News Archive


U.S. goods trade deficit widens in July; retail inventories fall

WASHINGTON (Reuters) – The U.S. goods trade deficit increased in July as exports fell, suggesting that trade would make a modest contribution to economic growth in the third quarter.

The Commerce Department said on Monday the goods trade gap increased 1.7 percent to $65.1 billion last month. Exports declined 1.3 percent, weighed down by an 8.0 percent tumble in shipments of motor vehicles.

There were also decreases in exports of consumer goods last month. Capital goods exports rose 1.5 percent.

“Early on in the third-quarter data cycle, we think trade will be a slightly positive factor for growth during the quarter,” said Daniel Silver, an economist at JPMorgan in New York. “With the July data now in hand for capital goods shipments and related trade flows, we think real equipment spending will be strong in the third quarter.”

Imports fell 0.3 percent, reflecting a 2.8 percent drop in motor vehicle imports as well as a 1.7 percent decline in industrial supplies. Capital goods imports rose 2.0 percent last months and imports of consumer goods dipped 0.1 percent.

“The readings on consumer and capital goods imports are consistent with our view of ongoing expansion in U.S. economic activity, led by household and business spending,” said Michael Gapen, chief economist at Barclays Capital in New York.

The government will publish its comprehensive trade report, which includes services, next week. Trade added nearly two-tenths of a percentage point to the economy’s 2.6 percent annualized growth rate in the second quarter.

The Commerce Department also reported on Monday that wholesale inventories increased 0.4 percent in July after rising 0.6 percent in June. However, retail inventories fell 0.2 percent after advancing 0.6 percent in June.

Retail inventories, excluding motor vehicles and parts, the component that goes into the calculation of gross domestic product also fell 0.2 percent last month after rising 0.5 percent in June.

Despite July’s soft inventory data, economists remained optimistic that inventory investment would contribute to growth in the third quarter. Inventory investment had a neutral impact on second-quarter GDP after slicing 1.46 percentage points from output in the first three months of the year.

Reporting By Lucia Mutikani; Editing by Andrea Ricci

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/HbL6sf4JyRU/us-usa-economy-trade-idUSKCN1B81H8

Western Digital group finalizing $17 billion deal for Toshiba chip unit: source

TOKYO (Reuters) – A consortium led by Western Digital Corp (WDC.O) is close to an agreement to buy Toshiba Corp’s (6502.T) $17.4 billion chip business, with the U.S. firm’s CEO in Tokyo to finalize the long and contentious talks, a person familiar with the matter said.

The consortium and Toshiba aim to announce a deal on Thursday when the board of the embattled Japanese conglomerate is due to meet, separate people familiar with the matter also said.

A deal would mark an end to months of uncertainty for Toshiba, which is scrambling to sell its flash memory unit – the world’s No. 2 producer of NAND chips – to cover billions in losses at its bankrupt U.S. nuclear business Westinghouse.

It would also be a remarkable victory for Western Digital, Toshiba’s joint venture partner for its chip business, after relations with the Japanese firm frayed to point where other bidders were chosen first and the U.S. firm initiated legal action that threatened to derail any deal.

Sources declined to be identified as the discussions were private.

Western Digital, Toshiba and a state-backed fund, the Innovation Network of Japan, which is a member of the consortium declined to comment. Representatives for U.S. private equity firm KKR Co (KKR.N) and the Development Bank of Japan, also members, were not immediately available for comment.

While Western Digital is very much in the driver’s seat in talks, it has made several key concessions to secure a deal that Toshiba is willing to accept and that will keep the unit out of the hands of rival chip firms, sources have said.

Its financial participation in the deal is limited to 150 billion yen ($1.4 billion) through convertible bonds, and its stake will be no more than a third when those bonds are converted, they said. A stake of more than a third would allow Western Digital to veto board decisions.

The U.S. firm will also not seek a management role, they said.

Other members of group, which is offering 1.9 trillion yen ($17.4 billion), will include the Innovation Network Corp of Japan and the Development Bank of Japan as well as KKR, with each putting up 300 billion yen, they said. Japanese banks and companies will also provide financing.

But it remains to be seen if a deal will be concluded by Thursday. Some senior executives at Toshiba Memory have threatened to quit if a deal with Western Digital is struck, sources say.

Both sides, however, have reason to cooperate.

Toshiba wants to close the sale by the end of the financial year in March to ensure it is not in negative net worth, where its liabilities exceed assets, for a second year running. This could result in a delisting from the Tokyo Stock Exchange.

Given regulatory approvals could take more than six months, Toshiba has been hoping to reach a deal by the end of the month to ensure it can close the sale in time.

For its part, Western Digital is eager to keep investing in their joint venture to keep up with industry leader Samsung Electronics (005930.KS), which recently announced 20.4 trillion won ($18.2 billion) of new investments into NAND production lines.

The U.S. firm, which has taken legal action against Toshiba arguing that any deal will need its consent, only appeared to gain the upper hand in talks over the past month.

Before that, Toshiba had picked a consortium of Japanese government-backed funds, U.S. private equity firm Bain Capital LP and South Korean chip maker SK Hynix Inc (000660.KS) as its preferred bidder.

Shares in Toshiba ended trade on Monday up 0.6 percent. It has lost around 30 percent in market value since late last year when the company flagged that its Westinghouse division was facing billions in losses.

Reporting by Makiko Yamazaki; Additional reporting by Kentaro Hamada and Ritsuko Ando; Editing by Edwina Gibbs

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/OTU4-zzn8rA/us-toshiba-accounting-idUSKCN1B806H

Gasoline futures surge as Harvey swamps Texas, euro holds at 2-1/2-year high

SINGAPORE (Reuters) – U.S. gasoline futures rose to a two-year high on Monday as Tropical Storm Harvey pummeled the heart of America’s energy sector, while the euro hit a 2-1/2-year peak after the European Central Bank president refrained from talking down the currency.

Following a subdued session in Asia as investors awaited damage estimates from the storm, financial spreadbetter LCG expected Germany’s DAX to open down 0.2 percent and France’s CAC 40 to start the day 0.3 percent lower. The UK is closed for a holiday.

U.S. stock futures were down 0.2 percent, suggesting softer opening on Wall Street later in the day.

Gasoline futures soared as much as 6.8 percent at one point as the storm, which came ashore on Friday as the most powerful hurricane to hit Texas in more than 50 years, continued to batter the state.

The region is home to a quarter of U.S. crude oil refining capacity, and some areas are expected to see a year’s worth of rainfall in the span of a week. At least two people have died so far, and the toll is expected to rise as the storm triggers additional tidal surges and tornadoes.

Harvey has knocked out a quarter of oil production from the Gulf of Mexico, prompting fears it could overturn years of U.S. excess oil capacity and low prices. Some U.S. traders were seeking to import oil product cargoes from North Asia, several refining and shipping sources told Reuters.

“The rain is expected to last through to Wednesday so the disruptions could last for some time yet,” said William O’Loughlin, investment analyst at Rivkin Securities in Sydney.

U.S. economic growth more than halved in the quarter after Hurricane Katrina mauled Louisiana in August 2005, but quickly bounced back by early 2006 as reconstruction began and gasoline prices moderated.

U.S. gasoline futures were up 5.6 percent at 0535 GMT.

After surging on Friday, crude oil prices were mixed on Monday as markets tried to gauge Harvey’s impact on oil production and refinery demand.

Brent futures, the global crude oil benchmark, rose 0.3 percent to $52.56 a barrel, adding to Friday’s 0.7 percent increase. But U.S. crude futures pulled back 0.4 percent to $47.70, paring Friday’s 0.9 percent increase.

Despite gains in energy shares across the region, MSCI’s broadest index of Asia-Pacific shares outside Japan rose less than 0.1 percent.

Japan’s Nikkei was little changed, but Japanese property and casualty insurers’ shares skidded as investors fretted about the broader impact of U.S. storm.[.T]

Chinese blue chips rose 1.6 percent, extending this summer’s blistering rally to nearly 11 percent after a raft of strong earnings, while Hong Kong’s Hang Seng added 0.4 percent.[.SS]

Australian shares slid 0.7 percent, and South Korea’s KOSPI was down 0.5 percent.

Markets mostly dismissed the firing of three short-range missiles by North Korea into the sea on Saturday, as the U.S. and South Korea conducted annual joint military drills that the North denounces as preparation for war.

U.S. Secretary of State Rex Tillerson said on Sunday the test was a provocative act but that the U.S. will continue to seek a peaceful resolution.

The Korean won strengthened 0.8 percent to 1,119.9 won to the dollar as the greenback faltered.

The euro hovered near its highest level since January 2015, retaining gains made on Friday after ECB President Mario Draghi refrained from citing the common currency’s strength as a concern or discussing monetary policy specifically at a central bankers’ meeting in Wyoming.

Instead, Draghi said the central bank’s ultra-easy monetary policy was working and the euro zone’s economic recovery had taken hold.

“The EUR bulls will feed off anything they can get that suggests a less accommodative stance going forward,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

The euro rose to as high as $1.19665 early on Monday and was up 0.1 percent from its $1.19215 close on Friday, when it advanced 1 percent, at $1.1931.

The dollar fell 0.3 percent to 109.13 yen, adding to Friday’s 0.1 percent slide, after Federal Reserve Chair Janet Yellen focused more on financial stability in a speech at the same event as Draghi.

Yellen’s remarks disappointed some investors who had hoped for hints on the Fed’s plans for interest rates, though most analysts had not expected either Yellen or Draghi to shed new light on policies.

The dollar index, which tracks the greenback against a basket of other major currencies, fell 0.3 percent to 92.467, its lowest level since January 2015.

The 10-year U.S. Treasury yield was at 2.1728 percent on Monday, from Thursday’s 2.194, further undermining the dollar’s yield appeal.

Spot gold crept up 0.25 percent to $1,294.42 an ounce, extending Friday’s 0.4 percent gain.

Reporting by Nichola Saminather; Additional reporting by Shinichi Saoshiro and Ernest Scheyder; Editing by Eric Meijer and Kim Coghill

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/QUWBcLxIxTk/us-global-markets-idUSKCN1B70YH

CBS agrees to buy embattled Australian customer Ten Network

SYDNEY (Reuters) – CBS Corp (CBS.N), the United States’ most-watched television network, on Monday said it plans to buy its biggest customer in Australia, Ten Network Holdings Ltd (TEN.AX), and launch its streaming service in the country.

Through the deal, Ten’s biggest creditor has thwarted a takeover by a consortium led by Lachlan Murdoch – co-chair of CBS rival and fellow Ten creditor News Corp (NWSA.O) – that was widely expected after Ten entered administration in June.

“We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar,” CBS Chairman and Chief Executive Leslie Moonves said in a statement.

CBS is wading into an Australian market where broadcasters, and Ten in particular, are cutting costs as losses deepen, with advertisers following viewers to streaming services such as Netflix Inc (NFLX.O) and Amazon.com Inc’s (AMZN.O) Amazon Prime.

Ten booked a A$232 million half-year loss in April, and rivals Seven West Media Ltd (SWM.AX) and Nine Entertainment Co Ltd (NEC.AX) swung to annual losses after writing down TV assets.

But the deal with Australia’s least-watched commercial network also buys CBS a foothold in the local online viewing market via Ten’s digital outlet Tenplay, as it seeks to capitalize on overseas sales of its proprietary shows.

“I certainly would welcome the Ten Network coming into a period of stable ownership and financially stable circumstances,” said Prime Minister Malcolm Turnbull. “That would be in the interests of the network, its employees, and, of course, its viewers.”

Neither party disclosed details of the deal, but analysts and local media valued Ten at A$200 million to A$250 million ($160 million to $200 million). Its shares had a market value of A$58 million before trading was suspended when the firm entered administration.

RELATIONSHIP

CBS has been benefiting from a gamble to own more of the shows it broadcasts rather than licensing them from studios. Global hits such as Hawaii Five-O helped swell international content licensing revenue to $1.5 billion in 2015, from $500 million 10 years earlier.

“CBS and Ten have had a strong relationship for a number of years; we are very excited about further developing that relationship … at this critical time,” said Ten CEO Paul Anderson.

Filings from administrator KordaMentha, lodged after creditors including Murdoch pulled a debt guarantee, showed CBS in July claimed A$844 million owed for licensing shows such as NCIS and CSI: Crime Scene Investigation.

“It’s already a huge relationship. All the major dramas on Ten are supplied by CBS,” said media analyst Peter Cox. However their popularity in Australia has waned, he said.

“The test will be whether an American network can relate to an Australian audience and deliver Australian programs that Australians want to watch.”

Under the deal, CBS gains digital terrestrial television channel Eleven, of which it already owns 33 percent, as well as Tenplay. It will also be able to launch its subscription video-on-demand service, CBS All Access, through Ten’s infrastructure.

The deal, which includes debt, needs approval from creditors and Australia’s Foreign Investment Review Board. Unlike the Murdoch consortium bid, it is not dependent on a change in media law that prevents a single party from owning print, radio and television assets in the same market.

“It is a shame that the failure to remove the media law restrictions meant that no Australian player was interested, as shareholders would have liked to see Ten Network stay in Australian hands,” said the Australian Shareholders’ Association director Allan Goldin.

Ten rejected a $588 million takeover bid from Time Warner Inc (TWX.N) in 2014.

($1 = 1.2599 Australian dollars)

Reporting by Tom Westbrook; Editing by Jane Wardell and Christopher Cushing

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7L1VezoxunQ/us-ten-network-m-a-cbs-corp-idUSKCN1B8004

GE shifts strategy, financial targets for digital business after missteps

NEW YORK (Reuters) – General Electric Co (GE.N) wants its industrial software business to cut costs and lift profits next year under new chief executive John Flannery, and is considering expanded partnerships and the possible sale of some equity in the unit, according to people familiar with the business.

Former chief executive Jeffrey Immelt spent six years and more than $4 billion transforming 125-year-old GE into a “digital industrial” company. But GE has had technical problems and delays with its software platform, known as Predix, which connects equipment like turbines and elevators to computers that can predict failures and reduce operating costs.

This spring, GE called an unusual, two month “time-out” to tackle the Predix problems, which have not been previously reported. With fixes in place, GE will now emphasize sales to existing customers in its energy, aviation and oil-and-gas businesses, and scale back efforts to sell to new customers in other sectors, three senior GE executives told Reuters.

“Our resources will go to our fastest-selling markets,” GE Digital Chief Executive Officer Bill Ruh said in an interview.

To help investors better understand Predix, GE also has redefined digital revenue to exclude $3 billion in hardware related to its gas-fueled power plants, providing a clearer picture of the “pure” software business and avoiding double-counting, Chief Financial Officer Jeff Bornstein said.

The company now expects $12 billion in digital revenue in 2020, compared with $15 billion under the old definition. GE’s total revenue hit nearly $124 billion last year.

The changes mark an important course correction for GE Digital, which so far has not delivered the revenue investors wanted and is partly responsible for a 25 percent decline in GE’s share price this year to a near two-year low.

GE estimates the industrial internet market will be worth $225 billion a year by 2020, and Flannery, who became CEO on Aug. 1, appears committed to Immelt’s vision of being a major player, according to two people familiar with his thinking. For a graphic on how GE’s industrial internet works, click tmsnrt.rs/2i9bZ0s

But the 55-year-old leader, known for finance skills and making tough decisions, is likely to press GE Digital to reduce costs and lift profits next year. He also may restructure how GE Digital operates, bring in more partners and possibly sell a minority stake in the unit, they told Reuters.

“There was a lot of money spent on Predix,” said a former senior financial executive at GE who worked with Flannery. “They are going to tighten the grip and ensure there’s a return.”

GE declined to comment on Flannery’s plans.

“ENDLESS CHECKBOOK”

Immelt was among the first executives to spot the industrial internet wave nearly a decade ago, and positioning the company to catch it became one of his signature strategic moves in his 16 year term as chief executive.

“This is an all-encompassing change,” Immelt said last year, as GE increased its digital investment.

Analysts and investors see potential for Predix to deliver substantial sales and profits. It already has attracted some large customers, including power utility Exelon Corp (EXC.N) and elevator maker Schindler Holding AG (SCHP.S), and orders rose 24 percent to $2.3 billion in the first half of 2017.

But some analysts and investors say the business has taken longer than expected to mature, and its current growth rate is too slow to hit GE’s $12 billion target by 2020. Spending also soared under Immelt, which weighed on profits.

“He gave Bill Ruh an endless checkbook,” Nick Heymann, an analyst at William Blair Co., said of Immelt.

Case in point: GE has budgeted $700 million more in digital spending this year – to a total of $2.1 billion – to further develop Predix and its applications, and to boost sales efforts. GE executives noted this is likely to mark the peak for digital investment.

GE Digital Chief Financial Officer Khozema Shipchandler said the 2020 revenue target is within reach since recurring Predix subscriptions “pile on significant revenue as time goes on.”

FIXING PREDIX

Immelt pushed GE to go digital sooner than other companies. But some early missteps cost time and money as GE’s strategy evolved. Engineers initially advised building data centers that would house the “Predix Cloud.” But after Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) spent tens of billions of dollars on data centers for their cloud services, AWS and Azure, GE changed course.

“That is not an investment we can compete with,” Ruh said.

GE abandoned its go-it-alone cloud strategy a year ago. It now relies on AWS and expects to be using Azure by late October, four months behind schedule, the executives said.

As GE pivoted away from building data centers, its engineers focused on applications, which executives now saw as more useful for winning business and more profitable than the platform alone.

“That is probably the biggest lesson we’ve learned,” Ruh said.

GE also faced legacy challenges in adapting to Predix software. GE has many algorithms for monitoring its machines, but they mostly were written in different coding languages and reside on other systems in GE businesses. This makes transferring them to Predix more time consuming, people familiar with the system told Reuters.

The acquisition of Meridium and ServiceMax over the past 10 months gave GE well-known applications and added about $150 million to annual digital revenue, GE said. But the new products also brought more code that had to be converted to run on Predix, people familiar with the systems said.

The result: software installation sometimes took much longer than GE anticipated, the code had bugs and applications sometimes lacked features that customers wanted, these people said.

GE executives acknowledged Predix had experienced technical problems and was behind schedule in hitting some goals. During the “time out” in May and June, GE Digital’s programmers made Predix more stable, they said.

The changes in strategy have come with a change in leadership. Predix chief Harel Kodesh and GE Digital Chief Commercial Officer Kate Johnson both left this year. Patrick Franklin, who succeeded Kodesh, called the “time out” to fix Predix.

Ruh said the leadership “evolved with the business” and that GE has the right people to keep Predix growing.

RIVALS TAKE AIM

The competition is not standing still. Large rivals such as Siemens AG (SIEGn.DE) and a crop of nimble startups are pressing to gain market share in GE’s main areas of energy, aviation, locomotives, health care and oil and gas.

Chicago-based startup Uptake signed a deal in March with subsidiaries of Berkshire Hathaway Energy (BRKa.N) to provide analytics on thousands of wind turbines, including those made by GE. C3 IoT, based in Redwood City, California, won a deal last year with French utility Engie SA (ENGIE.PA), a GE customer. Engie later signed a digital partnership agreement with GE.

Stewart Stevenson, a maker of fracking pumps and other equipment, met with GE about Predix in 2015 but quickly decided against it.

“They didn’t seem to be able to customize to meet the needs of our customers,” said Chris Harvell, the firm’s chief technology officer. “And if they did do any development, we’d probably end up paying quite a bit of money.”

The company chose Flutura, a 100-person, Houston firm started in 2012, for a pilot. Flutura lacked GE’s scale, but could easily produce custom code, he said.

Ruh said that while GE faces competitors in every deal, many startups are not true competitors because Predix includes unique applications and is available globally.

“No other competitor has these capabilities on their platforms,” he said.

Inside GE, executives remain bullish. Predix will pay off handsomely if GE stays focused on building it and winning customers, said Joshua Bloom, co-founder and chief technology officer of Wise.io, an artificial intelligence firm GE bought last year.

But, he said, “doing that right and at scale is a massive challenge.”

(For a graphic on an internet for infrastructure click, here)

Reporting by Alwyn Scott; editing by Joe White and Edward Tobin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/kzfJ5MXShiY/us-ge-digital-outlook-insight-idUSKCN1B80CB

Uber picks Expedia’s Dara Khosrowshahi as new CEO: sources

(Reuters) – Uber Technologies Inc [UBER.UL] chose Dara Khosrowshahi, the chief executive of travel company Expedia Inc, as its chief executive on Sunday, according to two sources with knowledge of the matter, handing him the challenge of leading the ride-services company out of a nearly year-long crisis.

Khosrowshahi, 48, would take on the daunting task of mending Uber’s image, repairing frayed relations among investors, rebuilding employee morale and creating a profitable business after seven years of losses.

In Khosrowshahi, Uber’s board has picked an executive with a track record of driving growth while also delivering profits – precisely what the unprofitable Uber needs to satisfy investors. He has also proven capable of making Expedia the leader in another industry full of change and competition — online travel.

But he would also have to contend with the legacy of Travis Kalanick, Uber’s pugnacious co-founder, who was ousted as CEO in June after shareholders representing about 40 percent of the company’s voting power signed a letter asking him to step down amid growing concern over his behavior and the behavior of senior managers under him.

The Uber board of directors has been meeting daily and deliberated on its pick for CEO throughout the weekend. A spokeswoman said on Sunday that the board had voted but was declining to disclose its choice publicly until after informing employees.

An Uber spokesman and an Expedia spokeswoman declined to comment. Khosrowshahi did not immediately respond to requests for comment through email and on Twitter.

Khosrowshahi, who has run Expedia for 12 years, was not known to the public to be among the top candidates for the job.

He beat out Jeff Immelt, chairman of General Electric Co and one of the finalists for the job, who said earlier on Sunday he was no longer in the running. Meg Whitman, chief executive of Hewlett Packard Enterprise, had also been a leading candidate, according to sources close to the process. Whitman last month denied having any interest in the job.

Unlike Immelt and Whitman, Khosrowshahi is not a fixture in the celebrity executive community. And since Expedia is based in Bellevue, Washington, he is a Silicon Valley outsider, offering a contrast to the “tech bro” culture Kalanick established at Uber.

FOCUSED ON GROWTH

The Iranian-American businessman came to the United States as a child in 1978 with his parents following the Iranian Revolution. He received a bachelor’s degree in engineering from Brown University and got his start at investment bank Allen and Co.

Khosrowshahi has certainly done well for himself – in 2015 he was the highest paid CEO in the country, mainly because of a nearly $91 million stock option grant. He is also on the board of the New York Times Company and sports merchandise company Fanatics Inc.

Under Khosrowshahi’s leadership, Expedia more than doubled its annual revenue since 2012 to nearly $8.8 billion in 2016. The company reported net income of $281.8 million for 2016.

In an interview with CNBC in May, he said: “Analysts are focused on margins. I am focused on growth.”

He led Expedia through a string of acquisitions since 2014, buying Airbnb rival HomeAway Inc for $3.9 billion, Orbitz Worldwide Inc for $1.3 billion and Travelocity for $280 million, cobbling together an online travel empire. Expedia is the world’s largest online travel agency by bookings.

He has been an outspoken critic of President Donald Trump, blasting Trump’s travel ban, which includes Iran, as “inward-looking” and “reactionary.” Expedia filed a legal challenge to the ban.

At Uber, he would bring an end to a company culture built on founder control. Kalanick enjoyed sweeping authority on the board and nearly complete autonomy in running the company, a governance style that helped to create a workplace that had few checks and balances.

Uber has been hit by allegations of sexual harassment, a lawsuit alleging trade-secrets theft, a federal criminal probe over use of software to evade city regulators, and allegations of executives mishandling the medical records of a victim who was raped by her Uber driver in India, among other controversies.

Uber was valued at $68 billion at its most recent investment last year, but recently some mutual funds have written down the value of their Uber investment by as much as 15 percent, a sign of wavering confidence in the company.

Despite the controversies, Uber is still a growing company. Last week, the company reported a 16 percent increase in ride bookings and a 17 percent jump in net revenue for the second quarter over the previous period, and its losses shrank by 9 percent.

Among Khosrowshahi’s first tasks at Uber would be filling a slew of executive vacancies, including those of chief financial officer, chief operating officer and general counsel. In the absence of top leadership, Uber has been run by a 13-person committee.

What role Kalanick has in the company going forward is a critical question whose answer remains unclear.

In a previous statement, Kalanick said he would support the new CEO “to guide Uber into its next phase of growth and ensure its continued success.”

A spokesman for Kalanick did not respond to a request for comment on Sunday evening.

Reporting by Heather Somerville in San Francisco. Additional reporting by Joe White in Detroit Jeffrey Dastin and Jonathan Weber in San Francisco.; Editing by Sandra Maler, Muralikumar Anantharaman and Clarence Fernandez

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8AUTHFBao2w/us-uber-ceo-idUSKCN1B70PD

Western Digital CEO in Japan to finalize Toshiba chip deal: source

TOKYO (Reuters) – Western Digital Corp’s (WDC.O) chief executive is in Tokyo to finalize an agreement to buy Toshiba Corp’s (6502.T) memory chip business, ending months of dispute over the auction, a person familiar with the matter told Reuters on Monday.

Toshiba is scrambling to sell its flash memory unit to cover losses from its bankrupt U.S. nuclear business Westinghouse.

A group including Western Digital, U.S. private equity firm KKR Co (KKR.N) and Japanese government investors are offering around 1.9 trillion yen ($17.3 billion) for the unit, separate sources previously told Reuters. The U.S. firm is offering 150 billion yen through convertible bonds, they said.

The group and Toshiba aim to announce a deal by Aug. 31 when Toshiba’s board meets, other people said on Monday.

Both Western Digital and Toshiba declined to comment. A KKR representative could not be immediately reached.

Some senior Toshiba executives had initially balked at Western Digital’s offer, but sources said on Friday that the U.S. firm took a conciliatory tack and decided not to seek a management role in the new business and limit its stake to no more than one-third even when it converts the bonds to equity.

Toshiba and Western Digital are the world’s second and third largest producer of NAND chips.

Reporting by Makiko Yamazaki; Editing by Himani Sarkar

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/OTU4-zzn8rA/us-toshiba-accounting-idUSKCN1B806H

Harvey throws a wrench into U.S. energy engine

HOUSTON (Reuters) – A hurricane in the heart of the U.S. energy industry is set to curtail near-record U.S. oil production for several weeks, with the impact expected to reverberate throughout the country and across international energy markets.

Harvey hit the Texas shore as a fierce Category 4 hurricane, causing massive flooding that has knocked out 11 percent of U.S. refining capacity, a quarter of oil production from the U.S. Gulf of Mexico, and closed ports all along the Texas coast.

Gasoline futures jumped as much as 7 percent to their highest level in more than two years in early Monday trading in Asia as traders took stock of the storm’s impact.

The outages will limit the availability of U.S. crude, gasoline and other refined products for global consumers and further push up prices, analysts said.

Damage assessments could take days to weeks to complete, and the storm continues to drop unprecedented levels of rain as it lingers west of Houston, home to oil, gas, pipeline and chemical plants. And restarts are dangerous periods, as fires and explosions can occur.

So far, the federal government has not announced if it will release barrels of oil or refined products from the nation’s Strategic Petroleum Reserve (SPR), which holds nearly 680 million barrels of oil.

The SPR was established in the 1970s to prevent supply shocks in the wake of an embargo imposed by several members of the Organization of the Petroleum Exporting Countries (OPEC).

“This is not like anything we have ever seen before,” said Bruce Jefferis, chief executive of Aon Energy, a risk consulting practice. It is too soon to gauge the full extent of Harvey’s damage to the region’s energy infrastructure, he said.

More than 30 inches (76 cm) fell in the Houston area in 48 hours and a lot more rain is forecast, according to the National Weather Service.

The storm was felt from coastal ports to inland oil and gas wells. Oil producers in the Eagle Ford shale region of south Texas have halted some operations.

At least four marine terminals in the Corpus Christi area, an export hub for energy deliveries to Latin America and Asia, remained closed due to the storm.

“We just simply don’t know yet the damage all this rain will have on Houston’s energy infrastructure,” said Andrew Lipow, president of energy consultancy Lipow Oil Associates LLC.

Texas refineries could be offline for up to a month if their storm-drainage pumps become submerged, he said.

As the storm churned towards Texas on Friday, U.S. gasoline futures RBc1 rose to their highest level in three years for this time of year. Those gains came even before several large Houston area refiners, including Exxon Mobil Corp (XOM.N), halted some operations.

Exxon closed the second largest U.S. refinery, its 560,500 barrel-per-day (bpd) refinery in Baytown, Texas, complex because of flooding. Royal Dutch Shell Plc (RDSa.L) also halted operations at its 325,700-bpd Deer Park, Texas, refinery. The refinery may be shut for the week, it said.

Flooding on highways between Houston and Texas City nearer to the coast led Marathon Petroleum Corp (MPC.N) to cut back gasoline production at the company’s 459,000-bpd Galveston Bay Refinery in Texas City, said sources familiar with plant operations.

Marathon Petroleum (MPC.N) employees were unable to drive to work and conditions at the plant forced the company to reduce gasoline output, said industry sources. Marathon spokesman Jamal Kheiry declined to discuss plant operations.

Not every plant in the region was hit. Operations were stable at the largest U.S. crude refinery, Motiva Enterprises’ [MOTIV.UL] 603,000-bpd Port Arthur plant, the company said.

Motiva double-staffed the refinery’s crew ahead of the storm, as did Total SA (TOTF.PA) at the company’s 225,500-bpd Port Arthur refinery, said sources familiar with plant operations.

Coastal refineries in Texas account for one-quarter of the U.S. crude oil refining capacity. All of those refineries have been impacted by Harvey since Thursday when refineries in Corpus Christi, Texas, shut in production ahead of the storm’s landfall on Friday.

Colonial Pipeline, the largest mover of gasoline, diesel and other refined products in the United States, said its operations had not been affected by Harvey. Any disruptions to the conduit would send prices across the U.S. Southeast and Northeast soaring. Traders have been keeping a close eye on whether there will be an outage at the pipeline.

Citgo Petroleum Corp [PDVSAC.UL] and Flint Hills Resources [FHR.UL], two of the refiners that closed last week as the storm approached, did not provide updates about the status of their Corpus Christi refineries on Sunday.

Reporting by Ernest Scheyder; Additional reporting by Devika Krishna Kumar in New York; Editing by Gary McWilliams and Sandra Maler

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/mtvkxG79eA4/us-storm-harvey-energy-idUSKCN1B70YQ

Jeff Immelt says not pursuing Uber CEO job

(Reuters) – Uber Technologies Inc’s [UBER.UL] choices for a new chief executive officer narrowed further on Sunday when Jeff Immelt, chairman of General Electric Co, said he was no longer in the running for the top leadership position.

Uber’s board of directors has been searching for a new CEO since June, when investors forced out co-founder Travis Kalanick following months of criticism over his leadership abilities. Immelt was among three finalists for the job, according to sources close to the situation.

“I have decided not to pursue a leadership position at Uber,” Immelt said on his Twitter account, adding that he had “immense respect for the company founders.”

Immelt is known for his ambitious vision during his 16-year tenure as CEO of GE, refashioning the company into a digital enterprise focused on leading the emerging business of internet-connected devices.

Another finalist is Meg Whitman, the chief executive of Hewlett Packard Enterprise. While Whitman has previously said in the media she has no interest in the job and plans to stay at H.P.E., sources say she is very much still in the running.

Uber’s next leader will be tasked with helping the company surmount a year of setbacks, remaking its tarnished image and creating a profitable business out of what has been a loss-making endeavor.

Kalanick was ousted following months of scandals. They included allegations of sexual harassment, a lawsuit alleging trade-secrets theft, a federal criminal probe over use of software to evade city regulators, and allegations of executive misconduct regarding a victim who was raped by her Uber driver in India, among other controversies.

Writing by Mary Milliken and Heather Somerville; Editing by Andrew Hay

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8AUTHFBao2w/us-uber-ceo-idUSKCN1B70PD