News Archive


Porsche CEO bets big on redesigned Panamera model


BERLIN Porsche expects to increase sales of the redesigned Panamera sedan by at least a third next year, its chief executive said, counting on enhanced digital features and more efficient engines to boost demand for the 113,000-euro ($125,000) model.

Volkswagen (VOWG_p.DE)-owned Porsche is targeting luxury-car buyers with a sportier, sleeker version of the four-door Panamera that is due to hit European showrooms in November and Chinese dealerships early next year.

To tap growth in its largest market, Porsche will offer an extended version to Chinese buyers – many of whom have drivers – which is 15 centimeters (6 inches) longer than the standard model, Chief Executive Oliver Blume told reporters on Tuesday.

“China is still on a high level, though not where it was two to three years ago,” Blume said during the model’s unveiling in Berlin.

“We expect (global) sales to be slightly above the level” of 20,000 cars per year originally targeted for the Panamera when it was launched in 2009, he said. A total of 15,004 of the cars were sold last year.

Forecasts by research firm IHS Automotive suggest the CEO could be more upbeat.

Sales of the Panamera, which saves costs by sharing a platform with models from Volkswagen’s (VW) Audi and Bentley brands, may more than double to 35,444 cars by 2020, IHS predicts.

By comparison, BMW’s (BMWG.DE) 7-Series model may increase 30 percent to 51,825 cars while sales of Mercedes’ (DAIGn.DE) S-Class may decline 21 percent to 79,044 units.

Porsche, a key contributor to VW group profit, drew fire from industry observers for the first-generation Panamera which it launched during the 2009 financial crisis when premium-car buyers withheld spending.

With its disproportionately long midsection and a humped up rear roofline, it was difficult to recognize the 2009 Panamera as a Porsche. The successor model, which boasts an infrared camera-based night vision device, comes with a rear roofline 2 centimeters lower.

“The concept (of the Panamera) required a lot of courage and many said we were crazy,” Blume said. “But courage changes everything.”

Despite parent VW’s diesel emissions scandal, there were no discussions among top managers at the group to discontinue the Panamera’s diesel version which surges to 100 kilometers an hour in 4.5 seconds.

“Today there are still many markets where diesel is indispensable to fulfill CO2 limits,” Blume said. “In the U.S. there are still many friends of diesel who appreciate the long-distance range.”

(Reporting by Andreas Cremer; Editing by Chris Reese)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/dVyuj-xOStA/us-porsche-launch-idUSKCN0ZE2ZV

Important to look at individuals in VW scandal: Lynch


PHOENIX U.S. Attorney General Loretta Lynch said on Tuesday that it was important for the Justice Department to look at individuals in the ongoing criminal investigation into the Volkswagen (VOWG_p.DE) emissions scandal.

Asked whether she would like to see company executives held accountable for the company’s wrongdoing, Lynch told Reuters:

“What’s important for us in every case, including this case, is to look at those individuals and see what if anything will be resolved with regards to them.”

Under a settlement announced on Tuesday, the German automaker will pay as much as $15.3 billion after admitting it cheated on U.S. diesel emissions tests for years, agreeing to buy back vehicles from consumers and provide funding that could benefit makers of cleaner technologies.

Lynch said U.S. justice officials will be looking at everyone involved in the making of VW decisions in the emissions scandal.

“Certainly it relates to every case, that when it comes to corporate wrongdoing whether it is civil or criminal, that the Department of Justice will be looking at everyone who was involved in making those decisions and in implementing the actions that led to the liability that we have found,” she said in an interview in Phoenix.

VW admitted in September that it installed secret software that allowed U.S. vehicles to emit up to 40 times legally allowable pollution.

(Reporting by Julia Edwards; Writing by Eric Walsh and Alistair Bell; Editing by Howard Goller)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fvtcFA56ZJM/us-volkswagen-emissions-lynch-idUSKCN0ZE2JT

Tesla investor group wants more independent board, cites Musk ties


SAN FRANCISCO An investor group called on Tesla Motors Corp (TSLA.O) on Tuesday to add two independent directors to its board and separate the roles of chairman and chief executive as it highlighted founder and CEO Elon Musk’s dominance of the board in the wake of Tesla’s proposed bid for SolarCity.

Musk is also the chairman and largest shareholder of SolarCity Corp (SCTY.O).

CtW Investment Group, which works with union-based pension funds and holds 200,000 shares of Tesla, in a letter to Silicon Valley-based Tesla, demanded the implementation of five steps it said would remedy Tesla’s “underlying governance deficiencies.”

In addition to adding two permanent independent directors and separating the chairman and CEO roles, CtW called for two independent directors to form a special committee to review the proposed SolarCity deal; a declassification of the board so that stockholders may have an annual say on the election of all directors; and revision of the corporate governance guidelines to forbid that immediate family members of board members serve concurrently on the board.

Telsa board member Kimbal Musk, who is CEO of Medium Inc, an internet software company based in Boulder, Colorado, is the brother of Elon Musk.

Tesla last week proposed an up to $2.8 billion all-stock acquisition of U.S. solar installer Solar City.

“The fiercely negative reaction to the proposed transaction only highlights the flawed (corporate governance) process and underscores our continuing concern about governance at the company,” CtW Executive Director Dieter Waizenegger wrote in the letter.

“We believe the board of directors at Tesla must be restructured in order to insure that stockholder interests are protected during this proposed acquisition and going forward,”

Waizenegger wrote.

Tesla said its directors acted in the company’s best interest in the proposed SolarCity acquisition.

“Tesla’s disinterested directors unanimously concluded that SolarCity is the most attractive asset in the solar market and that a combination can generate significant product and financial benefits,” the company said in a statement.

“Ultimately, our disinterested shareholders will have the final say on whether this combination is right for Tesla,” it added. “Nobody has more at stake in the success of Tesla than Elon, and he and our Board have overseen the creation of tremendous value for all of Tesla’s stockholders.”

Shares of Tesla fell as much as 10 percent the day after Musk announced the SolarCity proposal on June 21.

Musk owns 19 percent of Tesla and 22 percent of SolarCity.

Waizenegger said the complex web of relationships among Tesla board members and companies controlled by Musk or his family members “give rise to self-dealing behavior when transactions like that proposed with SolarCity are undertaken.”

Five of SolarCity’s eight board have recused themselves from ruling on the Tesla deal because of their ties to the company or to Musk.

On Monday, SolarCity said it had formed a special committee of just two directors, Donald Kendall and Nancy Pfund, to evaluate Tesla’s offer. Kendall, the chief executive of investment management firm Kenmont, is the only member of SolarCity’s board with no direct ties to Tesla.

(Reporting by Alexandria Sage; Editing by Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6NFgTw1Y-KQ/us-solarcity-m-a-tesla-idUSKCN0ZE2ZL

Nike quarterly sales rise less than expected, shares drop


Nike Inc’s (NKE.N) fourth-quarter revenue rose less than analysts had estimated as a strong dollar ate into sales from some overseas markets and as it cleared excess inventory in North America.

Shares of the world’s largest footwear maker tumbled 6.2 percent to $49.79 in extended trading on Tuesday.

Nike’s revenue rose nearly 6 percent to $8.24 billion in the fourth quarter ended May 31. Analysts on average had expected revenue of $8.28 billion, according to Thomson Reuters I/B/E/S.

The company, which owns the Jordan and Hurley brands, said its net income fell to $846 million from $865 million a year earlier. On a per share basis, profit was flat at 49 cents.

Nike said its gross margin declined 30 basis points to 45.9 percent as higher average selling prices were more than offset by higher product costs, the hit of clearing excess inventory in North America and unfavorable foreign exchange rates.

The company’s orders for delivery from June through November in North America, a demand gauge it calls “futures orders”, also fell short of expectations, signaling a slowing pace of growth in its biggest market.

Futures orders in the region were up were up 6 percent at the end of the fourth quarter, while analysts were expecting a 9 percent growth, according to Consensus Metrix.

While Nike still dominates its home territory, Germany’s Adidas (ADSGn.DE) is making inroads and smaller domestic rival Under Armour Inc (UA.N) is also providing stiff competition.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/F5uX69nipRA/us-nike-results-idUSKCN0ZE2MQ

Congressional watchdog expands probe of lax Wall Street oversight


NEW YORK A U.S. congressional watchdog said on Tuesday it has formally added three agencies to its investigation into whether government regulators are too soft on the banks they are meant to police.

In March, Reuters exclusively reported that the Government Accountability Office (GAO) was preparing a probe of the U.S. Federal Reserve and other to-be-determined regulators, in response to a request by Democratic U.S. Representatives Maxine Waters and Al Green for it to look into “regulatory capture.”

The review, requested last October, is the first by an outside agency into the perception that financial regulators are “captured” by and too deferential toward the bankers they supervise, so that Wall Street benefits at the public’s expense.

Lawrance Evans, director of the GAO’s financial markets and community investment division, said in an email on Tuesday that the probe would include the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA). The GAO will also look back at work by the Office of Thrift Supervision, which merged with the OCC in 2011, and regulates savings and loan institutions.

Evans said the investigation is technically separate from the probe of the Fed, “but it is indeed part of the work we are doing in response to the Waters/Green request.”

The FDIC declined to comment. Representatives from the OCC and NCUA were not immediately available to comment.

Perceptions of regulatory capture have dogged the U.S. central bank and other regulators since they failed to head off the 2007-2009 financial crisis that sparked a global recession.

(Reporting by Jonathan Spicer; Editing by Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/pKMdGxFEmF8/us-usa-regulators-probe-idUSKCN0ZE2MU

Wall Street bounces back after two-day Brexit rout


Wall Street bounced back on Tuesday, recouping some recent losses, as investors sought cheap assets after a two-day equities rout sparked by Britain’s decision to leave the European Union.

U.S. indexes joined stock markets around the world in the rebound after global equity markets had shed $3 trillion in value in the two days following Britain’s shock vote, according to SP Dow Jones Indices. Investors also pointed to solid U.S. economic data as helping to stabilize stocks.

Financials .SPSY and tech stocks .SPLRCT, hit hard in the wake of the referendum, were among the top gaining sectors on Tuesday.

“People are starting to say maybe this is going to take longer than they thought and maybe the impacts on the U.S. market won’t be nearly as great as feared,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. “So I think you’ve seen a bit of bargain-hunting.”

The Dow Jones industrial average .DJI rose 269.48 points, or 1.57 percent, to 17,409.72, the SP 500 .SPX gained 35.55 points, or 1.78 percent, to 2,036.09 and the Nasdaq Composite .IXIC added 97.42 points, or 2.12 percent, to 4,691.87.

All 10 SP sectors finished higher. Energy shares .SPNY gained 2.6 percent, leading all groups, supported by higher oil prices.

Major U.S. indexes had posted their worst two-day decline in 10 months following the British referendum.

Investors are still bracing for volatility in the coming weeks amid uncertainty about how Britain will pursue its EU exit, with some pointing to more possible downside. The SP 500 was within 17 points of its May 2015 record high last Thursday.

Still, the CBOE Volatility Index .VIX, the favored gauge of investor anxiety, fell about 21 percent to trade close to where it was before the Brexit vote. It was its largest one-day percentage decline since August 2011.

Data on Tuesday showed U.S. economic growth slowed in the first quarter but not as sharply as previously estimated. A report from the Conference Board showed consumer confidence increased to an eight-month high in June.

The data “reminded people that the U.S. economy is still in very good shape and sort of refocused everybody on the bigger picture, and let’s step back from the edge with regard to Brexit,” said John Traynor, chief investment officer of People’s United Wealth Management in Bridgeport, Connecticut.

Gilead Sciences (GILD.O) shares gained 5.2 percent after the large biotechnology company won U.S. approval for a hepatitis C medicine.

Endo International (ENDP.O) shares surged 18.3 percent, the top performer on the SP 500, as the drugmaker announced a new patent.

More than 8.2 billion shares changed hands in U.S. exchanges, above the roughly 7.5 billion average over the past 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by 2,644 to 440, for a 6.01-to-1 ratio on the upside; on the Nasdaq, 2,302 issues rose and 580 fell for a 3.97-to-1 ratio favoring advancers.

The SP 500 posted 16 new 52-week highs and 2 new lows; the Nasdaq recorded 22 new highs and 50 new lows.

(Additional reporting by Saqib Iqbal Ahmed in New York and Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian and Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/MY8wQ7wcids/us-usa-stocks-idUSKCN0ZE16V

Airbnb seeks funds valuing it at $30 billion: source


Apartment-sharing startup Airbnb is in talks for a new round of funding that would value the company at $30 billion, a source close to the company said on Tuesday.

Airbnb intends to use the financing to support new investments and growth opportunities, the source added.

The New York Times first reported the news on Tuesday.

Airbnb, which expects to achieve profitability in 2016, raised over $100 million in a round of funding late last year that valued the company at $25.5 billion.

The San Francisco-based startup, which operates in nearly 200 countries, also secured a $1 billion debt facility in June from some big U.S. banks to finance its expansion plans.

The rise of Airbnb and other such startups have increased the pressure on the hotel bookings business of established travel companies such as Priceline Group Inc and Expedia Inc.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/wPHrCn_Lxq0/us-airbnb-funding-idUSKCN0ZE2FR

U.S. SEC proposes rule on transition plans for investment advisers


WASHINGTON The top U.S. securities regulator on Tuesday proposed a rule intended to ensure that investors are not harmed when asset managers fall on hard times or close up shop.

The proposed rule would require investment advisers to put in place business continuity and transition plans, laying out how they would minimize material disruptions to service in the event of business disruptions such as natural disasters, cyber-attacks, technology failures or the departure of key personnel.

“While an adviser may not always be able to prevent significant disruptions to its operations, advance planning and preparation can help mitigate the effects of such disruptions and in some cases, minimize the likelihood of their occurrence, which is an objective of this rule,” Securities and Exchange Commission Chair Mary Jo White said in a statement.

She added that the proposal is part of a broader effort to “modernize and enhance regulatory safeguards for the asset management industry.”

Advisers could tailor their plans to fit their operations and risks specific to their particular business models. Specifically, they would need plans to maintain systems and protect data, arrange alternative work sites, keep up communications and review third-party service providers. They would also need to show how they would handle the transition of winding down or stopping services.

“This is an important part of Chair White’s rulemaking agenda for the asset management industry,” said David Blass, general counsel for the Investment Company Institute, the leading trade association for registered funds.

ICI is currently reviewing the proposal.

Regulators are drawing stricter boundaries for the industry and the SEC has zoned in on asset management this year. It has proposed changing information funds must disclose, as well as measures on their liquidity management and use of derivatives. The commission has also scaled back on examining brokers to boost oversight of investment advisers.

Also on Tuesday, the commission announced it added a new co-chief to its enforcement division’s asset management unit, Dabney O’Riordan, who has investigated “a wide variety of misconduct” across the industry. O’Riordan has worked on cases involving advisers who misallocated private fund expenses as well as investigations into “gatekeepers” such as auditors, according to the commission.

In April, the heads of the major U.S. financial regulatory agencies called for more analysis of hedge funds in its review of risks the asset management industry could pose to financial stability.

(Reporting by Lisa Lambert; Editing by Dan Grebler and Andrew Hay)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/03hKCMt10_A/us-usa-sec-assetmanagement-idUSKCN0ZE2EF

IKEA recalls 36 million chests, dressers after six deaths


WASHINGTON Swedish furniture retailer IKEA Group is recalling almost 36 million chests and dressers in the United States and Canada that have been linked to the deaths of six children, the U.S. Consumer Product Safety Commission said on Tuesday.

The furnishings can topple over if they are not anchored securely to walls, posing a threat to children, the commission said in a statement.

The recall covers six models of MALM chests or dressers manufactured from 2002 to 2016, as well as about 100 other families of chests or dressers, it said.

“It is simply too dangerous to have the recalled furniture in your home unanchored, especially if you have young children,” CPSC Chairman Elliott Kaye said in a statement.

Tipped-over furniture or television sets kill a U.S. child every two weeks, he said.

Two U.S. toddlers died in separate 2014 incidents when MALM chests fell over on them. A 22-month-old boy was killed last year in a similar incident, after IKEA had announced a repair program included a free wall-anchoring kit.

None of the furnishings in the fatal incidents had been anchored to the wall.

IKEA also had received reports of 41 tip-over incidents involving non-MALM chests that caused 19 injuries and the deaths of three children from 1989 to 2007.

As part of the recall, IKEA is offering refunds or a free wall-anchoring kit.

The U.S. recall covers about 8 million MALM chests and dressers and 21 million other model chests and dressers. About 6.6 million are being recalled in Canada.

(Reporting by Ian Simpson; Editing by Dan Grebler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/KtKhgGj2yis/us-usa-recall-ikea-ab-idUSKCN0ZE2CB