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TEXT-Fitch places VB-Verbund's viability rtng on RWN

The rating actions follow the announcement on 13 October 2011 that OeVAG will report a significant loss for FY2011 primarily as a result of write-downs of the book values of its subsidiaries Investkredit Bank AG and Volksbank Romania S.A. At the same time, OeVAG has stated that it will not repay the first tranche (EUR300m) of the government participation capital received in 2009 and that it will postpone the planned demerger of the banking business of OeVAG to Investkredit until further notice.In addition, and as part of its capital strengthening measures in preparation for Basel III implementation, VB-Verbund and OeVAG announced that they have decided to reorganise the structure of the group similar to Rabobank Group's ('AA+'/RWN), a development which Fitch views positively as it is likely to strengthen corporate governance, risk management control and consolidated supervision.The RWN on VB-Verbund's VR predominately reflects Fitch's view that VB-Verbund's central institution, OeVAG, continues to face material challenges in relation to its capital position, risk profile and business model, despite considerable deleveraging efforts since 2008. As Fitch does not assign a Viability Rating to OeVAG, the rating action is taken at VB-Verbund level.In its latest rating action commentary dated 19 July 2011, Fitch stated that should OeVAG's core capital not be strengthened as a result of the capital strengthening measures, VB-Verbund's VR would come under pressure. OeVAG represents a considerable proportion of VB-Verbund and for FY2011, net profit generated by the steadily performing VB-Verbund's primary banks will likely not be sufficient to offset OeVAG's expected sizeable loss (around EUR500m under IFRS on a consolidated level as publicly stated by management).With the exception of the VBI sale, which is likely to increase the regulatory core Tier 1 capital ratio at end-2011, capital raising measures announced earlier this year are being postponed, which is of concern as capital raising measures are being delayed at a time when European banks are faced with increasing capital requirements.Fitch expects to resolve the RWN in the near term once it has assessed the impact of the planned measures on the group's capital position, financial strength and business model. Depending on the outcome of Fitch's assessment, VB-Verbund's VR could be downgraded by more than one notch.VB-Verbund's and OeVAG's IDRs are solely based on the agency's view of sovereign support by the Republic of Austria ('AAA'/Stable). In Fitch's view, VB-Verbund's sizeable domestic market share should improve as the result of the announced reorganisation and will therefore continue to be systemically important for the Austrian economy. However, should the Austrian government's propensity to support the bank weaken or become constrained by legislative changes, then this would result in a downgrade of VB-Verbund's and OeVAG's IDRs.VB-Verbund, which is not a legal entity itself but a cooperative grouping of member banks, is Austria's fourth-largest banking group. OeVAG is the central institution of VB-Verbund, Austria's second-largest cooperative banking group. As such, Fitch has assigned OeVAG "group" ratings under Fitch's rating criteria for banking structures backed by mutual support mechanisms. Fitch does not assign OeVAG a Viability Rating.

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Olympus under pressure to disclose more on deals

A senior Olympus executive told investors on Monday that Woodford was dropped because of a clash in management styles and said the company may take legal action against him for disclosing confidential information in media reports following his firing.But analysts and investors remain dissatisfied."We do not think the market's confidence can be restored based on what we heard during the conference call," said analyst Motoya Kohtani of Nomura in a note to clients."With a former president playing the unusual role of whistle blower, the level of disclosure by Olympus thus far is unlikely to alleviate market concerns," he added."We think management should disclose the advisory fees paid for the Gyrus acquisition, broken down into preferred dividend stock, options and cash."Olympus shares fell to a fresh 2- year low of 1,455 yen early on Tuesday, before paring losses to trade down 1 percent at 1,539 yen in volatile trade. The stock lost 37 percent of its value in the prior two sessions, following Woodford's dismissal and his comments to the media.Woodford told the Financial Times he had taken documents on the acquisition of Gyrus to Britain's Serious Fraud Office on Monday and said he welcomed further investigation of the case.

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Detroit contracts expose autoworkers' anger

The plant, which is just a 15-minute drive down Michigan Avenue from Ford Motor Co headquarters, has become an emblem of the automaker's turnaround under Mulally.So when workers at the Wayne plant voted to reject a proposed four-year contract negotiated by the United Auto Workers union, it registered as a jarring slap to the CEO's vision for a unified company he calls "One Ford.""I think they've finally pushed us to the point that we have to do something," said Kevin Branham, a 49-year-old metal finisher at the plant. "This vote, it's a matter of people speaking out."The Ford contract seemed set for ratification after UAW leaders stepped up their lobbying for the deal. By Sunday, the "yes" votes had accounted for 62 percent of all those cast.But the surprisingly fierce debate over proposed, four-year contracts at Ford and smaller rival Chrysler Group LLC over the past week has exposed a rift between lower-paid, entry-level workers and veterans, as well as anger over CEO pay.The argument over wages and benefits for 67,000 unionized Ford and Chrysler autoworkers comes just two years after the Obama administration intervened to save General Motors and Chrysler from liquidation. The gratitude that many Detroit workers felt just after the bailout has given way to a frustrated sense that blue-collar workers have not shared equally in the industry's comeback."There is a lot of anger at Ford right now, and also a lot of anger at the union," said Brandon Gustafson, a 40-year-old assembly line worker at a Ford plant in Minnesota slated for closure just before Christmas.With the national unemployment rate stuck at around 9 percent and the risk of a renewed economic downturn, UAW officials led by President Bob King have said the proposed contract is the best they can get.Last month, General Motors workers ratified their own four-year deal by a 2-1 margin. But the debate over parallel deals at Ford, the strongest of the Detroit automakers, and Chrysler, the weakest, has turned bitter.A final ratification vote tally is expected by Wednesday for Ford and later this month for Chrysler.'WAIT UNTIL 2015'In union halls and on Facebook, UAW officials have said that rejecting the Ford contract would risk a strike, where workers would take home only $200 a week.By contrast, the Ford contract would give workers $16,000 in bonuses over four years, including $6,000 at ratification.Many veteran Ford production workers are unhappy with the lack of a base wage raise since 2003; they now make about $28 an hour. Mulally's compensation, including a 2010 package worth $26.5 million, has also been a flashpoint, workers say."We know Ford is profitable," said Scott Houldieson, secretary-treasurer of UAW Local 551, which represents the Ford Chicago assembly plant that makes the Explorer SUV and the Taurus sedan. "We know they are paying their executives handsomely. We know that a decent wage for us would not hurt Ford's bottom line."Another sore point: Many Ford workers had hoped the contract would resolve a grievance over pay that salaried employees received, but hourly workers did not. An arbitrator is expected to decide on the issue in mid-November.Analysts have said the contract at GM and the proposed deal with Ford would cap costs and link the pay of blue-collar workers more directly with performance. But there is a risk for investors that the kinds of deals negotiated in recent months will not hold up in 2015, when workers at GM and Chrysler will have won back the right to strike."Wait until 2015, when the chains come off," one Chrysler worker wrote on the union's Facebook page.The undercurrent of frustration stood out at Ford's Wayne plant, where the automaker invested $550 million for retooling at the peak of the auto industry's crisis in 2009.The bet at the time was that a once wildly profitable hub for full-size SUVs could be made over to produce the small Focus and a battery-powered, electric variant.Ron Andrus, 56, a Wayne worker, said many at his plant were on edge over the prospect of a strike. "It's all scary as to what's going to happen," he said.Some union officials have suggested workers direct their anger to the national economic debate. The UAW has endorsed the Occupy Wall Street protest and helped stage an "Occupy Detroit" rally."The Ford workers are angry for the same reasons a lot of the people are here," said Jaron Garza, a UAW-represented General Motors worker as he stood in a downtown Detroit park with more than 1,000 others in support of the Occupy Wall Street protesters."A lot of the bigger companies, banks and whatnot, have been taking, and the middle class has been bearing the brunt of the recession and the aftershocks that we are still feeling now," Garza said. "People are angry, and they think they've got something coming."Shares of Ford were down 1.6 percent at $11.38 at midday on Monday. The stock has lost 32 percent since the start of the year. Chrysler is controlled by Fiat SpA. Shares of Fiat are down 30 percent this year.