Category Archives: Companies

(ZH) Feds Launch Investigation Into Google’s Secretive “Project Nightingale”

(ZH) Big Tech can’t seem to go one month without becoming involved in some new data privacy scandal, but this time, Google parent Alphabet has outdone itself.

Yesterday, WSJ broke a story about a deal between Alphabet and Ascension Health System, a Catholic non-profit that operates hospitals and nursing homes in 21 states and Washington DC. Ascension has more than 2,600 facilities, but its data – including critical patient data – is presently spread across 40 data centers in more than a dozen states.

But thanks to a deal between the two organizations that spawned Google’s “Project Nightingale”, all of that data are being moved into Google’s cloud, and Google engineers are working on a system that they say could revolutionize how doctors use patient health data to make diagnoses.

The only problem, is some regulators have expressed concerns that the patient data aren’t being properly protected, or that Google might illegally use the data to hone its ad micro-targeting. The sensitive health data of millions of Americans would be quite a score.

And there’s reason to be suspicious: Without notifying patients or doctors, Ascension recently started sharing personally identifiable information on millions of patients with Google. The data include: patients’ names and dates of birth; lab tests; doctor diagnoses; medication and hospitalization history; and some billing claims and other clinical records.

Now, the Office for Civil Rights in the Department of Health and Human Services is investigating the arrangement to see if “this mass collection of individuals’ medical records to ensure that HIPAA protections were fully implemented.”

For those who are unfamiliar with the term, HIPAA protections are the same rights that prevent doctors from giving out patients’ information without their authorization.

Some Ascension patients who spoke with WSJ said they were suspicious of Google’s motives, since, according to its agreement with Ascension, Google is responsible for building the infrastructure, then Ascension will pay Google to manage the data after the project is completed.

Patients are worried that Google might find another payout somewhere else by using their data to court advertisers.

“Google is not doing this out of the goodness of their heart,” said Tim Wiesner, a 63-year-old retired nurse and Ascension patient in Wichita, Kan. He said he was disappointed not to have been notified of the data sharing directly by his doctor. “It just seems deceitful. I’m sure they are going to make money off our information.”

One academic agreed with the patients, adding that “the optics are bad.”

“The optics are bad. The legal argument is tenuous. Ethically, this is a bad strategy. They need to tell people what they are doing,” said Ellen Wright Clayton, a professor of biomedical ethics at Vanderbilt University. She said the Alphabet Inc. unit risks running afoul of the rules if it uses the health data to perform independent research outside the direct scope of patient care.

Some lawmakers have expressed reservations about ‘Nightingale’, and have asked Google to suspend the project.

“The optics are bad. The legal argument is tenuous. Ethically, this is a bad strategy. They need to tell people what they are doing,” said Ellen Wright Clayton, a professor of biomedical ethics at Vanderbilt University. She said the Alphabet Inc. unit risks running afoul of the rules if it uses the health data to perform independent research outside the direct scope of patient care.

Google employees working on the project might have access to the sensitive information. It’s not clear what the company is doing to try and prevent this. Google stands to reap tens of millions in profits by repeating this work for other health-care giants. It should be able to figure out a way to satisfy those who are concerned about illegal sharing of data.

(Reuters) Lithium producers hit by first big downturn of electric vehicle era

(Reuters) LOS ANGELES (Reuters) – The burgeoning lithium industry, which produces the powerhouse metal used to make electric vehicle (EV) batteries, has entered its first major downturn, an unwelcome bruising for investors eager to help combat climate change.FILE PHOTO: An aerial view shows the brine pools of SQM lithium mine on the Atacama salt flat in the Atacama desert of northern Chile, January 10, 2013. REUTERS/Ivan Alvarado/File Photo

Albemarle Corp (ALB.N), Tianqi Lithium Corp (002466.SZ) and others have been producing more lithium than automakers need. Global supply exceeds demand by about 5 percent, according to Canaccord data.

That comes as electric vehicle sales in China – the world’s largest EV market – fell nearly a third in September amid sliding government subsidies, the third consecutive monthly decline, according to Jefferies.

A global average of prices is down more than 50 percent since the start of 2018, according to Benchmark Mineral Intelligence, a metals pricing provider that is hosting an EV supply chain conference this week in Los Angeles.

“Current market conditions are challenging,” Luke Kissam, Albemarle’s chief executive officer, said last week.

Despite the weak data, analysts and executives expect a rosy future when they look out 10 years.

Benchmark’s Simon Moores called the lithium oversupply an “air pocket that detracts from the building wall of demand,” and noted much of the excess white metal on the market is for so-called technical grade, or the kind that goes into smaller consumer electronics such as stopwatches.

Battery-grade lithium is used primarily in EV batteries, and many automakers have high purity standards. Much of the lithium industry’s capacity to produce high-quality, battery-grade lithium is locked up until 2024, Moores said.

Weather and social unrest are just two of the myriad issues that have hampered the industry, fueling worries there may not be enough of the white metal to sate automakers in the years ahead.

“The future supply of battery-quality chemicals is very much in doubt,” said Joe Lowry, an independent industry analyst, who wondered how the industry can hope to produce at least 800,000 metric tons by 2025, more than double current capacity.

The popularity of future models from Volkswagen AG (VOWG_p.DE), Tesla and others will ultimately require massive lithium investments in the billions of dollars, said Chris Berry, an independent metals analyst.

But for now, lithium companies have reacted to the price drop by scaling back spending, a response to nervous investors pushing the industry to focus more on profitability.

“This delaying of investment will likely act as a powerful precursor for a pricing cycle in the early 2020s,” said Ernie Ortiz, president of Lithium Royalty Corp, an affiliate of Waratah Capital Advisors, which buys lithium royalty rights.

(BBG) Here’s Why Xerox Wants to Buy HP

(BBG) I started covering what’s now called Xerox Holdings Corp. in 1982, when I was 24 years old and I opened a correspondency for the Associated Press in Rochester, N.Y. Xerox was already past its glory days. It was known for having lost most of its copier market share to the Japanese. It had invented—but never exploited—the key computing technologies that went into the Macintosh computer, which came out in 1984. Some of my headlines from those years: “Xerox Unveils High-Volume Copier.” “Xerox Renews Office-Automation Drive.” “25 Years After the ‘914’, Xerox Faces New Tests.”

Considering how many things have gone wrong for Xerox along the way, it’s amazing that it’s healthy enough to mount a credible offer to buy another faded legend, Hewlett-Packard Co. What’s even more amazing is that its stock price has jumped since the news of a possible deal broke. It closed on Nov. 8 at $38.35 a share, up from $36.37 a share on Nov. 5. Often in a merger, the stock of the acquiring company goes down because investors fear it’s overpaying.

The optimism of Xerox shareholders appears to be based on projected savings. A merger that eliminated duplication would enable the combined companies to save costs in shrinking businesses. Xerox makes printers and copiers, while HP (having spun off its server business) makes printers and personal computers. Given the combined companies’ large market share, the deal might also invite the scrutiny of antitrust authorities.

Here’s what Bloomberg Intelligence analyst Robert Schiffman said about the possible deal: “A merger with HP would create a behemoth printing and PC maker with nearly $70 billion in revenue. Though top-line growth challenges may remain in the intermediate term, synergies could help boost annual free cash toward $5 billion and enable future deleveraging.”

In an interview, Schiffman said, “The benefit from Xerox’s perspective is that neither company is overlevered at this point.” Xerox will end up carrying a lot more debt if the deal goes through because it’s proposing to pay HP shareholders mostly in cash, a commodity that isn’t exactly lying around its Norwalk, Conn. headquarters. If instead Xerox paid mostly in its own shares, it would have to issue so many of them that HP shareholders would end up controlling a majority of the combined company.

That raises the question of why, if a merger makes financial sense, HP isn’t the acquiring party. That might still happen, Schiffman says. The problem for HP is that its board took a look at Xerox earlier this year, when it was essentially on the auction block, and decided not to bid. For HP to bid for Xerox now when the price is significantly higher would be hard to swallow.

(BBG) Airbus Enjoys Flurry of Asia Orders as Boeing Lags With Max Ban

(BBG)

Airbus A320neo
Airbus A320neo Photographer: Eric Cabanis/AFP via Getty Images

Airbus SE has taken orders for more than 350 planes in Asia since August, streaks ahead of rival Boeing Co. as the U.S. planemaker struggles to revive its grounded 737 Max.

A big win for Airbus came last month, when Indian budget carrier IndiGo ordered 300 narrow-body aircraft in a deal worth more than $33 billion at list prices. VietJet Aviation JSC and Cebu Air Inc. also confirmed purchases in recent days. Boeing received orders or commitments for only 16 jets in the past three months, according to the Chicago-based company’s website.

Airbus orders are for A320neo and wide-body A330neo aircraft, while Boeing’s are for twin-aisle 787s and 777 freighters. Boeing is in the throes of crisis following two deadly crashes of its 737 Max, including a Lion Air flight in October 2018 that plunged into the Java Sea, killing all 189 people on board.

Airbus shares have outperformed Boeing's this year

Boeing has been upgrading software on the 737 Max, but it remains unclear when it will be allowed to fly again. In an Oct. 29 article in USA Today, the Federal Aviation Administration’s Steve Dickson reiterated that the agency is addressing crash investigator recommendations and won’t be hurried as to “when, whether or how the 737 Max will return to service.”

Airbus hasn’t had it all plain sailing. India is threatening to ground A320neo jets operated by IndiGo unless the airline gets fixes for its Pratt & Whitney engines by Jan. 31. IndiGo, which has close to 100 A320neo-family jets and is adding more at a rapid clip, said last week it will work with the engine maker and Airbus so it has enough modified spare turbines to meet the requirement.

The European plane manufacturer also cut its full-year delivery target and said cash flow will be lower than expected as production challenges slow output of A320neos. Chief Executive Officer Guillaume Faury said U.S. import duties on foreign-built Airbus jets will become tougher to manage next year. He suggested that a World Trade Organization ruling allowing the European Union to impose similar measures on Boeing would help level the playing field.

Historically, Airbus is still behind Boeing in deliveries of aircraft to Asia Pacific customers, with a total of 3,312 versus 5,045 for the U.S. manufacturer, according to the companies’ websites.

(Economist) Peugeot’s boss, Carlos Tavares, plans a merger with Fiat Chrysler

(Economist) His methods have a lot to teach a troubled industry

In 2013 two Carloses sat atop the Renault-Nissan alliance. One was Carlos Ghosn, the Brazilian-born architect of the Franco-Japanese carmaking colossus. His protégé was Carlos Tavares, the Portuguese chief operating officer of Renault, who made sure that good cars rolled off the production line. But Mr Tavares, an engineer and racing driver, was not content trailing the fast-living Mr Ghosn. As he revealed in an interview that year, his ambition was to lead a big car company, such as General Motors. Mr Ghosn was horrified. Shortly afterwards, Mr Tavares quit Renault. A few months later he was boss of psa Group, maker of Peugeot and Citroën, Renault’s domestic rival. It was the start of a series of manoeuvres that have now made him the talk of the car industry, much like Mr Ghosn before and after his arrest in Japan last year on charges of financial misconduct (which Mr Ghosn denies).

On October 30th the boards of psa and Fiat Chrysler Automobiles (fca), an Italian-American company, said the two firms planned to merge. Mr Tavares would become chief executive of the combined group and John Elkann, fca’s chairman (who sits on the board of The Economist’s parent company), would chair its board. It would create the world’s fourth-biggest carmaker by vehicle sales, with a market value of around $50bn. On-off discussions between the two firms were ruptured in early summer when fca attempted to merge with Renault, a deal that was thwarted by Renault’s biggest shareholder, the French government. The merged group would probably find most of the €3.7bn ($4.1bn) of annual cost-savings they hope to achieve in Europe, a stagnant market where stringent environmental regulations are about to make carmakers’ lives tougher still. Competition issues in parts of Europe, feisty unions and messy politics could yet scupper any deal. Furthermore, it is not clear whether Peugeot is Fiat’s preferred partner.

(FT) Why mindfulness is big business

Mindfulness, feeling present in your own body, has roots in Buddhism but is increasingly popular in the west. Corporate mindfulness is growing and you don’t even have to put down your smartphone to try mindfulness meditation. In the run up to World Mental Health Day, the FT’s Daniel Garrahan tests the Headspace app and tries a mindfulness class, organic dance and a ‘gong bath.’

(BBG) Will Boeing Ever Recover From the 737 Max Debacle?

(BBG) First the company needs to get the planes back in the air. Then it needs to convince passengers that they’re safe to fly.

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 After two fatal 737 Max crashes, airlines have some persuading to do. PHOTOGRAPHER: KELSEY MCCLELLAN FOR BLOOMBERG BUSINESSWEEK

After grounding their Boeing 737 Max fleets for most of 2019, airlines expect to resume flying the once-hot-selling plane in early 2020. While that’s good news for carriers that have ordered almost 5,000 of the fuel-sipping jetliners, a big question remains: Will travelers be nervous about flying an airplane involved in two highly publicized fatal crashes?

Airlines with the 737 Max must convince many customers that the aircraft has been appropriately modified, tested, and certified safe. A monthly survey by UBS of 1,000 people in the U.S. finds that among those who plan to fly, about 15% say they’ll never travel on a Max. The same survey, however, finds that around 65% say they never or seldom check the type of aircraft they’re flying on.

Airlines may take comfort in the poll result, “but that has changed in the short term,” says Michael Gordon, chief executive officer of Group Gordon, which specializes in crisis communications. “It’s not that people care per se which plane they’re flying on, they just want to know if they’re flying on the 737 Max or not. I think consumers will think twice before flying on that plane.”

relates to Will Boeing Ever Recover From the 737 Max Debacle?
Featured in Bloomberg Businessweek, Oct. 28, 2019. Subscribe now. Find more stories at The Year Ahead.

Regulators grounded the Max on March 13 following crashes in Indonesia and Ethiopia that killed 346 people when the plane’s electronic controls pushed it into steep dives after receiving erroneous sensor data. British tabloids dubbed it the “DEATH JET,” and Boeing on Oct. 18 was further beset by reports that one of its test pilots had difficulties handling the Max during a simulator exercise in 2016. Boeing replaced Kevin McAllister, its commercial planes chief, on Oct. 22.

The hundreds of fatalities and persistent headlines about the jet’s tangled development and certification history complicate carriers’ efforts to return the plane to their fleets. While the Federal Aviation Administration is expected to wrap up its review this fall or winter, regulators in Europe and China plan to offer their own assessments of the safety of the 737 Max before allowing the plane to fly in their airspace. Delays in those approvals may put other nations behind the FAA’s schedule. Time is money for Boeing Co., which faces more than $9 billion in costs from the grounding, including a $4.9 billion after-tax charge.

relates to Will Boeing Ever Recover From the 737 Max Debacle?
A Boeing 737 Max takes off.SOURCE: BOEING

In the U.S., nervous flyers can be certain of one thing: The three U.S. airlines that fly the Max will make it abundantly clear to passengers if that aircraft is scheduled for their flight. “We’ll be open and honest with our customers that they’re flying on a Max,” says Ross Feinstein, a spokesman for American Airlines Group Inc., which has 24 Max planes and is scheduled to get 76 more. People booking a trip on the carrier’s website will see “Boeing 737Max 8 Passenger” below the flight time if it applies.

United Airlines Holdings Inc. will notify customers repeatedly if they’re booked on a Max—from the time of ticket purchase, to check-in, and in the boarding area—to separate concerned passengers from the plane as early as possible. Like American, United will rebook those passengers without a change penalty and won’t use the Max for swaps in cases where it has to replace an aircraft. United and American declined to say how long they’ll continue the two practices once the Max returns to service.

After the resumption, United will “explain to our customers and employees how our Max fleet will be put back into service and why we have the highest confidence that it is safe to do so,” spokesman Frank Benenati says.

Southwest Airlines Co. hasn’t finished its public communications plans for the Max’s return but will be “completely open and transparent with our customers and employees,” spokeswoman Brandy King says.

To date, Boeing has delivered 387 Max aircraft to 48 airlines or leasing companies globally, with more than 4,500 in its order backlog. American, United, and Canada’s WestJet Airlines Ltd., have removed the Max from their schedules into January. Southwest and Air Canada don’t expect to fly their Max planes before February.

Boeing bears the largest role in convincing the public that the Max is safe to fly, although airlines, their employees, and the FAA will also play a part, says Richard Levick, CEO of Levick Inc., a public relations firm that specializes in brand and crisis recovery. Travelers will “have to see it, hear it, hear it from third parties, hear it from regulators, hear it from the crews, hear it from friends who have flown the plane,” he says. “They have to hear it from the airlines over and over until it’s boring.”

Consultant Gordon says airlines with the Max should have their CEOs and other top managers flying on the plane with their families to show confidence in its safety. Still, he says it will take time to calm flyers. “Two years feels like the cycle of safe plane-riding” without another accident before consumers will forget, he says.

Southwest and American say they’ll fly the Max with executives and others—likely government officials and members of the media—before returning the planes to commercial service. The idea is the more that would-be travelers see the aircraft flying, the more comfortable they’ll become with it. “We’re not going to place ourselves or our passengers on an airplane until we know it’s safe,” says Dennis Tajer, spokesman for the Allied Pilots Association at American.

(JN) PSA e Fiat Chrysler já aprovaram fusão e Carlos Tavares será o CEO

(JN) PSA e Fiat Chrysler já aprovaram fusão e Carlos Tavares será o CEO

O grupo PSA e a Fiat Chrysler Automobiles (FCA) chegaram a acordo esta quarta-feira para uma fusão, avança a agência Dow Jones. A Bloomberg dá conta que o português Carlos Tavares será o CEO.

PSA e Fiat Chrysler já aprovaram fusão e Carlos Tavares será o CEO

O grupo PSA e a Fiat Chrysler Automobiles (FCA) chegaram a acordo esta quarta-feira para uma fusão, avança a agência Dow Jones. A Bloomberg refere que o conselho de administração do fabricante francês, que detém as marcas Peugeot, Citroën e Opel, já terá aprovado a operação.

A ediçlão online do jornal francês Les Echos indica que também a administração da Fiat Chrysler reuniu e aprovou o negócio, que deverá ser oficialmente anunciado esta quinta-feira.

PUBA operação, que tem sido referida como sendo uma fusão entre iguais por troca de ações, dará origem ao quarto maior grupo automóvel mundial, com um valor de mercado em redor dos 45 mil milhões de euros.

Esta quarta-feira, a Bloomberg tinha avançado que o grupo liderado por Carlos Tavares admitia a possibilidade de vender ou fazer o “spin-off” da Faurecia, fabricante de componentes, na qual detém 46% do capital. A Faurecia tem uma forte presença em Portugal, contando com unidades em Bragança, Vouzela, Nelas, São João da Madeira e Palmela.

A agência noticiosa refere ainda que a FCA estará a analisar a possibilidade de um dividendo extraordinário de cinco mil milhões de euros, por forma a equilibrar a fusão entre iguais, uma vez que, tendo em conta o valor de mercado atual de ambos os grupos, os acionistas da PSA ficariam com 55% do novo grupo resultante da fusão.

Ainda de acordo com a Bloomberg, que cita fontes próximas do processo negocial, o grupo resultante da fusão teria um conselho de administração composto por 11 elementos: seis da PSA e cinco da FCA, com Carlos Tavares como CEO.

Segundo o Les Echos, a PSA vai distribuir pelos acionistas os títulos que detém na Faurecia, enquanto a FCA irá distribuir um dividendo extraordinário de 5,5 mil milhões de euros em dinheiro aos seus acionistas.

O Les Echos refere ainda que a sede social do novo grupo será localizada na Holanda. O jornal indica também que, segundo uma fonte, “os dois grupos encontraram um equilíbrio satisfatório nas negociações” e que quinta-feira irão anunciar o início de negociações exclusivas para a fusão, que deverá ser formalizada “dentro de algumas semanas”. Os parceiros sociais irão reunir com a administração da PSA na manhã de quinta-feira.


Caso a fusão se concretize, o novo grupo será o quarto maior fabricante automóvel mundial, com vendas anuais de cerca de nove milhões de veículos, atrás da aliança Renault-Nissan-Mitsubishi, da Toyota e da Volkswagen.

Esta quarta-feira ambas as empresas confirmaram estar em negociações para uma fusão sem, contudo, adiantarem detalhes.

As ações da FCA fecharam a ganhar 9,53%, para os 12,87 euros, enquanto os títulos do grupo PSA valorizaram 4,53%, encerrando nos 26,05 euros. Com base nestes valores, a capitalização bolsista da Fiat Chrysler situa-se em 19,97 mil milhões de euros, abaixo dos 23,52 mil milhões da PSA.

(DieZeit) Don’t Be Naive, Germany

(DieZeit) Don’t Be Naive, Germany

Huawei shouldn’t be allowed to help build Germany’s 5G network. The government in Berlin needs to see that China exploits the weaknesses of liberal democracies.

Huawei 5G Breitband Netzausbau
The Global Mobile Broadband Forum in Zurich © Stefan Wermuth/​AFP/​Getty Images

Germany granted me protection as a political refugee. That is I why believe I have a duty to warn the federal government against making a mistake that will have far-reaching consequences. Angela Merkel’s Chancellery hasn’t ruled out the possibility of working together with Chinese telecommunications equipment maker Huawei to build Germany’s 5G mobile technology infrastructure. But Huawei is not a company like any other. It has close ties with the Chinese government and its military. Should Germany decide to allow Huawei to build one of the most critical infrastructure technologies, it would potentially be opening the backdoor for China to access and disrupt key national assets like electric power grids, the banking and financial system and telecommunications. It would also send a signal to those fighting for democracy and freedom in Hong Kong and beyond that Berlin puts economic interests above the consistent defense of Western values.

RAY WONG

26, a freedom activist from Hong Kong, received political asylum in Germany. In 2014, he founded a pro-democracy party in the city. Officials subsequently charged him with instigating riots and incitement of unlawful assembly. He managed to flee to Europe and today lives in Göttingen, Germany, where he studies political science at the local university.

Ray Wong © Norman Hoppenheit für Die Zeit

If you believe such warnings to be alarmist, then my answer is this: Don’t be naive, Germany. You can’t allow yourselves to be deceived into thinking that Huawei’s motives are purely commercial.

The 5G network is part of the foundations of the digital future. If the federal government compromises on the network’s security, in the long run it will compromise not only this country’s working environment, but also the privacy of its citizens. In the United Kingdom, government security experts concluded last year that the use of Huawei components in telecommunications infrastructure could pose risks to UK national security. Australia has already banned Huawei from providing 5G equipment out of fear the Chinese regime might one day shut down power grids and other networks.

I grew up in Hong Kong, so I know how naive it would be to trust the Chinese state to keep its word when it promises not to abuse 5G as a political tool. Hong Kong is the West Berlin in the new cold war, a small bastion of freedom in the grip of a totalitarian regime.

We know the reality behind the facade of the Chinese state. When China signed the agreement with Britain in 1984 regulating the handover of its former colony, it was agreed that the rights and freedoms of the people of Hong Kong would be upheld for 50 years. This didn’t happen. On the contrary, in the last 10 years, the people of Hong Kong have seen our rights systematically undermined. Why, Dear Germans, do you still believe you can trust Beijing?

(Reuters) ‘We know we made mistakes’ on 737 MAX: Boeing CEO

(Reuters) WASHINGTON (Reuters) – Boeing Co Chief Executive Dennis Muilenburg will acknowledge on Tuesday that the aircraft manufacturer made mistakes, as he appears at a congressional hearing on two 737 MAX crashes that killed 346 people, according to written testimony made public on Monday.FILE PHOTO: Boeing Chairman, President and CEO Dennis Muilenburg speaks at the New York Economic club luncheon in New York City, New York, U.S., October 2, 2019. REUTERS/Shannon Stapleton

“We have learned and are still learning from these accidents, Mr. Chairman. We know we made mistakes and got some things wrong,” Muilenburg will tell the U.S. Senate Commerce Committee.

The testimony, which was first reported by Reuters and made public later on Monday, added that the company had made improvements to the now-grounded 737 MAX airplane “that will ensure that accidents like these never happen again.”

Muilenburg, who was stripped of his title as Boeing chairman by the board earlier this month, will also testify before the U.S. House of Representatives Transportation and Infrastructure Committee on Wednesday.

U.S. airlines have canceled flights into January and February because of the grounding and the Federal Aviation Administration is not expected to approve the 737 MAX’s ungrounding until December at the earliest.

“We also know we can and must do better,” Muilenburg’s testimony says. It also expresses “deepest sympathies to the families and loved ones” of those killed, noting the hearing would be taking place on the anniversary of the crash of Lion Air Flight 610 in Indonesia that killed 189 people.

Muilenburg visited the Indonesian embassy in Washington on Monday to meet with the country’s ambassador, offer condolences and pay respects to those lost on the flight, Boeing said in a statement.

Muilenburg’s prepared testimony for Tuesday said that when the 737 MAX returns, “it will be one of the safest airplanes ever to fly.”

In March, after a 737 MAX crash of Ethiopian Airlines 302 killed 157 people, the plane was grounded worldwide.

Senate Commerce Committee Chairman Roger Wicker told Reuters last week that the 737 MAX “won’t fly unless 99.9% of the American public and American policymakers are convinced that it’s absolutely safe.”

Indonesian investigators reported on Friday that Boeing acting without adequate oversight from U.S. regulators and failed to grasp risks in the design of cockpit software on the 737 MAX, sowing the seeds for Lion Air 610 that also involved errors by airline workers and crew.

‘LONGER THAN EXPECTED’

Muilenburg noted that both crashes involved the repeated activation of a flight control software function known as MCAS after it received faulty sensor input.

Boeing’s development of that software has come under criticism in reports and from lawmakers and the company is adding safeguards to the system. Muilenburg said the changes would “eliminate the possibility of even extremely unlikely risks that are unrelated to the accident.”

Boeing has admitted few mistakes since the two fatal crashes. Earlier this month, the FAA questioned why Boeing withheld instant messages from a former pilot for months that raised questions about MCAS.

In May, Boeing acknowledged it did not tell the FAA for 13 months that it inadvertently made an alarm alerting pilots to a mismatch of flight data optional on the 737 MAX, instead of standard as on earlier 737s. The company insisted the missing display represented no safety risk.

Muilenburg acknowledged that getting the plane in the air “has taken longer than we originally expected, but we’re committed to getting it right, and return-to-service timing is completely dependent on answering each and every question from the FAA.”

He added that “regulators should approve the return of the MAX to the skies only after they have applied the most rigorous scrutiny, and are completely satisfied as to the plane’s safety.

The flying public deserves nothing less.”

U.S. Representative Peter DeFazio, who chairs the House panel, has one main question for Boeing at Wednesday’s hearing: “How the hell did this happen?”

(Reuters) South Korea grounds nine Boeing 737 NG planes with cracks

(Reuters) SEOUL (Reuters) – South Korea’s transport ministry on Friday said nine Boeing Co (BA.N) 737 NG planes in the country had been grounded after checks found structural cracks requiring repairs.

The suspension follows an order from the U.S. Federal Aviation Administration earlier this month for aircraft operators to inspect older Boeing 737 NGs for structural cracks.

Boeing on Oct. 11 said inspections of 810 of the planes globally had led to 38 requiring repair.

South Korea said it found nine planes with cracks among 42 planes examined.

Among the nine grounded planes are five operated by Korean Air Lines (003490.KS), according to the transport ministry.

The 737 NG is the third-generation 737 and version before the now-grounded 737 MAX, which is not impacted by the cracking issue.

A Korean Air spokesman said the carrier has 18 737 NG aircraft and will replace the five short-range airplanes with other jets.

(RTE) Twitter revenue hit by weaker advertising, low demand – shares plunge

(RTE)

Twitter seeing advertising problems including product bugs and unusually low demand over the summer
Twitter seeing advertising problems including product bugs and unusually low demand over the summer

Twitter has today posted worse-than-expected third quarter revenue and profit, which the company attributed to advertising problems including product bugs and unusually low demand over the summer.

Shares of the micro-blogging platform dropped by about 15% to $33 in trading before the bell.  

Twitter’s revenue rose 9% from a year earlier to $824m, missing Wall Street expectations of $874m, based on IBES data from Refinitiv. 

Total advertising revenue was $702m, an increase of 8% year-over-year. 

Twitter said its third-quarter net income was $37m, or $0.05 per share. In the same period last year, the firm reported net income of $789m, or $106m when adjusted to exclude certain items. 

Analysts had expected net income of $161.5m. 

Twitter had forecast that third quarter revenue growth would lag the first two quarters, partly due to ending some older ad formats. 

But it also encountered unexpected problems, such as bugs which impacted its ability to target ads and share data with ad partners, and fewer big events compared with the previous summer. 

For the fourth quarter, Twitter said it expects total revenue to be between $940m and $1.01 billion. Wall Street on average expects $1.06 billion. 

However, the social media platform did record a rise in daily users who see ads on the site, beating analyst estimates. 

Twitter has stopped disclosing its monthly active users count, instead reporting mDAU, a metric it created to measure users exposed on a daily basis to advertising through the site or Twitter applications that are able to show ads. 

Twitter’s chief executive Jack Dorsey said the growth in monetisable daily active usage (mDAU) was driven by product improvements, including making the site easier to navigate and more proactively identifying abusive content for removal. 

Twitter CEO Jack Dorsey

The company’s average mDAU hit 145 million, beating analyst expectations of 141 million, according to IBES data from Refinitiv. This alternative metric was up 17% year-over-year. 

In July, Twitter launched a more personalised desktop Twitter.com as part of its efforts to make the platform better for conversations. 

It has also experimented with the ability to follow topics, and has recently expanded testing for a feature to hide replies. 

Recently, the company made six-second video bidding available for global advertisers and it has continued to expand its live and on-demand video partnerships, including deals with NBC Olympics and Eurosport for coverage of the 2020 Tokyo Games. 

Twitter and other social media platforms have also recently come under scrutiny over their ad policies. 

Twitter, Facebook and Alphabet’s Google were this month criticised by US democratic presidential candidates, including former Vice President Joe Biden, for allowing politicians to run ads containing false or misleading claims. 

In August, Twitter announced it would no longer accept advertising from state-controlled news media outlets, shortly after it came under fire for showing ads from Chinese state-controlled media that criticized the Hong Kong protesters. 

Twitter also faced heat over its handling of user data when it said in October that email addresses and phone numbers uploaded by users to meet its security requirements may have been ‘inadvertently’ used for advertising purposes. 

Total operating expenses, including cost of revenue, rose by 17% year-over-year to $780m, partly due to plans to hire more employees.

The company expects fourth-quarter operating income to be between $130m and $170m.

(EUobserver) Gas and oil spent €250m lobbying EU

(EUobserver)

  • Investment in gas and oil continues despite growing awareness of climate emergency (Photo: European Parliament)

The fossil fuel industry pumped €250m into lobbying the EU in the past 10 years to water down climate friendly laws and targets, according to a new report.

“A cool quarter of a billion over the last decade buys a lot of access and influence in Brussels,” said Pascoe Sabido of Corporate Europe Observatory, a Brussels-based NGO, and one of the authors of the report.

(BBG) Google Says Quantum Computer Beat 10,000-Year Task in Minutes

(BBG)

Google’s Sycamore processor.
Google’s Sycamore processor. Source: Google

Alphabet Inc.’s Google said it’s built a computer that’s reached “quantum supremacy,” performing a computation in 200 seconds that would take the fastest supercomputers about 10,000 years.

The results of Google’s tests, which were conducted using a quantum chip it developed in-house, were published Wednesday in the scientific journal Nature.You’ve reached you

(BBG) Boeing Max Design Faulted in Lion Air Crash, Indonesia Says

(BBG)

  •  Reliance on one sensor made flight-control system vulnerable
  •  Investigators presented final findings to relatives of victims
Investigators examine engine parts from Lion Air flight JT 610, Nov. 2018.
Investigators examine engine parts from Lion Air flight JT 610, Nov. 2018. Photographer: Bay Ismoyo/AFP via Getty Images

Design flaws in Boeing Co.’s 737 Max and a lack of information for pilots on how to deal with malfunctions contributed to last year’s crash of Lion Air Flight 610, which killed 189 people, Indonesian investigators found.

In a nine-point presentation to victims’ families, the National Transportation Safety Committee criticized certification procedures for the jet, saying that a flight-control mechanism was approved based on incorrect assumptions. The so-called Maneuvering Characteristics Augmentation System was also implicated in the crash of an Ethiopian Airlines 737 Max in March that claimed 157 lives.You’ve reached your free article limit.Try 3 months for $105 $6. Cancel

(Reuters) Exxon, New York prosecutors face off in climate change fraud trial

(Reuters)

(Reuters) – A lawyer for New York’s attorney general on Tuesday told a state judge Exxon Mobil Corp (XOM.N) used two sets of books to hide the true cost of climate change regulations from investors, while an attorney for the oil major assailed the claims as false and politically motivated.

The lawyers’ opening statements kicked off a long-awaited trial in a civil lawsuit filed by the attorney general last year accusing Exxon of defrauding investors out of up to $1.6 billion.

The trial, expected to last up to three weeks, will take place before Justice Barry Ostrager in Manhattan Supreme Court without a jury and could feature testimony from Rex Tillerson, who served as Exxon chief executive officer and U.S. Secretary of State.

It is the first of several lawsuits currently pending against major oil companies related to climate change to go to trial.

The attorney general sued Exxon in October 2018 under the Martin Act, a New York state law that had been used primarily to go after financial fraud.

The lawsuit claimed Exxon falsely told investors it had properly evaluated the impact of future climate regulations on its business using a “proxy cost” of up to $80 per ton of carbon emissions, but internally used figures as low as $40 per ton or none at all.

“Exxon only ever told its investors about a single set of assumptions,” Kevin Wallace, acting chief of the New York Attorney General’s Investor Protection Bureau, told Ostrager Tuesday.

“What we are saying, and the law demands, is that Exxon not mislead its investors,” he said.

Theodore Wells, a lawyer for Exxon, said that after Tillerson became chief executive in 2006, the company put in place a “robust system” to manage the risk of increasing climate change.

He said the $80 per ton proxy cost represented a “global,” “macro level” assessment of the cost, while lower figures, known as greenhouse gas or GHG costs, were used for particular capital projects.

“There is no document that says … proxy costs and GHG costs were one and the same,” he said.

Wells also accused former New York Attorney General Eric Schneiderman of bringing the case for political reasons.

“They didn’t stay in their lane of objectivity and fairness,” he said.

Massachusetts is separately investigating whether Exxon concealed its knowledge of the role fossil fuels play in climate change.

Both Massachusetts and New York began investigating Exxon after news reports in 2015 saying company scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.

Those reports, by InsideClimate News and the Los Angeles Times, were based on documents from the 1970s and 1980s. Exxon said the documents were not inconsistent with its public positions.

Exxon and other oil companies including BP Plc (BP.L), Chevron Corp (CVX.N) and Royal Dutch Shell (RDSa.AS) face lawsuits by cities and counties across the United States seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by climate change.

(Barrons) Boeing Stock Dropped After the Downgrades Started Rolling In

(Barrons)

Photograph by Jim Watson/AFP/Getty Images

Throughout the many troubles of the 737 MAX, most Wall Street analysts have kept faith in Boeing stock—or at the very least, have taken a wait-and-see approach. That is starting to change as scrutiny of the company ramps up.

After a stream of MAX-related news over the weekend, multiple brokerages got off the fence and downgraded Boeing shares on Monday.

On Friday, emails and instant messages from 2016 surfaced that appear to indicate Boeing was aware its new flight control software—implicated in two deadly crashes—had issues. Boeing stock (ticker: BA) fell more than $25, or almost 7%, that day.

On Sunday, Boeing responded to the emergence of the emails provided by the House Subcommittee on Aviation, and provided more information on what happened between 2016—when the troubling emails were exchanged—and 2017, when the first MAX jets were delivered.

“It is unfortunate that this document, which was provided early this year to government investigators, could not be released in a manner that would have allowed for meaningful explanation,” reads the company’s news release. The company didn’t immediately respond to a request for comment on Monday.

Even though Boeing handed over those documents as early as February—before the second crash of the MAX involving an Ethiopian Airlines flight—some analysts no longer felt comfortable recommending the stock.

There is “too much new information to not re-look at cause [and] regulatory response [and MAX] timeline,” wrote UBS analyst Myles Walton in a Monday research report. “We now have to append [our] assessment further based on source material provided to Congress and the FAA on Friday that reinforces the perception of and heightens the potential of incomplete disclosure, which inherently puts more money [and] trust and time at stake.”

The new disclosure could mean the MAX doesn’t return to service around the end of 2019 as Boeing has said it would. Walton still believes the plane will fly again, but says his confidence has been eroded. He downgraded shares to Hold from the equivalent of Buy. and cut his price target for shares all the way to $375 from $470.

Credit Suisse also cut its stock rating, according to multiple reports. Analyst Robert Spingarn downgraded Boeing to Hold from the equivalent of Buy, and cut his price target to $323 from $416. “We can no longer defend the shares in light of the latest discoveries, discoveries which significantly increase the risk profile for investors,” wrote Spingarn in a Monday research report.

Baird analyst Peter Arment also moved to the sidelines on Monday because of what he called “textgate,” downgrading the stock from the equivalent to Hold from Buy. “We see increased production risks the next 24 months,” wrote Arment. “While a recovery in free cash flow will happen in 2020 and 2021, it will be at reduced levels tied to increased 737 MAX production costs.” His new $342 price target is based on an 8% free cash flow yield on his 2021 numbers. The average industrial company in the S&P 500 trades for about 4% to 5% free cash flow yield.

Gordon Haskett analyst Don Bilson thinks this weekend’s news doesn’t bode well for CEO Dennis Muilenburg. “House Transportation Committee Chairman Peter DeFazio told [The Wall Street Journal] that he thinks the board’s oversight has so far been pretty lame,” wrote Bilson in a Monday research note. Bilson doesn’t cover Boeing shares, instead focusing on special situations, including management change and board realignment.

There is, however, a small bit of good news from Wall Street on Boeing stock. Morgan Stanley analyst Rajeev Lalwani says the email release is a “false alarm,” noting that the company disclosed the documents earlier in 2019. He maintained his Buy rating on shares and has a $500 price target for the stock.

Boeing dropped 3.8% to $331.06 in Monday trading. The Dow Jones Industrial Average finished up 0.2%.

(CBS) Boeing 737 Max crash revelations could cost shareholders $53 billion

(CBS)

  • Wall Street analysts on Monday downgraded Boeing’s stock and said the company’s market value could drop $53 billion.
  • A UBS analyst estimated the company could lose $8.5 billion in cash flow over the next five years.
  • Famed consumer advocate Ralph Nader said Boeing CEO Dennis Muilenburg should go.

Boeing’s revelation late last week that a company test pilot had a strong indication that a system meant to prevent the 737 Max from crashing had “egregious” issues could cost the aircraft maker and its investors tens of billions of dollars, according to Wall Street analysts. 

Both of the analysts, from UBS and Credit Suisse, downgraded the stock. The two also independently cut their price targets for Boeing’s stock by $95, suggesting that the new safety evidence — and the growing legal and reputational hit to the company — could slice as much as $53 billion from the company’s total worth.

The test pilot messages, and the disclosure last week that Boeing has known about them for months, has also sparked new calls for the company’s top executives to resign. Consumer advocate Ralph Nader, whose grandniece was killed in the March crash of an Ethiopian Airlines flight, told CBS MoneyWatch on Monday that Boeing CEO Dennis Muilenburg, as well as the company’s entire board for directors, should go.

Trending News

“They need a new team,” Nader said. “The bosses and board at Boeing were complicit with what happened. It’s a conflict.”

Boeing did not return a request for comment on Nader’s statement. 

The analyst downgrades come as Boeing prepares to announce earnings later this week. The company is expected to have earned $1.5 billion in the third quarter of this year. But UBS analyst Myles Walton said those earnings were in jeopardy. 

He predicted the issues with the 737 Max, and the damage the episode has done to Boeing’s reputation, could lower the company’s cash flow by as much as $8.5 billion in the next five years. Walton said his “working assumption” was that the 737 Max crashes were a result of “poor assumptions.” But there is growing evidence to suggest that Boeing knew there was a problem and didn’t disclose it, and that’s a much bigger issue, Walton told clients.

Boeing shares fell 3.8%, or $12.94, on Monday to $331.06, adding to the sharp drop in the stock price during the past month. The stock entered October at just under $390.

The stock drop shows that Boeing’s efforts to steady itself in recent months haven’t fully reassured investors. Earlier this month, Boeing’s board stripped Muilenburg of his dual role as chief executive and chairman and elevated the company’s lead director, David Calhoun, to chairman. 

The company seemed to believe that would appease shareholders and critics, who have questioned whether Boeing has been upfront with shareholders about its problems with the 737 Max and whether it has moved fast enough to correct the issues.

Instead, Calhoun’s appointment has raised new questions about Boeing’s leadership. Besides taking on the Boeing chairmanship, Calhoun is also the lead independent director at construction equipment giant Caterpillar as well as chairman of the board of Gates International, which makes power transmission systems and has 15,000 employees worldwide. And that is all on top of Calhoun’s day job, being a top executive of Blackstone, the largest private equity firm in the world. 

“Shareholders of Boeing and Caterpillar should be concerned,” said Charles Elson, a corporate governance expert at the University of Delaware. “It would be ideal if he would step down from one of these roles.”

Nader called Boeing’s chairman and CEO split a “sop to shareholders” and a move that protects the company’s management. He said he believed Muilenburg was still essentially in charge, but he also predicted whistleblowers are likely to emerge and that could put more pressure of the company to make real changes. 

“Boeing is in a tremendous crisis,” Nader said.

P.O. (CNBC) Boeing lead pilot warned about flight-control system tied to 737 Max crashes, then told regulators to delete it from manuals

P.O.
As I have said time and time again, in my opinion, this plane will never fly again.
Full stop.
FCMP




(CNBC)

  • In 2016, a Boeing pilot warns a colleague about an “egregious” flight-control program on the 737 Max.
  • The system is later implicated in two fatal crashes that killed 346 people.
  • Emails show the pilot told regulators to delete the mention of the software from pilot manuals.

WATCH NOWVIDEO03:35FAA: Substance of Boeing documents is ‘concerning’

Boeing pilot warned about problems with the flight-control program on the 737 Max that was implicated in two fatal crashes, said he “unknowingly” lied to regulators, and told the Federal Aviation Administration not to include the system in pilot manuals before regulators deemed the plane safe for the public in 2017, according to messages released Friday.

The messages deepened the manufacturer’s crisis over the bestselling jets, which have been grounded worldwide since March in the wake of the crashes, sending the stock to an eight-week low.

The Boeing lead pilot complained in one of the messages that a flight-control system, known as MCAS, was difficult to control, according to the messages, which were obtained by NBC News.

That system and pilots’ ability to recover from its failure in flight are at the heart of investigations into the crashes. Investigators have implicated the system in both crashes — a Lion Air 737 Max that went down in Indonesia in October 2018 and an Ethiopian Airlines plane of the same model that crashed in March.

MCAS malfunctioned on both flights, repeatedly pushing the planes’ noses down until their final, fatal dives. All 346 people on both flights were killed.

“Oh shocker alerT! MCAS is now active down to M .2. It’s running rampant in the sim on me,” Mark Forkner, Boeing’s former chief technical pilot for the 737, said in 2016 to a colleague, Patrik Gustavsson, referring to the simulator, according to the transcript. “Granted, I suck at flying, but even this was egregious.”

His colleague replied that they would have to update the description of the system.

“So I basically lied to regulators (unknowingly),” read Forkner’s reply. Gustavsson responded: “It wasn’t a lie, no one told us that was the case.”

Forkner’s attorney, David Gerger, said in a statement, “If you read the whole chat, it is obvious that there was no ‘lie.’”

“The simulator was not reading right and had to be fixed to fly like the real plane,” he said. “Mark’s career — at Air Force, at FAA, and at Boeing — was about safety. He would never put anyone in an unsafe plane.”

‘Jedi mind-tricking regulators’

Forkner in January 2017 instructed an FAA employee to remove MCAS from pilot manuals and training, according to an email between the two that was obtained by NBC News.

“Delete MCAS, recall we decided we weren’t going to cover it in the FCOM or the CBT, since it’s way outside the normal operating envelope,” Forkner wrote.

He said in an earlier email to an FAA official that he was “jedi mind-tricking regulators into accepting training the training that I got accepted by FAA etc.”

The FAA on Friday said Boeing withheld these “concerning” messages for months from regulators.

The agency, which first certified the planes in 2017, said it is “disappointed that Boeing did not bring this document to our attention immediately upon its discovery,” adding it is “reviewing this information to determine what action is appropriate.”

Pilots at airlines, including American, complained after the crashes that they did not know about the MCAS system until after the first crash.

Boeing shares fell sharply Friday after the news broke, shedding nearly 7% and shaving about 170 points off the Dow Jones Industrial Average. The stock ended at $344, the lowest close since Aug. 21.

CEO under fire

The messages add to pressure already piling up on Boeing and CEO Dennis Muilenburg. The company and the FAA are facing several investigations into the plane’s design and software.

The company’s board removed Muilenburg as chairman last week, saying the division of the two roles will help him focus on bringing the plane back to service. Muilenburg is set to testify at two congressional hearings for the first time since the crashes: a Senate Commerce Committee hearing on Oct. 29 and a House Transportation Committee panel scheduled for Oct. 30.

Rep. Peter DeFazio, D-Ore., chair of the House Committee on Transportation and Infrastructure, called the instant messages “shocking, but disturbingly consistent with what we’ve seen so far in our ongoing investigation of the 737 MAX, especially with regard to production pressures and a lack of candor with regulators and customers.”

He said the incident “is not about one employee; this is about a failure of a safety culture at Boeing in which undue pressure is placed on employees to meet deadlines and ensure profitability at the expense of safety. Boeing will have to answer for this and other questions at our hearing on October 30th.”

WATCH NOWVIDEO03:18If Boeing did mislead the FAA, CEO Dennis Muilenburg is done: Jim Lebenthal

The FAA turned over the instant messages to U.S. lawmakers and the Department of Transportation’s Office of Inspector General, the agency said.

“Over the past several months, Boeing has been voluntarily cooperating with the House Transportation and Infrastructure Committee’s investigation into the 737 MAX. As part of that cooperation, today we brought to the Committee’s attention a document containing statements by a former Boeing employee,” Boeing said in a statement.

Boeing has developed a fix for the software that misfired on the crashes but regulators haven’t yet signed off.

Airlines have missed out on hundreds of millions of dollars in revenue because of the grounding, which forced them to cancel flights and reduce their growth plans. Carriers repeatedly pulled the planes out of ischedules with no end in sight to the grounding. Southwest this week canceled 737 Max flights through Feb. 8, later than any U.S. carrier.

“We want to know more details and we stand with [FAA] administrator [Steve] Dickson in his demand for more information and an explanation on why this information were withheld,” said Dennis Tajer, spokesman for American Airlines pilots’ union.

Pilots at Southwest, the largest Max customer in the U.S., earlier this month sued Boeing for allegedly rushing the plane to market and said the grounding has meant its pilots have lost out on about $100 million in pay.

“The FAA’s announcement echoes the very serious concerns at the center of SWAPA’s lawsuit, and this is more evidence that Boeing misled pilots, government regulators and other aviation experts about the safety of the 737 MAX,” Southwest pilots’ union said in a statement. “It is clear that the company’s negligence and fraud put the flying public at risk.”