LyrArc Article Gist
Sony's efforts to buy out Ericsson's 50% share of Sony-Ericsson joint venture in cell phone devices. Analysts estimate the value of Ericsson's stake at 1-1.25 billion euros. For Sony it is critical to become a major player in the smartphone business. Smartphones are carried by consumers everywhere and offer the opportunity to link smartphones to its online music, games and videos. The Sony-Ericsson venture failed to catch the smartphone trend early. After the launch of the Sony iPad, Sony sees significant opportunities in coming up with newer smartphone models and leveraging its technological strengths. This can only be done by having complete control over the smartphone business and having it in-house. Ericsson also sees it this way. Sony Ericsson Chief Bert Nordberg stated recently that the smartphone business has more in common with Sony than Ericsson. Ericsson's strengths are in heavy engineering and telecommunications, business to business, which are in contrast to the consumer emphasis at Sony. The Sony-Ericsson venture is barely profitable, with net profits of 90 millon euros for sales revenue of 6.3 billion euros in 2010. The strength of the Japanese yen, and the firmer valuation after the venture turned profitable in 2010- after two years of losses in 2008 and 2009- make a buyout of Ericsson's stake a good move for Sony....

LyrArc Article Gist
Alan Mulally talks to Charlie Rose about cost competitiveness, negotiations with the UAW, creating jobs, and the repayment of $20 billion of the $23.5 billion borrowed in 2006. Mullaly points out that 70% of R&D is connected with design and manufacturing- all the technology that goes into designing and building and the associated R&D.

LyrArc Article Gist
Nokia's failure to build the smartphone before Apple and other competitors. This comes after investment in R&D by Nokia exceeded that of Apple and Google in the last decade. The focus was on pure R&D as opposed to building products using new technologies and staying ahead of the curve.

LyrArc Article Gist
Foxconn announces salaries for workers would increase by 16-25% to about $400 a month before overtime. Foxconn plans to reduce overtime. Foxconn is a major supplier in China for Apple Computer.

LyrArc Article Gist
Nokia announced a loss of 929 million euros for the first quarter of 2012. Sales declined from 10.4 billon euros to 7.4 billion euros in the same quarter prior year. The only bright spot for the company is that the Lumia 900 sold throught AT&T has made a successful launch in the U.S. Nokia CEO Elop says the phone is sold out in stores in the U.S. Lumia sales were 2 million in the 1st quarter of 2012, at an average price of 220 euros ($290). Nokia's strategy now is to bring the Lumia line including the lower end Luma 610 phone to Asian markets by June- to China, Singapore, Vietnam, Taiwan, Indonesia and Malaysia. Nokia's biggest problem is the older Symbian phones, which consumers are passing by and which now have to be discounted rapidly or replaced quickly with the Lumia line. The other related problem is falling margins on basic phones as Chinese competitors discount heavily- basic Nokia phone prices fell 18% to 33 euros ($43) from 40 euros or($52) the prior year. The speed in the drop in business for mobile phones can be guaged from the sales decline of 40% in the 1st quarter from $9.3 billion to $5.6 billion. Things are made worse by the 772 million euro ($1 billion) charge taken for Nokia Siemens Networks, a network joint venture with Siemens. Sales for Nokia Siemens fell 7% in the first quarter to $3.8 billion. Nokia Siemens has 53 contracts to build new mobile networks with Long Term Evolution Technology more than competitors Ericsson and Huawei, according to Nokia Siemens. Everything now depends on the speed with which Nokia can move to its Lumia line across the board, especially in China....

LyrArc Article Gist
Plans to introduce its Luma line to China by June 2012 in cooperation with China Telecom. It is betting on Chinese demand for smartphones to recover. Sales of CDMA phones- China Telecom uses CDMA technology- are expected to double to 60 million in 2012 from 30 million in 2011. China provided 17% of Noka sales in 2011, mostly basic or older phones. The challenge is now to get the Lumia line up and running fast. Nokia's timing is right as smartphones are just beginning a surge in China- IHS forecasts an increase from 65 million in 2011 to 120 million in 2012. Nokia's advertising and marketing and close work with China Telecom has also to kick in for it to maximize on this opportunity.

LyrArc Article Gist
Strong competition from Samsung in emerging markets is another hurdle facing Nokia in its plans for recovery.

LyrArc Article Gist
Wessel describes the changes in American manufacturing as it goes through some of the same changes that happened in Germany in the years after reunification. With high unemployment German manufacturing companies worked with unions and the government for wage restraint over the last decade, resulting in wages barely keeping up with inflation. The increase in productivity and wage restraint helped Germany become more competitive with factories in Asia and Eastern Europe. Wages are now increasing with larger wage increase negotiated by the unions in Germany, as skilled labor is becoming scarce. In the U.S. Labor Department figures show an increase in output per hour in American manufacturing of 13% in the last 5 years and 21% in the five years before that. Typical of the wage changes in manufacturing- American Axle & Manufacturing plant in Three Rivers, Michigan hires assembly workers at $10 per hour, with older "legacy workers" making $18 per hour. General Electric brought back manufacturing work from Mexico paying workers $13 per hour for new hires, compared to to $21- $23 in prior years. At GM, Ford and Chrysler workers make $16-$19 per hour in base pay compared to older workers with legacy rates of $29-$33. The Bureau of Labor Statistics shows earnings for production workers in manufacturing averaging $19.15 per hour in April, which is where they were in 2000 adjusted for inflation. The impact of this large increase in productivity with new machinery and production methods, and the wage reductions in manufacturing, is a return of offshored jobs. Wages increased in China and Mexico in the last decade. After a 35% decrease in the number of manufacturing jobs in the U.S. from 1998-2010, the number of jobs has increased by 4.3% to 11.9 million in April 2012, according to the Labor Department....

LyrArc Article Gist
McDonald's is seeing declining sales in the U.S. The percentage of people in the U.S. going to McDonald's declined by 12.9% in the 19-21 age group and was flat for the 22-37 years age group, according to Technomic. Younger Americans especially are seeking out healthier alternatives with emphasis on fresh food. Another competing trend is fast casual restuarants such as Panera Bread. Fast casual restaurants increased from 9000 to 21000 in the last 10 years, while McDonalds has remained at 14,000. Chipotle started in 1993 and now has 1600 locations. Five Guys has 1000 locations. Consumer Reports surveyed 32,000 subscribers and rated McDonalds as the last in taste of 20 burger chains. Consumer Reports gave as a reason millenials and younger consumers who will try hard to get the right food. Problems in Russia about sanitary conditions and declining sales in China after the government accusations about a key supplier using expired meat also add to problems. Increasing concern about healthcare and obesity also add to the search for alternatives and careful selection of meals, especially among younger educated buyers....

LyrArc Article Gist
Under new CEO, Georges Plassat, Carrefour focusses more on Europe and reduces expansion in emerging markets. As part of this strategy Carrefour buys 127 malls in which it operates stores and forms a separate propoerty company in which it owns 42%. This reverses the decision in 2001 to sell 150 malls partly to finance the push into China, Brazil and Argentina and other European countries. The prior CEO, Lars Olofsson, increased emphasis on hypermarket stores and expanded presence in emerging markets. Carrefour share price took a 60% drop in 2010-2012 and is gradually recovering. Plassat's strategy is to go back to focus on Europe and withdraw from poorly performing places such as Greece, Portugal, Indonesia and Columbia.