Don't rush restoration of Copenhagen's Old Stock Exchange, Notre-Dame expert says

Published 30/04/2024, 

: A firefighter works after a fire broke out at the Old Stock Exchange, Boersen, in Copenhagen, Denmark April 16, 2024. 

Ritzau Scanpix/Ida Marie Odgaard via REUTERS/File Photo

By Lucien Libert and Isabelle Yr Carlsson

PARIS/COPENHAGEN (Reuters) - Restoring Copenhagen's Old Stock Exchange, a local landmark that partly burned down earlier this month, needs to be done step-by-step, resisting the emotional impulse to rebuild quickly, an expert involved in the restoration of Notre-Dame-de-Paris said.

Two weeks ago to the day, a blaze toppled the spire of the old exchange, causing large parts of its roof and later its walls to collapse. The scene was reminiscent of the fire that engulfed the French cathedral in 2019.

"It is important not to rush. There are a thousand problems to fix and the temptation is to go very fast," said Antoine-Marie Preaut, an official from the French Ministry of Culture, who was one of the first people to enter Notre-Dame after the blaze and has been closely involved in its restoration since.

"The will to rebuild is a response to the emotion created by the fire. But is it possible to rebuild? Can the structure support the spire again? At what cost and under which approach? The experts will help answer," he told Reuters.

"One needs instead to assemble a team across fields, to have the most comprehensive view possible."

The lord mayor of Copenhagen, Sophie Haestorp Andersen, will visit Paris this weekend for a climate change meeting but will discuss the fire while there.

She told Reuters she is hoping to learn from French experts how to prevent other historical buildings from damage by fire.

She said the Mayor of Paris had also invited Danish officials for a Paris visit, at a later stage, to study what can be relevant from the Notre-Dame fire.

The restoration of the French cathedral is nearing completion and the re-opening is scheduled for December.

Preaut said Danish authorities will need to secure their site and allow investigators to find out the cause of the fire, which is unknown. However, both fires started during renovation work.

"Fires can happen more frequently during renovations. More people come on a site, increasing the risk of something going wrong," said Preaut.

Finding the funds for restoration will also be key, said Preaut, given the works will cost more than before the fire.

To restore Notre-Dame, France raised 850 million euros ($911.29 million) in donations from the general public, France's richest businessmen and public financing.

"We don't know how much the Stock Exchange's restoration will cost. "We hope they can get some private financing ... this will be long and costly," said Preaut.

The images of the Danish fire were eerily reminiscent of the fire at Notre-Dame, Preaut recalled.

"It was troubling to see how similar the situations were: the pictures from April 16, when we saw the Copenhagen stock exchange on fire, it immediately looked like it was April 15, 2019 when Notre-Dame-de-Paris burnt," Preaut said.

($1 = 0.9327 euros)

Glass half-full: Beer Party up for election in Austria

Updated April 30 2024 

On the ballots Austrians will be able to put a cross over the Beer Party at parliamentary elections.

 (EPA PHOTO)


Austria's Beer Party will run in this year's parliamentary election even though it's still well short of its own funding target, its leader says, buoyed by growing support and choosing to see the glass as half-full.


The party, founded largely as a joke in 2015 by medical doctor and rock musician Dominik Wlazny, now poses a real threat of siphoning off votes from other parties, particularly those also on the left, at a time when the far right has a clear lead in the polls.


"Yes, the Beer Party will run in the coming parliamentary election. The support we have received is massive. That gives us the motivation to go through with it," Wlazny, 37, said in a statement to the media.


In January, he said entering the race would depend on whether it had gathered enough funds, which it planned to do by increasing its membership to 20,000 from "around 1300 active members" at the end of 2023. On Tuesday he conceded it was still far short of that, with the election due to be held by October.

"We have fulfilled more than half of our funding goal. Our glass is half-full, so to speak, and more is being poured in constantly," Wlazny said.


The party ran in the last parliamentary election in 2019 and secured just 0.1 per cent of the vote, but Wlazny came third in 2022's presidential election with 8.3 per cent. Recent opinion polls have put its support between five per cent and seven per cent.


To enter parliament, a party needs four per cent.


The party has previously campaigned on serious issues and those that are less so, ranging from improving the public health system to installing public beer fountains in Vienna.


Australian Associated Press

 

Canada Unions Brace for 2025 Labor Crunch in Oil Sands Maintenance Season

April 26, 2024 EnergyNow Media

Annual maintenance on Canada’s oil sands plants is forecast to cause no more disruption than usual this year, but trade union officials are warning of a labor crunch during Alberta’s 2025 turnaround season as construction takes off on two new industrial projects.

Every year producers in Alberta hire thousands of extra skilled workers to execute essential maintenance on oil sands upgraders, thermal projects and refineries. Canada is the world’s fourth-largest oil producer, and roughly two-thirds of its 4.9 million barrels per day (bpd) of crude come from northern Alberta’s oil sands.

The turnarounds, lasting from a few weeks to a couple of months, often involve temporarily shutting down production and can squeeze Canadian crude prices higher.

Maintenance at projects owned by Suncor Energy, Canadian Natural Resources, Cenovus Energy and Imperial Oil will take around 238,000 bpd of crude offline during the second quarter, according to company presentations, nearly 5% of Canada’s total production. A further 93,000 bpd will be shuttered in the third quarter.

This year maintenance season is relatively steady, union representatives told Reuters, with turnarounds at major projects spaced out and enough workers available.

In 2025, however, oil sands projects and Alberta refineries will be forced to compete for skilled trades as construction starts at Dow’s C$8.9 billion ($6.5 billion) chemical plant near Edmonton and work on a C$1.6 billion hydrogen facility being built by Air Products gathers pace.

“This is the calm before the storm,” said Terry Parker, executive director of the Building Trades of Alberta, adding wages are set to rise 3.6% this year, on top of a 4% increase last year.

A tighter labor market will likely push up wage bills for producers as they offer incentives and bonuses to secure workers and force them to bring in foreign trades, Parker said.

Canadian Natural, the country’s biggest oil and gas producer, said it monitors the availability of skilled workers on an ongoing basis and works with service providers to ensure it has enough people for maintenance activities.

The other companies did not respond to requests for comment.

Next year could mark the start of a multi-year period of tighter labor markets in Alberta. Construction on the Dow project is expected to last at least eight years and require 8,000 workers at its peak and the Air Products facility will hire around 1,200 people for each of its three phases, Parker said.

FOREIGN WORKERS

Discussions between Alberta unions and their sister organizations across the country are already underway, and firms will start hiring some temporary foreign workers in the autumn and winter, said Declan Regan, Local 955 president for the International Union of Operating Engineers.

“We’re going to see some really heavy pressure for finding trades during 2025,” Regan said, adding that crane operators, scaffolders, pipefitters and boilermakers will be in highest demand.

However, he warned Canadian companies may struggle to lure U.S. trades north due to a weak Canadian dollar.

“In our last boom we were focused on bringing Americans in because they’re closer and there’s no language barrier, but nowadays their economy is better and their money is better,” Regan added.

Turnarounds are expensive, with Imperial alone expecting to spend C$365 million out of its C$1.7 billion capital budget on maintenance this year, according to company guidance.

Wally Ewanicke, an organizer at Unifor National, said there was an emerging trend of firms extending time between maintenance periods to cut costs, boost production and maximise returns to shareholders.

“We are running certain equipment for longer than we did historically because they (companies) do not want to put capital in at the moment,” Ewanicke said, adding there was some concern among union members about an increasing risk of equipment failure and accidents.

Canadian Natural, for example, is shifting planned turnarounds at its 250,000 bpd Horizon plant to once every two years instead of once a year, a move the company said will allow it to increase production by around 14,000 bpd.

“We have identified the opportunity to perform a major turnaround safely, effectively and efficiently every second year,” Canadian Natural said, adding it will complete certain maintenance activities safely between major turnaround cycles.

(Reporting by Nia Williams in British Columbia Editing by Marguerita Choy)

Analysis-Canada risks losing investment to Mexico as labor productivity skids

FILE PHOTO: A view of an illustration outside a wood flooring sales office next to an employment agency in Toronto, Ontario, Canada October 8, 2021. REUTERS/Chris Helgren/File Photo© Thomson Reuters

By Promit Mukherjee

OTTAWA (Reuters) - Canada's low labor productivity level puts the country at risk of losing of billions of dollars of investments to Mexico, as the so-called nearshoring boom spurs companies to move supply chains to North America, economists and lobby groups say.

Mexico is fast becoming a global destination to manufacture products for supply to the U.S., where companies are seeking suppliers closer to home to reduce their dependence on China and shorten their supply chain. Canada, however, has seen little benefit from this trend.

If Prime Minister Justin Trudeau's government fails to take measures to boost productivity, Canada will miss a historic opportunity to attract funds flowing into the region from the "nearshoring" boom of U.S. companies looking for suppliers close to their homebase, economists warn.

The annual labor productivity of Canadian businesses declined 1.8% in 2023, its third consecutive year of decline. That prompted the Bank of Canada Senior Deputy Governor Carolyn Rogers to sound the alarm over the country's productivity declines, which she blamed on Canada's lagging investment in machinery, equipment and intellectual property.

That is primarily because an influx of cheap, low-skilled immigrant labor offered companies the incentive to substitute that for long-term investment in research, training and innovation. As a result, Canada's productivity level among G7 economies is now second to last after Italy and below the average of the OECD grouping of rich nations.

Economists say continued low labor productivity dampens profits as well as makes Canadian output expensive and uncompetitive globally.

Mexico, on the other hand, is finding itself in a sweet spot. Foreign companies have long been drawn to Mexico due to its lower labor and other input costs, said Juan José Gómez-Camacho, senior fellow at the SAIS Foreign Policy Institute in Washington D.C. and a former Ambassador of Mexico to Canada.

Now, "Mexico is benefiting the most" from the wave of new investments driven by U.S. efforts to reduce dependence on China, he said.
Mexico last year replaced China to become the biggest trading partner of the United States. Canada lost its status as the biggest U.S. trading partner a decade ago.

Mexico has seen foreign direct investment (FDI) into the country hit a record $36 billion in 2023, a 27% jump from a year earlier, with more than half flowing into manufacturing, according to official data.

Mexico's President Andrés Manuel López Obrador has doubled down on investments in public projects, which has helped pushed the country's gross fixed capital formation - a metric to gauge investments in factories and machineries - up 25% in the fourth quarter last year from the first quarter of 2022, according to World Bank data.

In contrast, FDI into Canada dropped 42% to C$52.4 billion ($38.4 billion) in 2023 from a year earlier. Its gross fixed capital formation dropped by 7% between the first quarter of 2022 and last quarter of 2023.

"The US and Mexico have taken this big gamble that by having very large domestic public investment we can get substantial positive return," said Joseph Politano, a New York-based economist who publishes the Apricitas Economics newsletter.

"Canada is not doing that at a scale like the U.S. or Mexico," he said.

'MISSED THE BOAT'

Mexico, whose sprawling landscape of industrial parks in the north boasts almost 100% occupancy, is setting up a trans-country railway corridor and its 18 ports have helped drive record FDI, according to economists and trade data from the government.

In the key autos sector, Mexico is already producing 1.5 times more vehicles than Canada and has already reached its pre-pandemic output level. Canada's vehicle production is languishing below 2019 levels and the sector finds it tough to compete with Mexico on labor costs due to a unionized workforce.


Mexico is also attracting investments from an array of automotive supply chain players as part of the transition to electric vehicles(EV), including Tesla.

To be sure, Canada has seen some signs of optimism on the investment front - notably a surge in EV-related investment over the past year, thanks to government tax incentives. That includes plans announced last week for a C$15 billion EV plant and battery manufacturing by Japan's Honda, the company's biggest investment in North America.

Swedish battery maker Northvolt, Ford Motor Co., Stellantis NV and Volkswagen also last year committed billions of dollars in investment into battery manufacturing in Canada.

"Canada is a world-class destination for foreign direct investment," said Katherine Cuplinskas, a finance ministry spokesperson. "The recently announced generational investments from Honda, Dow Chemicals, Volkswagen, Stellantis, and Northvolt are concrete proof points of Canada's attractiveness for global private capital."

The government has also promised C$2.4 billion to support artificial intelligence-related activities over five years in this month's budget, to improve productivity.

In the first three quarters of 2023, Canada saw the largest FDI on a per capita basis among G7 countries and attracted the third highest global investments in the world, and Cuplinskas said the stock of total FDI grew by C$52.4 billion last year, with the U.S. accounting for close to half.

However, economists say the government needs more concerted efforts to tap the nearshoring opportunity, and a budget proposal to increase the capital gains tax on wealthy individuals and businesses will further drive capital away.

Ultimately Canada is struggling to keep up while U.S. manufacturing activity is driven by subsidies in its Inflation Reduction Act and Mexico enjoys higher productivity levels and lower labor costs, said Pedro Antunes, chief economist at Conference Board of Canada, an independent think tank.

"We may have missed the boat," he said.

($1 = 1.3657 Canadian dollars)

(Reporting by Promit Mukherjee, editing by Deepa Babington)

CLIMATE CRISIS

Forest fires raze parts of India amid heat, dry weather

Reuters
Tue, 30 April 2024 

NEW DELHI (Reuters) - Frequent fires are razing forests in India's Uttarakhand state in the north and Odisha in the east amid high temperatures and long dry spells, and the blazes have been worsened by people burning the forest to collect a flower used to brew alcohol.

Data from the state-run Forest Survey of India shows that as of 2021, 54.4% of forests in India experienced occasional fires, most of them due to man-made factors.

"Agriculture stubble burning, misconceptions and burning of shrubs to shoo away wildlife are major reasons behind the forest fires," Swapnil Aniruddh, a forest official in Uttarakhand, told Reuters.


After a brief respite during the previous season from November to April, forest fires have picked up again this year, with 653 incidents in Uttarakhand alone, government data shows.

Odisha's fires have been exacerbated by people setting parts of the forest ablaze to collect Mahua flowers, which are highly sought after as they are used to brew a popular liquor.

During the current season, 10,163 fire points in Uttarakhand have been detected using the government's imaging radiometer.

Overall, loss of significant forest cover is a big worry for India as it tries to dramatically reduce its climate-changing emissions.

Among the organizations helping to curb the fires is the Indian Air Force, which has used the aerial firefighting 'Bambi Bucket' technique of collecting water from a nearby lake to spray over the region.

The situation may get worse, with India's weather department predicting more heat-wave days than normal between April and June this year, along with a longer dry spell for Uttarakhand.

(Reporting by Tanvi Mehta, Saurabh Sharma in Lucknow and Jatindra Dash in Bhubaneswar; Editing by Bernadette Baum)

‘Fearless Girl’ Lawsuit by State Street Settles on Eve of Trial

Chris Dolmetsch, Bloomberg News

“Fearless Girl” at its new site near the New York Stock Exchange in 2018. , Photographer: Jeenah Moon/Bloomberg

(Bloomberg) -- State Street Corp. and the artist it commissioned to create Wall Street’s Fearless Girl sculpture have settled a 2019 lawsuit on the eve of trial.

The bank, which commissioned the artwork, was set to square off against the sculptor, Kristen Visbal, in a trial starting Monday in lower Manhattan over replicas she sold that it claimed violated rights agreements between them. The two sides offered no details of the settlement in a court filing over the weekend. 

In its suit, filed two years after the bronze suddenly appeared in 2017 across from the financial district’s landmark Charging Bull, State Street alleged breach of contract and trademark infringement against Visbal, who denied the allegations and filed claims of her own. The suit thrust the piece back into the spotlight after the bank installed it just before International Women’s Day in March 2017. 

The work was part of a McCann ad campaign urging corporate boards to add more women as State Street was promoting its exchange-traded fund SHE, featuring US companies with gender-diverse senior management. It was supposed to be in place for just 30 days. But images of the dauntless girl went viral, generating worldwide news media coverage and drawing thousands of people to its location on lower Broadway. State Street and Visbal then negotiated the rights agreements that became the subject of their dispute. 

Fearless Girl was at the center of a more famous fight. It was moved to a site across from the New York Stock Exchange in 2018 after opposition from the creator of Charging Bull, Arturo Di Modica. He complained that the work and its location had distorted the meaning of his piece, which has stood by Bowling Green since 1989. 

Since Fearless Girl was installed, women continue to reach new heights in corporate America but are still almost a decade away from parity, according to data compiled by Bloomberg. While they occupied a record 33.5% of S&P 500 companies’ board seats at the end of last year, the ratio was 50-50 or more at just 29 companies, the data show. 

Just seven months after the statue’s installation, State Street itself agreed to pay $5 million to resolve US allegations that it discriminated against hundreds of female executives by paying them less than their male colleagues.

The Fearless Girl case is State Street Global Advisors Trust Co. v. Visbal, 19-cv-1719, US District Court, Southern District of New York (Manhattan).

©2024 Bloomberg L.P.

Wages, benefits boost US labor costs in first quarter

Apr 30, 2024

Single-family residential homes are shown under construction in Menifee, California, U.S., March 28, 2024.

 REUTERS/Mike Blake/File PhotoMike Blake

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. labor costs increased more than expected in the first quarter amid a rise in wages and benefits, confirming the surge in inflation early in the year that will likely delay a much- anticipated interest rate cut later this year.

The pick-up in labor costs reported by the Labor Department on Tuesday was despite signs of some easing in labor market conditions. Federal Reserve officials were due to start a two-day policy meeting on Tuesday.

"Fed Chair Powell has said wages were not the key to the nation's inflation outlook, but employment costs remain sticky and certainly won't help in the war on inflation," said Christopher Rupkey, chief economist at FWDBONDS.

The Employment Cost Index (ECI), the broadest measure of labor costs, increased 1.2% last quarter after rising by an unrevised 0.9% in the fourth quarter, the Labor Department's Bureau of Labor Statistics said.

Economists polled by Reuters had forecast the ECI would advance 1.0%. Labor costs increased 4.2% on a year-on-year basis after rising by the same margin in the fourth quarter.

The ECI is viewed by policymakers as one of the better measures of labor market slack and a predictor of core inflation because it adjusts for composition and job-quality changes.

The report followed data last week that showed price pressures heating up in the first quarter.

FED ON HOLD

The U.S. central bank is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July.

The Fed has raised the policy rate by 525 basis points since March 2022. Financial markets have pushed back expectations of a rate cut this year to September from June.

A handful of economists continue to expect that borrowing costs may be lowered in July in the belief that the labor market will slow noticeably in the coming months. Others believe the window for the Fed to start its easing cycle is closing.

Wages increased 1.1% in the January-March quarter after advancing by the same margin in the prior three months. They jumped 4.4% year-on-year after rising 4.3% in the fourth quarter. Private sector wages rose 1.1% after gaining 1.0% in the prior quarter. They gained 4.3% in the 12 months through March. Wage gains remain above their pre-pandemic levels.

Annual compensation costs increased 5.3% for union workers and were up 3.9% for non-union workers. Wages and salaries for union workers shot up 6.3% compared to the 4.1% rise for non-union workers in the 12 months through March.

State and local government wages accelerated 1.4% after rising 1.1% in the prior quarter. They surged 5.0% year-on-year after gaining 4.7% in the fourth quarter.

Inflation-adjusted wages for all workers increased 0.9% year-on-year after rising 1.0% in the fourth quarter, helping to underpin consumer spending and the overall economy.

Benefits increased 1.1% after gaining 0.7% in the October-December quarter. They advanced 3.7% year-on-year.

"Overall, the ECI suggests, like many labor market indicators, that the labor market has remained tight lately, even though the imbalance between labor demand and labor supply has been reduced in recent years," said Daniel Silver, an economist at JPMorgan.

(Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci)

 

European bank still in Russia see profits quadruple, pay over €800mn in taxes

Raiffeisen bank has seen its profits soar and accounts for half of all the taxes paid to the Russian government of western banks still operating in Russia. / bne IntelliNewFacebook

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By bne IntelliNews April 30, 2024

Western banks that have continued operations in Russia paid more than €800mn in taxes last year, marking a fourfold increase from pre-war levels, despite pledges to reduce their exposure following the full-scale invasion of Ukraine, the Financial Times reported on April 29.

The Financial Times' analysis revealed that the seven largest European banks in Russia—Raiffeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo, and OTP—collectively reported profits exceeding €3bn in 2023.

The significant tax contributions from these banks account for about 0.4% of all Russia’s expected non-energy budget revenues for 2024 and helps sustain the Kremlin's efforts to finance the war in Ukraine. Over half of the tax payments were paid by Austria’s Raiffeisen Bank International (RBI), which is the biggest of the foreign banks in Russia and has been reluctant to leave, despite repeated promises to wind its Russian business down. The bank complains that it has been unable to find a buyer for its business.

RBI's profits in Russia surged to €1.8bn from 2021 to 2023, representing half of the Austrian group's total profit. RBI was an early entrant to the Russian market and pioneered trade finance deals after Russia began to emerge from the chaos caused by the collapse of the Soviet Union in 1991. Subsequently it built up a major western style retail banking business catering to the emerging middle class in the boom years in the noughties.

Its recent gains are primarily attributed to heightened interest rates and the constraints international sanctions have imposed on Russian banks, enhancing the competitiveness of Western banks within the country.

"RBI’s Russian profits more than tripled to €1.8bn between 2021 and 2023, accounting for half of the Austrian group’s total profit," the FT reported. Additionally, RBI also paid €47mn due to a windfall levy imposed by the Kremlin on certain companies last year.

RBI has faced criticism from the European Central Bank and the US Treasury Department for its failure to withdrawal and more recently has been threatened with punitive action if no progress is made. Although the bank has reduced its loan book in Russia by 56% since early 2022, recent job postings indicate plans for significant expansion of its client base in the region.

Other German and Hungarian banks like Deutsche Bank, Commerzbank and OTP have substantially reduced their presence in Russia. Italy’s Intesa is nearing a complete exit, though it has not yet finalised the sale of its Russian business and UniCredit has opted not to comment on its operations.

US banks also remain financially active in Russia. Citigroup, despite shutting down its corporate and retail business, became the fourth-largest taxpayer among Western banks in Russia, earning $149mn and paying $53mn in taxes in 2023, according to data from the Kyiv School of Economics based on figures from the Russian Central Bank. JPMorgan, meanwhile, earned $35mn and paid $6.8mn in taxes while dealing with legal challenges from its former Russian partner, VTB.

The imposition of sanctions on most of the Russian financial sector, which includes denying access to the SWIFT international payment system, has inadvertently made international banks critical financial conduits between Moscow and the West. This role has significantly boosted RBI’s net fee and commission income in Russia, which jumped from €420mn in 2021 to €1.2bn in 2023.

RBI also has a subsidiary in Ukraine where it plays a similar role and earns substantial fees, facilitating transfers of money in and out of the country.

A senior Russian banking executive commented on the situation, told the FT: "It is not only in RBI’s interest to stay in Russia. The [Russian central bank] will do everything it can to not let them go because there are few non-sanctioned banks through which Russia can receive and send SWIFT payments."

 

Exclusive-Austrian officials warn off Raiffeisen from Russian oligarch deal, sources say

April 30, 2024

LONDON (Reuters) - Austrian authorities have urged Raiffeisen Bank International to drop a deal linked to a Russian oligarch fearing a backlash from the United States, people familiar with the matter said, a blow to its plans to unlock funds stranded in Russia.

Raiffeisen (RBI), the biggest Western bank in Russia, wants to buy a stake in construction group Strabag linked to Oleg Deripaska for 1.5 billion euros ($1.6 billion), a contested deal that has renewed international pressure on the Austrian lender.

In recent weeks, Austrian central bank officials have warned Raiffeisen about the deal, cautioning that it could backfire if the U.S. penalises the bank, said one person with direct knowledge of those discussions.

The move had come under fire from the U.S. Treasury because Deripaska is sanctioned, exacerbating tensions between Washington and Raiffeisen, which is already under scrutiny from U.S. sanctions enforcement agency OFAC.

Other Austrian public officials have also privately cautioned the bank away from the sale, believing it could be declared a breach of sanctions, said two people with direct knowledge of those discussions.

A spokesperson for Raiffeisen said the "acquisition of Strabag shares remains subject to the compliance review of RBI", adding that it "will not buy the shares from Mr. Deripaska nor any other sanctioned person or entity".

A central bank spokesperson declined to comment.

A spokesperson for Deripaska said he had "had nothing to do with Strabag for a long time" and would not comment, describing Western sanctions against him as "totally misguided" and "based on false information".

($1 = 0.9321 euros)

(Additional reporting by Alexandra Schwarz-Goerlich in Vienna; editing by Elisa Martinuzzi and Tommy Reggiori Wilkes)

By Francesco Canepa and John O'Donnell

Walmart to shut all health clinics in US over lack of profitability

Reuters 

Shopping trolley is seen in front of Walmart logo in this illustration

By Siddharth Cavale

(Reuters) -Walmart said on Tuesday it will close all 51 of its health centers and shut its virtual health care operations, saying it could not see it as a sustainable business model to continue.

"Healthcare is expensive to run. We were finding that the increased labor and operating costs environment, like with reimbursement, both public and private, made it difficult (to run the business) and obvious we had to close," Walmart spokeswoman Marilee McInnis told Reuters.

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The company said in a statement those challenges created an environment where it saw a "lack of profitability" that made the care business "unsustainable for us at this time."

The world's largest retailer expects to close the 51 health centers, which are typically located next to a Walmart Supercenter and house doctors and dentists, within 30 to 90 days, McInnis said. The clinics were spread across five states including Texas and Florida.

The Bentonville-based company launched the health center business in Georgia in 2019, offering primary care, dental care, behavioral health, labs and X-ray, audiology and telehealth services.

Walmart declined to disclose the sales it made from each health center or the losses Walmart might incur from closing the business.

"While this decision is disappointing to management, we believe it is immaterial to their financial outlook," D.A. Davidson analyst Michael Baker said.

The company said it would instead focus on its nearly 4,600 pharmacies and more than 3,000 Vision Centers located within its stores that offer many of the services that its health care centers offered.

Walmart's pharmacies, for instance, offer clinical services like testing and treatment for respiratory illnesses like flu and strep, which were also offered at health centers.

Companies such as Walmart, Walgreens, Amazon and CVS have expanded into providing healthcare services during the past five years, seeing opportunities in the highly fragmented U.S. system. But it has not been clear that consumers want such services from retailers or that they are profitable.

Walmart's move on Tuesday is a surprising reversal of plans it laid out last year to nearly double the number of U.S. health center locations it operated in 2024

And Walgreens has shuttered or sold about 160 VillageMD primary care locations in the last few months, Jefferies analysts noted, after the company expanded too fast and witnessed slower-than-expected growth of patients per doctor. In March, it recorded a $5.8 billion impairment charge on its investment in VillageMD.

Amazon in February said it would cut a few hundred jobs across its healthcare units, including clinic operator One Medical which it acquired for $3.5 billion last year.

The struggles show how difficult it is to crack the U.S. health care system, which is a conglomeration of employer-funded care, private health insurance and government programs that cost the United States $4.5 trillion in 2022. More recently, the sector has been facing other issues including a shortage of physicians and rising costs of drugs.

Walmart shares were down 1% in morning trading on Tuesday.

(Reporting by Siddharth Cavale in New York, Granth Vanaik and Leroy Leo in Bengaluru; Editing by Shounak Dasgupta and Shailesh Kuber and Chizu Nomiyama)

Residents of northern Israel brace for possible all-out war with Hezbollah

April 30, 2024 



By Andrew MacAskill

HAIFA, Israel (Reuters) -Eli Harel was an Israeli soldier in his early thirties when he was sent into Lebanon in 2006 to battle fighters from the Iranian-backed group Hezbollah in a bloody, largely inconclusive month-long war.

Now 50, Harel is ready to rejoin the army to fight the same group if shelling along Israel's northern border turns into a full-blown war with Iran's most powerful regional proxy. This time Israeli forces would face some of the most challenging fighting conditions imaginable, he said.

"There are booby traps everywhere," he told Reuters. "People are popping up from tunnels. You have to be constantly on alert otherwise you will be dead."

Harel lives in Haifa, Israel's third biggest city, well within range of Hezbollah's weapons. Haifa's mayor recently urged residents to stockpile food and medicine because of the growing risk of all-out war.

Israel and Hezbollah have been engaged in escalating daily cross-border strikes over the past six months - in parallel with the war in Gaza - and their increasing range and sophistication has spurred fears of a wider regional conflict.

Hezbollah has amassed a formidable arsenal since 2006.

Like Hamas, the militant Palestinian group battling Israel in Gaza, Hezbollah has a network of tunnels to move fighters and weapons around. Its fighters have also been training for more than a decade with Syrian President Bashar al-Assad's forces.

Hezbollah has so far restricted its attacks to a strip of northern Israel, seeking to draw Israeli forces away from Gaza. Israel has said it is ready to push Hezbollah back from the border, but it is unclear how.

EXILES IN THEIR OWN COUNTRY

Some 60,000 residents have had to leave their homes, in the first mass evacuation of northern Israel, and cannot safely return, prompting increased calls within Israel for firmer military action against Hezbollah. Across the border in Lebanon, some 90,000 people have also been displaced by Israeli strikes.

Eyal Hulata, a former Israeli national security adviser, said Israel should announce a date in the next few months when displaced Israeli civilians can return, effectively challenging Hezbollah to scale back its shelling or face all-out war.

"Israelis cannot be in exile in their own country. This cannot happen. It is the responsibility of the IDF (Israel Defense Forces) to defend civilians. It is what we failed to do on Oct. 7," he said, referring to the Hamas attack on southern Israel that prompted the current war in Gaza

Hezbollah did not respond to a request for comment. The group's leader Sayyed Hassan Nasrallah said in February that residents of northern Israel "will not return" to their homes.

The Israeli military said this month it had completed another step in preparing for possible war with Hezbollah that centred on logistics, including preparations for a "broad mobilisation" of reservists.

A conflict between Israel and Hezbollah would probably result in massive destruction in both countries. In the 2006 war, 1,200 people in Lebanon were killed and 158 in Israel.

Since October, more than 300 people have died in fighting in the border area, mainly Hezbollah fighters.

If war did break out, Israel would probably bomb targets in southern Lebanon before soldiers tried to push at least 10 kilometres across the border. Hezbollah would likely use its estimated arsenal of over 150,000 rockets to target Israeli cities. In 2006 the group fired about 4,000 missiles at Israel.

'IMMENSE' DAMAGE LIKELY

Assaf Orion, a retired Israeli brigadier general, told Reuters there was a growing likelihood of war erupting between Israel and Hezbollah, caused either by an unplanned escalation in clashes or by Israel losing patience with people being unable to return home.

Orion said the intensity of bombing in any war could be 10 times greater than in Gaza.

"The damage will be immense," he said. "Gaza will look like a walk in the park compared to that level of fighting."

Haifa, a port city built on the slope of a mountain from where it is possible to see the Lebanon border on a clear day, was targeted in 2006. Eight people were killed in the worst attack.

Nasrallah said in 2016 Hezbollah could hit ammonia storage tanks in Haifa, saying the result would be "like a nuclear bomb".

The mood in Haifa is a mixture of anxiety and fatalism.

Hundreds of evacuated Israelis have moved to the city and many said another war may be the only way to return home.

Assaf Hessed, 35, who lived in a kibbutz two kilometres from the border, said the military has until September to force Hezbollah back or residents will move elsewhere.

"We have to make a decision soon about where we live, we cannot go on like this much longer," he said.

(Additional reporting by Maya Gebeily in BeirutEditing by Gareth Jones)