|Bid||157.12 x 207000|
|Ask||157.14 x 63200|
|Day's Range||151.60 - 158.12|
|52 Week Range||131.44 - 163.98|
|Beta (3Y Monthly)||0.87|
|PE Ratio (TTM)||6.84|
|Forward Dividend & Yield||4.86 (3.21%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- The AirFreez is a funky-looking cube that, according to its website, uses “hydro-chill technology” to cool air and purify it in a “totally eco-friendly way” by using water rather than chemicals.It sounds too good to be true: a way of alleviating the record temperatures set to strike London and Paris this week with none of the negative effects of air-conditioning units that evacuate hot air and exacerbate rising temperatures outside. Consumers who love the environment but hate the heat have a solution.The small problem is that the product, which looks identical to those sold under the names Arctic Cube and Fresh Air, doesn’t appear to work very well. Consumer advocacy group UFC-Que Choisir found in 2018 that the product’s cooling effects could only be felt at a distance of less than 70 centimeters from the cube. One YouTube video shows water leaking liberally through the unit and its battery compartment. “You have more chance of electrocuting yourself than cooling down,” one reviewer scoffed.A gadget that over-promises and under-delivers is nothing new. But there’s a bigger pattern at work here. This is an example of the dark side of 21st-century e-commerce in which viral marketing campaigns – such as those miracle-cure ads bunched at the bottom of web pages – prey on the naivete of woke consumers.A recent investigation by France’s Le Monde showed how vendors use slick virtual store-fronts to promote cheap imports from China as sophisticated technology. Welcome to “drop shipping”: Cut-throat, low-margin, and not always consumer-friendly.The emphasis on climate-consciousness is a particularly telling development. Greenwashing, where companies talk up their products as sustainable and good for the environment, has been around for decades. But now it's being weaponized as sustainability moves to the forefront of young shoppers’ minds. A booming cottage industry of green product labels – over 460 worldwide – has sprouted up as a result.Consumers are receptive to visual signs of green advertising and promotion. In 2013, researchers Beatrice Parguel and Florence Benoit-Moreau conducted an experiment using different ads for the same car emitting the same, large amount of carbon dioxide. One vehicle was colored black, the other green and positioned alongside pictures of nature and foliage. The latter’s green visual cues improved perceptions of the car’s eco-friendliness, offsetting its grim emissions.Social media offers an especially potent channel. There’s often more sophistication put into the ads than the product itself. Take “EcoFuel” – a car accessory supposed to improve fuel efficiency. A slick YouTube video tells the story of an engineering student called Mathieu Bertrand, supposedly kicked out of college in front of his shocked fellow students after inventing the gadget. “The big oil companies and automakers are hiding this from the world,” he says, as stirring violin music plays in the background. Crack open the EcoFuel, though, and according to many online tear-downs, you’ll find a bunch of blinking LEDs and little else. The product looks as mysterious as the story promoting it: Mathieu Bertrand goes by the name of Lukas Weiss in the product’s German ads, or Victor Martinez in Spain, according to online fact-checker Hoax-Net.Given the importance of the fight against climate change in Europe, as well as the recent history of eco-fraud – Volkswagen AG’s emissions cheating scandal, or the carbon-credits scam – it might be time to crack down harder on bogus marketing.Facebook Inc. has wheeled out a self-reporting tool for misleading ads, but the company’s track record in this field isn’t reassuring. The nimble nature of drop shipping – myriad brand names for the same factory-ordered products that aren’t held in inventory – also makes it hard to control. Still, better information for consumers, tougher oversight of online marketplaces, and investment in genuinely climate-friendly air-con projects would help. Until those happen, expect the heat to play cruel tricks on the wallet.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- At least someone out there still has a soft spot for Daimler AG.Four profit warnings in just over 12 months have caused most equity investors to go cold on the Mercedes-Benz maker. After the latest shocker earlier this month the shares are down 20% over the past year, hovering just a touch above their lowest levels in nearly six years.So it must be some comfort for newly appointed Chief Executive Officer Ola Kallenius that he’s got two Chinese companies fighting for his affection. Beijing Automotive Group Co., which controls China’s second-largest listed automaker BAIC Motor Corp., has taken a 5% stake in the German company, according to an announcement Tuesday. That long-anticipated move complicates a love triangle that Kallenius and his predecessor Dieter Zetsche have had to negotiate with BAIC rival Zhejiang Geely Holding Group, which took a 9.7% slice of the company 18 months ago.Daimler has worked with BAIC for more than a decade on its Beijing Benz joint venture, and has a 30% stake in the Chinese company's Hong Kong-listed shares. That equates to almost 10% of the parent. (There’s also a small and largely dormant venture with another of China’s automakers, BYD Co.)(1)What is it that Chinese strategic buyers see in Daimler that professional investors elsewhere in the world are missing? It’s largely down to whether you’re looking at the past, or the future.Daimler’s dismal state right now is largely to do with the lingering legacy of the diesel-emissions scandal. As my colleague Chris Bryant has written, the costs from this could continue to mount long after the company has sorted out the technological shortcomings that led to it.That’s less of a worry if you’re a strategic investor. Unlike conventional shareholders who hope to sell their stock at a profit, the purchase for BAIC and Geely is essentially a sunk cost. Thanks to Daimler’s depressed valuation, its dividend yield is running at around 6.4%, enough to make payouts a significant contributor to the Chinese companies’ bottom lines (about a third of BAIC’s trailing 12-month net income, and a quarter of that at Geely.)Of course, that doesn’t look so great when compared with returns on invested capital that are in double digits at both Chinese companies. Every cent spent buying Daimler stock is one not spent on more productive investments at home.That’s where keeping an eye on the road ahead counts, though. While European investors focus on Daimler’s diesel-choked past, its Chinese suitors are much more interested in its plans for an electric future. In March, Geely formed a joint venture with Daimler to produce all-electric versions of Smart, the micro-car brand the German company has been pushing for two decades with unspectacular results. BAIC’s manufacturing joint venture, Beijing Benz, will meanwhile focus on the heftier EQC and EQB electric crossover SUVs.At a time when Chinese carmakers are under pressure to meet government mandates around electrifying their fleets – even as a cratering domestic market squeezes profit margins – such tie-ups make a lot of sense. While domestic companies are notoriously stingy in research and development spending, Daimler’s budget is the industry’s biggest after Volkswagen AG.Foreign auto companies have always been cautious about sharing too much of their intellectual property with their Chinese counterparts, and that's doubly the case given the current rumblings of trade war. Still, even out-of-date Daimler expertise can help its mainland partners come up with new electric models without spending too much of their own cash.Kallenius may welcome this vote of confidence, but he shouldn’t let all the attention go to his head. These Chinese suitors only want to marry Daimler for its money.(1) Many Chinese companies have units listed in Hong Kong and mainland exchanges whose operations are similar but not identical to the unlisted mainland parent companies which typically carry out major M&A activity. Throughout this article, "BAIC" and "Geely" refer to the unlisted parents.To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The European Union is keen to work with Washington to reform the World Trade Organization and cooperate on common challenges to global trade, but will retaliate if Washington makes good on its threat to raise car tariffs, a top EU official said on Monday. Sabine Weyand, the European Commission's director general of trade and former deputy Brexit negotiatior, struck a conciliatory but firm tone in remarks during her first official visit to Washington since taking on her new role a month ago.
WASHINGTON, July 22 (Reuters) - The European Union has seen little movement thus far in talks with the United States about reducing industrial tariffs, a top EU official said on Monday before meetings with U.S. officials. Sabine Weyand, the European Commission's new Director General of Trade, said it was important to build trust by moving forward in areas where the two economic blocs agreed, rather than focus solely on contentious issues. "It's a very mixed picture," Weyand told an event hosted by the Center for Strategic and International Studies think tank during her first official visit to Washington since taking over her new role. (Reporting by Andrea Shalal and Jonas Ekblom Editing by Chizu Nomiyama
(Bloomberg Opinion) -- Volkswagen AG announced that 2019 would be the last model year the Golf SportWagen and Alltrack, the automaker’s station wagons, will be produced for the U.S. The German company has sold wagons in the U.S. since 1966, starting with the Type 3 “Squareback” model. “Customers are speaking clearly about their preferences — it’s an SUV world now,” the company said in a news release. The data agree with VW, as I noted last year. As wagon models become scarce and the U.S. becomes more enamored of sport utility vehicles, there’s another type of car that’s going away, too: the convertible. Five years ago, convertibles made up less than a percent of U.S. auto sales, according to Edmunds; through the first four months of this year, they were barely six-tenths of a percent of total sales.Convertibles are also a shrinking percentage of total vehicle models available in the U.S., in a market with nearly 400 different models. Five years ago, convertibles made up more than 14% of total models available in the U.S. Today, they’re barely 8%. Station wagons and convertibles are probably as far apart on the spectrum of practicality as they can be, and convertibles’ diminished presence in buying behavior is a testament to the appeal of the SUV at the expense of other models. SUVs are probably more comfortable than a convertible for a long slog through commuter traffic, and they’re considered safer, too (though perhaps at the expense of those outside the vehicle). I’m not quite willing to say that SUVs will take over the world, though. In a driving-as-a-service future that also includes autonomous vehicles, the needs and wants of passengers may become more important than those of drivers. NTT Docomo Inc., which operates a vehicle-sharing service in Japan, recently noted some fascinating customer behaviors. A 2018 survey of 400 users found that 1 in 8 rented automobiles for purposes other than transportation:An overwhelmingly large number of respondents said they slept or rested in vehicles, followed by customers who said they used cars as spots to talk with friends, family and business clients on the phone.People also rented vehicles to watch TV in, get dressed up for Halloween, practice singing, rapping and English conversation, and even do facial stretches said to reduce the size of their face, NTT found.“Cars can be used for private space,” said the NTT Docomo official in charge of the study. “People used our vehicles in more ways than we expected.”If the car is a private space — whether moving or not — then is an SUV the ideal manifestation of that space? A minivan might be better for that purpose, or the reborn and electrified iconic camper van, which VW describes as “at home anywhere.” Design researcher Jan Chipchase, in a 2014 essay of concepts in autonomous mobility, says autonomous vehicles will inspire not only new human behaviors, but also new forms of automobiles that can accommodate or embrace them. One of his concepts is the “Highly Private Moment,”the term used in corporations to describe highly private activities that take place in vehicles. Expect to see a variety of hacks to temporarily disable sensors such as internal facing cameras. As a side note, if you want to introduce discussions on taboo activities into a corporation, reduce it to a generic TLA or FLA that is open to wide interpretation. e.g. VPMC = Very Personal Media Consumption. The rise in opportunities for compelling HPMs will lead to a seismic shift in physical vehicle design, sold or more mundane pursuits.The station wagon and the convertible are diminishing in American automotive life and culture. I don’t know if they will disappear — but I’m also not sure that the SUV conquers all in the end. Expect more new vehicle types that will meet demand for the car as private space.Reads to start your weekA domain name prospector is turning stray URLs into real businesses, including a retailer of Georgia onions. A “formal proposal to the Unicode Consortium, the governing body for emoji creation, to introduce the first-ever ‘Electric Vehicle With Charger’ emoji for smartphone keyboards.” Citi Bike comes to the Bronx, six years after its debut. Investor David Sacks on myths and realities in another electric vehicle business: scooters. Elon Musk’s Neuralink says it’s ready for brain surgery. The California town of Berkeley will no longer allow natural gas pipes in many new buildings after the end of this year. A former U.K. science minister wants to fund the National Health Service by selling $12 billion worth of patient data. America can’t shake cost disease, or the findings of the “chart of the century.” How “corn sweat” makes summer days more humid. Get Sparklines delivered to your inbox. Sign up here. And subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Nathaniel Bullard at firstname.lastname@example.orgTo contact the editor responsible for this story: Brooke Sample at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
United States-based diesel engines maker Cummins has made an indicative offer for Volkswagen's MAN Energy Solutions unit, people close to the matter said, as the carmaker seeks to slim down its portfolio of disparate assets. Volkswagen announced in May that it is exploring a sale or partnership for its MAN Energy Solutions as part of a restructuring of the German cars, trucks and bus empire. VW has held talks with Cummins, and received an offer from the U.S. company for MAN Energy Solutions, the sources said.
(Bloomberg) -- SAIC Motor Corp. expects annual sales to fall for the first time in at least 14 years as China’s biggest automaker battles through a slump in demand roiling the world’s largest car market, according to people familiar with the matter.The Shanghai-based company, Volkswagen AG and General Motors Co.’s biggest auto-making partner in China, projects 2019 sales will fall about 7%, said the people, who asked not to be identified because the information hasn’t been made public. The new target of 6.54 million is about 8% below SAIC’s public forecast for a slight increase in sales and would represent the first full-year drop on record, based on data compiled by Bloomberg back to 2006.Citing weakness in Chinese demand for cars, JPMorgan lowered its second quarter earnings per share estimate for GM on Thursday to $1.25 from $1.29, and also cut its projection for GM’s 2020 profit by about 1%.Investors seemed unfazed by the news as GM rose 1.1% to $39.53 as of 10:56 a.m. in New York.At SAIC’s venture with VW, sales are expected to fall by about 3% to 2 million units and deliveries at SAIC General Motors Corp. are projected to slide by almost 8% to 1.82 million vehicles, according to one of the people. The figures would represent the first full-year drop for the VW venture and the second-straight annual decline for the GM one, according to data compiled by Bloomberg.The projections are the latest signs of deterioration in the global car market, as shifts in technology and weakening economic growth give consumers fewer reasons to go to the showroom, whether it be in China, the U.S. or Europe. The slump is prompting traditional automakers to fight back, by slashing jobs, pursuing mergers, and plowing billions of dollars into electric and self-driving vehicles.A representative for SAIC said that if the overall market slides this year, the company plans to sustain its market share. Representatives for GM and the SAIC-VW venture declined to comment.In China, consumers bought more cars in June -- the first increase in a year -- but those gains were largely inflated by heavy discounts to clear inventory, indicating the trend won’t last. Deliveries to dealerships continued to fall. The state-backed China Association of Automobile Manufacturers is forecasting a second straight year of declines in the country’s passenger-car market, while researcher LMC Automotive last month predicted a 5% drop. GM representatives declined to comment on forward-looking figures.Adding to the woes in China are continued trade frictions with the U.S. and the advent of tougher emissions standards.SAIC reported this month a 17% drop in first-half sales and said it saw declines across its various ventures. The company has offered buyers incentives of as much as 50% over the past few months to clear inventory of cars that don’t meet stricter emissions standards, according to local media reports. Eighteen provinces and regions -- which together account for most of China’s car sales -- began requiring vehicles to meet the new criteria from July 1.It’s not just SAIC that’s suffering. Geely Automobile Holdings Ltd., which is controlled by billionaire Volvo Cars owner Li Shufu, issued a profit warning last week. That triggered a broader fear that the automaker -- which Sanford C. Bernstein sees as a barometer for sentiment on car stocks -- is foreshadowing further pain across the sector. Great Wall Motor Co. on Friday warned first-half profit fell about 59% and slashed its full-year sales forecast to 1.07 million units, or 11% below what it projected in March.Beyond China, European car registrations fell for the ninth time in 10 months, with June seeing the region’s biggest drop this year. In the U.S., most automakers posted shrinking sales in June and the industry is headed for the second annual sales decline in three years.Even India, long a growth market with still-low car penetration, is now suffering from a prolonged decline. Sales of passenger vehicles in the country dropped more than 17% in June, the eighth straight monthly retreat.(Adds analyst lowering estimate of GM’s EPS in third paragraph.)\--With assistance from David Welch and Kyle Lahucik.To contact Bloomberg News staff for this story: Tian Ying in Beijing at firstname.lastname@example.org;Steven Yang in Beijing at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, Ville Heiskanen, Emma O'BrienFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The head of the labor union representing most hourly workers at the U.S. automakers struck an adversarial tone on Monday, vowing in likely contentious talks for new four-year deals that they want to share in the companies' profits. Rising healthcare costs, job security and the use of temporary workers are also expected to be major sticking points.
The United Auto Workers and Ford Motor Co will officially launch talks on a four-year contract on Monday that are expected to be contentious, with rising healthcare costs, job security and the use of temporary workers expected to be major sticking points. General Motors Co and Fiat Chrysler Automobiles NV (FCA) will kick off their own talks with the UAW on Tuesday. When the negotiators for the union and Detroit's automakers last sat across the table from each other in 2015, U.S. new vehicle sales were booming.
(Bloomberg) -- The car industry is reinventing the wheel to prepare for autonomous vehicles.Japan’s Sumitomo Rubber Industries Ltd., whose roots stretch back to when Henry Ford was building his Model T, is developing a “smart tire” that can monitor its own air pressure and temperature, and eventually respond by itself to changes in road conditions.Yet it’s more than just tires that are being changed. Koito Manufacturing Co., AGC Inc. and Lear Corp. are putting semiconductors and sensors inside headlights, glass and seats to make them as intelligent as the cars driving themselves.Alphabet Inc.’s Waymo LLC, Intel Corp.’s Mobileye NV and Baidu Inc. dominate the core technology for autonomous driving, yet suppliers still count on finding their own space in the business. Parts for advanced driver-assistance systems and autonomous driving are expected to become a $57 billion market within a decade, according to BIS Research, and old-school companies born during the early days of the automobile know they must either adapt or risk extinction.“Autonomous driving is a challenge for carmakers, but it’s a bigger challenge for conventional parts makers,” said Zhou Lei, a partner at Deloitte Tohmatsu Consulting in Tokyo. “They are striving to become the ‘five senses’ of the vehicle so they can remain relevant.”Carmakers have disclosed more than $14 billion in investments in autonomy and mobility companies since 2010, according to data compiled by BloombergNEF. Toyota Motor Corp. tops that list at about $3 billion.Though the deployment of highly autonomous commercial fleets isn’t expected to begin until at least 2022, the looming threat is that the increasingly sophisticated designs of those cars will render some ordinary parts –- and their suppliers -- unnecessary.For example, why would a self-driving vehicle that uses cameras, lasers and sensors to get around need headlights or mirrors?Smart HeadlightsThe response from century-old Koito Manufacturing is to reinvent the headlight. The Tokyo-based company, which traces its roots to making lenses for railway signal lamps in 1912, is adding sensors and artificial-intelligence chips to lamps it plans to introduce by about 2025.Positioned on the four edges of the vehicle, the lamps will be able to process information and react, such as by illuminating poorly lit crossings, signaling pedestrians that it’s safe to cross and raising an alarm to surrounding drivers by flashing a specific color.The company’s current customers include Toyota, Volkswagen AG and General Motors Co., according to data compiled by Bloomberg.“Autonomous driving will change the role of lamps,” said Yuji Yokoya, who recently retired as executive vice president of the Tokyo-based company. “We see them not just as lamps, but more as corner modules.”Tokyo-based automotive glass-maker AGC is re-imagining that product and making it part of a vehicle’s communication system.Window AntennasThe company, founded in 1907 as Asahi Glass Co. Ltd., is designing windows with built-in antennas for 5G wireless connections, allowing cars to send and receive signals with other vehicles and infrastructure. AGC’s customers include Toyota, Tesla Inc. and Sony Corp., according to data compiled by Bloomberg.An overarching challenge is to convince carmakers that the smarter -- and more expensive -- components make economic sense. Not all parts manufacturers need a radical transformation to keep up with autonomous and electric vehicles since they’ve been evolving gradually as the industry takes shape, said Deepesh Rathore, an independent automobile analyst based in Bengaluru.“A car is a car, and the shape of the tire doesn’t change,” Rathore said. “I can imagine some of those companies having to reinvent everything -- especially those working with engines and gearbox technologies.”Even components that aren’t facing an immediate existential threat are evolving. Sumitomo Rubber is researching tires that can transmit data about road conditions to the car as well as to other vehicles.Smart Tires & SeatsThe next step will be a tire that automatically adapts to road conditions. When the tire detects water, it will change the structure of its surface into one that is optimal for wet roads, said Kozaburo Nakaseko, an official in the research and development division of Sumitomo.“Tires need to become smarter,” Nakaseko said. “We cannot move into an autonomous car society without information about the roads we drive on.”The innovations aren’t just limited to Japan. In the U.S., Lear Corp. is equipping its car seats with biometric sensors to detect stress, drowsiness and changes in heart rate, and then activate treatments in response. The seats also can transmit data to a doctor or family member if necessary, the company said.Other functions include controls that let users create individual “micro-climates” where they are sitting, and noise-canceling features in the headrests, the Southfield, Michigan-based company said.“All the mechanical stuff will just slowly go away, and there is a lot of electronics coming in instead,” said Egil Juliussen, principal auto analyst with IHS Markit. “You have to change in order to survive.”\--With assistance from Mei Futonaka, Anurag Kotoky, Indranil Ghosh and Gabrielle Coppola.To contact the reporters on this story: Ma Jie in Tokyo at email@example.com;Nao Sano in Tokyo at firstname.lastname@example.org;Masatsugu Horie in Tokyo at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, Ville Heiskanen, Michael TigheFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Our call of the day comes from a money manager who says he got out of stocks and bonds in early July, and why investors should follow suit.
The Trump administration said late on Friday it was issuing final rules to suspend a 2016 Obama administration regulation that more than doubled penalties for automakers failing to meet fuel efficiency requirements. Congress in 2015 ordered federal agencies to adjust civil penalties for failure to meet Corporate Average Fuel Economy requirements to account for inflation, and in response, the National Highway Traffic Safety Administration issued rules to eventually raise fines to $14 from $5.50 for every 0.1 mile per gallon of fuel that new cars and trucks consume in excess of the required standards. Automakers protested the hike, saying it could increase industry compliance costs by $1 billion annually.
Volkswagen started making the small car eight decades ago in Germany and ceased production this past week at its plant in Mexico. In its place: a new sports utility vehicle.
(Bloomberg) -- U.S. officials approved a record $5 billion privacy settlement with Facebook Inc. to resolve the Cambridge Analytica data scandal, people said, prompting an immediate outcry from lawmakers and privacy advocates who said it didn’t go far enough.Although details of the settlement with the U.S. Federal Trade Commission weren’t announced, the fine is steep but far from devastating for Facebook. The company, which reported revenue of almost $56 billion in 2018, had set aside $3 billion in anticipation of the fine.“This reported $5 billion penalty is barely a tap on the wrist, not even a slap,” said Senator Richard Blumenthal, a Connecticut Democrat, who called for a hearing on the agreement. “Such a financial punishment for purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year,” Blumenthal said.The FTC’s settlement was approved by a vote of 3-2, according to two people who asked not to be named because they weren’t authorized to speak publicly about the decision. The agreement still needs approval from the Justice Department.The resolution caps a probe that opened in March 2018 after news that Cambridge Analytica, a consulting firm hired by President Donald Trump’s campaign, obtained user data from a researcher who created a personality quiz app on the social network.The settlement is the largest privacy fine in the FTC’s history and also marks the most significant action yet against Facebook over a series of mishaps that have compromised users’ data and sent the company reeling from one crisis to another. The agency’s two Democratic commissioners, Rebecca Kelly Slaughter and Rohit Chopra, voted against it, according to one of the people.Slaughter, Chopra, Facebook and the FTC declined to comment.Democratic Senators Ron Wyden of Oregon and Mark Warner of Virginia also criticized the settlement, as did House Antitrust Subcommittee Chairman David Cicilline, a Rhode Island Democrat who is conducting an antitrust investigation of Facebook and other technology giants.The job of defending the settlement will fall to FTC Chairman Joe Simons, who has tried to avoid split enforcement decisions as head of the agency.While Facebook had agreed to give its board oversight of its privacy policies, Chief Executive Officer Mark Zuckerberg is the controlling board member with nearly 58% of the voting power. The board also includes Facebook’s other top executive, Chief Operating Officer Sheryl Sandberg. The two already have power over the company’s privacy policies.Public interest groups including Public Knowledge, Public Citizen and the Open Markets Institute said any deal with the FTC should impose remedies that would rein in Facebook’s data collection practices in addition to a fine.“Something clearly has to be done to strengthen the data protection practices of that company,” said Marc Rotenberg, president of the Electronic Privacy Information Center, which filed a complaint against Facebook that led to the FTC’s 2011 consent decree with the social-media company that addressed a litany of deceptive practices.Tech industry group NetChoice praised the fine, saying it would motivate companies to improve their privacy practices.The Cambridge Analytica incident stems from a personality-quiz app offered to Facebook users by a Cambridge University researcher. About 270,000 people downloaded the app, allowing the researcher to access data about those individuals and their friends. The information was subsequently sold to Cambridge Analytica.Even as it resolves the FTC privacy inquiry, Facebook is still grappling with regulatory scrutiny on several other fronts -- including the prospect of a new investigation by the FTC’s antitrust section under an agreement with the Justice Department that divided oversight of four of the biggest tech companies. One area of focus is likely to be the company’s acquisitions of the photo-sharing app Instagram and the Whatsapp messaging service.Elsewhere in the U.S., the Justice Department and the Securities and Exchange Commission opened investigations related to the Cambridge Analytica scandal. Separately, the attorney general for Washington, D.C., has sued the company, claiming it failed to safeguard users’ data. Other state attorneys general are also investigating.Facebook declined to comment on the status of those probes.The settlement ranks among the highest at the FTC, which reached a $10 billion settlement with Volkswagen AG in 2016 for deceptive advertising in the emission-cheating scandal involving diesel models. The agency’s previous record fine in a privacy action came in 2012, when Alphabet Inc.’s Google paid $22.5 million to settle claims it misrepresented its privacy assurances to Apple Inc.’s Safari users.\--With assistance from Kurt Wagner and Naomi Nix.To contact the reporters on this story: David McLaughlin in Washington at email@example.com;Daniel Stoller in Arlington at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- To understand how much strain the world’s leading auto manufacturers face as they make the daunting leap to the electric and autonomous vehicle age, just listen to their leaders.“The business part of you wouldn’t do these things,” Ford Motor Co. Chief Executive Officer Jim Hackett said in a Bloomberg Television interview on Friday. That startling admission came after he had just inked a massive deal with German arch-rival Volkswagen AG to join forces to develop electric and self-driving cars.The auto industry is being disrupted by increasingly stringent environment regulations mandating electric cars, while breakthroughs in driverless technology have the potential to upend the way humanity moves. That’s forcing carmakers to balance rivalry with survival.“The leadership part of you requires that you do it,” Hackett said of partnering with the competition. “You have to invest in things that are uncertain, before they are ready, because when they are ready you can’t catch up.”The collaboration commits Ford to build battery cars on a VW platform, while the German automaker invests $2.6 billion in the American company’s autonomous-affiliate Argo AI. That gives the startup an eye-popping valuation of $7.25 billion -- and the commercial launch of its robot rides is still two years off.“This game will change, so economies of scale will be important,” VW CEO Herbert Diess said at a press conference Friday to announce the expanded tie-up with Ford. “Sharing tech and using standards will be important to succeed in the future.”Ford’s one-upmanship with VW goes back decades -- from the German manufacturer’s founding in the run-up to World War II, to America’s hippie-era love affair with the Beetle and fuel-sipping Rabbit model during the oil shock era, and now trade wars that threaten to further politicize commercial battles.But the shift to battery-powered cars and autonomous driving will require different tools than the ones carmakers have spent the better part of a century honing. It’s no longer just about building ever-more powerful engines and sculpting exterior sheet steel.The Ford-VW deal is a bet on a coming age of electric-powered robo-cars that will take fresh approaches to competition, marketing and planning. And it will take money -- gobs and gobs of it.While the deal will result in a new electric passenger vehicle from Ford in 2023 and Argo joining with VW brand Audi’s autonomous operation to deploy self-driving test vehicles in Europe next year, it’s really about ensuring each company’s survival well into the future.“They’re looking at the longer term,” said Stephanie Brinley, auto analyst with IHS Markit. “These moves aren’t about 2025, these moves are about these companies trying to make sure they’re fully ready and capable for 2030 and 2040 and taking the steps you need to get that far down the road.”Electrification will cost carmakers $225 billion through 2023, roughly equal to the industry’s annual total for capital expenses, research and development spending, according to consultant AlixPartners. Self-driving cars will soak up an additional $85 billion through 2025.The partnership between Ford and VW shows how some companies are tackling the task with more urgency than others.So far buyers aren’t exactly swarming showrooms to pick up electric cars. High prices, patchy charging infrastructure, and, with the exception of Tesla Inc.’s sleek models, unorthodox styling have made them a tough sell.Likewise, the payoff in self-driving technology is years away and drivers remain resistant to turning over the wheel to a robot. But consumer habits are changing, as people rely less on ownership and turn to sharing apps, e-bikes and scooters for more of their transportation needs.Cash-rich giants like Alphabet Inc., Amazon.com Inc. and Apple Inc. have turned industries from phones to cameras to television upside down, and auto executives fear they could be next as cars become increasingly high-tech and software-dependent.“The OEMs have to invest through this valley to get to the other side,” Mark Wakefield, a managing director with AlixPartners, said last month. “But investing -- or partnering to invest -- to get through that is a way to span the generational path.”Jim Farley, Ford’s president of new businesses, technology and strategy, said the partnership with VW isn’t only about cutting costs. This collaboration could help accelerate each automaker’s trip through the profit desert Wakefield warns of.“This is not only a capital efficiency play,” Farley said in an interview. “It’s absolutely leverage on our margins, especially in a place like Europe.”Other automakers are also reinventing themselves. General Motors Co.’s acquisition of the self-driving startup Cruise in 2016 for $581 million has turned out to be prescient. The automaker has since attracted three major outside investments totaling $6.15 billion. As of May, GM Cruise was valued at $19 billion when T. Rowe Price Associates Inc. joined earlier backers, Honda Motor Co. and SoftBank Vision Fund.VW’s backing of Argo AI -- $1 billion in cash and another $1.6 billion for the value of its Autonomous Intelligent Driving unit that it’s contributing -- should put that self-driving startup on a similar path to attracting outside investment.“Now that a valuation’s been set and with the potential of this relationship, it does set us up well for that,” said Bryan Salesky, Argo’s co-founder and CEO, a veteran of Google’s self-driving car program. “I’m sure that’s in the cards at some point in the future.”Meanwhile, Fiat Chrysler Automobiles NV tried -- though it failed -- to build scale and gain access to electric-car technology through a merger with Renault SA, to make up for its dearth of battery-powered cars. Chairman John Elkann this week told Italian newspaper La Stampa that the attempt was “an act of courage” and would have allowed it to make better use of capital and more cars.On the other side of the spectrum sits the Renault-Nissan-Mitsubishi Alliance, where tensions threaten to rip apart two decades of cooperation just at the moment it’s needed most.Lack of a decisive strategy on electric cars this month also cost BMW AG CEO Harald Krueger a second term as leader, after he couldn’t unite a bickering board behind him. And Daimler AG’s new CEO Ola Kaellenius will have to dig deep on leadership skills to steer the Mercedes-Benz maker that’s endured four profit warnings in just over a year. Those two German automakers have partnered on a self-driving project they vowed earlier this month would see robot-piloted cars on highways by 2024.Building a software stack for autonomous vehicles may cost a few billions of dollars, while maintaining it will cost billions more each year, VW’s Diess said in the joint interview with Ford’s CEO. “The times we are facing, we will get into resource problems” without the help of partnerships, he said. “Because it gets really, really expensive.”\--With assistance from Chester Dawson and David Westin.To contact the reporters on this story: Keith Naughton in Southfield, Michigan at firstname.lastname@example.org;Elisabeth Behrmann in Munich at email@example.com;Christoph Rauwald in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, ;Craig Trudell at firstname.lastname@example.org, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Ford and Volkswagen deepened their partnership by agreeing to collaborate on self-driving cars and electric vehicles.
The S&P 500 closed above the 3,000 level for the first time, with the industrial, consumer discretionary and materials sectors each posting gains of at least 1%. Illumina Inc shares tumbled 16.1%, the most among S&P 500 companies, after the gene sequencing company's preliminary second-quarter revenue came in below analyst estimates.
The S&P 500 traded above the 3,000 level for a third straight session, also boosted by a 0.63% gain in the technology sector, the S&P 500's best performer so far this year. The healthcare sector fell 1.70%, the most among the 11 major S&P sectors, weighed down by a 4% slide in shares of Johnson & Johnson. The Dow Jones Industrial Average was up 157.23 points, or 0.58 percent, at 27,245.31 and the S&P 500 was up 6.24 points, or 0.21 percent, at 3,006.15.
The S&P 500 and the Dow Jones Industrial Average hit fresh record highs on Friday, as the indexes continued a strong run for the week on hopes of an interest rate cut this month, while investors waited for the start of the corporate earnings season. In his two-day testimony before Congress, Federal Reserve Chairman Jerome Powell said the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war and that the central bank stood ready to "act as appropriate". Abate said most of the positive catalysts that have driven the market higher, have been priced in and now the focus will shift to the earnings season in the next few weeks.
Ford and Volkswagen are adding self-driving and electric cars to their list of projects. Yahoo Finance's Dan Roberts joins Seana Smith on 'The Ticker' to discuss.
Jul.12 -- Herbert Diess, Volkswagen AG chief executive officer, and Jim Hackett, Ford Motor Co. chief executive officer, discuss the companies' expanding alliance on developing self-driving and electric vehicles. They speak with Bloomberg's David Westin.
Volkswagen and Ford are teaming up on electric and self-driving car technology as the industry races to embrace innovation. Jim Farley, Ford's President of New Businesses Technology and Strategy for the Volkswagen-Ford alliance joins Yahoo Finance. He talks with Adam Shapiro and Julie Hyman.