BMW Warns Profits Will Fall Due to Costs, Trade Uncertainty

German automaker BMW said Wednesday that profits in 2019 would be “well below” last year’s and that it planned to cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology.

The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates.

The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs.

The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still “remains the ambition” for the company given “a stable business environment.”

BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, MINI and Rolls-Royce brands are to get a single sales division.

Chief Financial Officer Nicolas Peter said that given the headwinds to earnings, “we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions.”

The company said the measures were needed “to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future.”

BMW shares were down 4.9 percent to 72.02 euros in Frankfurt.

Automakers around the world have faced heavy up-front costs for new technologies expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo.

BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules.

BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S. President Donald Trump has also threatened to impose auto import tariffs that would hit EU automakers, but has held off for now. BMW could also suffer disruption if Britain leaves the European Union without a negotiated departure agreement to address trade issues.

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EU Fines Google $1.7 Billion for Abusing Online Ads Market

European Union regulators have hit Google with a 1.49 billion euro ($1.68 billion) fine for abusing its dominant role in online advertising.

It’s the third time the commission has slapped Google with an antitrust penalty, following multibillion-dollar fines resulting from separate probes into two other parts of the Silicon Valley giant’s business.

 

The EU’s competition commissioner, Margrethe Vestager, announced the results of the long-running probe of Google’s AdSense advertising business at a news conference in Brussels on Wednesday.

 

“Today’s decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform,” Vestager said.

 

The commission found that Google and its parent company, Alphabet, breached EU antitrust rules by imposing restrictive clauses in contracts with websites that used AdSense, preventing Google rivals from placing their ads on these sites.

 

Google “prevented its rivals from having a chance to innovate and to compete in the market on their merits,” Vestager said. “Advertisers and website owners, they had less choice and likely faced higher prices that would be passed on to consumers.”

 

AdSense is an older Google product that lets web publishers such as bloggers place text ads on their websites, with the content of the ads based on results from search functions on their sites. Microsoft filed an EU antitrust complaint about the service in 2009 and the EU Commission formally launched its probe in 2016, although it said at the time that Google had already made some changes to allow affected customers more freedom to show competing ads.

 

Last year, Vestager hit the company with a record 4.34 billion euro ($5 billion) fine following an investigation into its Android operating system. In 2017, she slapped Google with a 2.42 billion euro fine in a case involving its online shopping search results.

 

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Robotics Company Creates an All Purpose Robot ‘Platform’

A robotics company hopes to bring a robot into every home and business, using a proprietary robotic platform—that can be programmed and tweaked for a wide variety of users and uses. Deana Mitchell takes a look at one of the world’s most customizable robots. It’s called Misty.

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Trump Accuses Twitter, Facebook, Google of Siding with ‘Radical Left Democrats’

U.S. President Donald Trump has accused social media outlets, including Facebook, Google and Twitter, of being biased, and suggested that the situation needs scrutiny. In answer to a reporter at the White House Tuesday, Trump said digital platforms tend to suppress Republican and conservative views. VOA’s Zlatica Hoke reports.

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NASA’s Plan to Scoop Up Dirt from Asteroid Hits Snag

NASA’s plan to scoop up dirt and gravel from an asteroid has hit a snag, but scientists say they can overcome it.

The asteroid Bennu was thought to have wide, open areas suitable for the task. But a recently arrived spacecraft revealed the asteroid is covered with boulders and there don’t seem to be any big, flat spots that could be used to grab samples. 

In a paper released Tuesday by the journal Nature, scientists say they plan to take a closer look at a few smaller areas that might work. They said sampling from those spots poses “a substantial challenge.”  

“But I am confident this team is up to that substantial challenge,” the project’s lead scientist, Dante Lauretta, told reporters at a news conference Tuesday.

The spacecraft, called Osiris-Rex, is scheduled to descend close to the surface in the summer of 2020. It will extend a robot arm to pick up the sample, which will be returned to Earth in 2023. The spacecraft began orbiting Bennu at the end of last year, after spending two years chasing down the space rock.

When the mission was planned, scientists were aiming to take dirt and gravel from an area measuring at least 55 yards (50 meters) in diameter that was free of boulders or steep slopes, which would pose a hazard.

“It is a more rugged surface than we predicted,” said Lauretta, of the University of Arizona in Tucson and one of the paper’s authors. But he said he believed a sample could still be collected.

NASA project manager Rich Burns said a spot will be chosen this summer and the setback won’t delay the sampling.

Patrick Taylor, who studies asteroids at the Lunar and Planetary Institute in Houston but didn’t participate in the spacecraft mission, noted in a telephone interview that the spacecraft was evidently maneuvering more accurately and precisely than had been expected. 

“That gives me confidence they will be able to attempt a sample acquisition,” he said.

Bennu is 70 million miles (110 million kilometers) from Earth. It’s estimated to be just over 1,600 feet (500 meters) across and is the smallest celestial body ever orbited by a spacecraft.

A Japanese spacecraft, Hayabusa2, touched down on another asteroid in February, also on a mission to collect material. Japan managed to return some tiny particles in 2010 from its first asteroid mission.

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WHO Panel Calls for Registry of All Human Gene-Editing Research

It would be irresponsible for any scientist to conduct human gene-editing studies in people, and a central registry of research plans should be set up to ensure transparency, World Health Organization experts said Tuesday.

After its first two-day meeting in Geneva, the WHO panel of gene-editing experts — which was established in December after a Chinese scientist said he had edited the genes of twin babies — said it had agreed on a framework for setting future standards.

It said a central registry of all human genome-editing research was needed “in order to create an open and transparent database of ongoing work,” and asked the WHO to start setting up such a registry immediately.

“The committee will develop essential tools and guidance for all those working on this new technology to ensure maximum benefit and minimal risk to human health,” Soumya Swamanathan, the WHO’s chief scientist, said in a statement.

A Chinese scientist last year claimed to have edited the genes of twin baby girls.

News of the births prompted global condemnation, in part because it raised the ethical specter of so-called “designer babies” — in which embryos can be genetically modified to produce children with desirable traits.

Top scientists and ethicists from seven countries called last week for a global moratorium on gene editing of human eggs, sperm or embryos that would result in such genetically-altered babies — saying this “could have permanent and possibly harmful effects on the species.”

The WHO panel’s statement said any human gene-editing work should be done for research only, should not be done in human clinical trials, and should be conducted transparently.

“It is irresponsible at this time for anyone to proceed with clinical applications of human germline genome editing.”

The WHO’s director-general, Tedros Adhanom Ghebreyesus, welcomed the panel’s initial plans. “Gene editing holds incredible promise for health, but it also poses some risks, both ethically and medically,” he said in a statement.

The committee said it aims over the next two years to produce “a comprehensive governance framework” for national, local and international authorities to ensure human genome-editing science progresses within agreed ethical boundaries.

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GM to Invest $2.7B in Sao Paulo, Brazil Factories Over 5 Years

General Motors said on Tuesday it would invest $2.7 billion in two Brazilian factories over the next five years, sparing them from a shakeup of the automaker’s operations, a decision hailed by the governor of Brazil’s largest state.

Sao Paolo state Governor Joao Doria told a joint news conference with GM executives that the plants in Sao Caetano do Sul and Sao Jose dos Campos had been slated for closure last December, and said he convinced GM to reverse the decision, saving jobs.

Last November, GM said it would slash thousands of jobs around the world and would close two unspecified plants outside of North America by the end of 2019.

The company declined to say whether its restructuring plans had referred to the two Brazilian factories, and declined to comment on whether the two plants had been slated for closure as Doria claimed.

Sitting next to Doria at the news conference, GM’s CEO for South America, Carlos Zarlenga, also did not directly address Doria’s recounting of the negotiations with GM.

Doria, a former businessman and reality TV show host, took office in January and became a vocal advocate for the state’s auto industry. Earlier this year, he said he would find a buyer for a Ford Motor Co. plant that is slated to close, after the U.S. automaker said it had tried and failed to find one.

At Tuesday’s news conference, Doria said GM told him in a call days before his inauguration that it planned to close the plants.

“I thought it was going to be good news,” Doria said. “But to my surprise I was told that the next day GM CEO Mary Barra would announce the closing of two factories in Sao Paulo. I fell off my chair.”

He said he dispatched his future state finance minister to fix the situation and landed a meeting in Miami with GM executives. He said 65,000 workers employed directly and indirectly by GM would have lost their jobs without his intervention.

Earlier this month, Doria announced an incentive plan granting automakers a 25 percent reduction in value added taxes if they created at least 400 jobs and invested at least 1 billion reais. At the news conference, GM announced it was creating 400 new jobs.

Zarlenga said the future of its Sao Paulo factories had presented GM “a really serious problem,” but did not confirm that the automaker had considered closing them down.

GM, the sales leader in Brazil, South America’s largest market, had warned local employees it was dealing with heavy losses and “sacrifices” would be necessary.

As announced, the plan pales in comparison to GM’s most recent investment plan in Brazil in 2014, which totaled $4 billion. However, the announcement does not include potential future investments in the automaker’s plants elsewhere in the country.

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Chinese Supplements Supplier Sentenced for Fraud

A Chinese national has been sentenced to 18 months in a U.S. prison in connection with a scheme to sell mislabeled dietary supplements to U.S. companies. 

Xu Jia Bao, an executive with Shanghai Waseta International Trade Co., was also sentenced to one year of probation for selling synthetic stimulant ingredients to a purported U.S. manufacturer of dietary supplements.  The U.S. company was, in fact, an undercover informant for the U.S. government. 

The prosecutors said Xu admitted that he and other executives at Waseta knew major American retailers would not carry supplements known to contain certain stimulants, such as DMHA. Xu also admitted that he and Waseta were responsible for a falsely labeled shipment of DMHA that was sent to Texas.

“Consumers are entitled to trust that dietary supplement products accurately identify their ingredients,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will vigorously pursue and prosecute those who attempt to circumvent.” 

Xu was arrested in September 2017 while attending a dietary supplement trade show in Las Vegas.

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