France to absorb shipyard as Italians lurk
PARIS -- The French government is nationalizing the Saint Nazaire shipyard to ensure an Italian company does not take it over at the end of the week.
Economy Minister Bruno Le Maire insisted that the decision is temporary and meant to buy time and that negotiations with the Italian state-owned group Fincantieri will continue. He said he was going to Rome on Tuesday for more talks.
The unexpected decision to nationalize the Saint Nazaire shipyard on the Atlantic coast is the first major foray into the industrial sector for President Emmanuel Macron, and runs counter to the free-market image the French chief of state has sought to project.
Le Maire did not use the word "nationalize" during his announcement, speaking only of the "right of preemption." That did not change the fact that the French state is taking over the shipyard, which last year turned out the world's largest cruise ship, the Harmony of the Seas, created the Queen Mary II and builds hulls of military ships, including aircraft carriers.
France's single object is "to defend the strategic interests of France," Le Maire said. France, trying to beat back a 10 percent unemployment rate, also wants to guarantee jobs for the shipyard workers, who could potentially be replaced by Italians. Le Maire said current orders mean there are 11 years of guaranteed work ahead.
-- The Associated Press
Alternative to financial benchmark urged
LONDON -- British regulators suggest that the end is near for Libor, the financial benchmark that was at the heart of a global market-rigging scandal.
The Financial Conduct Authority is urging banks to find an alternative to the London Interbank Offered Rate after 2021 as a dearth of financial transactions puts its relevance into question.
The rate has been steeped in scandal, but Financial Conduct Authority chief Andrew Bailey said Thursday that it's the sustainability of the rate that is in question "not because we suspect further wrongdoing or have any evidence of such."
Libor is the rate banks use to borrow from one another and is used to price services such as mortgages, bonds and consumer loans globally. In 2012, it emerged that employees at several global banks had colluded to manipulate the rate to their own advantage. Investigations in the U.S., Britain and elsewhere led to fines as well as the resignation of Barclays Chief Executive Officer Bob Diamond, among others.
The Bank of England has suggested it be replaced with another index average.
Bailey said that having to move to another system after 2021 would give banks enough time to adapt and "reduce the risks and costs of a more sudden change."
"The planning and the transition must now begin," he said in a speech in London.
-- The Associated Press
Jazzercise embezzler gets 7-year term
VISTA, Calif. -- A Southern California woman who embezzled about $1 million from the Jazzercise company has been sentenced to more than seven years in prison.
The San Diego Union-Tribune reported that Sherri Potts was sentenced Tuesday.
Potts was finance director of the Carlsbad-based exercise business for about nine years.
Authorities say the Fallbrook woman embezzled to finance personal expenses and a gambling habit.
The thefts were discovered after Potts was let go from the company in 2014.
She was arrested last fall and pleaded guilty in March to grand theft, forgery and fraudulent appropriation.
-- The Associated Press
GE's Pennsylvania plant to cut 575 jobs
General Electric Co., under pressure from an activist investor to cut costs, plans to end most locomotive manufacturing at a century-old Pennsylvania factory during a sharp downturn in the domestic rail market.
As many as 575 jobs would be eliminated from the Erie plant through 2018 as GE shifts production for international customers to a lower-cost facility in Fort Worth , said the head of the company's transportation business. Workers in Pennsylvania were told Thursday morning of the proposal, which is subject to a 60-day bargaining period with union officials.
"We've been operating in a challenged North American locomotive market," Jamie Miller, chief executive officer of GE Transportation, said in a telephone interview. "This action is taken so we can be as competitive as we can be."
Trimming costs is a priority across GE as it looks to strengthen operations after several quarters of weak earnings and a slumping stock price. The Boston-based manufacturer agreed earlier this year to deeper cost cuts through next year after discussions with shareholder Trian Fund Management, the company co-founded by Nelson Peltz.
About 2,000 jobs will remain in Erie, which is still the largest GE Transportation site, Miller said. While some component manufacturing will stay, the facility will be focused primarily on design, engineering and prototyping. No jobs are moving overseas, she said.
-- Bloomberg News
Spinoffs in Fiat Chrysler CEO's final plan
Fiat Chrysler Automobiles NV will evaluate whether to separate from some of its businesses in a strategy that Chief Executive Officer Sergio Marchionne will unveil in early 2018 as his last major project for the carmaker.
"The spinoff story is not over at Fiat Chrysler," Marchionne told analysts Thursday during a conference call after the Italian-American carmaker reported a 16 percent increase in second-quarter earnings. "We have an obligation to purify that portfolio." The CEO said he'll present a five-year business plan through 2022 in the first half of next year. He reiterated that he'll step down in 2019 and then have "zero involvement" in running the company.
Marchionne, 65, has dropped a yearslong search for a merger in favor of focusing on eliminating Fiat Chrysler's debt by the end of next year. The manufacturer's previous spinoffs to shareholders have included super-car maker Ferrari NV and the truck and tractor producer now called CNH Industrial NV. A possible candidate for a deal is auto-parts unit Magneti Marelli, and there's no "industrial restriction" on eventually separating Italian luxury brands Alfa Romeo and, less likely, Maserati, the CEO said Thursday.
-- Bloomberg News
Business on 07/28/2017