Archive for the ‘Business’ Category

Tata gets Jaguar, Land Rover; announcement today

Thursday, March 27th, 2008

US automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to Tata Motors for more than $2 billion, according to a sources. The figure is much less than Ford originally paid for either of the brands.

Ford has been looking to sell Jaguar and Land Rover to strengthen finances after losing $2.7 billion last year and $12.6 billion in 2006.

Ford, which signed the deal on Tuesday, plans to publicly announce the transaction in New York on Wednesday, said another source.

The deal will also see Ford pay about $598 million into Jaguar and Land Rovers’ pension funds, according to unions. Ford declined to comment, adding “our first responsibility is to communicate with our employees.”

The sale had been expected at the start of this month, but it was delayed as the two firms discussed their future relationship, including technology sharing and Ford’s provision of engines and body parts for the two brands.

Tata, India’s top vehicle maker, has been in talks with Ford since it was chosen as the frontrunner to buy Jaguar and Land Rover a few days into 2008.

Tata is pursuing the deal to gain a substantial foothold outside India. But analysts have questioned how Tata will incorporate the luxury brands into its stable of sturdy trucks and functional passenger cars, including the Nano, the world’s cheapest car which it unveiled in January.

While Land Rover has generated three years of record sales with its iconic SUVs, the fit of Jaguar is far less clear. Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, is spinning off Jaguar and Land Rover to focus on turning around its loss-making operations in North America.

The sale will include a commitment by Tata to continue buying engines from Ford, according to unions.

All Jaguar and Land Rover’s petrol engines are built in a Ford plant in South Wales, supporting hundreds of jobs there. Diesel engines come from Ford’s factory in Dagenham, east London.

One of the sources knocked down reports on Indian television earlier on Tuesday that the deal had been closed for $2.65 billion.

“That figure of $2.65 billion is highly unlikely,” one source close to the deal said of the report.

“You have to come south from that by quite a bit.” Ahead of the TV report, shares in Tata Motors rose 2.7 percent to a three-week closing high of 679.95 rupees, in a Mumbai market that surged 6.1 percent. Ford shares were down 0.2 percent at around $5.95 at 1813 GMT.

 

Why Dyslexics Make Great Entrepreneurs

Tuesday, December 18th, 2007

When Alan Meckler, the CEO of IT and online imagery hub Jupitermedia (JUPM), was accepted to Columbia University in 1965, the dean’s office told him he had some of the lowest college boards of any student ever admitted. “I got a 405 or 410 in English,” he recalls. “In those days you got a 400 just for putting your name down! Yet I was on the dean’s list every year I was there, and I won a prize for having the best essay in American history my senior year.”

It wasn’t until years later, at age 58, that Meckler learned he was dyslexic. He struggles with walking and driving directions, and interpreting charts and graphs. He prefers to listen to someone explain a problem to him, rather than sit down and read 20 pages describing it. As a youth, Meckler discovered a unique strength—baseball—and cultivated it religiously to compensate for weakness in other areas.

Asset or Handicap?

All of these things, according to Dr. Sally Shaywitz, a professor of learning development at Yale University, are classic signs of dyslexia. Shaywitz has long argued that dyslexia should be evaluated as an asset, not just a handicap. She recently co-founded the Yale Center for Dyslexia & Creativity, dedicated to studying the link between the two. “I want people to wish they were dyslexic,” she says. “There are many positive attributes that can’t be taught that people are generally not aware of. We always write about how we’re losing human capital—dyslexics are not able to achieve their potential because they’ve had to go around the system.”

It’s not clear whether dyslexics develop their special talents by learning to negotiate their disability or whether such skills are the genetic inheritance of being dyslexic. It’s a question Shaywitz plans to explore, along with trying to change the way dyslexia is viewed in the educational system and the business world. One project at the center will be an education series to train executives to recognize outside-the-box thinkers who don’t perform well on standardized tests.

Shaywitz recently tested a well-known CEO (whom she declined to identify) for dyslexia. The man confessed that he’d hired an outside company to help identify future leaders within the organization by administering a reading test. “‘The irony is,’ I told him, ‘you’re eliminating and sifting out all the people like yourself who might actually be the ones to be creative and make a difference.’”

Coping Skills

That kind of rejection, along with a penchant for creativity, may help explain why so many dyslexics are inclined to become entrepreneurs. Julie Logan, a professor of entrepreneurship at Cass Business School in London, believes strongly in the connection.

In a study to be published in January, Logan found that 35% of entrepreneurs in the U.S. show signs of dyslexia, compared to 20% in Britain. Logan attributes the gap to a more flexible education system in the U.S., vs. rigid tracking in British schools, and better identification and remediation methods. “Most of the people in our study talked about the role of the mentor and how important that had been,” Logan says. “The difference seems to be somebody who believes in you in school.”

The broader implication, she says, is that many of the coping skills dyslexics learn in their formative years become best practices for the successful entrepreneur. A child who chronically fails standardized tests must become comfortable with failure. Being a slow reader forces you to extract only vital information, so that you’re constantly getting right to the point. Dyslexics are also forced to trust and rely on others to get things done—an essential skill for anyone working to build a business.

“People really struggle to delegate, and these people have learned to do that already,” she says. “If you’re bogged down in the details, you’re not out there looking at where your business needs to go.”

Lemonade from Lemons

Paul Orfalea, who founded the copy-and-graphics chain Kinko’s 37 years ago, has both dyslexia and attention-deficit hyperactivity disorder. He proudly attributes much of his business success to an inability to do things most others can. “I would always hire people who didn’t have my skills,” he says. “My secret was to get out of their way and let them do their job.” He is also inured to failure. “You know what’s great about a C student? They have risk-reward pretty much well-wired,” he says. “A students are always putting in maximum effort, and C students say, ‘Well, is it really worth it?’”

Cisco Systems (CSCO) CEO John Chambers says dyslexia helps him step back and see the big picture. His third-grade teacher discovered his reading trouble; he says alternative teaching methods and supportive parents helped him learn to deal with it at an early age. “Dyslexia forces you to look at things in totality and not just as a single chess move. I play out the whole scenario in my mind and then work through it.… All of my life, I’ve built organizations with a broad perspective in mind.”

Meckler, who was one of the first to convert his IT trade publications into a sustainable, ad-supported business model for Web publishing, also strives for the big picture and has little patience for details. “In business meetings…I can hear a whole bunch of people talking about a lot of things, and I seem to be able to cut right to the chase,” he says. “I think my mind has been trained…to zero in on the salient point.”

Foundations for Successful Dyslexics

Those entrepreneurs who have embraced their dyslexia have also made it their personal mission to pave an easier way for the next generation. Discount brokerage pioneer Charles Schwab (SCHW) started the Charles & Helen Schwab Foundation, a resource center for kids and parents to overcome learning and attention disorders. Orfalea founded the Orfalea Family Foundation, to support and identify different learning styles and try to remove the stigma that comes with them.

Ben Foss, a researcher in assistive technologies in Intel’s (INTC) Digital Health Group, started a nonprofit and made a documentary film about the first man in America to win an employee discrimination case based on dyslexia. He’s now working to adapt technologies for the blind to also assist people with learning disabilities, too. Despite the titans of business disclosing their dyslexia to the world, Foss says it’s still daunting to climb the corporate ladder as a dyslexic. “If you’re John Chambers, Charles Schwab, or Richard Branson, sure. But if you’re a corporate VP in the mid-ranks, there’s a very large disincentive to saying you’re dyslexic, because you’re still being evaluated,” he says. “Ironically, talking about it on your terms is what allows you to become successful.”

Of course, being a misfit often lends itself to great entrepreneurship. Health-care entrepreneur and real estate magnate James LeVoy Sorenson has more than 40 medical patents to his name and is responsible for inventing the first computerized heart monitor, the first disposable paper surgical masks, and the first blood-recycling system for trauma and surgical procedures. He also dropped out of community college at 18, and was told by grade-school teachers he was either “slow-witted or developmentally disabled.”

At 86, Sorenson says overcoming dyslexia trained him to be persistent and solve problems in new ways: “I like to add one word to the end of many sentences: ‘yet.’ Instead of saying, ‘I can’t do it,’ I say, ‘I can’t do it—yet.’”

Source - Business Week 

Cethar makes a power move with PE backing

Tuesday, December 18th, 2007

For private equity (PE) players, mid-sized, family-owned companies in India still retain their charm. Leading PE firms are learnt to have evinced interest in a major fund-raising programme by Trichy-based Cethar Vessels, a Rs 1,100-crore boiler manufacturer, which has lined up an ambitious expansion programme to meet the growing demand for power generation.

Private equity players such as Chryscapital, CVC and UTI Ventures are some of the names that the closely-held Cethar is learnt to be talking to for offloading part of the promoter stake. The funds infusion could be in the range of $50-100 million, according to people close to the development.

The funds would be used up for Cethar’s expansion programme. The boiler maker had earlier said it would need about Rs 900 crore to build facilities for boiler auxiliaries and pressure parts. It also plans to raise Rs 500 crore from private equity funds and tie up with banks and institutions for the remaining amount.

When contacted, K Subburaj, chairman, Cethar Vessels, told ET: “We have mandated SSKI to find a private equity investor. We are meeting with Chryscapital. But it is one of the many meetings that SSKI is arranging for us. It will be at least a month before an investor is finalised.” Cethar is also likely to soon appoint an audit firm to do financial auditing and get another investment bank to help arrive at a valuation.

The company has been talking to a number of audit firms, including KPMG, for the purpose.Sources said Cethar intends to raise private equity money before March 2008 as it will help the company chip in with additional promoter’s equity for raising funds from banks and FIs. The company, which reported a revenue of Rs 1,100 crore last fiscal and has set its sights on about Rs 1,750 crore in the current year, has plans to go public before 2009.

Source - Economic Times 

About 1 in 5 IBM Employees Now in India

Monday, December 17th, 2007

IBM Corp.’s expansion in developing countries shows no sign of relenting. The technology company revealed Friday that it now has 73,000 employees in India, almost a 40 percent leap from last year.

IBM did not provide updated figures for its work force in the U.S., which has held steady around 125,000 people in recent years.

Nor did IBM project its total head count. It had 355,766 employees worldwide at the end of 2006.

If the total has risen by the same rate as in 2006, almost one in five IBM workers now is in India, its second-largest center.

Like many other technology providers, IBM has rushed to take advantage of the lower labor costs India offers even for highly skilled workers. IBM’s base in India numbered only 9,000 people in 2003, but it was about 53,000 last year.

IBM has been stressing not only the lower expense of working in India but the potential of the Indian market. IBM executives told visiting Indian journalists last week that the company expected to see revenue from the Indian market jump to nearly $1 billion this year, from $700 million in 2006.

Armonk, N.Y.-based IBM is also ramping up in other key developing markets. Its chairman and chief executive, Sam Palmisano, recently formed a new organization that will spur IBM’s investment in emerging economies.

The plan is meant to capitalize on the higher growth rates in the so-called ”BRIC” countries of Brazil, Russia, India and China. IBM’s revenue from those countries rose 18 percent in the first three quarters of this year, even after discounting the benefit of currency fluctuations. IBM’s total employee count in those countries now is nearly 100,000, up from 70,000 a year ago.

IBM’s vice president of financial management, Jesse J. Greene Jr., would not forecast how much more hiring the company still might do in emerging markets. However, he said ”we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.”

Source - Tech2

AMD Promises (Fingers Crossed) a Better 2008

Monday, December 17th, 2007

Amid a flurry of new product announcements, AMD took plenty of time during its annual meeting with New York financial analysts to flagellate itself over the manufacturing problems that made this a year it would rather forget.

The errata problems with the Quad-Core Opteron were front and center, as was the write-down of ATI assets announced yesterday. While the company did talk about 2008 shipment plans and a number of new processors and platforms, including a new eight-core processor, 2007’s financial problems dominated.

“We made some mistakes — shame on us — but with the success we had for four years of nearly flawless execution, we’ve done well,” said Chairman and CEO Hector Ruiz. “I have to say, looking back, we fell into complacency in one area: the difficulty and unpredictability of this increasingly complex technology we are building. So we blew it, we are very humbled by it and we are not going to do it again.”

He also expressed a little dissatisfaction with the low stock price, which many in the audience could do something to help change if they wanted.

“How can anyone conclude our company is worth 40 percent less today than it was a few weeks ago?” he asked.

President and Chief Operating Officer Dirk Meyer added that AMD has done a lot of things “very well” this year, but “we have done one thing very poorly. Namely, we haven’t delivered our quad-core product.”

The company denied claims that it stopped shipment of the Quad-Core Opteron due to the errata problem and said it’s currently spinning up new chips at its Dresden manufacturing facility that fix the problem. It will check those chips in January and begin volume shipments after that. Computers from OEM partners and system builder are expected in the second quarter.

For now, Meyer said he is “maniacally focused on being cash-flow neutral. We don’t want to have to go back to the market to borrow money,” he said, a reference to the 8.1 percent stake the company sold to a United Arab Emirates investment firm.

The company said it expects to break even in the second quarter of 2008 and be profitable beginning in third quarter.

The company also discussed “Montreal,” its first octal-core server processor, which will ship in 2009 along with AMD’s first server platform, codenamed “Piranha.” That platform will feature a new server chipset and HyperTransport 3.0 and support DDR3 memory.

The company also detailed its first notebook platform, called “Shrike.” Shrike is based on AMD’s first accelerated processing unit (APU), dubbed “Swift.”

The APU idea is a combination of a CPU and other processors in one core, such as CPU and GPUs. Swift, accordingly, combines CPU and GPU technology on a single processor die. AMD plans to begin shipping both Swift and Shrike during the second half of 2009.

The company also said it is on schedule to ramp up its 45nm production in first half of 2008, with products in market during second half of 2008. It also said it would reach 32nm in 2010, thanks to its partnership with IBM, which recently announced plans to offer 32nm production capabilities to processor designers.

AMD executives also described moving to a 55nm process for the company’s graphics processors and said it had made a number of wins in the notebook space, which will begin showing up in products starting next year.

In the consumer electronics space, AMD said it sees opportunities in LCD TVs, which continue to grow in popularity. It plans to release new MPEG video processors in 2008 for the HDTV market. It will also release new 2D and 3D graphics chips for the handset market.

Source - InternetNews

The Easy Trillions Are Gone

Monday, December 17th, 2007

The chill is on. Back in June, dealmakers gushed about the hot market after notching a record $2.7 trillion of mergers and acquisitions worldwide in the first half of 2007. With the number of deals down 49% in the credit crunch, sentiments have cooled: Nine percent of dealmakers are calling the M&A environment “excellent,” vs. 49% in midyear, according to exclusive research from the Association for Corporate Growth and Thomson Financial (TOC).

The groups’ biannual survey, which polled 813 private equity executives, investment bankers, lenders, entrepreneurs, and other players in M&A, found that the once-unbridled optimism has been replaced by more realistic expectations. Although the dreams of $100 billion buyouts are gone, most pros expect strong M&A activity. After all, private equity firms are sitting on huge piles of cash after collecting billions from investors in recent years. In the latest quarter they raised $30 billion, down from a record $60 billion in the fourth quarter of 2006.

Don’t expect the same type of deals, though. For one thing, it’s no longer a sellers’ market. Now that stock prices have dropped, 39% of dealmakers figure buyers have the upper hand, up from 13% six months ago.

Some 75% of the 212 private equity firms surveyed, a subset of the group, predict that the number of buyouts will shrink, while 93% figure distressed deals will be in vogue. Deals also may have a more international flavor. Some 43% of all participants think cross-border deals are increasingly important. Yet 46% of the private equity types say the U.S. is still the best place for their deals. Next best: China.

Despite the new mood, buyout firms don’t expect their day-to-day work will change much. Some 80% say they won’t change gears and modify their investment strategy. Of course, they may have to battle strategic corporate buyers over targets more than in the era of easy money. “The pendulum has shifted away from private equity,” says Robert Kaiser, vice-president at Thomson Financial. “In the future, private equity will be lucky to be 25% of U.S. M&A.”

Source - Businessweek