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Anglo American to cut staff by nearly two-thirds

One of the world's leading miners has said it will cut tens of thousands of jobs as part of a radical overhaul. The announcement comes as the industry is struggling with weak demand and painfully low commodity prices. Shares in the British mining giant took a beating on Tuesday after the company announced it would cut its workforce by nearly two-thirds, affecting some 85,000 out of its 135,000-strong staff, as part of a desperate attempt to cope with tumbling commodity prices. "We will be radically restructuring our portfolio, so the net result is expected to be a reduction to around 50,000 employees," a spokesperson told the AFP news agency. Anglo has already cut several thousand jobs in recent year, with its staff standing at 162,000 in 2013. Weak demand, in particular from the world's second biggest economy, China , has already sapped Anglo's stock price by 70 percent so far this year. Tuesday's announcement shaved off another 12 percent, pushing shares down to a new record low, with investors worrying that the restructuring plan might stop the bleeding temporarily but won't heal the wound in the long run. Pledging to take "bolder action," CEO Mark Cutifani also said he would whittle down the firm's portfolio from some 55 mines and smelters to around 20, focusing mainly on its diamond, platinum and copper businesses, which offer better long-term potential. Going forward, the company will consist of just three division: De Beers for diamonds, Industrial Metal for platinum and base metals, and Bulk Commodities for coal and iron ore. "Assets in nickel, coal and iron ore will have to compete and demonstrate their ability to drive down the cost curve, with the ability to deliver cash through the cycle. If not, they won't be in the portfolio, it's as simple as that," Cutifani told investors in the British capital. 'Outlook remains dim' The comment came on the same day as spot iron ore fell to a decade low of less than $40 (36.7 euros) a ton, while futures prices suggested more weakness for the steelmaking commodity already down by nearly half this year. "With few exceptions, the commodity price outlook remains dim, forcing miners to keep up their guard," consultants PwC said in a report on Tuesday. "As the old saying goes, survival will be of the fittest, and for miners also the leanest." To that end, the miner said it planned to sell several coal assets in Australia and South Africa, adding that it had secured more than $2 billion in sales so far. In addition, it would further slash investments through 2016 by about $1 billion. In a blow to shareholders, Anglo said it would suspend dividend payments until the end of next year in order to save money. The London-based miner, which is currently the world's fifth-biggest by market value, has been hit harder by the ongoing commodity crisis than many of its rivals, with higher-cost iron ore operations weighing heavier on its bottom line. By selling off the most costly, it hopes to not only save money, but also to save some of its parting employees' jobs in the process. Commenting on the layoffs, Anglo's spokesperson stressed that because many of the mines will be sold and not closed, "the 85,000 jobs don't (all) disappear as many will be employed by new owners." According to a company graph, the miner plans to shrink its workforce to 99,000 next year and 92,000 in 2017 followed by another sharp reduction.

One of the world’s leading miners has said it will cut tens of thousands of jobs as part of a radical overhaul. The announcement comes as the industry is struggling with weak demand and painfully low commodity prices. Shares in the British mining giant took a beating on Tuesday after the company announced it would cut its workforce by nearly ... Read More »

German manufacturing weakened by lackluster China

Foreign orders at German manufacturers dropped in September, as demand from China continues to be tepid. Manufacturing in Asia's powerhouse also dropped for a third straight month. Orders from abroad fell by 18 percent in September, compared to the same time the year before, according to Germany's VDMA manufacturing association. "During the course of the year, business in the mechanical engineering and machine tools sector has once again deteriorated," VDMA Chief Economist Ralph Wiechers said. The weakness in the Chinese economy was impacting on other markets, Wiechers said. The weaker orders from abroad were partially offset by orders at home and elsewhere in Europe and the US. It meant that, overall, orders in the first nine months of the year only fell by 1 percent. "That's down to hard work and shows how competitive our manufacturers are," VDMA economist Olaf Wortmann said. Meanwhile, China's manufacturing sector contracted in October for a third straight month, an official survey showed on Sunday, while a private factory survey on Monday also showed activity fell for an eighth consecutive month in October. Despite China's lackluster performance, the Asian powerhouse remains the No. 1 market for Germany's manufacturers and will continue to do so for the forseeable future, according to the VDMA.

Foreign orders at German manufacturers dropped in September, as demand from China continues to be tepid. Manufacturing in Asia’s powerhouse also dropped for a third straight month. Orders from abroad fell by 18 percent in September, compared to the same time the year before, according to Germany’s VDMA manufacturing association. “During the course of the year, business in the mechanical ... Read More »

Majority of VW’s rigged cars in Europe

German carmaker Volkswagen has said the overwhelming majority of its roughly 11 million cars with built-in defeat devices were sold across Europe. The company again apologized for the "wrongdoing of individuals." A Volkswagen spokesman on Monday reported that 8 million of the company's vehicles running in the EU were fitted with software capable of thwarting diesel-engine emission tests. In a letter co-signed by the current VW chief lobbyist Thomas Steg and cited by the German business daily "Handelsblatt," the carmaker said 1.2, 1.6 and 2.0-liter engines were affected. The authors of the letter addressed to national parliamentarians once again apologized for the behavior of "some individuals" and promised to fully clear up the scandal. No time to waste VW has been under mounting pressure to get to grips with the biggest business crisis in its 78-year history as revelations about its large-scale emissions cheating scandal have wiped out a third of the firm's stock price and rocked the auto industry as a whole. Up until now, VW had said it would have to refit up to 11 million diesel cars globally, including 2.8 million in Germany . Newly appointed Chief Executive Matthias Müller is to address employees at a staff meeting in Wolfsburg Tuesday. One day later, he's scheduled to brief the supervisory board on what measures have been taken so far to find the culprits and win back the trust of customers.

German carmaker Volkswagen has said the overwhelming majority of its roughly 11 million cars with built-in defeat devices were sold across Europe. The company again apologized for the “wrongdoing of individuals.” A Volkswagen spokesman on Monday reported that 8 million of the company’s vehicles running in the EU were fitted with software capable of thwarting diesel-engine emission tests. In a ... Read More »

BP to pay record fine over oil spill

British energy giant BP will pay a record fine to settle claims for damages stemming from the 2010 Gulf of Mexico oil spill. The agreement was reached with the Department of Justice and five US states. The deal announced Monday foresees BP paying a record $20.8 billion (18.6 billion euros) in fines arising from the 2010 Deepwater Horizon oil spill, which followed an explosion on an offshore rig in the Gulf of Mexico killing 11 workers. Beaches were blackened and the region's fishing and tourism industries were crippled in a tragedy that rocked the whole nation. The final settlement with the US Department of Justice and some US states was significantly higher than a previously announced deal in which BP was set to pay $18.7 billion to resolve claims from government entities. Costly affair Negotiators made it clear that Monday's deal resolved all civil claims against BP, ending five years of legal fighting over the nearly 134-million-gallon (500-million-liter) spill. Among other requirements, the British company will be forced to pay $5.5 billion in Clean Water Act penalties and nearly 45 billion to five US Gulf states - Alabama, Florida, Louisiana, Mississippi and Texas. BP had earlier already settled with people and businesses harmed by the 2010 disaster. That alone cost the firm close on $6 billion in payouts.

British energy giant BP will pay a record fine to settle claims for damages stemming from the 2010 Gulf of Mexico oil spill. The agreement was reached with the Department of Justice and five US states. The deal announced Monday foresees BP paying a record $20.8 billion (18.6 billion euros) in fines arising from the 2010 Deepwater Horizon oil spill, ... Read More »

TPP trade negotiators reach landmark deal

Pacific ministers have reached a deal on the biggest trade liberalization pact in a generation. News agencies reported the accord would set standards for 12 nations and reduce tariffs for a wide range of products. Officials cited by Reuters said the Trans-Pacific Partnership (TTP) would affect 40 percent of the world economy and had the potential to reshape industries. Should national lawmakers approve the deal reached Monday, it would influence everything from the price of cheese to the cost of cancer treatment in the nations concerned. The TPP accord had been controversial because of the secret negotiations that had shaped it over the past five years and the perceived threat to an array of interest groups from Mexican carmakers to Canadian dairy farmers. Stumbling stone removed The complex deal is to bring about tariff reduction schedules for hundreds of imported items from pork and beef in Japan to pickup trucks in the US. However, one issue had threatened to derail the talks until the very end, notably the length of monopolies to be awarded to the developers of new biological drugs. The US had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive treatments, while Australia, New Zealand and others would have preferred a five-year period of protection. Negotiators were reported to have agreed on a compromise on minimum terms that was short of US expectations.

Pacific ministers have reached a deal on the biggest trade liberalization pact in a generation. News agencies reported the accord would set standards for 12 nations and reduce tariffs for a wide range of products. Officials cited by Reuters said the Trans-Pacific Partnership (TTP) would affect 40 percent of the world economy and had the potential to reshape industries. Should ... Read More »

Asian markets see red, China fears persist

Weak Chinese industrial data and slackening demand for commodities the world over weighed heavily on Asian markets on Tuesday. Tokyo, Hong Kong, Shanghai and Sydney were all in negative territory. Key Asian stocks slid to their lowest levels in more than three years on Tuesday after China said its key industrial companies saw profits fall nearly 9 percent in August - the fastest plunge in four years. Demand for resources is softening in the world's number two economy as China experiences a painful slowdown in its economy , and commodities prices are taking a hit. Tokyo closed more than 4 percent lower, Hong Kong slid 3.59 percent by lunch, and Shanghai was 1.9 percent lower in late trading. Glencore on shaky ground Mining giant Glencore lost 26 percent in morning trading in Hong Kong, following a nearly 30 percent drop in London a day earlier as analysts warned of impending danger if commodities prices don't pick up. "We know all their businesses, including agricultural, enegery, or mining are all in trouble," said Jackson Wong, a securities analyst at Simsen Financial Group. "They are in a very tough situation over how they are going to survive in the next few years with the slow economy in China, that's the worry that investors have." Investors take refuge in western bourses Other analysts said Asian markets are also struggling to keep capital as investors jump ship. "Disappointing industrial profits in China continue to bolster concerns about growth and many investors are taking profits from the Nikkei and sitting in cash and alternatives, or repatriating capital to western markets in a perceived flight to quality," said Martin King, co-managing director at Tyton Capital Advisors. In Japan, investors are anxious before the release of the Bank of Japan's Tankan quarterly business survey on Thursday. The Japanese economy has been battling stagnation after it contracted in the second quarter.

Weak Chinese industrial data and slackening demand for commodities the world over weighed heavily on Asian markets on Tuesday. Tokyo, Hong Kong, Shanghai and Sydney were all in negative territory. Key Asian stocks slid to their lowest levels in more than three years on Tuesday after China said its key industrial companies saw profits fall nearly 9 percent in August ... Read More »

Will VW scandal end with prison sentences?

The auto industry is no stranger to legal trouble. Though companies normally reach financial settlements with US authorities, individuals at Volkswagen could face criminal charges. Spencer Kimball reports from Chicago. The timing couldn't be worse for Volkswagen. Before the VW emissions scandal broke, the US Justice Department vowed in a memo to redouble its efforts to prosecute individuals in white collar criminal cases - and a new CEO is unlikely to change that calculation. In the aftermath of the 2008 financial crisis, federal prosecutors extracted massive financial penalties from investment banks. But only one Wall Street executive, Kareem Serageldin at Credit Suisse, was prosecuted and sentenced to time in prison. "There's recently been criticism that the government has too often been using settlements with corporations as the end of the game and not following through as much on individual prosecutions," Samuel Buell, who prosecuted corporate crime at the Justice Department, told DW. Amid this controversy, the Justice Department's Resources and Environment Division has launched an investigation into Volkswagen cheating on diesel emissions tests, according to Bloomberg and "The Wall Street Journal." "This is their first opportunity really in a high-profile case to show that they mean business by going after individuals," Peter Henning, an expert on white collar crime at Wayne State University Law School, told DW. "So, unfortunately for Volkswagen, they're a year too late." Settlements the norm All three of the world's top automakers have now been subject to criminal investigations. GM was charged with concealing faulty ignition switches linked to 124 deaths. The world's third-largest automobile company settled with the Justice Department for $900 million. No individuals were charged with a crime. Toyota faced Justice Department scrutiny for withholding information about a sudden acceleration problem linked to fatalities. The world's second largest auto company settled with the government for $1.2 billion, but still faces some 400 wrongful death and injury lawsuits. Again, no individuals were charged. Now the world's top-selling car company, Volkswagen, potentially faces criminal charges for installing software to cheat diesel emissions tests . Though the emissions scandal has not been linked to any deaths, expert Peter Henning believes individuals at the company could very well face criminal charges. "This is intentional misconduct," Henning said. "This is so blatant. This has been going on for years. This was corporate a decision." "It's a perfect storm for Volkswagen," he continued. "The firm and the individuals don't have a lot of excuses, and you have a Department of Justice looking to go after individuals." Potential criminal penalties According to Samuel Buell, there's a range of charges individuals at Volkswagen could face depending on how the facts of the case pan out. Submitting false statements is a crime, and it's also illegal to defraud the United States government. There could also be charges for defrauding consumers who bought the diesel vehicles in question. Sentencing would likely be based on the damage done to consumers and the environment measured in monetary terms. According to Buell, if the damages reach tens of millions or even hundreds of millions of dollars, individuals could face stiff prison sentences. "You could be looking at five or 10 years," said Buell, a law professor at Duke University. "It's important to know that there's no parole in our federal prison system. The sentences are real. When a judge says five or 10 years, that's basically what you get." But holding individuals accountable in the corporate context is difficult, according to Brandon Garrett, author of "Too Big to Jail: How Prosecutors Compromise with Corporations." Prosecutors have described difficulty in determining responsibility amidst complex corporate structures. "The complexity of organizations where many people work together with many levels of supervisors and consulting lawyers and other specialists can all make assigning blame a challenge if there is no 'smoking gun' type evidence," he said.

The auto industry is no stranger to legal trouble. Though companies normally reach financial settlements with US authorities, individuals at Volkswagen could face criminal charges. Spencer Kimball reports from Chicago. The timing couldn’t be worse for Volkswagen. Before the VW emissions scandal broke, the US Justice Department vowed in a memo to redouble its efforts to prosecute individuals in white ... Read More »

Reports: Porsche CEO to become new VW chief

The supervisory board of German carmaker Volkswagen is to pick Porsche chief Matthias Müller as its next CEO, media reports say. He's to replace Martin Winterkorn, who resigned over a falsified emission tests scandal. The head of sports carmaker Porsche, Matthias Müller, would be appointed as Volkswagen's new chief executive on Friday, Reuters and the German business daily "Handelsblatt" reported, citing "sources familiar with the matter." "Bloomberg" also carried a similar report earlier on Thursday. Müller would replace Martin Winterkorn , who resigned on Wednesday in the wake of a huge scandal over manipulated emissions tests in the US and elsewhere, affecting some 11 million vehicles. Reuters reported VW's supervisory board would offcially present the new man at the helm after a meeting on Friday. Tall order Müller is the VW Group's former head product strategist and earned more laurels while being in charge of Porsche. The 62-year-old had been seen as the main favorite for replacing Winterkorn. Born in Chemnitz in East Germany, he originally trained as a tool maker and then graduated in information technology. He'll be facing the daunting task of fully clearing up the company's current scandal and regaining the trust of consumers worldwide.

The supervisory board of German carmaker Volkswagen is to pick Porsche chief Matthias Müller as its next CEO, media reports say. He’s to replace Martin Winterkorn, who resigned over a falsified emission tests scandal. The head of sports carmaker Porsche, Matthias Müller, would be appointed as Volkswagen’s new chief executive on Friday, Reuters and the German business daily “Handelsblatt” reported, ... Read More »

VW’s Winterkorn promises to fully clear up emissions scandal

VW CEO Martin Winterkorn has said he deeply regrets the current emissions cheating scandal surrounding the German carmaker. He said everything was being done to fully clear up the case as quickly as possible. In a video statement on the corporate website, Volkswagen Chief Executive Martin Winterkorn on Tuesday said he was "terribly sorry" for the emissions cheating scandal that had rocked the German auto maker. Winterkorn emphasized the scam "contradicted everything that Volkswagen stands for." "I formally apologize to our customers, the authorities and to the public in general for this misconduct," he said in the online video. The CEO promised that the scandal would be fully investigated, adding that all facts needed to be put on the table as quickly as possible and with the greatest possible degree of transparency. Heads to roll? Winterkorn provided no hint as to whether he'd step down from his post as a result of the scandal. He said it would be an error if the "huge mistakes of a few people were seen as a reason to place the honest work of 600,000 people under blanket suspicion; that's why I'm asking for your trust as we continue on our way. Workers' representatives on VW's supervisory board had reportedly pushed for heads to roll. "We can assure you that we will do everything possible to ensure the matter is cleared up quickly and that personnel consequences are drawn," Works Council chief Bernd Osterloh told employees on Tuesday. On Tuesday, it emerged that the emissions fixing could be a global problem - not just one in the US - with as many as 11 million cars from the Volkswagen AG family potentially affected. The cases revolve around diesel-powered models. VW's share price, already reeling from a difficult day's trade on Monday, was down almost 20 percent on Tuesday at around 106 euros ($118) per share. In March this year, the same stocks were selling for more than 250 euros each.

VW CEO Martin Winterkorn has said he deeply regrets the current emissions cheating scandal surrounding the German carmaker. He said everything was being done to fully clear up the case as quickly as possible. In a video statement on the corporate website, Volkswagen Chief Executive Martin Winterkorn on Tuesday said he was “terribly sorry” for the emissions cheating scandal that ... Read More »

Crisis could spread for VW beyond US

Volkswagen troubles could spread to important Chinese and European markets, as share prices tumble and the German auto giant faces hefty fines. As Volkswagen stocks plummeted after it admitted to rigging U.S. emissions tests, the auto giant could face further investigations in Europe and the important Chinese market where sales slipped earlier this year, say analysts. Volkswagen lowered its yearly sales forecast in July following weakened demand in China, where the German automaker delivers more than 40 percent of its vehicles. The latest revelations that it fitted some diesel cars in the US with software that gave false emissions data could be a further hit for the group in an "extremely important" market, Sven-Michael Werner, an attorney specializing in the automotive sector at the Bird & Bird's law firm in Shanghai. "I'm sure the Chinese regulators are looking into the matter in the US very closely and at whether similar instances would have occurred here," Werner told DW. "That's the typical pattern with overseas compliance issues. They will probably look at it unofficially at first and if they find anything there would be a formal investigation," said Werner, although, he added diesel cars are much less popular in China compared to other markets. US environment regulators ordered the German auto giant to recall nearly 500,000 diesel cars, including the VW Golf, when it emerged it used in-car software that met clean-air standards during testing but not during real-world driving conditions. The company could also face up to $18 billion (16 billion euros) in fines and its stocks tumbled more than 2o percent on Monday morning at the Frankfurt stock exchange. Diesel: Popular in Europe Diesel cars are immensely popular in the European Union where carmakers have been touting it as efficient and relatively clean fuel following improvements in quality over the past few years. In 2013, 53 percent of all newly registered cars in the EU had diesel-powered engines, while the diesel VW Golf has been the most popular car model in Europe for a number of years, according to the International Council on Clean Transportation (ICCT). But now the German government is also calling on carmakers for information to ascertain whether they were involved in falsifying car emissions data. "We expect from manufacturers reliable information so that the Federal Motor Transport Authority or KBA can investigate whether similar manipulation has taken place in Germany or in Europe," a spokesman for the environment ministry, Andreas Kuebler, told reporters on Monday. German rivals Daimler and BMW said the accusations directed at VW did not apply to them. Still analysts say it remains unclear whether other automakers had broken the rules. The scandal could also do untold damage to Germany's reputation as a leading car-making economy. "This has to be taken exceptionally seriously," Ferdinand Dudenhoeffer, a professor at Duisburg-Essen University, said. "This impacts the entire German automotive sector." US: Further struggles In the first half of 2015, Volkswagen surpassed Toyota as the world's largest automaker. Despite reaching that long-standing goal, the group has struggled in the US market where its strategy has been to promote its "clean diesel technology" as being better for the environment. In 2013, the VW America launched its "newest, most fuel efficient, TDI Clean Diesel engine" to power the 2015 Golf, Beetle, Passat and Jetta - all of which have been part of the U.S. recall – underlining its diesel strategy there. VW car sales have slipped in the North American market over the past few years, with diesel vehicles making up around a quarter of sales in the US. Ingo Speich, a fund manager at Union Investment, which owns about 0.4 percent of VW shares, said he expected the crisis to spread for the carmaker that makes vehicles from budget Seats and Skodas to luxury Bentleys and Lamborghinis. "The market is anticipating more than just the U.S. issue. We have to admit that just looking at the facts there is a huge loss of trust in management. That is the main issue," he said.

Volkswagen troubles could spread to important Chinese and European markets, as share prices tumble and the German auto giant faces hefty fines. As Volkswagen stocks plummeted after it admitted to rigging U.S. emissions tests, the auto giant could face further investigations in Europe and the important Chinese market where sales slipped earlier this year, say analysts. Volkswagen lowered its yearly ... Read More »

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