Category: Бізнес

SpaceX Reportedly to Lay Off About 10 Percent of Workforce 

Elon Musk’s rocket company SpaceX will reduce its workforce by about 10 percent of the company’s more than 6,000 employees, it said on Friday.

The company said it will “part ways” with some of its manpower, citing “extraordinarily difficult challenges ahead.”

“To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space based

Internet, SpaceX must become a leaner company. Either of these developments, even when attempted separately, have bankrupted other organizations,” a spokesman said in an email.

In June, Elon Musk fired at least seven people in the senior management team leading a SpaceX satellite launch project, Reuters reported in November. The firings were related to disagreements over the pace at which the team was developing and testing its Starlink satellites.

SpaceX’s Starlink program is competing with OneWeb and Canada’s Telesat to be the first to market with a new satellite-based internet service.

The management shakeup involved Musk bringing in new managers from SpaceX headquarters in California to replace a number of the managers he fired in Seattle.

Last month, SpaceX launched its first U.S. national security space mission, when a SpaceX rocket carrying a U.S. military navigation satellite blasted off from Florida’s Cape Canaveral.

In December, the Wall Street Journal reported that SpaceX was raising $500 million, taking its valuation to $30.5 billion.

The Hawthorne, California-based company had earlier outlined plans for a trip to Mars in 2022, to be followed by a manned mission to the red planet by 2024.

Another Elon Musk company, electric car maker Tesla Inc , said in June it was cutting 9 percent of its workforce by removing several thousand jobs across the company in cost reduction measures.

 

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U.S. to Seek Comprehensive Agriculture Access in EU Trade Talks

The United States on Friday signaled it would not bow to the European Union’s request to keep agriculture out of planned U.S.-EU trade talks, publishing negotiating objectives that seek comprehensive EU access for American farm products.

The objectives, required by Congress under the “fast-track” trade negotiating authority law, seek to reduce or eliminate EU tariffs on U.S. farm products and break down non-tariff barriers, including on products developed through biotechnology, the U.S. Trade Representative’s (USTR) office said.

Agricultural issues were among the major sticking points in past negotiations for a major U.S.-EU trade deal, the Trans-Atlantic Trade and Investment Partnership (TTIP), before talks were shelved after Donald Trump was elected president in 2016.

EU trade commissioner Cecilia Malmstrom told U.S. Trade Representative Robert Lighthizer in Washington on Wednesday that the 28-country bloc could not negotiate on agriculture in a new, more limited set of negotiations expected to start this year.

“We have made very clear agriculture will not be included,” Malmstrom told reporters after meeting Lighthizer, adding that the two sides had not yet agreed on the scope of the talks.

Trump and EU president Jean-Claude Juncker agreed last July to re-launch negotiations to cut tariffs on industrial goods, including autos, and also discuss ways for Europe to buy more U.S. soybeans.

Trump told Juncker that he would refrain from levying threatened 25-percent tariffs on EU-produced cars and auto parts, which he is considering imposing worldwide on national security grounds.

Trump has long complained about Europe’s 10-percent import tariff on autos. The U.S. passenger car tariff is only 2.5 percent, although U.S. tariffs on pickup trucks and other commercial trucks are 25 percent.

The U.S. negotiating wish list does not specifically mention autos, but pledges to seek duty-free market access for U.S. industrial goods that eliminate non-tariff barriers such as “unnecessary differences in regulation.”

USTR’s decision to push for a full-fledged trade negotiation on agricultural goods follows a hearing in December at which U.S. farm, food and beverage groups argued for their products to be included.

Influential lawmakers such as Senate Finance Committee Chairman Chuck Grassley, an Iowa farmer, have warned they might not support an EU deal that did not include agriculture. Now that the U.S. objectives have been published, the USTR may be ready to formally launch negotiations in as little as 30 days.

But the EU’s own negotiating mandates on industrial goods and regulatory cooperation need to be cleared by the European Commission, the bloc’s executive branch, and approved by member states, and it is unclear how long that process will take.

The United States had a $151 billion goods deficit with the EU in 2017, despite two-way annual trade of about $1.1 billion. USTR also said it will seek commitments by Europe not to impose duties on any digital downloads of U.S. software, movies, music and other products nor any rules that restrict cross-border data flows or require data localization, USTR said.

In an objective aimed at Europe’s efforts to tax products and services from U.S.-based internet giants, including Alphabet Inc’s Google, Facebook and Amazon.com, USTR said it would seek a “guarantee that these products will  not face government-sanctioned discrimination based on the nationality or territory in which the product is produced.”

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Uganda Not Worried China Will Seize Assets Over Rising Debt

Uganda’s growing debt is sustainable, and the country is not at risk of losing state assets to China, the country’s finance minister, Matia Kasaija, said this week.

Uganda’s auditor-general warned in a report released this month that public debt from June 2017 to 2018 had increased from $9.1 billion to $11.1 billion.

The report — without naming China — warned that conditions placed on major loans were a threat to Uganda’s sovereign assets. 

It said that in some loans, Uganda had agreed to waive sovereignty over properties if it defaults on the debt — a possibility that Kasaija rejected.

“China taking over assets? … in Uganda, I have told you, as long as some of us are still in charge, unless there is really a catastrophe, and which I don’t see at all, that will make this economy going behind. So, … I’m not worried about China taking assets. They can do it elsewhere, I don’t know. But here, I don’t think it will come,” he said.

China is one of Uganda’s biggest country-lenders, with about $3 billion in development projects through state-owned banks.

China’s Exim Bank has funded about 85 percent of two major Ugandan power projects — Karuma and Isimba dams. It also financed and built Kampala’s $476 million Entebbe Express Highway to the airport, which cuts driving time by more than half. China’s National Offshore Oil Corporation, France’s Total, and Britain’s Tullow Oil co-own Uganda’s western oil fields, set to be tapped by 2021.

Economist Fred Muhumuza says China’s foot in Uganda’s oil could be one way it decides to take back what is owed. 

“They might determine the price, as part of recovering their loan,” he said. “By having a foot in there they will say fine, we are going to pay you for oil. But instead of giving you $60 a barrel, you owe us. We’ll give you $55. The $5 you are paying the old debt. But we are reaching a level where you don’t see this oil being an answer to the current debt problem.”

China’s reach

Uganda’s worries about China seizing national assets are not the first in Africa.

A leaked December report in Kenya showed China was promised parts of Mombasa Port as collateral for financing a $3 billion railway it built from the port to Nairobi. Both Chinese and Kenyan officials have denied that the port’s ownership is at risk.

Reports in September that China was taking over Zambia’s state power company over unpaid debt rippled across Africa, despite government denials.

But the fear of a Chinese takeover of a sovereign state’s assets over debt is not completely without merit. Struggling to pay back loans to state-owned Chinese firms, Sri Lanka in 2017 handed over a strategic port.

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Despite Volatility in Retail Stocks, US Officials Predict Continued Growth

Despite the U.S. stock market recovery, Macy’s and American Airlines’ revised revenue forecasts for 2018 have sent their stock prices spiraling. Other retail stocks fell, too, including J.C. Penney, Nordstrom and Kohl’s. The reports come amid news of another iconic department store, Sears, fighting for survival. But U.S. trade and financial officials say the U.S. economy is on solid ground and will continue to grow for years to come. VOA’s Zlatica Hoke reports.

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Government Shutdown Hurts Small Businesses

The 800,000 federal workers who are not being paid or are working without pay during the partial government shutdown were the first to feel its impact. But as Anna Kook reports, other segments of the economy are also being hurt, especially in Washington, home to the largest number of federal workers in the country.

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Building Boom Turning to Bust as Turkey’s Economy Slows

Deep in a provincial region of northwestern Turkey, it looks like a mirage — hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.

Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairy tale for their investors.

The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry — a key sector — as the country’s economy heads towards what could be a hard landing in an intensifying downturn.

After a long period of solid growth, Turkey’s economy contracted 1.1 percent in the third quarter, and many economists expect it will enter into recession this year.

The country has been hit by high inflation and a currency crisis in August. The lira lost 28 percent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.

The villas close to the town center of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group’s Burj Al Babas project.

But the development of 732 villas and a shopping center — which began in 2014 — is now in limbo as Sarot Group has sought bankruptcy protection.

It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.

Driving force 

Sarot Group filed for bankruptcy protection after some of their Gulf customers could not pay for the villas they had bought as part of the $200 million (175 million euros) project, Sarot’s deputy chairman, Mezher Yerdelen, said.

So far, $100 million has been spent on the project.

“Some of the sales had to be cancelled,” Yerdelen told AFP, after the company sold 351 villas to Arab investors.

The villas are worth between $400,000 and $500,000 each. They were designed with the Gulf buyers in mind, architect Yalcin Kocacalikoglu said.

While the drop in oil prices hurt its Gulf customers, Sarot Group was also hit by “the negative impact of the economic fluctuations on construction costs” in Turkey, Yerdelen said.

Despite a legal battle over its bankruptcy status, Yerdelen said the company can continue making sales and that he hopes the project will be inaugurated in October 2019.

Yet the Al Babas project is hardly alone. Unfinished and empty housing projects are strewn across the country, testimony to the trouble the construction sector, and the wider economy, now finds itself in. 

The construction sector has been a driving force of the Turkish economy under Erdogan, who has overseen growth consistently above the global average since he came to power in 2003.

But the sector contracted 5.3 percent on-year in the third quarter of 2018.

“Three out of four companies seeking bankruptcy protection or bankruptcy are construction companies,” said Alper Duman, associate professor at Izmir University of Economics.

Turkey’s ‘locomotive’

“Whether we call it a construction bubble or a housing bubble, there is a bubble in Turkey,” he said.

He pointed to unsold housing stock as the main indicator of this, with data showing in that over the past 16 years 10.5 million apartments have been built but only eight million have been approved for use. 

“There is a high risk this bubble will burst,” he said.

Trade Minister Ruhsar Pekcan said in mid-December that 846 companies had applied for bankruptcy protection since March 2018 but opposition daily Sozcu claimed in October the figure was more than 3,000.

Turkish Chamber of Civil Engineers head Cemal Gokce expressed pessimism, predicting “more bankruptcy protection applications, bankruptcies” among construction companies.

He said too many homes have been built in Turkey.

And most are not luxury villas like Burj Al Babas with its style reminiscent of the Sleeping Beauty Castle at Disney theme parks, but simple apartments and homes for ordinary Turks.

The construction confidence index of the Turkish Statistical Institute (TurkStat) fell 2.1 percent in December to 55.4, after 56.6 in the previous month. Anything below 100 indicates a pessimistic outlook.

However, Kerim Alain Bertrand, who previously headed up a firm that provided and analyzed data on Turkey’s real estate market, said recently he was more optimistic, partly due to the country’s growing population.

“The construction sector is this country’s locomotive sector,” he said. 

While there will be a consolidation in the sector, it will “continue to be kept alive” by the young population, he added.

The median age of the population in Turkey was 31.7 in 2017, according to TurkStat, compared to 42.8 in the European Union.

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Cuba Cabinet Chiefs Ousted Amid Cash Crunch, Transportation Woes

Cuban President Miguel Diaz-Canel replaced his transport and finance ministers this week in his first Cabinet reshuffle since forming his own government in July and amid a cash crunch and growing discontent with the island’s transport sector.

Cuban state media said Wednesday that Transport Minister Adel Yzquierdo, 73, and Finance Minister Lina Pedraza, 63, had been “freed from their roles” without explaining why, adding they would be given “other responsibilities.”

Both had been originally been named by former President Raul Castro during his 10-year mandate and reconfirmed in their roles by Diaz-Canel, who took office from the 87-year-old in April.

They will be replaced by the respective vice ministers in each ministry, Eduardo Rodriguez, 52, and Meisi Bolanos, 48.

​Public transport mess

Some Cubans questioned the logic of promoting those who had also overseen strategies they deemed had failed.

Transport is one of the top complaints of Cubans living in the capital, with new regulations vastly reducing the number of private collective taxis on the road that had supplemented the creaking public transport system.

Many Cubans say they are struggling to get around and it is taking them far longer and costing more to do so.

“Transport is awful,” said Maritza Carrion, waiting for a bus in the business district of Vedado.

In one of his last public appearances, Yzquierdo announced on state television in December that Cuba was importing hundreds of microbuses and buses to alleviate the transport shortage.

The government has periodically done so in the past, only partly resolving the chronic transport shortage for a short while.

​National airline

Meanwhile Cuba’s national airline Cubana has had to slash flights over the last year because of a lack of planes that it blamed partly on the decades-old U.S. trade embargo.

It also faced a plane crash that killed 112, its deadliest in nearly 30 years, just weeks after Diaz-Canel took office.

“What we need are real solutions because it’s been nearly 60 years that we’ve been behind on transport,” said Yadier Osorio, 41. “The government still hasn’t found a solution.”

Under the article on state-run website Cuba debate about the Cabinet changes, many readers called for greater transparency over such decisions. Growing internet access is fostering greater public debate online and accountability from officials.

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Au Pairs Win $65.5M Settlement in Denver Lawsuit 

Young people from around the world who provided low-cost child care for American families will share in a proposed $65.5 million settlement of a lawsuit brought by a dozen former au pairs against the companies that bring the workers to the United States. 

 

Nearly 100,000 au pairs, mostly women, who worked in American homes over the past decade will be entitled to payment under the proposed settlement filed in Denver federal court Wednesday, a month before the case brought by a dozen former au pairs from Colombia, Australia, Germany, South Africa and Mexico was set to go to trial.  

 

They claimed 15 companies authorized to bring au pairs to the United States colluded to keep their wages low, ignoring overtime and state minimum wage laws and treating the federal minimum wage for au pairs as a maximum amount they can earn. In some cases, the lawsuit said, families pushed the limits of their duties, requiring au pairs to do things like feed backyard chickens, help families move and do gardening, and not allowing them to eat with the family. 

 

“This settlement, the hard-fought victory of our clients who fought for years on behalf of about 100,000 fellow au pairs, will be perhaps the largest settlement ever on behalf of minimum wage workers and will finally give au pairs the opportunity to seek higher wages and better working conditions,” said David Seligman, director of Denver-based Towards Justice, which filed the lawsuit in 2014. It was later litigated by New York-based firm Boies Schiller Flexner. 

Companies deny wrongdoing 

 

Under the settlement, which still must be approved by a judge, the companies agreed to make sure au pairs are informed about their legal rights in the future, but they denied any wrongdoing. 

 

Lawyers now need to track down au pairs who came to the U.S. on J-1 visas between Jan. 1, 2009, and Oct. 28, 2018, and have set up a website to help spread the word about the deal. 

 

While sometimes confused with nannies, au pairs have much less experience and earn a lot less.   

 

The program, overseen by the U.S. State Department, was launched as a cultural exchange program in 1986 as demand for child care grew. At first there were only 3,000 participants as part of a pilot, but last year there were over 20,000. The program occupies a gray area between work and an international relations effort, and critics say that makes it ripe for abuse.  

 

The sponsors said they were just following regulations from the State Department — which last adjusted au pair pay to $195.75 for a 45-hour work week in 2009 after the federal minimum wage rose to $7.25. Their hourly wage has actually been $4.25 though: Families were told to deduct 40 percent of their pay to cover the room and board they’re required to provide the au pairs, a practice challenged by the lawsuit. 

Too costly

 

In court filings, the sponsors argued requiring families to pay more in states with higher minimum wages would destroy the program by making au pairs unaffordable, hurting foreign policy goals. 

 

According to a 2016 report on U.S. child care by the Washington-based think tank New America, the average cost of full-time care in a child care center for children up to 4 years old is $9,589 a year for each child, more than the average cost of in-state college tuition. The average cost of full-time care at home with a nanny was $28,353 — 53 percent of the median U.S. household income and nearly three times the annual pay for an au pair.   

 

The practice of having au pairs — French for “on par with” — developed in postwar Europe, where young people lived with families in other countries to learn a language in exchange for helping with child care and some housework. In Europe, au pairs generally are limited to working 30 hours a week. 

 

Sarah Azuela said the ad she saw her final year of college in Mexico promised coming to the United States to work as an au pair would be the best year of her life, full of travel, meeting new people and becoming part of an American family. But she says what grew into a two-year stay turned out to be the worst time of her life, with her feeling more like a slave subject to the whims of her host families than a member of the household.  

 

At her last placement — working for a single mother in Virginia — Azuela said that in addition to helping care for three children, she cooked all the meals, cleaned, planted flowers and packed the family’s belongings and helped move them twice, first to an interim apartment and then to a permanent home. 

Positives

 

Nevertheless, Azuela was grateful her host mother gave her time to study for a business certificate at a university, which led her to extend her stay, and for not yelling or threatening to hit her as a previous host had done. 

 

“I don’t wish anyone to experience anything like this,” Azuela, who is from Hermosillo, Mexico, but now lives in Wisconsin, said about why she joined in the lawsuit.

 

Meanwhile, a related case challenging whether Massachusetts had the right to protect au pairs in its domestic workers’ bill of rights, since they are regulated by the federal government, is pending in federal appeals court. The State Department said in a court filing in September that federal law requires only that au pairs are paid the federal minimum wage, arguing federal law specifically states when other international guest workers, like camp counselors and teachers, are entitled to make more.  

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