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Exclusive: Not Made in America – Wal

CHICAGO (Reuters) – Walmart.com, trailing Amazon.com Inc in the number of goods for sale on its website, is recruiting vendors in China and other countries to boost its online offerings in a pivot away from Wal-Mart’s Made-in-America campaign.

While there is a financial incentive behind the move, Wal-Mart’s decision comes out of necessity: not all the goods its customers want – ranging from jeans to bicycles to beauty products – are manufactured within the United States.

That reality pits Wal-Mart against President Donald Trump’s “Made in America” push. It also risks alienating some of Wal-Mart’s existing U.S. vendors since it runs counter to the American-made pledge the retailer made in 2013 in a bid to win customers, and satisfy unions and other critics who said its drive for low cost goods was undermining American jobs. 

According to two sources with knowledge of the matter, Wal-Mart Stores Inc in February began inviting sellers from China, the United Kingdom and Canada to list on the marketplace section of Walmart.com, where it earns a share of revenue from goods sold and delivered to customers by third-party vendors.

Previously, it only allowed U.S. based sellers on the marketplace site, sources said.

Calling the unreported move a “measured approach,” Wal-Mart Vice-President of Partner Services Michael Trembley confirmed the invite-only program. He said foreign sellers currently make up less than five percent of its seller base.

Trembley said Wal-Mart’s move is focused on meeting customer demand for different types of products and increasing online assortment. Wal-Mart’s marketplace inventory has quintupled this year to 50 million items. That still pales in comparison to Amazon’s nearly 300 million products online, analysts said.

Shrinking that gap is key to Wal-Mart’s strategy to beat Amazon. Launched in 2009, the marketplace platform contributes more than 10 percent to Wal-Mart’s e-commerce revenue, but barely registers in total sales of nearly $486 billion, according to data from e-commerce analytics firm Marketplace Pulse. The data could not be independently verified by Reuters.

Amazon’s third-party marketplace, which also uses global vendors from countries like China, contributes to nearly half of Amazon’s retail sales, analysts said.

The move brings risks beyond the impact to Wal-Mart’s sales. Trump kicked off a “Made in America” week earlier this month where he promised he would take more legal and regulatory steps during the next six months to protect American manufacturers, lashing out against trade deals he said have hurt U.S. companies.

Trump’s comments come as the White House is seeking to renegotiate the 23-year-old North American Free Trade Agreement (NAFTA) in an effort to shrink the trade deficit with Canada and Mexico.

“No longer will we allow other countries to break the rules, steal our jobs and drain our wealth,” Trump said in a weekly address tweeted by the White House on July 21. “Instead we will follow two simple but very crucial rules: We will buy American and we will hire American.”

In a statement on Wednesday, Wal-Mart proposed policy actions to boost U.S. manufacturing which could help capture $300 billion worth of products that are imported. The retailer urged policymakers for simpler regulations on things like Made in USA labeling and modernize trade agreements.

Cindi Marsiglio, vice president for U.S. sourcing and manufacturing at Wal-Mart, told Reuters it is on target with its pledge to buy $250 billion worth of American-made products by 2023, and remains committed to boosting U.S. manufacturing.

“Against the Spirit of Their ‘Made in America'”

Some of Wal-Mart’s existing U.S. vendors – whom Wal-Mart has recruited to supply goods manufactured domestically as part of its highly publicized Made-in-America sourcing plan – are on edge about competition with foreign goods.

“It goes against the spirit of their ‘Made in America’ push,” said one seller of American-made socks to Wal-Mart.com, who spoke on condition of anonymity for fear of hurting business relations with the retailer.

Six out of seven U.S. manufacturers Reuters spoke with who are selling to Walmart.com said they were disappointed with the retailer’s move. Marsiglio said the retailer had not heard any complaints about its move to allow global vendors on its marketplace.

“It’s bad timing to start such a program given President Trump’s push in this direction and the resources they (Wal-Mart) spend on promoting a patriotic image,” said another vendor, who sells pet products.

Darius Mir, chief executive of MIA (Made in America) Seating Corp, a Tennessee based seller of office furniture to Wal-Mart.com, said he supports free trade and is open to competition on the platform. But he thinks it would help U.S.-based vendors if Wal-Mart could label “Made in USA” items listed on its website.

“Walmart must distinguish between a ‘Made In USA’ product from all others by grouping the American made product separately, and highlighting the Made In USA label,” he said.

Hollowed-Out Manufacturing

Wal-Mart’s third-party marketplace is part of an overall online initiative that is starting to show growth, with e-commerce sales growing 63 percent during the first quarter.

The progress has been led by e-commerce chief Marc Lore, who took over last year after Wal-Mart paid $3.3 billion for Jet.com, an online retail platform he founded.

Wal-Mart’s Trembley said the retailer’s approach to growing its marketplace, which analysts said has been slow, has been designed to avoid problems like counterfeit products, which is a challenge for rivals Amazon and Alibaba.

He said Wal-Mart vets sellers to the third party marketplace and has a high bar for selection.

The retailer has also put in place requirements for global vendors that could create U.S. jobs. For example, foreign sellers must be able to fulfill orders from a U.S.-based warehouse, they must use a U.S.-based return center and have customer support operating during U.S. business hours, Trembley said.

But finding U.S.-based suppliers remains a challenge. Beginning in the 1980s, Wal-Mart led a push to look overseas for inexpensive inventory, and the Made-in-America push—with its implied effort to rebuild a hollowed-out manufacturing base—has created more publicity than sales, retail consultants and analysts said.

Wal-Mart’s Marsiglio in an interview in April told Reuters that finding U.S.-based suppliers “remains one of the top challenges across our supplier base.”

This week she said one of the ways Wal-Mart is addressing that challenge is by working with existing suppliers and leveraging their manufacturing capacity to produce multiple items. For example, the retailer is working with a playing cards supplier who is now manufacturing plastic cutlery.

Wal-Mart had 10,249 sellers on its marketplace at the end of 2017’s first quarter, a substantial jump from 400 in the same period a year ago, according to data from Marketplace Pulse. This compares to millions of sellers on Amazon’s marketplace.

But few American consumers are willing to pay higher prices for American-made items. A Reuters Ipsos poll released on Thursday found 70 percent of Americans think it is important to buy U.S.-made products but 37 percent said they wouldn’t pay more for U.S.-made goods.

“This all boils down to one thing,” said Juozas Kaziukenas, founder and chief executive of Marketplace Pulse, the e-commerce analytics firm. “Wal-Mart’s marketplace has not been a success story, but with their renewed focus on e-commerce, they are trying to do everything they can to change that,” he said.

Editing by David Greising and Edward Tobin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8jXDmifFdWo/us-walmart-vendors-exclusive-idUSKBN1AC1VJ

Goldman launches new online lending strategy for mass affluent

(Reuters) – Goldman Sachs Group Inc is launching a new digital platform where customers of other wealth management firms and brokerages can apply for loans, the bank said on Thursday.

The platform, called GS Select, will make loans of $75,000 to $25 million using borrowers’ investment portfolios as collateral.

To find customers, Goldman is partnering with Fidelity Investment’s clearing and custody business, which caters to small brokerages and wealth management firms. Those firms, in turn, have investors who may need loans.

“It’s a relatively lower risk marketplace but a very big market,” Andy Kaiser, head of Goldman’s private bank, said in an interview.

Goldman also plans to leverage relationships with outside investment managers through its asset management division, which sells its own mutual funds, structured notes and alternative investments.

Goldman is turning to third parties because as a Wall Street bank that deals with ultra wealthy investors and corporations, it does not have direct relationships with so-called “mass affluent” borrowers who have less than $10 million in investable assets. Its own wealth clients typically have at least $50 million.

Reuters first reported on the plan in May 2016.

The bank says GS Select will be able to approve and process loans in just one day, and eliminate loads of paperwork that typically accompany applications.

In recent years, Goldman has been trying to grow traditional banking businesses it has little experience with as businesses like bond trading have slowed down.

Last year, it purchased $17 billion worth of online retail deposits from GE Capital Bank. It also launched Marcus, its first major foray into consumer lending, and acquired Honest Dollar, an online retirement savings platform for small businesses and startups.

Goldman has nearly tripled its funded loans over the last four years, but its $64 billion loan portfolio at the end of 2016 is only a fraction of those of bigger consumer banks like JPMorgan Chase Co.

Goldman’s chief rival Morgan Stanley has also been trying to lend more to its own wealth clients, primarily through securities-based loans.

Reporting by Olivia Oran in New York; Editing by Lauren Tara LaCapra and Richard Chang

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/h67NUeenJu4/us-goldman-sachs-lending-idUSKBN1AC0B4

McDonald’s swift to respond in China after moldy ice cream maker pictures go viral in U.S.

SHANGHAI (Reuters) – Viral photos and news reports in the United States allegedly showing a moldy ice cream maker at a U.S. outlet of McDonald’s Corp have prompted swift action from the fast-food giant thousands of miles away: in China.

The firm’s China unit posted a statement late on Wednesday on its Chinese microblog reassuring customers about the safety and cleanliness of its ice cream machines and other food-making tools, responding to reports and pictures swirling online.

The statement, which also appeared at the top of the burger chain’s China website, underlines the sensitivity to potential food safety concerns in China, one of the most important markets for McDonald’s and rival Yum China Holdings.

“We’re paying attention to the information being reposted today online about U.S. ice cream machines,” McDonald’s China said in the statement, adding the firm was investigating the case in the United States.

“In China, ice cream machines used at McDonald’s restaurants are automatically disinfected every day at a set time to ensure food safety.”

There was no similar statement posted prominently on McDonald’s U.S. website on Thursday.

McDonald’s and Yum Brands Inc, the global owner of KFC and Pizza Hut, have been hit before in the country by food safety scares, which can spread rapidly online in China and have an outsized impact on sales.

Media outlets including BuzzFeed, the Huffington Post and Mashable ran reports on Wednesday with photos showing a tray from an ice cream machine full of mold and dirt. The photos had earlier been posted online by a person who said he was an employee at a McDonald’s outlet in Louisiana.

On Thursday, Chinese media outlets picked up on the reports too. Some netizens posted it would put them off eating at the chain, though others defended the firm and pointed to how sensitive foreign brands were to any potential food scares.

“I think (Yum’s) KFC and McDonald’s are scared witless in China,” posted one user on microblog Weibo under the handle ‘Fei Na Xiong An’. “But clearly in terms of cleanliness they’re a lot better than the vast majority of local restaurants.”

Reporting by Adam Jourdan; Editing by Himani Sarkar

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/0Dv_tEZAlPM/us-mcdonalds-china-icecream-idUSKBN1AC09X

Asia shares hit 2007 top, dollar skids on Fed inflation tweak

SYDNEY (Reuters) – Stocks, bonds and commodities were all on a roll in Asia on Thursday, as bulls scented a softening in the Federal Reserve’s confidence on inflation that promised to keep U.S. interest rates low for longer than some had expected.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.9 percent to heights not seen since December 2007. It has gained over 5 percent so far this month.

South Korea and Japan’s Nikkei both added 0.2 percent, while Australia put on 0.3 percent. Stocks in the Philippines were at a one-year peak and Hong Kong’s Hang Seng index added 0.3 percent to push above 27,000.

But worries about tighter regulations nudged China’s blue-chip CSI300 index down 0.7 percent, though data showed a pick up in profit growth for industrial firms.

The latest rush for risk came after the Fed left U.S. rates unmoved as expected on Thursday, and tweaked its wording on inflation.

The market seized on the fact that the central bank noted that both overall and core inflation had declined, and it removed the qualifier “recently,” perhaps suggesting concerns the slowdown might not be temporary.

The Fed also said it expected to start winding down its massive holdings of bonds “relatively soon,” cementing expectations of a September start.

While that would be an effective tightening in financial conditions it might also lessen the need for actual hikes in rates, which matter more for currency valuations.

“The dollar’s biggest problem is it can’t expect help from the Fed for a long time,” said Alan Ruskin, global head of forex at Deutsche.

“In the short-term we are still in a risk-favorable loop, whereby subdued goods and services inflation supports a well behaved bond market and asset inflation. It’s just another day in paradise.”

A Reuters poll showed most primary dealers, the banks authorized to trade directly with the Fed, still see the Fed’s next rate rise in December. But Fed funds rate futures are pricing in less than 50 percent chance of a hike by then, compared to more than 50 percent before the Fed’s meeting.

Dollar Breaks Lower

Yields on U.S. 10-year benchmark U.S. Treasuries fell 5 basis points and were last at 2.278 percent. The dollar followed, falling to a 13-month trough against a basket of currencies of 93.322.

The euro, which had been bumping up against a 23-month top for most of the week, finally broke through to reach $1.1750, its highest since January, 2015.

The next major chart target was the 200-week average at $1.1807 – a measure the euro has not traded above since August 2014.

The dollar was fast approaching the 200-week barrier on its Canadian counterpart, and had breached that technically important level on the Australian dollar.

The dollar even fell back against the yen to 110.875, though the damage was somewhat limited by expectations the Bank of Japan would keep its super-easy policies in place longer than most other global central banks.

The prospect of U.S. policy staying stimulative saw Wall Street’s fear gauge touch a record low as stocks notched record closing highs. The Dow ended Wednesday up 0.45 percent, while the SP 500 added 0.03 percent and the Nasdaq 0.16 percent. [.N]

The declining U.S. dollar boosted commodities priced in the currency. Spot gold hit a six-week high and was last trading at $1,263.80, while copper reached territory not trod since May 2015.

Oil prices neared eight-week highs as a surprisingly sharp drop in U.S. inventories encouraged speculation a global crude glut would recede.

A bout of profit-taking in Asia on Thursday saw Brent crude futures ease 6 cents to $50.91 a barrel, while U.S. crude dipped 7 cents to $48.68.

Editing by Kim Coghill and Lisa Twaronite

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/YB1YxRcRvPM/us-global-markets-idUSKBN1AC01W

Facebook shares hit record high as mobile ad sales soar

(Reuters) – Facebook Inc’s mobile advertising business grew by more than 50 percent in the second quarter, the company said in its earnings report on Wednesday, as the social network continued to establish itself as the venue of choice for an ever-growing array of online advertisers.

Shares in Facebook, owner of four of the most popular mobile services in the world, rose more than 4 percent to about $173 in after-hours trading. Through Wednesday’s close, the stock price had climbed nearly 44 percent this year.

Facebook, which now has more than 2 billion regular users, has been squeezing more ads into its Facebook News Feed while adding more ads to its photo-sharing app Instagram, which has more than 700 million users.

With money cascading from those two services, Chief Executive Mark Zuckerberg said the company was turning attention to monetizing its two messaging services, Messenger and WhatsApp, which have more than 1 billion users each.

“I want to see us move a little faster here but I’m confident that we’re going to get this right over the long term,” Zuckerberg said in a conference call with analysts.

The company also is accelerating its push into video, an effort aimed at taking advertising dollars from the television industry and increasing the time people spend on Facebook.

Within weeks, Facebook is expected to start a video service that will include scripted shows, a sharp change for a business built on user-generated content.

Zuckerberg said video would be a significant driver of Facebook’s business in the next two to three years.

With those possibilities still on the horizon, Facebook said total revenue rose 44.8 percent to $9.32 billion in the second quarter of the year. That beat the average forecast of $9.20 billion among analysts tracked by Thomson Reuters I/B/E/S.

Growth was even steeper in mobile advertising, which increased to nearly $8 billion.

“In mobile we’re continuing to see great strengths,” Facebook Chief Financial Officer David Wehner said in a phone interview with Reuters. “We’re seeing more and more ad dollars getting allocated to mobile, and we think that trend will continue.”

“Killing It on Mobile”

Mobile ad revenue accounted for 87 percent of the company’s total advertising revenue of $9.16 billion in the latest quarter, up from 84 percent a year earlier.

“They’re killing it on mobile,” Needham Co analyst Laura Martin said, referring to Facebook’s suite of apps. “They are the de facto mobile advertising monopolies and that’s a really big deal.”

Martin said she sees no weaknesses in Facebook’s business.

Facebook and Alphabet Inc own half of the online advertising market worldwide, and Facebook’s revenue growth this quarter outshone Alphabet, the owner of YouTube and Google.

Alphabet on Monday reported a 21 percent increase in quarterly revenue, although it started the quarter from a larger base than Facebook did.

Facebook has not said how much of its revenue is attributable to its Instagram unit, although the photo-sharing app has become a greater focus of its business.

“Clearly, the biggest driver of growth is, overall, Facebook News Feed,” Wehner said. “Instagram is making a contribution and an increasing contribution.”

But investors want Facebook to find additional revenue streams because the company has warned it is hitting maximum ad load in the News Feed, potentially slowing its overall growth.

So far that has not happened.

“They kept warning about ad load, but the ad load continues to be strong,” said Ivan Feinseth, research director at Tigress Financial Partners. “I still think ad revenue will grow, because more advertisers are adapting to this platform because there are so many people out there.”

The popularity of Instagram also has put pressure on Snapchat, the app owned by Snap Inc. Instagram has added features similar to Snapchat’s and Snap’s stock on Wednesday closed at an all-time low of $13.40.

Facebook said about 2.01 billion people were using its service monthly as of June 30, up 17 percent from a year earlier.

For the second quarter, net income attributable to shareholders rose to $3.89 billion, or $1.32 per share, from $2.28 billion, or 78 cents per share, a year earlier. Analysts on average had expected earnings of $1.13 per share, according to Thomson Reuters I/B/E/S.

Reporting by David Ingram in San Francisco and Rishika Sadam in Bengaluru; Editing by Jonathan Weber and Bill Trott

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/e8cZM4leUCg/us-facebook-results-idUSKBN1AB2S8

Samsung Electronics expects continued chip boom after record second-quarter profit

SEOUL (Reuters) – Samsung Electronics Co Ltd (005930.KS) on Thursday said it expected the memory chip boom to continue in the current quarter, after reporting a record operating profit for the three months through June.

The world’s biggest maker of memory chips, smartphones and television sets is widely expected to break profit records for the full year, as better-than-forecast performance in its mobile business lifted quarterly operating profit slightly above its early-July guidance, analysts said.

The company on Thursday also announced its third share buyback of the year, at 1.7 trillion won ($1.53 billion) worth of common shares, as part of the 9.3 trillion won annual total that Samsung promised in January. It also announced the cancellation of 2 trillion won worth of its own shares.

“Looking ahead to the third quarter, the company expects favorable semiconductor conditions to continue, although overall earnings may slightly decline quarter-on-quarter as earnings weaken for the display panel and mobile businesses,” Asia’s third most-valuable company by market value said in a statement.

Analysts nevertheless forecast third-quarter earnings to exceed the second quarter on the strength of the so-called memory chip super-cycle.

“We think more than 15 trillion won (in third-quarter profit) is more than possible,” said analyst Greg Roh at HMC Investment Securities.

“The mobile business might be slightly weaker in the third quarter because the second quarter was so strong, but the expected sales from OLED (organic light-emitting diode) display supply to Apple Inc (AAPL.O) is seen to be reflected in earnings starting in the third quarter.”

Operating profit rose 72.7 percent in the second quarter from the same period a year earlier, to 14.1 trillion won, Samsung said in a regulatory filing. That compared with 14 trillion won estimated in July.

Revenue rose 19.8 percent to 61 trillion won, also in line with its earlier estimate.

The chip business was Samsung’s top earner as profit rose to a record 8 trillion won from 2.6 trillion won in the second quarter of 2016. Client demand for more powerful devices and supply constraints are pushing up prices of both DRAM and NAND memory chips, widening profit margins.

The mobile division, which competes with Apple Inc (AAPL.O), reported a profit of 4.1 trillion won, a decline from 4.3 trillion won a year prior.

Some analysts and fund managers said sales of Samsung’s new flagship Galaxy S8 smartphone have not exceeded those of the S7 by as much as the market had expected. But Koh Dong-jin, head of the firm’s mobile communications business, has said cumulative sales of the S8 and S8+ handsets from April is 15 percent higher than those of its predecessor.

The record earnings come as the firm’s Vice Chairman Jay Y. Lee is in detention while on trial for his alleged role in a corruption scandal involving former president Park Geun-hye. He has denied wrongdoing.

The lower court ruling is widely expected to come before Lee’s current detention period ends on August 27, a Seoul court spokesman said.

Samsung Electronics shares were up 0.9 percent as of 0055 GMT, while the Kospi benchmark share price index .KS11 was up 0.2 percent.

Reporting by Joyce Lee; Editing by Christopher Cushing

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/wreVmCN8dfY/us-samsung-elec-results-idUSKBN1AB34L

Singapore slings? Taking on Alibaba, Amazon launches Prime Now in the city state

SINGAPORE (Reuters) – Amazon.com Inc launched its two-hour delivery service in Singapore on Thursday, marking the e-commerce giant’s push into populous Southeast Asia and its first head-on battle with its Chinese rival, Alibaba Group Holding.

While Amazon does deliver to Singapore, higher-end services had not been available, such as Prime services which include access to the company’s video-streaming service. The Prime Now Singapore website, which went live on Thursday, promises delivery within two hours.

In Asia, Amazon has largely sidestepped China and focused on India. But its arrival in Singapore, a tiny but wealthy English-speaking city state of just over 5 million people, has been hotly anticipated as a gateway to a Southeast Asian region of 600 million, where currently only a fraction of sales are conducted online.

Industry executives are preparing for a battle of titans.

Alibaba owns Southeast Asia-focused Lazada, and spent an extra $1 billion to boost its stake to 83 percent last month.

Ahead of Amazon’s arrival, it launched subscription-based customer loyalty program LiveUp in Singapore in April, a venture which includes ride-hailing app Uber, video streaming service Netflix and local online grocer Redmart, which it owns.

“Singapore will be a test bed,” said Ajay Sunder, vice president of digital transformation at Frost and Sullivan.

“I would give Amazon another two quarters, they should be rolling out soon in southeast Asia, at least the major cities.”

Frost forecasts online product sales in southeast Asia to grow to $71 billion by 2021 from $16 billion in 2016.

Home Advantage?

Since launching five years ago, Lazada has expanded into six markets in Southeast Asia: Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam.

Besides financial support, Alibaba’s investment has boosted Lazada’s range of merchants and improved its logistics. Lazada and Alibaba could already be ahead, said Xiaofeng Wang, a senior analyst at research firm Forrester, with their longer experience of local customers, and with logistics and vendor systems.

Amazon, though, has deep pockets, technological nous and an inventory of U.S. products, she added.

But while Southeast Asia may be the last big battleground for e-commerce in Asia, it is not easy, with complex regulatory differences, language barriers and logistical barriers like the huge number of islands that make up the Philippines, or Jakarta’s paralyzing traffic. Internet connections can be slow or non-existent.

Lazada has used third-party providers and developed its own logistics and warehouses.

But the market is also fragmented, with several local players including Indonesia’s Tokopedia, in which a source has said Alibaba rival, Chinese e-commerce group JD.com Inc, is considering an investment.

Amazon’s Prime Now is Amazon’s express delivery service, which launched in New York City in December 2014 and has since expanded to several other major U.S cities, as well as European cities such as London, Berlin, Milan, and Madrid.

“Prime builds loyalty, and same-day delivery adds to convenience factor,” Frost’s Sunder said, adding Amazon could try the service in the main Southeast Asian cities.

“But Prime Now across Indonesia or across Thailand that will remain a distant reality given the logistical challenges.”

Reporting by Aradhana Aravindan; Editing by Clara Ferreira-Marques

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/la-nnOXR0hc/us-amazon-singapore-idUSKBN1AC03K

Foxconn announces U.S. manufacturing plant in Wisconsin

(Reuters) – Taiwanese electronics manufacturer Foxconn on Wednesday announced plans to build a $10 billion LCD display panel screen plant in Wisconsin, a deal President Donald Trump asserted would not have happened without his efforts.

The company said it plans to invest $10 billion over four years to build a 20-million square foot plant that could eventually employ up to 13,000.

Trump praised Foxconn chairman Terry Gou at a White House event, asserting: “If I didn’t get elected, he definitely wouldn’t be spending $10 billion … This is a great day for America.”

Wisconsin Governor Scott Walker said at the White House his state will award $3 billion in incentives and sign a memorandum of understanding on the investment on Thursday.

He told reporters at the White House the state legislature will need to approve the $3 billion incentives package. About half is for capital costs and nearly half for workforce development. There are also some sales tax exemption incentives.

Foxconn, formally known as Hon Hai Precision Industry Co Ltd (2317.TW), said in a statement that the investment “signifies the start of a series of investments by Foxconn in American manufacturing in the coming years.”

But Foxconn has had a mixed record following up on promises to create new jobs in the United States.

In 2013, Foxconn said it would invest $30 million and hire 500 workers for a new factory in Pennsylvania, but that facility was never completed. Foxconn has another small operation in Pennsylvania.

Foxconn, a major supplier to Apple Inc (AAPL.O) for its iPhones, said last month it plans to invest more than $10 billion in a display-making factory in the United States.

Wisconsin’s tax incentives would be awarded over 20 years if Foxconn meets hiring targets, officials said Wednesday.

Walker said the plant was the largest economic development project in the state’s history.

White House Chief of Staff Reince Priebus told a Wisconsin TV station that Trump was aboard Marine One over Kenosha, Wisconsin, in April and spotted the site of a former Chrysler plant.

When Foxconn executives met with Trump in the Oval Office, “the president said I know a good spot where you should go — that place in Kenosha,” Priebus recounted.

Walker said Foxconn is considering several sites in southeast Wisconsin and will announce a final site soon.

Trump has called for companies to build more products in the United States and open additional plants. He has made several announcements since his election in November about U.S. investments by both foreign and domestic manufacturers, building on his campaign focus on boosting American jobs. Some of those announcements sought to take credit for previously announced investments.

Corporate Welfare

Wisconsin state Senator Jennifer Shilling, a Democrat, questioned whether there is “legislative appetite for a $1 (billion) to $3 billion corporate welfare package… The bottom line is this company has a concerning track record of big announcements with little follow-through.”

Tai Jeng-wu, CEO of Foxconn’s Japanese unit Sharp Corp (6753.T), said in June that six U.S. states were being evaluated for a possible location for a plant to make displays.

The United States has added 70,000 manufacturing jobs since November, bringing the total to nearly 12.4 million, but has not added any net factory jobs in the last two months, according to the Bureau of Labor Statistics.

Overall only 8.0 percent of U.S. workers are employed in manufacturing, down from 22 percent in 1970 due to the impact of technological change and the growth of global supply chains.

Trump told the Wall Street Journal on Tuesday that Apple Chief Executive Tim Cook has committed to build three big manufacturing plants in the United States. Apple did not comment.

Reporting by David Shepardson; Editing by Dan Grebler and Chris Sanders

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jetLI3Ur2H8/us-apple-foxconn-wisconsin-idUSKBN1AB258

Exclusive: Discovery in the lead to acquire Scripps Networks

(Reuters) – U.S. media company Discovery Communications Inc is in the lead to acquire U.S. cable TV network owner Scripps Networks Interactive Inc, people familiar with the matter said on Wednesday, in a deal likely to top $12 billion.

The acquisition would bring together Scripps’ HGTV, Travel Channel and Food Network and Discovery’s Animal Planet and Discovery Channel, giving the combined company more pricing power with which to negotiate with cable TV operators such as Comcast Corp and Charter Communications Inc.

Discovery has entered into exclusive talks with Scripps after prevailing over a rival offer from Viacom Inc, another U.S. media company, one of the sources said. [nL1N1KH011]

While a deal could come as early as next week, negotiations are ongoing and no agreement is certain, the sources added.

The exact value of Discovery’s offer could not be learned, but sources said it is a cash-and-stock bid, comprising mostly cash, and valuing Scripps in the region of $90 per share. Scripps shares ended trading on Wednesday at $84.07.

The sources asked not to be identified because the negotiations are confidential. Viacom, Scripps and Discovery declined to comment.

Cable TV networks are coming under pressure as more viewers watch their favorite shows and movies on their phones and tablets, and there is also increasing competition for viewers from streaming services such as Netflix Inc and Amazon.com Inc.

By adding Scripps programming, Discovery, which has a market capitalization of $15.2 billion, could launch its own “skinny bundle” of networks at a low cost for viewers. The deal would also help Discover to sell its content overseas more easily.

Scripps has been considered a takeover target since the Scripps family trust that controlled the company was dissolved five years ago.

This is at least the third time that Discovery, whose shareholders include cable magnate John Malone, has held talks to buy Scripps.

Reporting by Jessica Toonkel and Liana B. Baker in New York; Editing by Lisa Shumaker

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