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Business
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17 мая, 17:51

Toyota takes a winding road to autonomous vehicles

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Intrepid data gatherers UBER’s fleet of autonomous vehicles has been parked up since one of its self-driving cars struck and killed a woman in Tempe, Arizona in March. That death highlighted once again the industry’s rush to develop self-driving cars. Waymo, a sister company of Google, plans to launch a robotaxi service in Arizona this year. General Motors says it will launch a fully autonomous taxi service, using cars with no steering wheel or pedals, in an American city in 2019. Volkswagen will make autonomous vehicles available through its new ride-hailing service, Moia, in 2021. Ford says it will be mass-producing fully autonomous cars by then, too. But not every carmaker is going at the same speed. Toyota, one of only three car companies that sells over 10m vehicles a year, has made no equivalent commitments. The Japanese firm is instead concentrating on using artificial intelligence (AI) and automation to make conventional cars safer and more enjoyable to drive...

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17 мая, 17:51

McKinsey manages to get itself sued for racketeering

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MOBSTERS, gangsters and bent cops have all been tried under America’s Racketeer Influenced and Corrupt Organisations (RICO) Act. Might consultants be next? McKinsey, a management consultancy, is being sued under the law by Jay Alix, the founder of AlixPartners, a competitor in the field of bankruptcy advice. Mr Alix alleges that McKinsey knowingly misled courts in order to land clients. The firm denies any wrongdoing. Bankruptcy is lucrative, for those doling out the advice. According to Debtwire, a data provider, corporate bankruptcies generated $1.3bn in fees in 2016, with lawyers taking home over half, and the rest going to consultants, accountants and financiers. McKinsey is a relative newcomer: it set up its restructuring arm, which turns around companies in financial distress, in 2010. Though its share of the market is smaller than those of the top players, AlixPartners and Alvarez & Marsal, its entry has stiffened competition. Its clients have included American Airlines,...

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17 мая, 17:51

Portugal’s energy giant may sell to a Chinese state-owned utility

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SHOULD Europeans worry that China Three Gorges (CTG), a state-owned firm, wants to buy EDP, a utility that is Portugal’s biggest company? It is three years since one local banker, Fernando Ulrich, called Portugal “a Chinese aircraft-carrier in Europe”—back then, Chinese buyers were already snapping up stakes in “strategic” local companies as quickly as the government could privatise them. CTG’s offer of €9.1bn ($10.8bn) for EDP, which was made on May 11th, will further unsettle those suspicious of China’s desire to snap up European assets. The country is unusually welcoming to investors from the east. Its national airline, TAP Air Portugal, and Redes Energéticas Nacionais, the monopoly power transmitter, both have Chinese investors. CTG is already EDP’s largest owner, with a stake of 23%, after a €2.7bn investment in 2012. Now the Chinese want outright control. To get that, CTG will probably have to raise its offer; EDP’s board rejected the price offered by the...

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17 мая, 17:51

How a few companies are bitcoining it

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IN A recent video Jeremy Sciarappa, a YouTuber, flips the lid off a red box in his living room to reveal a silver machine the size of a shoebox, whining noisily. The contraption is an Antminer S9, sold by Bitmain, a Chinese firm. Its job is to help validate transactions conducted in bitcoin, the world’s best-known crypto-currency. Because bitcoin has no central authority, it relies on its users to keep things humming along. Those who help out are granted bitcoins, in a process called mining. The Antminer s9 is beloved of hobbyist miners worldwide. Nestled inside are 189 application-specific integrated-circuit (ASIC) chips, designed by Bitmain to solve bitcoin’s cryptographic puzzles as quickly as possible. They were made by TSMC, a giant Taiwanese semiconductor firm. Mr Sciarappa and his fellow enthusiasts are a 21st-century version of the “49ers”, the young men who rushed to California in 1849 to try their luck digging and panning for gold. Few hit it rich, but the businesses that helped them...

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17 мая, 17:51

For European firms, resisting American sanctions may be futile

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“DONALD TRUMP is the sort of guy who punches you in the face and if you punch him back, he says ‘Let’s be friends’. China punched back and he retreated. The Europeans told him how beautiful he was, but they got nothing.” This is how an American official-turned-executive describes the latest twists in the Trump administration’s sanctions policy, which this year has roiled business from America to Europe, Russia, China and Iran. What business leaders see, analysts say, is a punitive approach that is capricious, aggressive and at times ill-prepared. But unless companies or their governments take the fight all the way to the White House, they have little choice but to abide by the long—and sometimes wrong—arm of American law. The capriciousness was evident on May 13th when President Trump executed a handbrake turn on ZTE, the world’s fourth-biggest telecoms-equipment maker, which is strongly supported by the Chinese government. It had been brought to the brink of bankruptcy after the American...

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17 мая, 17:51

Spotify kicks off a cultural shift in the music business

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More blues than rhythm for R. Kelly MAKING it on to an official playlist on Spotify, a streaming service, can help turn a singer into a superstar in the way that major radio stations once could. Until recently the main criterion for inclusion was a curator’s taste. Artists who have been accused of domestic violence and other serious crimes are on playlists with millions of followers, as are songs that critics find violently misogynist. That is starting to change. On May 10th Spotify announced a new policy on “hate content and hateful conduct”, and removed two artists, XXXTentacion, a rapper, and R. Kelly, an R&B singer, from their official playlists due to allegations of abuse and mistreatment of women. Both artists deny any wrongdoing. Their music will still be available on the service, but it will not be pushed to listeners. It then quickly emerged that Apple Music and Pandora, two other streaming services, had quietly taken similar action.   ...

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17 мая, 17:51

A Samsung executive is accused of union-busting

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ON THE face of it Samsung, South Korea’s biggest chaebol, as the country’s family-controlled groups are known, has had a good couple of months. In April it was name-checked in a report by the country’s antitrust body for good progress on corporate reform. It also posted record profits for the fourth quarter in a row, thanks mainly to its booming memory-chip business as well as its Galaxy range of smartphones. But on May 15th prosecutors spoiled the mood. They raided Samsung’s offices outside Seoul and arrested Choi Pyeong-seok, head of human resources at the after-sales subsidiary of Samsung Electronics, the group’s main earner, on allegations that he had been involved in sabotaging labour-union activities and might destroy evidence unless he was jailed (he has not responded to the allegations). Mr Choi’s arrest is part of an attempt by prosecutors to prove systematic breaches of labour law at the company’s highest levels. (Samsung says it is unable to...

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16 мая, 17:37

A storm breaks around AirAsia’s boss

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Co-pilots Najib and Fernandes “YOU only have one vote so use it wisely,” advised the captain of a lunchtime AirAsia flight from Singapore to Kuala Lumpur on May 9th. It was the third time he had reminded passengers of Malaysia’s election that day. Travellers delighted by the personal touch shook his hand as they disembarked. The pilot was not freelancing. AirAsia had planned to provide 120 flights with reduced fares to help Malaysians get home to vote (in the end, half of the flights were approved by the airline’s regulator). And the low-cost carrier’s political play went further than encouraging people to vote. Tony Fernandes, its British-Malaysian boss, arranged for an AirAsia plane to be painted with the slogan of the ruling coalition of Najib Razak, the prime minister at the time. Mr Fernandes also appeared in a video attributing the success of his business to the Malaysian government. Then came the most astonishing political result in the country for 61 years, as 92-year-old Mahathir Mohamad, a former prime minister, defeated Mr Najib. On May 13th Mr Fernandes went in front of a camera again. He apologised for having “buckled” under pressure applied by the defeated administration of Mr Najib (the two men are pictured, in the centre). “It wasn’t right and I will forever regret it,” he said. ...

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10 мая, 17:54

Xiaomi eyes a giant Chinese IPO

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IN CHINA no company achieved $1bn in annual revenue as quickly as Xiaomi did, in the year following the launch of its first smartphone in 2011. Chinese media initially nicknamed Xiaomi the “Apple of the East” (its literal translation is “little rice”). That was a stretch, even in good times. But within another two years the affordable-handset-maker became the world’s most valuable startup, worth $46bn. Analysts reckon that it now wants to raise up to $10bn in an initial public offering (IPO) on Hong Kong’s stock exchange which was announced on May 3rd. (Its filing documents disclose neither the valuation that it is seeking, nor a fundraising target.) That could afford it a very generous valuation of as much as $80bn—not far off the $91bn market capitalisation of Baidu, China’s biggest search engine and one of the country’s three “BAT” tech titans alongside Alibaba and Tencent. Yet only 18 months ago such talk would have seemed outlandish. In 2016 Xiaomi’s sales fell sharply and...

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10 мая, 17:54

The latest video-game fad shows off a DIY ethic

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TWENTY years ago schoolyard fads revolved around clothes and music. Now they are as likely to involve video games. The latest must-have is “Fortnite Battle Royale”, a lighthearted multiplayer shooter in which up to 100 players parachute onto a continually shrinking playing field, hunt each other down and compete to be the last one standing. It is wildly popular. One estimate is that it had 45m players in March. A match broadcast on YouTube, and featuring some of that site’s stars, attracted more than 1.1m concurrent viewers, making it one of the most watched streams ever. Other big publishers, such as Activision-Blizzard, are pondering jumping in with clones of their own. Parents blame it for unfinished homework and for corrupting their children’s oh-so-pure minds. Some schools have tried, mostly in vain, to prevent students from playing. Moral panics are tedious things. But “Fortnite” is interesting for a good reason. It shows the long-established influence within video-gaming...

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10 мая, 17:54

Air France-KLM is being brought to its knees by its unions

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AIR FRANCE likes to present itself as a cut above other European airlines. Offering fancy French food and free champagne in economy class on long-haul flights, the company’s strategy is to justify its high ticket prices by offering a premium service. But facing intransigent unions at home and competition from abroad, the airline’s financial fizz is rapidly going flat. A drawn-out fight with its unions has toppled the boss of its parent group, Air France-KLM, yet again. On May 4th Jean-Marc Janaillac, its chief executive, resigned after its workers voted against a pay rise of 7% over four years. His predecessor, Alexandre de Juniac, left two years ago after two executives had their shirts violently ripped off by a mob of angry workers over a restructuring plan. The latest resignation is more serious because investors are also losing their rag. Air France-KLM’s shares have halved in value since January; over the same period those of rival carriers such as IAG and Ryanair have risen. Air France’s trade unions are demanding an immediate pay rise of 5.1%. That looks bearable set against profits of €1.5bn ($1.8bn) last year. But a decent-looking performance in 2017 owed much to low oil prices. Its finances are weakening fast. Mr Janaillac had warned of a big drop in profits this year. A series of 14 one-day strikes has already cost Air France at least €300m in...

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10 мая, 17:54

Americans, tired of high-priced drugs, are fighting back

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IF ONE concern unites Americans, it is the high prices of prescription drugs. One incident in particular tarnished much of the pharma industry: in 2015 the price of an antiparasitic drug, Daraprim, jumped from $13.50 to $750 per pill. But large price increases remain stubbornly commonplace (see chart). According to IQVIA, a health-data firm, the wholesale prices of leading drugs such as Humira, Enbrel and Lyrica increased by more than 120% between 2012 and 2017. Other data show that cancer-drug prices rose from about $10,000 to over $100,000 per year in just over a decade to 2012. Further ahead, a new generation of cures, such as a gene therapy for haemophilia, may cost more than $1m. President Donald Trump, never one to avoid stoking a grievance, has waded in, accusing the pharma industry of “getting away with murder”. This week, as The Economist went to press, he was scheduled to deliver a speech outlining a strategy to lower prescription-drug prices. Whatever he says,...