US Business

Twitter on Wednesday unveiled — and then almost immediately scrapped — a new gray “official” label for some high-profile accounts as Elon Musk struggles to revamp the highly influential platform following his $44 billion buyout.

“I just killed it,” Musk tweeted just hours after the new tag was added to government accounts as well as those of big companies and major media outlets.

“Please note that Twitter will do lots of dumb things in coming months. We will keep what works & change what doesn’t,” the world’s richest man added to explain the U-turn.

The sudden change of heart will invite further scrutiny of Musk’s plans for Twitter a week after he laid off thousands of workers and drew a massive drop in spending by advertisers, who are wary of the site’s direction.

The botched rollout came out ahead of the hotly anticipated introduction of a revamped subscription model in which the site’s famed blue checkmark would be made available for a fee of $7.99.

The blue tick has been a mark of an account’s authenticity and doubts emerged that public figures or media outlets would pay for it. The official gray tag was seen by observers as a workaround to solve that problem.

The rollout of the new official label began on Wednesday and was on the accounts of companies such as Apple or BMW and public ones such as the White House and major media outlets.

But only a few hours later, it was gone.

Musk took control of Twitter after a drawn-out back-and-forth legal battle in which the mercurial tycoon tried to renege on the deal.

It emerged on Tuesday that Musk sold $4 billion worth of shares in Tesla to help pay for the deal in which he took on billions of dollars in debt.

The $7.99 subscription idea is seen as one way to overcome the loss in advertisers since Musk took over the company.

Twitter last week fired half of its 7,500 employees which Musk said was necessary as the company was losing four million dollars a day.

The Ferrari in which Formula One legend Michael Schumacher won the 2003 World Championship title sold for nearly $15 million at auction in Geneva on Wednesday.

“This remarkable car has achieved a world record price for a modern-era Formula One,” the Sotheby’s auctioneer said after the F2003-GA, Chassis 229 car went under the hammer for 13 million Swiss francs ($13.2 million).

When taxes and fees were added on, the final price stood at 14.6 million francs ($14.9 million), the auction house said later.

The previous record was held by another Schumacher-driven Ferrari, an F2001 model sold by Sotheby’s in New York in 2017 for $7.5 million.

The final price, offered by an unidentified telephone bidder from Europe after a bidding war of more than 40 minutes, far outstripped expectations, with the auction house estimating before the sale that the car would fetch up to 9.5 million Swiss francs.

It is “one of the most significant Formula One cars of all time”, the auctioneers said.

Schumacher, who has not been seen in public since suffering serious injuries in a skiing accident in 2013, raced nine times in the car.

– ‘Very important car’ –

He won five Grands Prix with it in the 2003 season and drove it when he clinched the title in Japan.

“It’s one of the Ferraris with the most victories in the constructor’s history, so it’s a very important car in the history of motor racing,” Vincent Luzuy, from the Sotheby’s branch dealing with luxury car sales, told AFP.

Designed by Rory Byrne and Ross Brawn, the F2003-GA featured a longer wheelbase to improve aerodynamics, he explained.

The model was brought in at the Spanish Grand Prix, the fifth race of the 2003 season. Chassis 229 is by far the most successful of the six F2003-GAs that were built.

Schumacher drove it to victory in Spain and also won the Austrian, Canadian, Italian and US Grands Prix in the car.

He also claimed pole position in Spain, Austria and Italy in the car, and the fastest laps in Austria, Italy and the United States.

The car powered Schumacher to his sixth F1 title — a total that saw the German overtake the five won by Argentina’s Juan Manuel Fangio in the 1950s.

It also helped Ferrari win a 13th constructor’s championship — the Italian team’s fifth in a row.

– Luxury week –

Schumacher’s Ferrari was sold during Sotheby’s Luxury Week, which began last Friday and where a range of sparkling jewels, pricy watches and designer handbags are going under the hammer.

Later Wednesday, a spectacular blue diamond will provide the grand finale to the jewellery sale, and has been estimated to fetch up to 15 million Swiss francs.

That 5.53-carat “fancy vivid blue” cushion-shaped diamond is part of the De Beers Exceptional Blue Collection — a group of eight rare fancy blue diamonds with a total value of more than $70 million being sold in Geneva, New York and Hong Kong.

Another piece expected to draw attention, and bids, is an emerald and diamond bracelet made in the 1850s, which once belonged to French empress Eugenie, the wife of emperor Napoleon III.

It has been estimated at between 60,000 and 80,000 francs.

Sotheby’s is already on a roll, having sold the 11.15-carat Williamson Pink Star pink diamond in Hong Kong last Friday for HK$453.2 million ($57.7 million), setting a record for price per carat paid at auction for any diamond or gemstone, the auction house said.

Pink diamonds are only found in a few places and fewer than 10 percent weigh more than one fifth of a carat, and the big ones are some of the most in-demand on the global market.

The 18.18 carat Fortune Pink — the largest pear-shaped “fancy vivid pink” diamond ever to go under the hammer — was meanwhile snapped up at a Christie’s auction in Geneva on Tuesday for $28.5 million.

Global stock markets fell Wednesday following weak Chinese data and as traders assessed results of US midterm elections.

The dollar rose strongly versus the British pound — a currency under pressure owing to the UK’s bleak economic outlook.

Oil prices slumped as official data from China showed the world’s second-largest economy languishing under its strict zero-Covid policy and US stockpiles increased.

Shares in Facebook owner Meta jumped 8.0 percent after the company said it would lay off 11,000 staff, in a move which follows a recent plunge of its valuation.

The tech industry is in a serious slump and several major firms have announced mass layoffs — Twitter’s new owner Elon Musk fired half its staff last week.

Ad-supported platforms such as Facebook and Google are suffering with advertisers looking to cut costs as they struggle with inflation and rising interest rates.

Bitcoin continued to slide on fallout from the near-collapse of cryptocurrency platform FTX, reaching the lowest level for two years at $17,052.49.

“Even if you are not involved in cryptos, the turmoil is definitely something to keep an eye on, as it may be an additional factor impacting risk appetite across the financial markets,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

– US midterms –

While equities rose ahead of the vote on the likelihood of legislative gridlock for the next two years, which would mean no new big increases in US government spending and taxes, they fell as results came in.

Republican hopes for a sweeping rebuke of President Joe Biden in congressional elections failed to materialise, with both parties picking up seats following a campaign fought against a backdrop of stubbornly high inflation and fears for US democracy.

While Republicans look like they will pick up a slim majority in the House, the outcome in the Senate is still unclear.

“The stock market had a nice, little run leading up to election day based on the gridlock angle,” said Patrick O’Hare at Briefing.com.

“It appears that is going to be the case, so participants are taking some money off the table,” he added.

– ‘No good news from China’ –

In China, speculation over how long Beijing will keep its harsh lockdown-and-testing Covid-19 policies has fuelled volatility on markets, despite the government vowing it will not change course.

The restrictions have taken a toll on the Chinese economy, with Data Wednesday showing China’s producer price index (PPI) fell by 1.3 percent on-year in October, pushing it into negative territory for the first time since December 2020.

The consumer price index (CPI) — the main gauge for retail inflation — rose 2.1 percent year-on-year in October, moderating slightly from September’s two-year high of 2.8 percent.

“The economy’s slowing, confirmed by the CPI data,” Iris Pang, chief economist for Greater China at ING Wholesale Banking, told AFP. 

“I don’t see any good news from China.”

– Key figures around 1530 GMT –

New York – Dow: DOWN 0.8 percent at 32,898.35 points

EURO STOXX 50: DOWN 0.3 percent at 3,728.03

London – FTSE 100: DOWN 0.1 percent at 7,296.25 (close)

Frankfurt – DAX: DOWN 0.2 percent at 13,666.32 (close)

Paris – CAC 40: DOWN 0.2 percent at 6,430.57 (close)

Tokyo – Nikkei 225: DOWN 0.6 percent at 27,716.43 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 16,358.52 (close)

Shanghai – Composite: DOWN 0.5 percent at 3,048.17 (close)

Pound/dollar: DOWN at $1.1415 from $1.1468 on Tuesday

Euro/dollar: UP at $1.0049 from $1.0005

Dollar/yen: DOWN at 146.06 yen from 146.26 yen

Euro/pound: UP at 88.04 pence from 87.23 pence

West Texas Intermediate: DOWN 2.1 percent at $87.01 per barrel

Brent North Sea crude: DOWN 1.8 percent at $93.66 per barrel

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Germany on Wednesday blocked the sale of two chipmakers to Chinese investors because of a potential threat to security.

“We must look very closely at company takeovers when it relates to important infrastructure or when there is a danger that the technology would flow to buyers from non-EU countries,” said Economy Minister Robert Habeck.

Chinese company Sai MicroElectronics had been seeking to buy the Dortmund factory of Elmos through its Swedish subsidiary Silex. 

The German government had rejected the planned takeover because “the purchase could endanger the order and security of Germany,” said the economy ministry.

Other ways of reducing the risks, including allowing the acquisition under certain conditions, were “unable to eliminate the identified dangers”, it added.

Elmos and Silex “regret” the decision, the German company said, adding the sale would have “strengthened semiconductor production” in Europe’s top economy.

Elmos said it was considering legal action as the ban on the acquisition was announced before the end of a review period and without granting the companies a hearing.

The second acquisition to be turned down was of Bavaria-based ERS Electronic, which supplies a cooling technology to wafer manufacturers, according to Germany’s minister for research Bettina Stark-Watzinger.

Fears have been growing in Germany about an over-reliance on Beijing, and letting critical infrastructure fall into the hands of Chinese state-linked companies.

Russia’s invasion of Ukraine and its subsequent dwindling of crucial gas supplies to Europe has further accentuated the concerns.

In particular, the microchip industry has come under scrutiny, as it produces key components used across industry from consumer electronics to battery-powered vehicles.

Earlier this year, the European Union unveiled a multibillion euro “Chips Act” aimed at doubling Europe’s market share in semiconductors and reducing dependence on supplies from Asia. 

– ‘Not naive’ –

Elmos, which primarily builds components for the automobile industry, said late last year it intended to sell the production facility at its headquarters.

Silex was seeking to buy the site for 85 million euros ($85.4 million).

But business weekly Wirtschaftswoche said Elmos had been the recipient of 5.9 million euros from the German state for two research projects. It had also received 8.1 million euros from an EU project on autonomous driving.

Habeck said that Germany remained open to investors, but that “we are also not naive”. 

Beijing has been trying to glean knowledge about production and development, underlined the minister, saying that the “statements from China are very clear”.

Habeck, of the ecologist Greens party, has recently locked horns with Chancellor Olaf Scholz over investments from China.

He deeply opposed a plan by Chinese shipping firm Cosco to buy a stake in a Hamburg port terminal, forcing Scholz to pull rank to force through the deal by allowing the purchase of a reduced stake.

Scholz has repeatedly underlined the importance of strong trade ties with Beijing, something that German industry leaders have also stressed.

China is a major market for German goods, particularly for auto giants Volkswagen, BMW and Mercedes-Benz, and many jobs in Europe’s top economy depend directly on the relationship.

On a controversial visit to Beijing last week, Scholz, accompanied by a delegation of German business bosses, told Chinese leaders that Berlin expected equal treatment on trade.

But Scholz’s trip has sparked controversy for coming so soon after Xi Jinping strengthened his hold on power in China last month.

With tensions between the West and Beijing running high on issues ranging from Taiwan to alleged human rights abuses, there had been concerns that the high-profile trip may have unsettled both the United States and the European Union.

European workers squeezed by the soaring cost of living went on strike in Belgium and Greece on Wednesday, with more stoppages threatening to paralyse parts of Britain, France and Spain in coming days.

Spreading industrial unrest poses a problem for governments which are already spending billions trying to blunt the worst effects of rising prices, at least for the most vulnerable.

Europe is acutely affected by the fall-out from the war in Ukraine, which is exacerbating a global energy crisis, inflation and a scarcity of some food products.

The onset of winter, when energy bills spike, and repeated predictions of a continent-wide recession are souring the labour mood even further.

Belgium and Greece saw general strikes on Wednesday, disrupting transport in their respective capitals, impacting businesses.

In Brussels, home to the European Commission and other EU institutions, workers were protesting inflation running higher than 12 percent — well above the 10.7 percent average across the eurozone.

The country’s biggest union, the FGTB, is demanding greater leeway to negotiate pay rises. 

But the Belgian government counters that Belgian salaries are already indexed to inflation — an arrangement not seen in most other countries.

The strike cut train services by 75 percent and closed the airport in the southern city of Charleroi, the main hub in the country for Europe’s leading airline Ryanair.

– Strikes in Britain and France –

In Greece, ferries serving its many islands were among the transport lines halted by a general strike, the second to hit the country since September.

Brief clashes erupted in Athens and Thessaloniki when hooded youths threw firebombs at police, who responded with tear gas.

In the capital, red paint was splashed at the entrance to Greece’s central bank, and a firebomb was thrown at a car in front of the finance ministry.

In the northern city of Thessaloniki, a banner said: “We choose life, not survival.”

Greek unions are insisting on salary rises to cope with inflation which has risen to 12 percent.

Stoppages were to be felt on Thursday in Britain and France, with the underground urban rail networks and buses in London and Paris to be severely affected.

Celine Verzeletti, of the French CGT trade union, predicted up to 200 “demonstration points”, roughly the same as the last national strike in France on October 18, when more than 100,000 people protested.

France is not as badly affected by inflation as its European peers, as the state holds stakes in the main energy companies and has minimised how far energy bills can rise.

Inflation in France is just over six percent — better than elsewhere — but with economic activity across the eurozone nosediving, hatches are being battened for what looks like a period of stagflation.

In Britain, where inflation is above 10 percent, worker protests over not being able to make ends meet are coming to a crescendo.

The Bank of England predicts the country is headed for a two-year recession, even though it was forced to hike interest rates, making it even tougher for UK households.

– EU energy moves –

On top of Thursday’s stoppage in London’s Underground, British nurses are to hold the first strike in the 106-year history of their Royal College of Nursing union at a date yet to be announced.

Announcing the result of a ballot, RCN General Secretary Pat Cullen said: “Anger has become action –- our members are saying enough is enough.”

Late next week, hundreds of employees at Heathrow airport are to halt work for three days, between November 18 and 21, to demand better pay.

Their action could force the cancellation of flights to Qatar, which is to host the World Cup football tournament that kicks off on November 20.

British dockers, university staff, postal employees and the legal profession have all held or threaten to continue strikes over pay eaten away by inflation.

In Spain, truck drivers have called an indefinite strike from next Monday. Their last stoppage, in March, led to empty supermarket shelves.

With labour protests mounting, the European Union is looking at ways to take some of the sting out of energy prices.

The European Commission and member states are working on proposals to promote the joint purchase of gas and possibly impose a mechanism to cap the price of wholesale gas within the European Union.

Details are not expected to be finalised until late this month, but the steps — and unseasonably warm weather last month — contributed to a fall in gas prices, though they are expected to rise again as winter bites.

The head of the European Central Bank, Christine Lagarde, said last week a “mild” eurozone recession looked likely — but warned it would not be enough to bring down record-high inflation.

Kenya Airways pilots returned to work on Wednesday, after a court ordered them to end their days-long strike which had led to hundreds of flight cancellations and stranded thousands of passengers. 

The strike, which began on Saturday, exacerbated the woes facing the troubled national carrier, which has vowed to “do everything possible to return to normalcy in the shortest time”.

“The strike is off, we are back to work,” a spokesperson for the Kenya Airline Pilots Association (KALPA) told AFP Wednesday, hours after a Nairobi court ordered the union to end the walkout.

Kenya Airways said that it expected to be up to 50 percent of normal operations by Thursday, rising to 70 percent by Friday and operating normally by November 12.

Officials at Nairobi’s Jomo Kenyatta International Airport said the airline was still struggling to clear the backlog from earlier flight cancellations.

“We have had several KQ flights on schedule today take off after the pilots resumed work,” an official at the Kenya Airports Authority told AFP, using the shorthand airline code.

“Things are getting back to normal,” he said. 

The airline said it was “doing everything possible to return to normal scheduled operations within the shortest possible time”.

“Over 5,000 of the 12,000 disrupted passengers have been uplifted”, it said in a Wednesday statement.

The dispute has added to the challenges facing Kenya’s recently elected President William Ruto, who has inherited a country already battling a cost-of-living crisis and a record drought.

Passengers at the airport told AFP they were cautiously optimistic after being forced to reschedule their travel plans because of the strike.

Peace Wamala told AFP she was hoping to finally make it to the Ugandan town of Entebbe following a cancellation on Tuesday.

She said she didn’t yet know “the exact time for our flight but we have been assured we will fly today”.

Another passenger, who only gave her name as Londiwe, told AFP: “I have had the worst experience on KQ during the strike for the past two days, but finally I have been told I will fly this evening.

“So I am just hoping the pilots will not go on strike again.”

KALPA launched the walkout in defiance of a court injunction issued last week against the strike, prompting the government to threaten the pilots with disciplinary action.

– ‘No disciplinary action’ –

Kenya Airways, which is part-owned by the government as well as Air France-KLM, is one of the biggest in Africa, connecting multiple countries to Europe and Asia. 

But it has been running losses for years, despite the government pumping in millions of dollars to keep it afloat.

In a breakthrough for the beleaguered airline, Justice Anna Mwaure on Tuesday ordered KALPA members to resume their duties “unconditionally” by 6:00 am (0300 GMT) Wednesday.

Mwaure also ordered the airline’s management to allow the pilots “to perform their duties without harassing them or intimidating them and especially by not taking any disciplinary action against any of them”.

Transport Minister Kipchumba Murkomen had urged the pilots and the airline’s management to obey the court order.

“In the past three days, this strike has disrupted travel plans for over 12,000 customers… forced the cancellation of over 300 flights, and affected 3,500 other employees who were not part of it,” he said.

The protesting pilots, who make up 10 percent of the airline’s total workforce, are pressing for the reinstatement of contributions to a provident fund and payment of all salaries stopped during the Covid-19 pandemic.

In a statement released Tuesday, the airline’s CEO Allan Kilavuka said: “We commit to complying with the court’s directions.”

The airline and the government have accused the union of engaging in “economic sabotage”, with Kenya Airways warning that the strike would lead to losses estimated at $2.5 million per day.

The airline was founded in 1977 following the demise of East African Airways, and flies more than four million passengers to 42 destinations annually.

It has been operating in large part thanks to state bailouts following years of losses.