Home Business and Economics This Week In Business: Volkswagen, Ford, and More

This Week In Business: Volkswagen, Ford, and More

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Volkswagen To Invest $344M In Brazil

Shortly after American carmaker Ford announced plans to exit the heavy truck sector in Brazil’s Sao Bernardo do Campo, rival Volkswagen announced plans to invest $344M into their factory there. The investment will come from Volkswagen’s truck brand Scania, which grew their sales by nearly 31% in the first 4 months of 2019.

The new investment will start in 2021 and end in 2024. It also comes at a time when large car producers move away from Sao Paulo, due to tax cut incentives. Overall, since 2016, Scania has put nearly 2.6Bn reais ($641M) into investments in their production factory. This new investment targets their assembly line, as well as a way to introduce new trucks into Latin America.

Ford Announces Plans To Cut 7,000 Jobs

Following with more car news, American carmaker Ford announced plans to cut 7,000 jobs on Monday. In the statement, they announced the cut as a 10% cut to salaried workers, which includes nearly 2,300 domestic jobs. The plan will save nearly $600M a year. It is also the second major US-based carmaker to announce cuts. Earlier this year, GM announced a 14,000 job count, double that of Ford’s.

Ford intends to cut the jobs by the end of August. However, the cut will mainly target management-level positions. CEO Jim Hacket said, “We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few says to wrap up and say goodbye.”

Marathon Oil Fined $1.5M For Gas Release

British oil firm Marathon Oil received a nearly $1.5M fine for a North Sea gas leak. The leak occurred on Boxing Day 2015, and it released nearly 2 tons of methane gas into the atmosphere. No one was injured by the event. Pipework broke while the nearly 100 workers were preparing for Boxing Day celebrations.

The British Health and Safety Executive said, “Marathon Oil had failed to undertake any suitable and sufficient inspection of the pipework that would have allowed the company to identify the risk and prevent the hazard.”

T-Mobile-Sprint Merger Gets FCC Approval

T-Mobiles $26Bn acquisition of rival Sprint gained the approval of the FCC on Monday. This is a huge leap forward in the approval of the deal. If lawmakers approve the deal, the total number of carriers in the US would drop to 3. However, the deal doesn’t have total approval.

Many people have expressed a concern that the deal will lead to higher prices and lower quality. The FCC has yet to make an official ruling. However, they are expected to make a decision by early June.

HPE To Buy Supercomputer Maker Cray

In a $1.3Bn deal, Hewlett Packard Enterprise announced plans to buyout supercomputer producer Cray. HPE said the deal is an attempt to increase its federal business and academia footprint. They also expect the deal to close by the end of the first quarter in 2020. Cray produces supercomputers capable of handling massive data sets, converged modeling, simulation, artificial intelligence, and analytics workloads.

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