Paw Print Rewind #037

Editor’s Note: This is the Paw Print Rewind, a daily recap of the top news headlines.

VW emissions issue extends to another 75K vehicles

Volkswagen dealership

Volkswagen has told U.S. regulators that emissions issues in larger luxury cars and SUVs extend to an additional 75,000 vehicles dating back to 2009, according to the U.S.’ Environmental Protection Agency (EPA).

The disclosure widened the VW scandal, which previously focused mainly on smaller-engined, mass-market cars.

During a Thursday meeting, VW and Audi officials told the EPA that the issues extend to all 3.0-liter diesel engines from the 2009-2016 model years. The new disclosure covers a total of 85,000 vehicles, according to the EPA.

“[The auxiliary emissions control equipment used] should have been reported.”

-Dave Clegern, California Air Resources Board spokesman

“We are willing to take another crack at reprogramming (the auxiliary emissions control software] to a degree that the regulators deem acceptable.”

-Brad Stertz, Audi spokesman

According to Stertz, the auxiliary emissions control software is legal in Europe, but Audi didn’t “properly notify regulators” about the device. The cost of reflashing the software is in the “double digits millions of euros.”

Study: GM, Ford, Fiat Chrysler labor costs rise in new pacts

Hourly labor costs will rise to an average of $60/auto worker by 2019 if proposed contracts at General Motors and Ford are ratified by rank-and-file members of the United Auto Workers union, according to a study released on Friday.

Hourly wages account for slightly less than half of total labor costs for UAW workers, which include healthcare and other benefits.

Ford’s current labor costs average $57/hour and GM’s average $55/hour, according to the study performed by the Center of Automotive Research’s Kristin Dziczek and private consultant Arthur Schwartz.

Fiat Chrysler Automobiles’ costs will rise to $56/hour by 2019, up from $47/hour before its workers ratified a new four-year contract that went into effect last month.

The rise of Fiat Chrysler’s labor costs was the most among Detroit’s Big Three automakers, and narrowed the cost advantage the company still maintains over GM and Ford, according to the study.

On Wednesday, UAW workers said that with three-fourths of votes counted, 52% of workers were against the new pact before a Chicago auto plant voted 68% against the contract.

GM’s four-year contract was approved for ratification by 55% of UAW members, but skilled trades workers turned it down, delaying its ratification.

Hourly labor costs are lower for most foreign automakers with U.S. plants, which put a lid on wages and benefits of the Detroit’s Big Three automakers. According to the Center for Automotive Research, Toyota’s labor costs are $48/hour, and are $49/hour at Honda, and $42/hour at Nissan.

Apple wins ContentGuard Holdings patent trial

Apple China Android

According to a ruling made Friday by a Texas federal court jury, Apple didn’t infringe on five antipiracy patents owned by Pendrell subsidiary ContentGuard Holdings.

The jury also found that Apple didn’t prove that the patents were invalid. No damagers were awarded to ContentGuard.

Sprint raising $1.1 billion from Softbank-led financing deal


Sprint will raise $1.1 billion in a financing deal led by Softbank.

Citing the deal, the Overland Park, KS-based company cut its full-year adjusted EBITDA forecast to $6.8-$7.1 billion from $7.2-$7.6 billion.

The company now expects an operating loss of $50-$250 million for the year, compared with a previous $200-$500 million forecast profit, according to CFO Tarek Robbiati on a conference call.

The lease-back deal is aimed at reducing costs resulting from a switch to new financing plans for phones that allow monthly payments from traditional two-year contracts.

The new plans are delaying money coming into Sprint for phone payments and has led to a cash burn as the company needs to make upfront payments to phonemakers.

“It was critical that they get the deal done … but it is smaller than investors would have hoped for.

“Coupled with their recent 50% off price cut, it’s not really enough to stop the bleeding.”

-Craig Moffett, MoffettNathanson analyst

Funding for the deal with Mobile Leasing Solutions (MLS), the company formed by SoftBank and other investors, would come from several lenders including international banks and leasing companies.

According to Sprint, the company expects to sell 2.5 million leased devices with an estimated book value of $1.3 billion to MLS.

Tesla recalling 90K Model S sedans to check seat belts

Tesla Model S

Tesla Motors is recalling all 90,000 Model S sedans produced to check for a possible defect in the front seat belt assemblies, according to the Palo Alto, CA-based company.

The recall is worldwide, with most affected vehicles in the United States.

According to Tesla, the recall’s costs will be “immaterial.” The problem was discovered after a single report to the company in early November of a seatbelt assembly breaking when a customer in the front passenger seat of a Model S on the road in Europe turned to talk with passengers in the rear seat.

There have been no accidents or injuries related to the problem, according to a Tesla spokesman. The company emailed owners of the battery-powered luxury sedan, asking them to bring their cars to one of about 125 Tesla service centers worldwide for an inspection of a bolt that attaches the seat belt mechanism to the body of the car.

“Our investigation was unable to reveal any root cause. We are going to look at every single car.

“We expect the vast majority of seatbelts to be fine.”

-A Tesla spokesman

Tesla may send service technicians to customers if necessary, according to the spokesman.

Fixing an improperly installed belt assembly will take about six minutes, according to company officials.

Tesla tells customers that they can test the seat belt assemblies themselves by pulling “very firmly” on the lap portion of the belt with a force of at least 80 pounds, but the company believes customers should still visit a Tesla service center.

U.S. clears genetically modified salmon for human consumption


U.S. Food and Drug Administration (FDA) health regulators cleared the way for a genetically engineered Atlantic salmon to be farmed for human consumption on Thursday to be the first approval for an animal whose DNA was scientifically modified.

The product, made by Waltham, MA-based AquaBounty Technologies, won’t require special labeling because it is nutritionally equivalent to conventional farm-raised Atlantic salmon, according to the FDA.

Kroger, the nation’s largest traditional grocery chain, has “no intention of sourcing or selling genetically modified salmon, according to company spokesman Keith Dailey. Trader Joe’s and Whole Foods Market also confirmed their intention to not carry the product.

“[Target is] not currently planning to offer genetically engineered salmon.”

-Molly Snyder, Target spokeswoman

According to AquaBounty CEO Ronald Stotish, the approval is “a game-changer that brings healthy and nutritious food to consumers in an environmentally responsible manner without damaging the ocean and other marine habits.”

The approval for the fish, which will be sold under the AquAdvantage brand, requires the salmon to only be raised in two designated land-based and contained hatcheries in Canada and Panama. According to FDA officials, all of the fish will be female and reproductively sterile to prevent inadvertent breeding of the genetically modified fish with wild salmon.

The agency also issued draft guidelines Thursday on how food manufacturers could identify whether the salmon in their products is genetically modified, stating that this labeling will be voluntary.

According to Stotish, AquaBounty will follow the FDA’s rule for labeling and currently “there would be no requirement for labeling.”

“Frankly, it’s an area that we don’t have to address today.”

-Ronald Stotish, AquaBounty Technologies CEO


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