Company news in brief

SA execs donate some pay

The bosses of South Africa's Vodacom and lender Absa will donate a third of their salary for the next three months to a support fund set up in response to the coronavirus outbreak, the company said on Sunday.

Shameel Joosub, Vodacom chief executive, and Daniel Mminele, Absa chief executive, join the heads of other major companies, including lenders FirstRand and Nedbank, in heeding calls from president Cyril Ramaphosa for others to follow the government's lead.

Ramaphosa earlier said top officials' salaries would be cut by the same amount for the same period. At Absa, chief financial officer Jason Quinn and a number of other top executives will also donate the same portion of their salaries.

Joosub received R11.5 million in base pay and benefits in 2019, according to the company's annual report. Mminele only took the helm at Absa earlier this year and there is no information about his pay currently available.

Another South African lender, Standard Bank, said on Saturday a mechanism would be set up to allow its leaders and executives to make voluntary donations to the fund. – Nampa/Reuters

Alrosa reports 60% gem sales fall

Russian diamond producer Alrosa on Friday reported a 60% fall in March sales versus a year earlier citing the spread of the coronavirus for the fall in demand.

The virus also hit the diamond trade, which traditionally involves a lot of travelling, with border closures and quarantine measures across the world.

The world's largest producer of rough diamonds by carats tried to offset the crisis partially by offering options for online trade and relaxed payment terms for its contracts in March.

However, March sales still fell 56% versus February and long-term contracts with several customers were terminated as they switched to spot purchases, the state-controlled company said in a statement.

“In this turbulent environment, the situation at the start and at the end of our trading session in March was completely different,” Alrosa said.

It refrained from any projections for April, saying only that there are hopes that demand in the Chinese market will be the first to start recovering as China eases quarantine measures. – Nampa/Reuters

Nissan may cut 1 mln cars

Nissan Motor Co Ltd's management has become convinced the struggling automaker needs to be much smaller and a restructuring plan due out next month would likely assume a cut of 1 million cars to its annual sales target, senior company sources said.

Even before the spread of the coronavirus, Nissan's sales and profits had been slumping and it was burning through cash, forcing it to row back on an aggressive expansion plan pursued by ousted leader Carlos Ghosn. The pandemic has only piled on urgency and pressure to renewed efforts to downsize.

No new sales target has been finalised and it remains unclear whether one will be formally disclosed.

But Nissan's plans for restructuring through to March 2023 should be based on the assumption that it would only be able to return to annual sales of 5 million cars by then, two sources said, adding this would entail a large reduction to manufacturing capacity.

Shrinking its sales target by 1 million vehicles would equate to closing three to four more assembly plants and shedding thousands more jobs on top of already announced plans to cut its workforce by 10%. The cutbacks would also ripple through to its suppliers and dealers. – Nampa/Reuters

Airbus shelves plan for new line

Airbus has shelved plans to create a new assembly line in Toulouse, France, for its A321 airliner as the company wrestles with the coronavirus crisis.

Airbus announced plans for the line in January when its problem was how to meet record demand for the jet from its site in Hamburg, Germany, which has struggled to accommodate the extra hours and complexity involved in making Airbus's most ambitious single-aisle jet.

Although the plan to convert the company's A380 production plant in Toulouse, which is winding down, remains on the table, the urgency to go ahead with it has disappeared with the financial pressures of the coronavirus crisis, industry sources said.

“Our plans for an A321 line in Toulouse are paused, on hold,” an Airbus spokesman confirmed. “When we see rates going up again, we will reconnect to the plans.”

Chief executive Guillaume Faury told reporters last week that Airbus would “hibernate” new investments to save cash. – Nampa/Reuters

Kia considers halting Korean plants

Kia Motors Corp told its labour union in South Korea that it wants to suspend operations at three of its domestic factories as the coronavirus outbreak weighs on exports to Europe and the United States, a union official said yesterday.

Hyundai Motor halted a line producing its Tucson sport utility vehicle in the southeastern city of Ulsan from April 13-17.

Hyundai and Kia Motors have suspended operations at most of their factories outside South Korea and China as the coronavirus spreads fast beyond Asia.

Government restrictions on movement to slow the spread are impacting consumer spending worldwide.

South Korea's exports for the first 10 days of April plunged 18.6% from the same period a year earlier, far below the 20.8% jump over March 1-10. Shipments of vehicles and vehicle components during the period tumbled 7.1% and 31.8% respectively. – Nampa/Reuters