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March 2018

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General Electric Company (GE) moves forward with its interest in India and Africa, opening up in emerging markets rapidly

General Electric Company (NYSE:GE) has adopted a rapid expansion plan by moving into emerging markets such as India and Africa.  This will help the company to grow immensely in high growth areas.

The company’s expansion plan in Africa will enable it to increase its revenue as well as the headcount at the same time. It will be investing in different segments such as transportation, power and healthcare segment.

General Electric Company, over the past few months has increased its focus over the industrial segment and away from other segments especially the financial segment. With its expansionary motive, the company moved in to Africa to further expand its industrial segment.

The company has also invested in India. India is an emerging market and has great demand. Its interest in Alstom over the period of time will take it a long way up the ladder.

General Electric Company has adapted itself rapidly with modetechnology and with time has conducted restructuring and moved to emerging markets for expansion. Recently, it announced the launch of Predix, the digital software allowing the company to build up the digital industrial ecosystem.

Through the Predix platform, it will also be able to benefit the utility companies by offering them better management of usage and production. In the long run this would lead to great cost savings.

TCC takes a look at Canadian courts regarding Chevron’s Ecuador case

Chevron Corporation (NYSE:CVX) seems to have been winning the race against the Ecuadorian plaintiffs. In the most recent turn of events, the courts in Canada have passed the decision in favor of Chevron. The Canadian law deemed Chevron and its Ecuadorian subsidiary as different entities and therefore indicated that the Ecuador lawsuit could not be imposed on Chevron.

The oil and gas prices have mostly traded at high levels and have allowed companies to make attractive returns but these higher returns have also presented a risk. When exploring for oil, oil spills can result can pose severe damaged to the environment and the companies.

Chevron, which has been exploring for oil in the Amazon region of Ecuador, was enforced by false allegations by the Ecuadorian government. A court in Lago Agrio imposed $18 billion penalty against false allegations of contamination. The penalty was later halved to $9.5 billion.

Another issue that needs to be assessed is that Chevron has never directly operated in Ecuador. Texaco Petroleum, which is Chevron’s subsidiary operating there was acquired in 2001 and was a minority partner in a consortium producing oil with Ecuador’s state run company.

The case had already gone in the US courts and the latest decision in the Canadian courts is another sign of victory. As reported by Chevron, the Vice President and General Counsel of Chevron, R. Hewitt Pate, said regarding the issue, “Once again, the plaintiffs’ attempts to enforce their fraudulent judgment have been rebuked.” He added, “We are confident that any jurisdiction that examines the facts of this case and the misconduct committed by the plaintiffs will find the Ecuadorian judgment illegitimate and unenforceable.”

The plaintiffs, as mentioned above, failed to please the US courts. As Chevron possessed no assets in Ecuador, the plaintiffs tried to win the blessings of the courts in other countries such as Canada, Brazil, and Argentina. However, it seems their luck has run out in Canada as well.

The ophthalmological product specialist has to work on multiple aspects to gain traction in the therapeutic field despite of fierce competition

Allergan plc Ordinary Shares (NYSE:AGN) has been working in the ophthalmology therapeutic area to clinch the majority of the share. In this regard, the drugmaker has acquired RetroSense, which is involved in the gene therapy development. Allergan will pay $60 million as an upfront payment, as well as regulatory and marketing payments upon the achievement of certain milestones on the development and marketing of RST-001. It is an investigational gene therapy portfolio indicated for the management and treatment of Retinitis Pigmentosa.

Allergan President and CEO Brent Saunders said, “The acquisition of RetroSense and its RST-001 program builds on Allergan’s deep commitment to eye care, and our focus on investing in game-changing innovation for retinal conditions, including retinitis pigmentosa, where patients desperately need treatment options.”

The drugmaker is one of the leading companies playing its vital role in the cure of ophthalmological diseases. The company has clinched $636 million in second quarter financial year 2016 (Q2FY16) expressing an increase of 10% compared to the same quarter in 2015. The company is emphasizing on the management and treatment of patients with dry eye and glaucoma.

The investigational therapy has an Orphan Drug Designation, and is undergoing Phase I/IIa trial in which patients were treated with low dose. It has shown good efficacy and safety profile. Retinitis Pigmentosa (RP) belongs to a rare and inherited genetic disease, which leads to progressive peripheral vision loss along with complaints of difficult in night vision. It results in the vision loss in majority of cases.

In order to expand the exposure of the company, it is working on the label expansion of its drugs, as well as Merger and Acquisitions (M&A) with other companies, specifically in the ophthalmology area. In August 2016, Allergan has acquired ForSight Vision5 worth of $95 million up front and other payments upon achieving the certain specified milestones of its molecule, bimatoprost indicated for the treatment of lowering the eye pressure in patients with glaucoma and ocular hypertension.

In addition, the ophthalmological company has purchased AqueSys worth of $300 million involved in glaucoma products, specifically its dry eye device, Oculeve, for $125 million plus milestones. Furthermore, Allergan is working diligently on the Research and Development (R&D), which includes central nervous system, medical aesthetics and dermatology, gastroenterology, women’s health, urology, and anti-infective treatments.

How Freeport is managing its debt burdenAsset Sales

Freeport-McMoRan Inc. (NYSE: FCX) stock had battered hard last year as investors feared company would have to file bankruptcy, as its debt burden had suppressed overall performance. Recent recovery in copper and oil prices has placed the company in a better state, but its position also appears strong because of the way in which company is managing with its debt burden.

We explain how the company is combating with its debt burden.

Asset Sales

In order to improve liquidity and pay off its debt, Freeport has raised significant cash in lieu of asset sales. Earlier in March this month, Freeport announced to raise around $263 million by selling a portion of copper and gold projects in Serbia based Timok project.

Its current partner in the project is an affiliate of Reservoir Minerals, which has the right to first refusal. If it does so, deal is expected to close in 2Q this year.

 In February last month, company announced to dispose of its 13% stake in Morenci mine to a Japan based company, Sumitomo, which was also its partner in the joint venture. This would provide Freeport with $1 billion and the deal is expected to close in mid-2016 after approval from regulatory authorities.

Freeport’s CEO, Mr. Richard Adkerson, mentioned that the company’s immediate target for FY16 is to restore company’s balance sheet and to make sure that it is in a better position to deliver value for its shareholders in current market environment.

In its 4QFY15 earnings call, the company mentioned of further asset sales possible to reduce its debt & enhance shareholder’s value. Company is already under agreement with Indonesia for disposing its 20.64% stake to state owned companies or to list them on stock exchange.

Grasberg asset, which is currently valued at around $16 billion, any final decision would provide the company with additional $3 billion of liquidity. With improvement in copper prices, the company might also get substantial value for the Grasberg asset.

One may ask whether the company would face difficulty in selling its assets or not. Natural resource companies like BHP Billiton and Rio Tinto are already looking to increase their copper exposure and they could be potential buyers for Freeport’s assets. These two companies expect to raise around $30 billion for acquiring copper assets.

Freeport looks to be heading in right direction to raise cash via asset sales to pay off its $20 billion debt burden and focus on its core assets to keep its ship afloat. Its stock has surged by 48.74% Year-to-Date.

The United Auto Workers seeks to unionize the Fremont factory as the EV maker plans to significantly increase its production rate over the next two years

Earlier this month, Tesla Motors Inc. (NASDAQ:TSLA) disclosed its plan to achieve the half a million delivery target by 2018, rather than by 2020, after seeing a stronger-than-expected response for its more affordable, compact sedan, the Model 3. Following the announcement and the recent $5 wage scandal, United Auto Workers (UAW) union sees this as the perfect opportunity to unionize the Fremont factory, which is the only vehicle assembly plant in the US which does not have a union.

Electrek recently reported that the UAW has expressed interest in unionizing the Tesla Factory’s workforce in a bid to assist workers from being exploited by the expanding electric vehicle (EV) maker. UAW President Dennis William stated that the union had been respecting the startup status of Tesla until now; however, the new Build Plan would rapidly make Tesla one of the biggest carmakers in the US, even bigger than luxury brands such Mercedes and BMW.

Mr. Willion said in a statement: “We’re watching that very closely. We just believe workers ought to have a voice in the workplace, and they ought to have collective bargaining rights.” The possibility of the union organizing the plant’s employees might have some disruptive consequences for an automaker like Tesla, which acts more like a tech company. While the company offers equity options to its employees, it brings some perspective to unionizing when the workers can also be owners of the company.

Additionally, the Fremont factory is situated in CA where workers are protected. Cal/OSHA protects employees from occupational hazards in the state, with highest minimum wage in the US and toughest worker rights regulations.

Recently, the automaker was bashed by Mercury News for hiring a subcontractor that paid merely $5 per hour to workers to construct the new paint shop. CEO Elon Musk said that his company, in fact, paid $55 per hour via that subcontractor.

 

Both former and current Tesla employees love working at the company but complain about long working hours. While a production employee requires working 12 hours per day (five days per week), he gets paid at least $17 per hour. The wage rate rapidly grows along with equity options.

 There is no doubt that Tesla employees work harder than most. Changing the world is not a 9-5 job. We make this very clear to all candidates when they apply to work at Tesla. At times, during heavy production ramp, some shops in the factory may have to work on Saturdays,” said a Tesla spokesperson to Electrek. “We give everyone advance notice when this is required to ensure they can plan their schedules accordingly.”

The OPEC member seeks to exploit rivalry among Big Oil, making it mandatory to include at least one Iranian crude oil firm in every consortium

Coming ahead of Western sanctions being uplifted over its nuclear program, Iran is in full zest to boost its production at pre-sanction levels. Not just the oil rich country but even the Big Oil companies are aggressively seeking to pave ways in the lucrative fields of Iran.

 

With Total SA (ADR) (NYSE:TOT) taking the lead via the South Pars project, followed by Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Eni SpA (ADR) (NYSE:E), and BP plc (ADR) (NYSE:BP), Iranian news agency has reported that the country is aiming to exploit the rivalry between these companies.

 

The OPEC member seeks to make this move, making it mandatory to include at least one Iranian crude oil firm in every consortium of oil & gas companies for the development of Azadegan crude oil field. It shall be mentioned that Japan-based Inpex Corporation and Petronas are also part of the consortiums that are bidding for the development of oil field.

 

Via the latest move, Iranian intelligence agents could easily watch and monitor the activities by the companies present in the consortium. Also, each Iranian company would get a chance to interact with the activities of the Big Oil on an international platform.

 

Having said this, it shall be noted that Shell has always been on close and good terms with Iran- a country it has a long history with. More so, the Anglo-Dutch company happens to be the largest buyer of the Iranian oil. Back in November, 2010, an article by Reuters stated: “Companies are still finding ways to buy Iranian oil. Royal Dutch Shell and some Italian and Spanish refiners buy Iranian barrels with finance coming from Chinese and Italian banks”

 

Although the latest move is great for the country but it is not beneficial for the oil & gas global markets; it would give rise to crude oil supplies—a detrimental hit to energy prices.

MIT AgeLab continues its Autopilot study to prove that it is safer than a human driver

Earlier this year, MIT AgeLab was seen recruiting owners of Tesla Motors Inc (NASDAQ:TSLA) to participate on a study based on driver interaction with the Autopilot features. The research aimed to show that autonomous driving assist features are safer than a human driver.

Electrek (via TMC) reported the details of the on-going study during the past weekend along with a presentation. MIT AgeLab Postdoctoral Associate, Lex Fridman, conducted the research by putting a camera facing towards the driver and screens in Tesla cars with Autopilot to study their interaction with the system.

The cameras can detect driver’s gazes and logging in any interaction with center touchscreen or steering wheel, including detecting when the Autopilot is engaged. The group managed to log the events without requiring to monitor the drivers, by synchronizing all the camera feeds through an image processing system, the publication noted.

MIT AgeLab has collected data of 1,000 hours on more than 30,000 miles using nine Tesla cars. During the presentation, Mr. Fridman said that he intends to support Tesla’s claim that the Autopilot is safer than a human driving using more data than currently held by Tesla.

Up till now, the firm has found that the Autopilot’s traffic fatality rate is one per 130 million miles since October 2015, compared to one per 90 million miles of manual driving since October 2014. While it understands why accidents so frequently take place with manual driving, the group still requires understanding why fatality rate of Autopilot is lower. Therefore, it requires a lot real-world semi-autonomous driving data.

Mr. Fridman and his team are striving to expand their research and start collecting more data, offering Tesla owners $1,000 per year to participate in the study. He suggested that the data is not affected by the drivers being aware that they are being watched.

The associate was contacted by Tesla regarding the research and he hopes that the company participates in it, while adding a camera facing towards the driver in its vehicles. Here is the presentation in form of a video:

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Tesla partners with Nordstrom to provides attract wealthy customers for test drives at the Grove ahead of this Father’s Day

As popular of its attractive electric vehicles (EV) grows and it plans to significantly increase its annual production, Tesla Motors Inc (NASDAQ:TSLA) is looking for more real estate properties to lease for more retailer and service locations across the globe. While it already has a dealership in Los Angeles, it is opening a retail booth this Father’s Day under a new pilot project.

Fast Company reported Tuesday that the electric vehicle (EV) will launch a gallery at a Nordstrom, Inc. (NYSE:JWN) location at The Grove, the city’s retail multiplex. The 400 square foot booth will display Tesla’s newest electric SUV, the Model X and attract Nordstrom’s fashionable customers with a fascinating interior car panel display.

Tesla’s staff will provide all the necessary details about EVs and offer on-site test drives to the incoming customers. The Nordstrom location is one of the 38 tenants of The Grove. Tesla and Nordstrom will work together under a pilot project through the end of 2016, during which both the companies will decide whether they want expand their collaboration.

Nordstrom said that it is focused on catering to its customers needs and “seeing how they respond to this type of differentiated experience.” The apparel and accessory retailer has 121 stores across North America, as well as 200 locations of its subsidiary Nordstrom Racks.

Tesla Vice President North America Sales, Ganesh Srivats, said that the automaker wants to provide the retailer’s customers a “Tesla experience” and he thinks that Nordstrom is trying to target Tesla’s market. Mr. Srivats, who worked for about eight years at a London-based fashion house Burberry, had extensive interaction with Nordstrom and plated an active role in the collaboration.

The EV maker is currently in process to gain a direct-sales license for the retail location. During the process, if a customer makes a purchase decision, the company’s representatives will either direct them to another nearby location or Tesla.com, where it receives large number of reservations. The nearest Tesla store from the new location is in Westfield Century mall at Monica Boulevard, Suit #165. 

The process is different from gaining approval from legislature in states, like Connecticut and Michigan, where automakers are forbidden to own or operate dealership. The new partnership with Nordstrom seems like an interesting strategy, as several families, particularly women who play active role in new vehicle purchase, shop at The Grove during weekends. Not to forget, Model X was designed with women in mind.

Apple has started to charge the winners of the ballot a ticket price of $1,599

Ticket lottery for Apple Inc.’s (NASDAQ: AAPL) 27th annual Worldwide Developers Conference (WWDC) ’16 has now been closed, and confirmations for ticket winners to the conference have also been shipped out.

WWDC ’16 is due to commence on June 13, to go on for four days through June 17, to be held at the Fort Mason Centre, San Francisco. As per schedule, the ticketing ballot came to an end on Friday morning at 10 a.m. According to the same schedule, all winners will be notified of the status of their tickets by Monday, April 25, and some of the developers who applied for a place at the conference have already been charged for their ticket. Picture proof of Apple charging the credit cards of the conference lottery winners have surfaced online, as social media is awash with credit card charges for WWDC ’16 worth $1,599.

As usually, Apple opted for the ballot system for this year’s Worldwide Developer Conference, as demand from the around the world far exceeds the capacity for the annual conference hosted by Apple. The lottery started on Monday, April 18, and confirmations for winners will all be sent by April 25, a week after the lottery started.

Apart from charging developers the $1,599 for the ticket, Apple is offering 350 scholarships for deserving students and members of the STEM system to attend the conference, which also includes 125 scholarships with travel assistance for developers with financial constraints.

WWDC is a huge platform for developers from around the world to showcase their talent and ideas to the world, and to interact and engage with their peers and the developer community from all parts of the world. Apple’s initiative to offer travel assistance to 125 scholarships is another step worth commending this year, as the Cupertino firm attempts to give back to the budding future generation of iPhone, iPad and who knows, even Apple Car and virtual reality developers.

Tesla Model X rollover crash is now being investigated by NHTSA which expects to determine whether the Autopilot was activated at the time of the accident

The National Highway Traffic Safety Administration (NHTSA) has been already investigating the Tesla Motors Inc (NASDAQ:TSLA) first fatal Autopilot crash in the Model S. Now, the government entity gave a statement yesterday that it will also be inspecting the most recent Model X rollover accident in Pennsylvania.

On June 01, a Model X owner, Albert Scaglione, was traveling on Pennsylvania Turnpike, about 100 miles east of Pittsburg. HisSUV ran into a guard rail and then the concrete median, leading to a roll over and stopping in the middle lane.  While the owner claimed that the Autopilot system was activated during the accident, Pennsylvania State Police’s investigator Dale Vukovich found no issues with the functionality of the autonomous driving technology and charged Mr. Scaglione.

In a statement, Tesla previously said that it does not have any data that shows that the system was working at the accident time. The company receives a “crash detection alert” whenever there is a big accident. Additionally, it was waiting for the owner’s response to further examine the issue.

The NHTSA wants to find “whether automated functions were in use at the time of the crash” like the owner claims. If the Autopilot’s semi-autonomous features, such as auto-steering or auto-lane changing, were activated during the crash then it may go into a full investigation of the crash.

Later, Tesla updated its statement via a spokesperson and stated there is literally no data. It received the automated alert from the SUV on the date of the accident, implying that airbag deployed; though, logs that include details on the vehicle controls’ state at the time of the crash were not available.

The automaker admitted that the antenna could have failed due to the accident. Like it always does to ensure that the owner is safe, it tried to contact Mr. Scaglione thrice via phone but was unsuccessful in doing so. Based on the available information, the company believes Autopilot had nothing to do with the crash.

Currently, the NHTSA is collecting data from all the parties involved to fulfill its objective, which may be linked with the existing preliminary evaluation being conducted by the organization over Tesla’s first fatality.