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Glaxo Says Executives May Have Broken Chinese Law

July 22, 2013 by Leave a Comment

The statement, released after three top Glaxo executives met with Chinese investigators, came amid signs that other drug makers could also come under scrutiny from the Chinese authorities.

On Monday, the British-Swedish drug company AstraZeneca said one of its employees had been questioned by the police in Shanghai. The company released a statement saying that the police had visited the company and had questions about a sales representative.

“We believe that this investigation relates to an individual case and while we have not yet received an update from the Public Security Bureau, we have no reason to believe it’s related to any other investigations,” the statement added.

Over the weekend, the drug makers Merck and Roche acknowledged that they had used the same small Shanghai travel agency that investigators say worked with Glaxo to bribe doctors, hospitals and government officials.

Glaxo has been under intense scrutiny for the past few weeks after investigators raided offices in China and detained four senior executives on suspicion of bribery and tax fraud.

In the statement Monday, Abbas Hussain, a Glaxo executive, said: “Certain senior executives of GSK China who know our systems well appear to have acted outside of our processes and controls, which breaches Chinese law. We have zero tolerance for any behavior of this nature.”

His statement, which came after a meeting with China’s Ministry of Public Security, or national police, continued: “I want to make it very clear that we share the desire of the Chinese authorities to root out corruption wherever it exists. We will continue to work together with the MPS and we will take all necessary actions required as this investigation progresses.”

Andrew Witty, the company’s chief executive, sent three top executives to China last weekend to meet with the government. They included Mr. Hussain, who apologized in a meeting with an official from the Ministry of Public Security.

The apology and statement that its executives may have broken the law is a sharp reversal for the company. A few weeks ago, executives at Glaxo said that this year they conducted an internal investigation into allegations of bribery and fraud in the China operations and found no evidence of wrongdoing.

The police in Shanghai have also detained Peter Humphrey, a British fraud investigator who had done some contract work for Glaxo, according to a person familiar with his case. But it was unclear whether the police were holding him in connection with the investigation into Glaxo or on a separate matter.

Article source: http://www.nytimes.com/2013/07/23/business/global/glaxo-says-executives-may-have-broken-chinese-law.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Amazon’s Labor Relations Under Scrutiny in Germany

March 3, 2013 by Leave a Comment

Then Mr. Sauer and several other activists unfurled a banner demanding in a curious mix of German and English that Amazon, the American online retailing juggernaut, negotiate a union wage contract with its currently nonunion work force here. “Make Tarif Vertrag,” it said in fluorescent letters. Then the organizers marched toward the gates of the Amazon complex to deliver the results of an online petition drive supporting the union’s demands.

That brief bit of guerrilla theater was the latest skirmish in an escalating battle between ver.di, one of the largest unions in Germany, and Amazon, which employs 8,000 permanent workers at eight distribution centers in the country, one of the online retailer’s largest markets outside the United States. Deservedly or not, Amazon’s labor relations have lately come under intense scrutiny by German media.

The triggering event was a Feb. 12 broadcast by one of Germany’s two main public television networks of a documentary about the treatment of some of the 10,000 temporary workers that Amazon hired last year to cope with the holiday rush. Many of those workers were bused in from countries like Spain or Romania where jobs are scarce.

Aired on ARD, a publicly financed broadcaster considered left of center, the documentary even implied that Amazon used neo-Nazi thugs to keep workers in line. It showed a team of security workers hired by an Amazon subcontractor roughing up a camera crew outside the temporary workers’ quarters.

The broadcast has since inspired countless headlines, preoccupied pundits on Germany’s ubiquitous television talk shows and may even become an issue in national elections this autumn in which left-leaning Social Democrats will be challenging the government coalition led by Chancellor Angela Merkel’s conservative Christian Democrats.

The continuing furor raises the question of whether Amazon will be the latest big American company to run afoul of German labor laws, which provide much broader worker rights than in the United States.

Walmart abandoned Germany in 2006 following an array of setbacks that included a legal struggle with ver.di, which represents two million workers in service industries including retailing, hotels, food service and public transportation. The name is an abbreviation of Vereinte Dienstleistungsgewerkschaft, or United Service Industries Union.

General Motor’s Opel unit, represented by the IG Metall union in Germany, has struggled for more than a decade to cut costs and stem losses in the face of strong worker resistance. Last week, Opel finally struck a truce with its employees that will allow it to close a factory in Bochum, Germany, in 2016 — but only after promising not to impose involuntary layoffs.

Now it seems to be Amazon’s turn to serve as a symbol for everything that many Germans resent about American-style management and so-called Anglo-Saxon capitalism. As an American company that has helped drive at least one German competitor out of business and makes heavy use of temporary workers, Amazon is a ripe target.

More flexible job regulations, introduced since 2005, have contributed to a plunge in unemployment. Germany’s 5.3 percent jobless rate is less than half the euro zone’s overall rate of 11.9 percent. But the changes are perceived by many Germans as creating a class of poorly paid workers with few protections. Amazon’s work force more than doubles every Christmas season when it hires an additional 10,000 temporary employees, many of them foreigners.

Amazon, which already pays above the union rate, has refused to negotiate with the ver.di union on wages or any other issue. But so far Amazon seems to be doing a better job than Walmart did in German public relations.

Article source: http://www.nytimes.com/2013/03/04/business/global/amazons-labor-relations-under-scrutiny-in-germany.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

TV Show Mirrors a Japanese Battery Maker’s Bind

February 12, 2013 by Leave a Comment

With the real-life manufacturer of Boeing’s Japan-made batteries under intense scrutiny, the three-part series, which was carried by the national broadcaster NHK and showed its finale on Saturday, came at an angst-ridden time, and underscored the hopes that Japan had pinned on technologies like lithium-ion batteries.

As portrayed in the series, Takumi Electronics might as well be Japan Inc. itself. Takumi’s lead in televisions and mobile phones has been eclipsed by more nimble upstarts in South Korea and China, echoing the fate of Japanese technology giants like Sony and Panasonic. The only hope the company has now lies in its advanced battery technology.

“These lithium-ion batteries took us years to develop, and our technological advantage won’t waver so easily,” the Takumi Electronics president says defiantly to reporters after yet another disastrous earnings presentation. “We are betting on big growth in electric cars, and we are about to clinch some big deals.”

GS Yuasa, the real-life maker of Boeing’s lithium-ion batteries, made a similar bet, one that has not yet paid off.

Fire and smoke in batteries aboard Boeing’s next-generation Dreamliner have led to the grounding of all 50 of the planes while authorities around the world try to figure out the cause. On Thursday, the head of the United States National Transportation Safety Board, Deborah Hersman, said the fire seemed to have originated in one of the batteries, and faulted aviation officials for not anticipating the risks.

On Saturday and again on Monday, Boeing crews took a 787 on test flights to monitor the performance of the lithium-ion batteries. Both flights, Boeing said, were uneventful.

The recent troubles are hardly what GS Yuasa could have envisioned when it started making the batteries. In 2009, it started supplying the batteries for Mitsubishi Motors’ i-Miev electric vehicles, billed as the first mass-produced, fully electric car. Everything seemed to go well at the beginning. GS Yuasa executives said in interviews three years ago that the company was struggling to keep up with inquiries pouring in from automakers.

But demand for the electric vehicles has not taken off. Last month, Mitsubishi Motors sold just 137 i-Mievs, and GS Yuasa’s factories have been running at less than capacity.

That has marred plans at the company, which had hoped its lithium-ion technology would soon replace its older lead-acid batteries as its core business. GS Yuasa has still not turned a profit on its lithium-ion batteries, losing 3.26 billion yen, about $35 million, on the business last year despite directing the bulk of its capital investment to the technology, according to its annual report.

Enter Boeing and its next-generation 787 jet, which relies more than ever on electric systems and the batteries that power them. GS Yuasa won a contract in 2005 to supply Boeing with lithium-ion batteries through the French aviation electronics company Thales, and GS Yuasa has promoted aviation as a growth area that could make up for the disappointing electric vehicle market.

GS Yuasa’s president, Makoto Yoda, had high ambitions, telling Kyodo News in late 2011 that he wanted to double sales of lithium-ion batteries to clients other than automakers within five years. By “building on our track record in supplying Boeing,” he said, the company aimed to open up new uses for the battery technology, including small jets and helicopters.

Advanced batteries are also crucial to wider Japanese industry at a time when the country remains stunned by how swiftly its once-dominant makers of semiconductors and flat-panel televisions have been overtaken by South Korean rivals. The culprit is commoditization, which made Japan’s prized technology indistinguishable from everyone else’s.

There is already fear that Japan’s prized lithium-ion battery technology could go the same way.

Though Japan was long the world’s dominant supplier of lithium-ion technology, led by Sony’s first commercial lithium-ion batteries in 1991, rivals have largely usurped Japan’s lead. The catch-up has been especially swift in smaller lithium-ion batteries, which have become increasingly common.

Article source: http://www.nytimes.com/2013/02/12/business/tv-show-mirrors-a-japanese-battery-makers-bind.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,