Boeing blows off billion dollar deal with Embraer, experts expect record deficit in the US – and further economic news

(dpa) The American aircraft manufacturer Boeing will not take over the Brazilian rival Embraer. The purchase of four fifths of Embraer’s commercial aircraft business for $ 4.2 billion failed, Boeing said on Saturday. In the end, it was not possible to agree on the conditions of the takeover in two-year negotiations, said Boeing manager Marc Allen. This is “deeply disappointing”.

The Boeing-Embraer deal broke.

David Becker / Reuters

The competition authorities had gradually waved the deal through, with the exception of the European Commission, which had recently examined it. With the purchase, Boeing would have incorporated Embraer’s range of smaller aircraft. That would have strengthened the Americans in competition with the European rival Airbus.

Boeing does not mention the coronavirus crisis in the report. But it is clear that the crisis is severely affecting the aircraft manufacturers’ business, with uncertain long-term consequences. For Boeing there is also the big problem with the 737 Max. The model has been banned from takeoff since two plane crashes worldwide. Boeing presents its quarterly results on April 29.

Picture taken on May 17, 2019: Air France aircraft parked at Paris Charles de Gaulle airport near Paris.

Picture taken on May 17, 2019: Air France aircraft parked at Paris Charles de Gaulle airport near Paris.

Christophe Ena / AP

(dpa) The aviation group Air France-KLM can count on government grants of € 9 to 11 billion in the Corona crisis. France supports Air France with loan aid of € 7 billion. The Dutch government promised its sister company KLM € 2 to 4 billion.

France will grant Air France € 3 billion in government loans, Economy Minister Bruno Le Maire said on Friday on TV channel TF1. In addition, there would be state guarantees for € 4 billion bank loans. “We have to save our national airline,” said Le Maire. But: “This is not a blank check.” Air France must become more profitable and become the airline that is the most careful with the environment worldwide.

Air France-KLM said that the state loan would be granted as a shareholder loan for four to a maximum of six years. The bank loan was granted for twelve months and should also be able to be extended twice for one year. The financial aid still had to be approved by the EU Commission.

Air France-KLM is also considering increasing its share capital and the French government is considering a stake in it, the company said. Le Maire assured that no nationalization was planned. The French state is currently the largest shareholder of Air France-KLM with 14.3%.

In addition to the aviation group, France also wants to help the automotive industry. Le Maire said the government is working on guarantees for bank loans of up to € 5 billion for Renault. Not only have airlines worldwide suffered severe crises with the collapse of air traffic due to the corona pandemic, the automotive industry is also suffering from slumps in production and sales. The French government is also planning further aid for the restaurants and their employees affected by the Corona crisis.

(Reuters) According to independent experts from the US Congress, the American budget deficit will reach a record 3.7 billion this fiscal year. $ rise. It will almost quadruple. The reason is the consequences of the coronavirus epidemic on the economy and the gigantic government aid programs, as the Congress Budget Office (CBO) announced on Friday (local time).

The Capitol Building in Washington on April 22nd. There is the seat of the American Congress.

The Capitol Building in Washington on April 22nd. There is the seat of the American Congress.

Andrew Harnik / AP

The American economic output (GDP) is therefore likely to collapse by almost 40% annually in the second quarter. The unemployment rate will peak at 16% and will remain in double digits until 2021. President Donald Trump recently signed a fourth aid package to fight the coronavirus crisis, triggering a further increase in the budget deficit.

The government is also considering state participation in American energy companies, which are under pressure due to low oil prices. “We’re considering a number of alternatives,” said Treasury Secretary Steven Mnuchin in Washington on Friday (local time). Trump also said he wanted to help the industry. He suggested that the government buy both US fuel and airline tickets in advance. “The energy business is very important to me and we will build it up,” said Trump. This should increase the country’s budget deficit even further.

(dpa) The EU Commission has rejected requests by the German government to restrict consumer rights in the event of travel cancellations due to the corona pandemic. The responsible Commissioner for Justice and Consumer Protection, Didier Reynders, told the newspapers of the Funke Media Group (Saturday) that he was aware of the unprecedented crisis for the tourism sector in Europe. However, decisions by the member states would have to comply with EU law and be coordinated within the EU. Under EU law, consumers have the choice of accepting a voucher or preferring a refund.

The German government wants a mandatory voucher solution and continues to campaign for it. “The Federal Ministry of Justice and Consumer Protection has taken note of the Commission’s first assessment of the proposed voucher solution,” said a ministry spokesman for the “Handelsblatt” (Saturday). The Federal Government would continue to work on a European level for a voucher solution that complies with European law, which in the current situation also takes due account of the interests of consumers.

(dpa) Volkswagen plans to gradually resume car production in Mexico after a stop as a result of the coronavirus pandemic in mid-May. According to preliminary planning, cars could be built again in the plant in the state of Puebla from May 18, the Mexican subsidiary of the German company said on Friday (local time). The restart at the other location in the North American country, in Guanajuato, depends on the approval of the authorities – the date will be announced in the coming days.

On March 20, Volkswagen Mexico announced that it would temporarily cease production due to the global pandemic until April 12. Later it was said that it would start again in May.

On Thursday, Volkswagen kicked off the first tapes in Zwickau, Saxony, after a break of weeks, but at a much slower pace than usual. Production in the Slovakian capital Bratislava started again on Monday. The restart at the Wolfsburg main plant is planned for next week. After the Germans, further European and American locations are to continue work. The other German carmakers are also preparing to restart. Daimler started up its plants on Monday.

According to official data, 12,872 people in Mexico have now been tested positive for the new type of corona virus, 1221 of them died accordingly. The pandemic is expected to peak in the Latin American country in the second week of May.

The VW plant in Puebla, a good 100 kilometers southeast of Mexico City, is one of the largest in the group worldwide. Last year, more than 440,000 Tiguan, Jetta and Golf models were manufactured there. The factory in Guanajuato produced over 330,000 engines. The group employs around 13,000 people in Mexico.

Volkswagen is experiencing the consequences of the crisis financially, as the group announced last week. The operating result fell from € 3.9 billion in the first quarter of 2019 to € 900 million.

American industry has suffered severe losses: employee of a bicycle factory in Manning, South Carolina.

American industry has suffered severe losses: employee of a bicycle factory in Manning, South Carolina.

Randall Hill / Reuters

(awp / Reuters) The American industry is experiencing a massive drop in orders in the wake of the corona crisis. Orders for consumer goods such as airplanes and machines dropped 14.4% in March, the Ministry of Commerce announced on Friday. Economists surveyed by Reuters had only expected a drop of 11.9%. In February there was still an increase of 1.1%.

The American economy is facing a recession due to weaker demand. “The figures from the Ministry of Commerce make it clear that GDP growth will be significantly impacted in the first quarter,” said Helaba economist Ralf Umlauf.

For the data on the gross domestic product (GDP) coming up in the first quarter on Wednesday, experts expect an annualized decrease of 4.1%. «The real economic data is increasingly dominated by the corona crisis. This will probably still show itself in April and only with the May data can there be hope for positive growth rates again, »forecast circulation. The American state wants to help the economy get over the crisis with aid packages worth billions.

(dpa) Credit card provider American Express suffered a slump in profits as a result of the corona pandemic. In the first quarter, earnings decreased 76% year over year to $ 367 million, the American financial firm said on Friday. The spread of the virus had a heavy impact on consumer spending from the end of February, said the company, which earns fees for card payments.

In addition, American Express increased credit default preparedness from $ 809 million to $ 2.6 billion, which weighed heavily on the balance sheet. “We are now in a different world,” warned CEO Stephen J. Squeri. The economic slowdown in the wake of the Corona crisis accelerated in April and had a “dramatic” impact on transaction volume. American Express is aggressively cutting costs in the face of burdens.

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