CLOs

Base salaries for regular workers in Japan rose by a record, a further indication of progress toward a positive economic cycle that will support market speculation of a near-term rate hike by the central bank, reports Bloomberg (Dec. 5, Yokoyama). Base pay for full-time workers increased by 2.8 percent in October from a year ago, the biggest gain for comparable data back to 1994, the labor ministry reported Friday. Growth in nominal wages for all workers accelerated to 2.6 percent from 2.5 percent the previous month.

From "Japan Base Pay Gains by Record, Keeps Door Open for BOJ Hike"
Abstract News © 2024 SmithBucklin

Chevron will cut capital spending next year for the first time since the pandemic-fueled oil crash, reports the Financial Times (5 December, McCormick), dialing back its shale expansion plans. It is the first time Chevron has lowered spending since 2021, when producers were reeling from a pandemic-induced collapse in energy demand, and comes as oil prices retreat on fears of oversupply in the global market. The OPEC cartel announced on Thursday it would continue to hold back supplies, in another sign of producer concern about the oil market’s health.

From "Chevron Cuts Capital Budget for First Time Since Pandemic Oil Crash"
Abstract News © 2024 SmithBucklin

US President-elect Donald J. Trump named Gail Slater, a veteran tech and media policy adviser, to the top antitrust post at the US Justice Department, reports the New York Times (5 December, Kang), as he vowed to continue a crackdown on the power of the biggest tech companies. Slater, if confirmed as assistant attorney general for the antitrust division, would inherit lawsuits to break up Google’s search monopoly and ad tech dominance, as well as a case accusing Apple of making it hard for consumers to switch software and hardware.

From "Trump to Nominate Gail Slater to Lead Justice Department’s Antitrust Efforts"
Abstract News © 2024 SmithBucklin

A federal judge rejected a deal that would have let Boeing plead guilty to a felony conspiracy charge and pay a fine for misleading US regulators about the 737 Max jetliner before two of the planes crashed, reports the Associated Press (5 December, Koenig). US District Judge Reed O’Connor in Texas said that DEI policies in the government and at Boeing could result in race being a factor in picking an official to oversee Boeing’s compliance with the agreement. The ruling creates uncertainty around criminal prosecution of the aerospace giant in connection with the development of its bestselling airline plane.

From "US Judge Rejects Boeing’s Plea Deal in a Conspiracy Case Stemming from Fatal Plane Crashes"
Abstract News © 2024 SmithBucklin

Atmos Energy announced that Karen E. Hartsfield, currently senior vice president, general counsel, and corporate secretary, will retire in late 2025, according to a release published by Business Wire (5 December). She will serve in her current role until December 31, 2024, and then move into a Senior Advisor position, continuing to serve on the company’s Management Committee. Hartsfield joined Atmos Energy in June 2015 and assumed her current role in August 2017. Jessica Bateman Pulliam has been appointed to replace her. Bateman Pulliam will join Atmos Energy from Baker Botts L.L.P. where she currently serves as a partner.

From "Atmos Energy Announces Retirement of GC Karen E. Hartsfield"
Abstract News © 2024 SmithBucklin

A McKinsey & Co. subsidiary agreed to pay more than US$122 million to resolve allegations it paid bribes to officials at two South African state-owned companies to help the firm win millions of dollars of consulting work, reports the Wall Street Journal (6 December, Smagalla). McKinsey Africa was charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and as part of the settlement, the subsidiary entered into a three-year deferred prosecution agreement, according to prosecutors in Manhattan. Vikas Sagar, a former McKinsey senior partner in the consulting firm’s Johannesburg office who participated in the bribery scheme, pleaded guilty in December 2022 to one count of conspiracy to violate the FCPA, according to the US Justice Department. Sagar’s guilty plea was unsealed on Thursday. McKinsey said it conducted an investigation into the conduct of Sagar and terminated his employment more than seven years ago, adding that it has “zero tolerance” for such conduct. Prosecutors said that McKinsey Africa, through Sagar, agreed to pay bribes to officials who at the time worked for Transnet SOC, South Africa’s state-owned rail, port and pipeline company, and Eskom Holdings SOC, the country’s state-owned power company. In exchange for the bribes, the consulting firm allegedly received confidential, nonpublic information about the awarding of consulting contracts between at least 2012 and 2016. The firm, according to prosecutors, then set proposals for consulting engagements with the knowledge that the South African consulting firms McKinsey had partnered with would pay a portion of their fees as bribes to Transnet and Eskom officials. The firm ultimately earned around US$85 million in profit as a result of the bribery scheme, prosecutors said.

From "McKinsey Subsidiary to Pay US$122 Million to Settle Bribery Allegations in South Africa"
Abstract News © 2024 SmithBucklin

Volkswagen (VW) Group CEO Oliver Blume warned staff that urgent measures are needed to secure the company’s future amid heightened competition, price pressure, and high labor costs, reports the Wall Street Journal (5 December, Chopping). In a speech to staff at the German auto giant’s Wolfsburg headquarters, Blume said the company has made good progress streamlining its operations and creating synergies while the design and quality of its cars has improved but labor costs and capacity must now be reduced. Meanwhile, workers warned of more strikes if plant closures remain part of wage negotiations. Europe’s car sector is in turmoil, with thousands of jobs on the line at automakers and their suppliers, all suffering from a weakening market on the continent and a slower-than-expected take-up of electric vehicles. “The price pressure is immense,” Blume said, adding VW had to work its way back up sales rankings in China, its single biggest market and a stable earnings contributor until recently, and that labor costs in Germany were too high to compete. “We therefore urgently need to take measures to secure the future of Volkswagen. Our plans for this are on the table." Daniela Cavallo, who leads Volkswagen’s labor council, said that all sides, including management and shareholders, had to make sacrifices.

From "VW CEO Says Urgent Measures Needed to Save Company"
Abstract News © 2024 SmithBucklin

China is imposing sanctions on 13 US military firms, reports Reuters (5 December, Lee, Cao), in response to the sale of US arms to Taiwan. In addition, China will freeze the assets of six executives from five companies, including Raytheon, BAE Systems, and United Technologies, in China, and bar their entry to the country. Chinese organizations and individuals are also prohibited from dealing with them.

From "China Slaps Sanctions on 13 US Military Firms over Taiwan Arms Sales"
Abstract News © 2024 SmithBucklin

Southwest Airlines is the latest airline lifting its revenue guidance for the final quarter of the year as travel demand holds steady, reports the Wall Street Journal (5 December, Seal). The carrier on Thursday said it now expects a key revenue measure to rise up to seven percent in the fourth quarter, up from previous guidance for 3.5 percent to 5.5 percent growth. The increase in revenue per available seat mile is based on both higher-than-expected demand and benefits from changes to the company’s revenue management, Southwest said. Southwest raised the revenue target it set just weeks ago when it reported stronger-than-expected third-quarter profit and sales and said it reached a truce with activist Elliott Investment Management, which had been pressuring the airline to boost its financial performance.

From "Southwest Airlines Lifts Revenue Outlook on Resilient Travel Demand"
Abstract News © 2024 SmithBucklin

Mali’s government has issued an arrest warrant for money laundering against Barrick Gold Corp. Chief Executive Officer Mark Bristow, reports Bloomberg (5 December, Katarina, Clowes), amid an escalating dispute over mine revenues in the nation. The authorities in Mali are also seeking to arrest Abbas Coulibaly, the general manager of the Canadian mining company’s Loulo-Gounkoto complex, say insiders. Four Barrick employees were arrested last month in a spat over how to divide the economic benefits of Mali’s biggest gold mine. Barrick issued a statement on Nov. 26 refuting the charges against its workers and saying it will continue to engage with the Malian government to find an amicable settlement that would ensure the long-term sustainability of the operations. Barrick has offered US$370 million to settle a tax claim arising from a government audit. The government has threatened to take back Barrick’s Loulo mine concession when the current permit expires in 2026. The warrant for Bristow comes after Resolute Mining Ltd. CEO Terry Holohan and two other employees were arrested last month. They were released after the company agreed to pay US$160 million to resolve a tax dispute.

From "Mali Issues Arrest Warrant for Barrick Gold CEO Mark Bristow"
Abstract News © 2024 SmithBucklin

The European Commission Wednesday issued a retention order to TikTok to preserve data on the Romanian election and for upcoming EU elections, reports UPI (5 December, Cunningham), amid suspicion of Russian interference in the vote. “We ordered TikTok today to freeze and preserve all data and evidence linked to the Romanian elections, but also for upcoming elections in the EU,” said Henna Virkkunen, Executive Vice President for Tech Sovereignty, Security, and Democracy. “This preservation order is a key step in helping investigators establish the facts and adds to our formal requests for information which seek information following the declassification of secret documents yesterday.” The commission has also stepped up monitoring of TikTok under the Digital Services Act. Data preservation was ordered in case the commission decides to investigate further. The order requires TikTok to “preserve internal documents and information regarding the design and functioning of the app’s recommender systems, as well as the way it addresses the risk of intentional manipulation through coordinated inauthentic use of the service.” The commission wants TikTok to specifically preserve any data regarding any systematic infringement the app’s terms of service prohibiting the use of monetization features for political content promotion.

From "EU Orders TikTok to Preserve Romanian Election Data amid Suspicion of Russian Interference"
Abstract News © 2024 SmithBucklin

Rocket Mortgage is pushing back against US accusations that it is to blame for low appraisals by outside firms that allegedly discriminated against a Black borrower, reports Bloomberg (5 December, White). The largest US retail mortgage lender is asking a federal court to fix “conflicting” regulatory mandates that require mortgage providers to use and oversee independent appraisers but keep hands off the results, Rocket Mortgage said Thursday. The company, a unit of Detroit-based Rocket Cos., sued the US Department of Housing and Urban Development (HUD) and asked the judge to rule that lenders aren’t liable for the actions of appraisal firms. HUD in July alleged that Rocket Mortgage and several appraisal companies undervalued the property of a Denver-area homeowner because she was Black.

From "Rocket Sues HUD to Dismiss Home Appraisal Bias Allegations"
Abstract News © 2024 SmithBucklin

The poor performance of General Motors’ Chinese joint ventures is forcing the company to write down assets and take a restructuring charge totaling more than US$5 billion in the fourth quarter of this year, reports the Associated Press (4 December). The automaker said that it will cut the value of its equity stake in the ventures by US$2.6 billion to US$2.9 billion when it reports its results early next year. In addition, GM will take US$2.7 billion worth of restructuring charges, most of it during the fourth quarter. Still, GM expects to post a full year net profit of US$10.4 billion to US$11.1 billion. The moves mark the culmination of years of decline in the market by the Detroit automaker and its Chinese partner, SAIC Motor Corp. Chinese automakers have flourished thanks to massive government subsidies and a flurry of new models that consumers have snapped up. That has forced foreign carmakers into retreat. Over the past six years, US, Japanese, Korean, and European automakers have closed or sold plants and walked away from joint ventures.

From "China Losses Force General Motors to Take over US$5 Billion in Charges"
Abstract News © 2024 SmithBucklin

Negotiators for EU institutions agreed to a compromise on Tuesday on a ban on the import of commodities linked to deforestation, which will be delayed by a year but without changes proposed by EU lawmakers, reports Deutsche Welle (4 December, Brändlin). The European Commission in October proposed a 12-month delay until Dec 30, 2025 after complaints from 20 EU countries, some companies and countries such as Brazil and Indonesia. EU governments backed the move. However, EU lawmakers voted last month not only to delay the EU Deforestation Regulation, but also to water it down by proposing a new "no risk" category of countries with vastly reduced checks. These would principally have been EU members. Negotiators for EU governments and lawmakers met on Tuesday and agreed on the 12-month delay, but with no changes to the existing rules. Large operators and traders will have to respect the obligations from Dec 30, 2025, and small enterprises six months later, a delay designed to allow companies around the world to adapt.

From "EU Agrees to Delay Deforestation Law"
Abstract News © 2024 SmithBucklin

The world economy is set for steady growth in the next two years if resurgent protectionism does not derail a recovery in global trade, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday, Reuters (4 December, Thomas) reports. The world economy is poised to grow 3.2 percent this year and 3.3 percent in 2025 and 2026 as lower inflation, job growth, and interest rate cuts help offset fiscal tightening in some countries, the OECD said in its latest Economic Outlook.

From "OECD Warns of Protectionism Risk to Global Growth Outlook"
Abstract News © 2024 SmithBucklin

Italian liquor maker Davide Campari-Milano nominated Simon Hunt as its new chief executive officer, reports the Wall Street Journal (5 December, Figueras), months after Matteo Fantacchiotti resigned from the role for personal reasons. Hunt will succeed Paolo Marchesini, chief financial and operating officer, and Fabio Di Fede, general counsel and business development officer. They were appointed as interim co-CEOs in September after Fantacchiotti’s resignation, which came just months after taking the helm of the group. The maker of Aperol and other aperitifs said Wednesday that it will appoint Hunt as CEO in a general meeting, planned for January 15. In its latest results for the third quarter, Campari reported a drop in profit and sales below analysts’ prospects, and said its performance was hurt by muted sales in the United States and poor weather in Europe. Coupled with the wider drop in consumption, the potential implementation of tariffs in the United States adds to the sector’s worries. Cross-border sales represent a significant part of sales for European spirits makers, with Campari having meaningful exposure to US imports from Mexico. The industry is also grappling with a challenging environment in China, another key market for European distillers, after the country’s authorities in October implemented provisional tariffs on brandy imports from the European Union. The move came after Brussels decided to impose duties on Chinese electric vehicles, the latest tit-for-tat in a trade dispute.

From "Aperol Maker Campari Nominates Simon Hunt as CEO"
Abstract News © 2024 SmithBucklin

French nuclear firm Orano says the military authorities in Niger have taken control of its uranium mining operations in the country, reports BBC News (4 December, Ross, Nesta). After seizing power in a coup in July last year, Niger’s military rulers said they would revamp rules regulating the mining of raw materials by foreign companies. In June, they withdrew Orano’s permit to exploit one of the world’s largest uranium deposits. Orano then suspended production. The country accounts for about five percent of global uranium output, making it one of the world’s top 10 producers of a vital raw material in the generation of nuclear power. Before the coup, Niger accounted for 15-20 percent of France’s uranium imports. Orano has for months been warning of interference in the running of its local unit, Somair, in which Niger has a 36.6 percent stake. The company said it had been struggling to export uranium because Niger’s border with Benin was closed for security reasons.

From "Niger Junta Takes Control of French Uranium Mine"
Abstract News © 2024 SmithBucklin

Brian Thompson, the chief executive of UnitedHealth’s insurance arm, was fatally shot outside a hotel in New York City Wednesday in what is being called a targeted attack, reports the Wall Street Journal (4 December, Lukpat, Mathews). UnitedHealth Group is a healthcare giant that includes the biggest US health insurer as well as doctor groups and other assets. Thompson was the CEO of its insurance unit, UnitedHealthcare. The company is based in Minnesota, but top executives were in New York on Wednesday for its annual investor day. Thompson, a longtime UnitedHealth veteran, took over as leader of the insurance unit in 2021. Before that, he oversaw the insurer’s Medicare and Medicaid businesses. He began working at the company in 2004.

From "UnitedHealth Executive Shot Dead in Targeted Attack"
Abstract News © 2024 SmithBucklin

The number of companies leaving the London Stock Exchange due to takeovers has hit the highest level for more than a decade amid growing concerns about the UK’s attractiveness to investors, reports Telegraph.co.uk (4 December). Forty-five companies have de-listed so far this year due to mergers or acquisitions, the highest since 2010, according to figures compiled by Bloomberg. It comes as one of the biggest companies on the exchange is facing pressure to quit. Activist investor Palliser Capital has told mining giant Rio Tinto that the FTSE 100 company’s Anglo-Australian structure had cost shareholders £39.5 billion and demanded an independent review of the arrangement.

From "London Stock Market Exodus Hits Worst Level in 14 Years"
Abstract News © 2024 SmithBucklin

Brazilian cosmetics maker Natura&Co will once again start to weigh what to do with its Avon business outside Latin America, reports Reuters (5 December, Romani). Natura had halted those plans in August, when its Avon Products unit, a US-based non-operating holding that it bought in 2020 as part of its acquisition of Avon, filed for Chapter 11 bankruptcy protection. Natura said on Wednesday that a US court overseeing the bankruptcy proceedings approved a previously announced agreement between Natura and Avon Products creditors, as well as a deal over Avon's operations outside the United States, allowing for Natura to again resume its analysis of what to do with the unit. Natura said its options for the Avon business outside Latin America could include partnerships, a spin-off, or a sale. Natura had first announced in February it was mulling its options, which could spawn a new listed firm managing the business. Avon's US business, which was never owned by Natura, would not be part of the deal.

From "Brazil's Natura&Co Resumes Studies for Avon Deal After US Court OKs Creditors Agreement"
Abstract News © 2024 SmithBucklin