:00:02. > :00:12.BBC News. Now for the latest financial news with Sally Bundock
:00:12. > :00:20.
:00:20. > :00:26.Switched on - Philips focus on LED lighting and healthcare equipment
:00:26. > :00:30.is reaping rewards. It reveals its latest profits numbers today.
:00:30. > :00:40.The Shanghai autoshow has just opened and western car makers are
:00:40. > :00:52.
:00:52. > :01:00.flocking to invest in production Welcome to World Business Report.
:01:00. > :01:04.We will also have news about a strike at Lufthansa. Its been a
:01:04. > :01:08.busy start to the year for the electronics giant Philips. It
:01:08. > :01:12.agreed to sell its audio and video unit and the Dutch company has just
:01:12. > :01:16.unveiled what it claims is the world's most efficient LED. Philips
:01:16. > :01:19.Chief Executive Officer Frans Van Houten - who has been at the helm
:01:19. > :01:22.for almost 2 years - is pushing the manufacturer into high-margin areas
:01:22. > :01:25.such as lighting products that save energy, and equipment for the
:01:25. > :01:29.health industry - moving the company away from its consumer-
:01:29. > :01:35.electronics past. The massive restructuring at Philips is saving
:01:35. > :01:39.the company 1.1 billion euros with 6,700 jobs cut. And it seems to be
:01:39. > :01:44.working. In a few hours time Philips will reveal its latest
:01:44. > :01:53.results. With me is William Mackie, an equity analyst at Berenberg Bank
:01:53. > :01:59.who follows Philips. We have had a strong resolves, will today be the
:01:59. > :02:09.same? Underlying and results will show an improvement in operating
:02:09. > :02:13.
:02:13. > :02:18.profits. We will expect benefits from restructuring. You believe the
:02:18. > :02:22.shift away from consumer electronics, which is incredibly
:02:22. > :02:27.competitive, in tooth lighting and healthcare was the right decision?
:02:27. > :02:32.Yes. The group has made a significant strategic shift across
:02:32. > :02:37.the group to refocus on the areas of strength within healthcare,
:02:37. > :02:44.lighting and consumer portfolio. Myself and the City will come their
:02:44. > :02:49.excerpts from a television and others. They had lower margins and
:02:49. > :02:55.were facing significant competition from the Far East. Her what is the
:02:55. > :02:59.outlook now? In healthcare, they are pushing for innovated new
:02:59. > :03:04.equipment but that is dependent of government spending which could be
:03:04. > :03:11.dodgy in the years ahead. Lighting, they're really going for the
:03:11. > :03:15.lighting. Aren't they winning their? Within the healthcare
:03:15. > :03:20.business, there is a huge amount of barring an innovation focus on key
:03:20. > :03:25.areas where there is potential for growth in emerging markets and also
:03:25. > :03:30.to provide better healthcare within Europe and North America. That is
:03:30. > :03:36.showing some benefits in markets against main competitors. In the
:03:36. > :03:42.lighting industry, they are faced with a revolution. A shift to Elly
:03:42. > :03:49.debased lighting products. Fill-ups have made a quick moves to
:03:49. > :03:57.restructure. Investing heavily to get a lead in lighting fittings and
:03:57. > :04:02.products. What about government spending on healthcare - how
:04:02. > :04:10.dependent is that size of the business dependent on governments
:04:10. > :04:15.are doing well. Many economies are not in that position? Nearly 45% of
:04:15. > :04:18.revenues from healthcare come from North America. Clearly, the fiscal
:04:18. > :04:28.cliff and concern about government spending have created uncertainty
:04:28. > :04:31.
:04:31. > :04:38.resulting some hospitals reconsidering. More requirements
:04:38. > :04:46.for healthcare services means for overtime he will pick up. There are
:04:46. > :04:54.particular challenges. Thank you for your time. One get the results
:04:54. > :04:58.from Philips I will be tweaking the details. -- tweeting. Later, we
:04:58. > :05:04.will be interviewing the chief executive of Philips about their
:05:04. > :05:11.numbers. Just after they are released. And jute union if not a
:05:11. > :05:13.colony on Twitter. -- do tune in. Global auto makers have flocked to
:05:13. > :05:16.China's premier car show in Shanghai, affirming its importance
:05:16. > :05:19.as the world's largest vehicle market. Foreign brands are
:05:19. > :05:22.particularly popular there - on Friday Volkswagen said it plans to
:05:22. > :05:29.increase its Chinese workforce by a third to more than 100,000 people
:05:29. > :05:33.by 2018 as the company continues to expand production capacity in China.
:05:33. > :05:42.And General Motors will add four new plants in the next three years
:05:42. > :05:46.to bring its production capacity to 5 million vehicles a year. Will
:05:47. > :05:51.invest $11 billion in China by 2016, but did not break out the cost of
:05:51. > :05:54.the new plants. Andrew Thomson, Head of Automotive for China and
:05:54. > :05:57.Asia Pacific at KPMG explained the allure of the Chinese market.
:05:57. > :06:01.going to be very, very competitive, but it's more stable. You don't
:06:01. > :06:04.have the volatility of the market and that allows you to plan much
:06:04. > :06:07.more effectively, to resource properly. You are investing in line
:06:07. > :06:17.with the market, and not necessarily deploying in lots of
:06:17. > :06:21.dollars that subsequently end up being wasted. We will have a more
:06:21. > :06:24.from the Auto Show in China as the week progresses. Japan has been
:06:24. > :06:26.given official approval to join negotiations for a Us-led free
:06:26. > :06:29.trade pact. It's called the Trans- Pacific Partnership. Trade
:06:29. > :06:32.ministers from the eleven nations already participating in the trade
:06:32. > :06:36.deal met in Indonesia over the weekend. The membership is central
:06:36. > :06:39.to Prime Minister Shinzo Abe's plans to open the economy to more
:06:39. > :06:49.competition and revive growth. Mariko Oi is in our Singapore
:06:49. > :06:51.
:06:51. > :06:55.bureau. Tell more about how important this is to Japan? It is
:06:55. > :07:00.quite significant. Japanese business leaders have been pushing
:07:00. > :07:06.the government to join these free- trade talks for a few years now.
:07:06. > :07:11.Big exporters will no doubt benefit by having access to huge markets.
:07:11. > :07:16.11 countries have been negotiating a with Japan's in Mosman, it will
:07:16. > :07:22.cover almost 40% of the global economy. One third of world trade
:07:22. > :07:27.as well. There has been a stronger position, especially in Japan, --
:07:27. > :07:31.strong opposition, especially from farmers. They have been or posing
:07:31. > :07:39.it. The Japanese government is expecting to negotiate on behalf of
:07:39. > :07:43.them. -- opposing. They have been some opposition from American
:07:43. > :07:48.lawmakers as well for allowing Japanese carmakers to be a will to
:07:48. > :07:54.access the US market. Nevertheless, the fact that Japan has been
:07:54. > :07:57.welcomed, which was widely expected, is still a significant step.
:07:57. > :08:01.other news: German airline Lufthansa has cancelled the
:08:01. > :08:05.majority of its flights scheduled for Monday due to a strike over pay.
:08:05. > :08:11.The airline said only about 20 of its flights would run as planned on
:08:11. > :08:15.Monday, out of more than 1,700 originally scheduled. German
:08:15. > :08:18.airports affected are Frankfurt, Munich, Dusseldorf and Hamburg.
:08:18. > :08:22.Lufthansa says it is offering free alternative bookings. Last week
:08:22. > :08:26.Lufthansa rejected union demands for a 5.2% wage increase over the
:08:26. > :08:31.next 12 months. Strikers are also looking for guarantees over job
:08:31. > :08:35.cuts. Commercial airline flights moved smoothly throughout most of
:08:35. > :08:39.the US on Sunday, the first day air traffic controllers were subject to
:08:39. > :08:41.furloughs resulting from deep government spending cuts. But the
:08:41. > :08:45.nightmarish flight delays and cancellations that the airline
:08:45. > :08:50.industry had warned of did not materialize. The real test will
:08:50. > :08:54.come on Monday, when traffic picks up. Passengers are adviced to stay
:08:55. > :08:59.in contact with their airlines. And airlines have also directed their
:08:59. > :09:02.customers to tell the FAA to find other ways to cut costs. Cyprus'
:09:02. > :09:10.central bank says all insurance firm deposits in the bailed-out
:09:10. > :09:12.country's second largest bank will now take a loss of 27.5%. The bank
:09:12. > :09:15.also said late Sunday that the savings of unregistered financial
:09:15. > :09:18.companies, charities and some educational institutions kept in
:09:18. > :09:28.the Bank of Cyprus will also take an identical loss, but only on
:09:28. > :09:28.
:09:28. > :09:32.deposits of over 100,000 euros - that's just over $131,000. That
:09:32. > :09:35.deposit loss was a key element in a deal that the country struck with
:09:35. > :09:44.its euro area partners and the International Monetary Fund last