Fiat Chrysler withdraws 50/50 merger proposal with Renault - Driving

Fiat Chrysler Automobiles (FCA) has withdrawn its merger offer with Renault, not long after reaching a tentative agreement with France on the terms of the proposed offer.

Renault issued a statement that it had been reviewing the potential 50/50 merger “with interest” but was unable to reach a decision because representatives of the French State – which owns 15 per cent of Renault – had asked for the automaker’s vote to be postponed to a later meeting. This request followed two consecutive days of meetings by Renault’s board of directors.

In turn, FCA issued a statement saying that “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”

The American automaker thanked the heads of Renault, along with its Alliance partners Nissan and Mitsubishi. FCA proposed the merger with Renault on May 27. It would have created the world’s third-largest automaker, behind Volkswagen and Toyota, and was valued at US$35 billion.

The Wall Street Journal reported that FCA had pulled the merger offer after Nissan refused to support the deal. The paper also said it was Nissan’s stance that caused the French government to ask for postponement of the vote.

Reuters reported that Nissan’s CEO, Hiroto Saikawa, said that the FCA-Renault merger “would require a fundamental review” of his company’s relationship in the Renault-Nissan-Mitsubishi Alliance. The connection between Nissan and Renault has already been strained by the arrest of CEO Carlos Ghosn.

Prior to FCA’s withdrawal, the merger proposal was expected to pass without any issues, although concerns about job losses were raised by European governments. The United Auto Workers Union (UAW) said in a statement that, “As with any merger of companies, the UAW is first and foremost concerned how this will impact our members. FCA leadership has stated to us that this action will not result in any closure of our represented locations.”

Following the initial announcement of the proposal, Mike Manley, CEO of FCA, sold US$3.5 million worth of his FCA shares. In other news, U.S. sales chief Reid Bigland has sued the automaker in a “whistleblower” lawsuit, claiming the company punished him for speaking to the federal government about how it reported its sales.

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June 06, 2019 at 08:01AM

End of an era as Bombardier eyes exiting regional jet business - Financial Post

By Emily Jackson and Frederic Tomesco

Bombardier Inc. is in talks to shed its last commercial jet program, a potential sale that would mark the end of an era for the Montreal-based plane and train maker as it struggles to turn around money-losing business units.

Japan‘s Mitsubishi Heavy Industries Ltd. is in discussions to buy the CRJ regional jet business, Bombardier confirmed Wednesday, although any agreement is contingent on management analysis, due diligence and board approval from both sides.

“There can be no assurance that any such discussions will ultimately lead to an agreement,” Bombardier said in a statement.

Analysts viewed the potential sale as a logical step given Bombardier’s strategy to shrink operations to focus on its more profitable train and business jet divisions. Bombardier’s stock price soared more than 10 per cent to $2.16 on the Toronto Stock Exchange, a welcome trajectory for investors who have watched shares plummet nearly 60 per cent from this time last year.

But should Bombardier reach a deal — analysts estimate a sale could fetch between US$300 million to US$680 million — it would mark the end of a 30-year stint in the commercial aviation business.

Bombardier launched the CRJ program in 1989 with a 50-seater plane, subsequent versions of which would become the world’s most successful regional aircraft with over 1,900 jets in service worldwide, according to the company’s website. The CRJ program paved the way for Bombardier’s forays into other commercial aircraft, including the Q400 turboprops and CSeries single-aisle jets designed to challenge Boeing and Airbus.

Despite more than $1 billion in government subsidies, the CSeries was late and over budget, prompting Bombardier to give control of the aircraft to Airbus. In late 2018, Bombardier sold its Q400 program to Longview Aviation Capital for US$300 million, a deal announced alongside 5,000 job cuts as Bombardier scaled back its aviation division.

Earlier this spring, Bombardier further consolidated all its aerospace programs into one aviation division, with the CRJ regional jet the lone holdout in the commercial aircraft space.

This week, Bombardier closed the sale of its turboprop business to Canada’s Longview Aviation, raising about $250 million.

So it came as no surprise when Air Current broke news of discussions, Citi analyst Stephen Trent noted to clients. At the same time, Bombardier announced that it’s teaming up with Japan’s Hitachi to bid on a US$3.5 billion high-speed rail project in Britain.

“These developments show the company’s shift toward its transport and business jet divisions,” Trent wrote.

The divestiture is expected to have a modest impact on financial results, given the commercial aerospace unit is forecast to lose about $125 million this year, Altacorp analyst Chris Murray noted to clients.

The program “may be better held in other hands that can use the talent already at Bombardier,” Murray said in a telephone interview. “Anything for Bombardier is better than continued losses in commercial aviation. They have not been putting a lot of capital in that space.”

He expects CRJ operations will continue as long as there’s a backlog of orders. Bombardier recorded 51 firm orders for CRJ jets as of Mar. 31. Bombardier shipped 20 regional jets last year, down from 26 the year before. That’s a far cry from the hundreds of CRJs the company delivered annually in the early 2000s.

Anything for Bombardier is better than continued losses in commercial aviation

Altacorp analyst Chris Murray

In Quebec City, Economic Development Minister Pierre Fitzgibbon did not seem worried about the possible transaction between Bombardier and Mitsubishi.

“Bombardier is in the midst of very significant restructuring,” Fitzgibbon told reporters. “And I think we need to leave the management to determine which sectors it feels will still be good.”

Production of the CRJ currently involves two Montreal-area plants, in St-Laurent and Mirabel. About 750 Bombardier employees in the region work on the program, spokesperson Nathalie Scott said Wednesday.

As Bombardier turns its attention to trains and business jets from commercial jets, Mitsubishi is a logical buyer, National Bank analyst Cameron Doerksen noted to clients.

The Tokyo-based company has its own regional jet program, called MRJ, which competes directly with the CRJ. But the MRJ has had trouble getting off the ground due to snags including aborted test flights, cost overruns and cancelled orders.

“Acquiring Bombardier’s CRJ program would bring with it a large global support network that Mitsubishi could leverage to support its new aircraft,” Doerksen wrote, adding that a large number of former Bombardier employees already work for MRJ.

Recent media reports have Mitsubishi working on a 76-seat jet that would comply with so-called scope clauses in the U.S. A planned 90-seat plane, which is years behind schedule, is too heavy to be allowed to fly on regional routes in the U.S. That essentially freezes Mitsubishi out of the world’s largest air travel market.

A deal for the CRJ could be as good for Montreal as the arrival of Airbus was.

“If I were Mitsubishi, I would want to build a greenfield factory in Quebec and get access to the CRJ customer base,” Addison Schonland, a partner at aviation consulting firm AirInsight in Baltimore, said in a telephone interview. “I would want to have the talent pool that’s part of the CRJ program. So a deal for the CRJ could be as good for Montreal as the arrival of Airbus was.”

In an interesting twist, Bombardier and Mitsubishi have been suing each other in the U.S. for several months. Bombardier has accused Mitsubishi of stealing trade secrets for its MRJ program, while the Japanese conglomerate countered by accusing its Canadian rival of trying to limit competition in the market for jets with fewer than 100 seats.

• Email: ejackson@nationalpost.com | Twitter: theemilyjackson

• Email: ftomesco@postmedia.com

With files from Bloomberg

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June 06, 2019 at 03:10AM

Oil Falls After Sharp Rise In Crude, Gasoline Inventories | OilPrice.com - OilPrice.com

Crude oil price trended lower after the Energy Information Administration reported a weekly build in crude oil inventories, at a sizeable 6.8 million barrels. This compares with a draw of 4 million barrels for the previous week.

A day earlier, the American Petroleum Institute estimated inventories had gone up by 3.545 million barrels last week, with gasoline inventories also swelling. The report contributed to an already present downward drag on prices.

At 483.3 million barrels, the EIA said, crude oil inventories were some 5 percent above the seasonal average.

In gasoline, the authority reported a build of 3.2 million barrels for the week to May 31. This compares with a decline of 600,000 barrels a week earlier. Gasoline production averaged 10 million bpd last week, compared with 10.1 million bpd a week before.

In distillate fuels, the EIA also reported an inventory build, of 4.6 million barrels for last week, which compares with a minor draw of 200,000 barrels a week earlier. Refineries churned out 5.4 million bpd of distillates last week, up from 5.1 million bpd a week earlier.

The EIA figures for crude oil will hardly provide any relief for prices as trade war-related concern about the global economy deepens. Earlier this week, Deutsche Bank said in a note to clients the tariff push by Washington has so far cost the U.S. financial market some US$5 trillion in lost stock appreciation opportunities. According to the bank, the average annual stock growth rate since 2009 has been 12.5 percent but in the past 12 months, this has slumped to less than 1 percent mainly on the back of the U.S.-China trade war.

In addition to this concern, Rosneft’s Igor Sechin yesterday spoke out openly against an extension to the production cuts into the second half of the year and said Rosneft would seek compensation from the Kremlin if it decides to stay in the deal.

At the time of writing, West Texas Intermediate was trading at US$52.62 a barrel with Brent crude at US$61.35 a barrel.

By Irina Slav for Oilprice.com

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June 05, 2019 at 09:42PM

Varcoe: New Indigenous coalition aims to buy a piece of Trans Mountain pipeline - Calgary Herald

Never-Ending Phone Spam Is Turning Off Consumers - NPR

Enlarge this image

Spam phone calls are the No. 1 consumer complaint at the Federal Communications Commission. Seventy percent of people no longer answer calls they don't recognize, according to Consumer Reports. smartboy10/Getty Images hide caption

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smartboy10/Getty Images

The spam calls keep coming, offering you loans or threatening you with jail time for IRS violations. By some estimates, they make up at least a quarter of all calls in the United States.

And as the problem continues to grow, it creates a whole new set of related nuisances for people like Dakota Hill.

He estimates he gets hundreds of unwanted spam calls every month. But Hill says he also gets calls from people who think he's spamming them.

In addition to hundreds of unwanted spam calls every month, Dakota Hill says he fields calls from people who think he's spamming them. Courtesy of Jade Hewitt hide caption

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Courtesy of Jade Hewitt

People call, asking: "Do I know you?" or "Why did you wake me up?"

In fact, Hill didn't place any of those calls. He figures his number is being "spoofed"; fraudsters use software to trick the caller ID system to make it appear as though calls are coming from his phone.

He explains this, over and over, to the people calling him.

There is an irony here. The cellphone has become our everything — our wallet, photo archive, computer and music library. But it's also becoming less appealing as a phone. Consumer Reports found that 70% of people no longer answer calls they don't recognize. Regulators and industry are combating junk calls. But at least so far, they haven't succeeded.

The Federal Communications Commission, which regulates phone companies, itself has been targeted.

"We've seen recently scammers using our number, spoofing our number, to try to convince consumers that they're from the FCC and in some way get money out of them," says Patrick Webre, chief of the agency's consumer bureau.

He says spam calls are the No. 1 consumer complaint and a top priority for the agency. FCC Chairman Ajit Pai has demanded that all U.S phone carriers install new technology to authenticate real calls and flag potential spam by the end of this year.

The battle against phone spam is so big that there's a sub-industry combating it.

At Hiya, a Seattle technology startup that's designing ways to block spam calls, U.S. calls are tracked on giant computer monitors. Jonathan Nelson, director of product management, says consumers are adapting — by not answering the phone and letting calls go to voicemail.

But spammers then devise clever new ways of bilking people. The latest example is the "one ring" scam, which emerged May 3. That day, Nelson's monitors turned a flurry of red.

"It was [an] explosion of calls," he says. "We'd never seen that level of volume before."

This scam involves robocallers hanging up after one ring, hoping to trick the victim into calling back on an expensive international toll line, mostly to West Africa.

Scams are easy to perpetrate and hard to stop, largely because technology allows calls to go out by the millions with the click of a button. Many scams prey on fear — of arrest or investigation by a government agency — and target immigrants, taxpayers, debtors or retirees.

And to be profitable, spammers need only a small fraction of recipients to fall for the scam. Scams cost Americans an estimated $10.5 billion a year, according to spam blocker Truecaller. But their success, Nelson says, comes at a high cost to consumers: "We're kind of seeing the death of the phone call."

Most cellphone carriers recognize they need to step up the fight.

Chris Oatway, associate general counsel for Verizon Wireless, calls the fight with spammers an "arms race" and says the company is investing more than ever in technologies to detect, identify and trace junk calls. "The key here is to restore trust in voice calls," he says.

But doing so is complicated, because telephone networks are so interconnected. If another wireless carrier doesn't flag a spam call, Verizon's network might not recognize it's a problem and let it go through. Oatway says that's just one way spammers might still succeed.

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2019-06-06 09:00:00Z
CAIiEMU9jFYdtF3KHQGHAm86fgcqFggEKg4IACoGCAow9vBNMK3UCDCvpUk

Fiat Chrysler bails; ECB time; Stock market gains - CNN

The company said Wednesday that it "has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

Earlier in the day, Renault said that the French government had requested its board of directors postpone the vote on the merger.

France, which owns 15% of Renault and is the company's largest shareholder, previously indicated that it would support a merger if the companies protect French jobs and auto plants.

Shares in Renault plunged nearly 7% in Paris on Thursday after the proposal was withdrawn. Fiat Chrysler stock dropped 1.6% in Milan.

2. ECB time: The European Central Bank meets Thursday as global trade tensions escalate and the race to find a replacement for president Mario Draghi heats up.

Analysts expect the central bank to outline details on additional cheap loans for banks while maintaining historically low interest rates.

Almost certain to come up: whether Draghi and the ECB would be open to cutting interest rates lower still.

"Draghi may have to adopt a dovish tone again, and, at least, not rule out rate cuts if asked about them," Bank of America Merrill Lynch analysts said recently in a research note.

The US Federal Reserve suggested it could cut rates earlier this week, driving markets higher. Fed Chair Jerome Powell said that he's closely monitoring developments on trade, and that the bank will "act as appropriate to sustain the expansion."

Meanwhile, India's central bank on Thursday gave the country its third consecutive interest rate cut as it tries to get a slumping economy back on track.

Before the Bell newsletter: Key market news. In your inbox. Subscribe now!

3. Market gains: US stock futures point to another day of gains as investors stay hopeful that the Federal Reserve could cut interest rates.

The Dow is poised to rise 70 points, or 0.3%. The Nasdaq and S&P 500 are set for a similar jump.

European markets opened higher after a mixed session for stocks in Asia. Britain's FTSE 100 rose 0.6%, while Germany's DAX index added 0.5%.

In Hong Kong, the Hang Seng rose 0.2%, while Japan's Nikkei closed flat. The Shanghai Composite, however, dropped 1.2%.

The Dow closed up 0.8% on Wednesday, logging its third consecutive day of gains. The S&P 500 was up 0.8%, and the Nasdaq added 0.6%.

4. Coming this week:
Thursday — ECB and Reserve Bank of India rate decisions; Europe's GDP growth estimate; Beyond Meat earnings
Friday — US jobs report

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2019-06-06 08:59:00Z
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Here's What Nissan Thinks About Merging With Dodge - CarBuzz

That’s not all, though, because the French government is another big reason for the merger's hold-up. In order to ensure that the consolidation the merger would bring about doesn’t take a toll on blue-collar workers in France, the French government, which is Renault’s largest single shareholder, is demanding a seat on the board of the new company to ensure that it has a say in protecting jobs.

French president Emmanuel Macron is especially sensitive to the needs of his country’s blue-collar workforce after anti-establishment forces, characterized by the yellow vest movement, have threatened his grip on power. So in order to cement its control over the automaker that would result from the merger, France is also asking for a seat on the board that will decide the company's CEO. FCA wants to weaken that seat’s power by removing a proposed rule that would require a unanimous board agreement to elect a CEO.

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2019-06-06 08:22:22Z
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