GM to shut Russian plant as sales slide

(GNN) - General Motors Co (GM.N) will shut a Russian factory and wind down its Opel brand in the country, taking a $600 million charge as it restructures to cope with a prolonged slump in the once-promising market, the U.S. carmaker said on Wednesday.

After several years of growth in excess of 10 percent, car sales in Russia shrank in 2014 as the economy weakened, battered by Western sanctions over the Ukraine crisis and sliding oil prices. The tumbling value of the rouble has caused consumers to pull back on large purchases, and raised the cost to GM and other manufacturers of importing parts.

GM’s retrenchment in Russia is the latest in a series of moves by global automakers to scale back money-losing bets on emerging markets that have failed to live up to the bullish expectations industry executives subscribed to earlier in the decade.

Last month, GM said it would close a factory in Indonesia and scale back operations in Thailand. Ford Motor Co (F.N) took an $800 million charge earlier this year to restructure troubled operations in Venezuela.

GM said it would stop production by the middle of 2015 at its St. Petersburg plant which makes the Chevrolet Cruze, Opel Astra and Chevrolet Trailblazer models. The idling of the plant will mean the loss of 1,000 jobs.

GM also will wind down the Opel brand in Russia by December, and stop assembling mass-market Chevrolet cars at GAZ (GAZA.MM), a Russian vehicle factory, to concentrate on premium car sales. GM said it would continue to assemble the current generation of Chevrolet Niva sport utility vehicles at a joint venture with Russian automaker Avtovaz OAO.

"This decision avoids significant investment into a market that has very challenging long-term prospects," GM President Dan Ammann said in a statement.

Just four years ago, GM said its Russian operations were gearing up to expand production capacity to 350,000 vehicles a year, and called Russia “an important strategic market.”

FOCUS ON PREMIUM SEGMENT

Going forward, GM said it will focus on the premium segment in Russia, which has held up better than the mass market, with Cadillac and some U.S.-built Chevrolet cars. Russia accounted for 1.9 percent of GM's global sales in 2014, down from 2.6 percent in 2013. The automaker does not break out financial results for the country, but consolidates Russian operations with its GM Europe unit.

GM Chief Executive Mary Barra has said Opel would regain profitability by 2016, and the company reaffirmed that forecast on Wednesday. The charge will primarily hit results for this year's first quarter, GM said.

Volatility in Russia has hit other automakers. Ford has cut jobs at its joint venture factory in Russia, and Nissan Motor Co Ltd (7201.T) earlier this week said it would halt production at its St. Petersburg plant for 16 days.

Russia's Economy Ministry said late on Wednesday that no other foreign car company that operates an assembly line in Russia has said it would leave the market, according to RIA news agency.

"The Ministry of Economic Development of Russia cannot agree with the assessment of the market by one individual company," RIA cited the ministry's spokeswoman as saying.

Russian industry and trade ministry officials, quoted by RIA, said GM suffered because it imported more than half of the parts for its cars. Renault-Nissan and Volkswagen AG (VOWG_p.DE) source about two-thirds of car parts within Russia for the cars they assemble there.

RUSSIAN MARKET SHRINKS

The Russian car market is forecast to shrink by up to 35 percent in 2015 according to PricewaterhouseCoopers.. The Russian Economy Ministry said it expects the domestic car market to return to growth in 2016.

But analysts say Russia is in for tough times.

"At least 70 percent of cars currently sold in Russia are sold at a loss. Auto groups only stay in this market to protect their share in anticipation of growth," said Oleg Datskiv, general director of online automobile portal Auto-dealer.ru.

Opel sold 912 vehicles in Russia in February, an 86 percent plunge from year-ago levels, said a spokesman at Opel’s base in the German town of Ruesselsheim.

The Opel Astra has a starting price of about 800,000 rubles ($13,000) in Russia.

(Reuters)(Additional reporting by Andreas Cremer in Berlin, Ben Klayman and Joe White in Detroit and Lidia Kelly in Moscow; Editing by Elizabeth Piper Elaine Hardcastle and Matthew Lewis)

GM to shut Russian plant as sales slide

(GNN) - General Motors Co (GM.N) will shut its Russian factory and wind down its Opel brand in the country, taking a $600 million charge as it restructures its business to cope with a deepening downturn, the U.S. carmaker said on Wednesday.

After several years of growth in excess of 10 percent, car sales in Russia shrank in 2014 as the economy weakened because of Western sanctions over the Ukraine crisis and a slide in oil prices.

The rouble also tumbled last year, making consumers think twice about large purchases and manufacturers find ways to cut costs.

The U.S. carmaker said it would stop production at its St. Petersburg plant which makes the Chevrolet Cruze, Opel Astra and Chevrolet Trailblazer models by the middle of 2015. The closure of the plant will mean the loss of 1,000 jobs.

It will wind down the Opel brand by December and stop assembling mass-market Chevrolet cars at GAZ (GAZA.MM), a Russian vehicle factory, to concentrate on premium car sales.

"This decision avoids significant investment into a market that has very challenging long-term prospects," GM President Dan Ammann said in a statement.

Russia's Economy Ministry said late on Wednesday that no other foreign car company having an assembly line in Russia has said it would leave the market, RIA news agency reported.

"The Ministry of Economic Development of Russia cannot agree with the assessment of the market by one individual company," RIA cited the ministry's spokeswoman as saying.

GM said it would take around $600 million in special charges related to the reorganization of the Russian business, primarily in the first quarter of 2015.

Russia accounted for 1.9 percent of GM's global sales in 2014, down from 2.6 percent in 2013.

RUSSIAN MARKET SHRINKS

The Russian car market is forecast to shrink by up to 35 percent in 2015 according to PricewaterhouseCoopers.. The Russian Economy Ministry said it expects the domestic car market to return to growth in 2016.

"The (growth) results can be undoubtedly achieved," the ministry said, adding that the government's so-called anti-crisis program aimed at supporting domestic companies as well as other forms of state support will help.

But analysts say Russia is in for tough times.

"At least 70 percent of cars currently sold in Russia are sold at a loss. Auto groups only stay in this market to protect their share in anticipation of growth," said Oleg Datskiv, general director of online automobile portal Auto-dealer.ru.

GM said it would focus on the premium segment in Russia, which has held up better than the mass market, with Cadillac and some U.S.-built Chevrolet cars.

Opel sold 912 vehicles in Russia in February, an 86 percent plunge on year-ago levels, said a spokesman at Opel’s base in the German town of Ruesselsheim.

Opel has raised prices several times to cope with the weak rouble, which fell more than 40 percent against the dollar in 2014, causing volumes to plunge and losses-per-vehicle to rise, the spokesman said.

Compared to some other foreign brands, Opel is hurt by a low level of integration into the local market. It imports more than half of all parts needed to assemble cars there.

By contrast, around 75 percent of car parts for Renault-Nissan (RENA.PA) (7201.T) vehicles sold in Russia come from local suppliers. This rate stands at about 60 percent for Germany's Volkswagen (VOWG_p.DE).

(Reuters)(Additional reporting by Andreas Cremer in Berlin, Ben Klayman in Detroit and Lidia Kelly in Moscow; Editing by Elizabeth Piper and Elaine Hardcastle)

Pinterest seeks $11 billion valuation with new funding: WSJ

(GNN) - Pinterest Inc, a photo pin-up site, is in talks to raise $500 million in a round of funding that would more than double its valuation to $11 billion, the Wall Street Journal reported, citing people familiar with the matter.

The company plans to raise the funds in the coming weeks, but it is not clear if any new investor would join the round, the Journal reported.

Pinterest, which allows users to create online bulletin boards based on various themes such as travel, decorating, or sports, was unavailable for comment outside regular U.S. business hours.

The new funding would value the company at more than twice the $5 billion valuation last May when it raised $200 million.

Pinterest has raised a total of $764 million so far from existing investors SV Angel, Bessemer Venture Partners, Fidelity, Andreessen Horowitz, FirstMark Capital, and Valiant Capital Partners.

(Reuters) (Reporting by Zara Mascarenhas in Bengaluru; Editing by Gopakumar Warrier)

Lockheed sees double-digit growth in cyber business

(GNN) - Lockheed Martin Corp, the No. 1 provider of information technology to the U.S. government, said it expected double-digit growth in its overall cybersecurity business over the next three to five years, and even bigger gains in the commercial sector.

Lockheed, also the Pentagon's biggest supplier, said it was making strong inroads in the commercial market by leveraging a dozen years of experience and intelligence gathered while guarding its own networks and those of government agencies.

Chief Executive Officer Marillyn Hewson said Lockheed was providing cybersecurity services for more than 200 customers around the world in critical infrastructure areas such as the energy, oil and gas, chemical, financial services and pharmaceuticals business.

Hewson told the company's annual media day that Lockheed had faced 50 "coordinated, sophisticated campaign" attacks by hackers in 2014 alone, and she expected those threats to continue growing.

Steve Field, a spokesman for the company, said cybersecurity accounted for about 10 percent of the company's Information Systems & Global Solutions (IS&GS) business, which reported revenues of $7.8 billion in 2014.

He said Lockheed had seen significant gains in the commercial market in recent years, and now represented a large number of companies on the Fortune 500 list, including 79 percent of utilities, 35 percent of oil and gas companies, 46 percent of chemical firms, and 46 percent of financial firms.

Lockheed last year acquired Industrial Defender, a leading provider of cybersecurity for control systems in the oil and gas, utility and chemical industries for an undisclosed sum.

Gerard Fasano, vice president for IS&GS business development, told reporters the acquisition had helped bolster Lockheed's presence in the rapidly growing cybersecurity market.

Other weapons makers, including Boeing Co and Harris Corp, have largely exited the cybersecurity business after finding it difficult to generate significant revenues.

(Reuters) (Reporting by Andrea Shalal; Editing by Ken Wills)

VW expects tough year after Europe, China slip in January sales drop

(GNN) - Volkswagen (VOWG_p.DE) is bracing for a challenging year, it said on Wednesday after reporting that sales at its core division fell for a fourth straight month in January, with demand shrinking in key European and Chinese markets.

January deliveries of VW-branded cars, representing the company's biggest division by sales and revenue, slipped 2.8 percent year on year to 507,100 vehicles.

Sales in Europe and China, which provided almost three quarters of the VW brand's record 6.12 million deliveries last year, eased by 1 percent and 0.7 percent respectively to 124,900 and 265,900 cars, the company said.

In Russia, where the rouble has been hammered by the slump in oil prices and Western sanctions related to the crisis in Ukraine, sales plunged by 28 percent to 6,200 cars.

"We are facing a challenging year," sales chief Christian Klingler said. "VW was not immune to the uncertainties in some regions that have continued into the current year."

Europe's largest carmaker, which sold a record 10.1 million vehicles across the multi-brand group in 2014, is seeking to cut costs at its core division by 5 billion euros ($5.66 billion) over the next two years to narrow the profit gap with rivals such as Toyota (7203.T).

(Reuters)(Reporting by Andreas Cremer; Editing by David Goodman)

Google Settles With UK’s Information Commissioner And Will Change Its Privacy Policy

While Google continues to work through implementing Right To Be Forgotten legislation in Europe, there are some more developments around how Google handles consumer data and privacy. The search giant has reached an agreement with the UK’s Information Commissioner’s Office over how it collects personal data in the country, signing and publishing a lengthy document outlining its commitment to make changes to its current privacy policy (the one first unveiled in January 2012 and implemented in March 2012 in Europe, which basically pulled together 70 of Google’s existing privacy policies).

The changes, the biggest of which will be completed by June 2015 , will put Google in line with the UK’s Data Protection Act, and will also see the company taking steps over the next two years for further improvements. It will also carry out user testing in the process. We’re embedding the full document below.

In a statement, Steve Eckersley, head of enforcement at the ICO, pointed out that Google had not been found to cause “substantial damage and distress to consumers” but that the changes were necessary anyway:

 “This undertaking marks a significant step forward following a long investigation and extensive dialogue. Google’s commitment today to make these necessary changes will improve the information UK consumers receive when using their online services and products.

 “Whilst our investigation concluded that this case hasn’t resulted in substantial damage and distress to consumers, it is still important for organisations to properly understand the impact of their actions and the requirement to comply with data protection law. Ensuring that personal data is processed fairly and transparently is a key requirement of the Act.

“This investigation has identified some important learning points not only for Google, but also for all organisations operating online, particularly when they seek to combine and use data across services. It is vital that there is clear and effective information available to enable users to understand the implications of their data being combined. The detailed agreement Google has signed setting out its commitments will ensure that.”

The settlement document, co-signed by Google’s general counsel/SVP Kent Walker and UK information commissioner Christopher Graham, is not quick reading. The majority of it is a rundown of what has happened in the last three years, from the introduction of Google’s policy, explaining what it does, and how the ICO started to investigate it. Probably the most important part of it for now is the list of seven commitments that Google has made for what it will do in the future:

1. Carry out the steps set out in Annex 1 with regards to the accessibility and content of the Privacy Policy and associated web content by 30 June 2015 [ie make it more accessible to ordinary consumers to see and understand];
2. Ensure that there is continued evaluation of the privacy impact of future changes to processing which might not be within the reasonable expectations of service users so that users are provided with prompt and adequate notice of such processing;
3. Keep the content of the Privacy Policy and associated web content under review and take appropriate actions so that service users are informed as to the ways in which their personal data may be processed;
4. Keep the overlay examples for the Privacy Policy under review to ensure that informative and relevant examples are always in use;
5. Continue to ensure that any significant future changes to the Privacy Policy are reviewed by user experience specialists and with representative user groups before the policy and associated tools are launched as appropriate;
6. Continue to pro-actively cooperate with the Commissioner and provide appropriate advance notice of any significant changes, and respond promptly to enquiries relating to the ways in which Google processes user data and its proposals for consequential changes to the Privacy Policy and supporting web content;
7. Provide a report to the Commissioner by August 2015 setting out the steps which the data controller has taken in response to the commitments set out in this undertaking.

Google has been in the spotlight in Europe over regulatory issues for years. The biggest of these have been in the arena of antitrust, and specifically the company’s dominance in areas like search and online advertising. These investigations are still ongoing, after the previous antitrust commissioner’s provisional settlement with Google was so roundly criticised for being too weak that it was sent back for further scrutiny. Now, with a new commissioner at the helm, we are effectively back at or near square one.

Separately, Google has been under a lot of scrutiny over how it handles personal data. People are still debating whether the RTBF rules — which effectively mean that Google and other search companies have to remove links in its search results for private individuals if those individuals request them to be taken down — violate freedom of information, or are the fairest way of ensuring individual control over our privacy. (Companies like Wikipedia are interestingly in opposition to RTBF.)

In the meantime, Google is still fighting how it can carry out the privacy policy introduced in 2012. It has faced trouble in Europe before: in 2013, the data protection authority in Holland also ruled that Google had violated its policies and forced the company to change how it discloses information to consumers in the country.

Document below. More to come.

Google Inc Privacy Policy Undertaking

President, Prime Minister meet business people #pmln

(ATimes) President Mamnoon Hussain and Prime Minister Nawaz Sharif said on Wednesday that every possible facility will be provided to the business community to bolster trade activities in the country. The President and Prime Minister expressed these views in a meeting with a delegation of businessmen and industrialists here at the Aiwan-e-Sadr.

The Prime Minister earlier held a one-on-one meeting with the President. President Mamnoon said the importance of strong economy has increased manifold in the era of globalisation and termed liberal trade policies a vital factor in this regard.

He said the government is sincerely taking steps in the right direction for the improvement of national economy and promotion of business activities. He urged the business community to benefit from the trade policies of the government and mentioned the flexible business policies of the country.

The President said that law and order situation and energy crisis are major impediments towards smooth continuation of business activities in the country, however expressed hope that these issues would be overcome soon.

Prime Minister Sharif said the government is taking steps towards facilitating businesspeople. He mentioned that the country was facing big challenges of terrorism and energy shortages, and added that efforts were afoot to meet these challenges and increase electricity generation. Besides, he said the import of liquefied natural gas (LNG) to meet energy demand.

He said infrastructure development was the government’s major priority and said a motorway would be constructed from Lahore to Karachi.

Sharif said, “We have discouraged lethargy in the government’s decision-making and are bringing an economic turnaround in the country.” He said economic indicators are improving, foreign currency reserves and stock market are high and rupee was stable against dollar. The Prime Minister said a 20-point agenda has been prepared for rooting out terrorism and extremism from the country. He said the 21st Amendment and the amendment to the Army Act are important steps “to clear this mess.”

He said swift justice is key to eradicating terrorism and the people spreading hatred and sectarianism would be tried in military courts. He said the Operation Zarb-e-Azb has played an important role in dismantling terror infrastructure and those terrorising society in the name of religion will be brought to justice.

Under the National Action Plan, another operation was being launched to make the country peaceful, he added. “These decisions have been taken in national interest and should have been taken earlier,” he said. The PM said the government will give incentives to the business community and said steps will be taken to woo overseas Pakistanis to invest in Pakistan.

He asked the Federal Board of Revenue to consider decreasing tax rates to encourage more people pay taxes resulting in larger revenue collection. He directed the Chairman FBR to hold a meeting with members of the business community to sort out their issues and apprise him personally on the outcome.

The Prime Minister also directed the Ministry of Water and Power and Private Power and Infrastructure Board (PPIB) to expedite approvals of pending cases of power plants and immediately remove all hurdles. The businesspeople gave relevant suggestions to the President and the Prime Minister. They regarded the unity displayed by all parties on the issue of terrorism as a good omen.

The meeting was informed that overseas Pakistanis are sending 25 billion dollars annually through different channels, and also Free Trade Agreement 2 is being negotiated with China. It will be independent of FTA 1, signed nine years ago. Minister for Commerce Khurram Dastgir Minister for Water and Power Khwaja Asif, Petroleum Minister Shahid Khaqan Abbasi, Chairman FBR and Secretary Water and Power were present.

APP, Asia Times