News Archive


Alphabet’s self-driving car unit sues Uber with trade theft charge


SAN FRANCISCO Alphabet Inc’s (GOOGL.O) Waymo self-driving car unit sued Uber Technologies [UBER.UL] and its autonomous trucking subsidiary Otto on Thursday over allegations of theft of its confidential and proprietary sensor technology.

Waymo accused Uber and Otto, acquired by the ride services company in August, with stealing confidential information on Waymo’s Lidar sensor technology to help speed its own efforts in autonomous technology.

“Uber’s LiDAR technology is actually Waymo’s LiDAR technology,” said Waymo’s complaint in the Northern District of California.

Uber said it took “the allegations made against Otto and Uber employees seriously and we will review this matter carefully.”

Lidar, which uses light pulses reflected off objects to gauge their position on or near the road, is a crucial component of autonomous driving systems. Previous systems have been prohibitively expensive and Waymo sought to design one over 90 percent cheaper, making its Lidar technology among the company’s “most valuable assets,” Waymo said.

Waymo is seeking an unspecified amount of damages and a court order preventing Uber from using its proprietary information.

Otto launched with much fanfare in May, due in part to the high profile of one of its co-founders, Anthony Levandowski, who had been an executive on Google’s self-driving project. Uber acquired the company in August for what Waymo said in the lawsuit was $680 million.

Waymo said that before Levandowski’s resignation in January 2016 from Google, whose self-driving unit was renamed Waymo in December, he downloaded over 14,000 confidential files, including Lidar circuit board designs, thereby allowing Uber and Otto to fast-track its self-driving technology.

Waymo accused Levandowski of attempting to “erase any forensic fingerprints” via a reformat of his laptop.

“While Waymo developed its custom LiDAR systems with sustained effort over many years, defendants leveraged stolen information to shortcut the process and purportedly build a comparable LiDAR system in only nine months,” the complaint said.

Last month, Tesla Inc (TSLA.O) electric car company sued the former head of its Autopilot system. It said he tried to recruit Tesla engineers for his new venture with the former head of Google’s self-driving program while still working there, and said he stole proprietary data belonging to Tesla.

Waymo’s lawsuit said it learned of this use of trade secrets and patent infringement after it was inadvertently copied on an email from a component vendor that included a design of Uber’s Lidar circuit board, which bore a “striking resemblance” to Waymo’s design.

Waymo noted that Google devoted over seven years to self-driving cars and said Uber’s forays into the technology through a partnership with Carnegie Mellon University had stalled by early 2016.

(Reporting by Alexandria Sage; editing by Grant McCool)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/nFucDq7HF-Y/us-autonomous-lawsuit-idUSKBN1622S6

Game company seeks to block Facebook from using virtual reality code


Video game publisher ZeniMax Media Inc., which earlier this month won a $500 million verdict against Facebook Inc.’s (FB.O) Oculus virtual reality unit for unauthorized copying of computer code, has asked a federal judge to block Oculus from using the code in its products.

ZeniMax made its request for an injunction in papers filed on Thursday in federal court in Dallas. It was the same court where jurors on Feb. 1 issued the verdict against Oculus and its founders Palmer Luckey and Brendan Iribe.

Tera Randall, a spokeswoman for Oculus, said the company was continuing with its plan to ask the judge to set aside the verdict, which she called “legally flawed and factually unwarranted.”

Lawyers for ZeniMax declined to comment.

If granted, the injunction could limit the number of games available for sale for Oculus’ Rift VR headset. Such a move would be a blow to a product still in its infancy and on which Facebook has made a big bet for the future.

Oculus has already made the disputed code available to companies that develop games, and it is embedded in many of the games available for use on the Rift, as well as Samsung Electronics Co’s (005930.KS) Gear VR, a smartphone-compatible device developed through a partnership with Oculus.

Mark Romeo, an Irvine, California-based intellectual property lawyer not involved in the case, said the potential disruption from an injunction, if granted, would put an “incredible amount of pressure on Facebook to enter into some sort of settlement.”

The litigation stemmed from Oculus co-founder Palmer Luckey’s 2012 correspondence with video game designer John Carmack, well-known for creating the Doom series. Carmack, who at the time was employed by a ZeniMax subsidiary, subsequently agreed to help develop software for the Rift. In 2013 he left ZeniMax and joined Oculus as its chief technology officer.

ZeniMax sued Oculus in 2014, less than two months after Facebook paid $3 billion for the start-up, claiming Carmack developed crucial Rift technology while he was a ZeniMax employee. ZeniMax also argued that Luckey breached a non-disclosure agreement.

The case culminated in a three-week trial in which ZeniMax sought $6 billion in damages. Jurors rejected a claim by ZeniMax that its trade secrets were stolen, but it found that Oculus used the copyrighted code without permission and violated the non-disclosure agreement.

(Reporting by Jan Wolfe; editing by Richard Chang and Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Ipu5V-EVRng/us-facebook-lawsuit-idUSKBN1622S4

Tesla’s ‘close to the edge’ cash foretells capital raise


SAN FRANCISCO Tesla Inc (TSLA.O) Chief Elon Musk has taken big risks repeatedly since going public in 2010, but investors were spooked on Thursday after he said the electric car company could get “close to the edge” as it burns cash ahead of its crucial Model 3 launch.

Facing yet another cash crunch, Tesla will likely be forced to head to Wall Street for more capital, analysts said. Shares tumbled 5.8 percent on Thursday, their biggest intraday percentage fall in eight months.

Musk told investors after the company released its fourth-quarter results on Wednesday that the upcoming Model 3 sedan, the $35,000 mass-market vehicle on which the company’s future profitability hinges, requires no additional outside funding as it readies for production this year.

“But we get very close to the edge,” Musk said. “So we’re considering a number of options but I think it probably makes sense to raise capital to reduce risk.”

Tesla had $3.39 billion in cash and cash equivalents at the end of 2016, but most of that comes from a May stock offering, cash from its SolarCity acquisition and nearly $1 billion in draws on its credit facilities.

The company spent $448 million in cash on operating activities in the fourth quarter.

Tesla’s warning of an expected $2 billion to $2.5 billion in capital expenditures in the first half of 2017 for the Model 3 leaves potentially less than a $1 billion cushion for Tesla, at a time of “high levels of execution risk,” wrote Morgan Stanley analyst Adam Jonas.

Analysts estimated the company will seek $1 billion to $2.5 billion in capital in the near term.

Tesla, which has had negative cash flow since 2014 and has posted a quarterly profit only twice since going public, has repeatedly gone to Wall Street for fresh capital.

“The automotive business is an extremely capital intensive business and we keep seeing companies who are thinking of getting into it underestimate that,” said Autotrader senior analyst Michelle Krebs, citing moves by Apple Inc and Alphabet’s Google to back off aggressive forays into the sector.

Individual model launches for established car companies do not carry the same hazards as for Tesla because the risk is less concentrated.

“No single launch is a ‘bet the company’ launch” for established automakers, said Michigan-based auto manufacturing consultant Michael Tracy, citing larger capital reserves. “If you’re Tesla, every time you’re stepping up to the plate, financially it’s extremely risky.”

Additionally, Musk’s need for speed in getting the Model 3 in the hands of approximately 373,000 reservation holders after volume production begins in September means he “has to ramp up faster than any other automaker would want to do,” Tracy said.

(Additional reporting by Paul Lienert in Detroit; Editing by Meredith Mazzilli)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ny1bZQGIE78/us-tesla-outlook-idUSKBN1621W5

Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation


WASHINGTON President Donald Trump declared China the “grand champions” of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.

In an exclusive interview with Reuters, Trump said he has not “held back” in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

“Well they, I think they’re grand champions at manipulation of currency. So I haven’t held back,” Trump said. “We’ll see what happens.”

During his presidential campaign Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, “stealing” American manufacturing jobs.

But Treasury Secretary Stephen Mnuchin told CNBC on Thursday he was not ready to pass judgment on China’s currency practices.

Asked if the U.S. Treasury was planning to name China a currency manipulator any time soon, Mnuchin said he would follow its normal process of analyzing the currency practices of major U.S. trading partners.

The Treasury is required to publish a report on these practices on April 15 and Oct. 15 each year.

“We have a process within Treasury where we go through and look at currency manipulation across the board. We’ll go through that process. We’ll do that as we have in the past,” Mnuchin said in his first televised interview since formally taking over the department last week. “We’re not making any judgments until we go continue that process.”

A formal declaration that China or any other country manipulates its currency requires the U.S. Treasury to seek negotiations to resolve the situation, a process that could end in punitive tariffs on the offender’s goods.

The U.S. Treasury designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. China was the last country to get the designation, in 1994.

The current situation is complicated because China’s central bank has spent billions of dollars in foreign exchange reserves in the past year to prop up the yuan to counter capital outflows.

The International Monetary Fund said last year that the yuan’s value was broadly in line with its economic fundamentals. The U.S. Treasury also said in its last currency report in October that its view of China’s external imbalances had improved somewhat.

Trump’s pronouncements about the yuan could also complicate matters for Mnuchin as he prepares for his first meeting next month with his Group of 20 finance minister counterparts in Baden Baden, Germany.

(Reporting by David Lawder and Steve Holland, Writing by David Lawder; Editing by Paul Simao)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/eBV2Xocz92Q/us-usa-trump-china-currency-exclusive-idUSKBN1622PJ

Trump again vows to bring back U.S. jobs, but offers few details


WASHINGTON President Donald Trump told chief executives of major U.S. companies on Thursday he plans to bring millions of jobs back to the United States, but offered no specific plan on how to reverse a decades-long decline in factory jobs.

In his first month in office, Trump has pressured a number of U.S. companies to hire in the United States but he has yet to publicly propose legislation tackling the big economic issues he campaigned on in 2016, including a job-boosting tax or infrastructure program. He will address a joint session of Congress on Feb. 28.

In a meeting with some two dozen CEOs at the White House, Trump said the United States had lost about one-third of manufacturing jobs since it joined the North American Free Trade Agreement in 1994 and asserted about 70,000 factories have closed since China joined the World Trade Organization 16 years ago.

But the Bureau of Labor Statistics says the number of private sector manufacturing facilities in the United States has fallen less than that, from nearly 400,000 in 2001 to 344,000 last year.

Lower wages, automation, foreign competition and other factors account for the steep decline in manufacturing jobs, experts say.

Trump has promised to roll out proposals that he says could have favorable ramifications for companies, including a plan to overhaul the tax code and an infrastructure package that was part of his presidential campaign promises to create millions of jobs. He has declined to specify what he had in mind.

“We’re going to find out how we bring more jobs back,” he told the CEOs.

General Electric Co (GE.N) chief executive Jeff Immelt said after the meeting in a Twitter post that “tax reform a high priority for job creation. Business community will come together to help find a workable solution.”

Ken Frazier, CEO of Merck Co (MRK.N), told reporters “it is very clear the president is interested in lessening the tax burden.”

Several of the CEOs who met Trump are part of a coalition that supports a so-called border adjustment tax, which would impose a 20 percent tax on goods that are imported into the country while providing write-offs for goods that are exported.

In an interview with Reuters, Trump spoke favorably about the border adjustment tax proposal being pushed by Republicans in the U.S. Congress, but did not specifically endorse it.

Trump is scheduled to dine at a Washington hotel on Thursday evening with members of The Business Council, a group of major U.S. company CEOs, including Immelt, Goldman Sachs’ Lloyd Blankfein and JP Morgan Chase’s Jamie Dimon.

(Reporting by David Shepardson and Ginger Gibson; Editing by Howard Goller and Alistair Bell)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/MKhyEnB82c8/us-usa-trump-ceos-idUSKBN162209

Buffett expected to tout passive investing in Berkshire annual letter


NEW YORK Warren Buffett, widely considered one of the world’s best investors, is likely to tout the merits of passive investing this weekend to readers of his annual letter to Berkshire Hathaway Inc (BRKa.N) shareholders.

The letter, slated for release around 8 a.m. EST on Saturday, will probably focus on familiar themes for the 86-year-old Buffett, with many single-spaced pages reviewing Berkshire’s businesses and managers, Wall Street, the economy and perhaps even politics.

“The letters are written as much for sophisticated financial people as for people in high school,” said Andy Kilpatrick, author of “Of Permanent Value: The Story of Warren Buffett.” “It’s a fun read, and when you get through it, you think, ‘Wow, I could be doing better with my life and my investing.'”

Buffett believes most stock investors are better off with low-cost index funds than paying higher fees to managers who often underperform. He told Fortune magazine he expects to write “a lot” about passive investing. (here)

Berkshire itself might seem anomalous, with shares of the Omaha, Nebraska-based conglomerate having generated a roughly 2 million percent gain in Buffett’s nearly 52 years at the helm.

In 2016, Berkshire’s stock price rose about 23.4 percent, easily outpacing the market, though most investors who bought its stock in recent years have achieved closer to market-average returns.

Kilpatrick expects Buffett to discuss Precision Castparts, an aircraft parts maker that Berkshire bought last January for $32.1 billion, its biggest acquisition.

Buffett is likely to discuss other Berkshire businesses, such as insurance and the BNSF railroad, and shower praise on Berkshire managers, perhaps including investing deputies Todd Combs and Ted Weschler.

Combs alerted Buffett to Precision Castparts, and Buffett may discuss what drove Berkshire’s unexpected, multi-billion-dollar investments in Apple Inc (AAPL.O) and the four biggest U.S. airlines.

Buffett may also focus on his desire to spend Berkshire’s huge cash pile after Kraft Heinz Co (KHC.O), which Berkshire partly owns, on Sunday scrapped a bid to buy food rival Unilever Plc (ULVR.L) that Berkshire might have helped finance.

U.S. President Donald Trump may also be a focus for Buffett, who was a vocal supporter of Hillary Clinton.

Buffett alluded elliptically to Trump in last year’s letter, bemoaning the “negative drumbeat” from presidential candidates talking down U.S. economic prospects.

Berkshire is also expected to report fourth-quarter results. Analysts expect operating profit of around $4.5 billion, or $2,717 per Class A share, down from $4.67 billion last year, Thomson Reuters I/B/E/S said.

(Reporting by Jonathan Stempel in New York; Editing by Jennifer Ablan and Dan Grebler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/JXToUOz5Qgw/us-berkshire-buffett-letter-idUSKBN1622JT

Tesla shares slip as cash-burn raises concerns


Tesla Inc’s (TSLA.O) shares fell nearly 6 percent as the electric car maker’s freewheeling cash burn deepened concerns that the company would need to raise more capital as it pushes ahead with the production of its mass-market Model 3 sedan.

Chief Executive Elon Musk said on Wednesday the company was considering a number of options but “it probably makes sense to raise capital to reduce risk.”

Analysts have estimated that Tesla would need to raise $1 billion-$2 billion in capital ahead of the launch of the Model 3 to minimize the risk of cash on hand running too low.

The company’s shares fell as much as 5.8 percent to $257.55 in morning trading – their biggest intraday percentage fall in 8 months.

The stock rose 3 percent in post-market trading on Wednesday after the company reported better-than-expected results.

Tesla said it plans an additional $2 billion to $2.5 billion in capital expenses before the launch and has $3.4 billion cash on hand.

Morgan Stanley analyst Adam Jonas estimates that the company will have spent about $10 billion in capital expenditures and RD from 2014 through the first half of 2017.

“We’re about to find out where this invested capital is going,” Jonas added.

(Reporting by Narottam Medhora in Bengaluru; Editing by Saumyadeb Chakrabarty)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ny1bZQGIE78/us-tesla-outlook-idUSKBN1621W5

Ghosn cedes Nissan CEO role to focus on alliance with Renault, Mitsubishi


TOKYO Nissan Motor Co (7201.T) said Carlos Ghosn will step aside as CEO after leading the company for 16 years, allowing him to concentrate on deploying his cost-cutting expertise across its alliance with Renault SA (RENA.PA) and newly added Mitsubishi Motors Corp (7211.T).

In handing over the helm to Hiroto Saikawa, a company veteran of 40 years, Ghosn ends years of speculation over when he would relinquish the top job at Japan’s No. 2 automaker amid investor concerns that he was stretching himself too thin.

Bringing Mitsubishi into the alliance last year has put the group’s annual combined sales at 9.3 million vehicles – close in size to industry leaders Toyota Motor Corp (7203.T) and Volkswagen AG (VOWG_p.DE).

That has brought new opportunities to benefit from scale but also the challenge of balancing the interests of all three automakers – particularly at a time when progress in plans to integrate Nissan and Renault further has been slow.

Ghosn, 62, will continue to be chairman at Nissan, a position he also holds at Renault and Mitsubishi. But he will remain CEO at Renault and heavily involved in the company, an indication of the depth of problems he still sees at the French automaker.

“There are still lots of things to be done inside the company in order to make its growth sustainable and lasting and solid,” he told Reuters in an interview.

While he did not elaborate on the issues he planned to tackle, deeper capital ties with Nissan have been stymied by the French government’s lifting of its stake in Renault to around 20 percent with little warning to Ghosn or the board.

Tightening emissions regulations have also exposed strains in the Nissan-Renault alliance as plans to integrate their engines and gearboxes have moved much slower than management had hoped for.

COST-CUTTING SUCCESSOR

Known as ‘Le Cost Killer’ from his earlier careers at Renault and Michelin, Ghosn burnished his reputation by engineering Nissan’s comeback from years of losses and debt. Unafraid to trample over long-standing business customs, he became a hero in Japan and one of the auto industry’s best known executives.

He leaves in his place at Nissan a man cut from very similar cloth with Saikawa a veteran cost-cutter who has spent much of his career managing purchasing and supply chains.

The 63-year old was named the company’s chief competitive officer in 2013, became co-CEO last November and also currently heads Japan’s auto industry lobby.

“The timing is a bit surprising,” said Takeshi Miyao, Asia managing director at consultancy Carnorama. “It appears Ghosn has decided very quickly that Saikawa is the right person to lead the company.”

Nissan is the strongest of the automakers in the alliance, long outperforming Renault in terms of vehicle sales and profits, while Mitsubishi still needs an overhaul after a mileage cheating scandal last year.

“Ghosn is likely to focus on strengthening and raising profitability at all the alliance members so that they are not overly dependent on Nissan,” said Miyao.

“Even if the alliance as a whole produces 10 million cars, if 3 million of those cars are not profitable it will be difficult for the alliance to continue.”

The three automakers will be looking not only to leverage scale to cut costs but also to strengthen their competitiveness in electric and self-driving cars, Ghosn said.

Brazilian-born, of Lebanese descent and a French citizen, Ghosn began his career at Michelin in France, moving on to Renault, where he oversaw a turnaround of the automaker.

He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO in 2001.

(Reporting by Naomi Tajitsu and Chang-Ran Kim in Tokyo; Additional reporting by Tim Kelly in Tokyo, Subrat Patnaik in Bengaluru, Laurence Frost in Paris and Tom Pfeiffer in London; Editing by Edwina Gibbs)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/S-_tYOnKMDk/us-nissan-moves-ceo-idUSKBN1612YT

Exclusive: Airbus calls for European ministerial meeting on A400M


Airbus (AIR.PA) has called for a European ministerial meeting to address the latest problems engulfing the A400M military plane, saying its own viability is at stake as it seeks government help to contain fresh losses on Europe’s largest defense project.

The move comes a day after Airbus took a fresh writedown of 1.2 billion euros against A400M losses and urged seven NATO buyer nations to limit its exposure to heavy fines and payment delays caused by new technical snags and delays.

In a letter to government buyers, the company spoke of “significant risks ahead” on the project, originally valued at 20 billion euros and now costing well over 30 billion euros, according to two people familiar with the letter’s contents.

“We are committed to the A400M program. However we are responsible to sustain the viability of Airbus,” said the letter signed by Airbus Chairman Denis Ranque and Chief Executive Tom Enders and sent to the capitals of Belgium, France, Germany, Luxembourg, Spain and Turkey and the UK.

Noting “huge losses” on the project, Airbus called for a meeting of ministers of those nations to take stock of the situation and agree on next steps in the best interests of the program, government customers and Europe’s defense industry.

It also called for talks with Europrop International (EPI), the consortium responsible for providing the troop carrier’s turboprop engines, which have been involved in some delays.

EPI is owned by France’s Safran (SAF.PA), Britain’s Rolls-Royce (RR.L), Germany’s MTU Aero Engines (MTXGn.DE) and Industria de Turbo Propulsores (ITP) of Spain.

An Airbus spokeswoman declined comment on Thursday on details of the company’s contacts with governments, but said there would be three elements to any discussions: the nations, the OCCAR pan-European procurement agency and the engine makers.

Engine consortium EPI could not immediately be reached for comment.

A spokesman for OCCAR had said on Wednesday the agency was in regular and ongoing dialogue with Airbus, but declined comment on the company’s request for new measures.

Airbus received a 3.5 billion euro bailout from the seven core purchasing nations in 2010, but has suggested it did not go far enough in limiting the company’s financial exposure.

Defence officials from the seven nations were expected to confer by telephone on Airbus requests as early as Thursday.

Germany, the largest A400M buyer, has so far given a cool response, saying it is important that Airbus should resolve outstanding problems on the military program.

(Reporting by Reuters bureaus, Writing by Tim Hepher, Editing by Richard Balmforth)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_irzGezV9lI/us-airbus-a400m-exclusive-idUSKBN1621SV