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Business

Business Briefs

Reliability ratings slam German car firms; business leaders optimistic for future conditions; RWE threatened with U.S. sanctions; Berlin moves to protect defense firms.

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20 million VW Golfs sold, but how many breakdowns?

German cars get a beating in reliability ratings

German car manufacturers have received more bad news this week. According to the Consumers Association, Volkswagen and VW-owned companies, Seat and Audi, have taken a severe beating in the association’s reliability ratings. VW was rated as poor while its subsidiaries dropped from good to average. The Audi TT also received one of the lowest scores for reliability for years in the association's Which? magazine. In another blow for the German car industry, Mercedes-Benz slipped two categories, from best to average. Dominating the top reliability places for both manufacturers and individual car models were the Japanese.

Business execs view coming months with optimism

According to a survey of German executives carried out by the Psephos Institute, business leaders in Germany were more optimistic about future business conditions in July/August than in June, the Handelsblatt newspaper reported. Some 42 percent of 797 managers polled said they expected conditions for business to improve over the next 12 months, up from 27 percent in June, the biggest increase since September 1999, the paper said. Of those polled, 64 percent said the current business situation is still “rather bad” while 19 percent said it’s “bad.” The number of companies that plan to increase investment in the coming months rose to 19 percent from 15 percent in the previous survey. Only 39 percent of executives plan more job cuts, down from 45 percent, while 14 percent said they will step up hiring, compared with 12 percent in June, Handelsblatt said.

US threatens RWE with sanctions over Libya deal

German utility giant RWE has been warned by the United States government over a deal to explore for oil and natural gas in Libya and could face sanctions if it goes ahead, the U.S. State Department said on Wednesday. Deputy spokesman Philip Reeker said Washington was examining the nature of a 64-million-dollar contract that RWE has signed with Libya to determine whether sanctions would be imposed under the 1996 Iran-Libya Sanctions Act. “United States policy has long been opposed to investment in the petroleum sector of Libya,” he said. “Reports such as those about a recent agreement by the firm RWE to explore for oil and gas in Libya are of concern to us,” Reeker told reporters.

Government moves to protect defense companies

The German government is attempting to prevent foreign investors from buying large stakes in German defense companies in a bid to safeguard security and defense interests. A statement out of Berlin said the government will propose a bill to limit foreign investment in defense companies to below 25 percent after last year's €700m ($797million) takeover of Howaldtswerke Deutsche Werft, the world's leading conventional submarine maker, by Chicago-based venture capital firm One Equity Partners. The aim of the move is to “fortify Germany's security and defense interests,” according to the Financial Times Deutschland.