Finance

Analysts had expected a stronger decline in US productivity

The productivity of the US economy fell less than expected in the fourth quarter of 2020. The ratio of production and working time fell to the year extrapolated by 4.2 percent, as the US Department of Labor announced according to a second estimate.

Analysts had expected a more pronounced decline of 4.7 percent on average. In a first estimate, a decrease of 4.8 percent was determined. In the third quarter, productivity had increased by 4.4 percent.

Unit labor costs rose by 6.0 percent in the fourth quarter, extrapolated to the year. Economists had reckoned with 6.6 percent after an increase of 6.8 percent had been determined. In the third quarter they had fallen by 9.6 percent.

After months of stagnation, Iran has agreed to talks on unresolved nuclear issues. The International Atomic Energy Agency (IAEA) will meet with representatives of Tehran at the beginning of April, initially at the level of technical experts, said IAEA boss Rafael Grossi in Vienna on Thursday. He hopes to clear up uranium particles by the summer that may reveal secret past activity or unknown inventory levels.

Image: APA (AFP)

In view of this development, Germany, France and Great Britain put a resolution critical of Iran before the Board of Governors of the Atomic Energy Agency on hold. “Iran must now prove that it is serious about reviving the 2015 nuclear agreement and entering into a dialogue with the USA,” said the German Foreign Office in Berlin.

Tehran's Foreign Office spokesman Said Chatibsadeh welcomed the decision against a resolution: “Today's step not only enables the continuation of the cooperation between the IAEA and Iran, but could also pave the way for the treaty implementation of the nuclear agreement.”

In his latest Iran report, Grossi expressed his concern that the country was not providing an explanation of the origin of uranium particles. Iran has now agreed to a “focused and systematic” educational process, according to Grossi. “Some open issues are to be clarified”. Grossi hopes the talks will move forward despite the current Iranian restrictions on IAEA inspectors. “I am a career optimist,” the IAEA chief continued.

Germany, France and the UK had planned to submit a text to the IAEA Board of Governors on Friday expressing “serious concern” that Iran is now restricting the inspection of its nuclear facilities. At the same time, they wanted to call on Tehran to re-authorize the inspections in full “immediately”. Iran protested vehemently against the resolution. The government in Tehran said that the adoption of the text could jeopardize efforts to save the 2015 nuclear deal.

The five UN veto powers USA, France, Great Britain, Russia and China as well as Germany concluded the nuclear deal with Iran in June 2015 after years of negotiations. It is supposed to prevent the Islamic Republic from building nuclear weapons. However, the former US President Donald Trump terminated the agreement in 2018 and had new sanctions imposed on Iran, under which the country's economy is suffering massively. Since then, Tehran has gradually withdrawn from its obligations under the agreement.

Trump's successor Joe Biden wants to revive the deal but demands that Tehran comply with the deal before the sanctions are lifted. Iran, on the other hand, is making the lifting of US punitive measures a prerequisite for the country's full compliance with the agreement.

The fact that the FFP2 masks by Hygiene Austria are originally produced in China has caused irritation in the past few days. The supposedly Austrian masks are by no means the only products that have Austria on them, but in truth there is hardly any Austria inside. In fact, in a globalized world with production processes based on the division of labor, the origin of a product cannot in most cases be reduced to a specific country of origin. But of course, “Made in Austria” sells better than “Made in China”.

The red, white and red origin marking adorns more products in this country than would be customary in other countries. The reference to the Austrian origin of a product is often made through the indication “Made in Austria” or the “Austria mark”, which is awarded by the Chamber of Commerce. However, this does not mean that the product was actually manufactured entirely in Austria or that 100 percent of its raw materials come from Austria.

As a small economy, Austria shouldn't try to produce everything itself anyway, explains WIFO economist Michael Peneder. “100 percent 'Made in Austria' would be absolutely pointless. That would not be possible for Austria without a great loss of prosperity. “

No clear rules for the “Austria” label

In order to be allowed to adorn oneself with the label, a “considerable part of the added value must come from Austria”, explains Herbert Herzig of the WKÖ: “There is no clear legal regulation that standardizes the origin labeling.” EU, according to which a “Made in Austria” label can only be awarded if the domestic added value is at least 55 percent, proved to be ineffective and did not prevail.

Herzig does not consider demands for a clear catalog of criteria as to when “Made in Austria” really applies: “This would result in even more unanswered questions.” If a producer wants an Austria label for his product, he can contact the Chamber of Commerce request. The respective regional chamber issues a certificate of origin after testing the product. After that, it is the company's responsibility not to deceive the consumer. “If, for example, an Austrian manufacturer produces beef shredded beef as a finished product in Austria and markets it as such, so that the meat for it does not come from abroad.”

AMA: From birth to the slaughterhouse in Austria

According to consumer advocates, the AMA seal of approval is a seal that you can “rely on”. For products that are equipped with this, the entire production must take place in Austria. In the case of meat, this means that the animal must be born in Austria, raised and fattened on an Austrian farm and ultimately slaughtered at an Austrian slaughterhouse.

For consumers, “Made in Austria” is often seen as a sign of quality. When it comes to food in particular, customers value the Austrian standard, which some manufacturers take advantage of with questionable names. In fact, local seals are used again and again carelessly, explains Nina Siegenthaler from the Association for Consumer Information (VKI): “In the meantime, retailers are increasingly relying on their own labels with questionable indications of origin. This makes it more and more difficult for consumers to maintain an overview. “

Styrian seed oil from China, Tyrolean bacon from the Netherlands

There have been plenty of examples of misleading in the past. A VKI study in 2012 showed that the Styrian pumpkin seed oil mostly did not originate in Styria, but was only decanted and packaged in China and Austria. From a legal point of view, the deception is not untrustworthy, as the term “Styrian Pumpkin Seed Oil” has been geographically protected by the EU.

There was an aftermath in 2015 for a local producer who sold “Austrian” fish fillets. The trout fillets were actually smoked in Austria, but they came from an Italian aquaculture. The Supreme Court rated the deception of origin as “misleading”.

And then there is “Speckkaiser” Karl Handl. His “Tiroler Speck” does not come from Alpine pigs, but from the bellies of Danish and Dutch pigs. In Austria they were only processed. Similar to the Chinese masks.

The recall of over 80,000 electric cars is costing the South Korean automaker dearly.

The global return campaign due to highly dangerous batteries spoils Hyundai's current balance sheet. Due to the repair of around 82,000 e-cars, the South Korean manufacturer has to reduce the operating result for the fourth quarter by almost 20 percent. Instead of the quarterly profit of 1.6 trillion won (1.18 billion euros) reported at the end of January, the result is now 1.3 trillion won (the equivalent of almost 960 million euros), as the company announced on Thursday.

Several return campaigns

During the $ 900 million recall, the battery systems of some electric cars had to be replaced. This particularly affects the Kona SUV model, the manufacturer's best-selling electric car. Batteries from LG Energy Solution, a subsidiary of the South Korean chemical company LG Chem, are installed in the car.

LG Chem is one of the major battery cell manufacturers and supplies many car manufacturers around the world, including Volkswagen. At the end of last year, Hyundai had already called the Kona to the workshops for a software update after a series of fires. After one of the recalled vehicles caught fire in January, the South Korean authorities initiated an investigation.

Battery manufacturer LG Chem rejects guilt

Battery manufacturer LG Energy Solutions denied any blame for the incidents, stating that Hyundai had misapplied fast charge logic in battery management. The battery cell is not the cause of the fire. However, the South Korean Ministry of Transportation found deficiencies in some battery cells made at LG Energy's Chinese factory. Hyundai itself did not comment on the causes of the fires.

Google search engine

More privacy on the net! Google announced that it would no longer track the search behavior of its users from next year.

On Wednesday, the internet giant Google announced a radical change for the year 2022. This is a change for the better for the users, because: In the future, the search behavior of the users will no longer be tracked. This means that no more data is collected that was previously used to display personalized advertising.

With this step, Google ensures better data protection and more privacy on the Internet.

In a blog post, Google manager David Temkin justified the plans for data protection: “It is obvious that digital advertising must evolve and respond to people's growing concerns about their privacy and the use of their personal identity.” However, Google has come up with a new concept.

The group wants to refrain in the future from selling advertising that is based on the tracking of individual users on various websites. This is a big step for a company that has made it possible to use cookies to track its users every step of the way for years.

“But people shouldn't just have to accept that they are being spied on all over the network in order to get potentially interesting advertisements for them,” Temkin writes in the blog post.

In fact, studies show that 72 percent of all Internet users feel that they are constantly being followed on the Internet. 81 percent even state that the risks of this persecution are greater than the possible benefits they personally derive from it.

However, the move that Google is now taking does not come as a complete surprise. Last year, the Internet group announced that third-party cookies should be completely blocked in their Chrome browser by 2022 at the latest – as has been the case with other browsers such as Firefox or Safari for years.

Now, however, Google is going one step further and promising not to develop an alternative that could replace third-party cookies.

“Once all of the third-party cookies are gone, we will not provide any other identifiers that individuals can track while they browse the Internet,” promises Temkin. However, in order to be able to continue selling advertising, Google will increasingly rely on aggregated and anonymized data of its users.

Cookies are to be replaced in the future by a new technology called “Federated Learning of Cohorts” or FLoC for short. Internet users are grouped into larger groups based on their interests and can be used with advertising on the basis of these groups. The tracking no longer takes place on the basis of the individual but on the whole group.

It should not be overlooked, however, that the new regulation only applies to third-party websites. Google's own products such as Gmail, YouTube or Google search may continue to collect information about their users . In addition, the step will initially only be carried out on websites, not on smartphones. This means that Google itself does not have to reckon with any major losses from this new regulation. The situation is different for advertising companies that previously relied on cookies to distribute their advertising.

The streaming service of rapper Jay-Z gets a new owner with the company Square from Twitter boss Jack Dorsey.

The music service Tidal, which wants to score points with higher streaming quality against Spotify and Apple Music, is taken over by the payment company Square for 297 million dollars. Behind this is Twitter boss Jack Dorsey, who founded Square during a break, is now at the top of both companies. Tidal owner Jay-Z will join Square's board of directors as part of the deal, the company announced on Thursday.

Twitter boss argues the purchase

Dorsey himself, in a series of tweets, raised the obvious question of how a streaming service and a financial services company fit together. His answer: It's about new ways in which musicians can earn money with their work. Square has created new opportunities for small retailers with its smartphone and tablet POS system – and the experience could also be useful in the music industry, argued Dorsey.

It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there's a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.

– jack (@jack) March 4, 2021

“We will work on completely new listening experiences to bring the fans closer together”. It is also about a simple integration of the sales of fan merchandise, modern tools for cooperation and additional revenue streams.

Tidal was started in 2014 by a Norwegian company, the following year Jay-Z and several other stars took over the streaming provider with the idea of creating a music service that belongs to the artists themselves. The other artists involved in Tidal should keep their shares, it said. Square pays the equivalent of around 247 million euros in a mixture of cash and stocks.

Also focus on crypto

Dorsey and Jay-Z already started a Bitcoin fund together in February, which is supposed to finance projects with the cryptocurrency, initially with a focus on development teams in Africa and India. The third largest cryptocurrency in the world, Cardano, could also play a role in the Twitter boss's crypto ambitions.

The organization behind Cardano is about to announce a huge project with an African state. Cardano founder Charles Hoskinson recently sparked such rumors in a video in which he alluded to little birds that would soon be twittering exciting news. Many crypto and Cardano fans interpreted this statement as an indication that Twitter or Twitter boss Dorsey has big plans for Cardano as well as Bitcoin.

Accusation of bogus deals and overvaluation of real estate.

After the collapse of the trading giant Steinhoff, three high-ranking ex-managers should answer to a German court on suspicion of billions in balance sheet manipulation, according to the prosecutor's office. The public prosecutor's office in Oldenburg has brought charges against the trio for incorrect presentation in balance sheets, as the investigators announced on Thursday.

Overall, according to the indictment, it is about balance sheet manipulation through sham deals of more than 1.5 billion euros. In addition, real estate is said to have been valued at 820 million euros too high in the books.

The prosecution did not reveal the names of the managers. The Oldenburg Regional Court has to decide whether the main proceedings will be opened against the managers. Up to three years imprisonment are available for balance sheet manipulation. Steinhoff is based in Stellenbosch near Cape Town in South Africa, but its roots are in Westerstede near Bremen.

Three years ago, the group had admitted that the balance sheet was missing more than six billion euros. The former management of the company, which at times was worth more than 20 billion euros on the stock exchange, had inflated sales through sham deals and thus hushed up losses. The managers at the time should be responsible for ensuring that the book profits from the bogus transactions flowed into the balance sheets. Steinhoff subsidiaries are said to have sold intangible goods and company shares for three-digit million amounts each to other companies that are related to Steinhoff. A fourth manager is also accused of aiding and abetting manipulation of the balance sheet. He worked for two companies involved in handling the bogus business.

The new Steinhoff management is working on getting the finances in order and cutting the company back to its healthy core. Subsidiaries in Europe such as the stakes in the German “Poco” cheap furniture stores, the Austrian “Kika” and “Leiner” furniture stores and the French furniture chain “Conforama” have already been sold. Protective shield proceedings have begun in the Netherlands, on which the Steinhoff Holding wants to come to an agreement with its creditors.

The US think tank Heritage Foundation now runs Hong Kong together with China.

The Chinese special administrative region Hong Kong is no longer listed in the ranking of the freest business locations in the world. The US-based Heritage Foundation, which consistently led Hong Kong in first place in the prestigious ranking from 1995 to 2019, has completely removed the financial metropolis in the latest edition of the list. Hong Kong is now assigned to China, which is in 107th place.

The Washington-based think tank said that this year the index only measures “economic freedom in independent countries where governments have sovereign control over economic policy”. In Hong Kong, developments over the past few years have “clearly shown that politics is ultimately controlled from Beijing”. The Chinese Special Administrative Region of Macau was also removed from the ranking for the same reason.

After the government cracked down on pro-democracy demonstrators, Hong Kong was overtaken by Singapore at the top of the rankings for the first time last year. Later that summer, Beijing introduced a controversial security law in Hong Kong, which made the situation of activists even worse. In this year's ranking, Singapore was once again in first place, followed by New Zealand, Australia and Switzerland.

The AUA parent Lufthansa flew in a record loss. The bottom line was a minus of 6.7 billion euros.

The corona pandemic is affecting airlines worldwide, flights are canceled.

The AUA had completely stopped flight operations for around three months in spring 2020. That also “led to a standstill in the account”, said AUA boss Alexis von Hoensbroech. The pandemic catapulted the airline into “the most challenging time in the history of aviation.”

The AUA lost an adjusted EUR 319 million at the operational level, unadjusted the AUA operating loss amounted to EUR 379 million, as the airline announced on Thursday.

AUA's turnover melted to a quarter of the more than two billion euros in 2019. The number of passengers fell from 14.6 million passengers in 2019 by 79 percent to 3.1 million. Total revenues fell by 69 percent to EUR 672 million. This also includes the EUR 150 million disaster aid that AUA received from the Austrian federal government. The AUA booked this subsidy, which does not have to be repaid, in December.

The collapse in business brought about a record loss for Lufthansa in 2020. The bottom line was a minus of 6.7 billion euros after a profit of 1.2 billion a year earlier, as the state-backed company announced in Frankfurt on Thursday. After the difficult start into the new year, CEO Carsten Spohr will also be a bit more pessimistic for 2021. The flight offer is likely to reach only 40 to 50 percent of the level from the pre-crisis year 2019. So far, he had thought up to 60 percent possible.

No dividend for shareholders

In the past year, the turnover of the MDax group collapsed by 63 percent to 13.6 billion euros. Once again, there will be no dividend for the shareholders. For 2021, Spohr assumes that the loss will be lower and that Lufthansa will not have to make full use of the state aid of a total of 9 billion euros despite the continuing difficult situation.

The parent company Lufthansa, which narrowly escaped bankruptcy, wants to post a lower operating loss this year after the highest loss in the company's history. “From the summer we expect a stronger demand as soon as the restrictive travel restrictions are reduced due to the further spread of tests and vaccines,” said Lufthansa boss Carsten Spohr and called for travel bans and quarantine obligations to be lifted.

Both Lufthansa and AUA had to receive state support due to the corona crisis.

The electric SUV from Ford is attacking its competitor Tesla in the USA.

Although Tesla dominates the US electric car market imposingly, the industry leader has recently become a serious competitor, reports CNet.

According to the latest edition of the Cars & Shared Mobility Report by consulting firm Morgan Stanley, Tesla's market share fell to 69 percent in February. In the same period of the previous year it was 81 percent. According to the Morgan Stanley Report, the Ford Mustang Mach-E is responsible for the decline “almost 100 percent”.

US electric car market grows 40 percent

The consulting firm estimates Tesla sales this February at 21,550 units. With this, Tesla still more than doubled the sales figures of all competitors, which are given as 9,527. Overall, according to the consulting firm, sales of electric cars in the United States rose by 40 percent in February.