Global Business Daily: Brazil GDP woe, Renault rethink, Wizz Air expansion
Patrick Atack in London
"We thought too big in terms of sales."
That's Renault's interim CEO Clotilde Delbos, explaining why the French car maker is cutting several thousand jobs and attempting to save more than $2 billion over the next three years.
Sticking with cars – we know it's been a dire year for sellers and manufacturers around the world so far. But new figures from the UK trade body SMMT shine a light on quite how bad: the country's production lines churned out a mere 197 vehicles in April. That's down from 71,000 in the same month a year before.
In a much more upbeat statement, Wizz Air boss Jozsef Varadi said: "We see the potential to re-stimulate demand for low-cost travel and contribute to the vital recovery of tourism in these markets," as he announced the low-cost carrier was expanding to four new bases in Europe. The firm – which far from cancelling all flights at the start of the COVID-19 outbreak signed government contracts to repatriate Hungarians – is quickly becoming one of the few "winners" of the pandemic and economic crisis.
And now for something completely different – have you ever wondered which European country has the most forest cover? Well, wonder no more dear reader, for my colleague Danny has put together those very statistics in a chart at the bottom of this briefing.
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The eurozone – the bloc within the EU that uses the euro currency – is on the brink of falling into deflation, as the pandemic continued to hit business and spending, pulling growth down to 0.1 percent. The European Central Bank meets next week and is expected to generate further monetary stimulus after this news.
Hungarian airline Wizz Air is hoping to boost the return of the air travel industry by expanding to four new European bases: Milan, Italy; Larnaca, Cyprus; Lviv, Ukraine; and Tirana in Albania. There will be 50 new routes in the plan, the company said.
U.S. consumer spending in April suffered its largest drop since 1959, with a 13.6 percent decline month-on-month. However, personal incomes grew during the same period, at least in part thanks to the Payment Protection Plan passed by Congress.
Brazil's GDP dived 1.5 percent in the first quarter of 2020, as Latin America's largest economy edges towards recession. From February to March, close to five million Brazilians lost their jobs, taking the total to more than 12 million unemployed.
The Chinese ride-hailing business Didi Chuxing's self-driving-car wing has raised at least $500 million in its first round of funding, according to a company statement. The ride-hailing service started experimenting with autonomous vehicles in 2016, before splitting the businesses in 2019.
EHang, the Chinese firm which has turned drones into flying taxis, has obtained permission from the Civil Aviation Administration of China to lift and deliver heavy goods. It will run a trial of the service in Taizhou, southeastern China.
German car firm Volkswagen will invest $2.3 billion in electric vehicle collaborations in China, the company said. It will take a 50 percent stake in JAC Motors and 26 percent of Guoxuan High-tech Co to move forward with its EV ambitions.
French car maker Renault will cut 15,000 roles as part of a plan to save more than $2 billion in the next three years. Interim CEO Clotilde Delbos said the firm's "mindset has completely changed" thanks to the coronavirus pandemic and prior commercial failures.
China's central bank has removed "clean coal" from the list of projects eligible for "green bonds" as the country tries to pivot its energy sector towards environmentally friendly methods.
Hungary's prime minister, Viktor Orban, has criticized the EU recovery package, saying the Commission's $824 billion bond plan set off "red lights" and accused the proposition of "financing the rich from the coffers of the poor."
In Norway, the Oslo government has proposed spending $369 million to make its economy more environmentally sound, as it emerges from the coronavirus crisis. Norway currently produces both oil and gas for energy and export.
French oil major Total's shareholders have rejected a plan by a group of investors to change the company's constitution in order to meet its obligations under the Paris Climate Accord.
The UK car industry may fall to its least productive year since the 1980s, according to a warning from the Society of Motor Manufacturers and Traders. Just 197 cars were produced by the country's factories in April, down from 71,000 in the same month last year.
The Spanish government has approved a basic income of $514 for 2.3 million people aged 23 to 65 with less than $18,477 in assets. Deputy prime minister Pablo Iglesias said the scheme would include incentives to find work.
Greek airline Aegean Airlines has asked the nation's biggest banks for a bailout loan of $166.9 million, which, according to the company, is 11 percent of its annual turnover.
Sports leagues and businesses around the world have set dates to return – with major competitions such as football's English Premier League restarting in June. The top-tier cricket season in Australia is not yet ready, but a short-format competition in Darwin will start next week.
Guy Ryder is the director-general of the International Labor Organization. He spoke to CGTN Europe about the effects a coronavirus-fueled increase in youth unemployment could have on the global economy.
Global youth unemployment figures were at almost 14 percent last year. How has COVID-19 changed this?
Yeah, I think we've seen COVID-19 have three impacts on young people at work. In the first instance, our estimate is that over one in six young people who were working at the beginning of a pandemic, they're no longer working. They've been ejected from their jobs. So that's the first impact already from a high unemployment starting point.
The second shock is about education and training. Because of the impact of the pandemic, a great deal of education and training has been interrupted. Ten percent of young people tell us in surveys they don't know how and when they're going to complete their education. So they're going to have a real problem in terms of skills acquisition. And the third shock for young people, and we're thinking at the end of the school year, is people trying to enter into the labor market for the first time right now. They've really got nowhere to go because we're in lockdown economies. And if you put these three impacts together, we have a very serious situation for young people, what we're calling the danger of a "locked-down generation" of young people simply getting left behind.
Why do you think the youngsters are deemed much more at risk then?
Well, in the first instance, young people pre-pandemic are concentrated in vulnerable areas of work, high concentrations in the informal economy, in much of the world. In the sectors that have been very highly hit by the pandemic, I think of food, accommodation, hotels and also retail and wholesale. Many young people in those jobs as well. And simply they're in the wrong place at the wrong time and they're suffering the consequences as a result.
What patterns then are we seeing developing globally in terms of gender divide as well?
This is an interesting thing. What we're seeing, again, in general and before the pandemic, young women were much worse off than young men in the labor markets, high concentrations in the so-called NEET population. Those are people who are not in education, employment or training. So women are in a bad place again to start off with.
I think the impact of the pandemic on young men and young women, it's somewhat ambiguous. We're seeing that the reduction of working hours is affecting men more than women effectively. But I think we'll have to see how this plays out. But there's no doubt in the bigger picture of things that young women are doubly disadvantaged in the labor market.
What do you think, then, is the longer-term outlook for young people?
I think we have to distinguish between two things as economies unlock and people get back to work. How many young people will simply drift back into the labor market and carry on more or less where they left off? That's one thing.
But I think the more worrying thing is, we don't know the numbers for this right now. Those people for whom the effects of this pandemic shock will be long term. And this is particularly worrying for young people because all of the evidence from past experience is that where young people are out of the labor market for a significant period of time, let's say a year or more than that at the beginning of their careers, the scarring effect, as we call it, stays with them more or less on a permanent basis. They simply do not catch up again as the years go by. And we have the example of young people who were hit by the crisis, the financial crisis, 2008/09. Many of those people are still in a disadvantaged state.
And this is where the notion of a lost generation comes into play. Unless we give real priority to these young people, we run the risk of leaving them behind, leaving them to one side and creating a reservoir of, frankly, secondary workers. And we simply cannot allow this to happen. Youth employment was a key labor market challenge pre-pandemic. It's now doubly the case.