November 22, 2024

You are here: Home / Archives for three quarters

Britain’s Recovery Picks Up

July 25, 2013 by Leave a Comment

LONDON — Britain’s economic recovery still has a pulse — if a weak one.

The country’s recovery gained momentum in the second quarter as all of its main industries reported faster growth, government statistics showed Thursday. But some economists warned that it was too early to say the country’s malaise was over.

Gross domestic product grew 0.6 percent in the three months that ended in June from the first three months of this year, when the economy grew 0.3 percent, the Office for National Statistics said Thursday. Growth spanned the service sector, which accounts for about three-quarters of Britain’s economy, as well as construction, agricultural and production, which includes manufacturing. It was the first time in three years that all those industries grew at the same time.

“Growth not only accelerated appreciably but is also becoming more broadly based,” said Howard Archer, an economist at IHS Global Insight. But he also said that “significant economic headwinds persist,” meaning that the economy “will likely remain prone to periodic losses of momentum.”

The report on Britain’s slight uptick came a day after data from the long-suffering euro zone showed some sign of improvement. A survey of purchasing managers by the research firm Markit indicated that manufacturers in Germany and France had begun increasing production as demand grew, and there was evidence that a credit squeeze for consumers was easing. But there too, the recovery was likely to continue to be fragile despite the positive reports, some economists said.

In Britain, the service sector grew 0.6 percent in the second quarter; the construction business grew 0.9 percent; and the agriculture sector increased 1.1 percent. Production, including manufacturing, grew 0.6 percent, the Office for National Statistics said.

“Firms are feeling upbeat and are capable of expanding,” said John Longworth, director general of the British Chambers of Commerce. “More and more are adopting a ‘have a go’ attitude when it comes to exporting, which is really encouraging as this will go a long way to driving growth further still.”

BT Group, the telecommunications company, on Thursday reported fiscal first-quarter earnings that beat some analysts’ forecasts and said the outlook for its business was improving slightly. EasyJet, the low-cost airline, said Wednesday that its sales rose in the second quarter as it added capacity in Europe.

The economic revival in Britain is also accompanied by a rise in the price of residential property, according to the mortgage provider Halifax, a unit of Lloyds Banking Group. The value of homes rose 0.6 percent in June to the highest level in almost three years, helped by government measures that assist potential home buyers with making down payments.

But some economists said Britain’s recovery could start to lose momentum again in the second half of this year. Banks remain reluctant to offer loans, especially to smaller and medium-size companies; real wages have barely moved; and inflation continues to be above the Bank of England’s 2 percent target. A recovery is also closely linked to the strength of the economies of continental Europe, Britain’s largest export market, and Asia.

Economists and investors are waiting to hear from Mark J. Carney, who took over as governor of the Bank of England at the beginning of this month, about how he aims to strengthen the economic recovery. Mr. Carney is expected to lay out the central bank’s new policy on giving more guidance on the future levels of interest rates in early August, when the latest inflation report will be released.

Article source: http://www.nytimes.com/2013/07/26/business/global/britains-recovery-picks-up.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

It’s the Economy: Is It Crazy to Think We Can Eradicate Poverty?

April 30, 2013 by Leave a Comment

It sounds like the sort of airy, ambitious goal that is greeted by standing ovations but is ultimately unlikely to ever materialize. Development experts don’t see it that way, though. The end of extreme poverty might very well be within reach. “It’s not by any means pie-in-the-sky,” says Scott Morris, who formerly managed the Obama administration’s relations with development institutions. When I asked Jeffrey Sachs, the development economist, if the target seemed feasible, he said, “I absolutely believe so.” And Nancy Birdsall, president of the Center for Global Development, the powerful Washington policy group, told me, “In many ways, it’s a very modest goal.”

In part, this is because the bar is set very low. The World Bank aims to raise just about everyone on Earth above the $1.25-a-day income threshold. In Zambia, an average person living in such dire poverty might be able to afford, on a given day, two or three plates of cornmeal porridge, a tomato, a mango, a spoonful each of oil and sugar, a bit of chicken or fish, maybe a handful of nuts. But he would have just pocket change to spend on transportation, housing, education and everything else. The 1.2 billion people living in such extreme poverty, according to researchers at the Massachusetts Institute of Technology, might own land, but they are not very likely to own durable goods or productive assets — things like bicycles — that might help them raise themselves out of poverty. In such families, about half or three-quarters of income goes toward food.

Fortunately, this deadly and cyclical form of poverty is already on its way toward obsolescence, and much faster than many development economists expected. The first Millennium Development Goal — to halve the proportion of the world population living in dire poverty by 2015 — was met five years early, as the rate fell to an estimated 21 percent in 2010, from 43 percent in 1990. Some economists had feared that the recession would arrest or even reverse the trend, given how interconnected the global economy is, but the improvement continued, unabated. Annual growth dipped for developing economies in 2009 but has since rebounded to about 5.3 percent a year, a figure dragged down by weaker peripheral European economies.

For much of the improvement, the world can thank one country: China, which alone accounts for about half of the decline in the extreme poverty rate worldwide. It has also driven significant gains across the region. In the early 1980s, East Asia had the highest extreme-poverty rate in the world, with more than three in four people living on less than $1.25 a day. By 2010, just one in eight were. But other middle-income countries, like Brazil, Nigeria and India, have experienced significant growth, too — in no small part because tens of millions of the very poor have moved from rural areas to cities, where they become richer, healthier and more productive for their economies.

Since 1980, the proportion of the developing world living in urban areas has grown to about 50 percent, from 30 percent, and according to the World Bank, that migration of hundreds of millions has been instrumental in pulling down poverty rates — and will be for a broader set of countries going forward. Cities bolster access to health services and public resources; infant-mortality rates, for instance, are 40 percent lower in urban Cambodia than in rural Cambodia. And workers themselves become more productive, often by making the switch from labor-intensive work like farming to capital-intensive work like manufacturing. Urban poverty is hardly attractive — slums are cramped, unplanned, unhygienic places — but it is, in many cases, less deadly. (Except when it’s not. A recent factory collapse in Bangladesh killed dozens of workers — a reminder of the sometimes-catastrophic human costs associated with rapid, unchecked urbanization and industrialization.)

Annie Lowrey is an economics reporter for The Times.

Article source: http://www.nytimes.com/2013/05/05/magazine/is-it-crazy-to-think-we-can-eradicate-poverty.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Samsung Reports 42 Percent Jump in Profit

April 26, 2013 by Leave a Comment

In an earnings report, Samsung said its net profit from January through March had soared 42 percent to 7.2 trillion won, or $6.5 billion, from 5 trillion won a year earlier.

Sales rose 17 percent to 52.9 trillion won. Operating profit was up 54 percent to 8.8 trillion won. Profit from the division that makes smartphones, tablets, personal computers and cameras accounted for nearly three-quarters of the company’s entire profit.

Samsung is the world’s largest maker of computer memory chips, televisions, mobile handsets and LCD panels. It does not provide smartphone sales figures, but it has increasingly relied on smartphones as its main profit generator — a strategy that has brought the company into patent and marketing clashes with Apple.

Samsung began sales of its latest Galaxy S4 smartphone in South Korea on Friday. It planned to introduce it in the United States on Saturday.

Samsung’s rivalry with Apple on the Apple’s home turf intensified as Apple reported its first profit decline in more than a decade. Apple also indicated it planned no major product releases until the autumn.

Samsung has challenged Apple’s once dominant place in the world’s smartphone market by flooding it with a range of models with a variety of screen sizes and prices and updating its versions faster than Apple ever has.

Samsung captured a third of the global smartphone market in the first quarter, according to data released by Strategy Analytics. Shipments of Samsung smartphones surged 56 percent to 69.4 million units in the quarter, it said. Apple iPhone shipments rose 6.6 percent to 37.4 million units.

“Although market uncertainties from the European crisis and the slow global economic recovery are still lingering, we expect to increase” spending on research and development “for strengthening our competitiveness ahead of planned new product launches,” Robert Yi, Samsung’s head of investor relations, said in a statement.

Article source: http://www.nytimes.com/2013/04/27/business/global/27iht-samsung27.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Sudan and South Sudan Agree to Resume Oil Production

March 12, 2013 by Leave a Comment

“Resumption of production shall take place as soon as technically feasible,” the agreement read.

South Sudan became independent of Sudan in 2011, taking with it nearly three quarters of the oil wealth. The pipelines, refinery and port to export the oil, however, are in Sudan.

The two sides, longstanding enemies that fought one of Africa’s longest and costliest civil wars, have been at odds for decades, and South Sudan halted oil production in January 2012 in a dispute with Sudan over transportation fees. Both countries came close to full-out war in April 2012.

Both countries have suffered from the loss of oil revenues, with South Sudan depending on oil for 98 percent of its revenue.

“We assume that we will resume as soon as possible,” South Sudan’s petroleum and mining minister, Stephen Dhieu Dau, told reporters in Juba, adding that it would take roughly three weeks to resume production, Reuters reported.

The agreement, signed in Addis Ababa, Ethiopia, under the supervision of the African Union, sets a timetable and the mechanisms to enact a cooperation agreement signed by both countries last September.

In addition to oil production, other matters addressed in the cooperation agreement are to be immediately carried out in the next two to three weeks, including security arrangements, the demarcation of borders, the status of people living across borders, trade, economics and pensions.

“March 10th is the D-Day to implement the agreement,” Sudan’s chief negotiator, Idris Abdel-Gadir, told reporters in Khartoum.

Before Tuesday’s agreement, the defense ministers of both sides agreed to begin the establishment of a demilitarized zone along the border as part of the agreed-upon security arrangements.

The Sudanese defense minister, Abdel-Rahim Hussein, confirmed on Sunday that Sudanese troops had begun withdrawing from the border zone. A day later, South Sudan’s military spokesman, Philip Aguer, said orders had been given to South Sudanese troops to withdraw from the border area.

In a statement, the United States State Department said, “The United States welcomes the technical agreement signed between Sudan and South Sudan establishing a safe demilitarized border zone (SDBZ), a firm timeline for the withdrawal of forces, and a way ahead for the deployment of a joint border monitoring force.”

At the United Nations Security Council, which discussed the Sudan-South Sudan tensions on Tuesday, Susan E. Rice, the American ambassador, told reporters that while council members had welcomed the agreements, she was also cautious, given the troubled history.

“There have been many agreements signed but too few actually implemented,” she said. The importance of agreements, she said, was that “they are not just signed and touted but in fact implemented in real terms promptly on the ground.”

No final agreement on the disputed district of Abyei was made, but a timeline to establish an administration, council and security council in the district were set up.

Both sides are scheduled to meet again on Sunday in Addis Ababa.

Rick Gladstone contributed reporting from New York

Article source: http://www.nytimes.com/2013/03/13/world/africa/sudan-and-south-sudan-agree-to-resume-oil-production.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Japan Airlines Says 787 Grounding Will Cost It $7.5 Million

February 4, 2013 by Leave a Comment

In announcing the forecast loss of about $7.5 million, the Japanese carrier joined other Dreamliner operators, like All Nippon Airways and United Airlines, in raising possible compensation demands. That adds to Boeing’s woes as it struggles to find out why a battery aboard a parked 787 burst into flames and another emitted smoke while a plane was in the air last month.

After those incidents, regulators around the world grounded the 50 Dreamliners that were in service. U.S. and Japanese officials investigating the two cases have not determined exactly what caused the lithium-ion batteries, made by a Japanese company, to overheat.

Japan Airlines, which operates seven 787s and has placed orders for 38 more, is pushing to get back on track after its emergence from bankruptcy last year and the relisting of its shares, which raised ¥663 billion.

In earnings announced Monday, the airline said net profit had fallen 3.7 percent to ¥140.6 billion in the first three quarters, through December, of its financial year. Sales rose 3.6 percent to ¥942 billion, Japan Airlines said, but were offset by a nearly 5 percent increase in operating costs as fuel prices climbed.

Japan Airlines also said that it would postpone the introduction of service between Helsinki and Narita International Airport near Tokyo, originally scheduled to start Feb. 25. The airline cited “necessary adjustments to JAL’s international routes utilizing the Boeing 787 aircraft.”

Still, it raised its full-year profit forecast through March by 16 percent to ¥163 billion, citing strong demand in Europe, the United States and Southeast Asia.

Speaking in Tokyo, Yoshiharu Ueki, president of Japan Airlines, said his company was more focused on doing all it could do to help get the 787s safely back in the air. He added, however, that the airline would begin compensation negotiations “once the situation had settled down.”

Article source: http://www.nytimes.com/2013/02/05/business/global/japan-airlines-says-787-grounding-will-cost-it-7-5-million.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

News Analysis: The Biggest Carbon Sin: Air Travel

January 27, 2013 by Leave a Comment

This odd law essentially forbids United States airlines from participating in the European Union Emissions Trading System, Europe’s somewhat lonely attempt to rein in planet-warming emissions. Under that eight-year-old program, European power plants and manufacturers pay fees if they produce excess carbon emissions. The aviation sector was slated to start paying this year, too, for emissions generated by flights into or out of European Union airports.

But after airlines and governments in the United States, India and China went ballistic — filing lawsuits, threatening trade actions and prompting legislation — the European Commission said it would delay full implementation for just one year to let the naysayers accede to an alternative global plan to reduce airlines’ carbon footprint.

Now, with President Obama’s promise in his Inaugural Address that dealing with climate change is part of his second-term agenda, all eyes are on the United States. The United Nations’ International Civil Aviation Organization is convening a multinational meeting in September on the airlines issue, one of the thorniest in climate change.

For many people reading this, air travel is their most serious environmental sin. One round-trip flight from New York to Europe or to San Francisco creates about 2 or 3 tons of carbon dioxide per person. The average American generates about 19 tons of carbon dioxide a year; the average European, 10.

So if you take five long flights a year, they may well account for three-quarters of the emissions you create. “For many people in New York City, who don’t drive much and live in apartments, this is probably going to be by far the largest part of their carbon footprint,” says Anja Kollmuss, a Zurich-based environmental consultant.

It is for me. And for people like Al Gore or Richard Branson who crisscross the world, often by private jet, proclaiming their devotion to the environment.

Though air travel emissions now account for only about 5 percent of warming, that fraction is projected to rise significantly, since the volume of air travel is increasing much faster than gains in flight fuel efficiency. (Also, emissions from most other sectors are falling.)

Which is why, in 2008, the European Union decided to bring aviation into its emissions control plan: “We believe that those of us who can afford to pay for an air ticket can also afford to pay for the pollution from their travel,” says Connie Hedegaard, the European commissioner for climate action. “Many Europeans don’t get why, politically, this should be controversial.”

Though many airlines have tried to reduce their carbon footprints through technical innovations — like more efficient aircraft designs and biofuels blends — they have successfully resisted any regulation or taxation of their emissions.

In an unsuccessful lawsuit before the European Court of Justice last year, United States airlines argued in part that the European Union had no right to tax emissions on trans-Atlantic flights because they went into international airspace.

Airlines for America, a trade group for United States carriers, has proposed setting emissions targets for flights from now until 2020 and adding in financial penalties only later. “The problem with the European trading scheme is that it started with a market-based measure — a tax,” says Nancy Young, the group’s vice president for environmental affairs. “We would accept a market-based mechanism only as a gap filler, if we don’t meet our targets. And we will be saying that very strongly.”

She said the European scheme was “extremely burdensome” and would cost United States airlines $3.1 billion between 2012 and 2020, adding, “It takes money out of U.S. aviation and puts it into European coffers.”

But some in the industry contest that view. “I think airlines typically overstate how difficult this is,” said David Hodgkinson, former director of legal services at the International Airline Transport Association, an industry group, who now practices aviation and climate law in his native Perth, Australia. “I don’t get why opposition is so fierce given that this is relatively straightforward and the cost is typically low and passed on to passengers.”

He said that Qantas, the Australian airline, is going along with the European scheme, under which airlines must buy so-called carbon allowances if they exceed assigned annual emissions targets, which decrease year by year.

Some analysts estimate that the European program would add about $5 to the price of a typical trans-Atlantic flight. While that may sound minimal, Ms. Young of the airline association maintained that United States airlines operate on razor-thin margins. She said, “This may be the difference between loss and profitability.”

Others note that ticket prices could ultimately rise much higher as a result of the plan. The price of carbon credits varies like a stock and is now at a record low. Ms. Kollmuss, the environmental consultant, said, “If the price went up, not so many people would fly to Europe or California on such a regular basis.”

This year, the European Union is collecting the emission payments on flights within Europe as per the original schedule. That has made it harder for European carriers to compete in a cutthroat industry, said Thomas Kropp, a senior vice president at Lufthansa.

Ms. Hedegaard, the European Union commissioner, said that if the International Civil Aviation Organization fails to come up with a solid, market-based program in September, the European Union will begin collecting the emissions fees for all flights in and out of its airports. One way or another, prices seem bound to increase some, and perhaps that is fair. We spend more for LED light bulbs and hybrid vehicles in part because we care about the environment.

At a global level, how the United States behaves in this year of airline negotiations “will be a good test” of whether President Obama will follow through on his inaugural pledge, Ms. Hedegaard said, and of “whether the U.S. is now going to engage more strongly in climate in the international arena.”

Elisabeth Rosenthal is a reporter on the environment and health for The New York Times.

Article source: http://www.nytimes.com/2013/01/27/sunday-review/the-biggest-carbon-sin-air-travel.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: ,

Renault to Reduce French Labor Force by 7,500

January 15, 2013 by Leave a Comment

PARIS — France’s ailing industrial sector took another body blow on Tuesday, as Renault said it planned to cut 7,500 domestic jobs by 2016, or about 17 percent of its French labor force, as it adjusted production capacity to the crushing downturn in the European car market.

The plan, which the company said would save €400 million, or $540 million, in annual fixed costs, is needed to lower its “break-even point” — the amount of revenue needed to cover all outlays — and to “clear the way for the new hiring needed for the future.”

The company said that if unions agreed to the plan it hoped to reach its job target without any plant closings, layoffs or buyouts. It would accomplish its goal, it said, mainly by not replacing retiring workers and by offering early retirement.

“Not a single person will be laid off,” said Sophie Chantegay, a Renault spokeswoman.

Of the 135,000 people that Renault employs worldwide, more than 44,600 work in France. Ms. Chantegay said the plan to reduce jobs would affect only the French work force.

Over all, France has lost three-quarters of a million industrial jobs in the past decade, and President François Hollande has made it a priority to try to stop the hemorrhaging.

Like its larger rival, PSA Peugeot Citroën, Renault has been suffering from too much capacity in a weak market. But compared with Peugeot, which generates most of its sales in Europe, Renault has held up relatively well, thanks to international operations that include important alliances with Nissan Motor Co. of Japan and Avtovaz of Russia.

Still, Renault has fallen behind the German leaders. Daimler and BMW, as well as Volkswagen, have continued growing on the strength of their global operations.

Carlos Ghosn, Renault’s chairman and chief executive, said Monday at the Detroit Auto Show that he expected the European market to be “difficult” in 2013, predicting that car sales would fall about 3 percent in 2013, following an 8 percent contraction in 2012.

Renault said that in 2011 its break-even point had been “too close to the 2.72 million cars sold, representing a risk to the enterprise.” Considering the volatility of the car market in recent years and the persistence of uncertainty about the European outlook, Renault said it was now necessary to bring its break-even point about 12 percent below the 2011 sales level.

Gérard Leclercq, the head of Renault’s French operations, said in a statement after a meeting with representatives of the company’s unions that Renault had “reaffirmed its desire to maintain the core of its corporate activities and the heart of its business in France, while acting to reduce its break-even point and preserve its capacity for investment.”

Renault said natural attrition and job cuts announced under a restructuring deal signed in February 2011 would account for about 5,700 of the jobs it plans to eliminate by 2016. It said a “supplementary adjustment” would have to be made to the restructuring plan to bring the total number to 7,500.

Peugeot is planning to cut about 17 percent of its French workers, and last year it agreed to sell a 7 percent stake to General Motors, with which it is planning several joint projects. On Monday, the French newspaper La Tribune reported that Peugeot was in talks about acquiring G.M.’s troubled Opel unit in Germany. Opel denied that report; Peugeot said it did not comment on “rumors.”

Mr. Ghosn said Monday that Renault and Nissan would work together on new inexpensive cars, which Renault will sell in Europe, while Nissan would sell under the Datsun brand in India, Russia and Indonesia. The new common production platform will produce its first cars in 2015, he said.

Asked what governments and companies could do to address the contraction of the market in Europe, he noted that European sales did not fall as much as United States sales during the recession but had also been slower to recover. Governments should try to determine “why consumers are not buying cars,” Mr. Ghosn said.

Sergio Marchionne, the chief executive of Chrysler and Fiat, said Monday at the Detroit show that European carmakers were collectively losing €4 billion to €5 billion a year. “There has to be a day of reckoning,” Mr. Marchionne said. “No industry can continue to fund losses of that magnitude.”

Vindu Goel reported from Detroit.

Article source: http://www.nytimes.com/2013/01/16/business/global/renault-to-reduce-french-labor-force-by-7500.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Houston Is Booming, Pushed by, Surprise, Its Energy Industry

December 5, 2012 by Leave a Comment

HOUSTON — Even first-time visitors here can tell that the city is growing rapidly. Construction cranes overhang office and apartment sites all along the Katy Freeway, a stretch of Interstate 10 that connects a string of booming submarkets west of the 610 Loop. This expanse includes the Westchase neighborhood and the Energy Corridor, home to an expanding cluster of energy companies.

The energy sector drives job growth and all manner of business activity here, with the greatest demand for office space concentrated in the west side where oil and gas companies are clustered, in the medical center just south of the central business district and in the Woodlands, a master-planned community 27 miles north of downtown.

“Houston is clearly a growth leader,” said Walter Page, director of office research at Property and Portfolio Research in Boston. “It was the first major economy in the U.S. to register more jobs than it lost in the recession.” Employment here is up 3.7 percent since August 2008, when it peaked before declining during the recession. That compares with New York’s gain of just 0.7 percent from its peak in April 2008 before declining, Mr. Page said.

The city’s office vacancy rate was 11.9 percent in the third quarter, down from 13.4 percent a year earlier, according to the CoStar Group, a real estate research firm in Washington. Developers are creating new space to meet that strong demand, completing 15 major office buildings in the first three quarters of this year alone. Of the 3.9 million square feet of office space under construction, more than 90 percent is in the western submarkets or in the Woodlands, Mr. Page said.

The energy sector accounts for 3.4 percent of the city’s employment, more than five times the national average of 0.6 percent, Mr. Page said. Despite that heavy concentration, the rest of the city’s economy is diverse and helps spread the wealth that energy brings into the community to other sectors.

Brisk commercial real estate sales reflect investor interest in the market. This year, an affiliate of the Houston-based Enterprise Products Company bought the Shell Plaza, a 1.8 million-square-foot office complex in the central business district, for $550 million, CoStar reported. The seller was a fund operated by Hines, a Houston-based developer that built the property in the 1970s. Last year, Shell renewed its leases for nearly 1.3 million square feet at Shell Plaza.

Hines developed much of the city’s commercial real estate. Today the company’s projects here include multifamily construction in the shadow of office buildings that it developed in the Galleria, a group of office towers, hotels and retail on the southwestern rim of Loop 610, with a skyline that rivals downtown’s.

Mark Cover, Hines’s chief executive for the southwest region, said that energy, the medical center and the Port of Houston are the three largest engines driving the economy here. “The global energy industry is headquartered here,” he said. “It’s not just oil and gas, it’s alternatives, too. Intellectual capital in the energy field is heavily concentrated here.”

In the only major city in the United States without zoning laws, developers can, in theory, build virtually anything, anywhere in the city. In practice, however, understanding and catering to local industries is a critical element in site selection, Mr. Cover says. “When you really get down to it, the city is market-zoned, because land prices are not based on zoning rights, they’re based on purely capitalistic, highest and best use value,” he said. “If you build the wrong product or build in the wrong place, the market is going to severely punish you.”

Market forces shape the city’s development in hubs, says Jim Knight, who heads land development in Texas for Bury Partners, an Austin-based engineering firm.

Refineries and distribution centers cluster near the port, while energy companies and other major employers tend to establish a presence, either downtown or in a submarket, and stick to that area indefinitely.

Article source: http://www.nytimes.com/2012/12/05/realestate/commercial/houstons-boom-is-led-by-the-energy-industry.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Bits Blog: Hackers Lay Claim to Saudi Aramco Cyberattack

August 24, 2012 by Leave a Comment

Unknown computer hackers claim they forced the world’s largest oil company, Saudi Aramco, to quarantine its oil production systems from infected PCs inside the company last week. They threatened to attack the company again this Saturday.

The hackers said that on Aug. 15, they unleashed a malicious virus into Saudi Aramco, the Saudi government-owned oil company,  in retribution for what they said was the government’s support for “oppressive measures” in the Middle East.

The hackers, who call themselves “Cutting Sword of Justice,” said the virus had destroyed some 30,000 — or three-quarters — of all of Saudi Aramco’s computers. That’s a remarkable claim, but to prove it, on Friday, they posted blocks of what they claimed were the infected I.P. addresses on Pastebin, a Web site often used by hackers to post data from cyberattacks.

Saudi Aramco did not return a request seeking clarification.

In a statement on its Facebook page, the company confirmed that its computer network had experienced “a sudden disruption” on Aug. 15 — the day hackers claimed to have attacked its network — and afterward had “isolated all its electronic systems from outside access as an early precautionary measure.” It said the disruption appeared “to be the result of a virus that had infected personal workstations” but said the virus “had no impact whatsoever on any of the company’s production operations.”

Displeased with that response, hackers said in a new Pastebin post on Thursday that they planned to deploy another cyberattack on Saudi Aramco at 5 p.m. this Saturday. “You will not be able to stop it,” they wrote.

The Saudi Aramco attack would be the first significant use of malware in a so-called hacktivist attack, in which hackers target a company for activist reasons rather than for profit. In the past, hacktivists have used application or distributed denial of service — DDoS — attacks in which they clog a Web site with traffic until it falls offline.

“Hacktivists rarely use malware,” said Rob Rachwald, director of security at Imperva, a security company based in Redwood City, Calif. “The fact that they used malware is a spooky trend. If other hacktivists jump on this it could be very, very dangerous.”

Mr. Rachwald added that the attack highlighted the ineffectiveness of the antivirus solutions that are supposed to protect computer systems against malware threats. “Antivirus is a vestige of the past,” Mr. Rachwald said.

The use of malware triggered several theories on the Internet that the real culprit behind the Saudi Aramco attack was Iran. Tehran and the Saud family government have sparred recently over the latter’s pledge to make up for any cut in Iranian oil exports as a result of American- and European-imposed sanctions.

Article source: http://bits.blogs.nytimes.com/2012/08/23/hackers-lay-claim-to-saudi-aramco-cyberattack/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Olympus Backtracks on Payments

October 19, 2011 by Leave a Comment

The company said, however, that there had been no wrongdoing and that it was considering legal action against the former chief executive, Michael Woodford, on charges that he had brought confusion to the company’s management and damaged its share price.

Mr. Woodford, a British executive, was stripped of his title Friday for reasons the board described as a culture clash between him and the company’s Japanese leadership. He had been appointed president of Olympus in April and chief executive only last month.

Mr. Woodford later said that his dismissal had come after he commissioned an investigation by the accounting firm PricewaterhouseCoopers that found unusually high advisory fees paid out by Olympus between 2006 and 2010 as part of its acquisition of the medical equipment company, Gyrus.

Separately, Mr. Woodford had also questioned the acquisitions of three companies in Japan in 2008, for a total of $773 million, seemingly unrelated to Olympus’s main business, and the subsequent writing down of their value by three-quarters in the same year.

The Olympus chairman, Tsuyoshi Kikukawa, had told the business daily Nikkei on Tuesday that the advisory fees related to the Gyrus deal had totaled about ¥30 billion, or $391 million — about half the amount that the PricewaterhouseCoopers report had alleged.

But Olympus then said Wednesday that it had indeed made a total of $687 million in advisory payments. The company did not specify to whom the payments had been made. The PricewaterhouseCoopers report alleged that some of the advisory fees had gone to a company incorporated in the Cayman Islands that had been stricken off the local register for nonpayment of listing fees.

Olympus also said that the acquisitions of the Japanese companies, which operated in sectors like facial cream and cookery products, had been based on an assessment that these companies owned “promising technology in the healthcare field.” It said that its auditors had not seen any irregularities or illegal conduct in any of the transactions.

The PriceWaterhouseCoopers report was “based on speculation and guesswork” that “differed from fact” and “led to misunderstandings,” the statement said.

Olympus “truly regretted” that Mr. Woodford, who still retains a position on the company board, “has brought about confusion to management and hurt the company’s value,” the statement said. “If necessary, we will consider legal action,” it said.

A Tokyo-based spokesman for Olympus said he could not give an explanation of why Mr. Kikukawa had given a different figure for the Gyrus fees to Nikkei on Tuesday.

In a phone call from London, Mr. Woodford said that the back-and-forth showed that the Olympus management “was getting desperate.” He has said he would be happy to respond to any legal action from Olympus.

In a report Wednesday, Goldman Sachs said it had suspended its ratings on Olympus “given increased uncertainty around past acquisitions and accounting practices.” J.P. Morgan also suspended its rating on Olympus, saying the company’s share price might remain volatile for reasons other than the economy or business earnings.

Olympus shares have lost almost half their value since Mr. Woodford’s dismissal. On Wednesday, they fell 2 percent to ¥1,389 in Tokyo.

Article source: http://feeds.nytimes.com/click.phdo?i=ae0ce34472cfb8fa01c5b399dedcbc95

Filed Under: Business News Tagged With: , ,
Next Page »