Davos updates | VW: Supply chain woes ease; orders backed up
May 24, 2022, 1:27 PM | Updated: May 25, 2022, 11:08 am
(Laurent Gillieron/Keystone via AP)
DAVOS, Switzerland (AP) — Executives with German automaker Volkswagen say at the World Economic Forum meeting in Davos that supply chain problems exacerbated by the Russia-Ukraine war are easing but they’re dealing with a huge backlog of orders.
Audi board member Hildegard Wortmann says the VW-owned brand has its “highest level of orders at the moment,” but customers are facing wait times of about year or more.
Chairman Herbert Diess says Volkswagen is seeing a “clear improvement through summer” on the supply of microchips it needs for its vehicles.
Diess says the automaker has no plans to pull out of China’s Xinjiang region, where it has for years operated a factory and showrooms, despite repeated reports of abuses against ethnic Muslim groups there.
He says that while the company’s Xinjiang operations are a negligible part of its overall China business, “we think that we would worsen the situation for the people working in this plant and most importantly for the entire region if we would pull out.”
Diess says being present in Xinjiang means VW’s standards are respected and it can control the situation. He didn’t elaborate.
The head of the World Trade Organization said that leaders in developed nations will need to “have the courage” to reduce dependency on fossil fuels.
At a separate session Wednesday at the World Economic Forum meeting in Davos, WTO Director-General Ngozi Okonjo-Iweala also called for countries to avoid export restrictions on food as Russia prevents shiploads of Ukrainian grain from getting to poorer countries.
On a climate panel, she says it’s tough to tell voters that “they’re not going to have gas for heating and cooking. But sometimes if you’re a brave leader, you have to have the courage to tell people that these are the tough choices we have to make.”
Okonjo-Iweala also says the COVID-19 pandemic showed that rich nations do have the funding to deal with global emergencies, raising questions for poorer countries who were promised $100 billion to combat climate change.
In a panel on trade, she says 25 million tons of grain from Ukraine need be evacuated and another harvest is coming next month. She says, “This food crisis is real and we must find solutions.”
Europe is helping with land routes to get grain to ports in Poland other countries, and officials say there are talks on creating secure sea corridors.
Okonjo-Iweala says 22 WTO members have export restrictions, which she hopes to lower to avoid price spikes that exacerbate the problem.
Former U.S. Vice President Al Gore is calling for stronger gun legislation in the wake of the mass shooting in Texas that killed 21 people, mostly children.
Speaking on a climate panel Wednesday at the World Economic Forum meeting in Davos, Gore said the latest mass shooting represented a “uniquely American form of devastation.”
Gore, who shared a Nobel Peace Prize with the U.N.’s top body of climate scientists for their work on climate change, made the remarks on the panel on “greenwashing,” or businesses claiming to be environmentally friendly when they are not.
Gore also made a parallel between the failure to pass comprehensive gun control legislation in the U.S. with the seeming inability of Congress to pass major climate change legislation. He said lobbying and vested interests are able to maintain the status quo.
Gore says, “Our democracy has been paralyzed, bought, captured. It has to stop.”
Both Ukrainian and European Union officials have pointed out how Europe is sending massive amounts of funding to Ukraine amid Russia’s invasion, while still fueling Vladimir Putin’s war machine by buying Moscow’s oil and and natural gas.
European Commission Executive Vice President Valdis Dombrovskis said on a trade panel at the World Economic Forum gathering that the EU needs to act on energy if it wants to get at the heart of financing for Putin’s war.
Otherwise, he said Wednesday, “We are in somewhat of a paradoxical situation where we are providing massive support to Ukraine with one hand and then we provide financing to Putin to continue its war with another hand. So this clearly needs to stop.”
Ukrainian Foreign Minister Dmytro Kuleba echoed the thought in separate comments at Davos. He says Europe has learned Russia uses energy as a weapon and that it’s important to diversify.
He added, “After three months of fighting, my message is simple: kill Russian exports.”
Israeli President Isaac Herzog is calling on other nations to consider a “renewable Middle East” as a resource for sustainable food, water and energy solutions.
At the World Economic Forum meeting in Davos, Herzog appealed Wednesday for a new partnership with nations in Europe, Asia and Africa modeled in part on the economic agreements Israel has struck with four Arab nations.
He says such new links would expand a “zone of understanding, despite wide gaps and conflicting narratives” about a surge in violence between Israel and the Palestinians.
Herzog’s speech comes amid international criticism of Israel’s conduct, including over the recent killing of Al Jazeera journalist Shireen Abu Akleh in Jenin.
A reconstruction by The Associated Press lends support to assertions from Palestinian authorities and her colleagues that the bullet that killed her came from an Israeli gun.
Herzog, asked after his speech about Abu Akleh’s death, called it a “very tragic event” but said “there could be a few scenarios.” That’s an apparent reference to Israel’s insistence that Abu Akhleh could potentially have been killed by a Palestinian bullet.
Financial officials at the World Economic Forum’s annual gathering in Davos say Russia’s war in Ukraine has been a major setback to the global economic recovery.
Gita Gopinath, IMF’s first deputy managing director, said on a panel Wednesday about global growth that “a confluence of shocks” are hitting the world.
She says there’s a cost-of-living crisis as prices of fuel, food and other commodities soar. On top of that, central banks are raising interest rates to tackle high inflation, China is seeing a slowdown amid COVID-19 lockdowns and the real estate sector is facing weaknesses.
European Central Bank President Christine Lagarde says the war in Ukraine has revealed that the problems are especially acute in Europe.
On a panel called European Unity in a Disordered World?, she said, “Europe is 20% more open to global value chains vulnerabilities” than other global markets. Because of that, Lagarde says, “it’s not surprising that the breaking down and the bottlenecks of global value chains affect European companies and us more than others.”
The World Economic Forum has unveiled an initiative to develop the metaverse, a virtual reality construct that many tech companies are betting will be the next big thing for the internet.
The metaverse will merge virtual life with real life and create endless new playgrounds and workspaces for users equipped with virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
The forum said Wednesday that it will work with businesses, regulators, civil society and academic experts to help define and build the metaverse. The focus will be on governing the metaverse as well as how to create economic and societal value.
In a panel talk on the metaverse, Facebook parent Meta’s chief product officer, Chris Cox, says he envisioned the need for standards and governance. Meta is betting big on the metaverse as the next big source of the company’s growth.
He says there “will probably be something like a ratings system” for movies, music and other content in the metaverse so parents and young people “can have some sense of what the rules are in the environment that they’re going to walk into.”
Cox compared it to walking into a bar versus a playground, which each have a “different expectation” of the rules that govern those places.
A top Saudi official has touted a dual strategy of increasing oil production capacity for export abroad while advocating for a domestic reduction of emissions in line with Saudi Arabia’s net-zero pledge.
Saudi Minister of Economy and Planning Faisal al-Ibrahim said on a panel at the World Economic Forum meeting in Davos that “these two points do not contradict each other.”
He said Wednesday that focusing on climate change without focusing on energy security could lead to more countries burning “the dirtiest kind of coal in a time of need.”
Climate activists and many scientists and energy experts argue otherwise, advocating for an immediate end to greater investment in fossil fuels to keep global temperatures from rising further.
Al-Ibrahim says “energy demand from oil will continue to increase and that higher prices and revenue from oil will help the country reach its 2060 net-zero targets quicker.
The World Economic Forum and leaders of some of the world’s largest businesses are announcing the expansion of a partnership aimed at propelling green technologies.
The First Movers Coalition includes businesses that make major purchases around green technologies and down their supply chains. The idea is to send market signals that lead to more investing and scaling up of technologies like green steel, green hydrogen and carbon capture.
On Wednesday, U.S. climate envoy John Kerry was joined by Bill Gates, Salesforce co-CEO Marc Benioff, Google Chief Financial Officer Ruth Porat and several others to announce in Davos that the number of companies had gone from more than 30 to 55.
Sweden, India, Japan, Denmark, the United Kingdom and other countries also joined the partnership, first launched by the U.S. and World Economic Forum.
Gates says “so many green products carry a price premium” compared with established fossil fuel technologies and that “the way you get rid of that is scale up the production.”
The world’s top climate scientists warn that greenhouse gas emissions must be sharply reduced this decade to keep temperature rise to 1.5 degrees C (2.7 F) since pre-industrial times.
The CEO of Ukraine’s largest private energy company says it won’t buy any energy from Russia as long as he’s in charge and insists the European Union can start making up for its “dramatic mistake” of growing dependent on Russian oil and natural gas by buying energy from Ukraine.
Maxim Timchenko of DTEK Group told The Associated Press at the World Economic Forum’s gathering in Davos that consumption of its services in Ukraine has dropped 35% since Russia invaded on Feb. 24. He says some of that excess electricity could be shipped to Europe.
Millions of Ukrainians fled their homes during the war, which also has upended business operations and their electricity needs.
Hours before the war erupted, DTEK disconnected from the grids of Belarus and Russia as part of a test run, and Timchenko says it hasn’t restored the connection. In mid-March, he says the company “synchronized” with the EU grid — but only in “emergency mode.”
He says that doesn’t allow the country to get revenue from exporting electricity and that “Ukraine needs this revenue to support financial stability of our energy system.”
Ukrainian President Volodymyr Zelenskyy says that his country will not give up its land to end Russia’s war.
Speaking by video link Wednesday at a “Ukrainian breakfast” during the World Economic Forum’s gathering in Davos, Zelenskyy said he didn’t believe Russian president Vladimir Putin fully understood what was going on in Ukraine.
Responding to a question from CNN’s Fareed Zakaria about whether it was possible to negotiate an end to the conflict, Zelenskyy said through a translator that “Ukraine is not going to concede our territory. We are fighting in our country, on our land.”
He added that it’s a war not against anybody but “for our land, for our freedom, for our independence, and for our future.”
As a first step to diplomatic negotiations, Zelenskyy says Russia would need to demonstrate its desire to engage in talks and “should demonstrate at least something like steps withdrawing their troops and equipment to the position before the 24th of February,” when the invasion began.
Pfizer says it will provide nearly two dozen products, including its top-selling COVID-19 vaccine and treatment, at not-for-profit prices in some of the world’s poorest countries.
The drugmaker announced the program Wednesday at the World Economic Forum’s annual gathering in Davos, Switzerland, and said it was aimed at improving health equity in 45 lower-income countries. Most of the countries are in Africa, but the list also includes Haiti, Syria, Cambodia and North Korea.
The products, which are widely available in the U.S. and the European Union, include 23 medicines and vaccines that treat infectious diseases, some cancers and rare and inflammatory conditions. Company spokeswoman Pam Eisele says only a small number of the medicines and vaccines are available in the 45 countries.
Eisele says New York-based Pfizer will charge only manufacturing costs and “minimal” distribution expenses. It will comply with any sanctions and all other applicable laws.
This month, the head of the World Health Organization called on Pfizer to make its COVID-19 treatment more widely available in poorer countries.
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