President Donald Trump, who has vowed to stop U.S. manufacturing from disappearing overseas, will seek job-creation advice on Thursday from at least five companies that are laying off thousands of workers as they shift production abroad.

Caterpillar Inc (CAT.N), United Technologies Corp (UTX.N), Dana Inc (DAN.N), 3M Co (MMM.N) and General Electric Co (GE.N), are offshoring work to Mexico, China, India and other countries, according to a Reuters review of U.S. Labor Department records.

Executives from the five companies are among a group of business leaders due to meet with Trump on Thursday to discuss how to help the president deliver on his promise to increase factory employment, according to the White House.

About 2,300 U.S. workers at these five companies stand to lose their jobs within the next two years as a result of offshoring, according to the Labor Department’s Trade Adjustment Assistance Program, which provides retraining benefits to workers displaced by global trade. Reuters obtained the information through a Freedom of Information Act request.

The companies confirmed the planned job cuts to Reuters. It is not clear whether the other 19 executives due to meet with Trump on Thursday are currently offshoring work, as the TAA program does not cover all workers who lose their jobs due to global trade.

The lost jobs amount to a small fraction of the hundreds of thousands of U.S. workers employed by those involved in the meeting. General Electric, for example, employs 125,000 U.S. workers, financial filings show.

On the campaign trail and in the White House, Trump has painted globalization as a zero-sum game that has enriched low-wage countries while leaving the United States littered with abandoned factories and underemployed workers, and he has threatened to tax companies that offshore U.S. jobs.

The experience of companies on Trump’s task force, however, shows the reality is more complex in a world where they are serving customers across the globe. Several said they were creating many new U.S. factory jobs even as they move work to other countries.

It’s not clear whether Trump will opt for the carrot or the stick.

Trump plans to meet business leaders to hear their reasons for “why they’re going offshore,” said a White House aide who spoke on condition of anonymity.

Blue-collar workers who share Trump’s skepticism of global trade say they will be watching closely to see if he will try to save their jobs. “I don’t think he’s a typical politician, so there is hope alive for middle-class families that he will do something,” said Scott Schmidt, one of 222 workers at a GE engine plant in Waukesha, Wisconsin who are due to lose their jobs later this year when the company shifts production to Canada.

General Electric CEO Jeffrey Immelt is among those due to meet with Trump on Thursday.

GE says it is closing its Waukesha plant because Congress has hobbled the U.S. Export-Import Bank’s ability to finance large export orders while most other industrialized nations still offer such financial support. The company says it laid off 225 workers last year at a Houston factory for the same reason, shifting production to France, the United Kingdom and Hungary.

GE says it is also closing an Ohio factory and laying off 180 workers because consumers are buying fewer of the florescent and incandescent light bulbs they make there. What production remains will be handled by a factory in Hungary.


The U.S. economy lost 6 million manufacturing jobs from 2000 to 2010, roughly one-third of its total, in part due to offshoring, but the sector has added 900,000 jobs since then, according to the U.S. Bureau of Labor Statistics.

Multinational companies say labor costs now are only one factor they consider when deciding where to manufacture. An auto maker, for example, may decide to build a particular model in the country where sales are strongest, prompting parts suppliers to set up there as well so they can turn around orders quickly.

The offshoring picture is also more complex than official statistics indicate as a shuttered factory in the United States does not always mean a new factory abroad.

When auto-parts maker Dana Corp closes a factory later this year in Glasgow, Kentucky that is operating at 20 percent of capacity, one of its plants in Ohio will pick up the work, along with other factories in Mexico, India and China. Dana CEO James Kamsickas is among those scheduled to meet with Trump on Thursday.

The company plans to hire nearly 700 U.S. workers over the next three years as it expands factories in four U.S. states, spokesman Jeff Cole said.

That is little comfort to the 223 people in Kentucky who will lose their jobs. “It seems like all these CEOs and companies have turned their backs on the American worker,” said Dana employee Tim Wells, one of those who will be laid off.


The group also includes United Technologies CEO Gregory Hayes, who took heat from Trump last year for planning to move jobs from Indianapolis to Mexico. The company struck a deal with the incoming president in November to preserve roughly 700 jobs in exchange for $7 million in tax breaks.

United Technologies says it still plans to lay off 786 workers at a separate Indiana plant and move production to Mexico this year. The company is also moving work from a facility in Arden Hills, Minnesota, resulting in a loss of 72 jobs. Most of that work is staying in the United States but some is moving to Poland, spokeswoman Bethany Sherman said, and some of the affected workers will be offered positions elsewhere.

The company is adding more than 1,000 new jobs in the United States, Sherman said.

Other participants include Caterpillar Chairman Doug Oberhelman, who oversees a company that is laying off 712 workers in the American South and Midwest and moving the work to China, Mexico, Italy, France and Germany as it weathers the largest sales slump in its history. A Caterpillar spokesman said it is simultaneously creating 1,300 new manufacturing jobs elsewhere in the United States.

Also due to participate is Inge Thulin, CEO of 3M, which is eliminating 130 jobs in suburban Cincinnati and moving production to Mexico. The company says it has added more than 2,000 U.S. manufacturing jobs over the last five years.

(Additional reporting by David Shepardson; Editing by Ross Colvin and Bill Rigby)

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Olympics, smartphones push Twitter revenue up 30 percent in Brazil

SAO PAULO Twitter Inc has found a bright spot in Brazil, Latin America’s largest economy, even as weak advertising sales across the globe have punished the social network’s stock in recent weeks.

Advertising revenue rose about 30 percent in Brazil last year, Twitter’s top executive in the country told Reuters, defying a two-year slowdown in the local economy and more than doubling the company’s 13 percent revenue growth globally.

Twitter, which does not break down its revenue by country, gave no concrete sales numbers in Brazilian or U.S. currency. It was an unusual move for the company to give details on its performance in one country.

“Brazil is a motor of growth for Twitter, both in users and in revenue,” said Fiamma Zarife in a recent interview.

A surge of interest in real-time marketing around the Olympics, which Rio de Janeiro hosted in August, brought new clients to the platform, she said, and rising smartphone use continues to generate user growth in the country.

The performance in Brazil last year may have been a bright spot for Twitter, but the company is still struggling to convince investors it can win the global war for online advertising against rivals Snapchat and Facebook Inc.

Earlier this month, Twitter posted its slowest quarterly revenue growth since it went public four years ago, sending its shares down more than 10 percent to a seven-month low.


While the number of Twitter’s monthly active users worldwide edged up 4 percent in the fourth quarter from a year earlier, it jumped 18 percent in Brazil, the third-fastest-growing market over that period, according to Zarife.

Zarife said there is more room to run in Brazil as smartphone use continues to grow. Just 70 percent of Brazilians on Twitter connect via the mobile app, compared to about 83 percent globally.

Smartphone penetration doubled in two years to 40 percent of Brazilians last year, according to pollster Ibope. That has boosted many tech companies in the country, even as Brazil’s economy struggles with its deepest recession on record.

Digital ad spending in the country was expected to grow 12 percent in 2016 to 10.4 billion reais ($3.4 billion), according to industry group IAB Brasil.

Zarife said her strategy for attracting both users and advertising will be to focus on video content and live events. Brazil was second only to the United States in Twitter conversations about the Super Bowl, she said.

The strategy paid off during the Olympics, when Zarife said several clients including Banco Bradesco SA, a sponsor of the event, stepped up marketing on Twitter and were convinced to keep a strong presence on the platform since then.

Zarife, formerly head of agency relations in Brazil, took the top job in the country last month from Guilherme Ribenboim, who remains Twitter’s vice president for Latin America.

(Reporting by Brad Haynes; Editing by Bill Rigby)

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