Volkswagen cuts 50,000 more jobs

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1:06Another 50,000 jobs are going as VW embarks on the biggest restructuring in its history. It's world business express from the BBC World Service. I am B.C. at DeBio. Also Kenya tells Tata Chemicals to pack up and leave and Microsoft puts time limits on its Xbox cloud service. The board of German car giant Volkswagen has approved another 50,000 job cart as part of the biggest restructuring in the group's history. It means VW now plans to share a hundred thousand jobs by 2030 and it's also considering the future of four of its German plans. Workers at VW's headquarters in Wallsburg have been reacting to the news. Well the future is in danger for all of us here so it's just difficult to say how long we can stay here and well we're all just trying to fight for it. We actually want to keep our jobs. We want to continue living securely and Germany with our families.

2:08Of course at first glance I don't think it's very nice but I believe that people will eventually find their place in other fields so it won't be the case that people are simply let go from here. Instead they'll find new jobs. Bicic scheme is a rector at the centre for automotive research in Duesburg, Germany. I asked her what's behind the decision. It is on too much capacity. It is as well to stay competitive in a global very very competitive market especially against the the light of the Chinese competition. And of course after the last two years where Mr. Trump convicted more tariffs so the overall cost situation got worse and this is why they had to move now. And what about profitability? Refinability overall is not bad. I mean we are not talking about a company going bankrupt, not at all, but to keep up the profitability to have sufficient funds for investment into the future. This is actually the point. So there will increase further but at the current point

3:11of time I'm saying the thing there are around 4% a little bit below which is still okay in comparison to the Chinese as well. But it is necessary to have more budget to be prepped for the future. Now for German plans are still potentially at risk. So how significant would factory closures be for VW and for Germany's wider car industry? It might be necessary to close one or two depending on how large they are and which products they provide or could provide for the future. But overall it is the they are trying not to close them because it would be a tough sign for overall German economy and of course for the society and especially the areas where those factories are in are quite on a weak structure. So Volkswagen very often is the main provider for jobs. But well, because in jobs and reducing costs be enough though, are there other things that VW could actually do to become more competitive again?

4:13I mean they are very competitive. It is just more obviously in Europe they are more competitive against the Chinese than the Chinese themselves. In China it's a different picture. So they need overall all the manufacturers need to comply with a regional requirement on product. And need to become overall fast. I'm not saying that there is the gold in China speed because it is not. But it is to be efficient overall at providing the right product for the right market. Bichik's came from the Centre for Automotive Research. Well let's bring in Randip Somal who's a fund manager at M&G Investment to look at the numbers there now. Rundee VW shares are up today. Why are markets responding so positively to these job cuts? Yeah, I mean that the restructuring has seen a 2.5% rise in its share price. But let's keep it into context. The shares are still down 22% this year for the reasons discussed around competition. The reason the shares are positive is that the whole board has agreed to these job losses both

5:13the Union Council and the Works Council which sit on VW's board. So there isn't going to be a standoff and the market has reacted positively to that. But we need to keep into context this business needs to become more efficient. Volkswagen manufactures 9 million cars with 630,000 employees. Toyota can do 11 million with just 380,000 employees. That's why it's important. Now let's talk about data out today which shows the US economy added 162,000 jobs in August, beating Wall Street expectations. So how does this affect the crucial Federal Reserve vote on interest rates later this month? It's been a big surprise. We weren't expecting this number to be so strong. We started to see some deterioration in July and especially with inflation rising oil going up with the Iran War. This is a knockout number. The equity markets and the bond markets in the US have reacted negatively because they think there's a likelihood now that the Fed will increase rates in September. It's the leisure, the construction and the manufacturing

6:17industries that are coming in really strong. Randips Amel of M&G Investments thank you. Now to Kenya, wet president William Routou has told one of India's major chemical companies, Tata Chemicals, to pack up and leave. The president says the company has not delivered enough benefits for Kenya, accusing it of exporting solar ash rather than processing more of the mineral locally. Our reporter Alfred Lastic explains how Mr Routou's decision unfolded. It spoke to me from Kenya's border in Darisalam. Those arguments is that they have been exporting for over 100 years and they don't see any impact in terms of employment, in terms of establishing industries within Kenya where they can use the refined chemicals. And so in July this year they are said that they didn't comply to the Kenya's mining laws and that their certificates were revoked and removed from operations. And in July 29th the ministry announced that they had to suspend mining

7:22activities in Lake Magadi. So that is the main argument. So from what you're saying there, it's been an ongoing issue. So has Tata Chemical said anything yet? So far we have not had anything no any respond yet to the public but they filed a case in court and the case is still active but so far they are not doing an activity in the Lake Magadi way. They've been extracting more than 350,000 tons of solar ash and exporting it to markets like India's Southeast Asia and even the Middle East. So it could be a big blow to those countries who receive such exports but also to Kenya as well. It's still a debate in Kenya and people are saying that the president didn't do the right decision. They followed some better ways and approaches that will be beneficial to both Kenya and also the benefiting countries including the company that has been operating on the ground.

8:23The BBC's Alfred Laster. Microsoft is putting monthly limits on how long some gamepad subscribers can stream games through Xbox Cloud service. From November, customers on its ultimate plan will get up to 15 hours of cold gaming a month. Premium users will get 10 hours and those on the basic tier just five before having to pay extra time. Microsoft says the limits are needed because of the rising cost of cold gaming and will allow it to keep investing in the service. And finally, it's a very happy birthday for the British studio behind Wallace and Gormid and Sean the ship. Ardman animations is celebrating 50 years since it was founded in Bristol by childhood friends Peter Lord and David Sproxton. Since then, its films have brought in more than $1.1 billion at the global box office and one for a Kalemi Awards. Saar Peter Lord spoke to the BBC this morning. Me and my partner David, we were at school together, we were school boys and we started

9:28out officially in 1976 and there are only plans to keep going. I would say that was it. And Hootman, some of us, we've been astonished and in fact just believing if anyone told us what the future held. And that's our show today. Please subscribe to get the latest search for world business expression. Don't want to miss anything. I am busy. I did buy it. Thank you for listening and have a good weekend. . Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at CME Group.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer

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