Company news in brief

29 May 2020 | Business

‘SAA can still be saved with funding’

South African Airways (SAA) can still be saved if it gets the necessary funding, the state-owned airline's administrators said, adding they were talking to the government about a potential restructuring.

The comments in a letter to affected parties seen by Reuters mark a shift in tone from a recent appearance before a parliamentary committee, when the administrators said a wind-down of the business was a probable outcome.

"There is still a reasonable prospect of rescuing SAA, subject to the receipt of ... requisite funding," the letter read. "That will be set out in the business rescue plan to be published in due course."

The administrators are still expected to push for a wind-down if more funding is not forthcoming.

SAA's roughly 5 000 employees have been on unpaid leave since the beginning of May, and the administrators have said the airline does not have enough cash to pay salaries. – Nampa/Reuters

Exxon shareholders reject splitting roles

Exxon Mobil Corp shareholders soundly rejected climate-related proposals and splitting the chairman and chief executive's roles at the oil major's shareholder meeting on Wednesday.

Climate activists had swung behind efforts to split the roles of chief executive and chairman after prior defeats on resolutions seeking to make it more accountable to shareholders on climate change risk. This year's vote on an independent chair collected 32.7% of the vote, down from nearly 41% last year.

Influential proxy adviser Institutional Shareholder Services this year recommended a vote against the independent chairman resolution.

That was enough to overcome support for the measure by Exxon's second-largest shareholder, BlackRock Inc, which said it voted in favour of an independent chairman and against the re-election of two directors over the company's approach to climate risks.

Unlike European rivals, Exxon faces little government pressure to curb greenhouse emissions or strike deals with climate activists. Under CEO Darren Woods, it blocked six climate resolutions from this year's ballot, encouraging activists to seek the split. – Nampa/Reuters

Chevron to cut up to 15% of staff

Chevron Corp will cut 10% to 15% of its worldwide workforce as part of an ongoing restructuring at the second-largest US oil producer.

The oil producer previously disclosed a 30% reduction in its 2020 spending and some voluntary job cuts amid this year's sharp drop in oil prices and lower demand for oil and gas due to the Covid-19 pandemic.

Chevron, which has 45 000 employees, expects to remove about 10% to 15% of its global staff to "match projected activity levels," spokeswoman Veronica Flores-Paniagua confirmed.

The about 4 500 to 6 750 job cuts envisioned are to "address current market conditions," with varying impact on each business unit and region, said Flores-Paniagua. Most reductions will take place this year.

"This is a difficult decision and we do not take it lightly," she said. – Nampa/Reuters

Lufthansa rejects EU conditions on bailout

Lufthansa's US$10 billion government bailout was thrown into doubt on Wednesday after the German airline's supervisory board refused to accept the conditions attached by Brussels.

The board, which had been expected to sign off on the aid, instead refused EU requirements that Lufthansa permanently give up take-off and landing slots at Frankfurt and Munich airports, where it commands a two-thirds market share.

The bailout plan nevertheless remains "the only viable alternative" to insolvency, Lufthansa said, and negotiations will continue over EU demands that would "lead to a weakening" of its airport hubs as well as its ability to repay loans.

The European Commission had "no comment on the specific case", a spokesperson said.

Terms discussed with Brussels included the forfeiture of 72 slots used by 12 of 300 jets based at the two airports, a source familiar with the matter said. But whereas Lufthansa wanted to reclaim the slots after repaying aid, the Commission sought permanent concessions, the person said. – Nampa/Reuters

Nissan plans to slash costs

Nissan Motor Co outlined a new plan on Thursday to become a smaller, more cost-efficient carmaker after the coronavirus pandemic exacerbated a slide in profitability that culminated in its first annual loss in 11 years.

Under a new four-year plan, the Japanese manufacturer will slash its production capacity and model range by about a fifth to help cut 300 billion yen (US$2.8 billion) from fixed costs.

It will shut plants in Spain and Indonesia, leave the South Korean market and pull its Datsun brand from Russia as part of a strategy unveiled on Wednesday to share production globally with its partners Renault and Mitsubishi Motors.

Chief executive Makoto Uchida said improving the company's cash flow was its biggest challenge. He reiterated that Nissan's cash liquidity was good even though it had negative free cash flow of 641 billion yen in the year ended in March.

Nissan declined to give any forecasts for its current financial year which started in April due to the uncertainty created by the coronavirus pandemic. It also declined to give details on how many jobs it was cutting. – Nampa/Reuters