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Boeing books $2.6 billion order from

NEW YORK Boeing Co (BA.N) said on Thursday it had booked an order for 27 of its 737-800 aircraft, worth about $2.6 billion at list prices, from UK airline

The planes, due to be delivered over the next two years, will boost the leisure airline’s all-Boeing fleet to nearly 87 aircraft. It has just under 60 currently.

The airline is a unit of Dart Group PLC (DTG.L), and flies to 55 destinations from seven UK airports.

The order lifts Boeing’s order backlog of current generation 737s to 1,400 planes. It has an additional 2,869 orders for the forthcoming 737 MAX aircraft, due to enter service in 2017.

Boeing also said on Thursday it had firmed up orders for 30 of its 737 MAX jets from Ruili Airlines, a Chinese startup.

The provisional order, valued at about $3.2 billion at list prices, was announced at the Paris Airshow in June.

(Reporting by Alwyn Scott; Editing by Tom Brown)

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Cyber missions could fuel Boeing EA-18G orders: U.S. Navy chief

WASHINGTON The Pentagon is evaluating whether potential cyber missions could drive demand for additional Boeing Co (BA.N) EA-18G electronic attack jets, or Growlers, the top U.S. Navy officer told Reuters on Thursday.

Chief of Naval Operations Admiral Jonathan Greenert said any decisions about additional orders of Growlers should be included in the Pentagon’s budget request for fiscal 2017, since Boeing will shut the production line after all orders have been fulfilled.

Greenert said it was imperative to map out any additional orders now, given the high cost of restarting production once the line closed.

“This is kind of a no-fail deal,” he said in an interview. Boeing was pursuing several other foreign orders, but he did not believe they were large enough to sustain production of the jets.

Boeing’s combined St. Louis production line for F/A-18E/F fighter jets and the EA-18G Growlers was slated to shut in 2017, until Congress added funding for 12 more F/A-18E/F Super Hornets to the fiscal 2016 budget plan, and Boeing signed a deal to sell 28 of the jets to Kuwait.

If those orders are confirmed, the line should remain open well into 2019, Boeing has said.

Greenert, who will retire and be replaced by Admiral John Richardson on Sept. 18, said the Navy still believed its planned purchase of 153 Growlers was sufficient, but more work was underway to assess the needs of other military services, as well as the possible use for cyber missions.

He said the Navy had asked the Pentagon’s Cost Analysis and Program Evaluation (CAPE) office to evaluate the electronic warfare needs of the U.S. Air Force and Marine Corps.

Navy officials had estimated that the two services might need about 30 more Growlers to meet their needs, according to sources familiar with the study, although both services had told Navy officials they planned to satisfy their requirements using the Lockheed Martin Corp (LMT.N) F-35 fighter jet. The sources requested anonymity because the study was incomplete.

Greenert said a department-wide review of electronic warfare needs had also revealed a possible need to outfit Growlers or other aircraft with special cyber “pods” or “nodes” that could be used for jamming or infiltrating enemy computer networks, and removing information.

That issue was still being evaluated by the military services, and would also include U.S. Cyber Command and the staff of the Joint Chiefs, he said, adding that he expected the fiscal 2017 budget proposal to provide clear answers about the number of jets needed.

Greenert said the Navy was watching for possible shortfalls of F/A-18E/F fighter jets on its aircraft carriers, given delays in the F-35 program and lengthy repair times for existing jets.

He said the Navy had made progress in speeding up repairs of older jets, which could limit the need for more Super Hornets. “I think we’ll manage our way through that,” Greenert said.

Boeing had no immediate comment.

Greenert said the Navy remained focused on improving cybersecurity after a major breach of the unclassified Navy-Marine Corp network last year, and would dedicate “hundreds of millions of dollars” to the effort, beginning in October.

(Reporting by Andrea Shalal; Editing by Richard Chang)

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Chipotle critic turns up heat with ‘Chubby Chipotle’ ad

LOS ANGELES Chipotle Mexican Grill Inc (CMG.N), known for its indulgent burritos, is battling a “Chubby Chipotle” ad campaign from the food industry group whose “Nanny” ads helped sink New York City’s ban on super-sized sugary drinks.

The Center for Consumer Freedom’s full-page advertisement in Thursday’s New York Post depicts a smiling, shirtless, overweight young man flexing one arm and resting the other on his ample tummy.

The text under the “‘Chipotle’ Healthy” headline reads: “Eat two ‘all natural’ Chipotle burritos a week and you could gain 40 pounds in a year.”

It urges consumers to find out more at, a site that calls the company’s executives “fast food hypocrites” for claiming that Chipotle’s menu is GMO-free and for bending their own rules on “no antibiotics ever”.

The CCF, founded by powerful lobbyist Rick Berman to fight smoking bans in eateries, said it is supported by restaurants, foundations and individuals. It declined to name the company that funded the latest Chipotle campaign.

The ad is “a deliberate effort to smear us,” Chipotle spokesman Chris Arnold said.

“These are agenda-driven people who are being backed by unknown parties. It doesn’t matter who they are as long as they pay,” Arnold said.

Public health experts have warned that Chipotle dishes loaded with cheese, sour cream and guacamole can approach or exceed daily recommended allowances for calories, sodium and saturated fat.

The company said it is different from other chains because diners choose what goes into each Chipotle meal.

The CCF ad is the latest blow against the popular company.

A California woman earlier this week accused Chipotle of false advertising related to its claim that it had removed genetically modified organisms, or GMOs, from its food when many of its beverages contain a sweetener made with genetically modified corn.

Arnold called the lawsuit “meritless” and “filled with inaccuracies.” He added that Chipotle has been transparent about GMOs in beverages.

Chipotle won a loyal following by offering meat from animals that have never received antibiotics. Still, critics are quick to note that it serves conventionally raised chicken when such supplies fall short. And, Chipotle recently cited tight supplies for its decision to allow a new pork producer to use antibiotics to treat animal illness “only when necessary.”

The CCF in 2013 fought then-New York City Mayor Michael Bloomberg’s proposed obesity-fighting sales ban on large sugary beverages by depicting him as a nanny.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Bernard Orr)

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Fiat Chrysler says talking with UAW union about health care co-op

DETROIT Fiat Chrysler Automobiles (FCAU.N)(FCHA.MI) is considering a health care co-op proposed by the United Auto Workers to cut rising costs.

“Yes, we are talking to them (the union) about a co-op and it is an idea we support,” said FCA spokeswoman Jodi Tinson on Thursday.

In June, UAW President Dennis Williams publicly proposed combining workers from FCA, Ford Motor Co (F.N) and General Motors (GM.N) to have more leverage in dealing with health care providers.

(Reporting by Bernie Woodall; Editing by Chris Reese)

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VW’s unassuming CFO emerges from boardroom wars as chairman

FRANKFURT Austrian Hans Dieter Poetsch, Volkswagen AG’s (VOWG_p.DE) finance chief, faces a massive task in his future role as chairman – to maintain the support of the often divided stakeholders who have chosen to back him while improving the carmaker’s profitability.

Although Volkswagen Group has grown to become the world’s largest carmaker it has proven to be one of the most difficult companies to manage as radical reforms can be blocked by labour representatives, who hold half the seats on the supervisory board, and its home state of Lower Saxony, which controls a 20 percent stake in the company.

Poetsch, who has been VW’s chief financial officer for 13 years, was chosen as chairman on Thursday because he is seen as a relatively neutral and unthreatening figure.

Unlike some other senior VW engineers, he has avoided becoming seen as too beholden to ousted former chairman Ferdinand Piech or Chief Executive Martin Winterkorn.

Poetsch’s gentle demeanour should help him mend fences at VW which has been rocked by the clash between Piech and Winterkorn, but analysts and observers wonder whether a consensus-oriented approach is what VW needs right now.

Ferdinand Dudenhoeffer, professor of automotive industry economics at the University of Duisburg Essen, said Poetsch, a former chief executive of automotive paintshop systems manufacturer Duerr (DUEG.DE), was a bad choice.

“He’s nice, approachable. He’s good to go out for a drink or a bite to eat with. He’s not the type who likes conflict,” Dudenhoeffer said. “He’s a stop-gap because they couldn’t find a strong external candidate.”


However, Volkswagen’s belief that it makes the best cars in the world is seen as having led it to a German-centric, top-down management approach that has prevented it from developing cars that meet the tastes of Chinese and American consumers.

“Peace is the worst thing that can happen to VW. That means ‘keep going in the same direction’,” Dudenhoeffer said.

Piech, the departed industrial scion and grandson of Beetle designer Ferdinand Porsche, was no stranger to conflict and radical decisions.

For years, he managed the balance of power between powerful labour representatives, senior VW managers and shareholders, sometimes by ousting his own staff, as in the case of former CEO Bernd Pischetsrieder.

Meanwhile, Poetsch worked in the background, ensuring that Volkswagen Group had the financial means to absorb bold acquisitions masterminded by his fellow Austrian, Piech, such as the purchase of truck makers MAN (MANG.DE) and Scania (SVKBF.PK), sportscar maker Porsche and motorbike maker Ducati [DUMTG.UL].

Now he faces the task of reining in some of VW’s bloated operations to boost profits, even if that means making himself unpopular at headquarters by cutting jobs at home.

“He has a clear understanding of the key financial problems the group is facing,” said Evercore ISI analyst Arndt Ellinghorst, welcoming the appointment.

After years of chasing growth VW overtook Toyota (7203.T) as the world’s largest carmaker earlier this year, delivering 5.04 million vehicles in the January to June period, ahead of Toyota’s 5.02 million, but it did so far less efficiently.

In the quarter ended June 30, Toyota had 342,872 employees. In contrast, Volkswagen has 597,800 staff, according to quarterly results.

A former head of group controlling at BMW, Poetsch also has plenty of insight into engineering processes, having studied industrial engineering at the Technical University in Darmstadt before spending his entire career in finance.

Given his focus on the numbers, and his success in integrating Porsche, VW’s rival factions threw their backing behind Poetsch to hold the role as chairman, a post which casts the deciding vote on any restructuring decisions.

“His appointment lays the foundations for a trusting relationship between the management and supervisory board,” Lower Saxony premier Stephan Weil said in a statement. “The naming of Poetsch is a good decision for Volkswagen and therefore also for Lower Saxony.”

(This story has been refiled to correct punctuation in first sentence)

(Writing by Edward Taylor; Editing by Greg Mahlich)

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U.S. sanctions against Chinese firms could be next week: FT

The United States is preparing to sanction Chinese companies connected to the cyber theft of U.S. intellectual property as early as next week, the Financial Times reported on Thursday.

The FT cited three U.S. officials as saying the sanctions probably would come next week in advance of Chinese President Xi Jinping’s visit later in the month.

Suspicions that Chinese hackers were behind a series of data breaches in the United States have been an irritant in relations between the United States and China.

The United States is also considering sanctions against Russian individuals and companies for cyber attacks, U.S. officials have told Reuters.

The officials, who spoke on condition of anonymity, had said

any move against Chinese entities or individuals before Xi’s trip was possible but unlikely because of the strain it could put on the visit. It will include a state dinner at the White House hosted by President Barack Obama.

“The Chinese government staunchly upholds cyber security, firmly opposes and combats all forms of cyber attacks in accordance with law,” Chinese Embassy spokesman Zhu Haiquan said in a statement earlier this week.

Asked about the possibility of sanctions coming next week, State Department spokesman Mark Toner told reporters, “When it comes to economic sanctions, we don’t preview any kind of sanctions beforehand for obvious reasons. We don’t want to give a heads-up to those who may be potential targets of economic sanctions to begin to take steps to evade sanctions activity.”

Zhu said China wants enhanced dialogue and cooperation with the United States and that “groundless speculation, hyping up or accusation is not helpful to solve the problem.”

The U.S. government has suffered a series of embarrassing cyber attacks in recent months, including one on the White House Office of Personnel Management (OPM) that potentially provided a treasure trove of data about government employees to foreign spies.

U.S. officials suspect that attack was linked to China, which has denied any involvement in hacking U.S. databases and says it too has been a victim of cyber attacks.

The sanctions Washington is currently considering would not target suspected hackers of government data, but rather foreign citizens and firms believed responsible for cyber attacks on commercial enterprises, one U.S. official said.

If taken, the action would be the administration’s first use of an executive order signed by Obama in April to crack down on foreign hackers accused of penetrating U.S. computer systems.

(Writing by Bill Trott; Editing by David Storey, Bernard Orr and Alan Crosby)

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Wall Street higher ahead of key U.S. jobs data

NEW YORK Wall Street rose on Thursday after European Central Bank chief Mario Draghi hinted at additional stimulus measures and ahead of a key U.S. jobs report that may figure in the Federal Reserve’s decision about when to lift interest rates.

The Dow Jones industrial average .DJI rose 23.12 points, or 0.14 percent, to 16,374.5, the SP 500 .SPX gained 2.19 points, or 0.11 percent, to 1,951.05 and the Nasdaq Composite .IXIC dropped 16.48 points, or 0.35 percent, to 4,733.50.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)

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Samsung to make new smartwatch available to competition

BERLIN Samsung Electronics (005930.KS) said on Thursday it would make its next smartwatch technology available to its competitors who also use Google Inc’s (GOOGL.O) mobile platform Android, hoping to increase its share of the market, which is now dominated by Apple Inc (AAPL.O).

The watch will be available as of October, it said at an event in Berlin tied to the IFA, Europe’s largest consumer electronics trade show.

Making the new smartwatches compatible with smartphones made by competitors could help sales for Samsung, which saw its market share shrink sharply following the launch of arch rival Apple’s Apple Watch.

Worldwide smartwatch shipments grew to 5 million in the second quarter of this year from 1 million in the same period last year, according to data of research firm Strategy Analytics.

“We are leading the way in this segment,” said Younghee Lee, Samsung’s global marketing head for mobile. “But we realise we can’t do it alone.”

Apple Watch captured a 75 percent global smartwatch market share, followed by Samsung with an 8 percent share.

Samsung launched its new watch on Monday. The Gear S2 comes with mobile payment technology just like Apple’s Watch.

Samsung did not give a price tag for the watch.

(Reporting by Harro ten Wolde; Editing by Maria Sheahan)

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U.S. and euro zone business improves, Asia a concern

LONDON/NEW YORK Global manufacturing and service sector activity expanded in August at the same pace as in July, with both the U.S. and euro zone doing better than Asia, according to purchasing manager surveys.

“Scratching beneath the headline numbers, however, reveals an ongoing disparity between the relatively strong performance of the developed nations whereas growth in the emerging markets is quite weak,” said David Hensley, a director at JPMorgan.

JPMorgan’s Global All-Industry Output Index, produced with private data vendor Markit, held steady at July’s 53.7 last month and has been above the 50 mark that divides growth from contraction since October 2012.

Markit’s global service sector purchasing managers index (PMI) rose to 54.4 in August from 54.1 in July, though on Tuesday the world manufacturing PMI expanded at its weakest pace in just over two years last month.

“The trend in key regions such as Asia will need to improve if global growth in 2015 is to exceed its 2014 outcome,” Hensley said.

The global PMIs combine survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.


In regional data, U.S. service sector growth in August reached its highest level since May, signaling good third-quarter economic growth.

Markit’s final service sector PMI for August improved to 56.1 from 55.7 in July, but average prices charged by U.S. service businesses fell to end 25 straight months of increases.

“Inflationary pressures have abated, which will help the argument that interest rate hikes can be delayed,” said Chris Williamson, Markit’s chief economist.

An alternative survey from the U.S. Institute of Supply Management (ISM) also showed service sector growth remained robust during August but was off a 10-year peak reached in July. The ISM service sector PMI fell to 59 last month from 60.3 in July.

Elsewhere in the Americas, activity in Brazil’s services sector fell for the sixth straight month in August, but contracted at a slower pace than in July, according to HSBC/Markit.

The more modest contraction, combined with a downturn in the manufacturing sector, lifted HSBC’s Composite PMI to 44.8 in August from 40.8 in July, but nevertheless suggested Brazil’s recession may have deepened in recent months.

“This bodes ill for the Brazilian economy, which will likely see further declines in activity in upcoming months,” said Pollyanna De Lima, an economist with Markit.


Business activity in the euro zone accelerated at its fastest pace in more than four years in August, according to surveys that highlighted a divergence between laggard France and the other big economies in the currency bloc.

While generally upbeat, the set of surveys still point only to modest third-quarter economic growth of about 0.4 percent in July-September, according to Markit.

“The upwards momentum that the euro zone economy had has started to fizzle out, and growth no longer seems to be accelerating,” said Nick Kounis, head of macro and markets research at ABN AMRO.

Markit’s euro zone service sector PMI rose to 54.4 from July’s 54.0, after the manufacturing PMI, released on Tuesday, dipped to 52.3 from 52.4.

Markit’s final August Composite Purchasing Managers’ Index (PMI) rose to 54.3, its highest level since May 2011. It has now been above 50 since July 2013.

Italian firms had their best performance since early 2011 and German growth strengthened. It was a different story in France, the bloc’s second biggest economy, where the composite PMI slumped to its lowest since the start of the year.

On Thursday the European Central Bank cut its growth and inflation forecasts, warning of possible further trouble from China. At the same time, the euro zone central bank pledged to beef up or prolong its economic stimulus if needed, which helped global stock markets rally.

August was disappointing for the British economy too with the Markit/CIPS PMI for the service sector recording its weakest growth since May 2013, just as the Bank of England is considering when to start to raise interest rates.

“Let’s face it, August was not a pretty month and a number of downside events will have weighed down on business sentiment and activity,” said Kallum Pickering at Berenberg Bank.


Activity in Japan’s services sector expanded at the fastest pace in almost two years in August, easing concerns about economic growth after disappointing industrial production and household spending data for July.

The Markit/Nikkei Japan Services PMI which rose to 53.7, the highest since October 2013, from 51.2 in July.

Japan’s economy contracted in April-June as exports and consumer spending weakened. The government is counting on a return to growth in the current quarter to fulfill its pledge to revitalize the economy.

India’s service sector grew for a second month in August, keeping pressure on the central bank for another rate cut to bolster a slowing economy. India’s Nikkei/Markit services PMI rose to 51.8 in August from 50.8.

Economists remain concerned about China, where PMI data earlier this week from Ciaxin/Markit showed activity in both the manufacturing and service sectors slowing. Chinese stock markets, the source of much of the global volatility in recent weeks, were closed for a two-day holiday starting Thursday.

(Additional reporting by Mike Connor in New York, Brad Haynes in Brazil, Aaradhana Ramesh in Bengaluru, and Stanley White in Tokyo; editing by Chizu Nomiyama)

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