Issue #40

Volkswagen closing plants and cutting jobs, food boss calls for ‘nutrition arms race,’ 23andMe bankruptcy threatens DNA, and more.

News from October 24 - October 31, 2024

Volkswagen Closing Plants and Cutting Jobs

Volkswagen plans to close three German plants, cut tens of thousands of jobs, and reduce wages by 10% amid intense competition, especially from China, and high transition costs to electric vehicles. 

VW’s employee union warns of potential strikes if management does not reconsider, while politicians, including Chancellor Olaf Scholz, call for job protections, blaming past management decisions for VW’s current challenges. 

Thomas Schäfer, head of VW brand: “We are currently earning too little money from our cars. At the same time, our costs for energy, materials, and personnel have continued to rise. This calculation cannot work in the long term.”

Source 

Office Property Values Face New Test 

Citypoint, London’s first skyscraper, is up for sale at £500 million, marking potentially the largest office transaction in over two years. Brookfield, the Canadian group selling the building, is testing market interest as high interest rates continue to drag down valuations.

Commercial real estate has dropped 20% in value since 2022, with the sector still grappling with high borrowing costs. 

Investors, needing liquidity, are beginning to offload assets, bringing properties like Citypoint to market. This sale could indicate how well the commercial property sector can withstand current pressures.

Source

Spanish Growth Rises as Eurozone Slows

Spain is set to become the world’s fastest-growing advanced economy in 2023, with 2.9% growth, outpacing the U.S. and expanding over three times faster than the Eurozone average. Driven by tourism, foreign investment, and public spending, this growth has boosted investor confidence, bringing Spanish bond yields closer to German ones—a sign of reduced risk. 

However, some argue growth is mainly due to low-wage immigration, which may limit productivity and per capita gains.

Ignacio de la Torre, economist: “Quality growth would imply an increase in productivity that would lead to an increase in GDP per capita and hence a better standard of living. Germans are more productive than Spaniards. They have more income, so they live better and can work fewer hours.”

Source

Bulletin Board

• Netflix Launches Clip Sharing. Netflix’s new Moments feature allows users to save and share favorite scenes from shows and movies directly on social media, linking friends to the exact scene in their own Netflix app. Initially available on iOS, users can click “moments” to save clips for rewatching or sharing on Instagram, Snapchat, and Facebook. The release coincides with Netflix’s It’s So Good campaign featuring Cardi B and Simone Biles sharing favorite moments. Source 
• Food Boss Calls for ‘Nutrition Arms Race.’ Nomad Foods CEO, Stéfan Descheemaeker, urges the UK government to require food companies to publish annual reports on the healthiness of their products to drive a “nutrition arms race.” Descheemaeker proposes mandatory front-of-pack nutrition labels and supports a sugar and salt tax, aiming to incentivize healthier options across the industry. His views reflect growing support for regulation among food industry leaders to combat obesity and encourage responsible practices beyond voluntary measures. Source  
• Vinted to Expand Beyond Clothing. Vinted, the profitable Lithuanian second-hand fashion platform, is expanding into categories like electronics, books, and toys to capture more of the used goods market. CEO Thomas Plantenga aims to make “second-hand the first choice” globally by focusing on efficiency and quality. Vinted’s valuation rose to €5 billion, backed by major investors like TPG, while competitors struggle. Plantenga hints at future U.S. expansion but plans to prioritize European growth for now. Source
• 23andMe Bankruptcy Threatens DNA. DNA-testing company 23andMe, once valued at $6 billion, now faces possible bankruptcy with its valuation down 99% since going public in 2021. Hit by a major data breach affecting 6.9 million accounts and the resignation of its entire board, the company’s policies allow for customer DNA data to be sold if ownership changes. Without HIPAA protections, this data could be transferred to new owners, sparking privacy concerns. CEO Anne Wojcicki promises data privacy and is considering taking the company private amidst the ongoing crisis. Source
• Evan Spiegel Fights to Revive Snap. Evan Spiegel is fighting to revive Snap as its value falls to 1% of Meta’s, which has surged 60% while Snap’s stock dropped 90% since 2021. Snap faces heavy competition, especially from Meta, which has cloned popular features like Stories and filters with great success. As Spiegel doubles down on augmented reality, insiders worry about its costs, and investors are demanding clarity on AR spending amid major leadership turnover and ad challenges. Source 

‍Disclaimer: This blog offers insights into international business and global events for informational purposes only. It is not intended as investment or business advice. WeavePay is not liable for any decisions made based on the content provided.

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