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FLEX - Flex News Story

$17.53 0.1  0.6%

Last Trade - 14/05/21

Sector
Technology
Size
Large Cap
Market Cap £6.21bn
Enterprise Value £7.02bn
Revenue £17.11bn
Position in Universe 1005th / 6846

UPDATE 4-Huawei's ties with partners FedEx, Flex fray on U.S.-China tensions

Fri 26th July, 2019 12:57pm
* FedEx suspected of withholding over 100 Huawei shipments
-Xinhua
    * FedEx says DoC ban "unclear" and caused "complexity" 
    * Huawei said Flex had "seized" 700 mln yuan of its goods
    * Flex says working to find solution, remains committed to
China

 (Recasts with FedEx comment)
    By Sijia Jiang and Josh Horwitz
    HONG KONG/SHANGHAI, July 26 (Reuters) - U.S. FedEx Corp
 FDX.N  on Friday again apologised and blamed Washington's ban
on Huawei for being "unclear" as Beijing deepened an
investigation into why the delivery firm was holding up packages
meant for the telecoms equipment maker.
    Huawei was placed by Washington on a blacklist in mid-May
that effectively blocks U.S. firms from doing business with the
Shenzhen-based firm.
    Chinese authorities investigating FedEx suspect it illegally
held back more than 100 Huawei  HWT.UL  packages and has also
violated other laws, state news agency Xinhua reported on
Friday. 
    FedEx in a statement on Friday afternoon said, "These
shipments in question were handled while we were trying to
comply with the U.S. DOC BIS order which was unclear and
resulted in considerable complexity for our operations. We
apologize for any confusion or harm to our customers as a
result."
    Beijing started a probe into FedEx last month after Huawei
said the U.S. delivery firm had diverted parcels intended for
the company. Xinhua said on Friday that investigators also
discovered "clues to other violations". 
    On Thursday, Huawei had accused U.S.-listed Flex  FLEX.O  of
seizing its goods in China. urn:newsml:reuters.com:*:nL4N24Q2ME    
    The developments mark the latest fallout from Washington's
trade ban on Huawei, which has not only rattled the global
technology supply chain tied to Huawei's $105 billion business
but also is causing much confusion among companies and
organisations well beyond the U.S. borders regarding the limits
of restrictions.  urn:newsml:reuters.com:*:nL4N22S13G urn:newsml:reuters.com:*:nL4N2363BB
    FedEx has apologised for multiple incidents of diversion of
Huawei packages, which it attributed to "operational errors",
but it later sued the U.S. government for what it said was an
"impossible task" to "police the contents" of export shipments.
 urn:newsml:reuters.com:*:nL2N23U020    
    FedEx said on Friday that it initiated the suit against the
U.S. DOC "to prevent similar occurrences happening in the
future" and reiterated its commitment to the Chinese market. 
    Huawei told Reuters on Thursday that Flex had withheld some
700 million yuan ($102 million) worth of its goods in its China
factory, confirming a report by Chinese government-backed
newspaper Global Times. 
    Flex kept the Huawei assets in its factory in the southern
city of Zhuhai after the U.S. blacklisting and caused losses for
Huawei, according to the report.
    Huawei told Reuters that it has retrieved some 400 million 
yuan of goods last month after negotiations and is still trying
to take back the rest.  
    Flex said in an emailed statement to Reuters, "Flex and
Huawei have had a long-standing and successful partnership which
has recently been impacted by unforeseen challenges resulting
from the US/China trade situation. Both parties are actively
working to find a mutually agreeable way forward given these
facts."
    A Flex spokesman declined to say whether it still held any
Huawei assets or counts Huawei as a customer, but said China
remains "a very important center of production and end-market"
where it employs tens of thousands of people. 
    Flex said on Friday in its quarterly earnings statement that
it would accelerate a move to reduce its exposure to certain
products in China and India after "recent geopolitical
developments and uncertainties", which primarily impacted "one
customer in China". It did not name the customer.
    "We have seen a reduction in demand for products assembled
for that customer," it said.  urn:newsml:reuters.com:*:nASB01UU4
($1 = 6.8757 Chinese yuan renminbi)

 (Reporting by Sijia Jiang in Hong Kong and Josh Horwitz;
Editing by Muralikumar Anantharaman and Elaine Hardcastle)
 ((Sijia.Jiang@thomsonreuters.com; +852 65313893;))
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