Business & Finance News

Costly Electric Vehicles Confront a Harsh Coronavirus Reality

(Bloomberg) — At a factory near Germany’s border with the Czech Republic, Volkswagen AG’s ambitious strategy to become the global leader in electric vehicles is coming up against the reality of manufacturing during a pandemic.

The Zwickau assembly lines, which produce the soon-to-be released ID.3 electric hatchback, are the centerpiece of a plan by the world’s biggest automaker to spend 33 billion euros ($36 billion) by 2024 developing and building EVs. At the site, where an East German automaker built the diminutive Trabant during the Cold War, VW eventually wants to churn out as many as 330,000 cars annually. That would make Zwickau one of Europe’s largest electric-car factories—and help the company overtake Tesla Inc. in selling next-generation vehicles.

But Covid-19 is putting VW’s and other automakers’ electric ambitions at risk. The economic crisis triggered by the pandemic has pushed the auto industry, among others, to near-collapse, emptying showrooms and

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California gives too many unchecked tax breaks. It’s time to shine a light on them

State Sen. Hannah-Beth Jackson (D-Santa Barbara) is pushing a bill that would enlist a team from UC Berkeley to examine "tax expenditures" or tax breaks. <span class="copyright">(Rich Pedroncelli / Associated Press)</span>
State Sen. Hannah-Beth Jackson (D-Santa Barbara) is pushing a bill that would enlist a team from UC Berkeley to examine “tax expenditures” or tax breaks. (Rich Pedroncelli / Associated Press)

California’s state government is dishing out $73 billion in tax breaks annually to millions of people and hundreds of interests. But there’s no evidence that this generosity is good or bad for the state.

Does it create jobs? Attract businesses to California? Help companies expand?

You’d think Gov. Gavin Newsom and the Legislature would want to know whether the levy largess has been beneficial for California or just a giveaway.

That’s especially true now as state politicians face a projected $54-billion budget deficit because the economy was straitjacketed to prevent the spread of the coronavirus. Tax receipts are projected to plummet by $41 billion through June 2021.

“We don’t have a clue” about the effectiveness of tax breaks, says

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Argentina Braces for Ninth Default

(Bloomberg) — Argentina’s leader Alberto Fernandez faces a defining moment in his presidency Friday as the nation braces for its ninth sovereign debt default.

After five months in office grappling with recession, 50% inflation and a crash in the unofficial peso rate, Fernandez is trying to strike a deal with bondholders over the coming weeks to prevent even worse chaos.

If he succeeds, there may be light at the end of the tunnel for an economy that was in deep trouble even before the coronavirus pandemic, and an increased chance that Fernandez will solidify his power within the government coalition. If he fails, and there’s a disorderly default on $65 billion of overseas debt, it’ll be another major blow to the rapidly shrinking economy.

“A hard default would mean Argentina loses its chance at an orderly economic recovery,” said Alejandro Catterberg, director of Argentine consulting firm Poliarquia.

It’s familiar territory

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Burberry hit by Covid-19 disruption but encouraged by recent Asia trading

Burberry on Friday said it is encouraged by a “strong rebound” in parts of Asia where lockdowns have eased, as it outlined how UK shops will look in future.

The FTSE 100 company, known for its trademark trenchcoats, revealed how Covid-19 travel restrictions and store closures hurt sales and profits for the year to March. But it also pointed to signs of growth since then.

Chief executive Marco Gobbetti said: “It will take time to heal but we are encouraged by our strong rebound in some parts of Asia.” Sales since the start of April in mainland China and Korea are ahead of the prior year.

The shares improved 34p to 1409p.

Finance chief Julie Brown said when its UK branches reopen, stores will mirror what other sites are doing to promote social distancing. That includes staff splitting shifts, limiting the number of customers allowed in, and having signs up

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