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General Motors CEO Mary Barra said the automaker’s full-year 2018 earnings exceeded its previous expectations and that 2019 is looking even better, citing strong sales in China and high demand for its truck and utility vehicles in the U.S.

“From a 2018 perspective, it is not only a focus on really capitalizing on the new trucks we have out there, the light duty trucks, but also the focus on cost reduction so it was across the board. Every element of the company,” Barra told CNBC’s Phil LeBeau.

The second largest U.S. automaker had previously told investors it expected 2018 adjusted earnings of between $5.80 and $6.20 a share and adjusted automotive free cash flow of $4 billion. It now expects to surpass those projections and painted an even better picture of 2019, Barra said Friday.

She forecast diluted adjusted earnings per share of between $6.50 to $7 and adjusted automotive free cash flow $4.5 billion to $6 billion for 2019.

GM’s shares surged 6 percent in premarket trading on the news.

Barra also said GM tightened its belt last year, helping to boost earnings. She announced several plant closures and 14,000 job cuts in November. The reorganization is estimated to save about $6 billion by the end of 2020, with about half of those cost savings realized by the end of 2019, the company said at the time.

Barra said the job cuts were a “proactive” move in an otherwise strong labor market.

“We have been transparent with the [United Auto Workers union], helping them and making sure they understand the business and that customers’ preferences are changing,” she told reporters on a call Friday morning.

GM plans to expand its footprint overseas with a global family of vehicles it is set to launch in China this year, Barra said on the call. She said GM has 20 new or updated products coming out in China.

“When you step back and look at China, we have been there for 20 years, we have had tremendous success, we have very strong brands,” she told LeBeau. “We think that the trade talks that are going on right now are very constructive, the fact they have extended this round to have even more discussion, the next is already scheduled, we know there is discussion of durable goods stimulus in country that we think will apply to autos.”

Cadillac will become the company’s lead electric vehicle brand, it said. It’s projecting just over 17 million in total U.S. vehicle sales in 2019 and 27 million in China — about flat from 2018. She said annual auto sales in China will eventually climb to 30 million.

WATCH:
CNBC’s full interview with General Motors CEO Mary Barra

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Airbus kicks off Paris Airshow with a new plane announcement

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The Airbus logo on a glass sign in Toulouse, France.

Balint Porneczi | Bloomberg | Getty Images

The European plane-maker Airbus has kicked off the 2019 International Paris Airshow with the launch of a long-range, single-aisle airliner and an announcement that they have agreed to sell 100 planes to the U.S. plane lessor Air Lease Corporation.

The Los Angeles based aircraft leasing company, has agreed 27 firm orders of the new Airbus A321XLR, 23 Airbus A321neos and 50 A220-300s.

Air Lease Corporation, founded from scratch in 2010, now has 387 Airbus aircraft and is the European plane maker’s third largest leasing customer.

At the same conference, Airbus unveiled details of its A321XLR – the latest evolution of the company’s hugely successful A320 series.

At a press conference Monday, Airbus claimed the plane now boasted the longest single-aisle plane range in the world at 4,700 nautical miles. The plane can take 244 passengers but on a long-range trip, the number of seats would reduce to about 200.

Airbus said the routes would now open up to operators who had an interest in flying routes such as India to Europe or China to Australia.

The chief commercial officer for Airbus, Christian Scherer, said the new plane would come with a newly designed fuel tank that could carry nearly as much fuel as a bigger twin-aisle plane.

No catalog price was offered for the plane but Scherer added that it had a “health commercial premium” over earlier versions.

The latest version of the XLR is entering an area of the market that the industry expected rival Boeing to address with the announcement of the NMA (New Midsize Aircraft), known alternatively as the 797.

Earlier Monday, Boeing poured cold water on any new plane announcement of its own but said it could “continue to work on the business case of the NMA.”

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Huawei slashes revenue forecast amid US pressure in trade war

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A Huawei logo displayed at a retail store in Beijing.

Fred Dufour | AFP | Getty Images

Huawei will reduce its production capacity which could hit revenue growth, the CEO of the Chinese tech giant said on Monday, as he revealed his plans to deal with the continued pressure from the U.S.

“In the next two years, I think we will reduce our capacity, our revenue will be down by about $30 billion dollars compared to forecasts, so our sales revenue due this year and next will be about $100 billion,” Ren Zhengfei, founder of the telecoms equipment giant said, adding that the firm will regain its “growth momentum” after 2020.

Huawei is currently on a U.S. blacklist that restricts American businesses selling products to the Chinese firm. The restrictions have affected Huawei’s business as it relies on American suppliers for components and software in several of its products including smartphones and laptops.

Huawei reported revenue over $100 billion for the first time in 2018 — about 19.5% higher than 2017. Ren’s comments suggest that revenue growth will be roughly flat in 2019 and 2020.

We are strong, I think there is no way we can be beaten to death.

Ren Zhengfei

Huawei founder

Ren said the company is also looking at creating different versions of its products.

“In the next two years, we are going to do a lot of switch over of different product versions that will take time and that will take time to ramp up, and it will take some time to test whether that works,” he said in Mandarin, according to a Huawei translation. “After that step, we will be stronger.”

Ren did not specify whether this meant using components from different suppliers.

Huawei has been developing its own operating system, which CNBC reported could be ready later this year in China. The company was also forced to scrap a planning laptop launch. Huawei’s consumer business CEO Richard Yu told CNBC that the move was a result of the company being on the U.S. blacklist.

Ren said the company will continue to work with American companies if it can.

“In the past, when we were not as strong, we were determined to work together with U.S. companies. In the future, we will be more determined to work with US companies. We are to afraid of using U.S. components, we are not afraid of using U.S. elements,” Ren said.

“We are strong, I think there is no way we can be beaten to death,” he added.

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It’s ‘complicated to negotiate with the EU’, Wilbur Ross says

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The United States is finding it difficult to negotiate trade with the European Union, U.S. Commerce Secretary Wilbur Ross told CNBC Monday.

Both sides of the Atlantic have been at odds over trade ever since President Donald Trump took office back in 2016. Since then, the president ended trade negotiations between the U.S. and the EU over a wide-ranging deal (the Transatlantic trade and investment partnership – TTIP), has imposed tariffs on European steel and aluminium products, as well as threatened to slap further duties on European carmakers.

“For the moment, it’s complicated to negotiate with the European Union, because they just had their parliamentary election, they haven’t picked a new president of the European community yet, they haven’t picked a new trade commissioner and so there’s really nobody to negotiate with who will be around in the long term,” Wilbur Ross, the U.S. Commerce Secretary told CNBC’s Phil LeBeau at the Paris Airshow.

European citizens voted at the end of May on new lawmakers that will sit in the European Parliament, starting July 2. The new chamber will be responsible for approving, alongside with the 28 country leaders, a new president of the European Commission – the EU’s executive arm.

The new European Commission President is expected to start the mandate on November 1. Until then, the current team will be responsible for carrying on with the day-to-day activities of the institution, including negotiating trade deals.

“The way the European Commission works, the trade commissioner needs to get a mandate from all the countries before he or she is able to have meaningful negotiations so it’s probably going to be some time in the fall before anything in substance gets going,” Ross said.

Europe’s trade commissioner, Cecilia Malmstrom, got a mandate from the 28 European countries in April to reach a deal with the U.S. over industrial goods. However, the European Commission has previously said that Washington has not said yes to starting official rounds of talks, despite the EU being ready to do so.

There’s one big motivation for Europe to reach a deal with the U.S.: preventing duties on its carmakers – a sector responsible for much of the economic growth in the region.

“I’m an optimist by nature so I think there’s a very good chance we will work something out with them,” Ross said about a deal with Europe.

“But if not, the President is totally comfortable going the other direction,” he added, hinting at the chance of car tariffs.

Trump announced last month that he would delay tariffs on cars and auto part imports for up to six months as discussions with the European Union and Japan take place and while he seeks to conclude talks with China. The president had threatened as early as last year that he would slap a 25% tariff on car imports from the European Union.

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