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Rabu, 22 Januari 2020

Wall Street pegs Boeing's 737 MAX bill at more than $25 billion - Reuters

(Reuters) - Boeing Co’s (BA.N) bill for the 737 MAX grounding could balloon to more than $25 billion, analysts estimated on Wednesday, a day after the U.S. planemaker warned of further delay in returning its once best-selling jet to service.

FILE PHOTO: An employee works on a Boeing 737 Max aircraft at the Renton Municipal Airport in Renton, Washington, U.S. January 10, 2020. REUTERS/Lindsey Wasson

The company has already booked $9 billion in costs related to the grounding, including $5.6 billion as compensation for airline customers and $3.6 billion in charges to cover additional production costs.

Jefferies analyst Sheila Kahyaoglu said Boeing may now need to boost its compensation package for customers by another $10 billion and revise its cost estimate related to the 737 MAX’s production by an additional $5.4 billion.

“Our estimates assume 737 MAX deliveries restart in Q3 2020,” Kahyaoglu said, lowering the brokerage’s price target on the stock to $390 from $420.

Boeing said on Tuesday it did not expect to win approval for the return of the 737 MAX to service until mid-year due to further potential developments in the certification process and regulatory scrutiny on its flight control system.

Added to the delay, weak Chinese demand for its widebody 787 Dreamliners as well as production problems with its new 777X jetliner have also made investors jittery, Vertical Research analyst Robert Stallard said, downgrading the stock to “hold” from “buy” and lowering his target price to $294 from $388.

“We are expecting Boeing’s up-coming results to be ‘an absolute disaster’, and that now looks guaranteed,” Stallard said.

“We don’t see Boeing being in a position to increase cash returns to shareholders until 2022.”

The company, which is expected to report its fourth-quarter results on Jan. 29, could not be immediately reached for comment.

Of 23 brokerages covering the stock, 13 rate it “hold”, seven “buy” or higher and three “sell” or lower. Their median price target is $356.50.

Shares of the company were down 1% at $310.02. Up to Tuesday’s close, Boeing’s shares fell nearly 26% since the fatal crash of an Ethiopian Airlines plane on March 10, after which the 737 MAX fleet was grounded.

Reporting by Ankit Ajmera in Bengaluru; Editing by Sweta Singh and Saumyadeb Chakrabarty

Our Standards:The Thomson Reuters Trust Principles.

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2020-01-22 14:08:00Z
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Boeing stock slides premarket after Vertical Research downgrades, forecasts 'disaster' quarter - MarketWatch

Boeing Co. shares BA, -3.33% were downgraded to hold from buy by Vertical Research Partners on Wednesday, after the aerospace giant said it does not expect its 737 Max fleet to resume flying until mid-2020, much later than previously expected. "While yet another push out in the estimated return to service of the MAX is bad enough, the ramifications of this have yet to reverberate," analysts Robert Stallard and Karl Oehlschlaeger wrote in a note to clients. "From a Boeing perspective, this means over a year without deliveries of its most profitable product line, while customer compensation costs are likely to be higher than previously thought. As we noted in our 4Q19 earnings preview, we are expecting Boeing's up-coming results to be "an absolute disaster", and that now looks guaranteed." Troubles with the Max, which has been grounded since two fatal crashes thought to be related to Boeing's MCAS system, are not the only challenges facing the company, said the note. The Max is inferior to Airbus' A320 NEO, the 787 rate is "arguably too high" and the 777x is facing development and demand challenges, said the note. "Overarching all this is the issue of 'Hubris' that we have noted before, and a toxic corporate culture that has arguably been the root cause of many of the problems that Boeing management now has to deal with. A new CEO could help, but in our experience changing a company's culture is a very tough, long term process," said the note. The analysts lowered their price target for Boeing stock to $294 from $388 and cut forecasts for 2019 to 2022. Shares were down 0.6% premarket and have fallen 12% in the last 12 months, while the Dow Jones Industrial Average DJIA, -0.52% has gained 20% and the S&P 500 SPX, -0.27% has gained 26%.

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2020-01-22 12:40:00Z
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Toyota, Honda recall 6 million vehicles over air bags - WJW FOX 8 News Cleveland

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Toyota, Honda recall 6 million vehicles over air bags WJW FOX 8 News ClevelandView full coverage on Google News
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2020-01-22 10:27:00Z
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G.M.’s Cruise Unveils a Self-Driving Car. Don’t Look for It on Roads. - The New York Times

SAN FRANCISCO — Cruise, the autonomous vehicle division of General Motors, unveiled an ambitious new vehicle on Tuesday that its executives said was “the beginning of the future beyond the car.”

Emphasis on “beginning.”

The futuristic electric vehicle, called the Cruise Origin, has a long road to travel before any passengers will be able to hail a ride in it. Cruise would not name a time frame for its availability. It provided no details on how many vehicles it planned to produce, or whether it has begun test drives on closed tracks. It has not obtained state or federal regulatory approval to drive on roads.

“Our work is far from done,” Dan Ammann, chief executive of Cruise, said in a presentation.

Cruise emphasized that the Origin is more than just an idea, however. In an interview, Mr. Ammann said that the company would begin producing prototypes of the Cruise Origin and test driving the car “in the near future.”

Referring to the annual consumer electronics show in Las Vegas, he said, “Unlike some things you see at CES, for example, this is not a concept car.”

The event, held in a dark San Francisco warehouse with thumping hip-hop and orange uplighting, represented a coming-out party for the latest autonomous technology company eager to show progress at a moment when excitement around the category is waning.

Four years ago, self-driving hype reached a fever pitch. Automakers struck partnerships with technology companies almost every week. Start-ups raised piles of funding at high valuations.

That year, G.M. plunked down nearly $1 billion to acquire a 40-person start-up in San Francisco called Cruise. The start-up went on to raise billions more in outside funding. Head count swelled to 1,700 workers.

But hype hit reality when testing data made it clear that it would take many more years for self-driving technology to be ready for widespread adoption. Google and Tesla had predicted fully autonomous self-driving cars would be available by 2018, a deadline that passed with little fanfare.

Mr. Ammann introduced the Origin alongside Kyle Vogt, Cruise’s co-founder and president. A room full of “Cruisers,” the company’s term for its employees, cheered them on.

The rectangular-shape vehicle with double sliding doors on each side has no steering wheel or brakes. Inside, it is spacious, with room for six people sitting and facing each other.

Cruise’s plan is not to sell the vehicles but to operate a system of autonomous taxis — essentially, robo-taxis — that can be hailed via an app. It is in a race with Uber, which has an autonomous vehicle division, and Waymo, which is backed by Google’s parent company, Alphabet.

Cruise’s executives said that their vehicle is designed to last for one million miles, far longer than typical cars. “Traditional cars haven’t been designed with that mentality,” Mr. Vogt said in an interview.

Their presentation hinted at a future in which Cruise Origin cars could also transport cargo autonomously.

Mr. Vogt said that unveiling the car could help speed up conversations with regulators.

“Seeing the vehicles in the flesh makes it easier to have these conversations because it’s a little bit less abstract,” he said.

Permits are one hurdle. Another is technology.

Cruise must get its vehicles to the point where their sensors and software can navigate city roads, with all their complicated, unpredictable scenarios, as well as a human driver can.

When asked if it would take as many as five years to make the Cruise Origin a reality, Mr. Vogt said, “I hope not.”

“This is going into production,” he added. “This car is going to happen.”

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2020-01-22 05:02:00Z
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Selasa, 21 Januari 2020

CEOs haven't been this pessimistic about the world economy since 2009 - Axios

DAVOS — A parade of billionaires, CEOs, world leaders and hangers-on has now arrived in Davos, Switzerland, bearing skis, packed schedules and deep concerns about the global economy.

PwC's annual Global CEO survey — 1,581 CEOs across 83 territories — was conducted in the fall and released tonight as the World Economic Forum opened. It makes for some pretty alarming reading.

The big picture: 53% of CEOs expect global economic growth to decline in 2020, up from 29% in 2019 and just 5% in 2018. Their views of their own companies’ prospects were the bleakest since 2009.

That sentiment was spread across all regions, though CEOs in the Asia-Pacific are most optimistic and North American CEOs least so.

What they’re worried about:

CEOs in the Asia-Pacific view trade conflicts as the top threat to their organizations’ bottom lines, while geopolitical uncertainty is the top concern in the Middle East, populism ranks first in Latin America, policy uncertainty in Africa and cyber threats in North America.
Over-regulation is the biggest concern among CEOs in Europe, and also finishes top in the global average.

What they’re doing about it:

Trade conflicts didn’t even register as a top 10 concern until last year, but are now top-of-mind, particularly in China.
Chinese CEOs who are “extremely concerned” about trade conflicts are far more likely to say they’re shifting production to alternative territories than a year ago (44% then, 63% now).
Among "extremely concerned" U.S. CEOs, 50% are adjusting supply chains but just 23% are moving production, while 34% aren't making any changes at all (compared to 5% in China).
Worth noting: Chinese CEOs now list Australia, not the U.S., as the most important country for their growth prospects.

What they foresee:

CEOs around the world expect massive changes for big tech. By 2022, most anticipate more regulations (71%), including on social media, the break-up of dominant firms (63%), and compensation of individual users for their data (51%).
While companies are eager to stress their climate consciousness while in Davos, just 24% of CEOs are “extremely concerned” about climate change.
In China, though, the percentage of CEOs who see new opportunities for their companies through climate change initiatives has jumped from 2% in 2010 to 47% now — far higher than in Germany (20%) or the U.S. (15%).

Who's coming to Davos

15,000 total attendees (3,000 of them with official invitations) including 100 billionaires and 53 heads of state or government, per Politico.

Climate will dominate the official agenda. I eavesdropped on a few attendees tonight discussing whom they most wanted to see, and Greta Thunberg was the consensus pick. Soon after, placard-waving climate protesters chanted their way through the streets
Several panels will also be dedicated to inequality and human rights.

Between the lines: The irony of the uber-rich and super-powerful arriving by private jet to discuss these topics in a proudly exclusive setting (there are at least 10 tiers of access badge) is lost on no one.

But the sheer concentration of power and wealth in one Alpine town makes Davos, now in its 50th year, a hard-to-match destination for deal-making and consensus-building.

Trump in town

Davos opened this evening on the third anniversary of President Trump's inauguration, and on the eve of impeachment proceedings that will likely be watched more closely than his speech on Tuesday morning.

The big picture: Trump’s America First populism and climate skepticism are anathema to the Davos set, but his tax cuts and economic record are not.

Two candidates who scare many CEOs more than Trump — Bernie Sanders and Elizabeth Warren — are among the top contenders in the Iowa caucuses, which begin two weeks from today.
Kellyanne Conway told reporters ahead of Trump’s trip that he planned to “take on the perils of socialism right there in Davos,” while heralding his NAFTA replacement deal and partial trade agreement with China.

Trump's Davos dance card:

European Commission President Ursula von der Leyen
Pakistani Prime Minister Imran Khan
Iraqi President Barham Salih
Kurdistan Regional Government President Nechirvan Barzani
Swiss President Simonetta Sommaruga
World Economic Forum Founder Klaus Schwab

Also heading to Davos: Venezuelan opposition leader Juan Guaidó, who is defying a travel ban and may struggle to re-enter Venezuela.

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2020-01-21 13:02:00Z
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CEOs haven't been this pessimistic about the world economy since 2009 - Axios

DAVOS — A parade of billionaires, CEOs, world leaders and hangers-on has now arrived in Davos, Switzerland, bearing skis, packed schedules and deep concerns about the global economy.

PwC's annual Global CEO survey — 1,581 CEOs across 83 territories — was conducted in the fall and released tonight as the World Economic Forum opened. It makes for some pretty alarming reading.

That sentiment was spread across all regions, though CEOs in the Asia-Pacific are most optimistic and North American CEOs least so.

What they’re worried about:

CEOs in the Asia-Pacific view trade conflicts as the top threat to their organizations’ bottom lines, while geopolitical uncertainty is the top concern in the Middle East, populism ranks first in Latin America, policy uncertainty in Africa and cyber threats in North America.
Over-regulation is the biggest concern among CEOs in Europe, and also finishes top in the global average.

What they’re doing about it:

Trade conflicts didn’t even register as a top 10 concern until last year, but are now top-of-mind, particularly in China.
Chinese CEOs who are “extremely concerned” about trade conflicts are far more likely to say they’re shifting production to alternative territories than a year ago (44% then, 63% now).
Among "extremely concerned" U.S. CEOs, 50% are adjusting supply chains but just 23% are moving production, while 34% aren't making any changes at all (compared to 5% in China).
Worth noting: Chinese CEOs now list Australia, not the U.S., as the most important country for their growth prospects.

What they foresee:

CEOs around the world expect massive changes for big tech. By 2022, most anticipate more regulations (71%), including on social media, the break-up of dominant firms (63%), and compensation of individual users for their data (51%).
While companies are eager to stress their climate consciousness while in Davos, just 24% of CEOs are “extremely concerned” about climate change.
In China, though, the percentage of CEOs who see new opportunities for their companies through climate change initiatives has jumped from 2% in 2010 to 47% now — far higher than in Germany (20%) or the U.S. (15%).

Who's coming to Davos

15,000 total attendees (3,000 of them with official invitations) including 100 billionaires and 53 heads of state or government, per Politico.

Climate will dominate the official agenda. I eavesdropped on a few attendees tonight discussing whom they most wanted to see, and Greta Thunberg was the consensus pick. Soon after, placard-waving climate protesters chanted their way through the streets
Several panels will also be dedicated to inequality and human rights.

But the sheer concentration of power and wealth in one Alpine town makes Davos, now in its 50th year, a hard-to-match destination for deal-making and consensus-building.

Trump in town

The big picture: Trump’s America First populism and climate skepticism are anathema to the Davos set, but his tax cuts and economic record are not.

Two candidates who scare many CEOs more than Trump — Bernie Sanders and Elizabeth Warren — are among the top contenders in the Iowa caucuses, which begin two weeks from today.
Kellyanne Conway told reporters ahead of Trump’s trip that he planned to “take on the perils of socialism right there in Davos,” while heralding his NAFTA replacement deal and partial trade agreement with China.

Trump's Davos dance card:

European Commission President Ursula von der Leyen
Pakistani Prime Minister Imran Khan
Iraqi President Barham Salih
Kurdistan Regional Government President Nechirvan Barzani
Swiss President Simonetta Sommaruga
World Economic Forum Founder Klaus Schwab

Also heading to Davos: Venezuelan opposition leader Juan Guaidó, who is defying a travel ban and may struggle to re-enter Venezuela.

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Huawei founder says Chinese giant can 'survive further attacks' from the US as he predicts escalation - CNBC

Huawei CEO Ren Zhengfei attends a session at the Congress center during the World Economic Forum (WEF) annual meeting in Davos, on January 21, 2020. (Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images)

Fabrice Coffrini | AFP | Getty Images

Washington may step up its campaign against Huawei, but the impact on business will be minimal, the Chinese telecom giant's founder, Ren Zhengfei, said on Tuesday.

Huawei has been the target of U.S. concern over its links to the Chinese government. Washington maintains that Huawei is a national security risk because its networking equipment could be used for espionage by the Chinese government. Huawei denies all the claims.

Last year Huawei was put on a U.S. blacklist that restricted its access to American technology. Ren expects that pressure to continue.

"This year the U.S. might further escalate their campaign against Huawei, but I feel the impact on Huawei's business would not be very significant," Ren said at the World Economic Forum in Davos.

"This year in 2020, since we already gained experience from last year and we got a stronger team, I think we are more confident that we can survive even further attacks," he added.

Washington has been pressuring allies, most recently the U.K., to block Huawei from next-generation mobile networks known as 5G. Meanwhile, the U.S. is looking to introduce a rule that could block an increased number of foreign-made goods to Huawei, Reuters reported earlier this month, citing unnamed sources.

The blacklist even lead to Huawei having to release a flagship smartphone without licensed Google Android software.

But Huawei has been investing in its own core technology over the past few years, including chips and software. Last year Huawei launched its own operating system, called HarmonyOS, but it has not put it on any of its smartphones yet.

Ren said that Huawei has spent "hundreds of billions" to prepare a "plan B," which has allowed the company to survive.

"If we had this sense of security from the U.S., we did not have the need to come up with these back up plans. Since we didn't have that sense of security, we spent hundreds of billions to put our own plan B. That's why we withstood the first round of attack," Ren said.

The Huawei founder added that the U.S. is "overconcerned" with his company.

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2020-01-21 10:36:00Z
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