The Dutch government is to halt its multibillion-euro COVID-19 bailout to national carrier KLM amid a standoff with a pilots’ union about terms of the rescue package, Dutch Minister of Finance Wopke Hoekstra said on Saturday.
The dispute, if not resolved, could have dire consequences for KLM, which employs about 30,000 people.
The company on Friday announced that it recorded a loss of 234 million euros (US$273 million) in the third quarter of this year as a result of the aviation slump caused by the COVID-19 pandemic.
Photo: AP
“Without this loan, KLM will not get through this difficult time,” chief executive Pieter Elbers said in a statement. “This makes this impasse extremely worrying.”
The Dutch government in June threw KLM a 3.4 billion euro lifeline to help the airline survive the sharp downturn in air travel amid the pandemic.
The package is made up of a 1 billion euro loan and 2.4 billion euros in guarantees for bank loans.
However, there were strings attached, including a demand that KLM cut costs by 15 percent, and improve its sustainability.
“It is up to KLM and the unions to ensure that the conditions set are still met,” Hoekstra said in a letter to the Dutch parliament.
KLM submitted a restructuring plan to the government on Oct. 1, in which labor unions representing pilots, cabin crew and ground staff agreed to pay cuts.
However, the agreements only apply until 2022; Hoekstra is seeking assurances from KLM that unions would agree to pay cuts throughout the duration of the bailout, likely five years.
KLM said five labor unions agreed to sign a “commitment clause,” saying their members would agree to pay cuts for the full duration.
It said one of the unions representing cabin and ground staff was still considering the matter, while the pilots’ union did not sign.
Hoekstra called the pilots’ stance “very disappointing and risky.”
The pilots’ union said its members already have agreed to a 20 percent pay cut and that they are committed to “continue taking responsibility to get KLM through the crisis and make it a healthy company again.”
SEMICONDUCTORS: The firm has already completed one fab, which is to begin mass producing 2-nanomater chips next year, while two others are under construction Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, plans to begin construction of its fourth and fifth wafer fabs in Kaohsiung next year, targeting the development of high-end processes. The two facilities — P4 and P5 — are part of TSMC’s production expansion program, which aims to build five fabs in Kaohsiung. TSMC facility division vice president Arthur Chuang (莊子壽) on Thursday said that the five facilities are expected to create 8,000 jobs. To respond to the fast-changing global semiconductor industry and escalating international competition, TSMC said it has to keep growing by expanding its production footprints. The P4 and P5
Printed circuit board (PCB) maker Global Brands Manufacture Ltd (精成科技) is to fully acquire Japanese peer Lincstech Co for about NT$8.4 billion (US$256.9 million) as the company aims to add high-end PCBs to its PC-centric product lineups. The company also expects the deal to help expand its manufacturing sites in Southeast Asia, as local firms diversify to mitigate geopolitical risks. “The acquisition will mean an important step for the company to further expand its presence in Southeast Asia and globally,” Global Brands Manufacture chief financial officer Weng Chia-yu (翁家玉) said at a news conference in Taipei yesterday. The company has set up manufacturing
DOWNFALL: The Singapore-based oil magnate Lim Oon Kuin was accused of hiding US$800 million in losses and leaving 20 banks with substantial liabilities Former tycoon Lim Oon Kuin (林恩強) has been declared bankrupt in Singapore, following the collapse of his oil trading empire. The name of the founder of Hin Leong Trading Pte Ltd (興隆貿易) and his children Lim Huey Ching (林慧清) and Lim Chee Meng (林志朋) were listed as having been issued a bankruptcy order on Dec. 19, the government gazette showed. The younger Lims were directors at the company. Leow Quek Shiong and Seah Roh Lin of BDO Advisory Pte Ltd are the trustees, according to the gazette. At its peak, Hin Leong traded a range of oil products, made lubricants and operated loading
The growing popularity of Chinese sport utility vehicles and pickup trucks has shaken up Mexico’s luxury car market, hitting sales of traditionally dominant brands such as Mercedes-Benz and BMW. Mexicans are increasingly switching from traditionally dominant sedans to Chinese vehicles due to a combination of comfort, technology and price, industry experts say. It is no small feat in a country home to factories of foreign brands such as Audi and BMW, and where until a few years ago imported Chinese cars were stigmatized, as in other parts of the world. The high-end segment of the market registered a sales drop
RSS