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Fiat Chrysler kicks off Magneti Marelli spin-off

MILAN (Reuters) – Fiat Chrysler (FCA) (FCHA.MI) has kicked off its planned spin-off of parts maker Magneti Marelli which will be registered in the Netherlands and listed on the Milan stock exchange, a document outlining initial plans and seen by Reuters showed.

Fiat Chrysler Automobiles (FCA) U.S. headquarters is seen in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook

The spin-off is part of a plan by FCA Chief Executive Sergio Marchionne to “purify” the Italian-American carmaker’s portfolio and to unlock value at Magneti Marelli.

Analysts say Magneti Marelli could be worth between 3.6 billion and 5 billion euros ($4.2 bln-5.8 bln). It sits within FCA’s components unit alongside robotics specialist Comau and castings firm Teksid.

FCA has created a separate entity called MM Srl, the document showed, into which it will fold Magneti Marelli’s electronics and electro-mechanical operations related to racing motorbikes and racing cars, as well as 14 other holdings in various companies around the world, including Germany, Slovakia, Mexico and South Africa.

MM will be incorporated into a Dutch holding company via a cross-border merger, it added.

FCA declined to comment.

The move follows a similar procedure adopted by FCA for the spin-off and listing of trucks and tractor maker CNH Industrial (CNHI.MI) and supercar brand Ferrari (RACE.MI), which are both registered in the Netherlands and listed in Milan.

The Dutch holding company would allow Marchionne, known for his success in extracting shareholder value through spin-offs, to introduce a loyalty share scheme to reward long-term investors through multiple voting rights, as was the case with CNH and Ferrari. That would tighten the grip of FCA’s controlling shareholder Exor, the Agnelli family’s investment holding company, on the parts maker.

Magneti Marelli, which employs around 43,000 people and operates in 19 countries, is a diversified components supplier specialized in lighting, powertrain and electronics.

The Magneti Marelli separation is expected to be completed by the end of this year or early 2019, FCA has said.

FCA’s advisers initially looked at a possible initial public offering for the business to raise cash to cut FCA’s debt, but the Agnelli family – FCA’s main shareholder – was put off by low industry valuations and did not want its stake in Magneti Marelli to be diluted, three sources close to the matter told Reuters in March.

Magneti Marelli has often been touted as a takeover target and FCA has fielded interest from various rivals and private equity firms over the years.

South Korea’s Samsung Electronics (005930.KS) made a bid approach in 2016 but negotiations fell through as it was only interested in parts of the business, other sources have said.

($1 = 0.8595 euros)

Reporting by Agnieszka Flak and Paola Arosio; Editing by Susan Fenton

Depending Precariously on Tesla

The transition to EVs is increasingly dependent on the success of Tesla—with Tesla likely to account for 60% of all EVs sold in the United States by the end of this year.

A Tesla vehicle is parked at a charging station inside a mall in Shanghai on October 23, 2017. – Tesla has reached an agreement with Shanghai authorities that would make it the first foreign automaker to build its own plant in China, putting it in the driver’s seat in the world’s biggest electric-vehicle market, the Wall Street Journal reported. (Photo by CHANDAN KHANNA / AFP) (Photo credit should read CHANDAN KHANNA/AFP/Getty Images)

When I visited Tesla’s tiny factory in Silicon Valley in March 2008—months after Elon Musk took over as CEO—I was floored by their ambition and skeptical they could survive, much less thrive. Tesla’s journey from upstart visionary to household name has been a wild ride, filled with remarkable highs and lows. 2010 saw Tesla become the first auto manufacturer to launch an IPO in more than 60 years. The company’s stock and profile soared, eventually reaching a market capitalization of more than $50 billion, similar to Ford and General Motors.

At the same time, Tesla has struggled to maintain adequate cash flow, meet targets, and overcome manufacturing issues. Recent challenges meeting expectations and demand for the Tesla’s Model 3 mass-market sedan— challenges compounded by co-founder and CEO Elon Musk’s erratic and distracted behavior—are fueling predictions that the company is on the verge of collapse.

Tesla’s volatile past makes it difficult to predict its future. I don’t have any personal, professional, or financial interests in the success of the company. But as someone who has dedicated a career to studying electric vehicle (EV) technology and policy, I am confident that we need a strong private-sector leader like Tesla pulling EV technologies and markets forward in the United States. Such leadership has profound implications for climate change, pollution, and U.S. competitiveness in the global economy.

The status of EVs is fragile, especially in the United States. EV market share has crept up to 1.4% nationwide. The Trump administration is threatening to freeze national fuel-efficiency and CO2 standards, which would undermine automaker investments in EVs. It is also threatening to block the zero-emission vehicle mandates in place in California and nine other states, further undermining investments.

While domestic progress on EVs stalls, other countries are pulling away. China sold almost half a million EVs the first half of 2018, comprising 3% of that country’s domestic auto market (double the equivalent U.S. figure). China now accounts for half of all EVs sold worldwide. China is also leading on electrifying larger vehicles. The Chinese city of Shenzhen, home to 13 million people, has converted every one of its 16,000 buses to electricity. The story is similar in Europe. Cities across the continent are agitating for cleaner air and threatening to ban diesel cars. EVs sales are emerging as an important substitute for diesel, with EV sales now approaching 2% of all light-duty vehicles sold in Europe.

If not for Tesla, the gap between the United States and other global powers would be even wider. Tesla is the only company other than BYD, the Chinese company Warren Buffet invested in, making a massive and unequivocal commitment to EVs. Though Tesla is admittedly falling short of its ambitious production goals, it is continuing to churn out and sell its Model X SUV and Model S sedan, and is ramping up its less-expensive Model 3. It is likely that by the end of this year, Tesla will account for over 60% of all EV sales in the United States (up from 43% in May–June).

Tesla also plays an essential role as a visionary. Tesla consistently pushes the envelope on EV technology, forcing a rethinking of what EVs are and can be. Tesla pioneered over-the-air software updates, long driving ranges, and a network of fast chargers that enable Tesla owners to drive anywhere in the United States without running out of juice. And by designing their vehicles to be sleek and sexy, Tesla has helped take EVs from objects of ridicule to objects of desire.

If Tesla falls, who can we count on to carry the torch on EVs? Unfortunately, potential successors lag far behind. GM’s Chevrolet Bolt can travel more than 200 miles on a single charge, making it range-competitive with Tesla. But GM’s resolve is suspect. EVs account for just 0.5% of GM’s total U.S. car sales. Nissan does slightly better, with EVs accounting for nearly 1% of total U.S. sales, though Nissan’s sole EV (the Leaf) has a range half that of a Bolt or Tesla. BMW’s EV sales rate in the United States is best (at 8%), but at a much smaller overall sales volume. These low figures are not surprising given that EV production is at present a money-losing proposition.

Certainly the fact that all major automakers are even producing EVs represents major progress. But active innovation and sustained commitment is needed for progress to continue to the point where EV manufacturing becomes profitable and hence self-sustaining. Indeed, a new industry study suggests that smart technology and manufacturing designs, as embedded in the Tesla Model 3, might generate 30% profits, more than triple the industry average.

The success of EVs is crucial in so many ways—to the success of the U.S. auto industry, cleaning up our cities, and slowing climate change. So far, Tesla is the only company leading that charge.

Dan Sperling is the Distinguished Blue Planet Prize Professor of Engineering and Environmental Science and Policy at the University of California, Davis, and lead author of Three Revolutions: Steering Automated, Shared, and Electric Vehicles to a Better Future. Opinions expressed in this piece are the personal viewpoint of the author. Follow on Twitter: @DanSperling_ITS, @ITS_UCDavis, @3Rev_ITSDavis 

Tesla Fires A Shot Across The Bow

ARS Technica reported Friday that Tesla (NASDAQ:TSLA) has removed the $35,000 version of Model 3 from its orders page. Though the company claims the lower-priced, short-range version of Model 3 will be available eventually, some Model 3 reservation holders are sure to be disappointed. On the other hand, focusing on more heavily optioned, higher-margin Model 3 cars should cheer the company’s shareholders. Tesla “shorts” would do well to look carefully to this development because it suggests an aggressive and potentially winning strategy.

Tesla Model 3

Background

Tesla has this month sold its 200,000th electric car in the US, beginning the 18-month wind-down of the federal income tax credit for US Tesla buyers. Elon Musk announced on July 1 that the 5,000 per week Model 3 production goal had been achieved (more or less). Both of these events conform to a Tesla strategy described last April for maximizing the gross amount of federal incentives for its customers.

For Tesla, a key factor in a credits maximizing strategy is that initial high-rate Model 3 production can be skewed toward higher-end configurations because early US customers will enjoy the full $7,500 tax credit (in addition to any state and/or local incentives), making these higher-priced cars affordable for a wider range of buyers. We see exactly this in Tesla’s producing long-range, AWD and performance configurations of Model 3, while delaying the lower-priced, short-range versions. Higher-end Model 3 configurations, particularly those carrying Autopilot and Full Self-Driving software options, will give Tesla higher margins. These fancier models are also likely to appeal to BMW’s (OTCPK:BMWYY) 3 Series and Mercedes’s (OTCPK:DDAIF) C Class higher-end customers.

Let us remember briefly what happened in the high-end luxury sedan segment when Tesla brought Model S to the party. The fun part happened in 2014 and 2015. In an essentially static market, Model S sales took off, while all the other players lost ground.

Luxury segment change in sales 2014-15

And Tesla’s Model S ended up king of the hill.

2015 US Luxury car sales

Images from Author’s February 18, 2016 article here.

Will it happen again?

Could Model 3 grab market share in the much larger entry-luxury car segment like Model S did in the high-end luxury car market? Because, if Tesla were to carve the heart out of the BMW 3 Series, Mercedes C Class, and similar models from Audi (OTCPK:AUDVF), Lexus (NYSE:TM), Cadillac (NYSE:GM), Acura (NYSE:HMC) and others, these carmakers will feel a lot of pain. And Tesla might just make a go of its Model 3.

The first thing to understand about the market for entry-luxury cars is that buyers don’t have to buy these cars. Anyone purchasing or leasing even a base model BMW 320i ($34,900 base price) can buy or lease a Toyota, Hyundai (OTCPK:HYMLF) or Chevy that will take them to where they need to go and bring them back for a lot less money. Entry-luxury cars offer something “special” beyond basic, efficient transportation that buyers are willing to pay extra to have. The “special” something may be quicker acceleration or cushier seats, or fancy wheels, or special headlights, or any of a bunch of other nice, cool or trick features, gizmos and tasteful brand badges that set one of these cars apart from those driven by the hoi polloi motoring public. And at least some buyers in the entry-luxury market are willing to pay a lot more to drive a “special” car. Many entry-luxury cars are offered with an array of optional configurations and optional features that allow a customer to spend much more than the base car price. A Mercedes C Class sedan (base price $40,250) in the AMG C63 S configuration can be optioned-up past six figures by just checking the boxes (and it’s still not as quick as the AWD Performance Model 3.)

Tesla Model 3 doesn’t have to be cheaper than the competition to win in the entry-luxury market. It just needs to be price competitive and have better “special stuff”. And Model 3 has special stuff – smooth, quick acceleration; clean, futuristic interior; Full Self-Driving; batteries; SuperCharging; a Tesla badge – that other cars in in this market do not have. (Let’s not get into an argument about Tesla’s Full Self-Driving being “real”. The company offers the feature. Its cars have the hardware. You can’t tick the box for this for any non-Tesla car.)

This leaves the question of Tesla’s pricing compared to the ICE competition. Let’s take a look at how three different Tesla Model 3s compare to three roughly similar BMW 3 Series cars. Using Tesla’s Model 3 website and BMW’s US website, I configured three Tesla Model 3 cars and three roughly comparable BMW 3 Series sedans: base models, AWD models and performance models. The following table gives an idea of how these cars compare on performance and pricing. For simplicity, the 0-60 time is used as the performance metric and only to show that chosen car configurations are of generally similar performance. Pricing shown is the manufacturers’ US list before any tax credit, incentives, discounts, etc.

Model 0-60 Base Optioned

Tesla Model 3 – Base Model

5.6 35,000 35,000

BMW 320i – Base Model

7.1 34,950 34,950

Tesla Model 3 – Long Range, AWD

Blue Paint; 19″ Wheels; Auto Pilot; Self-Driving;

Delivery

4.5 53,000 64,500

BMW 340ix – AWD

Premium Pkg; Executive Pkg; Blue Paint; 19″ Wheels

Drive Asst; Park Ctrl; Blind Spot; Active Cruise;

Heated Rear Seats; Heated Steering Wheel;

Charging + WiFi; Apple Play; Destination

4.6 50,950 63,535

Tesla Model 3 – Long Range, AWD, Performance

Blue Paint; 19″ Sport Wheels; Auto Pilot; Self-Driving;

Delivery

3.5 64,000 74,000

BMW M3 – RWD Performance

Blue Paint; 19″ Wheels; Drive Asst; Executive Pkg;

Automatic Trans; Stainless Pedals; Blind Spot;

Charging + WiFi; Apple Play; Destination

3.9 66,500 78,320

This comparison shows that in order to match the performance and features of a Tesla Model 3, one is looking at a BMW 3 Series that costs about the same. While many investors think of Tesla cars as being “expensive” compared to the touted $35,000 base price, quite the same thing can be said of BMW cars – and, presumably, those of its competitors as well. Tesla’s “effective” pricing is lower by the amount of federal tax credit, any state and local incentives, and any purported fuel cost savings over the ownership period. BMW’s prices are also lower by the amount of any dealer discounts, promotional incentives, trade-in allowances and the like.

The big price differential between Tesla and BMW (and most legacy players) comes in the guise of Tesla making higher-end configurations, while (for now) avoiding lower-cost versions of the Model 3. It isn’t that Tesla cars are more expensive, the company just makes more expensive [versions of its] cars…

Shot Across The Bow

This is where Tesla’s strategy and the outlook for the entry-luxury car market starts to look interesting. What the company has done in reaching 5,000 per week Model 3 production, delivering its 200,000th US car at the beginning of Q3 and delaying the Model 3 short-range configuration is to tell the car market this: Tesla will make a quarter million high-end BMW 3 Series comparable cars a year, sell these (primarily in the US for Q3 and Q4) and not bother with entry-level product (yet). Or, to put it more bluntly, the company just told BMW, Mercedes, Audi, Lexus, Cadillac and the other entry-luxury segment carmakers that it will eat their lunch. Because if Tesla sells a half million highly optioned entry-luxury cars into the market, the other companies will be left mostly with the entry-level end of the market. Ouch!

Tesla is aiming to repeat what it did with Model S, but this time on a much, much larger scale. And we are not talking about someday. The company’s plan is up, running and in play right now, today.

The competition has nothing ready to put in Tesla’s way. The GM Bolt electric car is not an entry-luxury product, and no versions are offered that effectively compete with higher-end Model 3 configurations. Jaguar’s (NYSE:TTM) iPace is coming to the market, but it is aimed at the costlier Tesla Model X, and no robust cross-country Supercharger-like network exists to support the iPace at this time.

How It Will Go

Entry-luxury carmakers offer cars from low-end entry models through AWD and performance cars. Unit sales are largely at the low end, but a disproportionate amount of carmakers’ profit is earned from higher-margin, highly optioned cars. In a market of competing, mature technology ICE cars, and with a need to sustain dealer networks and maintain market share, legacy carmakers must deliver a full range of product. Build only high-end cars and most of their customer base will defect and market share and dealer networks collapse. Build only entry-level cars and most of the profit goes away.

In 2016, BMW sold 545,116 3/4 Series (sedan/coupe) cars. To achieve this sales volume, the company offered entry-level as well as higher-end configurations of its 3/4 Series cars. Arguably, to steal half a million sales from BMW’s 3/4 Series for the Model 3, Tesla would need (at least) to deliver both high-end and entry-level Model 3 cars, because that covers the price range of cars that BMW 3/4 Series customers buy. But such does not appear to be the company’s plan.

Tesla aims to take market share from the high end of the entry-luxury car segment mix. It has put off making the short-range, $35,000 version of Model 3, so buyers with $35,000 to spend can’t buy a Model 3, at least for now. This means Tesla has no chance, for now, of stealing half a million BMW 3/4 Series customers for Model 3 and wiping the BMW 3/4 Series cars from the face of the earth. But Tesla doesn’t need every BMW 3/4 customer. There are plenty of Acura, Alfa Romeo (NYSE:FCAU), Audi, Cadillac, Infiniti (OTCPK:NSANY), Jaguar, Lancia, Lexus, Lincoln (NYSE:F), Mercedes and Volvo (OTCPK:VOLAF) entry-luxury customers to be had. Tesla may even bag some BMW 5 Series, Audi A6 and Mercedes E Class customers with its long-range, AWD and performance versions of the Model 3.

If Tesla pulls off this high-end, cream-skimming strategy – like it did with Model S – that will be good for the company and for shareholders. It will be disastrous for legacy competitors because profits come largely from selling high-end configuration, highly optioned vehicles, and Tesla is going after those high-margin sales. It is one thing for a company like BMW to see, say, 20% of its 3 Series customers across the board go over to Tesla and quite a different thing should the top (high end) 20% of its customers defect.

Conclusions

Tesla has embarked on a bold strategy, choosing to target Model 3 sales at the high end of the entry-luxury car market rather than offering Model 3 configurations covering the entire segment. Tesla is following a strategy that will “cream-skim” high-end, high-profit customers from the likes of BMW, Mercedes, Lexus and Cadillac. Tesla did this same thing with Model S. Its strategy is already in play. Within the next quarter or two, investors may expect to see a rout of legacy carmakers even greater than was seen in 2014-15 with Model S as Tesla takes on the entry-luxury segment in earnest with Model 3.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: These writings about the technical aspects of Tesla, electric cars, components, supply chain and the like are intended to stimulate awareness and discussion of these issues. Investors should view my work in this light and seek other competent technical advice on the subject issues before making investment decisions.

Insider threat management firm ObserveIT raises $33 million

JERUSALEM (Reuters) – ObserveIT, a provider of insider threat management software, said on Tuesday it raised $33 million in a private funding round with participation from Bain Capital Ventures and Spring Lake Equity Partners.

NightDragon Security, the cybersecurity investment firm founded by industry veteran Dave DeWalt, also participated.

The funding will be used to accelerate product innovation and to expand the sales and marketing teams to support the company’s global growth.

ObserveIT, founded in 2007 by two Israelis, said that in the past year the company increased customer deals by 185 percent while new customer deal size grew by more than 250 percent.

“Whether accidental or malicious, insider threats are increasing in both frequency and cost,” said Mike McKee, CEO of ObserveIT.

The firm, which employs 150 people, is based in Boston and has its main research and development center in Israel.

Reporting by Steven Scheer; Editing by Tova Cohen

Traveling This Summer? Get a Lot More From Your Trip Without Spending a Dime

I knew I was destined to travel on business to India, even though I have turned down numerous offers over the years, mainly because I was afraid of getting sick. My fears finally abated when friends in their 70s and 80s returned from India without any health problems, so when a global tech company invited me to deliver a workshop at their leadership summit in Bangalore last month, I accepted. The trip was a great experience and thankfully my fears never materialized. I attribute this to creative resilience and a little ingenuity:

Check government websites for visa information, and traveler’s alerts. (I don’t travel anywhere that has a red-letter warning.) Give yourself and your client ample time to get all the paperwork completed if you are getting a business visa. It can be quite complicated and time-consuming.

In addition to getting the appropriate vaccinations, my best defense against gut problems is to take a high potency probiotic every day starting two weeks before departure and about one week after I return. I also diligently avoided unpeeled produce.

Use a travel agent to book your ticket because if anything goes wrong, they can fix your problem more easily than if you booked online through a third party.

2. Learn about local culture (corporate and societal)

Check with your clients about local customs and dress codes so you don’t make any faux pas. Learn a few words of greeting in your host’s language to create a connection. Whenever I said namaste or namaskar, people would light up. Even security.

I reached out to my network in Bangalore via Linkedin to let them know I would be in town, and as a result, I received several invitations for lunch and dinner, including being a guest speaker at the Bangalore chapter of the Institution of Engineering and Technology. These were wonderful opportunities to connect with local business leaders and innovators and to gain new perspectives about creativity and innovation from their point of view. 

Reconnecting with my contacts from India before I went to Bangalore also helped me prepare psychologically. Several people gave me tips on what to expect and offered help if I needed it, and that helped me feel safer.

While staying at my gloriously opulent hotel, I met other business executives who were in town to check on their Bangalore teams, and it was illuminating to compare notes about doing business in India. My client for example put on an impressive first-class summit at a luxury hotel for their Indian contingent to benefit from in terms of engagement and professional development. In contrast, an executive from another global company told me they never host conferences or summits for their Indian employees. No surprisingly, they have a hard time keeping their employees, even when given raises, because the company is not cultivating connection and employee engagement.

4. Be curious and be present

Nothing makes me feel more present than being immersed in the unknown. As much as I loved being in the lush tropical gardens at my hotel, I also wondered on my own down busy commercial streets (where you take your life in your hands because there are no lights for pedestrians) and quiet residential neighborhoods, inhabited by stray dogs and cows.

I relied on advice from the hotel concierge, trip advisor and chance encounters with locals about what to see and where to go within my limited timeframe to make the most of my visit. I place a lot of value on chance encounters. As my friend Synne Kune Loh says, “Your destiny lies with the next person you might.” That is especially true when traveling, and I strike up conversations with anyone I think might be interesting, including people in lineups, at museums, and in restaurants. Sometimes I’ll invite them to join me at my table, or vice versa. The best conversations happen when you are genuinely curious and honoring of other cultures. 

Enhance your travel experience by keenly observing the world around you. Take in the big picture as well as the details that make a place special. Easily done with your camera but take note: if you always have your nose in your devices you are not being present to your environment. 

5. Step out of your comfort zone

Traveling to foreign lands is a great way to step out of your comfort zone, discover different world-views, break out of outmoded mental models, and gain new cultural experiences; all of which will lead you to new creative ideas and business insights. Enjoy your adventure.

17 Fascinating Ways United, Southwest and Other Airlines Are Changing Their Airplanes. Do Passengers Notice?

Here are 17 of the most interesting examples–culled from my recent interviews with the airlines and other sources. (Hat tip to the U.K. newspaper The Telegraph for a few of these.)

Almost every airline cited new, thinner seats as a weight-savings measure: Southwest and United especially. Even if nobody likes them otherwise.

“I know these have a less than stellar reputation,” United spokesperson Charles Hobart said, “but they can be just as comfortable as the previous seats once you work them in.”

2. No more plastic straws

American Airlines and Alaska Airlines have done away with plastic straws. American says their planes will drop 71,000 pounds as a result, but it’s not the initiative they wanted to highlight.

“Our fleet is more fuel efficient today because of hundreds of new aircraft we’ve taken over the past five years,” an American Airlines spokesperson told me via email. “It’s the youngest fleet among the big U.S. airlines. That’s the main point I’d make for American,”

3. Lighter in-flight magazines

Changing the card stock on in-flight magazines means United’s weigh only an ounce; previously they were several ounces. British Airways did this too.

With about 757 planes, 8,700 total seats, and one magazine per passenger, a single ounce means four tons less weight to lift off the ground with each United flight per day.

4. Less paper in the cockpit

Southwest pointed this one out: “We recently finished equipping our pilots and flight attendants with electronic flight bags, eliminating the need to carry paper charts and manuals.  Switching to these tablets removed 80 pounds from each flight and saved more than 576,000 gallons of fuel.” 

5. Smaller video screens

JetBlue gets a nod: “On our restyled A320 aircraft, our (Inflight Entertainment) IFE is lighter and there are fewer of those under seat boxes that power the IFE,” an airline spokesperson told me. “We have also recently changed out food and beverage carts to a lighter weight cart.”

JetBlue: We have lighter video screens.

United: We have no video screens!

“We’ve removed video screens as you know,” United’s Hobart told me. “Many people are bringing their own on board. We offer streaming PDE–personal device entertainment instead. That’s a considerable weight-savings.”

The Australian airline Qantas has a new line of flatware and tablewear that it says is 11 percent lighter: “The range has now rolled out across our International fleet (and Domestic business class), resulting in an annual saving of up to 535,000 kilograms in fuel,” a spokesperson said.

8. No heavy plates in first class

Similar move on Virgin Atlantic, “which has thinner glassware and got rid of its heavy, slate plates from upper class,” according to the Telegraph.

“The carrier also changed its chocolate and sweet offerings to lighter versions, redesigned its meal trays (which in turn meant planes were able to carry fewer dining carts), and altered its beverage offering for night flights, when fewer people drink.”

Those big bottles of alcohol and perfume all add up, so they’re grounded. “We removed on board duty free products,” United’s Hobart told me. “Very few people were purchasing them anyway.”

10. Restocking the galley

Southwest: “We changed the way we stock our galleys, reducing the weight carried on each flight, and saving an additional 148,000 gallons of fuel in 2014 and 2015 combined.”

British company Thomas Cook “no longer prints receipts for in-flight purchases, saving it the need to carry 420,000 till rolls across its fleets,” according to the Telegraph.

It also “reduced the number of spare pillows and blankets it carries from four down to two.”

I’ll say that one again: pillows and blankets.

Spirit Airlines gets the mention here, and for something people complain about: their comically small tray tales. Besides being slightly less expensive to manufacture, they weigh a little less, which means less fuel required to transport them.

This one seems smart, like there are probably a lot of ways to make a drink cart weigh less. Several airlines said it was a priority.

“Ours were 50 pounds, and we got them down to 27 pounds,” United’s Hobart said.

I’d never heard of this one, but the Telegraph said that in 2008, Air Canada cut life jets out of some planes, and replaced them with “lighter floatation devices.” Apparently this was allowed as long as the aircraft “didn’t venture more than 50 miles from the shore.”

Did anyone even notice? Prior to its merger with Delta Air Lines, Northwest Airlines reportedly made a point of slicing limes into 16 slices as opposed to 10. That means they nearly halved the number of limes they had to carry.

16. The straight up solution

This one goes back 30 years, but it’s so apt. In 1987, United reportedly realized that removing one olive from every salad it served could save $40,000 a year. That would be just over $89,000 today. Not significant in itself for a $37 billion a year company, but hey, everything counts.

This is the tricky one that airlines would probably love to implement, but it’s hard. In 2013, Samoa Air introduced a “fat tax,” as the Telegraph put it, “whereby passengers would be charged a fare according to their weight.”

Separately, Japan’s All Nippon Airways, in 2009 “asked passengers to visit the lavatory before boarding because empty bladders means lighter bladders.”

Electrolux Pure i9 Review: An Effective, But Expensive Robot Vacuum

Many people like to run their robovacs at night or while they’re at work. I choose to run ours while I’m awake, right after dinner and while we’re putting the kids to bed.

First off, I don’t see any reason to walk around all evening with crumbs sticking to the bottoms of my feet if I don’t have to. But I’ve also found that most robot vacuums will require rescue, which means you have to be awake or around. If you’re sufficiently pressed for time and energy that you need a robot vacuum, you’re probably not being as diligent as you could be about eliminating botvac booby traps, like tiny doll socks or stray shoelaces.

Even with navigational aids like virtual wall barriers, magnetic strips, or no-go lines, only a few robot vacuums have been reliable enough to leave completely unattended. I’m happy to report that the Electrolux Pure i9 is one of them.

Love Triangle

Right out of the box, the Electrolux Pure i9 looks markedly different from the other botvacs that I’ve tried. It’s a steel-gray, rounded triangle that measures 12.8 inches across and 3.3 inches high. It’s only 0.2 inches less in diameter than the Roomba 690, but it looks much smaller.

Electrolux

It comes with only its charging stand, a magnetic side brush, and instructions to download the Pure i9 app. Unlike other robot vacuums, it’s not compatible with Alexa, Google Home, or other voice assistants.

Out of the box, it took two hours to charge. Setting it up by connecting it to the app is an easy, familiar process, and the app itself is clean and simple to navigate. Just follow the app’s instructions to connect the Pure i9 to your Wi-Fi; you can also operate it with buttons on the botvac’s top panel. Once connected, you can select your robot’s name (I chose “Dung Beetle”) and tinker with its settings. For example, you can select a more energy-efficient eco mode, or a mute option that reduces the volume of the bot by about 5 decibels, from 65 to 60. You can schedule cleanings, or switch the app’s language. You can access online support or visit Electrolux’s online shop for replacement parts.

Power Hour

The botvac’s battery life is not overly long. In normal mode, it ran for 50 minutes—slightly longer than the advertised 40 minutes—before it had to return to the base for charging. It was able to clean 270 (very dirty) square feet in 40 minutes. But I strongly suspect that Electrolux might be able to increase that runtime if it could make the navigation software slightly more efficient.

The Pure i9 uses a 3-D vision camera set in the front to navigate. It’s exceptionally accurate. Even without navigational aids, the Pure i9 never got lost or stuck. It never dinged my furniture or bashed into any walls. It never mistook a cliff where there was none, or failed to clamber over the lip of a doorway or a carpet. When I stepped in front of it, it paused to assess the situation before moving around my feet.

After one cleaning session, I realized that my toddler had completely disassembled a flag banner and hidden it under the couch. Almost any other botvac would have found this to be a disaster—frayed string, little pieces of loose fabric—but the Pure i9 navigated smoothly around it.

However, the mechanism by which it steered clear of obstacles was maddening to watch. It’s easy to intuitively divine how the navigation mechanisms in a robot vacuum work. The cheaper ones ping-pong randomly back and forth, while powerful, methodical botvacs, like the Neato line, vacuum back and forth in orderly parallel lines.

The Pure i9 gave the impression of being an elderly butler, wandering around haphazardly with a dusting brush in a sheepish, absentminded manner. “Does that robot vacuum know where it’s going?” our babysitter asked, watching it work one morning.

Every time it went around a corner, came up against the base of a chair, or approached the edge of a rug, it stopped and re-started over and over, repeatedly reassessing the situation until it deemed it safe to go forward. “Oops, oh no, excuse me,” I imagined it saying in a British accent, every time that it started shuffling in the hallway for one, two, or five minutes. “How perfectly buffle-brained of me. Please, you go first.”

I could chart its progress in real-time on a map of my house in the app. Electrolux doesn’t display the amount of square feet cleaned or time spent cleaning graphically over time, as do iRobot and Neato. But the map is a fairly close approximation of what my house looks like, and made it easy to check if I’d had the bathroom or bedroom doors closed on any given day.

Let Me Clear My Throat

With mute on, I measured the Pure i9’s sound at a fairly quiet 60 decibels. In normal mode, the vacuum ran at about 65 dB, which kicked up to a turbo 70 dB whenever it encountered a particularly filthy patch of carpet.

After each cleaning, the high traffic areas by the door and under the kitchen table were clear. The triangular shape with the side brush may have helped with digging into the corners.

The Pure i9 didn’t provide nearly as deep a carpet clean as the Roomba 980, mainly because it wasn’t able to thoroughly agitate the fibers. But the anti-tangle brush wasn’t constantly snarling and stopping the vacuum, in the way that the Neato Botvac D7 Connected did. I also didn’t have to clean out the bin nearly as much. Even with its diminutive size, it has an impressive dustbin capacity of 0.7 liters. In comparison, the dustbin of the Samsung Powerbot holds only 0.3 liters.

The Pure i9 has AutoPower, which automatically detects the floor surface that the vacuum is on and calibrates the level of cleaning power. When battery runs down, it returns automatically to the base, recharges, and restarts, which occasionally scared me awake when I forgot that it hadn’t finished and it automatically restarted in the dead of the night.

My one real gripe is that the Pure i9 is only so-so at returning home to the charging station. If a cleaning cycle had finished, it went back no problem. But if I stopped it and pushed the home button halfway through, the app informed me that the the Pure i9 was returning home even when it clearly wasn’t. Some mornings, I would awake to find it sitting sadly, alone in a corner.

Not Afraid to Trade(off)

It’s hard for me to recommend products that I wouldn’t purchase myself. Spending $899 is a lot, especially for a robot vacuum that lacks many basic functions. I don’t use a voice assistant to control my robot vacuum, but many people do, and much cheaper robot vacuums work with Google Home and Alexa. It also has spot cleaning but no directional control and no remote, which has bothered me in the past.

Still, its very simplicity won me over. I have spent so much time fussing with navigational aids to help my robot vacuums, that it never occurred to me that I might not even need them. And while its navigational quirks can be maddening, I have spent more evenings than I would like, cowering in bedrooms, listening to Neato Connecteds trying to break the door down. I appreciated a shy, sheepish robot vacuum that gave my house a thorough clean without breaking anything, or itself, in the process.

In the end, this isn’t my top recommendation for a high-end robot vacuum. But if you’re looking for a slightly smaller, reliable, and good-looking robot vacuum, the Electrolux Pure i9 makes a very decent contender.

A Long-Term Look At Inflation

By Jill Mislinski

The Consumer Price Index for Urban Consumers (CPI-U) released yesterday morning puts the year-over-year inflation rate at 2.87%. It is substantially below the 3.76% average since the end of the Second World War and above its 10-year moving average, now at 1.631%.

  • For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly update.
  • For a better understanding of how CPI is measured and how it impacts your household, see our Inside Look at CPI components.
  • For an even closer look at how the components are behaving, see this X-Ray View of the data for the past six months.

The Bureau of Labor Statistics (BLS) has compiled CPI data since 1913, and numbers are conveniently available from the FRED repository (here). Our long-term inflation charts reach back to 1872 by adding Warren and Pearson’s price index for the earlier years. The spliced series is available at Yale Professor (and Nobel laureate) Robert Shiller’s website. This look further back into the past dramatically illustrates the extreme oscillation between inflation and deflation during the first 70 years of our timeline.

For a long-term look at the impact of inflation on the purchasing power of the dollar, check out this log-scale snapshot of fourteen-plus decades and how the value of the dollar has declined.

Original post

Facebook says Indonesian user data not misused

JAKARTA (Reuters) – Social media giant Facebook has assured the Indonesian government that personal data of about one million of its citizens had not been improperly accessed by political consultancy Cambridge Analytica.

FILE PHOTO: A 3D plastic representation of the Facebook logo is seen in this illustration in Zenica, Bosnia and Herzegovina, May 13, 2015. REUTERS/Dado Ruvic/File Photo

Facebook has faced intense scrutiny, including multiple official investigations in the United States, Europe and Australia, over allegations of improper use of data for 87 million Facebook users by Cambridge Analytica.

Indonesia, where more than 115 million people use Facebook, has also been pressing the firm to explain how its citizens’ personal data was harvested by Cambridge Analytica via a personality quiz. 

“Facebook has reported to the Communications Ministry that no data from any Indonesian users was collected,” Deputy Communications Minister Semuel Pangerapan said on Friday.

A Facebook official had told members of parliament in April that 1,096,666 people in Indonesia may have had their data shared, or 1.26 percent of the global total.

This led Communications Minister Rudiantara, who goes by one name, to briefly threaten to shut down Facebook in Indonesia if personal data was found to have been breached.

But Facebook told Reuters on Thursday it had only indicated the number of Indonesian users “who could potentially have had their data accessed, not necessarily misused”.

“Both public records and existing evidence strongly indicate Aleksandr Kogan did not provide Cambridge Analytica or (its parent) SCL with data on people who use Facebook in Indonesia,” it added, referring to the researcher linked to the scandal.

Facebook says Kogan harvested data by creating an app on the platform that was downloaded by 270,000 people, providing access not only to their own but also their friends’ personal data.

Pangerapan said he believed Facebook had improved options for users to limit access to data, but did not say whether authorities would continue their inquiry.

The Indonesian communications ministry had sent a letter to the company in April seeking confirmation on technical measures to limit access to data in Facebook and more information on an audit the social media company was doing.

Britain’s information regulator on Wednesday slapped a small but symbolic fine of 500,000 pounds on Facebook for breaches of data protection law, in the first move by a regulator to punish the social media giant for the controversy.

Reporting by Fanny Potkin & Cindy Silviana; Editing by Himani Sarkar

Israel's Elbit speeds up race to fly military drones in civil airspace

REHOVOT, Israel (Reuters) – Israeli defense firm Elbit Systems on Thursday unveiled a 1.6 ton unmanned aircraft vehicle (UAV) designed to fly in airspace currently reserved for piloted civilian planes as a race heats up to deploy military drones outside combat zones.

Employees check an Elbit Systems Ltd. Hermes 900 unmanned aerial vehicle (UAV) at the company’s drone factory in Rehovot, Israel, June 28, 2018. Picture taken June 28, 2018. REUTERS/Orel Cohen

The move came hours after a U.S. rival staged a landmark transatlantic demonstration flight, as arms firms vie to develop drones with flexibility to be used in civilian-controlled airspace – a drive that could spawn future technology for unmanned airliners.

Changing security concerns following the dismantling of Islamic State and rising geopolitical tensions have caused European countries to shift defense efforts from far-away conflicts to homeland security, resulting in demand for drones that can be safely integrated into civilian airspace to, for example, monitor border crossings, Elbit officials said.

A version of Elbit’s Hermes 900 StarLiner is being assembled for the Swiss armed forces and is scheduled to be delivered in 2019 in a deal worth $200 million.

“We are getting a lot of interest from other customers for the same configuration … from all over the world,” Elad Aharonson, general manager of Elbit’s ISTAR division, told Reuters.

The StarLiner, being launched ahead of next week’s Farnborough Airshow, is derived from the Hermes 900 operated by Brazil for surveillance during the 2014 World Cup. That operation required closing off airspace to civilian aircraft, something the StarLiner, with technology to detect aircraft and avoid collisions, will not require, Elbit said.

Elad Aharonson, general manager of the Elbit Systems Ltd. ISTAR division, stands among unmanned aerial vehicles (UAVs) at the company’s drone factory in Rehovot, Israel, June 28, 2018. Picture taken June 28, 2018. REUTERS/Orel Cohen

The drone is compliant with NATO criteria, qualifying it to be integrated into civilian airspace, Elbit said. It will still need approval of the various civil aviation authorities.

The StarLiner has been flying in civilian airspace in Israel over the past year.

California-based General Atomics’ MQ-9B SkyGuardian – a version of the widely used Predator family – completed its Atlantic crossing on Wednesday ahead of the world’s largest military airshow at RAF Fairford in western England.

Elbit expects to receive approval from the European Aviation Safety Agency (EASA) for its own product in the coming months.

EASA was not available for comment.

Israel’s drone exports in 2005-2012 totaled $4.6 billion, according to consultancy Frost & Sullivan. They reached $525 million in 2016, accounting for 7 percent of Israel’s defense exports, defense ministry data show.

Drones are a major source of revenue for Elbit and state-owned Israel Aerospace Industries. The United States and Israel dominate the industry but face growing competition from cheaper Chinese drones.

Slideshow (8 Images)

U.S. military drone makers are vying for a larger share of the global market, which market researcher the Teal Group forecasts will rise from $2.8 billion in 2016 to $9.4 billion in 2025.

INTELLIGENCE GATHERING

Flying alongside airliners would expand the horizons of drones originally developed for military surveillance. But it would also call for advanced sensors and software that could eventually filter back into commercial use as developers look at single-pilot and ultimately pilotless cargo or passenger jets.

The StarLiner can reach 30,000 feet – the altitude of some commercial jets – and photograph an 80 square kilometer (31 square mile) area, Elbit said.

“Some customers would like to use the system to gather intelligence,” Elbit CEO Bezhalel Machlis said. “Another example can be for homeland security applications, to fly above an area and make sure it is monitored against terrorist activities.”

The drone can be equipped with radar, cameras to take video and still pictures, and signals intelligence to analyze electronic signals.

“This is a major step towards unmanned civilian planes,” Aharonson said, adding the main barrier to such aircraft would be psychological rather than technical.

Editing by Jonathan Weber, Tim Hepher and Mark Potter