Airbus to Cut Up to 2,500 Jobs in Defence and Space Division by 2026

Published

1 day ago

October 16, 2024

RTX

Airbus has announced plans to reduce its workforce by up to 2,500 jobs within its Defence and Space division by mid-2026, as part of a restructuring effort aimed at boosting competitiveness. The move, confirmed in a statement on Wednesday, is part of a broader strategy to create a more efficient organisational structure, though detailed specifics of the plan have yet to be released.

Mike Schoellhorn, CEO of Airbus Defence and Space, highlighted the challenges faced by the sector, including disrupted supply chains, rapidly evolving warfare technologies, and mounting cost pressures driven by budgetary constraints. “In recent years, the defence and space sector and, thus, our Division have been impacted by a fast-changing and very challenging business context,” Schoellhorn said. He noted that while transformation efforts initiated in 2023 have improved operational performance and risk management, the company now needs to take further steps to adapt to the increasingly difficult market conditions.

Schoellhorn stressed the need for Airbus Defence and Space to become “faster, leaner, and more competitive” in order to remain a leading player in the evolving industry. He pointed specifically to the space market as a growing challenge, necessitating these changes to ensure the company’s long-term competitiveness and sustainability.

The job cuts follow Airbus’ recent financial struggles. In its second-quarter earnings report released at the end of July, the company reported a drop in profits, further underscoring the need for cost-cutting measures. Earlier this year, Airbus had revised its full-year earnings expectations, predicting adjusted earnings before interest and tax (EBIT) to reach approximately €5.5 billion, down from its initial estimate of €6.5 billion to €7 billion.

Airbus has pledged to handle the upcoming job cuts responsibly, assuring its employees that it will implement all available social measures to mitigate the impact on staff. In the statement, the company underscored its commitment to act as “a responsible employer” while acknowledging the necessity of these workforce reductions to enhance its future competitiveness.

The world’s largest aircraft manufacturer hopes that these restructuring efforts will strengthen its position in the global defence and space sector. The move comes at a time when companies in the defence industry are facing heightened competition and pressures to adapt to rapidly advancing technologies and changing geopolitical dynamics.

Business

European Central Bank Cuts Interest Rates for Third Consecutive Time Amid Falling Inflation and Sluggish Growth

Published

11 hours ago

October 17, 2024

RTX

The European Central Bank (ECB) announced a reduction in interest rates during its October meeting on Thursday, marking the third consecutive cut since June. The new interest rates are set at 3.40% for main refinancing operations, 3.65% for the marginal lending facility, and 3.25% for the deposit facility.

The main refinancing rate, which banks pay to borrow money from the ECB for one week, has seen a decrease of 25 basis points. The marginal lending facility rate is the cost for banks borrowing from the central bank overnight, while the deposit facility rate is the interest received by banks for overnight deposits with the ECB. In a statement, the ECB explained that the decision to lower rates was based on an updated assessment of the inflation outlook and the dynamics of underlying inflation.

“The incoming information on inflation shows that the disinflationary process is well on track. The inflation outlook is also affected by recent downside surprises in indicators of economic activity,” the ECB noted. Policymakers convened in Ljubljana, Slovenia, for this month’s meeting, deviating from the usual location in Frankfurt.

The rate cut comes as inflation in the eurozone fell to a revised 1.7% in September, down from 2.2% in August, marking the first time it has dipped below the ECB’s 2% target in three years. The decline was largely driven by falling energy prices; however, core inflation, which excludes volatile energy and food prices, remained relatively high at 2.7%, down slightly from 2.8%. Services inflation also continues to be a concern, running at 3.9% year-on-year.

Despite the positive trend in headline inflation, economists predict it may hover around the 2% target for the remainder of 2024, with a possibility of slightly overshooting the mark. ECB President Christine Lagarde expressed confidence that inflation would return to target in a timely manner, acknowledging that the ECB would consider recent developments in their policy decisions.

The ECB’s decision to cut borrowing costs is also a response to signs of stagnation in the eurozone economy. The growth rate was revised downward to 0.2% for the second quarter of 2024, reflecting lower-than-expected private consumption and investment, despite a positive contribution from net trade. The ECB projects third-quarter growth to remain at 0.2%, with annual growth estimates revised down from 0.9% to 0.8%. For 2025, forecasts have been downgraded from 1.4% to 1.3%.

The HCOB Eurozone Composite PMI, which surveys manufacturing and services sectors, slipped below the 50-point threshold in September, indicating a contraction in private sector activity. Germany, the largest economy in the eurozone, is particularly struggling, with predictions of a 0.2% shrinkage in 2024, following a 0.3% contraction in 2023.

This latest rate cut from the ECB follows a 50-basis-point reduction by the U.S. Federal Reserve last month, marking its first rate cut since early 2020.

Business

Company Hacked After Hiring North Korean Cyber Criminal as Remote IT Worker

Published

1 day ago

October 16, 2024

RTX

A company has fallen victim to a cyber attack after inadvertently hiring a North Korean hacker as a remote IT contractor. The unidentified firm, which operates in the UK, US, or Australia, was targeted after the technician falsified his employment history and personal details to secure the position.

The incident highlights growing concerns over the infiltration of Western companies by North Korean cybercriminals, with experts noting a rise in such cases in recent years. The company allowed cybersecurity responders from Secureworks to disclose the breach in a bid to raise awareness among other organizations.

The technician, believed to be a man, was contracted during the summer and quickly gained access to the company’s computer network using remote working tools. Once inside, he downloaded sensitive data before issuing a ransom demand to the firm. After working for four months and receiving a salary, the contractor was terminated due to poor performance. It is suspected that his earnings were funneled back to North Korea through complex laundering schemes designed to evade Western sanctions.

Following his dismissal, the firm received ransom emails containing some of the stolen data along with a demand for a six-figure payment in cryptocurrency. The hacker threatened to publish or sell the stolen information online if the ransom was not paid. The company has not disclosed whether it complied with the ransom demand.

This incident is part of a disturbing trend, as authorities and cybersecurity experts have warned of an increasing number of covert North Korean workers infiltrating Western firms. The US and South Korea allege that North Korea has tasked thousands of individuals to take on high-paying remote jobs to generate revenue for the regime and circumvent international sanctions.

In September, cybersecurity firm Mandiant reported that dozens of Fortune 100 companies had unknowingly hired North Koreans. Rafe Pilling, Director of Threat Intelligence at Secureworks, described this incident as a “serious escalation of the risk” posed by fraudulent North Korean IT workers. “No longer are they just after a steady paycheck; they are looking for higher sums, more quickly, through data theft and extortion from inside the company defenses,” he noted.

This incident follows another case in July when a North Korean IT worker attempted to hack their employer, cybersecurity firm KnowBe4. The company quickly disabled the worker’s access after detecting suspicious behavior, highlighting the importance of vigilance in hiring practices.

Authorities are urging employers to exercise caution when onboarding new hires, especially those in fully remote positions, to safeguard against potential cyber threats. The incident serves as a stark reminder of the risks associated with remote work and the need for thorough vetting processes.

Business

The Role of Loan-to-Value (LTV) Ratios in Conventional Loan Approval

Published

2 days ago

October 16, 2024

Webdesk

When it comes to securing a conventional loan, one key factor that can make or break the approval process is the Loan-to-Value (LTV) ratio. For many first-time homebuyers and real estate investors, understanding LTV ratios is critical to obtaining favorable loan terms and ultimately achieving financial goals. LTV ratios directly impact the amount a borrower can qualify for, the interest rate they’ll receive, and whether they’ll need to pay for additional mortgage insurance. In this article, we’ll explore how LTV ratios work, what borrowers need to know about down payments, and how they can improve their chances of securing the best loan terms.

What is Loan-to-Value (LTV) Ratio?

At its core, the Loan-to-Value (LTV) ratio is a measure used by lenders to assess risk when offering a mortgage. It represents the percentage of the loan amount compared to the appraised value of the property. The higher the LTV ratio, the more risk the lender is taking on, as a larger portion of the home’s value is being financed by the loan.

How is LTV Calculated?

To calculate the LTV ratio, lenders use the following formula:

For example, if a borrower is looking to purchase a home worth $300,000 and plans to make a down payment of $60,000, they would need a loan of $240,000. In this case, the LTV ratio would be:

An 80% LTV means that the borrower is financing 80% of the property’s value, while the remaining 20% is covered by their down payment.

Why LTV is Important in Conventional Loan Approval

LTV ratios play a crucial role in the approval process because they give lenders a clear understanding of the level of risk they are taking on. Generally, the lower the LTV ratio, the more comfortable lenders are with approving the loan, often resulting in better loan terms for the borrower.

Lower LTV = Higher Approval Chances

A lower LTV ratio indicates that the borrower is contributing more upfront in the form of a down payment, reducing the lender’s risk. Borrowers with lower LTVs often receive more favorable loan terms, such as lower interest rates, reduced fees, and the possibility of avoiding Private Mortgage Insurance (PMI). Conversely, a higher LTV ratio may lead to higher interest rates and the requirement of PMI to protect the lender against the risk of default.

Higher LTV = More Risk

Lenders may be more cautious when considering loans with higher LTV ratios (typically above 80%). Borrowers with high LTVs are more likely to be required to purchase PMI, which adds an additional cost to their monthly payments. This is particularly important for first-time homebuyers who may have limited resources for a down payment.

The Relationship Between LTV and Down Payment

The down payment a borrower makes directly affects their LTV ratio. In general, the larger the down payment, the lower the LTV ratio, and the better the loan terms a borrower can expect.

Typical Down Payment Percentages

For conventional loans, borrowers are typically required to make a down payment of at least 20% to avoid paying PMI. However, many lenders offer programs that allow down payments as low as 3% for qualified borrowers, though this would result in a higher LTV ratio and the addition of PMI until the LTV reaches 80%.

Example of LTV Changes with Different Down Payments

If a borrower purchases a $300,000 home with different down payments:

20% down payment: $60,000 down, $240,000 loan = 80% LTV
10% down payment: $30,000 down, $270,000 loan = 90% LTV
3% down payment: $9,000 down, $291,000 loan = 97% LTV

The higher the LTV, the more expensive the loan becomes due to higher interest rates and PMI costs. Therefore, it’s important for borrowers to aim for a lower LTV whenever possible.

Improving Your Chances for Loan Approval with LTV

There are several strategies borrowers can use to improve their LTV ratio and increase their chances of securing a conventional loan.

Save for a Larger Down Payment

One of the most effective ways to reduce your LTV is to save for a larger down payment. By putting more money down upfront, you can lower your LTV ratio and improve your loan approval odds while also reducing the overall cost of the mortgage.

Purchase a More Affordable Home

If saving for a larger down payment is not feasible, consider purchasing a home that is below your maximum budget. A lower loan amount will reduce the LTV and make it easier to meet lender requirements.

Pay Down Existing Debts

Lenders also look at your overall financial picture, including debt-to-income (DTI) ratio, when determining loan eligibility. By reducing your existing debt, you can improve your creditworthiness and potentially secure better loan terms.

Conclusion

Understanding Loan-to-Value ratios is a critical component of the conventional loan approval process. Borrowers who have a clear grasp of how LTV ratios work and how they affect loan terms can better position themselves for approval and more favorable mortgage conditions. Whether it’s by saving for a larger down payment, reducing existing debt, or choosing a home within budget, taking steps to lower LTV can save money in the long run.

For those who need guidance, working with a trusted mortgage lender like A&D Mortgage can make the process smoother and increase the chances of success in securing a conventional loan.

FAQ

What is a good Loan-to-Value (LTV) ratio for conventional loans?
An LTV ratio of 80% or lower is generally considered good for conventional loans. Borrowers with LTVs below 80% are often able to avoid PMI and may receive better interest rates.

How can I reduce my LTV ratio before applying for a loan?
To reduce your LTV ratio, you can save for a larger down payment, consider purchasing a more affordable home, or pay down existing debts to improve your overall financial profile.

What is the relationship between LTV and PMI (Private Mortgage Insurance)?
PMI is typically required for conventional loans with an LTV ratio above 80%. Borrowers can avoid PMI by making a larger down payment or refinancing once their LTV drops below 80%.

Does a higher down payment always lead to better loan terms?
Generally, a higher down payment results in a lower LTV ratio, which often leads to better loan terms such as lower interest rates, no PMI, and reduced fees.