Archive for July, 2010

• Boeing Gets Order for Up to 30 Jets From Dubai.  Emirates Airline of Dubai, the largest Arab airline, has placed an order for thirty commercial 777 jets from American aviation giant Boeing. The transaction which is estimated to be worth about $7 billion, further bolsters airlines’ confidence in Boeing’s jets and shows the start of the recovery of the airline industry. Airbus, Boeing’s European rival, and Boeing both projected that commercial air traffic will regain its growth over the next couple years. However, this deal proves that this new growth and need for more airplanes will be fastest and strongest in the Middle East and China.
• Google 1, LVMH 0.  In a world where technology is continuously advancing, companies are finding themselves faced with intellectual property issues and disputes. Google allows advertisers to bid on small text ad terms, regardless of whether or not the bidders own the trademark. However, LVMH, the French company that owns Louis Vuitton, said that allowing companies to bid on terms containing “Louis Vuitton” was a trademark infringement. The French court initially voted in favor of LVMH, but has now reversed the ruling to be in favor of Google. If the decision had stayed, Google could have faced serious administrative and financial problems.
• European Regulators Go After Google.  Skeptical European regulators have always had a fear of “bigness,” which they exemplified in the past anti-trust examinations of Microsoft.  Today, however, they are going after the heart of Google, its advertising business of AdWords text. Google has always kept it a secret as to how it decides which advertising strategies to utilize for its services. Now, however, French regulators have sided with a French GPS location company, requiring Google to reactivate the company’s account, which previously had been shut down. This seems to be the beginning of regulators’ attempts to make Google’s advertising system and procedures more transparent.
• New BNY Mellon CEO Seeks More Deals, Hires.  Bank of New York Mellon Wealth Management is looking for more deals and hires in various markets across the U.S. and the world. Chief Executive Lawrence Hughes says he intends to expand organically by increasing BNY Mellon’s existing sales force, and to expand through acquisitions in strategic markets. BNY recently acquired the Canadian investment advisor, I(3) Advisors, to further extend global expansion. The company is also seeking to increase hiring in countries where their asset management and investment services are already established, such as Brazil and China. The company has seen 17 consecutive quarters of growth, something Hughes says has been aided by BNY’s expansions over the past 19 years.
• Toyota Settles Infringements Case of Hybrid Patent.  Japanese car maker, Toyota Motor Corp., has settled a patent-infringement dispute through an agreement with Paice LLC, as hearings were to begin on a claim against Toyota by the U.S. International Trade Commission (ITC). Alex Severinsky, founder of Paice, said that his 1994 patented system for powering electric hybrid cars was taken and used by Toyota without his permission. The ITC is set up to eliminate unfair trade practices, and when a violation occurs, it can ban the product, a decision that if made would cause severe financial damage to Toyota. On the other hand, the ITC must also see whether Severinsky has the right to protect or be reimbursed for the millions of dollars invested in his patented invention. 

^{Compiled and summarized by Aylin S. Khor}

• U.S. Moves to Block New BP Oil Leases.  Following the BP Deepwater Horizon oil spill catastrophe in the Gulf of Mexico, U.S. lawmakers are pushing an amendment to ban the U.K. company from obtaining any further oil leases, due to safety concerns.  In addition to being under intense scrutiny in Congress, BP is under investigation by the U.S. Department of Justice and environmental regulators for ignoring safety failures and could face billions of dollars in fines.  Lawmakers may have to be more lenient than some of their constituents are demanding, as the amendment to the oil rig safety bill could harm both jobs and the country’s ability to access domestic resources. 
• Meanwhile, in other U.S./U.K. news, AMR Nears British Airways Alliance as EU Backs Deal.  With the European Union’s antitrust approval, British Airways Plc and AMR Corp’s American Airlines have moved one step closer to forming a trans-Atlantic alliance between the two airlines that will control nearly 50 percent of the flights at London’s Heathrow Airport.  The plan will give both carriers the equal footing and similar advantages that other airlines, such as Air France and Lufthansa, already possess.  BA and AMR have already agreed to relinquish 10 flight slots in the U.S. and U.K., but are still awaiting approval of the antitrust alliance from the U.S. Transportation Department.  The two have been attempting this alliance for years.  Critic and competitor Virgin Atlantic Airways Ltd. says this monster monopoly will only hurt consumers.
• A “success story” offers a case study on How Not to Run a Business in China.  Lessons can be learned from the broken business venture between American Olaf Kristoffer Bauer and Chinese Yuan Jie, “partners” in the Chinese pizza chain Kro’s Nest.  As a first rule, you need to be clear on ownership structure of the business, which plagued Bauer and Jie.  Second rule, as a foreigner, be fully aware of the rules and follow them accordingly.  You should not let the legal and political intricacies of the Chinese business world lead to disregard for the rules, for that will surely lead to government action.  Finally, foreign entrepreneurs should pay careful attention to establishing their guanxi, or trust network.  Building a solid and trusting guanxi takes years, but the pay off will undoubtedly make it easier to do business in China.
• Google Escapes with Apology in Australia- May Not Be So Lucky Elsewhere.  U.S. company Google’s apology to Australia gets them out of some hot water for violating privacy, namely inadvertently collecting personal data from unprotected wireless networks via its Street View cars, the device which captures real street views for GoogleMaps imagery.  However, an apology likely will not cut it for everyone or everywhere.  Google is still facing potential legal action in Australia, as well as the U.S. and various European countries.   Governments in these various jurisdictions are undertaking investigations that may result in criminal penalties and various government sanctions against the internet search-engine giant.

^{Compiled and summarized by Aylin S. Khor}

• Apple Under Fire Over Privacy in Germany.   American based company Apple has come under fierce scrutiny over its new plan to disclose user locations to geo-specific advertising companies.  The previously anti-Orwellian company, that once labeled IBM as the world controller of the computer industry, is now being accused of taking the very same “Big Brother” role.  Already considered invasive by some, the new terms and conditions that appear when purchasing from the Apple iTunes store (or App store) now state that Apple and its partner companies “may” anonymously disclose the “real-time geographic location” of that person’s Apple device, leading to an uproar by users and privacy groups in the United States and Germany.
• And in other Apple news … Apple Making New Push Into China.  Apple is getting ready to open its flagship store in Shanghai.  China is the world’s largest mobile phone market with the fastest growing consumer electronic product demand, that it is a wonder Apple has not already expanded fully into China.  Over the next two years Apple plans to open 25 new retail stores so consumers will have the convenience of purchasing Apple products directly from the store, as opposed to on the black market.  Though some say consumers will still choose the cheaper, smuggled phones, most analysts are convinced that Apple will highly benefit from the ever rising population of affluent Chinese and their booming economy. 
• And in other China news … Google Tries New Approach to China.  The government of China is requiring Google to change how users access its search engine, which now re-routes users to the Hong Kong based site (google.com.hk), to avoid censorship.  The strict censorship laws that pertain to the China based site (google.com.cn) are forcing Google to lose its place in the Chinese market.  Google says it tried this strategy to provide full-service results to its users, while still complying with Chinese law.  Though China encourages foreign corporations to do business in China, these companies must be aware of and operate accordingly with the regulations and requirements of Chinese law.
• Cadmium in “Shrek” Glasses Could Extend to Past Souvenirs.  McDonald’s has recalled approximately 12 million Shrek glasses after the Consumer Product Safety Commission (CPSC) found traces of cadmium in the glasses this month. However, activists and lawyers say the cadmium risks may be traced back to the previous Shrek movie glasses, among others. When tested, the glasses, made by Arc International, a French manufacturer in New Jersey, came up positive for cadmium, but still meet legal regulatory standards. Representatives of Arc International said the cadmium-based pigments are legal in all countries in which they do business. However, the CPSC wants to ensure that manufacturers in the United States, such as this company, and those abroad, such as in China or Germany, meet the required regulations in the safety of their products. 
• Coming to America … SMFG Looks for U.S. Acquisition.  The Japanese corporation Sumitomo Mitsui Financial Group, Inc. (SMFG) is looking to acquire a 20% share in a U.S. bank in an attempt to strengthen its place in the world economy, as growth stagnates in Japan. SMFG will list its shares on the New York Stock Exchange to make the acquisition process easier, but will also have to be aware of how to culturally and properly integrate with the U.S. bank, says Shinichi Ina, an analyst at Credit Suisse. Not only is SMFG focusing on a U.S. acquisition, but it is also looking to further increase its presence in fast growing Asian economies, particularly China, Indonesia, India, and Vietnam.

^{Compiled and summarized by Aylin S. Khor}