This month’s Global Talent Update discusses global firms cutting their European operations due to sluggish growth and high energy costs; China reopening earlier than expected could hit supply chains in the short term; how governments and companies in Latin America are closing gender gaps.
U.S. home appliances maker Whirlpool is folding its European business into a new company controlled by Turkish rival Arcelik, reducing its exposure to a market where it had warned attractive profit margins could be some way off. Whirlpool has also agreed to sell its Middle Eastern and African businesses to Arcelik, which the Turkish firm said was for 20 million euros ($21.65 million) in cash.
The moves come after Whirlpool launched a review of its Europe, Middle East and Africa (EMEA) operations last year and said it planned to focus on higher margin businesses.
Global firms have been cutting their European operations due to sluggish growth and high energy costs. Turkish exporters, meanwhile, have gained a competitive edge from a plunge in the country’s lira currency to record lows, making goods produced in Turkey cheaper to overseas buyers. The combined entity is expected to have annual sales of 6 billion euros and is likely to have more than 20,000 employees across multiple European countries.
China reopening earlier than expected could hit supply chains in the short term, but boost growth in 2023. According to mobility data analyzed by economists at Goldman Sachs, China is likely to see “weaker growth momentum during the frontloaded ‘exit wave’ on the back of surging infections, a temporary labor shortage and increased supply chain disruptions.”
Despite shorter-term concerns for China’s reopening, however, the economists have a rosy outlook for China’s growth in the long run. “Improved growth expectations in 2023 might outweigh unfavorable factors such as deterioration in goods and services trade balances,” they said.
The firm added that the country’s reopening measures are positive for the onshore yuan as well, adding it only expects marginal weakening of the currency over the next year to maintain 6.90-levels against the U.S. dollar. The economists at Goldman Sachs also said the latest measures will likely benefit the surrounding region’s growth as travel normalizes.
The World Economic Forum is working with thirteen countries to convene Gender Parity Accelerators, which are national public-private collaboration platforms that support countries in closing economic gender gaps. In Latin America and the Caribbean, accelerators have been convened in Argentina, Chile, Columbia, Costa Rica, Dominican Republic, Ecuador, Mexico and Panama in partnership with the Inter-American Development Bank.
In Chile, for example, member companies have seen women’s representation in the workforce increase to 41%, almost 10 percentage points above the national average. Companies enrolled in the three-year accelerator programme also reported a significant 37.5% decrease in the gender pay gap — men employed by member companies earn on average 5.6% more per hour, compared to the national average of 18%. Collectively these companies employ 130,000 local women — or 7% of salaried private sector employees.
It is unlikely that global gender parity will be achieved in our lifetime, according to the World Economic Forum, which has been measuring gender pay gaps in countries around the world since 2006. The most challenging gender gap is the economic dimension which, according to the latest data, it estimates will take 151 years to close.