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European Edition
3rd May 2024
 
THE HOT STORY
Stellantis cuts costs by hiring engineers in lower-cost countries
Stellantis is recruiting a majority of its engineering workforce in lower-cost countries such as Morocco, India, and Brazil to contend with cheaper Chinese electric vehicles and slower demand. The carmaker is cutting costs to make more affordable vehicles and is seeking savings by hiring engineers in countries where the cost per employee is significantly lower than in hubs like Paris and Detroit, and it aims to have roughly two-thirds of its engineers in lower-cost countries in the long term. Western carmakers, including premium automakers like BMW, are also adding white-collar jobs in countries like India to tap local talent. The strategy is expected to add expertise in areas such as software, artificial intelligence, and battery-cell chemistries. However, the push to hire engineers in lower-cost countries has caused some development problems, requiring engineers from France and Italy to fix local issues.
STRATEGY
Macron and Tusk rail against Brexit ahead of elections
Emmanuel Macron has warned European nationalists against following Britain out of the European Union, saying that Brexit has impoverished the UK and failed to solve the country's immigration problems. Nationalist parties are surging across Europe ahead of polls next month. Elsewhere, Polish prime minister Donald Tusk, the president of the European Council during the Brexit negotiations, has said that Poles will be richer than Britons in five years’ time because of Brexit. “A fierce debate is taking place in Great Britain, caused by the World Bank’s forecast that GDP per capita will be higher in Poland than in the UK in 2025,” said Mr Tusk on the 20th anniversary of Poland’s membership of the EU. “And I promise this: on the 25th anniversary, Poles will be richer than the British. It’s better to be in the EU.”
INVESTMENT
Foreign direct investment in Europe falls 4% in 2023
Foreign direct investment (FDI) into Europe fell 4% in 2023, with Germany experiencing a sharp 12% drop in projects. Companies cited concerns over Germany's economic slowdown and energy security as reasons for the decline. This marks the first annual fall in European FDI projects since the COVID-19 pandemic, and overall foreign investment in the region is now 14% lower than its peak in 2017. The survey by EY also revealed that volatile energy prices, domestic politics, and new European regulations were among the concerns of companies surveyed. Julie Teigland, EY EMEIA Area Managing Partner, highlighted the challenges faced by smaller companies due to the rapid pace of regulation. France topped the foreign investment list, while Britain overtook Germany for second place. The war between Russia and Ukraine had a significant impact on FDI in bordering countries. Romania, Finland, Latvia, and Lithuania all saw substantial declines in FDI.
DIVERSITY & INCLUSION
Ireland now has no female CEOs at listed companies
Ireland has become the only EU state with no women leading any of its listed companies. All 31 companies listed on Euronext Dublin's website are now headed by men. This is in contrast to other EU countries, where almost all have at least one woman leading a listed company. The lack of gender equality is particularly pronounced in traditionally male-dominated industries like construction. While progress has been made in achieving equality at board level, the absence of a female CEO in a listed company shows that there is still work to be done. However, Ireland's startup scene appears to attract more women than its listed companies. The government has set a target of 33% female representation on boards by the end of 2023.
MANAGEMENT
Tesla's top HR executive departs
Tesla's top human resources executive, Allie Arebalo, has left the company, joining a handful of other senior leaders that have recently departed. It is unclear whether Arebalo was let go as part of broader job cuts or if she stepped down. Tesla has been slashing jobs across the organisation, targeting a staff reduction of about 20%. Arebalo, one of the most senior women at the company, had been in her role since February 2023 and worked for Tesla for about six years. Musk and Arebalo didn’t immediately respond to requests for comment.
REMUNERATION
Goldman Sachs to scrap bonus cap for London-based staff
Goldman Sachs is to remove a cap on bonuses for its London-based staff, bringing its remuneration policy in Britain in line with its operations elsewhere in the world. The move paves the way for the bank to resume making multimillion pound payouts to its best-performing traders and dealmakers. “This approach gives us greater flexibility to manage fixed costs through the cycle and pay for performance,” Goldman said in a statement. “It brings the UK closer to the practice in other global financial centres, to support the UK as an attractive venue for talent.”
WORKFORCE
Visa curbs bring fall in UK immigration
UK visas issued to skilled workers, health and care staff, and students have fallen by a quarter compared with last year, leading to a decline in Britain's record levels of immigration. The number of visas granted to these groups decreased from 184,000 to 139,100 in the first three months of this year. The tightening of rules on foreign students bringing family members has led to an 80% fall in dependant visas while the number of study visas issued also decreased significantly. The decline in visas for health and care workers is attributed to measures to strengthen the rules for companies sponsoring visas in the sector. Experts suggest that most of the decline would have happened even without the new policies. Labour said the policy changes had come too late and that they lacked accompanying measures to boost skills in the domestic workforce to fill labour shortages.
Deutsche Bank reaches pay deal with unions for Postbank workers
Deutsche Bank's management has reached a pay deal with unions for thousands of workers at its Postbank division. The bank will pay employees 11.5% more in a two-step raise, less than the 15.5% unions had been demanding.
Portugal's unemployment rate drops to 6.5% in March
Portugal's monthly unemployment rate decreased to 6.5% in March, according to the National Statistics Institute (INE). The labour underutilisation rate remained unchanged at 11.4%. The youth unemployment rate for 16-24 years old decreased to 22.3% in March, but rose from 19.5% a year ago.
Paris waste collectors threaten strike during Olympics
Unions representing Paris waste collectors have threatened to strike for the entire Olympics period, while rail unions have called a one-day strike in May - both are calling for bonuses for their workers during the Games period. The waste collectors' strike in March 2023 resulted in uncollected rubbish across Paris.
SUSTAINABILITY
EU investigates ‘greenwashing’ at 20 airlines
The European Commission has written to 20 airlines operating in the EU asking them to address “misleading green claims.” In a letter sent by the Commission and national consumer protection authorities in Belgium, the Netherlands, Spain and Norway, the airlines are given 30 days to say how they will bring their practices in line with EU law. The move follows a complaint brought by European consumer organisation BEUC and its member groups against climate-related flight compensation schemes.
INTERNATIONAL
Biden says xenophobia hinders Asian economies
US President Joe Biden has claimed that "xenophobia" is hindering the economic growth of China, Japan, and India, while he emphasized the positive impact of immigration on the US economy. Speaking at a fundraising event in Washington, Biden stated that countries like China and Japan are struggling economically because they do not welcome immigrants. The International Monetary Fund has forecasted a deceleration in growth for these countries, while the US is expected to grow at a slightly brisker rate due to migrants expanding the local labour force. Biden's remarks come as concerns about irregular migration become a prominent issue ahead of the US presidential election. He has been working to strengthen economic and political relations with countries like Japan and India to counter global powers such as China and Russia.
Saudi activist sentenced to 11 years in prison for supporting women's rights
Saudi Arabia has sentenced women's rights activist Manahel al-Otaibi to 11 years in prison for criticising laws in the kingdom. The 29-year-old fitness instructor was arrested in November 2022 and sentenced by a counterterrorism court in January. Her charges were related to her choice of clothing and expression of her views online, including calling for an end to Saudi Arabia's male guardianship system. Otaibi had been a supporter of reforms brought in by Crown Prince Mohammed bin Salman. However, the country still has laws that discriminate against women in marriage and divorce. The reforms have drawn criticism from human rights groups, and the government continues to crack down on critics and female activists. This is not the first time a Saudi court has handed down harsh sentences to those who criticise the government. Despite Prince Mohammed's acknowledgment of bad laws, it remains unclear why he has not taken action to end such sentences.
OTHER
Austria calls for regulation of AI weapons systems
Austria has called for fresh efforts to regulate the use of artificial intelligence (AI) in weapons systems, as concerns grow over the development of autonomous weapons. Austrian Foreign Minister Alexander Schallenberg has urged the international community to agree on rules and norms to ensure human control over AI weapons. He says the use of AI in weapons systems poses ethical and legal challenges that need to be addressed urgently. "We cannot let this moment pass without taking action. Now is the time to agree on international rules and norms to ensure human control," Austrian Foreign Minister Alexander Schallenberg told a Vienna meeting of non-governmental and international organisations as well as envoys from 143 countries.
 


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