Money news | Commerse, Banking and Financial industry

Antitrust move may let America Movil cut labor costs union

´╗┐Antitrust measures announced last week that would split up Carlos Slim's America Movil and open its fixed line network to competition may help Mexico's dominant telecommunications provider reduce labor costs, according to a labor union spokesman. The announcement initially hammered the company's shares, though they have since rebounded and closed at 13.60 pesos each on Thursday. The new rules drew opposition from a labor union representing 60,000 workers at America Movil's fixed line unit, known as Telmex. The reorganization would create a new entity that could hire new workers and pay them less than under the existing contract, said Eduardo Torres Arroyo, spokesman for the Mexican Telephone Workers' Union (STRM)."That possibility exists," Arroyo said. "We're trying to keep that from happening."

Paula Garcia, spokeswoman for America Movil, declined to comment on whether the company's labor costs could be reduced or not as a result of the new rules. STRM has threatened a strike if the rules are not changed, though the union has not had a major walkout since 1982. Mexico's regulator, the Federal Telecommunications Institute (IFT), is looking to increase access to America Movil's fixed line network while attracting capital for the network's expansion, according to Alexander Elbittar, a researcher with Mexico's CIDE university who specializes in regulation and competition.

The rules could end up benefiting America Movil, in part by freeing it from some of its obligations to its workers, according to Elbittar."There's going to be a separation of the part of the company that has union representation," Elbittar said. "Telmex hasn't been a great performer of late. This could be a chance for a relaunch."America Movil, which has businesses throughout Latin America, saw revenues grow by about 9 percent in 2016. Expenses, however, rose by nearly 15 percent. Rising costs in Mexico drew questions from analysts during a Feb. 3 conference call, according to a transcript posted on the company's website. An executive who was not named in the transcript said the company needed more time to bring costs lower, but did not say how it would do so.

Francisco Hernandez Juarez, leader of the STRM, told Reuters that America Movil requested the rule, even though the company has publicly opposed it and said it plans to challenge it."This order comes from the regulator," Garcia wrote via email. The IFT declined to comment. Elbittar said it is common for a regulator to design a rule in consultation with the businesses it will affect."Regulators aren't businesspeople, and they aren't aware of all the subtleties," he said.

U.S. insurer AIG makes Luxembourg its EU hub to cope with Brexit

´╗┐U.S. insurer AIG (AIG. N) plans a European Union hub in Luxembourg following Britain's decision to leave the bloc, the biggest financial services firm so far to detail such a move. AIG said on Wednesday it would keep its main European headquarters in London and open a subsidiary in Luxembourg, which along with Frankfurt, Paris and Dublin is touting itself as an alternative base for firms wishing to retain access to the EU after Brexit."This ... ensures AIG is positioned for whatever form the UK's exit from the EU ultimately takes," Anthony Baldwin, Chief Executive of AIG Europe said in a statement. Major banks have said they plan to set up EU subsidiaries to continue to be able to sell their services across the bloc, but few have announced concrete decisions. British bank Lloyds (LLOY. L) has said it is likely to convert its Berlin branch into a subsidiary, and M&G, the fund arm of British insurer Prudential (PRU. L), is setting up a management company and distribution firm in Luxembourg.

AIG has previously said it was also looking at Dublin as a possible EU hub and insurer Hiscox (HSX. L) has said it will choose between Luxembourg and Malta. Lloyd's of London, the world's largest speciality insurance market, is due to pick a location for its EU subsidiary by the end of March, with Dublin and Luxembourg on its shortlist.

AIG chose Luxembourg for its proximity to the insurer's European clients, position as a founding member of the EU, stable economy and expertise in financial services and "fintech", an AIG spokeswoman said. The switch would involve "changes at senior leadership level", she added, without giving more details. AIG currently has a branch in Luxembourg with a staff of three. Eighty-eight insurance companies and 216 reinsurance firms have a presence in Luxembourg, according to financial development agency Luxembourg for Finance.

"Over the coming months, we expect more companies to follow in the footsteps of both AIG and M&G, whether in the insurance sector, asset management, banking industry or in the fintech space," Nicolas Mackel, CEO of Luxembourg for Finance said. AIG said the proposed changes were expected to be completed in the first quarter of 2019, subject to regulatory approval.

Are you looking for "phone spy"? Check out phonespying The passionate experts in this field are ready to answer all of your requests.