13, May 2020
UK in ‘significant recession’ as economy shrinks by record 5.8 percent 0
Britain’s economy shrank by a record 5.8 percent in March as the Covid-19 crisis escalated and the government shut down much of the country, according to official data that point towards an even bigger hit to come.
The monthly drop in gross domestic product was felt in almost all sectors – from the country’s shuttered restaurants and bars to its building sites and factories – and was the largest since comparable records began in 1997.
“The sharp contraction in UK Q1 GDP comes as little surprise, but does clearly highlight the magnitude of the challenge facing policymakers,” JP Morgan market strategist Hugh Gimber said.
In the first three months of the year, GDP contracted by 2.0 percent from the last three months of 2019, the biggest drop since the depths of the financial crisis in late 2008, the Office for National Statistics said.
The Bank of England said last week that the contraction of the economy in the April-June period could approach 25 percent and lead to the largest annual decline in more than three centuries.
British two-year government bond yields sank to a record low of -0.045 percent after the data, reinforcing expectations that the Bank of England will ramp up its record £645 billion (€732 billion) of asset purchases next month.
Finance Minister Rishi Sunak said Britain was now in the midst of a significant recession.
“We have to support people’s jobs, their incomes, livelihoods at this time, and support businesses so we can get through this period of severe disruption and emerge stronger on the other side,” he said after the GDP data.
On Tuesday, Britain’s government extended a costly job support programme for another four months, though businesses will need to pick up more of the tab from August.
The decline in first-quarter GDP was slightly smaller than economists had forecast in a Reuters poll, and less than the 3.8 percent slump suffered by the euro zone in the first quarter.
The worst-hit country in Europe with more than 40,000 deaths from Covid-19 according to official data, Britain has been in extensive lockdown since March 23 – a later date than in many other euro zone countries.
Small steps to ease lockdown
England tentatively began easing its Covid-19 lockdown on Wednesday, with some people who cannot do their jobs at home urged to return to work, while Scotland, Wales and Northern Ireland, which have semi-autonomous governments, are sticking with a “stay at home” message for now.
UK Prime Minister Boris Johnson’s government has faced a barrage of criticism that its new guidance – stay alert, control the virus, save lives – was confusing.
Appearing on Sky News TV, Transport Minister Grant Shapps was asked why estate agents were being allowed to restart house viewings when people could not have their own relatives to visit.
“The truth of the matter is, you have to start somewhere. The lockdown message was very straightforward – it was just stay at home. Now as we start to unlock, of course, there have to be decisions made,” Shapps said.
“There is no perfect way of doing this, and we’d ask people to use their common sense … Right now, there has to be a cut-off somewhere.”
Workers were being advised to avoid public transport if at all possible, and schools remained closed, prompting questions about how parents and people who could not get to work by other means were supposed to apply the new guidance.
Employers faced the daunting task of creating safe environments for their staff, with detailed guidance on one-way systems at entry and exit points and in stairwells, spacing out workstations and other minutiae.
For those still working from home or unable to work, there was only a very slight change in the regime. People were now allowed out to exercise more than once a day, and two people from separate households were allowed to meet outdoors as long as they kept two metres apart.
Martin Hewitt, chairman of the National Police Chiefs’ Council, said officers would still be encouraging people to go home if they were out for reasons other than the authorised exercise, shopping for essentials, health or work.
Fines for transgressions have been increased.
“Everybody will carry on hopefully working in the spirit we’ve had for the last seven weeks,” he told BBC TV.
“It’s not for the police to police people being two metres apart, that’s about everyone’s individual responsibility. If there are those people who refuse to abide by the new regulations then we will move to enforcement if that’s what we have to do,” he said, describing that as a last resort.
(FRANCE 24 with REUTERS)
28, May 2020
Coronavirus Crisis: Boeing cutting more than 12,000 US jobs, thousands more planned 0
Boeing Co (BA.N) says it is eliminating more than 12,000 US jobs as the largest American planemaker restructures in the face of the coronavirus pandemic.
Boeing also disclosed it plans “several thousand remaining layoffs” in coming months but did not say where those would take place.
Boeing is slashing costs as a sharp drop in airplane demand during the pandemic worsened a crisis for the company whose 737 MAX jet was grounded last year after a second fatal crash.
Boeing said it restarted 737 MAX production at a “low rate” at its Renton, Washington factory. Reuters reported in April that regulatory approval for the MAX was not expected until at least August.
Boeing shares closed up 3.3% at $149.52, then rose another 4.6% to $155.84 after hours on news of the MAX production restart.
The company announced in April it would cut 10% of its worldwide workforce of 160,000 by the end of 2020. Boeing said Wednesday 5,520 US employees will take voluntary layoffs, and also disclosed it was notifying 6,770 workers of involuntary layoffs.
Chief Executive Dave Calhoun told employees in an email the “pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices. … I wish there were some other way.”
CFRA analyst Colin Scarola upgraded Boeing to buy and raised his price target to $174 from $112 saying Boeing “can weather its current crises and grow over the long term.”
In April, Boeing recorded zero orders for the second time this year and customers canceled another 108 orders for the 737 MAX, compounding its worst start to a year since 1962.
Last month, Boeing raised $25 billion in a bond offering that allowed it to avoid taking government aid.
The job cuts include more than 9,800 employees in Washington State. Boeing said the “several thousand remaining layoffs will come in additional tranches over the next few months.”
Boeing said it expects to resume 737 MAX deliveries in the third quarter following regulatory approvals before gradually increasing to 31 per month during 2021.
The aerospace sector has been hard hit including many Boeing suppliers.
General Electric Co (GE.N) said this month it planned to cut its aviation unit’s global workforce this year by as much as 25%, or up to 13,000 jobs. SpiritAero Systems Holdings (SPR.N) announced it is cutting another 1,450 jobs in Kansas.
American Airlines to cut management, support staff by 30%
American Airlines Group Inc must reduce its management and support staff by about 30% and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, showed a letter to employees made public on Wednesday.
All major US airlines have said they will need to shrink in the fall, once US government payroll aid that bans involuntary job cuts expires on Sept. 30.
Competitor United Airlines Holdings Inc has also said it will need to reduce its management and administrative staff by about 30%.
Despite the bailout and other liquidity raises, American must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in the letter.
American, with over 100,000 employees, will offer voluntary options before implementing involuntary reductions if there is not enough take-up, she said.
Once it has reduced its management ranks, the company will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the aim of avoiding involuntary furloughs.
“This is a goal, though, not a commitment, and a stretch goal at that,” Eberwein said, adding the company will be working with unions in coming weeks and months.
American has said it is accelerating fleet retirement and expects to fly roughly 100 fewer aircraft in the summer of 2021. Nearly 40,000 employees have already opted for temporary voluntary leave or early retirement.
Earlier, American Chief Executive Doug Parker said the airline hoped to avoid furloughs and rejected speculation that it or another major US carrier will have to file for Chapter 11 bankruptcy protection due to the coronavirus crisis.
(Source: Reuters)