Ford Revs Up To Stem £3.7m Daily EU Loss

The Ford Motor Company has stemmed quarterly losses in Europe by 21%, but it is still losing £3.7m a day.

It said $571m (£344m) was lost in the three months to the end of December.

That figure was down from the £441m European loss in the third quarter, which was equivalent to £4.79m a day.

However globally, Ford saw a 90% rise in fourth quarter profit of $3bn (£1.8bn), on revenue of $37.6bn (£22.67bn).

The 90% profit rise was achieved with a number of tax gains in the year, compared to the 2012 figure.

This included $2.1bn (£1.2bn) in accountable items, such as allowances held against US tax-deferred assets.

Revenue for the second biggest American vehicle maker rose 3.6% in the last three months of 2013, compared to the same period in the previous year.

:: Ford's chief financial officer Bob Shanks will appear on tonight's Jeff Randall Live, at 7pm.

Ford boss Alan Mulally said Ford had a healthy 2013

The profit rise was strengthened by increasing sales in North America, offset by the lower losses in Europe against weakening sales in South America.

"We had an outstanding year in 2013, demonstrating that our One Ford plan continues to drive solid results and profitable growth for all," Ford chief executive Alan Mulally said.

Ford's North America division accounts for nearly a third of total sales and while its quarterly sales were higher, profit was 9% lower due to price cuts.

That was exacerbated by $300m (£180m) costs to cover the recall of its Escape SUV.

Ford also saw better sales and deliveries in the Asia-Pacific-Africa sector, where its pre-tax profit hit a record of $106m (£63m).

That was up around three times the figure of the previous year.

The company considered 2013 "one of Ford's best years ever" as it and key rivals benefited from a sales surge in vehicles.

Total global net income for 2013 was $7.2bn (£4.34bn) on revenue of $146.9bn (£88.6bn), up 26.3% from 2012's of $5.7bn profit and $133.6bn revenue.

Ford now expects 2014 to give a similar profit return as last year.

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Ikea Growth Contracts Amid Record Profit

Profit growth at Swedish home furnishing giant Ikea has contracted by nearly two-thirds, year-on-year.

Net earnings increased by 3.1% in the 2012-13 financial reporting period, reaching €3.3bn (£2.7bn).

But despite it being a record profit, the rate of growth was almost two-thirds below the previous year.

In 2011-2012 profit growth was 8.0% and in 2010-2011 it was 10.3%.

Revenue growth also slowed last year, recorded at 3.2%, or €28.5bn (£23.4bn). In 2010-2011 and 2011-2012 revenue grew by 6.9& and 9.8%, respectively.

In a statement to Sky News, Ikea said: "We continued to increase sales despite challenging conditions in many markets, and we gained market shares in almost all markets.

"It is true that the tough economical climate has put us a bit behind schedule in the financial year 2013, but our long-term growth plan remains unchanged, even if growth is slightly less this year than previous years."

The company's largest markets are in Germany, the US, France, Russia and Sweden.

"Consumer spending is improving in many countries. While the challenging economic situation may not be over, there are positive signs," president and CEO Peter Agnefjaell said.

"Important consumer markets such as the US are coming back and Europe in general is starting to recover. Even some of the challenging markets in Southern Europe are showing good signs of activity."

In early January, Ikea said it fell behind its target of doubling sales to €50bn by 2020.

The company hopes to see solid growth in coming years from the growing middle classes in emerging markets.

The sales goal had "so far proved to be too aggressive", according to Goeran Grosskopf, chairman of the Ingka Holding parent company.

But Mr Agnefjaell added: "We have a long-term focus."

"We'll keep developing better products at lower prices, improving the shopping experience and becoming more accessible to our customers, for example through an improved service offer, e-commerce and continued expansion."

Ikea currently owns more than 300 stores in 26 countries and employs 135,000 people worldwide.

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Lloyds Cuts 1,390 Jobs Amid Strategic Review

Lloyds Banking Group is cutting 1,080 jobs and outsourcing another 310 roles, the company has confirmed.

It said the losses are part of the strategic review, previously announced in 2011.

The cuts affect the retail, risk, operations and commercial banking divisions.

The company said 90 new roles would be created within the risk, operations and commercial departments.

The taxpayer-backed group hoped a number of roles would be shed through natural wastage.

Voluntary redundancy would be an option and compulsory cuts taken where necessary as a "last resort".

Lloyds said that since the strategic review about a third of job losses have resulted in redundancies.

The bank said in a statement: "Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way.

"All affected employees have been briefed by their line manager today. The Group's recognised unions Accord, Unite and LTU were consulted prior to this announcement and will continue to be consulted."

The Unite union slammed the job losses and said nearly 35,000 people have been affected at the bank since 2008.

Unite national officer Rob MacGregor said: "While staff at Lloyds Banking Group continue to work hard to deliver half year profits of £2.1bn, management has confirmed it is to give 1,390 staff another kick.

"Lloyds Banking Group is well on the road to recovery, with the CEO being recently rewarded handsomely with a share bonus in the region of £2.5m, yet staff are being made redundant.

"Unite will continue to oppose these job losses and has sought an urgent meeting with Lloyds to outline the union's concerns."

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Ed Balls Says Stronger Recovery Is Needed

Labour Needs Better Response To Economic Growth

Updated: 4:50pm UK, Tuesday 28 January 2014

When does good growth turn bad? Statistics showing the UK economy is growing at the fastest rate since the financial crash have been met by a wall of warnings.

Growth - 0.7% in the final quarter - is unbalanced and unsustainable.

The recovery is fragile because it is driven by consumer spending and house prices (in other words - debt).

Weak exports and business investment could mean it is short lived.

This is undoubtedly true, but one thing is more certain: the wrong type of growth is still better than no growth at all.

For the Conservatives, four quarters of sustained growth means the economic plan is working.

But what does it mean for Labour?

This was Ed Balls' response: "Today's growth figures are welcome and long overdue after three damaging years of flatlining. But for working people facing a cost-of-living crisis this is still no recovery at all.

"Wages are now down £1,600 a year after inflation under David Cameron and tax and benefit changes since 2010 have left families worse off by an average of £891 this year.

"And with business investment still weak, construction output down and housing demand outstripping housing supply, this is not yet a recovery that is built to last."

Remarkably similar to a statement by the shadow chancellor sent last November, beginning: "After three damaging years of flatlining", discussing the "cost-of-living crisis" and calling for "a recovery that's built to last".

On the surface, there's nothing controversial about the similarity.

However, the November email prompted a much-discussed leaked exchange by two of Ed Miliband's closest advisers.

Torsten Bell - Mr Miliband's chief economic adviser - forwarded the statement to Labour's head of strategy, Greg Beales.

He wrote: "As an example of why we're having problems on EB (Ed Balls) messaging - this is his current three part argument: Cost of living; Recovery built to last; Economy works for working people. Nightmare."

Mr Beales replied: "When did built to last become a part of our thing?"

This means "built to last" has finally been adopted wholeheartedly by Ed Miliband's inner circle, or Labour is still split on its economic messaging.

Either way the Opposition needs to work out a consistent and convincing way to respond to improving economic news.

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iPhone Sales Drive Record Apple Revenue

The release of Apple's iPhone 5s and iPhone 5c have helped drive record revenue figures for the tech giant, the company's quarterly results show.

Apple's revenues rose to $57.6bn (£34.7bn) for the last three months of 2013, which is a new quarterly record.

The figures reveal that Apple also made profits of $13.1bn (£7.9bn) over the same period on the back of strong iPhone sales - matching record profits set a year ago.

Tim Cook: 'We continue to invest heavily in our future'

Last year also saw the release of the iPad Air and iPad mini, products which have helped the tech giant reverse a recent profit slump.

The company sold some 51 million iPhones over the period, and a further 26 million iPads.

Apple also sold 4.8 million Macs, compared with 4.1 million over the same quarter in 2012.

Tim Cook, Apple chief executive, said: "We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, software and services.

"We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better."

Despite the strong performance, Apple has forecast revenue below analysts' predictions for the current quarter, amid concerns that it will be squeezed by competition from devices running Google's Android software.

Apple's share price fell 8% to $505.05 in extended trading.

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Honda: Japan's First Net Car Exporter From US

Honda has become the first Japanese carmaker to become a net exporter of cars from the United States.

The company said it exported 108,705 vehicles from its production plants in the US last year while importing 88,537.

The statistics cover vehicles wearing the Honda and Acura brand badges.

Honda North America's executive vice president Rick Schostek called it a milestone that was "30 years in the making".

He said the value of the US-made export vehicles was $2.65bn (£1.6bn).

The average value of each vehicle was $24,377 (£14,680).

The milestone for Honda comes after it bet more than $2.7bn on a strengthening recovery in the car market, by expanding its production facilities in the US over the past three years.

Mr Schostek said company strategy was designed to boost production in the US and also make cars close to the final destination markets where they are sold.

In 2012 Honda had to recall nearly 500,000 CR-Vs over safety issues

The company said it shipped cars from its US plants last year to 50 countries, with most exports to Mexico. No vehicles went to the Japanese home market.

It did not include a breakdown figure of cars sent to Canada.

Honda helped break America's addiction to gas-guzzlers when it imported the small Civic into the country in 1973, as the global energy crisis shocked motorists.

It started making cars in America 1982, at a plant in Ohio in the first production facility owned by a Japanese carmaker.

The firm now operates seven assembly plants in North America, including four in the United States. It will open its eighth factory, in Mexico, next month.

The 2013 output was a major shift from a year earlier, when imports to the US stood at around 136,000, against  exports of about 74,000.

Honda made 1.78 million vehicles in total in North America last year, including a record 1.3 million in the US.

It said 95% of Hondas sold in the US last year were made domestically.

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Cable Warns About Wrong Type Of Recovery

Business Secretary Vince Cable has warned that Britain's economic recovery could prove to be a "short-term bounce" if it is based on a housing boom.

He made the comments on the eve of the publication of the latest GDP figures, which have shown the country's strongest growth since the financial crisis began in 2007.

But the senior Liberal Democrat expressed concern that the recovery is too heavily based on housing prices and consumer spending.

"Despite a fall in real earnings, consumers have had the confidence to start spending again - dipping into their savings held for a rainy day and making use of rising house prices, at least in London and the South East, to borrow more easily," he said.

"Despite these encouraging signs, the shape of the recovery so far has not been all we might have hoped for."

In the speech at the Royal Economic Society at Bank of England, Mr Cable said that a "real recovery is taking place".

But he said sustained growth is dependent on rebalancing the economy and preventing a return to "boom-bust cycle".

"The big question now is whether and how recent growth and optimism can be translated into long-term sustainable, balanced, recovery without repeating the mistakes of the past," he said.

"We cannot risk another property-linked boom-bust cycle which has done so much damage before, notably in the financial crash in 2008.

"Indeed, unless our government put long term rebalancing at the heart of economic decision-making I believe the recovery could prove to be short-lived."

Mr Cable did stress he is "confident" the government is taking action to ensure the UK has a "sustainable, balanced, long term recovery" - rather than a "short-term bounce".

But he said he was concerned about the effects of loose monetary policy on asset prices but stopped short of calling for a tightening.

Sky's Political Correspondent Sophy Ridge says: "There will be a few eyes rolling in the Treasury because we do have these positive GDP figures Vince Cable is still sending out a warning that this is not the kind of growth we want.

"To be fair to the Business Secretary though, there are some economists that do agree with him.

"Vince Cable's concerns are that there is not enough growth in exports, business investment - it's all based on consumer-driven spending and crucially on a housing boom."

"He's concerned that the Government's Help to Buy policy could essentially cause a housing bubble, which could drive up growth in the short term, but not in the long term."

The Cabinet minister has previously expressed concerns about the Government's Help to Buy policy.

Under the scheme, which came into effect at the beginning of October, people can buy homes of up to £600,000 with a deposit of just 5% as the Government guarantees up to 20% of the mortgage.

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Barclays Imposes Travel Ban As Jobs Axe Looms

By Mark Kleinman, City Editor

Barclays has slapped travel restrictions on its staff around the world as part of a renewed cost-cutting drive that is expected to include hundreds of job cuts in the coming weeks.

Sky News has learnt that Antony Jenkins, the bank's chief executive, has authorised a ban on all employee travel for internal meetings and demanded that executives restrict themselves to international travel only for "essential" discussions with clients and regulators.

The edict, which is understood to have signed by chief financial officer Tushar Mozaria earlier this month, comes as Mr Jenkins prepares a new wave of job cuts that insiders said was likely to impact on highly-paid directors and managing directors at its investment banking division.

Around 1,700 jobs were cut in the unit last year, with several hundred more expected to be shed in the next few weeks, said a person familiar with Barclays' plans.

Barclays, which is the first of the UK-listed banks to report its results for 2013 on February 11, is under pressure to improve its return on capital.

Last year, it raised nearly £6bn from shareholders following discussions with banking regulators about its leverage ratio, a measure of the strength of its balance sheet.

Senior sources said that Mr Jenkins had set up a special committee to oversee costs at the bank, headed by Patrick Clackson, the head of business transformation.

"There is a lot of anxiety inside the business about just how sharp the costs axe is going to be next month," said one.

Barclays' board is in the process of finalising proposals for bonus and dividend payments for last year, with insiders indicating that the bank will continue the rebalancing of staff and investor returns that commenced under Mr Jenkins a year ago.

The chief executive, who has been in the role since the summer of 2012, has set ambitious cost reduction targets, which the latest measures reflect.

The Sunday Telegraph reported at the weekend that Barclays was also examining the future of its sponsorship of the Premier League as part of a broader review that has seen it ending its association with London's 'Boris Bikes' scheme.

Last March, Sky News revealed that Mr Jenkins had signalled to shareholders that Barclays could shed as many as 40,000 jobs in the coming years as a consequence of increasing automation of services in its retail bank.

Lloyds Banking Group plans to remove more than 1000 roles, while Royal Bank of Scotland's new chief executive will announce next month a substantial cost-cutting programme, insiders say.

The job cuts in Britain's banking sector come despite the broader pick-up in the economy, with the Office for National Statistics saying that GDP had grown by 0.7% in the fourth quarter.

Barclays declined to comment.

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Branson Targets Take-Off For US Airline Float

By Mark Kleinman, City Editor

Sir Richard Branson has opened talks with banks about a flotation of Virgin America, his domestic US airline that moved into the black for the first time last year.

Sky News has learnt that Virgin America is preparing to appoint banks to oversee an initial public offering (IPO) that would involve the company listing on a US stock exchange within months. A float could value it around £1bn, bankers said on Tuesday.

The listing will follow a six-year struggle to turn the airline into a profitable business, which last November culminated in it posting a consecutive quarterly profit for the first time in its six-year history.

Sir Richard's Virgin Group has a 49% economic stake in Virgin America, but only a 25% voting stake, consistent with regulations governing the ownership of US carriers. Laws state that domestic airlines operating in the country must be majority-owned and run by US-domiciled institutions and individuals.

The remainder of Virgin America, which launched its maiden flight in 2007, is owned by Cyrus Capital, an investment fund, and senior executives.

Earlier this month, the company reported a robust performance in December, with traffic measured in revenue passenger miles rising 7.1% on capacity that was 0.8% lower than in the same month in 2012.

Load factor, another measure of airlines' performance, was 81.9% last month, up six points from the same month a year prior. The number of onboard passengers rose 10.7% from December 2012, it said.

David Cush, a former American Airlines executive who now runs Virgin America, said its improved financial results were the culmination of a more realistic approach to capacity growth and its balance sheet.

"Our strong financial results demonstrate the success of a series of strategic initiatives that started in late 2012. Reduced capacity growth, a focus on increasing unit revenue, and changes to our capital structure are all contributing to improving results.

"With the leading product in the domestic skies, we are well-positioned to continue building on these results in 2014 and beyond."

Virgin America now operates with a fleet of 53 aircraft and does not expect to increase this number until the second half of next year.

It recently undertook a debt restructuring covering roughly $300m of borrowing obligations, which has generated about $10m of annual cost savings.

A Virgin Group spokesman could not be reached for comment on the flotation, which is expected to raise some funds to repay debt and invest in the business.

A successful flotation of Virgin America would echo the model used several times by Sir Richard to take some of his business ventures, such as Virgin Mobile, to the public markets.

In the UK, Virgin Money is expected to follow in the next couple of years.

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Economy Grows At Fastest Rate Since Crash

The British gross domestic product (GDP) figure for the fourth quarter of 2013 stood at 0.7%, with growth for the full year reaching 1.9%.

Output for 2013 reached its fastest annual rate of growth for six years, according to the Office for National Statistics (ONS).

The figures were in keeping with forecasts made by economists.

The preliminary result shows the important service sector - which accounts for around three-quarters of the economy - was up 0.8%.

The ONS said construction was 0.3% down on the previous three months, due to weak figures being recorded in November.

Agriculture was up 0.5% in the October to December period, while production was up 0.7% in the same three months.

Manufacturing was up 0.9% in the quarter, which was its biggest quarter-on-quarter rise since Q3 in 2010.

ONS chief economist Joe Grice said the service sector is now above the pre-recession levels, but both production and construction are still below that level overall.

Mr Grice said: "We have now seen four successive quarters of significant growth and the economy does seem to be improving more consistently.

"Today's estimate suggests over four-fifths of the fall in GDP during the recession has been recovered, although it still remains 1.3% below the pre-recession peak."

The latest figures have given a boost to the Chancellor and come just weeks after the International Monetary Fund (IMF) did a U-turn on its forecast for the UK economy.

George Osborne told Sky News: "I think these numbers represent a real boost to the economic security of hard-working families.

"And the good news is the recovery is broadly balanced with manufacturing growing the fastest of any sector, so there's evidence that our long-term economic plan is working, but I am the first to say the job isn't done and the biggest risk to the recovery would be to come off that economic plan, and that would damage job creation and mean we don't have such bright economic prospects."

He added: "Where I have had the opportunity I have focussed the effort on those on low and middle incomes.

"That's my priority, that's where my tax-cutting priorities lie becaue I want to help those hard-working families who have got more economic security because jobs are being created, but of course have had a very dififcult time because our country went through such a terrible economic period."

The IMF now forecasts growth in 2014 of 2.4%, a figure which is in line with the Office for Budget Responsibility.

The Bank of England's current forecast is for growth of 2.8% in 2014.

Shadow chancellor Ed Balls told Sky News: "This is not yet the strong and balanced recovery we need.

"It's not a recovery driven by business investment - that's still very flat - or by exports - they've been weak -  what's going on at the moment is consumers are saving less and consumer spending is picking up somewhat.

"That's happening because housing demand and house prices are going up.

"We're not building the houses we need to match that that's why construction output is still falling. There's a lot more to do."

Mr Balls added: "For working people facing a cost-of-living crisis this is still no recovery at all."

Robert Johnson, managing director of Craftsman Tools, an engineering firm in Otley, West Yorkshire told Sky News: "I think the growth is real.

"We have seen a 10% growth last year and we are predicting growth of 30% over the next three years."

But one of the biggest problems his firm faced was getting skilled workers.

Mr Johnson said: "We feel we have got to invest in advanced machinery and equipment which we can do, but getting skilled people is the hardest thing.

"We have had to start our own apprentice school two years ago, and we are training our own apprentices to fill the skills gap."

And a skills shortage risked holding the economy back, he warned.

"It's a mixture of skilled people and advanced machinery that will help us go forward," said Mr Johnson.

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