Despite Trump tweet, Ford says it won’t make hatchback in US

Despite Trump tweet, Ford says it won’t make hatchback in US
Citing Trump’s new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America. (Reuters)
Updated 10 September 2018

Despite Trump tweet, Ford says it won’t make hatchback in US

Despite Trump tweet, Ford says it won’t make hatchback in US
  • Citing Trump’s new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America
  • Trump took to Twitter Sunday to declare victory and write: “This is just the beginning. This car can now be BUILT IN THE USA. and Ford will pay no tariffs!”

WASHINGTON: Ford won’t be moving production of a hatchback wagon to the United States from China — despite President Donald Trump’s claim Sunday that his taxes on Chinese imports mean the Focus Active can be built in America.
Citing Trump’s new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America.
Trump took to Twitter Sunday to declare victory and write: “This is just the beginning. This car can now be BUILT IN THE USA. and Ford will pay no tariffs!”
But in a statement Sunday, Ford said “it would not be profitable to build the Focus Active in the US” given forecast yearly sales below 50,000.
For now, that means Ford simply won’t sell the vehicle in the United States. Kristin Dziczek of the Center for Automotive Research said that Ford can make Focuses “in many other plants around the world, so if they decided to continue to sell a Focus variant in the US market, there are several options other than building it in the United States.”
In April, Ford announced plans to stop making cars in the United States — except for the iconic Mustang — and to focus on more profitable SUVs. It stopped making Focus sedans at a Wayne, Michigan, plant in May. The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China.
“Without the tariffs, the business case was pretty solid for that model in the US market,” Kim said.
Demand for small cars in the US has been waning for years with relatively low gasoline prices and a shift from cars to SUVs and trucks.
If Ford sold fewer than 50,000 Focus Active wagons per year, it would run a US factory on only one shift per day, which isn’t cost-effective, Dziczek said. Automakers like to run plants on at least two shifts, and preferably three per day to cover the cost of building and equipping the factory, and to turn a profit.
Ford also wouldn’t want to spend millions on equipment to build the Focus Active here because at low sales volumes it wouldn’t get a good return on its investment, Dziczek said.
If sales were high enough to justify production at a US plant, the price of a compact vehicle isn’t high enough to cover the difference in wages here, she said.
“The margins are very slim,” Dziczek said. “Even if you had demand and volume, it’s still very difficult to build a small car in the US profitably, which is why you find very few of them here.”
In China, labor costs are about $8 per hour including benefits, but it’s more than $52 per hour in the US, according to Dziczek.
Ford, BMW, Mercedes and others export about 250,000 vehicles to China from the US each year, Dziczek said. Most of them are luxury cars and SUVs with higher profit margins that can cover higher US wages, she said.
For the Focus Active, the tariffs on Chinese vehicles changed everything. The United States on July 6 began imposing a 25 percent tax on $34 billion in Chinese imports, including motor vehicles. Last month, it added tariffs to another $16 billion in Chinese goods and is readying taxes on another $200 billion worth. China is retaliating with its own tariffs on US products.
The world’s two biggest economies are clashing over US allegations that China deploys predatory tactics — including outright cybertheft — to acquire technology from US companies and challenge American technological dominance.


US fuel supply to normalize ‘fairly soon’

US fuel supply to normalize ‘fairly soon’
Updated 16 May 2021

US fuel supply to normalize ‘fairly soon’

US fuel supply to normalize ‘fairly soon’
  • Gas station outages down about 12 percent from the peak, says official

WASHINGTON: Energy Secretary Jennifer Granholm says the nation is “over the hump” on gas shortages following a ransomware cyberattack that forced a shutdown of the nation’s largest gasoline pipeline.

Problems peaked Thursday night, and service should return to normal in most areas by the end of the weekend, Granholm said Friday in an interview with The Associated Press.

“The good news is that ... gas station outages are down about 12 percent from the peak” as of Friday afternoon, with about 200 stations returning to service every hour, she said. “It’s still going to work its way through the system over the next few days, but we should be back to normal fairly soon.''

A cyberattack by hackers who lock up computer systems and demand a ransom to release them hit the Colonial Pipeline on May 7. The hackers did not take control of pipeline operations, but the Georgia-based company shut it down to prevent malware from affecting industrial control systems.

The Colonial Pipeline stretches from Texas to New Jersey and delivers about 45 percent of the gasoline consumed on the East Coast. The shutdown has caused shortages at the pumps throughout the South and emptied stations in the Washington, DC.

President Joe Biden said US officials do not believe the Russian government was involved, but said “we do have strong reason to believe that the criminals who did the attack are living in Russia.'”

As Colonial reported making “substantial progress” Friday in restoring full service, two people briefed on the matter confirmed the company had paid a ransom of about $5 million.

Granholm, like other Biden administration officials, urged drivers not to panic or hoard gasoline.

“Really, the gasoline is coming,'' she said. “If you take more than what you need, it becomes a self-fulfilling prophecy in terms of the shortages. Let’s share a little bit with our neighbors and everybody should know that it’s going to be okay in the next few days.'”

Granholm’s agency is leading the federal response to the ransomware attack. She said the incident shows the vulnerability not only of US infrastructure, but also personal computers. Her 86-year-old mother recently suffered a ransomware attack on her iPad, Granholm said.

“So it’s just happening everywhere,'' she said. “All these cybercriminals see an opportunity in the cloud and in our connectivity. And so we all have to be very vigilant. That means we’ve got to have security systems on our devices and individually we shouldn’t be clicking on any email with attachments from people you don’t know. I mean it’s just around us.'”

Biden signed an executive order on cybersecurity this week, and the Energy Department and other agencies are working to protect critical infrastructure, she said.

Much of the US pipeline infrastructure, like Colonial, is privately owned. The chairman of the Federal Energy Regulatory Commission, which oversees interstate pipelines, said this week that the US should establish mandatory cybersecurity standards for pipelines similar to those in the electricity sector.


Survey shows Saudi entrepreneurs ‘most optimistic in the world’

Survey shows Saudi entrepreneurs ‘most optimistic in the world’
Updated 15 May 2021

Survey shows Saudi entrepreneurs ‘most optimistic in the world’

Survey shows Saudi entrepreneurs ‘most optimistic in the world’
  • Kingdom tops rankings among 43 countries for confidence in starting a business

RIYADH: Saudi entrepreneurs are among the most optimistic in the world, a new survey shows, with an overwhelming majority believing the Kingdom offers good opportunities to start a business despite the economic impact of the coronavirus disease (COVID-19) pandemic.

The Global Entrepreneurship Monitor (GEM) 2020/2021 report, which surveyed adults aged between 18 and 64, found that 90.5 percent of those surveyed in Saudi Arabia believed there were good opportunities to start a business in their area, ranking it first in the world among 43 countries surveyed.

At the same time, 91.5 percent of respondents said that it was easy to start a business, again ranking the Kingdom first in the world on this issue, while 86.4 percent said they believed they possessed the skills and knowledge to launch a business, second only behind Togo.

Despite the high level of optimism, the pandemic has had an impact on the business community’s outlook. The percentage of Saudi adults who said they were planning to start a business within the next three years has dropped from 32 in 2019 to 25 percent in 2020.

The main reason for this was fear of failure, cited by 51.6 percent of respondents and earning the Kingdom sixth place in the global rankings.

Of those who were looking to start a business, 90 percent said they had delayed their start date as a result of the pandemic, with only Italy seeing higher delayed business launches.

The survey also found that 41.6 percent of respondents said that they knew someone who had started a business during 2020, while 57.1 percent said they also knew someone who had stopped working on a new venture as a result of the economic impact of COVID-19. 

A positive factor for Saudi entrepreneurs was the Kingdom’s performance on access to funding. Saudi Arabia earned a score of six on this category, up from five in 2019 and placing it third overall globally.

This is demonstrated by the fact that Saudi Arabia saw a surge in financing awarded to small and medium-sized enterprises (SMEs) in 2020 by the Kingdom’s banks and financial companies.

Figures released by the Saudi Central Bank (SAMA) in late January showed that in the third quarter of 2020 the total amount of credit awarded to SMEs was SR176.2 billion ($46.99 billion), up from SR115 billion in Q3 2019 and SR106.7 billion in Q3 2018.

While the total figure rose 8.3 percent in 2019, it surged 52.4 percent in 2020. Among the four categories of companies monitored by SAMA, the biggest increase was for micro companies — classed as those with fewer than five employees — which saw an 89 percent rise in the total credit awarded to them.

Commenting on the results, Wassim Basrawi, managing director for Wa’ed, the entrepreneurship arm of Saudi Aramco, told Arab News: “In 2020, we also experienced rising demand for our loan, venture capital and incubation services at Wa’ed. The demand was there. We are doing this because we have full confidence and trust in our entrepreneurs and are deeply committed to supporting new ideas, solutions and products that fill critical gaps in the Kingdom’s economy and promote economic diversification.”

Basrawi also confirmed that Wa’ed is planning to double its deal volume in the next three years to meet this increasing demand for financing by SMEs.

The GEM survey also showed that Saudi Arabia has a high percentage of adults who have supported entrepreneurs, with one in 10 revealing that they have personally helped fund a startup business. This compares to one in 20 in many other developed nations. The average amount invested by Saudi adults was $6,000.

In May, the monthly IHS Markit Purchasing Managers’ Index survey found that firms in the Kingdom also boosted staff numbers for the first time in five months, as business activity in the non-oil private sector accelerated at its fastest pace in three months.

This backs up the results of the GEM survey, which found that 9.4 percent of Saudi adults said that they planned to hire six or more employees within the next five years, one of the highest rates among all countries surveyed.


More than 89k families benefit from Sakani program

More than 89k families benefit from Sakani program
Updated 15 May 2021

More than 89k families benefit from Sakani program

More than 89k families benefit from Sakani program
  • Various projects are underway in parts of the Kingdom in partnership with real estate developers

RIYADH: A total of 89,493 families benefited from the various housing solutions offered by the Saudi Housing Ministry’s Sakani program since the beginning of 2021 until April 30, the Saudi Press Agency reported.

A total of 66,651 families have already moved into their new homes, according to official data.

The Ministry of Housing and the Real Estate Development Fund formed Sakani in 2017 with the aim of facilitating home ownership in the Kingdom through the creation of new housing stock, allocating plots and homes to nationals and financing their purchase. It has a goal of reaching 70 percent home ownership by 2030.

In April alone, 19,373 families benefited from the different housing options offered by Sakani.

The program recently launched new e-services to serve people effectively.

The app, which allows users to access four new services, can be downloaded at: qrco.de/bc5N3L.

HIGHLIGHTS

● A total of 89,493 families benefited from the various housing solutions.

● In April alone, 19,373 families benefited from the Sakani program.

● The program recently launched new e-services to serve people.

The services include electronic financing, ready-made units, approved contractor, and interactive maps.

The services had been added to ensure Sakani becomes “the go-to destination for housing services and solutions, in order to make it easier for Saudi families to own their first home.”

Various projects are underway in parts of the Kingdom in partnership with real estate developers.

About 178 infrastructure projects covering 244 million square meters have been developed at a cost of more than SR8 billion ($2.13 billion), said National Housing Company CEO Mohammed bin Saleh Al-Bati.

“In 2017, housing options under construction were limited, but now developers are racing to obtain licenses,” said General Supervisor of Real Estate Development Deputyship at the Ministry of Housing, Sultan Al-Sheikh. 

“Reservation of residential units on new developments is often complete within a few days and in some cases hours.”


L’Oreal pledges $340k to help women’s aid group expand into KSA

L’Oreal pledges $340k to help women’s aid group expand into KSA
Updated 15 May 2021

L’Oreal pledges $340k to help women’s aid group expand into KSA

L’Oreal pledges $340k to help women’s aid group expand into KSA
  • As part of the L’Oreal Fund for Women, the pledge will be given to Shamsaha

RIYADH: L’Oreal, the world’s biggest cosmetics group, has pledged SR1.26 million ($340,000) to help a women’s domestic abuse support group expand its operations into Saudi Arabia.

The French beauty giant last year launched a $60 million endowment fund to support initiatives to help women around the world affected by the coronavirus (COVID-19) pandemic.

As part of the L’Oreal Fund for Women, the pledge will be given to Shamsaha, a Bahrain-based nonprofit corporation dedicated to women’s empowerment, to help fund its two-year plan to expand into Saudi Arabia.

Shamsaha provides 24/7 crisis support for victims of abuse and domestic violence, and the funding from L’Oreal will be used to set up partnerships with key stakeholders in the Kingdom to offer Saudi women medical, therapeutic and legal support, as well as food, supplies and transportation.

“The pandemic’s lockdown measures created a very trying environment for everyone across the globe, but even more so for victims of domestic abuse. As a group that has been committed to empowering women, it was essential to take action to help the most vulnerable, particularly those affected by the COVID-19 pandemic,” Remi Chadapaux, managing director of L’Oreal Middle East, said in a statement.

L’Oreal, the owner of brands such as Maybelline, Lancome and Garnier, in February predicted there would be a rebound in makeup sales once the impact of the pandemic had declined and people begin to return to work.

This was evident in first-quarter sales, which rose 10.2 percent year-on-year to €7.6 billion ($9.1 billion), beating analysts’ expectations, mainly due to strong sales in China.


Tourists return to US capital as pandemic ebbs

Tourists return to US capital as pandemic ebbs
Updated 15 May 2021

Tourists return to US capital as pandemic ebbs

Tourists return to US capital as pandemic ebbs
  • Reopening highlights the country’s steady transition back to normality

WASHINGTON: With the park in front of the White House reopening this week, selfie-snapping tourists have suddenly reappeared.

Washington DC, home to some of the toughest anti-virus regulations in the country, is now reopening, highlighting the US’ steady transition back to normality.

Boasting imposing landmarks such as the US Capitol and the Supreme Court, Washington began reopening the doors of its museums on Friday, including the National Museum of African American History and Culture, and the National Portrait Gallery, which will soon host a painting of former President Donald Trump.

By next Friday, six museums run by the famed Smithsonian Institution, and the National Zoo, will once again welcome visitors as vaccination rates climb and infections continue to plunge.

The question now is how to attract more tourists and spur an economic rebound after a year of pandemic restrictions that left the US federal capital city, normally a hub for conferences and meetings of international institutions, stricken.

“For the moment, I have very few customers,” said Ngre Phung, whose mobile souvenir shop is parked near the African American museum.

So far, DC residents, who are packing the terraces of restaurants and bars, have not rushed downtown to peruse Phung’s selection of caps, T-shirts and other trinkets. Instead the shopkeeper relies heavily on visitors to nearby museums.

“It’s very key with the museums opening,” said Anne Purcell, director of hospitality market analytics for the northeast region at CoStar Group.

Between the 555-foot (170-meter) Washington Monument obelisk and a memorial to World War II, Read Scott Martin sat on his pedicab, patiently waiting for customers to emerge from the crowd.

At the moment he gives about three or four tours a day, but that can double on weekends.

“The last few weeks, it was improving,” he said, especially since the city’s Cherry Blossom Festival in the spring. His optimism is boosted by increasing arrivals of tourists from Asia and Latin America.

One of them is 17-year-old Valeria, who came from Peru for a week-long visit, posing for photos in front of the White House with her little sister and parents.

“We wanted to come before the COVID-19 but we have to cancel our trip,” she said.

However, the overwhelming majority of visitors are from other US states coming to see family, or tourists stopping by on their way to New York.

Ghania and Abdel, who live in Los Angeles, were in Washington to visit their daughter Shiraz, 26, who just graduated from Georgetown University.

“This is our first trip in just over a year,” the couple originally from Algeria said in French. “We were waiting to be fully vaccinated and for the city to get a little busier.”

But these leisure travelers are not the ones who typically fill hotel rooms.

Hotel occupancy in Washington, DC on Saturday, May 1 was only 43.4 percent, slipping to 42.4 percent the following Saturday, according to STR, which provides data and analysis for the industry.

That is far from the 80.3 percent and 78.6 percent recorded on the first two Saturdays in May 2019.

“Tourism is only one component of the city’s business,” said Purcell, noting that Washington is “very reliant” on conventions and business travel.

With travel restrictions still in place for many countries including large parts of Europe, the tourism sector is still struggling and its recovery is uncertain.

“It’s still very unclear whether business travel will return to pre-pandemic levels because everyone has gotten so used to doing so much online,” Purcell said.

In 2019, Washington welcomed 1.8 million visitors from abroad, led by China, Britain and India, and 22.8 million domestic visitors, according to Destination D.C.

While waiting for the return of international business travelers, the organization will soon launch a major advertising campaign to target the American public.