COMPANY NEWS IN BRIEF

COMPANY NEWS IN BRIEF Nike sees social media storm in China

Anger with Nike Inc erupted on Chinese social media late on Wednesday after China’s netizens spotted a statement from the sporting goods giant saying it was “concerned” about reports of forced labour in Xinjiang and that it does not use cotton from the region.

Topics around the Nike statement were among the highest trending on China’s Twitter-like social media Weibo yesterday, and the social media storm had wider fallout.

Popular Chinese actor Wang Yibo terminated his contract as a representative for Nike in response to social media criticism over its Xinjiang statement, his agency said in a statement.

It was unclear when Nike had put out its statement, which did not have a date on it, and Nike was not immediately available for comment.

“We are concerned about reports of forced labour in, and connected to, the Xinjiang Uyghur Autonomous Region (XUAR),” Nike said in the statement. -Nampa/Reuters

Mastercard battles return of UK class action

A specialist London court will this week re-consider allowing an historic 14 billion-pound (US$19 billion) class action against Mastercard to proceed, which could entitle adults in Britain to about 300 pounds each if successful.

Former financial ombudsman Walter Merricks, who alleges that Mastercard overcharged more than 46 million people in Britain over nearly 16 years, hopes the Competition Appeal Tribunal (CAT) will certify the case after the UK Supreme Court overruled objections to it proceeding in December.

A two-day court hearing will kick off on Thursday and will determine the fate of Britain’s first mass consumer claim and clarify the rules for a string of other competition class actions that have stalled in its wake.

Merricks, who is being advised by US-headquartered law firm Quinn Emanuel, alleges Mastercard charged excessive “interchange” fees, the fees retailers pay credit card companies when consumers use a card to shop - between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices.

Mastercard says the claim should not be brought, that people received valuable benefits from its payments technology and that the lawsuit is driven by US lawyers and backed by organisations focused on making money for themselves. - Nampa/Reuters

GM further cuts production in North America

General Motors Co extended production cuts in North America on Wednesday due to a worldwide semiconductor chip shortage that has impacted the auto sector.

The US automaker said its Wentzville, Missouri, assembly plant would be idled during the weeks beginning March 29 and April 5. It will extend down time at its plant in Lansing, Michigan, which has been idled since March 15, by two weeks.

The action was factored into GM’s prior forecast that it could shave up to US$2 billion off this year’s profit, spokesman David Barnas said. GM did not disclose how much volume would be lost by the move, but said it intended to make up as much lost production as possible later in the year.

The chip shortage came as North American auto plants were shut for two months during the Covid-19 pandemic last year and chip orders were cancelled, and as demand surged from the consumer electronics industry as people worked from home and played video games. That’s now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems. - Nampa/Reuters

Tencent's quarterly revenue jumps

Chinese gaming and social media group Tencent Holdings Ltd on Wednesday reported a market-beating 26% jump in quarterly sales, helped in part by a surge in revenue from its online gaming business.

Revenue rose to 133.67 billion yuan (US$20.5 billion) in the quarter ended December, versus market expectations of 132.19 billion yuan, based on data from Refinitiv.

Tencent, which has benefited from a surge in paying users for video games in China and international markets, said online games revenue rose 29% to 39.1 billion yuan.

Profit rose 175% in the same period to 59.3 billion yuan, largely thanks to fair-value gains in companies Tencent has invested in, and sales of stakes.

Tencent’s two hit games, Honor of Kings and PUBG Mobile, continued to top the rank in China and internationally, respectively, in this quarter.- Nampa/Reuters

VW's Skoda aims for 2021 rebound

Czech carmaker Skoda Auto, part of the Volkswagen Group, said on Wednesday it would invest around 2.5 billion euros over the next five years on future technologies, with more than half going to electric vehicle investment.

The Czech Republic’s largest exporter is hoping for a rebound in 2021 from a global car sales drop but faces uncertainty over the coronavirus pandemic and a semiconductor shortage rattling the industry.

“This year is likely to be another big challenge,” finance director Klaus-Dieter Schuermann said. “We expect Skoda Auto’s group performance to improve, with sales revenue significantly above the level of last year.”

Skoda reported on Wednesday a 54.5% drop in 2020 operating to 756 million euros (US$894 million). Sales revenue dropped 13.8% to 17.1 billion euros.

Global deliveries remained above 1 million cars for a seventh straight year despite a 19% drop after production outages at the outset of the pandemic and a fall in China, its biggest single market. - Nampa/Reuters