Author: Charlotte Gill

Technology firms battle to save nation’s health as hospitals struggle

Posted on by Charlotte Gill

The rising demands for healthcare, as a result of ageing populations and soaring demand from newly enriched emerging economies, means that considerable strain is being placed on a system that is incredibly costly to maintain. From new life-saving medication to the latest revolutionary equipment, hospitals are struggling to pay for what is being demanded of them by the public.

[H]ospitals are struggling to pay for what is being demanded of them by
the public

According to a study last year by the Organisation for Economic Cooperation and Development (OECD), government spending on healthcare across its 34 member nations would soar to almost 12 percent of GDP within the next two decades, compared to the 5.5 percent over the last decade. Such a rise would not be sustainable at current economic growth levels, and so something must be done to make the health industry more efficient. This goes in hand with another recent study that showed that in the US, roughly $8.3bn is lost each year as a result of out-dated medical technology.

However, there are signs that a technological revolution is underway within healthcare, spurred on not by the traditional universities and pharmaceutical giant-innovators, but the leader manufacturers of consumer electronics. Innovative new products and ground-breaking research are set to transform the way people monitor their health and how doctors can respond to illnesses.

Both Apple and Google have been investing considerable amounts of money into researching products that will provide huge amounts of up-to-date, accurate data on people’s physical lifestyles. Google’s hiring of futurist Ray Kurzweil signifies that it is serious about investing in big technological themes that can have drastic impacts on how people lead their lives, with much of his work dedicated towards ‘smart medicine’. Apple, on the other hand, has been making a number of strategic hires from the medical profession, as well as experts in wearable computing.

Alongside this is the growing emergence of ‘big data’, which is already set to transform many industries, but it is in healthcare that it could have the most profound effect. Allowing medical researchers far greater insight into people’s bodies and the trends that effect them could allow far greater personalisation of medication, as well as a more efficient form of health provision.

Changing habits
The way in which people access health services is perhaps something that requires an immediate shift. Booking in to see your local doctor, or visiting a hospital for minor problems, can be both costly and time-consuming. In the future, it seems likely that these practices will be made far more efficient.

Intel’s Eric Dishman, a Global Director of the firm’s Health Innovation division, told consultants EY recently that there would be a large shift in the way healthcare is accessed by people. “Over the next decade, as much as 50 percent of healthcare will shift from the hospital and clinic to the home and community. New technologies will drive in-home care, at-workplace care and in-car care – thereby improving prevention, detection, behaviour change and caregiver support.”

He adds, “A lot of care can be done in quick snippets — ten seconds of interaction with your doctor — and doesn’t require a face-to-face visit. Cancer patients shouldn’t be sent to germ-filled hospitals for chemotherapy. It would be far safer and cheaper for them to have home infusion, but the current system is not set up that way.”

Wearable revolution
One sign that healthcare is being transformed is the interest shown by consumer electronics firms like Apple and Google, such as health and fitness tracking devices, which Dishman describes as the “consumerisation of medical devices.” “A wide range of personal health technologies are coming into their own – something we refer to as the consumerisation of medical devices and the medicalization of consumer devices. We will increasingly conduct virtual visits with doctors, nurses and care coaches through our cell phones, tablets and laptops.”

Nike is perhaps the company that has popularised wearable-tracking products the most with its FuelBand. While it’s a product that has been used mainly by fitness fanatics, the technology behind it has allowed for an important insight into the daily activities of users and has intrigued more specialist technology firms. Nike surprisingly announced recently that it would be ceasing production of the FuelBand, instead focusing its attention on providing software for companies like Apple.

While the move might hint that the technology had not taken off as others may have felt, many believe that Nike is stepping back from the market in advance of far bigger players – namely Apple and Google – entering it themselves. With a popular iOS app already available for Apple products, and the news that the tech giant was hiring a number of former FuelBand designers, it’s clear that there is still a future for the technology.

Apple’s rumoured iWatch product is expected to expand on the tracking sensors employed in the FuelBand, offering a whole range of information about a user’s body. While many had initially thought that Apple would release a product that would merely be a wrist-attached iPod, their ambitions seem to be far higher. A series of hires from the biotechnology field further suggests that the company has big plans for the health industry.

The company is thought to be looking at employing sensors in its smart watch that can monitor blood-sugar levels, nutrition, hydration, blood pressure, as well as fitness-related tracking. These will all be stored on a Healthbook app that can be accessed on a smartphone or computer.

What this means, however, is that a doctor can be provided with a highly detailed analysis of a user’s lifestyle and key health levels, giving them a better chance of correctly diagnosing any ailments and prescribing a more efficient treatment.

Digging deep
Another recent scientific breakthrough that will allow minuscule wireless electronic devices to be placed inside the body could also drastically change how people track their health and power life-changing implants like heart pacemakers and nerve stimulators. The research, by Professor Ada Poon and published in the Proceedings of the National Academy of Sciences, revealed that it would be possible to charge tiny medical devices that were implanted deep inside the body. Dubbed ‘mid-field wireless transfer’, the technique could potentially lead to devices like sensors and nerve stimulators being implanted in parts of the body previously impossible to access.

Professor Poon, lead researcher on the technology, said in a statement that the breakthrough was significant as there is a need to ensure implants can be placed deep within the body. “We need to make these devices as small as possible to more easily implant them deep in the body and create new ways to treat illness and alleviate pain.”

Currently, implanted devices have to be relatively close to the skin to be charged through near-field wireless power. Others, like heart pacemakers, need to be fitted with long-lasting batteries that eventually need replacing, therefore meaning further dangerous and invasive surgical procedures.

Tailored medicine
Personalised medicine is something that many believe is one of the next breakthroughs within healthcare, representing a shift from the mass produced, one-size-fits-all model long used in the pharmaceutical industry. The Human Genome Project, which began in 1990 and was completed in 2003, is currently being analysed and is expected to unveil a number of advances in medicine. It is also expected to reveal, from a person’s genes, whether they have a predisposition to certain illnesses, such as breast cancer, liver diseases, and a range of others. While the research had been hugely expensive before, the price is falling considerably.

Dishman says that the cost of research into human genomes has dropped so dramatically recently that it will herald a new wave of personalised treatments for patients. “The cost of sequencing a genome has fallen from nearly $100m per genome a decade ago to below $5,000 today. In a few years, I expect it to be essentially free. Some clinics will have access to genomic computing clusters building personalised models of their patients that doctors will use to design customized treatments. Clinicians will need decision-support tools to make sense of all this data and coordinate large patient populations.”

In a report published last year, management consultancy group McKinsey & Company said that big data was one of the key areas set to revolutionise the healthcare industry over the course of the coming decade. “An era of open information in healthcare is now underway…Pharmaceutical-industry experts, payers, and providers are now beginning to analyse big data to obtain insights. Although these efforts are still in their early stages, they could collectively help the industry address the problems related to variability in healthcare quality and escalating healthcare spend. For instance, researchers can mine the data to see what treatments are most effective for particular conditions, identify patterns related to drug side effects or hospital readmissions, and gain other important information that can help patients and reduce costs.”

However, the report goes on to say that there are a number of challenges that the healthcare industry must overcome if it is to harness big data to its fullest potential. “For big data initiatives to succeed, the healthcare system must undergo some fundamental changes. For instance, the old levers for capturing value, such as unit-price discounts based on contracting and negotiating leverage, do not take full advantage of the insights that big date provides and thus need to be supplemented or replaced with other measures.”

Smarter health
As emerging economies across the world see their citizens become wealthier, they will in turn have greater demands on health services. The studies that show healthcare costs are rising make it vital that something is done to ensure that everyone is able to have access to the best medical services. Fortunately, the technological revolutions that are occurring within the industry could well prove to be the magic pill it needs.

Apple confirms Beats acquisition

Posted on by Charlotte Gill

After weeks of speculation, Apple has finally confirmed the details of the Beats Electronics deal in what marks the California company’s largest acquisition to date. The acquisition overall comes to $3bn, and will see the company’s co-founders Jimmy Iovine and Dr Dre join Apple’s ranks.

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Apple’s CEO Tim Cook in a statement. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

Some are unconvinced that Apple is interested in either Beats’ headphone or streaming business

Although Beats Electronics is only five-years-old, a short history of high profile celebrity endorsements and successful marketing campaigns have seen the company explode onto the headphone market, in which it is the leading player.

The company also boasts a formidable streaming service with some 110,000 subscribers, which, although far short of Spotify’s 10 million, could lend Apple a vital helping hand in securing a foothold in the streaming market. Past endeavours such as last year’s iTunes Radio have seen Apple struggle to get to grips with rival subscription services such as Spotify and Pandora. And the fact that Apple have resorted to acquiring an outside party shows the seriousness with which the tech giant intends to occupy a sizeable share of the market.

“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”

Some are unconvinced that Apple is interested in either Beats’ headphone or streaming business, and have speculated that the company’s interests lie elsewhere. “Expect Apple to tie Beats into a more comprehensive wearables strategy in the future,” wrote the digital analyst James McQuivey in a Forrester blog post. “It has the technology and manufacturing chops, Beats has a brand that can get people to wear conspicuous gear without shame. Put the two together and you have a recipe for body-based product innovation. As if Apple came to the wearables market, took one look at Google Glass and said, “We can do better than that.””

As pioneers in the music industry, both Jimmy Iovine and Dr Dre will prove to be crucial assets for Apple in bringing cutting edge music products and services to customers. Since the release of the iPod, Apple has led a number of path-breaking advances in the music industry, and the acquisition of Beats only serves to underline the company’s commitment to doing so again in the future.

Google to build self-driving cars

Posted on by Charlotte Gill

The California tech giant Google has unveiled plans to build its own self-driving cars, with the expectation being that the completed vehicles will be road-worthy within the year. Since development on the project began in 2009, the firm’s automobiles have logged upwards of 700,000 miles as part of an effort to rid the roads of human error.

[M]any have been quick to criticise the design, fearing that it could increase congestion on the roads

“We’re really excited about this vehicle – it’s something that will allow us to really push the capabilities of self driving technology, and understand the limitations,” said Chris Urmson, Director of the company’s Self-Driving Project at a Southern California tech conference.

The company has been testing cars equipped with Google-built sensors and navigation technology for some time now, although the news that it intends to build the vehicles itself marks the beginning of a new chapter for the firm.

However, with only two seats and a top speed of 25mph, many have been quick to criticise the design, fearing that it could increase congestion on the roads and extend already lengthy commutes for those in the city. Combining laser and radar sensors, alongside extensive camera data, the vehicle is without a steering wheel or pedals to speak of, and comes equipped only with a stop-go button.

What’s more, some remain unconvinced of the technology’s benefits prior to mainstream adoption. “Until the majority if cars have this capability there will be incremental safety gains from self-driving cars and also increased mobility options for those that weren’t able to benefit from passenger vehicles,” said Thilo Koslowski, Vice President and Distinguished Analyst at Gartner.

Google intends to introduce a steady stream of some 200 vehicles to the city of Detroit, using the site as a testing ground for the self-driving technology.

Association for Safe International Road Travel statistics show that in the US alone, over 37,000 people die every year from road crashes and another 2.35 million are injured or disabled. Supporters of the technology believe that computer-driven automobiles could go some way to curb road traffic accidents, with some going so far as to say the technology could potentially revolutionise road transport.

“Self-driving cars, if they become viable (and it’s looking like they will), are going to change transportation forever,” says Michael Battista, Senior Consulting Analyst for InfoTech. “There will be indirect effects on pretty much every aspect of human life. Transportation jobs will be lost and gained, everybody will have more productive hours in a day when commuting downtime is eliminated, and the possibility of shared autonomous cars could eliminate the need for most parking lots.”

However, there still exists a number of issues to iron out before self-driving cars enter onto the market in any meaningful way, not least of which being “consumer trust and loss of control,” according to Koslowski.

“Laws and regulations move less quickly, but as we’ve seen in other disruptive transportation technologies, like Uber, sometimes the technology is able to plow ahead anyway,” says Battista. “Lawmakers and luddites will certainly resist self-driving cars, but if Google is pushy enough to get them out there and prove that they work—and save a whole lot of lives—then resisting our robotic chauffeur friends will be nearly impossible.”

GlaxoSmithKline bribery case now investigated in the UK

Posted on by Charlotte Gill

Britain’s Serious Fraud Office (SFO) has launched an official criminal investigation into allegations that GlaxoSmithKline executives and officials engaged in widespread fraud and bribery in China. The announcement by the SFO comes just weeks after Chinese officials accused GSK’s British CEO Mark Reilly of illicit activity said to have generated ‘illegal revenue worth billions of renminbi.’

Under the UK Bribery Act, domestic authorities have the remit to investigate corruption at home or abroad, so it had been expected that the SFO would follow in China’s footsteps and launch an official investigation.

The company is facing further bribery allegations in Poland and Iraq, Jordan and Lebanon

According to a press statement released by GSK, it was informed on Tuesday that the SFO had ‘opened a formal criminal investigation into the Group’s commercial practices.’ So far, the pharmaceutical company has refused to comment beyond stating it is ‘committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO.’

The 10-month investigation by Chinese officials has revealed GSK executives in China were directly involved with the bribing of health officials, doctors and hospitals in order to boost drug sales in the country. In early May, the results of the GSK bribery case investigation were handed over to the prosecution service, along with a list of 46 employees and executives, fingered by police as suspects.

“Under the UK Bribery Act, there is the offence of failing to prevent bribery on behalf of an organisation by an associated person and it has extraterritorial reach – the offence does not have to been committed here it just needs to be a UK business or a business with significant interests here,” says Nathan Peacey, an expert in regulation and Partner at Bond Dickinson, in London. “If the company is found guilty themselves committing offense rather than an associated person, they will be disbarred from public contracts in the EU.”

It is unlikely that GSK as a whole will be prosecuted, but rather the brunt of the accusations will likely be made against executives and employees involved in the alleged fraud. Because of the ‘identification principal’ prosecutors “would need to identify someone with sufficient seniority or a directing mind of the business” in order to bring charges against the company, according to Peacey. “It is notoriously hard to prosecute criminal offenses of this nature for very large organisations. Having said that, if successfully prosecuted discretion for EU organisations that award contract to exclude the company from future contract races.

“It has a potential impact, and will have impact on their share price,” he added.

When allegations of corruption and fraud first surfaced GSK denied it or its employees engaged in any form of systemic corruption, though it admitted that a small number of staff had appeared to have broken Chinese law. In the months since the scandal broke, GSK has reviewed some of its practices in China, including getting rid of individual sales targets and reviewing its marketing operations.

Sales have dropped considerably in China in the wake of the scandal, severely hindering GSK’s efforts to established a strong foothold in one of the world’s fastest growing markets for pharma products.

Since news of the Chinese investigation broke in 2013, it had been warned that GSK was at risk of prosecution in the UK and the US, as both countries have passed legislation allowing for the prosecution of companies abroad. The company is facing further bribery allegations in Poland and Iraq, Jordan and Lebanon.

Luxembourg drives the e-City revolution | Video

Posted on by Charlotte Gill

The city of Luxembourg was one of the first to invest in an e-City programme – the technology of which allows citizens to connect with each other quickly via a smart, integrated network. The New Economy speaks to the city’s former Mayor, Paul Helminger, to find out about the effectiveness and cost of HOTCITY, Luxembourg’s e-City programme.

The New Economy: Paul, what was your original vision for the e-City of Luxembourg?

Paul Helminger: Well, quite frankly, my first concern was to improve the efficiency of the city services using the whole gamut of new technologies the information and communications could offer, so it meant really looking inside at the city and streamlining the processes, weeding out things that were done in double, really with the idea to end up with the city being a sort of one-stop service provider for the city. Once we had done that, the second idea was to bring this closer to the citizen via the internet, at home first, and then the third stage was to bring it to where the citizen or the visitor to the city was at any given moment, so in other words introduce this concept of seamless coverage of the city as a hotspot, which became HOTCITY.

[I]t makes the city much more liveable

The New Economy: So why was this ultra-modern connectivity important for the city, its citizens and businesses?

Paul Helminger: The city is quite an extraordinary city, it’s fully 65 percent today, more than that, of its residents do not hold Luxembourg passports. In other words, we are living in a city that is very multilingual, that is very mobile, we double in size during the day with all the commuters coming into work, so we have this need to connect to the citizen, to the visitor, in ways that use the full power and availability of the internet. So it makes the city much more liveable, it gives the citizen an idea of how to move around the city, where things are happening, information about events, live transmissions of events, regardless of whether he is at home, or whether he sits on a cafe terrace. So that is the idea, and I think in the meantime we’ve come very close to realising that.

The New Economy: How much did the initiative cost and how did you get support for it?

Paul Helminger: Well, let me say that the investment in the platform and in the network which we really insisted should be in the hands of the city, it has cost us a couple of million over the years.

The New Economy: And where did the support for the network come from?

Paul Helminger: I think it started with our services themselves, who suddenly were able, if they were at their workplace somewhere in the city, to on-the-spot reach out to the files which they’d left at the office, so they realised that their own work had become much more efficient, and of course we saw that on the cost-side. And then for the citizens themselves, the idea that they would be able to sort of buy their bus tickets, find out exactly when the next bus would come, where there would be an empty parking space, all these things of course make the life of being the citizen, the resident, or the visitor to the city much easier and make therefore the city much more attractive. So the response I think was really very good.

[T]he basic idea was the make sure that we had an open platform

The New Economy: What role did the private sector play in the e-City program?

Paul Helminger: We had been looking before we launched this at the sort of other cities which had happened around the world, and we found that cities that had really gone to private operators and entrusted a private operator with building similar systems, and we found cities that had wanted to do it all of their own. We kind of came to the conclusion after this sort of benchmarking that once thing was important, that we would set up a network and a platform that would be open, and the one way to guarantee that was to have the city as the owner of both the platform and the network, but then to make sure that that platform was open so that all service providers, whether they be in telecommunications or internet services, would be able to use that platform. Now we have one strategic partner, because we obviously needed sort of a kickstart, but the basic idea was the make sure that we had an open platform, an open system where all telecom and all service providers could join, and that also has proved to be a big success.

The New Economy: So finally, you said you looked at how other cities were doing it. Cities today looking around thinking they want to develop their own e-City network, what advice would you give to them?

Paul Helminger: Well I think it is exactly that, that they should make sure that their system is an open system, because that is what encourages providers, people that have ideas about new applications, new services to offer, to come to you and ask to be part of the ecosystem that is today HOTCITY.

The New Economy: Paul, thank you.

Paul Helminger: Thank you.

China to scrap 11 million ‘high-pollution vehicles’

Posted on by Charlotte Gill

According to a short statement posted on the government’s web portal, China intends to scrap six million ‘high-polluting vehicles’ before year’s end. The move comes as part of China’s emboldened efforts to curb emissions, particularly in northern regions where smog currently clouds much of the cityscape.

China’s Cabinet admitted that it had already fallen short of its 2011-2013 targets, and pledged to ramp up its efforts to prevent this from happening again. A recent report from China’s environmental watchdog revealed that 31.1 percent of Beijing’s air pollution stems from vehicle exhausts, leading the country’s government to resort to drastic measures in order to overturn the damage done so far.

31.1 percent of Beijing’s air pollution stems from vehicle exhausts

Of the six million cars due to be eliminated from service, 20 percent are in the municipalities of Beijing and Tianjin, as well as the Hebei province. Namely, 330,000 vehicles will be withdrawn from Beijing, and another 660,000 from the Hebei province.

What’s more, according to an action plan published by the State Council, another five million will be eliminated next year, bringing to total number of vehicles affected to 11 million. “Strengthening control on vehicle emissions will be a major agenda item for the country’s energy savings, emissions reductions, and low-carbon development during the next two years,” it reads.

“In terms of automotive emissions standards legislation, China, in principle, has been lagging behind Europe for some time,” says Richard Smokers, Strategic Advisor on Sustainable Mobility for TNO. “However, it has quickly been catching up over the last decade.”

The measures will be mandatory, although the authorities are yet to specify details on how the plan will be carried out in full. The plans are by far the most drastic unveiled thus far as part of China’s drive to cut emissions, as the country looks to bring energy consumption per unit of growth down by 3.9 percent in 2014 to meet an ambitious 16 percent target.

Sony overhauls ahead of sixth annual loss – will it be enough?

Posted on by Charlotte Gill

Electronics-giant Sony is in for a massive overhaul according to its Chief Executive Kazuo Hirai, who has unveiled an ambitious target to increase the company’s operating profit by threefold by 2016. Hirai vowed to complete large-scale restructuring measures in order to turn around Sony’s troubled consumer electronics arm.

This follows the firm’s expectations of a $500m annual net loss, down from the $1.3bn loss recorded in 2013

At a strategy briefing Hirai said that the firm is selling its Vaio computer brand, spinning off parts of its TV business and boosting core areas such as games, imaging technology and mobile devices. Nevertheless, Sony is heading towards its sixth annual loss in seven years, with restructuring costs mounting despite being set to cut 5,000 jobs.

The promises are similar to those of two years ago, which saw a restructuring involving the sale of its PC business and cost cuts in its sales and headquarters divisions.

“We will finish off the restructuring of the electronics business, and we will not put off the reforms,” Hirai explained to investors in Tokyo.

Combined with stable profits from its entertainment and financial businesses, Hirai said he was confident in the firm achieving a turnaround as cost savings would enable Sony to achieve an operating profit of ¥400bn ($3.95bn) for the year through March 2016, compared with a profit of ¥140bn forecast for the current year. This follows the firm’s expectations of a $500m annual net loss, down from the $1.3bn loss recorded in 2013.

In a surprising move, Sony did not provide any longer-term revenue or profit targets for the next three years. This follows heavy criticism from investors after the firm in previous years failed to deliver on its bullish goal forecasts. During the previous fiscal year alone, Sony cut its earnings guidance three times and its latest revenue target is 8.2 percent below what Hirai pledged two years ago.

“Unless we produce the results, I don’t believe we can draw up our medium to long-term strategies,” he said.

Despite Sony’s TV business racking up major losses, Hirai pledged he would turn around the TV arm, which to a large extent was responsible for Sony’s ascendance in the electronics industry in the 1990s. Sony will also be looking into new businesses like wearable technology, batteries and medical equipment.

Unilever to sell off pasta sauce division to Japan’s Mizkan

Posted on by Charlotte Gill

Unilever has agreed to sell off popular food brands Ragú and Bertolli to Japanese food manufacturer Mizkan for $2.15bn. Unilever has been on a roll with sell-offs recently, particularly of its food businesses, as it looks to develop its more profitable personal care lines.

The company has been unloading some of its slow-growing food brands in order to focus on its more profitable
beauty brands

Ragú is the biggest selling pasta sauce in the US, and was the defining brand to popularise Italian cuisine in the country. Together with Bertolli, they generate annual sales of over $600m, according to Unilever. Mizkan, on the other hand, has been quickly expanding in rapid markets: the 210-year-old family-company picked up Sarson’s Vinegar and Hayward’s pickles – two popular British brands – in 2012

“This sale represents one of the final steps in reshaping our portfolio in North America to deliver sustainable growth for Unilever, and enables us to sharpen our focus within our food business,” said Unilever President Kees Kruythoff in a statement. The company has been unloading some of its slow-growing food brands in order to focus on its more profitable beauty brands like Dove.

The deal includes two production sites, and will be a significant achievement for Mizkan. The company has been striving to be less dependent on Japanese markets, where it primarily manufactures condiments and rice wine.

“This transaction allows us to further achieve our objectives of diversification and expansion of our international footprint,” Kazuhide Nakano, Chairman and CEO of Mizkan Holdings, Mizkan Group’s parent, said in a statement. “Mizkan is strongly committed to the long-term growth of Ragú and Bertolli.”

Ragú commands 27 percent of the American sauce market, according to research by Euromonitor, and accounts for 40 percent of Unilever’s sauce business. However, sales have declined 18 percent since 2009, as independent brands have grown to account for up to a quarter of the market.  Unilever sold Ragú’s British arm in 2011, as well as Skippy Peanut Butter, and some European meat businesses like Peperami, earlier this year. It is still looking to unload its Slim-Fast diet food business.

The deal is expected to be finalised in early June.

Better safe than sorry for GM as it recalls another 2.42 million vehicles

Posted on by Charlotte Gill

The American automaker General Motors has decided to recall another 2.42 million vehicles, again owing to mounting safety concerns and pressure from regulators and senior internal sources to improve processes and standards. The decision marks GM’s 29th safety and non-compliance-related recall, which together amount to over 13 million vehicles and $400m in damages through the April May period alone.

The circumstances come a week on from a $35m fine government-issued, which is the maximum allowed by US law and the highest civil penalty on record as a result of a recall investigation. The latest recall relates to airbag, gearbox and seat belt issues, which are together believed to be responsible for 18 crashes and one injury, according to the company.

The decision marks GM’s 29th safety and non-compliance-related recall, which together amount to over 13 million vehicles and $400m
in damages

The company stated briefly that the decision was part of GM’s ‘continuing effort to quickly address emerging safety issues.’ Since her appointment in January, Chief Executive Mary Barra has launched an internal investigation into the misgivings that gave rise to the issues and pledged to overhaul the practices that allowed the faults to go unchecked.

Barra has vowed to restore customer trust in the automaker, beginning first with a thorough analysis of the company’s inability to detect and report safety issues. Since the beginning of the year, Barra has appointed a new Head of Global Safety and launched 35 product investigations to clamp down on any remaining and future issues.

The latest string of recalls, four in total, comes less than a week after the company withdrew 2.7 million cars, and will no doubt come as a crushing blow to the company’s already tattered reputation.

The total number of vehicles recalled so far this year amounts to more than the automaker sold throughout the entirety of last year, and has so far cost the company $1.7bn, near enough wiping out any earnings there may have been for the first half of 2014.

US and China embroiled in espionage dispute

Posted on by Charlotte Gill

Yesterday’s ground-breaking move by the US Department of Justice to charge five Chinese military officers with spying on leading American companies has drawn a furious reaction from China’s government.

The Chinese officials – members of Unit 61398 of the Chinese People’s Liberation Army – are accused of hacking into the computer networks of firms that include Alcoa, Allegheny Technologies, US Steel, the United Steelworkers Union, Westinghouse Electric, and SolarWorld.

China responded to the news by accusing the US of hypocrisy and having made up the allegations

The charges come as many of the US firms claim that they are losing market share as a result of cheaper products offered by Chinese rivals. SolarWorld has reportedly seen pricing strategy documents stolen, while Westinghouse is said to have had key documents stolen while it was negotiating a deal to build a nuclear power plant with a Chinese state-owned firm.

Announcing the news, Attorney General Eric Holder said that the hackings had been done to aid China’s state-owned companies gain a competitive advantage over their US rivals. “The alleged hacking appears to have been conducted for no reason other than to advantage state-owned companies and other interests in China, at the expense of businesses here in the United States.”

He added, “As President Obama has said on numerous occasions, we do not collect intelligence to provide a competitive advantage to US companies, or US commercial sectors.”

However, China responded to the news by accusing the US of hypocrisy and having made up the allegations. Xinhua, the state-run news agency, said the US had frequently hacked into Chinese institutions.

“The US attacks, infiltrates and taps Chinese networks belonging to governments, institutions, enterprises, universities and major communication backbone networks. Those activities target Chinese leaders, ordinary citizens and anyone with a mobile phone. In the meantime, the US repeatedly accuses China of spying and hacking.”

According to revelations by whistle-blower Edward Snowden, the US hacked into computers of leading Chinese telecoms manufacturer Huawei in recent years.

AT&T to boost digital offerings with takeover of DirecTV

Posted on by Charlotte Gill

A colossal deal has been announced that will see US telecom giant AT&T buy pay-TV giant DirecTV for $48.5bn, further shaking up an industry that has seen considerable consolidation in recent months. The move by AT&T will also see it acquire the so-called ‘holy trinity’ of digital offerings – phone, broadband and video services. It is expected to capture many millions of new customers across the US.

The deal comes after a recent takeover bid by US telecom leader Comcast for cable TV provider Time Warner Cable. That deal is still awaiting the scrutiny of regulators concerned over the implications for the industry’s competition, and it is thought that AT&T’s move will face similarly stringent oversight.

The deal will see AT&T pay shareholders $95 a share in a combination of cash and stock

DirecTV has been looking to partner up with a telecom provider in order to boost its lacklustre Internet provision, while AT&T has been struggling to improve on its paltry 5.7m phone-internet-TV subscribers. The deal will see AT&T pay shareholders $95 a share in a combination of cash and stock, and is a premium of around ten percent more than what DirecTV was trading at on Friday.

Randall Stephenson, AT&T’s CEO, said in a statement that the deal would enhance both companies’ offering and allow for better deals for customers. “This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across the multiple screens – mobile devices, TVs, laptops, cars and even airplanes.”

He added in a call to investors that they had been looking to do such a deal for some time now. “It gives us the parts to fulfil a vision we have had for a couple of years, that is, the opportunity and the ability to take premium content and deliver premium content over multiple points for the customer, whether it be through a smartphone, through a tablet, or television or laptop.”

Time Warner Cable’s acquisition by Comcast for around $45bn has seemingly pushed AT&T to find a similar partner in a market that is becoming increasingly competitive. Other rivals, such as Sprint and T-Mobile US, are also thought to be looking at merging with firms.

Chinese authorities hit GSK with fresh charges of bribery

Posted on by Charlotte Gill

Mark Reilly, the British former Head of GlaxoSmithKline in China, has been accused by local authorities in China of ordering bribes for doctors and government officials, after a ten-month investigation. According to officials, the illicit activity would have generated “illegal revenue worth billions of renminbi”.

Chinese police have accused the UK-based pharmaceutical giant of funding bribes in China by overcharging on medicines, inflating some prices by as much as seven times their value in other markets. The police statement, seen by the BBC, accuses Reilly and two other colleagues of personally overseeing a “massive bribery network”. The case has now been passed on to prosecutors.

If convicted Reilly could face a maximum penalty of life imprisonment

It now appears that GSK was also inflating import costs by providing false declarations to customs authorities in order to transfer profits to other countries. “The more drugs the company sold, the more they bribed; and the more they bribed, the more drugs they sold,” a spokesperson for the Economic Crime Investigation Department of Public Security Ministry has been quoted by the FT as saying.

Since accusations surfaced in the summer of 2013, GSK has denied it or its employees engaged in any form of systemic corruption, though it admitted that a small number of staff had appeared to have broken Chinese law. In the months since the scandal broke, GSK has reviewed some of its practices in China, including getting rid of individual sales targets and reviewing its marketing operations.

Reilly has since parted ways with GSK and left China temporarily, but is now back in the country and said to be assisting police with investigations. According to The Daily Telegraph, Reilly is barred from leaving; however a spokesman from GSK denied the allegation, commenting: “At no point was he detained…Mark remains in China to help further with the investigation should it be required.” If convicted Reilly could face a maximum penalty of life imprisonment.

GSK has apologised for its employees’ actions, but suggested they were carried out outside of company controls. However, the company is facing similar accusation in Poland, suggesting a much more widespread problem. If allegations are proven in China or Poland, the company will also likely face consequences at home, for being in violation of the UK Bribery Act, as well as the US Foreign Corrupt Practices Act.