Negotiations over raising the US debt limit have stalled, with the possibility of a default on Treasury bonds looming over the coming weeks unless the US raises its $US16.7 trillion borrowing limit.
Democratic Senator Richard Durbin said negotiations have been suspended as Republican House Speaker John Boehner considers options with his caucus, with market volatility increasing as the October 17 deadline approaches.
“The odds that there won’t be a deal over the next month are near zero, but there is some chance we won’t see something by [October] 17th. If that happens … we could easily correct 3-5%,” Northern Trust Global Investments chief investment strategist Jim McDonald told Reuters.
Toyota Australia to cut jobs and reduce car production
Toyota Australia has announced plans to axe 100 jobs as it cuts car production at its Melbourne plant from 470 to 430 vehicles per day.
Toyota Australia executive vice president Dave Buttner says that while the auto giant wants to continue its 50-year history of building vehicles in Australia, it has to cut the cost of building each car to $3800 by 2018.
“We’ve just got to keep working hard to reduce our overall cost base. That’s the key to our ongoing sustainability as a manufacturer,” Buttner says.
Thodey defends job cuts at Telstra AGM
Telstra chief executive David Thodey has defended the practice of offshoring contact centres at the company’s annual general meeting, saying consumers increasingly prefer to contact the company over the internet.
“[Around] 40% of customers transactions were completed online in 2013—compared to only 30% in 2012—and this percentage will grow again this year. This means that our contact centre work is declining quickly and will continue to so,” Thodey said.
“The size and nature of our workforce is re-balancing to reflect the fact that some parts of our business are reducing in size, while other parts are growing,” Telstra chairwoman Catherine Livingston said.
“We are responding to the changing market structure, including the establishment of the NBN, and changing demand for our fixed line services,” she said.
The Dow Jones Industrial Average is down 0.87% to 15168.01. The Aussie dollar is up to US95.36 cents.