News Archive


Hyundai Motor U.S. names new chief, Krafcik out


DETROIT (Reuters) – Hyundai Motor Co (005380.KS) said on Friday its U.S. chief, John Krafcik, is stepping down after his contract was not renewed and will be replaced by the U.S. sales chief David Zuchowski.

During Krafcik’s five-year tenure Hyundai’s share of the U.S. market rose to as high as 5.1 percent for 2011 from 3 percent in 2008. But it has fallen to 4.6 percent due mainly to production capacity constraints.

Zuchowski is 55. He takes over on January 1 after the surprise announcement of Krafcik’s departure. Krafcik’s contract expires at the end of the year.

Neither Zuchowski nor a Hyundai spokesman gave any reason for why the parent company in South Korea did not offer Krafcik a contract extension.

Krafcik, 52, led the U.S. arm of Hyundai as it set sales records using innovative marketing techniques including a program that allowed Hyundai buyers who lost their jobs during the recession in 2009 to return their new cars.

But Krafcik also oversaw Hyundai as the company was cited by the U.S. Environmental Protection Agency for overstating fuel mileage claims on its cars in 2012.

Last week, Hyundai reached a preliminary $210 million settlement on the fuel mileage issue in a class action suit. Kia Motors, which is Hyundai’s sister company but is mostly operated separately in the United States, reached a settlement of $185 million last week.

Zuchowski said in a telephone interview on Friday that Krafcik’s departure was a surprise even to “those that were in the inner circle” at Hyundai’s U.S. headquarters.

A Hyundai spokesman said Zuchowski is not an interim leader and Zuchowski said the company is undergoing “a very orderly transition.”

Analyst Karl Brauer of Kelley Blue Book said Krafcik “has a strong relationship with numerous power brokers and an enviable record after five years at Hyundai. He oversaw the Korean carmaker’s growth while developing several innovative branding exercises. He would be a powerful addition to any automaker’s executive team.”

Zuchowski said Hyundai has a goal of returning to 5 percent U.S. market share, but he said it may take a couple of years to get to that level of sales again, considering the supply constraints.

SOUTH KOREAN MOTHERSHIP

“We’re working very closely with our Korean mother ship to secure additional production from Korea as well to make sure that we can maintain our market share growth,” said Zuchowski.

“We think and our parent company thinks that 5 percent (U.S. market share) is very important and that is one of our key priorities, whether it’s done next year or done the following year, that’s absolutely what we want to do.”

He said 2014 will be an important year for Hyundai as it rolls out a new version of its flagship vehicle, Genesis, a full-sized, luxury sedan, in the first half of the year and a new Sonata in the second half.

“I would say that my biggest challenge is to make sure that we have an effective and successful launch of those two products,” Zuchowski said.

The Genesis was named 2009 North American Car of the Year and the Sonata is credited by executives from rival Toyota with reshaping the U.S. midsize sedan market when it was last revamped in 2009.

Genesis sales were down 8 percent through November and Sonata sales were down 10 percent.

Hyundai’s U.S. sales will set a record in 2013. But through November, its share of the U.S. market was down because its sales were up 2.2 percent as the overall industry sales rose 8.4 percent.

Hyundai has 824 U.S. dealers, a number that the company does not plan to greatly expand, Zuchowski said.

One of those dealers, Brad Benson of Brad Benson Hyundai in South Brunswick, New Jersey, said that while Krafcik “did a great job,” as a dealer he is happier with a “sales guy” as the head of the company’s U.S. division.

“Dave Zuchowski has been a huge part of this company behind the scenes for quite a while,” Benson said in a telephone interview. “He’s much more involved with the dealers. He’s so down to earth, but he really knows how to sell cars.”

Zuchowski joined Hyundai in February 2007 and previously had been with Mazda Motor Corp (7261.T) and Ford.

Before coming to Hyundai in 2004 as head of product development and strategic planning, Krafcik was with Ford Motor Co (F.N) and the venture between General Motors Co (GM.N) and Toyota Motor Corp (7203.T) that built cars in a jointly run factory in California.

(Additional reporting by Deepa Seetharaman and Ben Klayman in Detroit; Editing by Cynthia Osterman and Leslie Gevirtz)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/UiVN5hwgYBE/story01.htm

Big year ends with Wall Street hopeful for 2014


NEW YORK (Reuters) – As Wall Street’s best year in more than 15 draws to a close, few are expecting a repeat performance in 2014, though traders have plenty of reasons to feel optimistic.

While the market will likely enter January quietly, with many traders still out for the holidays and few major catalysts, the upward trend is seen continuing next week, especially in some of 2013’s high-flying names.

Economic growth is expected to accelerate next year, boosting employment and consumer purchasing power. But with markets repeatedly notching all-time highs, that may not translate to market gains as dramatically as in 2013.

“There’s a pervasive feeling that the economy is getting better, and the Fed is still on the market’s side after saying it would keep rates low,” said Donald Selkin, chief market strategist at National Securities in New York.

“However, while new money will still be flowing into stocks next year, probably we’ll see less money come in. There’s little chance of another 30 percent gain or so next year.”

The SP 500 .SPX has risen 29 percent so far in 2013, its best annual performance since 1997. The Dow Jones industrial average .DJI is up 26 percent while the Nasdaq is up nearly 38 percent.

The gains have been widespread, with all 10 SP 500 sectors higher on the year. The weakest group, telecoms .SPLRCL, rose 6.5 percent while consumer discretionary .SPLRCD led the year with a gain of 40 percent.

One of the market’s biggest boosts this year — the Federal Reserve’s stimulus program — will not be as strong a factor after the central bank announced a slowing of the program in December. The Fed beginning in January will buy $75 billion in Treasuries and mortgage-backed bonds per month, down from $85 billion, and Fed Chairman Ben Bernanke, whose term expires on January 31, suggested the U.S. central bank could continue to slowly reduce that stimulus throughout 2014.

The latest Reuters poll showed analysts expect the SP 500 to rise to 1,925 points by the end of 2014, which represents a rise of 4.5 percent from current levels.

Subscription video company Netflix Inc (NFLX.O) was the SP’s strongest performer in 2013, with a jump of almost 300 percent, followed by electronics retailer Best Buy Co Inc (BBY.N) and semiconductor maker Micron Tech (MU.O), both of which climbed nearly 240 percent. Tesla Motors (TSLA.O) was another standout, soaring 346 percent, while Facebook Inc (FB.O) more than doubled.

These names could see further upside next week thanks to “window dressing,” a practice in which investors buy securities with big gains to improve the appearance of their holdings before presenting the results to clients. The 2013 year will close out on Tuesday, with the market closed on Wednesday for the New Year’s Day holiday.

“Consumer discretionary and tech names have driven the market over the past 12 months, so it wouldn’t surprise me to see continued upside on them next week,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.

However, Dollarhide said the names were “priced for perfection” and vulnerable to pullbacks next year.

“There won’t be a sudden ‘let’s sell Micron and Netflix’ movement, but if profit growth slows or a conference call doesn’t go well, absolutely you could see a 20 to 30 percent selloff after doubling this year,” he said.

The fourth-quarter earnings season won’t start in earnest until the second week of January, but there will be a few clues into the economy’s strength coming out next week, with data on consumer confidence and manufacturing.

Next week will also see reads on the housing market with November pending home sales on tap for Monday and the Case/Shiller report on October home prices on Tuesday. The housing sector has been in focus as U.S. benchmark Treasury yields rose to two-year highs, which could put pressure on mortgage rates, which are typically driven by the yield on the 10-year Treasury note.

“If yields stay this high, I would consider that both a technical and psychological negative for markets,” said Mark Grant, managing director at Southwest Securities in Fort Lauderdale.

Pending home sales, or sales which are in contract but not yet closed, are seen rising 1 percent while the October home prices are expected to rise 0.8 percent.

In the latest week, the Dow rose 1.6 percent while the SP was up 1.3 percent and the Nasdaq rose 1.3 percent.

(Editing by Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/FNvwcG342eo/story01.htm

Target says PINs stolen, but confident data secure


BOSTON/NEW YORK (Reuters) – Target Corp said PIN data of some customers’ bank ATM cards were stolen in a massive cyber attack at the third-largest U.S. retailer, but it was confident that the information was “safe and secure.”

The stolen PIN data was “strongly encrypted” when it was removed from Target’s systems, spokeswoman Molly Snyder said in a statement on Friday.

“The most important thing for our guests to know is that their debit card accounts have not been compromised due to the encrypted PIN numbers being taken,” Snyder said.

News of the PIN theft was first reported by Reuters on Tuesday.

Target uses the Triple DES encryption standard that can only be unlocked with a digital cryptographic “key” when the PIN data is received by the company’s outside payment processor, she noted.

Target has declined to identify its payment processor.

“The ‘key’ necessary to decrypt that data has never existed within Target’s system and could not have been taken during this incident,” Snyder said.

Some security experts said that even if the encryption is not broken, cyber criminals can still break the PINs.

“There is potential for gaining access to debit card accounts,” said Shane Shook, an executive with the cyber security firm Cylance Inc, who has investigated some of the biggest cyber breaches.

While it is virtually impossible to decrypt a PIN without the digital key to unlock it, Shook said many debit card holders choose easy-to-guess numbers like 1234. He said that in some investigations he has found that more than 20 percent of PINs could easily be guessed.

Chris Morales, research director with NSS Labs and a security expert who has helped investigate major breaches, said the hackers may be able to crack the PINs on some of the stolen debit cards.

U.S. merchants and banks have refused to adopt technologies used overseas, such as embedding credit cards with computer chips for additional security. Instead they use PINs to secure accounts, which leave them more vulnerable to theft.

“PINs are not secure,” Morales said.

Criminals can identify PINs by using online systems some banks offer which allow customers to access their accounts using their debit card numbers and PINs, he said.

Madeline Aufseeser, a credit card analyst with research firm Aite Group, said she does not believe the hackers could unscramble the PINs, but still advises Target customers whose accounts have been compromised to replace their cards immediately.

“Smart consumers are calling their banks and getting them reissued,” she said. “Better safe than sorry.”

Target has said little about how the cyber crooks accessed its network or stole the data in the attack which breached 40 million payment card numbers at unprecedented speed.

BAD TIMING FOR TARGET

The attack began on November 27, the day before the Thanksgiving holiday and continued until December 1, making it the second-largest data breach in U.S. retail history.

The largest breach against a U.S. retailer, uncovered in 2007 at TJX Cos Inc, led to the theft of data from more than 90 million credit cards over about 18 months.

News of the breach at Target has hurt the retailer’s reputation and stock price.

Target’s consumer perception scores dropped to their lowest level since 2007 after the breach, according to a survey of 15,000 people by YouGov BrandIndex, which tracks thousands of brands around the world.

“Target’s problems may very well continue and that is unfortunate, as we’ve been seeing a little bit of a perception rebound the last two days,” YouGov BrandIndex Chief Executive Ted Marzilli said.

Marzilli said Target’s perception scores bottomed out the day before Christmas and the impact from the latest news could be less severe now that the holiday shopping rush is over.

The Minneapolis-based retailer’s shares have fallen about 2.3 percent since December 18, when news of the cyber attack broke, while the Standard Poor’s 500 index has risen 1.7 percent over the same period.

Target is due to report quarterly results on February 26, but may disclose the impact of the breach sooner.

(Reporting by Jim Finkle and Dhanya Skariachan; Editing by Bob Burgdorfer and Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/aPCQzifaic4/story01.htm

Swiss banks Lombard Odier and VP Bank sign up to U.S. tax deal


ZURICH (Reuters) – Lombard Odier Cie and VP Bank (Switzerland) on Friday became the latest Swiss banks to say they would work with U.S. officials in a crackdown on lenders suspected of helping wealthy Americans evade taxes through hidden offshore accounts.

Unlisted Geneva-based Lombard Odier with 203 billion Swiss francs ($227 billion) in client assets is the biggest privately-held firm so far to say publicly it will take part in a Swiss government-brokered scheme to make amends for aiding tax evasion.

The deal between the United States and Switzerland is part of a U.S. drive to lift the veil on bank secrecy in the Alpine country, the world’s largest offshore finance centre with more than $2 trillion in assets.

Under the deal, Swiss banks have until the end of the year to sign up to the program, which requires the firms to hand out some previously hidden information and face penalties of up to 50 percent of assets they managed on behalf of U.S. clients.

A host of smaller listed Swiss banks have come forward – now including Liechtenstein-based VP Bank – but the majority of Switzerland’s private banks are unlisted and often family-run firms such as Lombard Odier.

Swiss banks that sign up select which category they fall under within the scheme. Those putting themselves in the second category have reason to believe they may have committed tax offences, and are eligible for a non-prosecution agreement if they come clean and face fines.

So-called category 3 banks have not engaged in criminal conduct or are deemed “compliant” under U.S. tax rules. They would receive a “non-target letter”, or a promise from prosecutors they won’t be charged later, and will not have to pay fines.

“After a detailed analysis of the program and its implications, the Bank has decided to take the prudent step of signing up to category 2 within the required deadline of 31 December 2013. It reserves the right to join category 3 which opens in the summer of 2014,” Lombard Odier said in a statement.

VP Bank, which had client assets under management of 28.8 billion Swiss francs at the end of June, also said its Swiss subsidiary was joining in category 2 but might switch to category 3 later.

VP Bank said its financial stability would not be affected by this decision and it expected “record solid annual results for 2013” despite the expense related to the U.S. program.

(Reporting by Caroline Copley and Silke Koltrowitz; Editing by Jane Merriman and Anthony Barker)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/TlWTwM3tR_o/story01.htm

Hyundai Motor U.S. chief Krafcik out, Zuchowski named successor


DETROIT (Reuters) – Hyundai Motor Co (005380.KS) said on Friday its U.S. chief, John Krafcik, is stepping down after his contract was not renewed and will be replaced by the U.S. sales chief David Zuchowski.

Krafcik, 52, had been the chief of Hyundai’s U.S. operations since late 2008, when its share of the U.S. market was 3 percent. It rose to 4.9 percent in 2012.

Zuchowski is 55. He takes over on January 1 after the surprise announcement of Krafcik’s departure. Krafcik’s contract expires at the end of the year.

Krafcik led the U.S. arm of Hyundai as it set sales records by using innovative marketing techniques including a program that allowed Hyundai buyers who lost their jobs during the recession in 2009 to return their new cars.

Before coming to Hyundai in 2004 as head of product development and strategic planning, Krafcik was with Ford Motor Co (F.N) and the venture between General Motors Co (GM.N) and Toyota Motor Corp (7203.T) that built cars in a jointly run factory in California.

But Krafcik also oversaw Hyundai as the company was cited by the U.S. Environmental Protection Agency for overstating fuel mileage claims on its cars in 2012.

Last week, Hyundai reached a preliminary $210 million settlement on the fuel mileage issue in a class action suit. Kia Motors, which is Hyundai’s sister company but is mostly operated separately in the United States, reached a settlement of $185 million last week.

Capacity constraints have limited Hyundai’s sales since it hit a market share of 5.1 percent for 2011. Its share of the U.S. new-vehicle market through November was 4.6 percent, down from 4.9 percent through November 2012.

(Reporting by Bernie Woodall, Deepa Seetharaman and Ben Klayman in Detroit; Editing by Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/C8lwCMhja9M/story01.htm

Nasdaq to compensate firms on December 31 for botched Facebook IPO


NEW YORK (Reuters) – Nasdaq OMX Group Inc will compensate firms on December 31 for qualifying claims related to Facebook Inc’s botched May 2012 initial public offering, the exchange operator said in a note to traders on Friday.

Nasdaq said previously it would pay up to $41.6 million in claims to market participants that lost money when a glitch in Nasdaq’s system during the IPO prevented timely order confirmations for many traders, leaving them unsure about their exposure for hours and, in some cases, for days afterwards.

Nasdaq said a total of $41.6 million in claims qualified for compensation, even though market makers estimated they lost $500 million collectively.

Firms that qualified for compensation had until December 23 to agree not to sue Nasdaq over the IPO in order to be eligible for a one-time voluntary payout.

While Nasdaq was fined $10 million by the U.S. Securities and Exchange Commission, the largest fine ever for an exchange, the snafu was just one of a raft of high-profile technology glitches that have plagued exchanges in recent years.

In August a software bug paralyzed thousands of Nasdaq-listed stocks marketwide for three hours. That happened just days after a technical problem at Goldman Sachs sent a flood of erroneous orders to the U.S. equity options markets.

After the Nasdaq outage, the U.S. Securities and Exchange Commission called the heads of all of the exchanges to Washington to discuss ways to strengthen critical market infrastructure and improve its resilience when technology fails.

Other major glitches include BATS Global Markets’ botching of its own market debut, which it had to abandon, just months before Facebook’s IPO. And on August 6, the exchange operator faced an outage on one of its markets of nearly an hour.

CBOE Holdings Inc experienced a glitch in April that shut down the Chicago Board Options Exchange, the No. 1 U.S. stock-options market, for half a day, preventing trading in options on two of the U.S. market’s most closely watched indexes.

At IntercontinentalExchange Group’s NYSE Euronext unit, a bug in new software being rolled out in September briefly led to a trading halt across U.S. options markets.

(Editing by Kenneth Barry)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/VJoAJ8evyyw/story01.htm

Toyota recalling more than 400,000 vehicles in Saudi Arabia


(Reuters) – Toyota Motor Corp (7203.T) is recalling more than 400,000 vehicles in Saudi Arabia that were produced from 2006 to 2010 due to concerns about unintended acceleration, the company and Saudi Arabia’s trade ministry said.

This is the same issue that led to the recall of nearly 19 million Toyota vehicles worldwide from late 2009 to early 2011.

Toyota and its agent in Saudi Arabia, Abdul Latif Jameel Co, will install brake override systems in the affected vehicles, the Saudi Arabian Ministry of Commerce and Industry said in a statement this week.

This is the second country, after the United States, where installation of the brake override system to prevent runaway Toyota vehicles has been required, the statement said.

Toyota in an emailed statement said that its main Toyota brand and luxury Lexus brand vehicles “are safe even without” a brake override system.

Regulators in the United States in 2011 found that there was no electronic-based cause of unintended high-speed acceleration in Toyota vehicles.

But, Toyota said it recalled the vehicles in Saudi Arabia to “ensure customers’ peace of mind” and after the trade ministry’s “strong request” that software for a brake override system be installed, Toyota said in its emailed statement.

The Toyota brake override system automatically counteracts any instances of unintended acceleration, including cutting power to the engine.

The recall in Saudi Arabia affects seven Toyota brand and three Lexus brand vehicles from model years 2005 to 2011.

(Reporting by Bernie Woodall; Editing by Bob Burgdorfer)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/QOF_OCJo_E0/story01.htm

For New Year’s, Entrepreneur.com Gives You Our Ultimate Startup Toolkit

Is 2014 the year you finally put your innovation and entrepreneurial drive to work and start your own business?

Come on, admit it. You’ve toyed with the thought for a while. You had a business idea that was just a seed a month ago, but now has grown into something you believe can actually work.

Entrepreneurs are a unique offspring of the American dream, laser-focused in their belief that they can change the world by scribbling an idea on the back of a cocktail napkin and abandoning caution to turn that idea into a successful and profitable enterprise. We celebrate that at Entrepreneur, which is the online community for these dreamers, builders and executives.

Start here to realize your dream. Over the New Year’s holiday, we are giving you the best of our advice on starting a business. Learn the basics you need to start a company, hire employees, market your product and seal the deal with customers.

Think of it as a toolkit for innovators. You made your New Year’s resolution to start a business. Let us help you keep it.

More From Entrepreneur

Article source: http://finance.yahoo.com/news/years-entrepreneur-com-gives-ultimate-180039321.html

Tension rises ahead of Monte Paschi meeting on cash call


SIENA, Italy (Reuters) – Tensions at troubled Monte dei Paschi di Siena (BMPS.MI) grew on Friday with sources saying Chairman Alessandro Profumo may quit if the Italian bank’s top investor slaps him on the face by delaying a vital 3 billion euro ($4.11 billion) capital hike.

The world’s oldest bank was forced to accept 4.1 billion euros of state aid earlier this year after being hammered by the euro zone debt crisis and loss-making derivatives trades.

The Tuscan bank needs a cash call to repay the state aid and avert nationalization. Profumo and CEO Fabrizio Viola want to launch it in January and have asked shareholders to approve this time framework this week.

They have already secured a pool of banks ready to guarantee the rights issue and would like to carry it out quickly to remove uncertainty and avoid a string of cash calls by other European lenders that might make fundraising harder.

But the biggest shareholder – a cash-strapped not-for-profit foundation with close ties to politicians in Siena – is determined to push back the cash call to mid-2104 to win more time to sell down its 33.5 percent stake and repay debt.

A shareholder meeting due on Friday had to be reconvened for Saturday as only 49.3 percent of investors showed up, below the required 50 percent plus one legal threshold. This was mainly due to small investors still enjoying the Christmas break.

On Saturday, the quorum will be lowered to one third of shareholders, allowing the foundation to easily postpone the capital increase.

A stone-faced Profumo left Friday’s aborted meeting without making comments.

Aides and bankers close to the situation said Profumo, a strong-willed, internationally respected banker, could resign if the foundation votes against his proposal for a January cash call on Saturday as expected.

“He is very annoyed,” said an aide.

The 56-year old former CEO of UniCredit (CRDI.MI), who bought Germany’s Hypovereinsbank and Italy’s Capitalia while at the helm, left Italy’s largest bank by assets in 2010 after clashing with core shareholders, a group of baking foundations.

The millionaire banker, who chose to receive a token salary of around 60,000 euros when he joined the beleaguered Monte dei Paschi in April 2012, may decide to quit if the foundation publicly defies him with what would essentially amount to a no-confidence vote, insiders said.

Antonella Mansi, a feisty 39-year-old businesswoman recently appointed head of the Monte dei Paschi foundation, said on Friday she was serene. “See you tomorrow,” she told reporters, knowing she can count on a stake large enough to block any unwanted decision at Saturday’s meeting.

“It’s important to carry out the capital increase as early as possible,” said Roberto Lottici, fund manager at Ifigest. “Monte dei Paschi is being kept afloat by the state loans, but they are very costly.”

STATE AID

The rights issue, along with a tough restructuring plan, is among the conditions the European Commission imposed before giving its green light to the state aid for Monte dei Paschi.

The size of the capital increase is higher than the lender’s stock market value of around 2 billion euros and the operation is regarded as risky as the bank is still loss-making.

Monte dei Paschi shares rallied 4 percent in early trading, but dropped after the shareholder meeting was rescheduled. The stock was down 1.7 percent at 0.174 euros at 8:13 a.m. ET.

Siena mayor Bruno Valentini, whose city council is the top stakeholder in the Monte dei Paschi foundation, said postponing the cash call might help keep the bank in Italian hands.

“We cannot let the third biggest bank in this country fall prey to foreign interests,” he told reporters. “Monte dei Paschi is not just an issue in Siena, it is a big national issue.”

Saddled with around 340 million euros of debt, the foundation is looking for a buyer for all or part of its stake. It fears that a cash call next month would massively dilute its holding and leave it with virtually nothing to sell.

Profumo said last week that a delay would bring uncertainty and could force the bank to be nationalized.

Under the agreement with Brussels, if Monte dei Paschi cannot complete the capital increase by the end of 2014 the Treasury would convert the bonds it bought from the bank into shares, effectively nationalizing the bank.

The bank, which is axing 8,000 jobs and shutting 550 branches, said a delay in the cash call would add 120 million euros of costs from interest payments on the state debt.

(Additional reporting by Danilo Masoni; Editing by Lisa Jucca and Peter Graff)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fCN7Oj9Rx3Y/story01.htm