A bankruptcy judge on Friday granted US Airways authority to temporarily cut the pay of its union workers by 21 percent, comparing the airline's financial outlook to "a ticking fiscal time bomb." \nThe 21 percent pay cut is nearly all of the 23 percent reduction the air carrier had sought. \n"I have absolutely no doubt that wage cuts of this magnitude would and will result in severe financial hardships," US Bankruptcy Judge Stephen Mitchell said. But US Airways' financial situation is so unstable that "basically what we have here is a ticking fiscal time bomb." \nThe pay cuts are in place until Feb. 15 next year, six weeks short of what the airline had sought. Mitchell also granted the airline authority to reduce the size of its jet fleet. \nAlso Friday, Delta Air Lines Inc, the nation's third-largest carrier, said it was weeks away from being forced to file for bankruptcy because of widening losses -- ranging from labor and pension costs to fuel expenses. United Airlines, a unit of UAL Corp, said it would need even more labor cuts than anticipated to get out of bankruptcy, and that it would seek the court's help if it is unable to reach an agreement with its unions. \nFriday's ruling means the average US Airways salary would drop from US$59,509 to US$47,012, putting the airline below the other five major traditional carriers as well as Southwest Airlines, but higher than JetBlue and America West -- two carriers US Airways now seeks to emulate. \nUS Airways had projected that a 23 percent pay cut would save US$165 million between now and March 4, when it feared it would essentially run out of cash. \nAfter Friday's ruling, the airline's chief executive, Bruce Lakefield, said the company was still calculating the financial effect of the decision, but he was pleased. \n"Our mission here is to save as many jobs as possible. We are being attacked on every front" by low-cost competitors, he said when asked about the ruling's effect on workers. \nThe judge gave the airline authority to impose the cuts immediately, but Lakefield told employees in a recorded message that a timeline will be announced in the next few days. \nMollie McCarthy, leader of the Association of Flight Attendants' Philadelphia-based local, said the pay cuts are devastating and particularly galling given that management is not taking a similar hit.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a