Honda axes 800 British jobs on weak demand

Honda has announced it intends to cut 800 jobs this year at its Swindon plant in Britain. Source: AAP

HONDA has announced it intends to cut 800 jobs this year at its Swindon plant in Britain owing to weakening demand for its vehicles in Europe.

"Honda Motor Europe has today announced changes to its UK car manufacturing operation to ensure the long term stability of its future business," the group said in a statement on Friday.

"Sustained conditions of low demand in European markets make it necessary to realign Honda's business structure. As such, Honda ... will enter into formal consultation with its associates to consider these changes and the proposal that it will reduce the workforce by 800 associates by spring 2013."

Ken Keir, executive vice president at Honda Motor Europe, added that current "conditions of sustained low industry demand require us to take difficult decisions."

The Swindon plant in southwest England currently employs about 3500 staff, including 500 recruited only last year, in part to work on a new diesel engine line.

Britain's biggest union Unite called Honda's decision "a hammer blow to UK manufacturing and the local economy."

A spokesman for the Department for Business, Innovation and Skills said the British government would be working "to minimise the impact of the job losses."

He added: "Times are tough in the European market but the automotive industry remains a major success story for the UK.

"Over the last two years global manufacturers including Nissan, Jaguar Land Rover and BMW have invested STG6 billion ($A9.21 billion) in the UK, safeguarding and creating new jobs."

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Catherine 'delighted' with first portrait

The first official portrait of Prince William's wife, Catherine, has been unveiled in London. Source: AAP

THE first official portrait of Prince William's wife, Catherine, has been unveiled in London, with the Duchess giving the work a royal thumbs up.

Catherine, 31, attended the National Portrait Gallery on Friday where artist Paul Emsley's work was revealed to a private audience which included the Duke of Cambridge.

"I think, from what I can see this morning, she's delighted with it. I'm very happy about that," Emsley said of Catherine's reaction.

The award-winning artist was commissioned by the gallery to capture Catherine and worked with the Duchess during a series of photography sessions.

The larger-than-life sized head and shoulders painting shows Catherine's flowing brunette hair and soft features against a dark background.

"In discussions it became clear that what she wanted herself, and I was very happy with that, was that the portrait should convey her natural self as opposed to her official self," Emsley told reporters, as published by The Independent online.

"The fact she is a beautiful woman is for an artist difficult. In the end I think what I tried to do really was to convey something about her warmth and her smile."

Asked of any royal feedback he received during the unveiling, Emsley said Catherine, who has a history of art degree, commented on the portrait: "It's just amazing".

The work was praised by prolific royal portrait artist Richard Stone, who said Emsley is "brave" to have embarked on a work of such large scale.

"It's very challenging to do something larger than life, and he seems to have pulled it off very well," said Stone, whose first royal commission was to paint the Queen Mother, which he went on to do six times.

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Virgin hoping for smooth system change

Virgin Australia moves to a new reservations system this weekend and asks passengers to be early. Source: AAP

IF all goes to plan, passengers travelling on Virgin Australia flights this weekend will hardly notice anything out of the ordinary.

Virgin Australia is making the switch to a new check-in and reservations system this weekend and while flights are operating as normal, the airline has asked passengers to arrive at the airport extra early.

Domestic travellers were advised to arrive 60 minutes before their scheduled departure time, while those jetting off on Virgin's international flights should be at the airport three hours before departure.

The advice will be especially important for those flying on Sunday as internet, mobile and kiosk check-in will be unavailable and passengers will have no option but to head to an airport counter to pick up their boarding pass.

And to be on the extra safe side, passengers should bring a copy of their e-ticket or itinerary.

The switchover has been a year in the planning and some 4,000 staff have been trained on the new system.

Virgin said this week extra staff will be at airports and in the call centre to help customers and ensure there is minimal disruption to flights.

In November 2011, Virgin said it would move its entire reservations system to the Sabre global distribution system, replacing the Navitaire and Amadeus booking systems used currently.

The airline hoped moving to Sabre will boost sales through travel agencies and travel management companies, allow greater recognition and more benefits for frequent flyers and offer better integration with Virgin's airline partners.

Also, the cutover to Sabre will mean all of Virgin's flight numbers will begin with the two letter code "VA".

Currently, Virgin's domestic flights have the two letter code "DJ" and its international flights "VA".

Staff from Sabre will also be in Australia to assist.

At 1421 AEDT, Virgin was down one cent at 42 cents.

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UK army dumps Browning pistols for Glocks

The British army is dumping the Browning pistol it has used for 40 years for the faster Glock 17. Source: AAP

BRITAIN'S army is dumping the Browning pistol it has used for more than 40 years, opting for the faster and lighter Glock 17.

The defence ministry said on Friday it had signed an STG8.5 million ($A13 million) contract for more than 25,000 of the Austrian-made pistols.

The UK joins a host of law enforcement agencies and the Dutch, Norwegian and Austrian armies in opting for the Glock 17. The pistol has a larger magazine than the Browning in use by the UK armed forces.

Britain's defence ministry said the decision to abandon the Browning came after it became increasingly expensive to maintain the pistol.

"When it came out in the 1960s, it was a fantastic pistol, but technology advances," said Warrant Officer 1 Mark Anderson, who tested the sidearms competing for the UK contract after the defence ministry put out a tender for a replacement pistol two years ago.

The faster and more accurate Glocks are considered a boon for troops increasingly facing threats at close quarters, like in Afghanistan where soldiers are dealing with the risks of insider attacks.

Anderson said the Glock earned the confidence of the troops and passed tests of extreme temperatures and climates "with flying colours".

The Glock magazine capacity is 17 rounds, compared with the Browning's 13, and the new pistols are quicker on the draw.

While the Browning had a manual safety catch that needed to be switched off, with the Glock "you just draw it and engage," Colonel Peter Walden told reporters.

That's because the Glock has three internal safeties and can be kept loaded in a holster, unlike the Browning, Walden said.

Saving vital seconds could be the difference between life and death, said Walden.

The defence ministry said the Glocks should be deployed in Afghanistan by the latter part of 2013.

The Glocks are being issued as secondary weapons mostly for personal protection in case the primary firearm fails or soldiers are in close environments, like compound-clearing operations, where short-barrelled weapons are considered a smarter choice.

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Housing construction picks up

AUSTRALIA'S housing construction sector appears to be finally picking up but economists and industry groups warn further interest rate cuts may be needed to ensure the nascent recovery gathers steam.

The number of residential building approvals rose 2.9 per cent in November, the Australian Bureau of Statistics said on Thursday.

UBS senior economist George Tharenou said the figures suggested a modest recovery was underway in the housing sector, though he said almost all of the growth had been in approvals for multi-unit properties.

He said the figures suggested a series of interest rate cuts from the Reserve Bank of Australia over the past year was helping to stimulate growth in the sector.

The RBA has cut the cash rate, currently at 3.0 per cent, by 1.75 percentage points since November 2011.

"To us it shows an uptrend since the RBA started cutting interest rates," Mr Tharenou said.

"But it does show a shift in household patterns to high-density living, which is the more affordable end of the market," he said.

Construction approvals for multi-unit properties rose 10.1 per cent in November, while approvals for houses fell 0.3 per cent.

But National Australia Bank chief economist Rob Henderson said the housing figures weren't as positive as they first appeared, with a fall in the value of buildings approved.

Mr Henderson said the value of residential buildings approved in the month rose 2.7 per cent, after falling 11.4 per cent in October, while the value of non-residential building approved fell 14.4 per cent.

"It's hard to paint a positive picture out of these figures," he said.

He said the RBA may have to cut interest rates again this year to provide a greater boost to the sector.

"You'd want to see an apparent turnaround for construction before too long, otherwise it suggests more interest rate cuts are needed to stimulate the economy."

Master Builders Australia chief economist Peter Jones welcomed the rise in approvals figures but agreed further rate cuts were needed.

"The danger is that the recovery could run out of steam as the impact of previous interest rate cuts appear to have failed in lifting new homebuyer confidence and underpinning a sustained housing recovery," he said.

"Authorities are banking on a strong revival in residential building as the economy loses mining as its key driver. For this to eventuate, the Reserve Bank should cut interest rates at the next board meeting in February," Mr Jones said.

The ABS figures showed the growth in building approvals was centred around Victoria, which saw an 8.7 per cent rise during November.

All of the other states recorded a fall in approvals, with South Australia, down 13.9 per cent and Tasmania, down 7.7 per cent, the worst performers.

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China trade rebounds in sign of recovery

CHINA'S trade growth rebounded strongly in December in a positive sign for the recovery of the world's second-largest economy.

Export growth more than quadrupled from the previous month to 14.1 per cent while imports - which failed to grow at all in November - rose 6 per cent in a sign of increasing domestic demand, data showed on Thursday.

The trade figures add to evidence China is gradually emerging from its worst economic downturn since the 2008 global crisis.

Factory output and other activity improved in the final quarter of 2012, but analysts say a recovery still is shaky and will be too weak to drive a global rebound without a turnaround in the United States and Europe.

The improvement comes as a new generation of Communist Party leaders who were installed at a congress in October are taking power.

Beijing is pinning hopes for recovery on government-driven investment and domestic consumer spending that is rising but not as fast as authorities want.

Private sector analysts, the World Bank and other forecasters expect growth of about 8 per cent in 2012 and about 7.5 per cent this year.

That is far stronger than the West and Japan but would be China's weakest performance since the 1990s.

The country's global trade surplus nearly doubled over the same month in 2011, rising 90 per cent to $231.1 billion, according to the General Administration of Customs.

For the full year, the global trade surplus rose 49 per cent to $231.1 billion.

In November, export growth had plunged to 2.9 per cent while imports were flat. That was in line with analysts' warnings that a trade rebound that started in August was unsustainable due to weak European and US demand.

Reliance on trade has declined as domestic consumption growth but export-driven manufacturing still employs millions of workers and any weakness raises the risk of job losses and unrest.

The commerce minister, Chen Deming, warned in November that exporters face "relatively grim" conditions in coming months and "many difficulties" in 2013.

Import growth has been depressed by government curbs aimed at cooling a boom in construction and industrial investment that have cooled demand for foreign iron ore, copper and other raw materials.

Communist leaders want to shift the basis of economic growth to domestic consumption and services, a strategy that promises smaller but more sustainable gains. That could hurt commodities suppliers such as Australia, Brazil and some African economies, where Chinese spending has fuelled an economic boom.

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Australians spend less with retailers

RETAILERS are continuing to struggle as Australian consumers funnel their money online and towards new cars, overseas holidays and restaurants.

Australian retail spending slumped 0.1 per cent in November, according to figures released by the Australian Bureau of Statistics on Wednesday.

The fall in spending disappointed retailers who were hoping for a strong Christmas sales period.

"November should be a good month for the retail sector, towards the end of the month at least people start to focus on what will be in Santa's sack," Australian National Retailers Association CEO Margy Osmond said.

"This didn't happen in 2012 and the result will send a chill through retailers' spines as they look to 2013."

Ms Osmond said it appeared consumers were increasingly doing their Christmas shopping online, with overseas-based retailers receiving most of the benefits.

"We know that Australians look for bargains overseas at peak buying times and it appears they have fully embraced overseas options early to ensure gifts arrive on time."

Commonwealth Bank chief economist Michael Blythe said Australians were still spending money, but less of it was going towards retailers.

"It appears consumers are being very selective where they spend and what they spend their money on," he said.

"We know they (consumers) are quite happy to get out there and buy new cars at record rates at the moment, and of course we have record numbers heading overseas and no doubt doing a bit of their retail spending there."

Household goods retailers suffered the biggest fall in sales in November, with spending down 0.9 per cent, which came on top of a 1.5 per cent fall in October.

Clothing stores (down 0.6 per cent) and department stores (down 0.4 per cent) also struggled in November while spending in the normally resilient food retailing section was flat in the month.

The only bright spots were a 0.3 per cent rise in spending in the cafes, restaurants and takeaway food sector and a 1.0 per cent rise in the sector marked "other" by the ABS, which includes businesses like newsagents, florists and chemists.

Among the states and territories, conditions were best in Victoria (up 0.3 per cent) and the ACT (up 1.0 per cent), while retailers in the Northern Territory (down 0.9 per cent) and South Australia (down 0.6 per cent) fared worst.

St George senior economist Jo Heffernan said the figures were surprisingly weak, given the series of interest rate cuts over the past year.

The Reserve Bank of Australia has cut the cash rate, now at 3.0 per cent, by 1.75 percentage points since November 2011, although the most recent move, a 0.25 percentage point cut in December, came after the period covered by the retail figures.

Ms Heffernan said more rate cuts may be needed before the retail sector picks up.

"The rate cut delivered in December should go some way to easing consumer caution, however, it is likely that another rate cut will be necessary in coming months to assist with sectors, such as retail, which remain soft," she said.

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Kiwi gains against major currencies

THE New Zealand dollar has gained against the greenback and euro ahead of the European Central Bank reviewing its monetary policy amid signs the 17-nation bloc's economy is deteriorating.

The kiwi rose to 83.80 US cents at 5pm in Wellington from 83.50 cents at 8am and 83.55 cents on Tuesday. It advanced to 64.09 euro cents from 63.63 cents on Tuesday.

European central bankers are expected to keep the benchmark interest rate at a record low 0.75 per cent when they review monetary policy settings at their Thursday meeting, as weaker economic figures spark fears about the region's ability to recover from its sovereign debt crisis.

Euro-zone unemployment rose to a record 11.8 per cent in November, according to Eurostat data, while separate data showed Germany's exports dropped more than expected in the same month.

"The kiwi/euro might continue to rally up if people talk about cutting rates" at the ECB meeting, said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland.

The currency "looks a little over-stretched at 64/64.50 euro cents."

The New Zealand currency has decoupled slightly from US equities, with stocks on Wall Street falling in the lead-up to fourth-quarter earnings season, and Mr Kelleher said it would probably get sold at 84/84.50 US cents.

The kiwi dollar increased to 79.84 Australian cents from 79.71 cents on Tuesday after government figures showed consumer spending across the Tasman unexpectedly shrank 0.1 per cent in November.

New Zealand's currency gained to 73.27 yen from 73.10 yen after Reuters reported the Bank of Japan will consider monetary easing this month and may double its inflation target to two per cent.

The trade-weighted index advanced to 75.45 from 75.16.

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Emergency warning for Mathinna fire in Tas

A BUSHFIRE emergency warning has been issued for Mathinna in northeast Tasmania.

Residents at Bull Bottom, Mathinna, are being told the area is at direct risk from an uncontrolled fire within the next hour.

Authorities say it is likely too late to leave the area but those without a bushfire plan should leave immediately if there is a clear path.

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NZ dollar may gain against euro

THE New Zealand dollar may gain against the euro as investors prepare for the European Central Bank to review monetary policy amid fears the region's economy will continue to shrink this year.

The kiwi increased to 63.66 euro cents at 5pm in Wellington from 63.54 cents on Monday. It was little changed at 83.53 US cents from 83.55 cents at 8am, up from 82.94 cents on Monday.

Traders are preparing for the ECB to review its benchmark interest on Thursday and the bank is expected to keep its main refinancing rate at a record-low 0.75 per cent, according to a Bloomberg survey.

That comes as economists are picking the euro region's economy to shrink 0.1 per cent this year after a 0.4 per cent contraction in 2012, according to a Bloomberg survey.

"No one is expecting them to cut interest rates, but if you look at the situation in Europe, it continues to be pretty challenging over there," said Dan Bell, currency strategist at HiFX in Auckland.

New Zealand's currency "has got more potential to get back over 64 euro cents - overall, the New Zealand dollar has started the year in favour".

The euro got a fillip in Asian trading after Japan's Finance Minister Taro Aso said the world's third-biggest economy would buy bonds issued by the European Stability Mechanism to help weaken the yen.

The kiwi rose to 73.66 yen at 5pm in Wellington from 73.07 yen on Monday.

The kiwi dollar rose to 79.69 Australian cents from 79.14 cents after Australia reported a wider trade deficit than expected.

The trade-weighted index advanced to 75.17 from 74.82.

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Tehran air pollution leaves 4460 dead

An Iranian official has revealed air pollution in Tehran has left over 4000 people dead in a year. Source: AAP

AIR pollution in Tehran has left 4460 people dead in a year, an Iranian health official says in reports, with another sounding the alarm over a high dose of carcinogens in domestically made petrol.

Hassan Aqajani, an adviser to the health minister, made the announcement on state television on Sunday, and said the Tehran residents died over a year from March 2011.

High air pollution is a constant woe for the eight million residents in Tehran. It forced the city's closure on Saturday, the second time in a month.

"In recent days, the number of patients who have visited Tehran hospitals with heart problems has increased by 30 per cent," Aqajani said.

Tehran's pollution is mainly blamed on bumper-to-bumper traffic in a city wedged between two mountains which trap fumes. But major Iranian cities also struggle with pollution on a seasonal basis.

Pollution is also exacerbated by increasing reliance on domestic production of petrol of a lower grade, and therefore more polluting, a byproduct of Western sanctions on Iran's fuel imports.

Youssef Rashidi, director of Tehran's air quality monitoring services, on Sunday warned carcinogens in Iranian-made petrol is higher than international standards.

"Based on Euro 4 standard the amount of carcinogens in petrol should be less than one per cent but the level of our domestically produced petrol is between two and three per cent," Rashidi said in remarks reported by Bahar newspaper.

The level of sulphur in the petrol is three times higher than the standard, he said.

Iran produces around 60 million litres of petrol on a daily basis, corresponding roughly to its national consumption, according to figures from the oil ministry.

Officials have promised to increase the production of higher grade petrol with Euro 4 and 5 standards, used in European countries, from nine million litres per day to around 25 million by March.

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Three killed in Indian oil depot blaze

Three people have been killed by a fire at an oil depot in the western Indian state of Gujarat. Source: AAP

THREE people have been killed by a fire at an oil depot in the western Indian state of Gujarat, officials say.

One of the nine storage units of state-run Indian Oil Corporation (IOC) caught fire in Surat city on Saturday, said police officials, in a blaze that took firefighters 21 hours to bring under control.

"The three victims were welders who were trapped in the inferno," a police official said by telephone from Surat.

The cause of the fire was not immediately known and Indian Petroleum Minister Veerappa Moily, who visited the smouldering site, said an inquiry has been ordered.

"A high-level team has been constituted to investigate the cause of the fire and it has been asked to submit its report by January 20," Moily told reporters.

The weekend blaze at Surat is the second linked to the organisation since 2009 when a massive fire killed 11 people at an IOC storage facility in northern India.

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Afghan detainees walk free from jail

WITH tears streaming down their faces, scores of suspected Afghan militants embraced waiting relatives and walked to freedom - just one sign of increasing attempts at reconciliation after 11 years of war.

About 80 men, all wearing white skull caps, were released from jail on Friday at a ceremony inside Pul-e-Charkhi, Afghanistan's largest prison located on dusty flatlands east of the capital Kabul.

Most had been detained by US-led foreign troops hunting down Taliban militants and were held at Bagram airfield, where the international force (ISAF) is based, before being transferred into Afghan custody.

President Hamid Karzai, who will hold talks with President Barack Obama in Washington this week, has insisted all prisoners are handed over as Afghanistan takes over security ahead of the pull-out of foreign troops in 2014.

But US officials have often expressed fears that some detainees are released only to return immediately to the battlefield.

"It has been 20 months I spent in jail," one prisoner in his 30s told reporters, declining to give his name. "I was taken in (the southern city of) Kandahar. I don't know why I was arrested, but I was taken by foreign troops."

He said he had been treated well, but another man said he had been arrested in the northern province of Sari Pol and then abused by Afghanistan's intelligence agency, the National Directorate of Security (NDS).

"These prisoners released today were not criminals at all. I was accused of being a Taliban man, but I am innocent," he said. "I spent two and a half years in jail.

"We were treated very badly by the NDS, their behaviour was horrific," he said as he prepared to leave the jail after a ceremony of speeches and prayers followed by a celebration lunch.

The men were among hundreds of prisoners being freed this month as the government looks to build bridges with opposition groups, including militants who have waged a bloody insurgency against the US-backed government since 2001.

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Central Africa rebels capture more towns

CENTRAL African Republic rebels have captured two more towns overnight, just days before talks are due to open on the crisis in the impoverished country, an official says.

"The rebels took two towns near Bambari", a town already under the control of the Seleka rebel coalition, Territorial Administration Minister Josue Binoua said on Saturday.

"This shows their intent to wage war even during negotiations," he said.

There was no immediate reaction from the rebels about the claim.

Binoua's statement came just days before the central African regional bloc CEEAC hopes to start hosting talks between the rebels and President Francois Bozize in an effort to solve the nearly month-long crisis in the mineral-rich but impoverished and unstable country.

The rebels threw those plans into doubt on Friday when they contradicted claims by CEEAC officials that they had agreed to the talks due to begin in Gabon's capital Libreville on Tuesday, saying they had not been informed of the initiative by the Economic Community of Central African States.

On Saturday, Binoua said the talks, which have the support of the UN Security Council and the United States, would proceed as planned.

"There will be three delegations of 15 members each - the government, rebels and opposition," he said.

Bozize will head the government delegation while the opposition will be led by the lawyer Nicolas Tiangaye, he added.

The rebels, who charge that Bozize has not abided by terms of earlier peace deals, launched an offensive on December 10 in the north and easily overran an ill-equipped and poorly trained army, marching across a large part of the country before halting their push within striking distance of the capital Bangui, in the southwest.

Rebel troops were stationed at Sibut, some 160 kilometres from the capital.

Unrest in the landlocked equatorial country has alarmed the country's neighbours and the international community, with the UN Security Council twice calling on Seleka to halt its offensive and engage in peace talks.

Meanwhile, central African nations have begun sending reinforcements to Damara, the last major town between the rebels and the capital, to bolster the army against the rebels.

The violence in the country has affected more than 300,000 children, including through recruitment as child soldiers, family separation, sexual violence and forced displacement, UNICEF has said.

The Central African Republic, with a population of about five million, is notorious for unrest including coups, army mutinies and rebellions.

Bozize himself took power in a coup in 2003 and has since been twice elected into office.

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