News Archive

Dollar strengthens after Fed chair remarks, global stocks higher

NEW YORK (Reuters) – The U.S. dollar rose on Tuesday against a basket of major currencies following an upbeat economic assessment from the head of the U.S. Federal Reserve, while world stocks climbed as a heavy week of corporate earnings also kicked into gear.

Wall Street’s main indexes erased losses from the start of the session to trade solidly positive.

In written testimony, Fed Chairman Jerome Powell said the economy was on the cusp of “several years” of the job market remaining strong and inflation remaining around the Fed’s 2 percent target.

Assets reacted modestly for the most part following Powell’s prepared remarks, in which he signaled he believed the economy was doing well and that an era of stable growth may continue, provided the Fed gets its policy decisions right.

The U.S. dollar pared gains immediately following the release of the testimony, but then quickly bounced back and added to gains.

“He reiterated the view of the economy as being strong, growing at a solid pace with recent inflation data as more or less encouraging,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

The Dow Jones Industrial Average rose 63.79 points, or 0.25 percent, to 25,128.15, the SP 500 gained 12.88 points, or 0.46 percent, to 2,811.31 and the Nasdaq Composite added 50.77 points, or 0.65 percent, to 7,856.49.

FILE PHOTO: Traders work at the post where UnitedHealth Group is traded on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 31, 2018. REUTERS/Brendan McDermid/File Photo

As a busy week of corporate earnings began, Netflix Inc shares dropped 4.9 percent after the company’s subscriber growth fell short of Wall Street expectations, while Johnson Johnson shares gained 3.5 percent, boosting the SP 500 and the Dow industrials, after the healthcare company’s results topped estimates.

The pan-European FTSEurofirst 300 index rose 0.26 percent, helped by Powell’s testimony amid a batch of mixed company updates.

MSCI’s gauge of stocks across the globe gained 0.20 percent.

The dollar index, tracking it against a basket of major currencies, rose 0.52 percent, with the euro down 0.47 percent to $1.1654.

U.S. Treasury yields rose, with the two-year yield hovering near a decade high, as Powell’s comments supported traders’ view of further rate increases from the U.S. central bank.

Benchmark 10-year notes last fell 1/32 in price to yield 2.86 percent, from 2.856 percent late on Monday.

Oil prices steadied after steep falls on Monday as worries over supply disruptions eased and the focus moved to increasing production and potential damage to global growth from the U.S.-China trade dispute.

U.S. crude rose 0.29 percent to $68.26 per barrel and Brent was last at $72.43, up 0.82 percent on the day.

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Additional reporting by Getrude Chavez-Dreyfuss in New York and Sruthi Shankar in Bengaluru; Editing by Bernadette Baum and Susan Thomas

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JPMorgan Chase invests in artificial intelligence startup Volley

NEW YORK (Reuters) – JPMorgan Chase Co (JPM.N) has made a strategic investment in, a San Francisco-based startup that uses artificial intelligence to help large enterprises automatically generate training content for employees, the companies said on Tuesday.

FILE PHOTO: A view of the exterior of the JP Morgan Chase Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files

The companies declined to disclose the size of the investment, but Volley said it will use the funding to double its team of less than 20 over the next nine months.

JPMorgan’s investment comes as banks increasingly look to use artificial intelligence to make better use of the growing amount of data that they hold across a variety of business lines, ranging from trading to compliance.

The startup is developing software that can process data from disparate sources to create quizzes and other corporate training material such as cyber security or compliance courses.

Its technology can help large companies, including banks, save money and time when creating educational content for employees, Volley founder and chief technology officer Carson Kahn said in an interview.

Volley had initially focused on developing an app for students that used its machine learning engine, but later pivoted to developing technology for enterprises, Kahn added.

New York-based JPMorgan takes equity stakes in young technology companies that can help the bank enhance customer experience, become more efficient and protect its assets.

“Volley’s innovative technology to ingest, integrate and target micro-learning content automatically can fundamentally transform the way firms like ours approach learning and knowledge management,” Joseph Infozino, head of learning platforms at JPMorgan Chase, said in a statement.

Volley’s investors also include Zuckerberg Education Ventures, a fund investing on behalf of Facebook Inc (FB.O) founder Mark Zuckerberg, as well as former global co-heads of technology at Goldman Sachs Group Inc (GS.N) Paul Walker and Don Duet.

Walker, also a senior advisor at Volley, said in an interview that the company’s technology could help augment people’s ability to learn by identifying their knowledge gaps and creating personalized content.

“Volley is tackling and solving one of the most difficult and important problems in machine learning: extracting knowledge from unstructured information,” Walker said.

Reporting by Anna Irrera; Editing by Will Dunham

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Thyssenkrupp leadership vacuum revives restructuring hopes

FRANKFURT (Reuters) – Thyssenkrupp (TKAG.DE) shares were indicated 3.4 percent higher early on Tuesday as analysts expect a deeper restructuring of the German submarines-to-elevators conglomerate after the resignation of its chairman.

FILE PHOTO: Thyssenkrupp’s logo is seen close to the elevator test tower in Rottweil, Germany, September 25, 2017. REUTERS/Michaela Rehle/File Photo

Ulrich Lehner resigned on Monday saying he was no longer able to safeguard the interests of employees and shareholders, deepening a leadership crisis after Chief Executive Heinrich Hiesinger resigned earlier this month. [nL8N1U91S5]

“A sharply worded resignation announcement from Dr. Lehner makes clear that aggressive restructuring may be in the cards, supporting our 33 euros sum of the parts based price target,” Jefferies analyst Seth Rosenfeld said in a note late on Monday.

“It is clear that Thyssenkrupp is at a crossroads.”

Thyssenkrupp shares closed at 20.60 euros on Monday.

Lehner, 72, said in a statement he no longer enjoyed sufficient support to develop the company in the interest of its customers, employees and shareholders and would leave at the end of July.

“I take this step consciously to enable a fundamental discussion with our shareholders on the future of Thyssenkrupp,” Lehner said.

“A break-up of the company and the related loss of many jobs is not an option.”

Hiesinger and Lehner had championed a European merger of Thyssenkrupp’s steel interests with those of India’s Tata Steel (TISC.NS), sealed on June 30. [nL8N1TV6BY]

But activist shareholders have demanded deeper restructuring steps to raise the performance of its various businesses.

Hiesinger embarked on a restructuring push, merging the company’s European steel operations together with rival Tata, but failed to win unanimous backing from some Thyssenkrupp shareholders.

Thyssenkrupp installed Guido Kerkhoff as acting chief executive but Hiesinger’s departure opens up more fundamental questions about a company that was long run not only for profit, but also with the aims of upholding the legacy of its founding family and preserving jobs for its 158,000 workers.

Thyssenkrupp’s materials trading business is widely seen as a potential candidate for a sale, joint venture or listing.

But activists have called for more radical steps.

Thyssenkrupp has, however, insisted that some divisions such as elevators are a core part of the company.

“I respect Lehner’s decision, but I regret it,” Wilhelm Segerath, head of the Thyssenkrupp works council and a senior official in the IG Metall industrial trade union, said in a statement.

Workers command half of the seats on Thyssenkrupp’s supervisory board. Together with Krupp foundation, workers have the power to block deeper restructuring moves.

Segerath called on the main shareholders to work together to develop Thyssenkrupp.

“There can be no break-up of the business,” he told Reuters.

Reporting by Tom Kaeckenhoff, Douglas Busvine and Edward Taylor; editing by Jason Neely

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Moonwalking: South Korea’s wage, hours policies backfire for jobless, low income workers

SEOUL (Reuters) – President Moon Jae-in wants South Koreans to work less and earn more – and to achieve that his government has hiked the minimum wage and slashed the maximum length of the working week. But Heo Jeong, who serves barley tea samples at a Lotte Mart store in Seoul, says she lost a third of her income as a result.

FILE PHOTO: A worker mops the floor at Lotte World Mall in Seoul March 4, 2015. REUTERS/Kim Hong-Ji/File Photo

Heo’s store shortened its opening times and cut staff hours. The 48-year-old now makes 1.2 million won ($1,077) a month working 32 hours instead of 40, a third less than before because she now isn’t getting much night work at premium rates or as many chances to earn bonuses.

She is not alone. Many businesses are closing early rather than hiring additional staff after the legal cap on working hours was cut to 52 per week from 68, effective July 1.

It is one of a number of signs that Moon’s reforms are starting to backfire and his pledge to be the “Jobs President” who tackles inequality head on may be at risk, economists warn.

Another problem is that a January hike in the minimum hourly wage – the biggest in 17 years at a whopping 16 percent – may have had the opposite effect on incomes for the lower paid, and also become a deterrent to investment and recruitment.

Household income for the lowest 20 percent fell 8 percent in the first quarter from a year earlier, marking the sharpest fall since 2003 when Statistics Korea began compiling data, and almost a quarter of those aged 15-29 remain unemployed.

“I want to work more hours, and take night shifts as much as possible,” said Heo. “I don’t necessarily see anyone actually making more money around me. I myself have cut down on groceries.”

A Lotte spokesman confirmed that most Lotte stores cut store hours, and some of its sub-contract workers worked fewer hours as a result.

On Saturday, the government-mandated Minimum Wage Commission heightened concerns over the issue by announcing that next year the minimum wage will increase another 10.9 percent to 8,350 won ($7.40) an hour.

That prompted a small business group, the Korea Federation of Micro Enterprise, to threaten to refuse to implement the reform. “Small-business owners are at a crossroads where they cannot help but choose either business shutdowns or staff cuts,” it said in a statement.

Certainly, South Korean companies have slowed down hiring. The monthly average number of jobs added so far this year, 142,000, is the slowest pace seen since the 2008-09 global financial crisis.

On Monday, Moon acknowledged possible negative consequences for small business owners and low-income earners from a higher minimum wage, but said his policies will continue to focus on boosting incomes.

“Steep increases in the minimum wage aim to ensure a dignified life for low-income workers, while raising household income to boost domestic demand, which in turn will lead to job creation,” Moon told his cabinet members at a policy meeting in Seoul, adding that efforts will be made to provide subsidies for the low-income earners who suffer as a result of the policies.

A Blue House official at the Presidential Committee on Jobs, a body Moon launched last year to fulfill his election promise of creating jobs, declined to elaborate further.

Moon remains popular, with 69 percent backing in polling in July, though that is down from a peak of 83 percent in May after his summit with North Korean leader Kim Jong Un and his rating has fallen for a fourth week in a row, according to Gallup Korea. It is unclear how much the economy is playing into those numbers.


Shipbuilder Hyundai Heavy Industries (009540.KS) and retailers Lotte Shopping (023530.KS) and Shinsegae Inc. (004170.KS) are among companies who have begun to power off computers at 5:30 p.m. for office workers to prevent overtime, according to spokespeople for the companies.

A number of Korean retailers have pulled forward closing times to 11 p.m. from 12 p.m. because of the higher wage costs.

“We’re trying to make working hours flexible for our workers and have shortened business hours at most of our stores,” an official at Lotte Shopping told Reuters, asking not to be named as he was not authorized to talk to the media. All three firms declined comment on hiring plans.

Lee Jae-kwang, who owns a Paris Baguette bakery in the posh Gangnam district of Seoul, says he is sending his workers home earlier in the evening and closes the store himself an hour earlier at 10 p.m.

“Adding jobs is the last thing on my mind. The steep increase in wages is a real financial strain for us,” said Lee.


To be sure, Moon is trying to fix some major structural economic problems. The youth unemployment rate reached 9.8 percent in 2017, almost three times the rate for all workers, yet South Koreans put in the third longest hours among the 36 members of the Organization for Economic Cooperation and Development, behind only Mexico and Costa Rica. Also South Korea’s labor productivity growth was only 19th among OECD countries in 2017.

And for many white collar workers, the new policies are a relief.

“I didn’t even think about leaving earlier than my boss last year. Now I can go watch movies every day and take my accounting classes at night, because they literally shut down my computer,” said Shin Duk-young, a 29 year-old office worker at a retailer in Seoul. He asked that the company not be named. Also, while the poor got hammered in the first quarter, average household income grew 3.7 percent from a year earlier, the fastest expansion in four years. Income for the top 20 percent surged 9.3 percent, making income inequality the worst on record, according to Statistics Korea.

This has yet to boost domestic demand, though. Consumer sentiment is at its lowest since May 2017, when Moon won the general election.

Labor unions say the policies can only achieve their goal if small companies get subsidies and low-income earners get tax credits. They criticize the government for delaying related reforms of tax policies.


If Moon is to fulfill his campaign promise on the minimum wage, he will have to keep lifting it to 10,000 won per hour by 2020.

Lee Sang-jae, chief economist at Eugene Investment and Securities, said Moon’s policies are “steps in the right direction” to tackle low incomes. But in a June report on South Korea, the OECD warned that scale would be unprecedented amongst its members and recommended Moon to assess this year’s economic impact before raising wages any further.

Many economists doubt any such assessment would go well.

The labor market shake-up comes as China, the gravitational center for Asian economies, shows signs of a slowdown and South Korean exporters risk being caught in the crossfire of a trade war between Washington and Beijing.

“Wage floor hikes and other pro-labor policies could help reduce inequality long down the road, but it has come at a very bad timing,” said Park Chong-hoon, an economist at Standard Chartered in Seoul.

Additional reporting by Hyunjoo Jin; Editing by Marius Zaharia and Martin Howell

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Asia stocks sag on oil’s slide, dollar dips before Fed testimony

TOKYO (Reuters) – Asian stocks were mostly lower on Tuesday, with a sharp decline in crude oil prices weighing on energy shares, while the dollar dipped ahead of Federal Reserve Chairman Jerome Powell’s first U.S. congressional testimony.

People walk past an electronic board showing Japan’s Nikkei average outside a brokerage in Tokyo, Japan, March 23, 2018. REUTERS/Toru Hanai

Spreadbetters expected European stocks to open slightly higher, with Britain’s FTSE, Germany’s DAX and France’s CAC each gaining about 0.1 percent.

Overnight on Wall Street, the Dow edged up 0.2 percent but the SP 500 lost 0.1 percent as energy shares were hit by the drop in oil that offset a jump in financials. [.N]

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.3 percent lower following two sessions of gains.

Chinese shares extended losses after dropping the previous day on soft economic data. The Shanghai Composite Index fell 1.1 percent, as did Hong Kong’s Hang Seng.

Australian stocks fell 0.5 percent and South Korea’s KOSPI was flat. Japan’s Nikkei rose 0.8 percent, supported by exporters’ gains.

“Crude has been rising steadily so some kind of adjustment was due. From this context the impact on the broader economy, inflation and therefore the stock markets should be limited,” said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.

Crude prices slumped more than 4 percent on Monday, with Brent futures reaching a three-month low of $71.52 a barrel, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers. [O/R]

Concerns over China’s second-quarter economic growth also weighed on oil prices. The country’s economy expanded at a slower pace as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low.

But Brent has gained about 7.5 percent in 2018, during which it poked above $80 a barrel in May to a 3-1/2-year high, as supply has been kept in check while a relatively strong global economy has supported demand.

“The stock markets have been quite steady recently, and this shows that investors are starting to look beyond the U.S. midterm elections, which by then President (Donald) Trump’s posturing is expected to have peaked out,” said Monji of Daiwa SB Investments.

In currencies, the dollar index inched down 0.05 percent against a basket of six major currencies to 94.474 .

The index shed 0.25 percent on Monday, nudging away from a two-week high of 95.241 scaled on Friday ahead of Fed Chairman Powell’s testimony.

Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday, followed by an appearance on Wednesday at the House of Representatives Financial Services Committee.

He is likely to reiterate the Fed’s stance towards gradual monetary policy tightening, and market focus will be on his views on recent trade tensions.

“In short, we expect the chairman to signal optimism on growth and inflation, consistent with continued ‘gradual’ tightening,” wrote Jim O’Sullivan, chief economist at High Frequency Economics.

“He will undoubtedly acknowledge some downside risks associated with the administration’s trade warmongering, but he will likely try to avoid sounding critical of the administration.”

The euro rose 0.05 percent to $1.1719 after adding 0.25 percent overnight.

The dollar pared the previous day’s losses and gained 0.1 percent to 112.39 yen, crawling back towards a six-month peak of 112.80 touched last week.

The Australian dollar dipped 0.2 percent to $0.7405 .

Treasury yields remained buoyant after rising overnight when strong U.S. domestic retail sales supported the view of solid economic growth in the second quarter.

The two-year Treasury yield was at 2.602 percent and in reach of a decade-high of 2.611 percent scaled on Monday.

Brent crude was last up 0.5 percent at $72.20 and U.S. crude futures stood little changed at $68.07 a barrel after sliding more than 4 percent on Monday.

Copper on the London Metal Exchange was up 1.1 percent at $6,255 a tonne amid low stockpiles. The industrial metal had sunk to a one-year low of $6,081 last week when trade war fears buffeted the broader markets. [MET/L]

Editing by Jacqueline Wong and Richard Borsuk

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Tesla shares fall after CEO Musk abuses British caver

(Reuters) – Shares of Tesla Inc fell over 3.5 percent on Monday after Chief Executive Elon Musk directed abuse on Twitter at one of the British cavers involved in the rescue of 12 Thai children last week.

A number of analysts and investors, requesting anonymity, told Reuters that Musk’s comments were adding to their concerns that his public statements were distracting him from Tesla’s main business of producing electric cars. The stock sell-off knocked almost $2 billion off the company’s market value.

Tesla shares were at $307.20 in after-hours trading on Monday from Friday’s close of $318.87.

James Anderson, a partner at Tesla’s fourth-largest shareholder, asset manager Baillie Gifford, called the weekend’s events “a regrettable instance” and said he had reiterated to the company the need for “peace and execution” of its core business.

The billionaire entrepreneur’s spat with British caver Vernon Unsworth started last week, after rescue teams rejected Musk’s offer of a mini-submarine created by his rocket company SpaceX to help rescue a 12-member soccer team and their coach trapped inside a flooded cave in the northern province of Chiang Rai.

“He can stick his submarine where it hurts,” CNN quoted Unsworth as saying last week. “It just has absolutely no chance of working.”

Musk shot back on Sunday on Twitter: “We will make one (video) of the mini-sub/pod going all the way to Cave 5 no problemo. Sorry pedo guy, you really did ask for it.” The tweet was later deleted.

FILE PHOTO: Elon Musk arrives to speak at Boring Company community meeting in Bel Air, Los Angeles, California, U.S. May 17, 2018. REUTERS/Lucy Nicholson/File Photo

Tesla spokespeople and lawyers did not respond to emails and phone calls from Reuters requesting comment on Musk’s comments on Twitter.

Musk gave no evidence for alleging Unsworth was a pedophile. Unsworth said he would consider taking legal action against Musk over the remarks, in comments filmed in Chiang Rai on Monday by Australia’s 9News.

“It’s not finished. No justification. At the end of the day we were here to rescue 12 young boys. I don’t really understand the guy. Obviously it’s a bruised ego. I’ll take advice when I get back to London,” Unsworth told 9News.

Reuters could not immediately reach Unsworth for comment.

His wife, Voranan Rattawipakhun, told Reuters on Monday that her husband would return to Britain on July 19, where he will speak to lawyers.

A police officer in the Chiang Rai district where Unsworth has lived for seven years, who declined to be named because he was not authorized to speak to the media, said that no charges or complaints had ever been filed against Unsworth.

In a Tweet, Musk had proposed “a tiny kid sized submarine” for the rescue. He showed a test of the submarine in a Los Angeles swimming pool on July 9.

Last week, Narongsak Osottanakorn, the leader of the rescue operation in Thailand, rejected Musk’s mini-submarine as not suitable for the task. Musk responded on Twitter on July 10, calling Osottanakorn “not the subject matter expert.”

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Musk also regularly uses Twitter to criticize media reports on Tesla, which has struggled to meet its own production targets for its Model 3 sedan, which is seen as key to the company’s profitability.

Reporting by Sonam Rai in BENGALURU, by Amy Sawitta Lefevre, Aukkarapon Niyomyat and Panarat Thepgumpanat in BANGKOK, and by Panu Wongcha-um in CHIANG RAI; Writing by Patrick Graham and John Chalmers; Editing by Bill Rigby and Raju Gopalakrishnan

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IBM seeks $167 million from Groupon in dispute over early internet patents

WILMINGTON, Del. (Reuters) – International Business Machines Corp on Monday asked a U.S. jury to award it $167 million in a lawsuit accusing e-commerce marketplace operator Groupon Inc of using patented technology without authorization.

FILE PHOTO: The logo for IBM is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid/File Photo

IBM lawyer John Desmarais told a jury in federal court in Delaware that Groupon infringed patents describing foundational e-commerce technology that had already been licensed to Amazon Inc, Facebook Inc and Alphabet Inc’s Google for between $20 million and $50 million per company.

“Most big companies have taken licenses to these patents,” Desmarais said. “Groupon has not. The new kid on the block refuses to take responsibility for using these inventions.”

Groupon lawyer J. David Hadden argued that IBM was overreading the scope of its patents and claiming ownership of building blocks of the internet.

“A key question for you in this case is whether these patents cover the world wide web,” Hadden told jurors. “They do not and that is because IBM did not invent the world wide web.”

An IBM executive is expected to testify during the two-week trial about licensing deals with technology companies like Amazon and Google, providing a rare glimpse into IBM’s efforts to derive revenue from its large patent portfolio.

The Armonk, New York-based company invests heavily in research and development and has secured more U.S. patents than any other company for the past 25 years.

IBM sued Chicago-based Groupon in 2016, alleging infringement of four patents.

Two of the four patents at issue relate to Prodigy, a late-1980s forerunner to the internet, developed by IBM and others, that describe a system for showing applications and advertisements that reduces server loads.

IBM also said it patented so-called “single sign on” technology that allows consumers to log in to a retailer’s website with their Facebook or Google account.

Desmarais told jurors IBM is a prolific innovator and seeks to license its patents on reasonable terms. IBM had no choice but to sue Groupon after it refused to negotiate a licensing deal, he said.

Hadden countered IBM was unreasonably seeking money from every significant internet company.

“We are here because IBM has another business that IBM does not talk about in its commercials,” he said. “In that business IBM uses its huge stock of patents as a club to get money from other companies.”

Reporting by Jan Wolfe, Editing by Rosalba O’Brien

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Amazon workers strike in Germany, joining action in Spain and Poland

FRANKFURT (Reuters) – Thousands of workers will walk off the job on Tuesday at Amazon warehouses in Germany to demand better working conditions, joining colleagues in Spain and Poland in taking action that coincides with a major sales promotion.

FILE PHOTO: A view of the new Amazon logistic center with the company’s logo in Dortmund, Germany November 14, 2017. REUTERS/Thilo Schmuelgen

The Verdi services union called the one-day strike to back its demand for labor contracts that guarantee healthy working conditions at fulfilment centers run by the world’s largest e-commerce company.

“The message is clear – while the online giant gets rich, it is saving money on the health of its workers,” said Stefanie Nutzenberger, Verdi’s top official responsible for the retail sector.

The one-day strike at six facilities in Germany coincides with Seattle-based Amazon’s Prime Day promotion. Workers in Spain are out on a three-day strike, meanwhile, while in Poland they are staging a work to rule, Verdi said.

Amazon said it expected only a fraction of its 12,000 workers in Germany to join the strike, and that there would be no impact on Prime Day deliveries.

It also said Amazon fulfilment center jobs offered competitive pay and comprehensive benefits from the first day of employment. Permanent staff earn 12.22 euros ($14.31) an hour or more after two years.

“We believe Amazon’s Fulfillment Center jobs are excellent jobs providing a great place to learn skills to start and further develop a career,” the company said in comments emailed to Reuters.

Germany is Amazon’s second largest national market after the United States. Net sales grew by 20 percent last year to $17 billion, accounting for 9.5 percent of the total, according to the company’s annual report.

Reporting by Douglas Busvine, editing by Louise Heavens

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Ford agrees to $299.1 million U.S. Takata air bag settlement

WASHINGTON (Reuters) – Ford Motor Co agreed to a so-called economic loss settlement of $299.1 million covering at least 6 million U.S. vehicles with potentially faulty Takata air bag inflators, court documents filed in a federal court in Miami on Monday show.

The Ford logo is pictured on the company’s stand during the 88th Geneva International Motor Show in Geneva, Switzerland, March 7, 2018. REUTERS/Denis Balibouse

The settlement covers several forms of economic damages linked to the inflators, including claims that vehicles were inaccurately represented to be safe, buyers had overpaid for cars with defective or substandard air bags and faced out of pocket costs to deal with recalls.

Six automakers have previously agreed to similar settlements worth over $1.2 billion combined, including: Honda Motor Co; Toyota Motor Corp; Nissan Motor Co; Mazda Motor Corp; Subaru Corp and BMW AG.

At least 23 deaths worldwide are linked to the rupturing of faulty Takata air bag inflators. The issue has sparked the largest auto industry safety recall in history, involving about 100 million inflators among 19 major automakers.

More than 290 injuries worldwide are also linked to Takata inflators that can explode, unleashing metal shrapnel inside cars and trucks.

To date, 21 deaths have been reported in Honda vehicles and two in Ford vehicles.

Ford said in a statement it remains “focused on working with our customers to get their vehicles repaired.”

The settlement also covers out-of-pocket costs, including lost wages and child care costs, Ford owners may face, or already incurred, to get vehicles repaired. Under the settlement, Ford will also provide free rental or loaner vehicles to owners of recalled vehicles who are awaiting repairs when parts are not available.

In total, nearly 30 million U.S. vehicles remain unrepaired in the recall.

Takata last year pleaded guilty to a felony charge of wire fraud to resolve a U.S. Justice Department investigation and agreed to a $1 billion settlement.

The defect led Takata to file for bankruptcy protection in June 2017. In April, auto components maker Key Safety Systems completed a $1.6 billion deal to acquire Takata. The merged company is now known as Joyson Safety Systems and is a subsidiary of Ningbo Joyson Electronic Corp.

Heidi King, the deputy administrator of the U.S. National Highway Traffic Safety Administration on Friday urged automakers to make their Takata air bag recall plans for replacing all defective parts.

“It is imperative that manufacturers take every available step to reach each and every owner of a vehicle with deadly air bags, and take action to ensure that those dangerous air bags are replaced as soon as is safely possible,” King said.

The Ford-Takata settlement must still be approved by a federal judge.

Reporting by David Shepardson, editing by G Crosse

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