News Archive


Exclusive: Microsoft CEO Nadella to visit China amid antitrust probe


BEIJING (Reuters) – Microsoft Corp Chief Executive Officer Satya Nadella is set to visit China in late September, a source familiar with the matter said on Thursday, as the Chinese government conducts an antitrust investigation into the world’s largest software company.

It is not clear if Nadella, who took over as Microsoft CEO in February, will meet with any Chinese government representatives as part of his visit, or try to resolve issues with the State Administration for Industry and Commerce (SAIC), one of China’s antitrust regulators.

A Microsoft spokesman would not confirm the visit, saying the company does not comment on executive travel plans. SAIC officials could not immediately be reached for comment.

Microsoft is one of many foreign firms to have come under scrutiny as China seeks to enforce a 2008 anti-monopoly law, which some critics say is being used to unfairly target overseas businesses.

Foreign CEOs often pay calls on the world’s second-largest economy to strengthen business and political ties. Nadella would be at least the second major tech executive to have visited the country as antitrust tensions simmer.

Qualcomm Inc President Derek Aberle, looking to end to the wireless chip giant’s own antitrust scrutiny, met with China’s National Development and Reform Commission (NDRC) last week.

Nadella’s predecessor, Steve Ballmer, did occasionally go to China in his 14 years as CEO, but visits were rare to a country where Windows and Office are widely pirated. Ballmer said in 2011 that Microsoft got more revenue in the Netherlands than China.

Microsoft Deputy General Counsel Mary Snapp already met with SAIC officials in Beijing earlier this month to discuss the antitrust matter.

Despite the rampant Windows piracy, China’s SAIC initiated an antitrust probe into Microsoft earlier this month, saying that the company may have broken anti-monopoly laws regarding compatibility, bundling and document authentication for its Windows operating system and Office suite of applications.

On Tuesday, SAIC head Zhang Mao said at a briefing in Beijing his organization – one of three antitrust regulators in China – was focusing on Microsoft’s web browser and media player, and suspected the company had not been fully transparent with information about its Windows and Office sales. [ID:nL3N0QW1C5]

The investigation has been met with puzzlement outside China, given that Microsoft settled U.S. and European antitrust cases around Windows more than a decade ago, and its desktop software monopoly is now largely irrelevant with the explosion of tablets and phones running Apple Inc or Google Inc software.

The probe comes amid a spate of antitrust probes against foreign firms in China, including Qualcomm and German car maker Daimler AG’s luxury auto unit Mercedes-Benz, renewing fears of Chinese protectionism.

(Additional reporting by Bill Rigby in Seattle; Editing by Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/AuJo6ztHE0w/story01.htm

Tyson wins U.S. Justice Dept antitrust nod for Hillshire deal


WASHINGTON (Reuters) – Tyson Foods Inc (TSN.N), the largest U.S. meat processor, on Wednesday won U.S. antitrust approval for its $8.5 billion purchase of Hillshire Brands Co (HSH.N).

To win approval for the merger, the companies agreed to sell Heinold Hog Markets, the U.S. Department of Justice said. The attorneys general of Iowa, Illinois and Missouri, all big hog-producing states, joined the settlement.

“Today’s proposed settlement will help ensure that hog breeders in the United States will continue to receive the benefits of vigorous competition when selling sows,” said Bill Baer, assistant attorney general for DOJ’s antitrust division.

The two companies combined buy about 35 percent of all sows sold in the United States.

Tyson’s share price rallied on the approval, rising as much as 2 percent before closing at $37.71, up 1.5 percent. Hillshire closed near steady at $62.96.

But about 10 minutes before the Justice Department announced the deal, the share prices of both companies dropped sharply and there was a large increase in stock and options volume, suggesting that traders were bracing for bad news.

Trading volume for Hillshire totaled 8.07 million shares, compared with the 50-day average of 2.54 million; of the total, trading volume, almost 5.5 million came several minutes before and after the DOJ’s release, according to Reuters data.

Springdale, Arkansas-based Tyson is a massive seller of chicken, beef and pork while Chicago’s Hillshire sells packaged meat brands such as Jimmy Dean, Ball Park and State Fair as well as bakery products like Sara Lee.

The companies overlap in the business of buying sows when they are too old to breed, the Justice Department said.

Heinold Hog Markets, which had revenues of $270 million and has operations in Illinois, Iowa, Indiana, Michigan, Minnesota and Nebraska, buys the animals from farmers and resells them to manufacturers. Hillshire buys them to make sausage for its Jimmy Dean and Hillshire Farm brands.

“Although the sale of sows constitutes a small percentage of overall revenues, farmers rely on this source of income as an important contribution to their earnings,” the Justice Department said in a competitive impact statement filed with the U.S. District Court for the District of Columbia.

That court must approve the proposed settlement.

The deal had came under fire from some farm, consumer and rural organizations, as well as lawmakers like Senator Charles Grassley of Iowa, who worried that a larger Tyson will have power to push down the prices paid to hog farmers and drive up the prices paid by consumers at the grocery store.

“Because Tyson can align its pork slaughter business with Hillshire’s branded processing business, Hillshire products will have a leg up on competitors, who will likely have to raise prices,” said Wenonah Hunter, executive director of Food Water Watch.

In a statement, Grassley said that requiring the sale of Heinold showed the Justice Department “took my concerns into consideration in regard to the slaughter sow market.”

(Reporting by Diane Bartz; Editing by Ros Krasny, Sandra Maler, Lisa Shumaker and Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/aGEKT-aUD2I/story01.htm

Exclusive: GM plans to move some Chevy Equinox assembly to Mexico -source


DETROIT (Reuters) – General Motors Co and the United Auto Workers on Wednesday trumpeted the news that production of the Cadillac SRX would be shifted from Mexico to Tennessee, but Reuters has learned that GM also plans to move some other assembly work in the opposite direction.

The company plans to shift some production of the Chevrolet Equinox from Spring Hill, Tennessee, to Ramos Arizpe, Mexico, when the crossover vehicle is redesigned in 2017, according to an industry source familiar with GM’s plans. That move could partially offset any new jobs created by the shift of SRX work from Ramos Arizpe to Spring Hill, which is expected in mid-2016, the source said.

Both GM and the UAW declined to comment on whether the Equinox work would move to Mexico.

As for how many jobs the addition of the SRX at Spring Hill would create, based on current and projected figures provided by GM, Reuters estimates the move could add about 200 jobs at the plant. A GM spokesman said it would be “fair to say” there would be a net increase but declined to be specific.

Earlier in the day, UAW President Dennis Williams said in a statement that the shift of Cadillac production from Mexico to the United States was “a big victory” for the union. The UAW declined to say how many jobs would be added in Spring Hill.

GM told Reuters on Wednesday that the current SRX will continue to be assembled in Mexico for an unspecified period of time after the new SRX begins production in Spring Hill.

GM said a year ago it planned to invest $350 million in the Spring Hill plant, which was built originally for GM’s now-defunct Saturn brand. At the time, GM said the Spring Hill plant would be retooled to build two new midsize crossover vehicles.

In addition to the new SRX, the plant is expected to build a replacement for the GMC Acadia, according to the source, who spoke on condition of anonymity.

On Wednesday, GM said it will invest another $185 million to build a new class of engine in Spring Hill. The engine plant will retain about 390 jobs, GM said.

The retooled vehicle assembly plant will require about 1,800 hourly workers, GM said.

The Spring Hill complex currently employs just over 2,000 hourly and contract workers in vehicle and engine assembly, stamping and molding operations.

GM plans to build the next-generation Equinox, along with a replacement for the GMC Terrain, another crossover, in Ingersoll, Ontario and Ramos Arizpe, according to the source.

During contract talks in 2011, concessions granted by the UAW to GM before the automaker’s 2009 bankruptcy, including the establishment of a two-tier wage system, helped GM decide to make the Equinox at Spring Hill instead of producing it in Mexico. A hallmark of the four-year agreement signed in 2011 was new work at several plants, including Spring Hill, instead of raises for veteran union auto workers.

GM suspended production of autos at Spring Hill in 2009. The plant continued to operate at reduced capacity as an engine plant until 2012 when GM resumed building vehicles there.

The former Saturn plant was once the site of GM’s experiment with a more collaborative relationship with workers based in part on the model of Japanese automakers led by Toyota Motor Corp.

GM scrapped the Saturn brand in 2009. By that time, Saturn production had been already shifted away from Spring Hill.

(Reporting by Paul Lienert and Bernie Woodall in Detroit; Additional reporting by Veronica Gomez in Mexico City; Editing by Jonathan Oatis, Eric Effron and Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/hePr71WeJ8w/story01.htm

Boeing plan would bring Silicon Valley services to its South Carolina site


NORTH CHARLESTON S.C. (Reuters) – Boeing Co is expected to receive final approval on Thursday to build what could be a Silicon Valley-style corporate campus as part of a major expansion of its factory in South Carolina.

Boeing has asked officials to rezone 466 acres of newly acquired land for use as an “Aerospace Campus,” with dining and other consumer conveniences more familiar to employees of Amazon.com Inc or Google Inc than airplane factory workers.

Boeing, which tends to be guarded about any future expansion, said there no immediate plans to start erecting the new services, but it is not ruling them out.

The conceptual plan shows the “maximum utilization” of the site “as potential future business needs might dictate,” spokeswoman Candy Eslinger said.

The new zoning would enable Boeing to include restaurants, coffee shops, cafes, dry cleaners, office supply stores, travel agencies, barber shops, newsstands, convenience stores, and child care, health and postal facilities, according to plans filed with the city of North Charleston.

The proposed expansion, due for a vote by city officials on Thursday, highlights the growing potential of Boeing’s South Carolina factory. The plans also stand out in the community, said city planner Charles Drayton.

“They’re building a corporate atmosphere, more than just an industrial park,” he said. “It’s unusual in North Charleston.”

Planned communities in the city of just over 100,000 residents are mostly associated with residential and commercial use, Drayton said. “This one happens to be industrial and commercial, which makes it unique.”

Boeing’s North Charleston facilities currently are configured to make three 787s a month, and fuselage sections for the high-tech jet. It also will be the only site making Boeing’s biggest Dreamliner, the 787-10, which is due out in 2018.

Boeing’s plans, which show no timeline for construction, call for development of a new manufacturing plant, airplane parking, throughways for airplane and parts movement. The new 466-acre campus will add to the current footprint of 275 acres in North Charleston. Boeing has a long-term lease on the land.

The manufacturing plant would take up 79 acres on the new campus, the documents show. Parking and movement areas for airplanes and airplane parts would take up 126 acres. Space is allowed for offices, car parking and circulation, storm water detention and buffer zones.

Boeing also is expanding at its plant in Everett, Washington, where it also makes 787s. On Aug. 13, the company broke ground there on a new wing facility for its 777X jetliner, which is due in 2020.

Boeing’s North Charleston plan has already been approved by the city’s public safety committee, officials said. Wetlands mitigation has been approved by the U.S. Army Corps of Engineers. Drayton said the plan had been recommended by planning staff.

(Reporting by Harriet McLeod; Editing by Alwyn Scott and Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Fta9xnEi474/story01.htm

U.S. judge rejects Apple bid for injunction against Samsung


SAN FRANCISCO (Reuters) – A U.S. judge rejected Apple Inc’s latest bid for a permanent injunction against Samsung Electronics Co Ltd in another sign of the diminishing impact of the smartphone patent wars.

Apple won a $120 million jury verdict against Samsung earlier this year over three Apple patents. However, U.S. District Judge Lucy Koh in San Jose, California, on Wednesday denied Apple’s request to stop Samsung from selling infringing features on its smartphones related to those patents.

An Apple spokeswoman declined to comment. In a statement, Samsung said it welcomed the ruling. “We remain committed to providing American consumers with a wide choice of innovative products,” Samsung said.

Until this year, the two leaders in mobile technology had been engaged in global patent litigation over Samsung’s phones that use Google’s Android operating system. However, Apple and Samsung agreed earlier this month to drop all patent lawsuits outside the United States.

In her ruling on Monday, Koh ruled that Apple’s reputation as an innovator “has proved extremely robust” despite Samsung’s patent infringement.

“Apple has not demonstrated that it will suffer irreparable harm to its reputation or goodwill as an innovator without an injunction,” Koh wrote.

Samsung is still appealing the result of a blockbuster 2012 trial over a separate batch of patents, with Samsung seeking to undo $930 million in damages. And while Apple says those damages should stand, the iPhone maker is no longer asking an appeals court to revive its bid for a permanent sales ban against several older Samsung phones.

The case in U.S. District Court, Northern District of California is Apple Inc vs. Samsung Electronics Co Ltd, 12-630.

(Reporting by Dan Levine; Editing by Chizu Nomiyama, Bernard Orr and Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/gCa0y2BMY6o/story01.htm

Mega-IPO to rekindle the ‘bromance’ behind Alibaba’s rise


BEIJING (Reuters) – Masayoshi Son’s nose for an investment has turned a $20 million start-up punt on Alibaba into a stake worth maybe $50 billion or more as the Chinese e-commerce giant co-founded and led by Jack Ma heads to what could be the biggest U.S. tech IPO of all time.

Son, CEO of Japanese telecoms firm SoftBank Corp, also put money into a young Yahoo Inc, co-founded by Jerry Yang, in 1995, and Yahoo’s subsequent investment in Alibaba saw Ma, Son and Yang build Alibaba Group Holding Ltd [IPO-BABA.N] into one of world’s biggest internet companies as China’s e-commerce market took off.

“It was the look in his eye, it was an ‘animal smell’,” said Son of his decision to back Ma when they first met in 2000. “It was the same when we invested in Yahoo … when they were still only 5-6 people. I invested based on my sense of smell,” he quipped in a group media interview in May.

Under pressure from investors, Yang quit Yahoo in early 2012 and gave up his seat on Alibaba’s board. He is now a founding partner of AME Cloud Ventures, a San Francisco venture fund.

But next month, the three poster boys for Asian technology entrepreneurship, bound by a shared ambition and a taste for sushi and golf, are set to be reunited on Alibaba’s board following the firm’s long-awaited New York IPO.

For potential IPO investors, the reunion – Yang will be an independent director, while Son will be a director and Ma the executive chairman – is likely to further tighten Ma’s control over the company as Son and Yang tend to follow his direction, former Alibaba, SoftBank and Yahoo insiders said.

SoftBank has a 34 percent stake in Alibaba, and Yahoo owns 23 percent. Son has said SoftBank doesn’t plan to sell down its Alibaba stake in the IPO, while Yahoo may sell up to about 16.5 percent of Alibaba.

Alibaba, SoftBank and a spokesman for Yang declined to make Ma, Son and Yang available for interview for this article.

“MR. TEN TIMES”

The son of a pachinko parlor operator, Son has risen to the top of Forbes’ Japan rich-list, forging SoftBank into a tech titan worth $84 billion, making it Japan’s second-most valuable listed company behind Toyota Motor Corp.

SoftBank increased its stake in Yahoo in 1996, buying into the U.S. firm’s IPO to become its primary shareholder. The stake has since been whittled down to almost nothing, but the two remain Yahoo Japan Corp’s biggest investors, each holding more than a third of the Japanese firm.

In 2000, Son met Ma, an elfin and outspoken former English teacher from China’s eastern city of Hangzhou. The two, who often joke about being both short and smart, according to a person close to Son, saw each other as kindred spirits. Their shared drive helped Alibaba grow from just 18 people working out of an apartment to a company with more than 22,000 employees and global ambitions.

David Wei, a former CEO of Alibaba.com and co-founder of Vision Knight Capital, recalled how he nicknamed Son “Mr. Ten Times”. “Every time I explained any business plan or model, Masa’s first reaction was to say, ‘David, can this be ten times bigger?'” said Wei. “In the cases I managed to answer, he would ask again, ‘What about ten times more?'”

“CRAZY” MEN

When Ma first heard that Son was in China sniffing out potential investments, he emailed him and snagged some brief ‘face time’. After just five minutes of listening to Ma riffing on his vision from a scrap of paper, Son extended the meeting and ended up investing 2 billion yen (about $20 million at the time) in Ma’s company.

“Ma is a ‘never-say-die’ kind of person, but really there was only one person who understood him, and look how much money it’s earned Masayoshi Son,” said Shou Yuan, a former Alibaba employee acquainted with Ma and Son. “Son has a lot of self-confidence, he’s even conceited, but his appearance is always one of modesty. He’s crazy, but Ma’s also crazy. It’s very common for crazy people to like each other.”

When Alibaba launched its Taobao consumer-to-consumer marketplace in 2003, Son donated his wristwatch to be sold on the new site and, as the pair met more frequently, Ma developed a love for Japanese food. “Jack always loved the best Japanese food … and the best Japanese food in Japan can always be generated by Masa,” said Wei, the former Alibaba.com chief.

Yang, who like Son has a Japanese wife, shares the taste for good Japanese cuisine, and is a frequent diner at a small sushi bar in Los Altos, California, a popular hangout for Silicon Valley heavyweights including Google’s Sergey Brin.

A PHILOSOPHICAL PAIRING

Ma first met Yang in the late 1990s, when he was working for the government and acted as Yang’s official guide to the Great Wall. By 2005, their friendship had developed and the idea of Yahoo investing in Alibaba came up.

Yang contacted Ma at the prompting of senior Yahoo executives who were trying to figure out how best to get a foothold in the China market, said a former Yahoo executive familiar with the Alibaba transaction.

“Jerry was reluctant at first because it was very difficult to do business with Chinese entrepreneurs,” he said. “(Yang and Ma) spent a lot of time together, they had to get to know each other, build a relationship … Almost all were quiet, deep discussions, philosophical, full of Chinese proverbs – particularly from Jack.”

Ma kept Son in the loop in the months running up to Yahoo’s investment, and even took up golf so he could bond with Yang. “Jack committed a lot of effort to learning golf, I think because Jerry invited him, and he couldn’t play,” Wei said.

The final decision – with Yahoo buying a 40 percent stake in Alibaba for more than $1 billion – was made at a Pebble Beach golfing retreat exclusively for Chinese professionals. “Jack really liked Jerry’s personality,” said a person whose firm invested in Alibaba. “Jerry really solidified that deal.”

Son, who can also show a domineering streak, was reluctant to reduce the size of his valuable Alibaba ‘insider’ stake by selling to Yahoo, but Ma eventually won him over.

“The only place where there was challenge (to Ma) was about taking the initial investment from Yahoo. Son’s biggest point was that he didn’t want to sell anything to Yahoo,” said another person whose firm invested in Alibaba. “As part of that deal insiders had to sell 40 percent of their stake, and Masa fought that tooth and nail.”

With Yahoo on the board and its money and China operations in Alibaba’s hands, the Ma, Son and Yang triumvirate envisioned an alliance between their three companies that could one day knock Google out of China, said people close to them.

On the board, the three always acted in harmony in meetings with Alibaba executives, said former executive Wei. But their management styles were very different.

“When Masa talks, nobody else talks,” Wei said, but Yang’s style was more American, more inclusive. “When other Yahoo representatives were there he’d always talk last. He’d encourage others to share their ideas, thoughts, challenges.”

EXISTENTIAL THREAT

However, while Yang’s investment in Alibaba was lauded as one of his best decisions at Yahoo, the stake was big enough to rankle Beijing, which feared the U.S. firm held too much sway over Alibaba, people familiar with the matter said.

“Yahoo essentially became a liability – their investment in Alibaba posed an existential threat to the company,” said a person involved in the partnership at the time.

Yahoo China’s search engine was subject to local censorship in line with the government’s control of the Chinese internet, and Yahoo’s reputation back home was dented when the China business handed over a local dissident’s e-mails to Beijing, resulting in his imprisonment.

Ma and Yang, however, remained close even after Ma split Alipay, an online payment subsidiary, from Alibaba in 2011 without the board’s approval, said people who know the two men. Yang was reluctant to challenge Ma over the move, sitting on his hands rather than addressing the issue, the people said.

More recently, Yang has been instrumental in helping Alibaba get a foothold in Silicon Valley as the Chinese group increases its overseas investments. He introduced Alibaba to Tango, a mobile messaging app-maker in which he was already invested. Alibaba later paid $215 million for a minority stake.

Son, too, has supported Ma – who sits on SoftBank’s board – particularly when Alibaba last year traded blows with the Hong Kong Stock Exchange over a controversial proposed listing structure.

“Son’s involvement and advice regarding Alibaba’s business have been huge,” said a SoftBank executive who didn’t want to be named because of the personal nature of his comments.

Having his two key allies back on Alibaba’s board will further cement Ma’s grip on the company even as the IPO opens Alibaba up for outside investors.

“(Ma) doesn’t have much patience for people who get in the way of the ideals he’s pursuing,” said the person involved in the Yahoo-Alibaba partnership.

(1 US dollar = 102.4400 Japanese yen)

(Additional reporting by Norihiko Shirouzu in BEIJING, Yoshiyasu Shida in TOKYO and Alexei Oreskovic and Gerry Shih in SAN FRANCISCO; Editing by Ian Geoghegan)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/601sVXkJRsw/story01.htm

InterMune drug may offer big upside to Roche if aimed at liver


(Reuters) – Roche Holding AG’s planned $8 billion purchase of InterMune Inc is centered around hopes for blockbuster sales of its lung drug, but the smaller company’s development pipeline may end up giving the Swiss drugmaker a far bigger bang for its buck.

Industry analysts have forecast annual sales of about $2 billion for the pulmonary fibrosis treatment, pirfenidone, once it gains U.S. approval, giving Roche a valuable addition to its respiratory franchise.

But the company is expected next year to begin clinical trials of ten-fold more potent next-generation drugs that could also treat similar damage to the liver and kidneys as well as lungs.

Success there could be a game-changer, given the unmet medical need to treat liver and kidney scarring that can be caused by factors such as obesity, diabetes and alcohol and drug abuse.

“Liver fibrosis is a huge, multibillion-dollar market that’s far bigger than the lung fibrosis market,” said Katherine Xu, an analyst with William Blair Co. “It involves millions of patients in the United States, versus 100,000.”

Pirfenidone, a pill with annual sales of about $150 million in Europe and Canada, treats a progressive scarring condition of the lungs called idiopathic pulmonary fibrosis that typically kills patients within a few years.

Roche announced its proposed $8.3 billion cash purchase of InterMune on Sunday.

The two companies have barely mentioned the liver potential of the newer formulations as they focus on unlocking the value of pirfenidone by winning U.S. approval of the drug for lung fibrosis. The Food and Drug Administration awarded the medicine its “breakthrough” designation – a signal the agency sees it as a potentially important new therapy.

The FDA approval is expected this year following large trials that showed it prolonged patient lives. A rival drug from privately held Boehringer Ingelheim is also expected to gain U.S. approval this year.

While the focus has been on the potential of pirfenidone to treat lung damage, Dr Talmadge King, chairman of the Department of Medicine at the University of California, San Francisco, said fibrosis is believed to occur in a similar way throughout the body, including the heart.

“If you can get the drug to the site and slow or prevent the process from occurring … it has the potential to have a positive effect in a number of organ systems, so I would assume that that’s where it’s going to head in time,” said King, a lung specialist who led the large late-stage trial of pirfenidone upon which InterMune based its U.S. marketing application.

InterMune’s research chief, Scott Seiwert, said animal studies suggest that the newer formulations of pirfenidone have “a much milder side-effect profile.”

InterMune has said trials of its potent next-generation pirfenidone analogues could involve patients with lung, liver or kidney fibrosis. Seiwert declined to predict what the Roche strategy will be.

Many analysts have yet to delve into the InterMune pipeline’s potential of treating liver and kidney fibrosis.

“It’s not something we’ve included in our valuation” of InterMune, said Morningstar analyst Karen Andersen, given the many failures of other drugs that have attempted to treat liver fibrosis, and InterMune’s focus on preparing for the U.S. launch of pirfenidone.

She noted that huge sales of new drugs for hepatitis C, especially Gilead Sciences Inc’s Sovaldi, “have drawn a lot more attention to liver-related diseases.”

Gilead and Biogen Idec Inc are developing injectable drugs against pulmonary fibrosis, with Gilead also testing its drug against liver fibrosis. But they are a few years away from seeking approval, and Andersen predicted InterMune will be the entrenched leader.

(Reporting by Ransdell Pierson and Bill Berkrot in New York; editing by Matthew Lewis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/I2rHp5Jg01M/story01.htm

Exclusive: GM moving some production between Mexico and Tennessee


DETROIT (Reuters) – General Motors Co is shifting some production of the Cadillac SRX from Mexico to Tennessee, but will partly offset that by moving some Chevrolet Equinox manufacturing from Tennessee to Mexico, an industry source told Reuters.

GM announced the Cadillac move on Wednesday at its Spring Hill, Tennessee plant outside Nashville, but declined to comment on the Chevrolet move.

A GM spokesman said the production changes at Spring Hill likely would result in the creation of more U.S. jobs but declined to say how many.

UAW President Dennis Williams said in a statement that the shift of Cadillac production from Mexico to the United States “is a big victory” for collective bargaining.

The UAW declined to comment on the report that GM planned to shift some production of the Equinox, a crossover vehicle, from Spring Hill to Ramos Arizpe, where the SRX, also a crossover, currently is built, when both models are redesigned in 2016-2017.

GM said the current SRX will continue to be assembled in Ramos Arizpe for an unspecified period of time after the new SRX begins production in Spring Hill

GM said a year ago it planned to invest $350 million in the Spring Hill plant, which was built originally for GM’s now-defunct Saturn brand. At the time, GM said the Spring Hill plant would be retooled to build two new midsize crossover vehicles.

The plant is expected to begin building replacements for the SRX and the GMC Acadia, beginning in mid-2016, according to a source familiar with GM’s plans who spoke on condition of anonymity.

On Wednesday, GM said it will invest another $185 million to build a new class of engine in Spring Hill. The engine plant will retain about 390 jobs, GM said.

The retooled vehicle assembly plant will require about 1,800 hourly workers, GM said.

The Spring Hill complex currently employs just over 2,000 hourly and contract workers in vehicle and engine assembly, stamping and molding operations.

The Equinox is expected to be redesigned about a year after the SRX, the source said. GM plans to build the next-generation Equinox, along with a replacement for the GMC Terrain, another crossover, in Ingersoll, Ontario and Ramos Arizpe, according to the source.

During contract talks in 2011, concessions granted by the UAW to GM before the automaker’s 2009 bankruptcy, including the establishment of a two-tier wage system, helped GM decide to make the Equinox at Spring Hill instead of producing it in Mexico. A hallmark of the four-year agreement signed in 2011 was new work at several plants, including Spring Hill, instead of raises for veteran union auto workers.

GM suspended production of autos at Spring Hill in 2009. The plant continued to operate at reduced capacity as an engine plant until 2012 when GM resumed building vehicles there.

The former Saturn plant was once the site of GM’s experiment with a more collaborative relationship with workers based in part on the model of Japanese automakers led by Toyota Motor Corp.

GM scrapped the Saturn brand in 2009. By that time, Saturn production had been already shifted away from Spring Hill.

(Reporting by Paul Lienert and Bernie Woodall in Detroit; Additional reporting by Veronica Gomez in Mexico City; Editing by Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/zxruLotJK2g/story01.htm

Wall Street drifts to another record in light trading


NEW YORK (Reuters) – U.S. stocks were little changed on Wednesday, with the SP 500 creeping up to another record closing high in a lethargic session, though a number of retail stocks traded heavily after reporting results.

Both Tiffany Co and apparel retailer Express Inc rose after posting quarterly revenue that topped expectations and raising their full-year profit views.

Shares of Tiffany rose 1 percent to $101.75 while Express jumped 12.7 percent to $16.45 on volume that easily eclipsed its 50-day average.

Best Buy Co Inc was the SP 500’s biggest percentage gainer, up 6.3 percent at $31.69. The electronics retailer rebounded from a 6.8 percent plunge on Tuesday after it forecast a drop in full-year sales.

The SP retail index edged up 0.1 percent. After a sluggish start to the year, the index is up 8.4 percent for August, on pace for its best month since October 2011.

On the downside, apparel retailer Chico’s FAS Inc fell 4.6 percent to $15.29 after its results.

The retailers “are always late in the earnings season announcements, so there has been a lot of volatility due to earnings at a time of low volume,” said Robert Eschweiler, global investment specialist at JPMorgan Private Bank in Houston.

“In a lot of cases there has been a lot of short activity, so you get big moves in either direction,” he said.

Volume was depressed with some market participants on vacation ahead of the Labor Day long holiday weekend in the United States.

The Dow Jones industrial average rose 15.31 points, or 0.09 percent, to 17,122.01. The SP 500 gained 0.1 point, or 0.01 percent, to 2,000.12, and the Nasdaq Composite dropped 1.02 points, or 0.02 percent, to 4,569.62.

The SP was slightly below the 2,000 mark as the closing bell rang, but it crept marginally higher to set a record close as trading settled, its 31st record close of the year.

Analog Devices Inc was one of the SP 500’s biggest decliners, off 2.3 percent at $51.03 a day after reporting third-quarter results.

Even so, the Nasdaq 100 notched its 11th straight advance, its longest winning streak in about 14 months.

Digital Ally Inc slumped 19.5 percent to $11.49 on heavy volume, pulling back after a massive rally that had driven the stock’s price up more than 200 percent in August. The wearable camera maker has reported heightened demand since Aug. 9, when a white police officer shot and killed an unarmed black teen in Ferguson, Missouri, triggering weeks of protests.

Volume was thin, with about 4.05 billion shares traded on U.S. exchanges, well below the 5.39 billion average so far this month, according to data from BATS Global Markets.

Advancing stocks outnumbered declining ones on the NYSE by 1,705 to 1,305, while on the Nasdaq, decliners beat advancers 1,492 to 1,179.

(Reporting by Chuck Mikolajczak; Editing by Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Qp2yEqROxwc/story01.htm