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Monthly Archives: July 2013

Opinion »

Op-Ed: Shirking Responsibility in the Gulf

BP is now engaged in an aggressive campaign to limit how much it pays for the losses caused by its reckless behavior.

They are not using these objects, of course, but clicking on the pictures of them in popular word-processing programs like Microsoft Word or Google Docs. The icons linger like vestigial organs of an old-style office, 31 years after I.B.M.’s personal computer brought work into the software age. They symbolize an old style of office software, built for the time when the desktop computer was new and unfamiliar.

But no longer are workers tethered to a desk, or even to an office; we are all toting around laptops, tablets and smartphones to make every place a workplace. And so office software is changing. These days, what is important is collaboration, small screens, fast turnarounds, social media and, most of all, mobility.

“The way people use things is fundamentally changing,” said Bret Taylor, chief executive of Quip, a start-up offering document-writing software that focuses more on mobile than desktop work.

Mr. Taylor, 33, is one of the best-regarded young software engineers in Silicon Valley. He helped create Google Maps before serving as Facebook’s chief technical officer. His co-founder, Kevin Gibbs, also 33, helped create Google’s data centers and as a side project developed the software that suggests completions when people start to type questions into Google search.

Their company is one of several that are developing office software for the mobile world. Some of the new programs still borrow from images of old-fashioned work in their design. But the capabilities they offer are decidedly up-to-date.

Last month Box, an online service for storing documents, pictures and other data, bought Crocdoc, a company that makes it possible to view Microsoft Word documents and other popular file formats across a variety of devices at the right size for whatever screen is being used at the time. Evernote, another online storage outfit, allows people to write, edit and share notes together, instead of e-mailing multiple versions of a Word document to one another.

Sam Schillace, Box’s vice president for engineering, wrote the original program that became Google Docs, which was introduced only six years ago.

He explained that in a mobile world, where everyone is in nearly constant contact, speed and ease of use are more important than lots of font choices. “We were guilty of taking the existing nature of documents,” he said, “but six years ago connectivity was a question. Now everything is connected all the time.”

Both Microsoft and Google are scrambling to make their products reflect a work environment where PCs exist alongside other devices. There is a mobile version of Microsoft Office, which includes Microsoft Word, but it can only be used to edit certain kinds of documents and collaboration is limited. One reason for this, the company says, is that it does not want to force its user base to relearn too much, too quickly.

“We have one billion users of Office,” said Julia White, general manager of Office marketing. “You can’t expect them to change every day.”

Still, social media touches, such as “liking” an e-mail to show you’ve read it instead of writing a response, are likely to be seen in the future, she said.

Quip’s product is for now fully available only for Apple’s mobile devices and laptops. It combines instant messaging with document creation, storage and sharing in a primarily touch-screen environment.

Tap an icon of a manila folder and the material inside appears, which any user can organize as they see fit. Tapping one of those documents brings it up to be written, edited or commented on.

Like on Facebook, people’s pictures appear alongside their comments. The pictures also appear on any folder or document a person has open, making it easy to start working with someone else.

This article has been revised to reflect the following correction:

Correction: July 31, 2013

An earlier version of this article misspelled the given name of a Stanford University researcher. He is Mathias Crawford, not Matthias.

The gross domestic product grew at an annual rate of 1.7 percent, hardly indicative of an economic boom, let alone enough to bring down elevated levels of unemployment soon. It is also the third quarter in a row in which growth failed to top 2 percent, the average since the recession ended in 2009.

Still, the increase was an acceleration from growth in the first quarter of 2013, which was revised downward to 1.1 percent from an earlier estimate of 1.8 percent by the Bureau of Economic Analysis.

“It was a reasonable performance,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “In the long run, it’s not enough but I’ll take growth wherever I can get it.”

The economy’s trajectory is being closely watched by the Federal Reserve as it determines whether to ease its huge stimulus efforts. Fed policy makers will conclude a two-day meeting Wednesday and issue their latest statement on the economy early Wednesday afternoon.

On Wall Street, stocks rose modestly as traders readied for the Fed announcement, watching closely for any change in the language of the statement that might indicate the central bank’s course.

Many economists had anticipated growth of below 1 percent in the second quarter, as automatic spending cuts imposed by Congress and higher taxes that went into effect this year began to bite.

Federal spending did decline by 1.5 percent in the second quarter, but the drop was not as severe as the falloff in government spending in earlier quarters. Meanwhile, exports rose 5.4 percent, reversing a decline in the first quarter.

Most experts predict growth will pick up in the second half of 2013 as the drag from the federal spending cuts and higher taxes begins to fade.

“On balance it was a positive report showing a healthier economy than previously believed,” said Michelle Meyer, senior United States economist at Bank of America Merrill Lynch. “But growth has slowed in the past few quarters, reflecting fiscal tightening in Washington.”

The chairman of the Federal Reserve, Ben S. Bernanke, has hinted the Fed will soon begin tapering, or winding down part of its extensive bond purchases aimed at stimulating the economy, but the timing is uncertain.

On Wall Street, analysts and traders are speculating the Fed could start tapering as early as September if the economy enjoys healthier growth and the job situation improves, or it could be delayed to December or beyond on evidence of weakness.

While the Federal Reserve is not expected to announce a change in policy later in the day Wednesday, the economic data in the second quarter paints a more vigorous picture than anticipated and may increase the odds that the Fed will taper sooner rather than later.

Indeed, there were pockets of strength in Wednesday’s data from the Bureau of Economic Analysis. For example, residential fixed investment increased by 13.4 percent, a sign the housing sector continues to recover. Personal consumption rose 1.8 percent, as consumers showed some resiliency, especially given the increase in payroll taxes at the beginning of 2013.

Higher inventories, always a volatile component of economic reports, added 0.41 percentage point to overall growth. But analysts cautioned that inventory estimates were often adjusted as more data comes in, raising the possibility that second quarter growth could be revised downward in the future.

More clues about the economy’s performance will come Friday when the Labor Department reports on monthly job creation and the unemployment rate. Economists estimate the economy created 185,000 jobs in July, according to a Bloomberg survey, a bit below the 195,000 level in June, with the unemployment rate falling to 7.5 percent, from 7.6 percent.

The latest data come as the government performed its first comprehensive revision in how the economy is measured since July 2009.

As a result, the estimated growth in 2012 was actually healthier than originally thought. Last year’s annual rate of growth in economic output was revised upward to 2.8 percent, from 2.2 percent. The government also slightly adjusted the estimate of the severity of the recession from 2007-9, saying that the economy contracted at annual rate of 2.9 percent, instead of 3.2 percent.

WASHINGTON — After months of frustrating delays, a chemical company announced Wednesday that it had produced commercial quantities of ethanol from wood waste and other nonfood vegetative matter, a long-sought goal that, if it can expanded economically, has major implications for providing vehicle fuel and limiting greenhouse gas emissions.

The company, INEOS Bio, a subsidiary of the European oil and chemical company INEOS, said it had produced the fuel at its $130 million Indian River BioEnergy Center in Vero Beach, Fla., which it had hoped to open by the end of last year. The company said it was the first commercial-scale production of ethanol from cellulosic feedstock, but it did not say how much it had produced. Shipments will begin in August, the company said.

The process begins with wastes — wood and vegetative matter for now, municipal garbage later — and cooks it into a gas of carbon monoxide and hydrogen. Bacteria eat the gas and excrete alcohol, which is then distilled. Successful production would eliminate some of the “food versus fuel” debate in the manufacturing of ethanol, which comes from corn.

“Biomass gasification has not been done like this before, nor has the fermentation,” said Peter Williams, chief executive of INEOS Bio.

The plant, which uses methane gas from a nearby landfill, has faced a variety of problems. One was getting the methane, which is a greenhouse gas if released unburned, to the plant’s boilers. Another was its reliance on the electrical grid.

The plant usually generates more power than it needs — selling the surplus to the local utility — and is supposed to be able to operate independently. But when thunderstorms knocked out the power grid, the plant unexpectedly shut down and it took weeks to get it running again, said Mark Niederschulte, the chief operating officer of INEOS Bio.

“We’ve had some painful do/undo loops,” he said.

The plant has produced “truckloads” of ethanol, said Mr. Williams, but still has work to do to improve its yield. Mr. Niederschulte said, “Now we want to produce more ethanol from a ton of wood, rather than just making ethanol from a ton of wood.”

An official at the Environmental Protection Agency, which grants valuable credits to companies that make renewable fuel, said that the agency could not verify the claim that INEOS was first, because that might give away confidential commercial information. But the agency’s figures show that, so far, there was been very little production of ethanol from cellulose.

Congress laid out a quota for production of biofuels from nonfood sources, but the agency has had to cut it back every year because of lack of production.

INEOS has a goal of eight million gallons a year.

If ethanol can be produced at reasonable cost from abundant nonfood sources, like yard trimmings or household trash, it could displace fuel made from oil, and that oil, and its carbon, could stay in the ground, reducing the amount greenhouse gases in the atmosphere, experts say. Carbon from wood scraps or garbage would enter the atmosphere via cellulosic ethanol, but cutting down a tree or trimming a garden creates space for new growth, which absorbs carbon dioxide from the air.

In the second quarter — Comcast’s first full quarter owning 100 percent of NBCUniversal, in which it had previously held a 51 percent stake — earnings rose to $1.7 billion, or 65 cents a share, from $1.35 billion, or 50 cents a share, in the period a year earlier. Wall Street analysts had been expecting earnings of 63 cents a share.

Total revenue rose 7 percent, to $16.3 billion, from the second quarter of 2012, lifted by the continued growth of the company’s broadband Internet and business products. Free cash flow increased 25 percent, to $1.9 billion. Comcast was the first major television and Internet provider to report quarterly earnings, so its healthy results may augur more good news when others report in the weeks to come.

It is broadband, not cable television, that is generally bolstering cable companies’ results these days, because nearly nine out of 10 American households already subscribe to some sort of TV, but only two-thirds subscribe to broadband.

Comcast has been losing TV subscribers to DirecTV and Verizon FiOS for years. It lost another 159,000 in the second quarter, but the rate of loss has slowed lately. The company squeezed a 2.7 percent revenue gain from its television business, largely through rates increases and subscribers who chose more expensive packages.

Its revenue gain on the broadband side, however, was 8 percent.

“Cable had outstanding growth, particularly in high-speed Internet, and NBCUniversal had strong performance across all of its businesses,” Brian L. Roberts, the chief executive of Comcast, said in a statement. He credited the company’s “focus on delivering innovative products and a superior customer experience is driving our success, including stronger video, voice and business services results in cable.”

This article has been revised to reflect the following correction:

Correction: July 31, 2013

Because of a rounding error, an earlier version of the headline with this article misstated the increase in earnings for Comcast. Earnings increased 28.6 percent, not 26 percent, in the second quarter.

The Siemens supervisory board named Joe Kaeser, a 56-year-old with a long career at the company, to replace Peter Löscher, 55. Mr. Löscher was brought in to lead the company, one of Germany’s largest employers, in 2007 amid a corruption scandal, but recently took the blame for a series of operational problems and a decline in sales.

Mr. Löscher’s departure was a foregone conclusion after Siemens said on Saturday that the supervisory board planned to vote on his dismissal at a meeting Wednesday. In a statement on Wednesday, Siemens said Mr. Löscher was leaving by mutual consent.

“During the past week I came to the conclusion that the foundation of trust necessary for me to remain was lacking,” Mr. Löscher said in a statement.

An earnings report by Siemens on Wednesday showed an improvement in net profit and new orders during the three months through June, Siemens’s fiscal third quarter, but a decline in sales. In addition, third-quarter operating profit fell at the company’s most important divisions, and Siemens said it expected profit for the full year to fall to 4 billion euros, or $5.3 billion, from 4.6 billion in 2012.

Net profit rose 43 percent to 1.1 billion euros, Siemens said, but the gain came largely from the Osram lighting unit, which the company has spun off in an initial public offering.

Among the company’s four divisions, operating profit fell 31 percent to 1.3 billion euros, Siemens said, largely because of the cost of a restructuring program. Sales fell 2 percent to 19.25 billion euros, while new orders rose 19 percent, to 21.14 billion euros.

Much of the jump in orders came from a single contract to provide regional trains for the expansion and improvement of rail service in greater London known as Thameslink.

Mr. Kaeser, who has worked at Siemens since 1980 and been chief financial officer since 2006, is seen as a steady hand who will help regain the confidence of employees weary of constant restructuring plans.

“Our company is certainly not in crisis, nor is it in need of major restructuring,” Mr. Kaeser said in a statement. “However, we’ve been too preoccupied with ourselves lately and have lost some of our profit momentum vis-à-vis our competitors.”

Mr. Löscher, an Austrian who came to Siemens from the United States drug maker Merck and previously was a top executive at General Electric, was given credit for restoring the German company’s reputation after a foreign bribery scandal that had decimated the ranks of Siemens’s top management.

But recently Mr. Löscher took the blame for delays in delivering high-speed trains for the German railroads and problems completing a huge offshore wind generation project in the North Sea. Those problems led to a profit warning last week that presaged Mr. Löscher’s departure.