Nissan ex-chief Ghosn seeks bail after indictment on two new charges

TOKYO (Reuters) – Nissan ex-Chairman Carlos Ghosn has requested his release on bail after being indicted in Tokyo on Friday on two new charges, his lawyers said, as the once-feted auto executive awaits a lengthy criminal trial that could be as long as six months away.

Ghosn was the overlord of an alliance that included Nissan Motor (7201.T), Mitsubishi Motors (7211.T) and France’s Renault (RENA.PA), until his surprise November arrest and removal as chairman of both Japanese automakers sent shockwaves through the industry.

The former executive, lauded for rescuing Nissan from the financial brink two decades ago, was charged with aggravated breach of trust for temporarily transferring personal investment losses to Nissan in 2008.

Ghosn, former Representative Director Greg Kelly and Nissan itself were also charged for understating Ghosn’s income for three years through March 2018. The three parties have already been indicted for the same charge covering the years 2010-2015.

Ghosn and Kelly have denied all charges. Nissan said it regretted any concern caused to its stakeholders.

It is rare in Japan for defendants who deny their charges to be granted bail ahead of trial. Kelly posted bail on Christmas Day and is unable to leave Japan without special permission. Ghosn’s lawyer, Motonari Otsuru, expects his client to be held until trial, which he said could begin in about six months.

If bail is granted, Ghosn – who is suffering from fever, according to his lawyer – would not likely be released until Tuesday given that Monday is public holiday.

Kelly, a Ghosn ally, was hospitalized for treatment of a pre-existing neck problem after his release and has since been discharged, said his lawyer Yoichi Kitamura.

“This second indictment for Kelly comes as no surprise as it merely makes what was a five year period for the first into eight years,” Kitamura said.

Kitamura said he expects Ghosn and Kelly to be tried together on the two charges of understating income, and that he will work closely with Ghosn’s legal team.

NISSAN COMPLAINT

Also on Friday, Nissan said it had filed a criminal complaint against its former leader.

The automaker, in a statement, said it filed the complaint “on the basis of Ghosn’s misuse of a significant amount of the company’s funds. Nissan does not in any way tolerate such misconduct and calls for strict penalties.”

Ghosn, 64, appeared in court on Tuesday for the first time since his arrest, looking thinner and greyer. He denied the allegations, calling them “meritless” and “unsubstantiated”.

He said he had asked Nissan to temporarily take on his foreign exchange contracts after the 2008-2009 financial crisis prompted his bank to call for more collateral. He said he did so to avoid having to resign and use his retirement allowance for collateral.

Ghosn’s lawyer Otsuru on Tuesday said Nissan had agreed to the arrangement on condition that any losses or gains would be Ghosn’s. Ghosn said the contracts were transferred back to him and that Nissan did not incur a loss.

On Thursday, the boards of Nissan and controlling shareholder Renault – where Ghosn remains chairman – met for an update on the matter. Nissan later said it remained committed to the alliance.

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As Brexit debate begins, PM fails to win over Northern Irish kingmakers

LONDON (Reuters) – British Prime Minister Theresa May failed to win over the Northern Irish party which props up her government to her Brexit deal on Wednesday, just hours before members of parliament were due to resume a debate on the divorce accord.

The future of Brexit remains deeply uncertain – with options ranging from a disorderly exit from the European Union to another membership referendum – because British lawmakers are expected on Jan. 15 to vote down the deal May struck with the EU in November.

May pulled a vote on the deal last month, admitting it would be defeated, and promised to seek “legal and political assurances” from the EU.

But the Northern Irish Democratic Unionist Party (DUP) said it would not support the deal unless May dropped a part known as the backstop which is aimed at preventing a hard border between the British province and EU-member Ireland if both sides fail to clinch a future trade deal.

“The only thing which could swing the DUP round is if the backstop as it applies to the United Kingdom as a whole or to Northern Ireland specifically were removed from this agreement,” said Sammy Wilson, the DUP’s Brexit spokesman.

Wilson, who is among 10 DUP MPs propping up May’s minority government, cast as “window dressing” her proposals to give the Northern Irish assembly the power to vote against new EU rules if the border backstop comes into force after Brexit.

Her deal, he said, was “ruinous”. Britain is due to leave the EU on March 29 at 2300 GMT.

May has repeatedly ruled out delaying Brexit, though she has also warned British lawmakers that if they reject her deal then Brexit could be derailed or the United Kingdom could leave without a deal.

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The government needs 318 votes to get a deal through parliament as seven Sinn Fein MPs do not sit, four speakers and deputy speaker do not vote and the four tellers are not counted.

BREXIT FANTASY?

May’s de-facto deputy cautioned MPs that it was a delusion to think the government would be able to negotiate a new divorce deal with the EU if parliament voted down her deal.

“I don’t think the British public are served by fantasies about magical, alternative deals that are somehow going to spring out of a cupboard in Brussels,” Cabinet Office Minister David Lidington said in an interview with BBC radio.

May’s government suffered a defeat in parliament on Tuesday when MPs who oppose leaving without a deal won a vote on creating a new obstacle to a no-deal Brexit.

The 303 to 296 defeat means the government needs explicit parliamentary approval to leave the EU without a deal before it can use certain powers relating to taxation law. May’s office had earlier played down the technical impact of defeat.

The defeat highlights May’s weak position as leader of a minority government, a split party and a deeply divided country as the United Kingdom prepares to leave the club it joined in 1973.

Lidington said the vote showed that many MPs do not want a no deal but he cautioned that it was not enough to show simply what MPs did not want. Without an alternative, he said, the default position would be leaving without a deal.

Some investors and major banks believe May’s deal will be defeated on Tuesday but that eventually it will be approved.

The ultimate Brexit outcome will shape Britain’s $2.8 trillion economy, have far-reaching consequences for the unity of the United Kingdom and determine whether London can keep its place as one of the top two global financial centres.

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Nissan's executive Munoz takes leave of absence

(Reuters) – Japanese automaker Nissan Motor Co Ltd (7201.T) said on Saturday its chief performance officer, Jose Munoz, was taking a leave of absence.

“Jose Munoz has taken a leave of absence to allow him to assist the company by concentrating on special tasks arising from recent events,” the company said in a statement.

Munoz, who also leads Nissan’s China operations, previously led company’s growth strategy in the United States.

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Automakers close out 2018 with drop in U.S. new vehicle sales

DETROIT (Reuters) – Major automakers on Thursday posted a weak finish to 2018 for U.S. new vehicle sales as the industry braced for what is widely expected to be a worse year for sales in 2019.

Ford Motor Co (F.N) reported an 8.8 percent drop in sales for December, with declines in passenger cars, SUVs and pickup trucks.

American consumers have gradually been abandoning passenger cars in favor of larger, more comfortable SUVs and pickup trucks that are far more profitable for automakers.

Sales of Ford’s F-Series pickup trucks, the top-selling U.S. brand since the 1980s, fell 1.8 percent in December and its SUV sales were off 4.4 percent.

Toyota Motor Corp’s (7203.T) December sales dropped 0.9 percent from the same month in 2017. The Japanese automaker posted strong gains in SUV and pickup truck sales, but passenger cars were down 16.5 percent, including its flagship Camry sedan, which slid 32.9 percent.

General Motors Co (GM.N), which stopped reporting monthly sales last spring, reported a 2.7 percent drop in fourth-quarter sales, with declines for Chevrolet, Cadillac and Buick brands.

The No. 1 U.S. automaker also posted drops for some of its more popular larger vehicles, including the Chevrolet Suburban, the Cadillac Escalade and the GMC Yukon, all high-margin SUVs.

GM reported a small decline for its Silverado pickup truck in the fourth quarter as it transitioned to a new, revamped model.

The automaker expects industrywide U.S. new vehicle sales to hit 17.3 million units for 2018, a slight increase versus 2017.

While analysts have estimated that 2019 will be a down year, automakers were upbeat about the market.

“We are very bullish on pickups heading into 2019,” Kurt McNeil, GM’s U.S. vice president for sales operations, said in a statement. “We feel confident heading into 2019 because we have more major truck and crossover launches coming during the year and the U.S. economy is strong.”

Fiat Chrysler Automobiles NV (FCHA.MI)(FCAU.N) bucked the trend for December, posting a 14 percent increase in sales.

Its key Jeep and Ram brands were up 10 percent and 37 percent, respectively, in December. Ram pickup truck sales were up 34 percent in December.

“This year’s performance underscores the efforts we undertook to realign our production to give U.S. consumers more Jeep vehicles and Ram pickup trucks,” Reid Bigland, FCA’s head of U.S. sales, said in a statement. “We see sales remaining solid in 2019.”

Ford shares were down 0.5 percent at $7.86, FCA dipped 0.5 percent at $14.26 and GM was down 2.6 percent at $32.78.

After a long bull run, U.S. new vehicle sales were expected to drop in 2019 as rising interest rates weigh on sales and translate into higher monthly car payments for consumers. Recent stock market turmoil and uncertainty over the health of the U.S. economy could also add to consumer caution in the short term.

While passenger car sales have fallen rapidly, a pick-up in profitable trucks and SUVs are expected to remain relatively robust despite an overall decline in sales.

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Trade wars cost U.S., China billions of dollars each in 2018

CHICAGO (Reuters) – The U.S.-China trade war resulted in billions of dollars of losses for both sides in 2018, hitting industries including autos, technology – and above all, agriculture.

Broad pain from trade tariffs outlined by several economists shows that, while specialized industries including U.S. soybean crushing benefited from the dispute, it had an overall detrimental impact on both of the world’s two largest economies.

The losses may give U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, motivation to resolve their trade differences before a March 2 deadline, although talks between the economic superpowers could still devolve.

The U.S. and Chinese economies each lose about $2.9 billion annually due to Beijing’s tariffs on soybeans, corn, wheat and sorghum alone, said Purdue University agricultural economist Wally Tyner.

Disrupted agricultural trade hurt both sides particularly hard because China is the world’s biggest soybean importer and last year relied on the United States for $12 billion worth of the oilseed.

China has mostly been buying soy from Brazil since imposing a 25 percent tariff on American soybeans in July in retaliation for U.S. tariffs on Chinese goods. The surge in demand pushed Brazilian soy premiums to a record over U.S. soy futures in Chicago, in an example of the trade war reducing sales for U.S. exporters and raising costs for Chinese importers.

“It’s something that’s crying for a resolution,” Tyner said. “It’s a lose-lose for both the United States and China.”

Total U.S. agricultural export shipments to China for the first 10 months of 2018 fell by 42 percent from a year earlier to about $8.3 billion, according to the U.S. Department of Agriculture.

The most actively traded soybean futures contract averaged $8.75 per bushel from July to December 2018, down from an average of $9.76 during the same period a year earlier.

    As of Dec. 28, futures in the last month of the year were averaging $8.95-1/2 a bushel. That was down from $9.61-3/4 for all of December last year.

To compensate suffering farmers, the U.S. government has allocated about $11 billion to direct payments and buying agricultural goods for government food programs, after consulting economists, including Tyner.

In North Dakota, which exports crops to China through ports in the Pacific Northwest, soy farmers face at least $280 million in losses because of Beijing’s tariffs, said Mark Watne, president of the North Dakota Farmers Union.

“You could almost put another $100 million on top of this because all commodity prices are down and that affects North Dakota farmers indirectly,” Watne said.

China’s tariffs improved margins for U.S. soy crushers such as Archer Daniels Midland Co (ADM.N) by leaving plentiful supplies of cheap soybeans on the domestic market.

Chinese soybean mills, on the other hand, front-loaded soy purchases ahead of the tariffs. This led to an oversupply that reduced Chinese processing margins and led factories this summer to make the biggest cuts in years to the production of soymeal used to feed livestock.

China resumed purchases of U.S. soybeans in early December following a trade truce agreed to by leaders from the two countries during G20 summit in Argentina. But Beijing kept its 25 percent tariffs on the oilseed from America, which effectively curbed commercial Chinese buying.

“With the tariffs, the beans can’t go into the commercial system,” said a manager at a major Chinese feed producer, speaking on condition of anonymity. “The buying will have a very limited impact on the market.”

China also suffered as products such as phone batteries were hit by U.S. tariffs, and customers began looking to buy from other countries.

A study commissioned by the Consumer Technology Association showed U.S. tariffs on imported Chinese products cost the technology industry an additional $1 billion per month.

The conflict also squeezed U.S. retail, manufacturing and construction companies that had to pay more for metal and other goods.

“Input price pressures remained elevated in part due to tariffs, particularly in manufacturing and construction, and firms were struggling to pass these higher costs onto customers,” the Dallas Federal Reserve said.

The Big Three Detroit automakers – General Motors, Ford and Fiat Chrysler Automobiles – have each said higher tariff costs will result in a hit to profits of about $1 billion this year.

The pain is ongoing, economists say: Ford and Fiat expect a similar hit in 2019.

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Toyota, Honda U.S. sales fall in November

(Reuters) – Sales of new Toyota and Honda cars in the United States both fell in November, the Japanese carmakers said on Monday, pointing to an overall dip in U.S. industry numbers last month in the face of rising car prices and interest rates.

Toyota Motor Corp (7203.T) sales, which rose 1.4 percent in October, fell about 0.6 percent to 190,423 units last month, due to decreased demand for its Prius and Camry sedans, the company said.

Honda Motor Co Ltd (7267.T) said its sales fell 9.5 percent to 120,534 vehicles, more than doubling the pace of decline as it was hurt by lower volumes on passenger cars like its Civic.

Overall U.S. car sales dipped 2 percent last year from a record high of 17.55 million in 2016 and are expected to decline further in 2018. However, a fall in November would be the first since 2009 in a month when dealers traditionally offer deals to clear stock ahead of the new year.

Industry watchers have said that interest in replacing older cars is finally waning after nearly a decade of robust new car sales while rising interest rates and trade tariffs have pushed up the costs of buying.

There was progress in talks with China this weekend, but President Donald Trump has still threatened to impose a broad 25 percent tax on cars imported into the United States, potentially inflating prices further.

To make up for slowing sales, automakers have cut jobs and curtailed production of traditional passenger cars, while gradually moving to larger SUVs and trucks, which tend to be more profitable.

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U.S. agency probes 1.7 million GM SUVs for windshield wiper failures

WASHINGTON (Reuters) – The U.S. National Highway Traffic Safety Administration (NHTSA) said on Tuesday it is investigating whether General Motors Co (GM.N), the largest U.S. automaker, should recall an additional 1.7 million sport utility vehicles due to an issue with windshield wiper failures.

GM in August 2016 recalled 367,800 2013 GMC Terrain and Chevrolet Equinox SUVs in the United States to address the problem.

But after receiving 249 complaints about similar problems, the federal agency said it is probing whether the recall should be expanded to include an additional 1.7 million vehicles from the 2010-2016 model years.

The automaker said it is cooperating with the NHTSA review.

GM said it recalled the 2013 GMC Terrain and Chevrolet Equinox SUVs “because warranty data showed a higher-than-expected failure rate,” adding it has continued to monitor field data on other model years of those vehicles.

GM noted that no crashes or injuries related to the issue have been reported.

The Detroit-based automaker said the recalls were prompted after a GM Canada brand quality manager reported a potential safety issue relating to reports of windshield wiper failures in Canada through GM’s “Speak Up For Safety,” program in late 2015.

The data showed significantly higher field incidents in parts of Canada, which prompted a June 2016 recall there. Over the next two months, a higher number of U.S. reports prompted a U.S. recall, the company added.

In the 2016 recall, GM said the front-wiper module would be replaced with a module that has a water deflector and, if needed, dealers would fill the water management hole and drill a new small hole in a different location.

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