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France's competition authority has ordered Google to negotiate with publishers to pay for reuse of snippets of their content -- such as can be displayed in its News aggregation service or surfaced via Google Search. The country was the first of the European Union Member States to transpose the neighbouring right for news into national law, following the passing of a pan-EU copyright reform last year. Among various controversial measures the reform included a provision to extend copyright to cover content such as the ledes of news stories which aggregators such as Google News scrape and display.
Elon Musk's Tesla told employees on Tuesday (April 8) the company will furlough all non-essential workers and start implementing salary cuts. It's part a continued shutdown of Tesla's U.S. production facilities. Tesla says they plan to resume normal operations on May 4. That's according to an email sent by the company's in-house lawyers which was seen by Reuters. It joins a long list of automakers which have also been forced to furlough U.S. workers as demand for cars plummets. The suspension interrupts Tesla's plans to ramp up production of its Model Y sport utility vehicle. According to Musk, demand for the Model Y was expected to top all of Tesla's other models combined. Tesla said in late March they have enough cash flow to successfully navigate the upcoming period of uncertainty. But for now, pay for salaried Tesla employees will be reduced starting April 13, and cuts will remain in place until the end of the second quarter.
Google's game-streaming service Stadia is now free for anyone with a Gmail account, the company announced today. Assuming you've got a compatible device and controller — and good internet in one of the 14 supported countries — you can sign up right now and get the "Pro" edition with a handful of built-in games for two months. Until today, Stadia was only available via a $129 "Premiere Edition" that came with a controller, though a free "Base" version has been long promised.
To stay connected amid the coronavirus-induced lockdown, people across the world are relying heavily on the Internet, which brightens up prospects for cloud players.
(Bloomberg) -- The bad news is well-known: The coronavirus pandemic could spark the deepest economic downturn of our lifetimes — something between the Great Recession and the Great Depression.Here’s the good news: If countries cooperate and keep their markets open, they could quickly rebound and avoid a repetition of the two darkest economic periods of the past century.That was the message World Trade Organization Director-General Roberto Azevedo delivered Wednesday from his residence on the outskirts of Geneva.During an extraordinary YouTube webcast, Azevedo offered an exit strategy for nations looking to regain their post-pandemic economic footing:Provide a robust fiscal stimulus package to consumers and businesses Contain the health crisis as expeditiously as possible Coordinate international efforts to limit trade restrictionsThat third part is crucial, he said, because “a turn towards protectionism would introduce new shocks on top of those we are currently enduring.”Right now some 70 nations — including the U.S., China and much of Europe — are imposing export curbs on critical medical supplies, according to the University of St. Gallen’s Global Trade Alert.These measures, the nations say, are essential to protect the health of their citizens and first responders. But some restrictions struggle to pass the smell test.Protectionism might be a natural instinct in a health crisis that respects no borders, but like consumer hoarding, it can cause more harm to the greater good. A far better way to propel rapid global economic recovery is for nations to cooperate and avoid unnecessary barriers to trade, Azevedo argued.Global markets should remain free of restrictions “so that we pull each other up and not hold each other down,” he said.While it’s too soon to say if Azevedo’s call for unity will fully resonate with world leaders, President Donald Trump nodded in that direction Wednesday.In a tweet, Trump thanked Indian Prime Minister Narendra Modi for releasing stocks of an anti-malarial drug for possible treatment of the disease.“Extraordinary times require even closer cooperation between friends,” Trump wrote, just two days before a U.S. ban on exports of some personal protective equipment takes effect.Charting the Trade TurmoilThe coronavirus pandemic may cause a deeper collapse of international trade flows than at any point in the postwar era, the World Trade Organization said. The Geneva-based trade body presented two possible scenarios: In an optimistic case, the WTO forecasts global merchandise trade may fall 13% in 2020, while the pessimistic case sees those volumes drop by 32% this year.Today’s Must ReadsNo paychecks | Japan’s three biggest automakers are poised to add almost 32,000 people to the unprecedented ranks of North American workers seeking unemployment benefits. Export ban | The U.S. government’s ban on exports of some personal protective equipment to fight the virus will take effect Friday and will be in place for four months. Output cut | Airbus slashed its aircraft output by a third to about 48 planes a month, in a stark concession to the pandemic and travel restrictions rocking the aviation industry. Labor supply | Poland has leaned in recent years on more than a million workers from Ukraine to sustain its economy. The coronavirus is shaking up that relationship. Not so handy | Hand sanitizer will be hard to find in the U.S. for a long time because there aren’t enough chemicals and plastic containers to meet demand. Stephanomics podcast | Senior trade reporter Shawn Donnan explains how the pandemic has shifted his focus from debates about globalization to looking at the damage happening on the ground right now. Bloomberg AnalysisBritain’s labor woes | Unemployment in the U.K. may have jumped to 6.3% from 3.9%, Bloomberg Economics estimates. Brazil challenge | Coronavirus hits Brazil where it hurts the most, turning already-tepid growth into a recession. Use the AHOY function to track global commodities trade flows. See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities. Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- There has been concern for months in Silicon Valley that the eventual Democratic presidential candidate would be someone who wanted to break up large technology companies. Bernie Sanders’s decision Wednesday to end his campaign effectively ends that scenario, leaving a presumptive nominee—former vice president Joe Biden—who is comparatively content with the way Silicon Valley does business.The turn in the primary race corresponds with an upheaval in political priorities due to the Covid-19 crisis. It’s still uncertain how the aftermath of the pandemic will play out, but the political landscape the industry faces in 2020 has almost certainly been transformed over the last six weeks.The primary process first took a hostile turn to the tech industry last spring when Senator Elizabeth Warren proposed a plan to force Amazon.com Inc., Alphabet Inc. and Facebook Inc. to spin off parts of their businesses. Sanders, the democratic socialist senator from Vermont, later said he would “absolutely” aim to break up large technology companies if elected. At the same time, multiple investigations into allegations of anticompetitive behavior from large technology companies were accelerating.For his part, Biden has called it “premature” to call for breaking up companies like Facebook. The former vice president has criticized tech companies and their leaders, particularly Facebook CEO Mark Zuckerberg, telling the New York Times editorial board that he had “never been a big Zuckerberg fan.” In the same interview, Biden suggested revoking Section 230 of the Communications Decency Act, a law protecting tech companies from legal liability for what their users post. The industry has made defending the law one of its top political priorities.But Biden’s attacks have never provoked the concerns as those from Sanders and Warren. He has deep ties to the tech industry; his former director of communications, Jay Carney, is now Amazon’s top spokesman. Biden has also repeatedly framed his administration as a continuation of the Obama years, and several former Obama officials have set up shop in Silicon Valley.While the tech industry rank-and-file mostly donated to the industry’s antagonists, its executives seemed most excited about younger moderates Pete Buttigieg and Cory Booker. Biden is a happy consolation prize.An open question is who Biden surrounds himself with now that he seems to have locked up the nomination. Neither Warren nor Sanders has endorsed him, and may hold out to push Biden to pick staff supporting their priorities.The anti-tech momentum may also fade because of the coronavirus pandemic. While state and federal antitrust investigations will continue, new antitrust rules will likely take a back seat to more economic rescue legislation. Tech services seem even more vital when large swaths of the population are confined to their houses. And Google, Facebook, Apple Inc., and others have been quick to offer help in various ways.President Donald Trump has been vocally critical of technology companies, and he’s widely unpopular among tech workers. He has regularly called for crackdowns on social media companies and other perceived enemies in the industry. But his top policy achievement, a major corporate tax cut, helped send tech stock prices soaring. (They have since come back down after coronavirus fears have sunk the entire market.) Trump has also seemed to pick favorites among the tech sector, cozying up to Oracle Corp. and Apple, while repeatedly criticizing Amazon and Facebook.Silicon Valley voters generally lean Democratic. But it’s even harder than usual to predict what the upcoming election will look like. Even basic questions about the mechanics of voting remain unresolved. But for now, the things the tech industry was worried about at the beginning of this year seem like a distant memory.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Zoom Chief Executive Officer Eric Yuan pledged that his company will meet the highest security standards, seeking to put millions of new users at ease after numerous security lapses on the video-meeting application.Zoom Video Communications Inc. is launching a feature called Security that sets all privacy settings to their highest level, including putting passwords on meetings and employing waiting rooms that force meeting hosts to filter conference attendees, Yuan said Wednesday on a webinar. The San Jose, California-based company also is planning to roll out upgraded encryption for its video calls and meeting rooms for large webinars. “Zoom is safe compared to peers,” Yuan said. “We are determined to do better and hold ourselves to the highest standard on security and privacy.”Zoom has never sold user data and never will, he said.The security webinar was part of Yuan’s mea culpa campaign to rebuild trust with the more than 200 million users who’ve turned to Zoom amid the Covid-19 pandemic. Zoom was sued by a shareholder Tuesday who alleged the company fraudulently concealed its lack of end-to-end encryption and its data transmissions to Facebook, just one of several lawsuits that have sprouted during the revelations about the software maker’s privacy problems. The steps to bolster security weren’t enough to allay concerns at Google, which is trying to move employees away from Zoom. The Alphabet Inc. company, which has a rival product called Meet, deactivated the Zoom app on its employees’ work computers.“We have long had a policy of not allowing employees to use unapproved apps for work that are outside of our corporate network,” Google spokesman Jose Castaneda said in an emailed statement. “Recently, our security team informed employees using Zoom Desktop Client that it will no longer run on corporate computers as it does not meet our security standards for apps used by our employees. Employees who have been using Zoom to stay in touch with family and friends can continue to do so through a web browser or via mobile.”Google’s policy was reported earlier by Buzzfeed News.Earlier Wednesday, Zoom announced it had hired Facebook Inc.’s former security chief Alex Stamos as an adviser and formed a security council to help guide its next steps. Before its recent surge in popularity, Zoom had focused primarily on corporate communications.“I am attracted to difficult problems, and this creates some doozies,” Stamos, now director at Stanford University’s Internet Observatory, wrote Wednesday in a blog post. “The adaptation of a successful enterprise collaboration tool into virtual classrooms, virtual doctor’s offices and a myriad of other applications (including at least one virtual Cabinet Room) has created privacy, trust and safety challenges that no company has ever faced.”The company, Stamos added, “has some important work to do in core application security, cryptographic design and infrastructure security, and I’m looking forward to working with Zoom’s engineering teams on those projects.”Zoom’s shares had jumped as much as 11% Wednesday before giving back most of those gains on news of Google’s decision. The stock increased 3.6% to $117.81 at the close in New York and has jumped 73% this year.(Updates with Google’s decision to restrict Zoom use for employees in the sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Alphabet Inc.’s Wing unit is seeing a dramatic increase in the number of customers using its drone delivery service in rural Virginia during the Covid-19 pandemic.Wing, which began routine deliveries under a test program approved by the federal government last October, has added new vendors and expanded the items customers can order to better serve people during the epidemic, the company said in a statement Wednesday.“The technology is particularly useful at a time when people are homebound in many cases and the need to limit human-to-human contact is important,” spokesman Jonathan Bass said in an interview.Deliveries have more than doubled in the Christiansburg, Virginia, area where the U.S. test is being conducted and in a similar project in Australia, Bass said.In addition to partnerships with FedEx Corp. and the Walgreens drug-store chain, Wing recently began deliveries from a bakery and a coffee shop.Mockingbird Cafe sold 50% more pastries through Wing’s drones in its first weekend with the company than it typically sold in its store prior to the virus-related business disruptions.Deliveries from Walgreens have included toilet paper, medicine and toothpaste, the company said. They recently added items such as pasta and baby food to meet demands of people staying home.While the payload of Wing’s autonomous drones is limited, orders are fulfilled within minutes, Bass said.The program is being run in the community around Christianburg. Wing is working with nearby Virginia Tech, which has a drone-test program approved by the Federal Aviation Administration.Amazon.com Inc., United Parcel Service Inc. and many smaller companies are also experimenting with the concept of drone deliveries.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. will furlough non-critical employees without pay and temporarily cut executive salaries as much as 30% to conserve cash while the coronavirus pandemic forces the shutdown of much of its operations.In the U.S., those ranked vice president or above will see the steepest salary reductions, followed by a 20% drop for directors and a 10% cut for others, according to an internal memo seen by Bloomberg News. Workers outside the U.S. will see similar reductions. Those who can’t work from home and aren’t assigned critical tasks will stay employees and keep their health-care benefits.The moves add Tesla to the growing number of companies slashing labor costs to weather the pandemic. The outbreak hit just as Chief Executive Officer Elon Musk was ramping up the production of the new Model Y crossover, accelerating output at a plant near Shanghai and clearing the way for construction of a new facility outside Berlin.“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” Tesla said in the memo. A representative for the company declined to comment.Tesla shares rose 1% as of 9:45 a.m. Wednesday in New York trading.Reopening PlanTesla agreed to idle U.S. production last month days after authorities ordered the San Francisco Bay area to shelter in place. The electric-vehicle maker expects to resume normal production at its U.S. facilities on May 4, according to the memo, which is the day after the stay-at-home measure is scheduled to end.Even after re-opening its facilities, Tesla will probably need about two weeks to ramp up production again, Dan Levy, a Credit Suisse analyst, wrote in a note late Tuesday. The roughly 30,000 cars that the company had in inventory at the end of the first quarter will be sufficient to meet weakened demand, he said.The company has more than 56,000 employees, according to a recent company-wide email. Its sole U.S. vehicle-assembly plant is in Fremont, California.Wage adjustments and equity grants will be put on hold, according to the memo. The pay cuts are expected to last until the end of the second quarter, and those furloughed are likely to be asked to return on May 4.Nevada, ShanghaiAt its Nevada gigafactory, Tesla reduced on-site staff by 75%, according to the county where the plant is located. The facility produces battery packs and electric motors with partner Panasonic Corp.Tesla’s Shanghai plant, meanwhile, recovered from a virus-related shutdown faster than many in the industry with the help of local authorities. After resuming operations in February, the factory surpassed the capacity it reached before the shutdown, making 3,000 cars a week, the company said last month.Tesla also is planning to expand its lineup in China by introducing a locally built Model 3 sedan with a longer driving range from as early as this week, people familiar with the matter have said.While Tesla is down significantly from a peak close of $917.42 in mid February, the shares are still up 30% for the year.(Updates with shares trading in the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The idea to go for pay cuts, layoffs and furloughs is to conserve cash as Tesla, Inc. (TSLA) and other car companies continue to bleed with halt in production and deliveries.
(Bloomberg) -- On March 24, Jeffrey VanWingen, a family physician in Grand Rapids, Michigan, posted his first-ever video to YouTube. VanWingen, decked out in medical scrubs in his kitchen, spent 13 minutes explaining how to disinfect a cereal box, a carton of broth, and some broccoli, while a masked friend filmed him from a safe distance. He gave it a title likely to show up in anxious web searches: “PSA Grocery Shopping Tips in COVID-19.” Within a week, the video had over 20 million views, and VanWingen was fielding calls from across the world to translate it into other languages. By then, it was too late to alter the ninth minute, when VanWingen tossed bags of apples and oranges into a sink of soapy water—something scientists say could cause more harm than good. He tried futilely to contact YouTube to edit that portion out of the video. He settled on inserting a disclaimer: “Correction: Rinse fruits and vegetables with water—no soap.”Millions of people have been frantically scouring the internet in recent weeks for health advice, turning doctors like VanWingen into YouTube’s newest, unexpected stars—and putting significant weight behind their recommendations. “I’m not tech savvy and I am not vain. I just wanted to help people,” he said in a phone interview. “With something like this pandemic, there's no guidebook.”VanWingen didn’t tout an experimental drug or a “silver solution” as cures for Covid-19, and didn’t blame the spread of the virus on 5G networks – all claims that have appeared on YouTube. But his video, coming from a medical professional, did create alarm in a way that some viewed as irresponsible. “He’s treating handling your groceries like doing open heart surgery,” Donald Schaffner, a biologist at Rutgers University. “He’s giving people panic attacks.” There is no evidence that Covid-19 is transmitted through food or grocery packaging, according to the U.S. Food and Drug Administration. The World Health Organization has described the overabundance of covid-related communication online as an “infodemic,” making it hard for people to find credible information within the deluge. YouTube is relying on a secretive ranking system to separate legitimate medical advice from quackery. The choices aren’t always straightforward. The site has to decide how to handle videos from experts on contested medical topics or posts, like VanWingen’s, that are popular and useful but also contain seemingly honest mistakes. It’s even harder to know where to set boundaries when official opinion on subjects like whether people wearing masks in public is still in flux.A big part of YouTube’s solution is an authoritativeness score, an algorithm that gleans the credibility of people who post videos about news events and certain topics including health. The company has said it surfaces videos from news outlets, hospitals and “experts” to viewers most often. Videos from creators with lower scores aren’t necessarily taken down, but are punished by YouTube’s automated system for video recommendation. YouTube relies on medical doctors to review videos about medical treatments. Its process often includes multiple layers of review, a company spokeswoman said, but she wouldn’t name the doctors or say how many are involved. Even video creators that YouTube actively promotes during the pandemic, like Mikhail “Doctor Mike” Varshavski, who has some 5.5 million followers, know little about the process. “I don't know what my score is,” he said. “Honestly, it’s really confusing to us as creators.”Roger Seheult, a California pulmonologist, produces MedCram, an eight-year old YouTube page that, before January, posted mostly arcane lectures for medical students. Then Seheult turned to the coronavirus, posting dozens of dispatches on the outbreak. Traffic exploded. One of his most popular videos, with over a million views, is a seventeen-minute clip from March 10 in which he says he is “cautiously optimistic” about hydroxychloroquine, a malaria drug U.S. President Donald Trump has suggested as a coronavirus treatment, with mixed scientific support. In the video, Seheult reads through several medical studies and reports about the experimental drug. He ends the video by saying randomized control trials on hydroxychloroquine are still needed. In an interview, Seheult said he believes the drug’s potential benefits outweigh the risks “for many patients under my care.” Like other social-media platforms, YouTube was criticized in recent years for the way its recommendation engine promoted conspiracy theories about health, particularly those raising suspicions about vaccines. Since then, YouTube has worked to remove false claims from search results and recommendations. It now puts a link to health organizations and Google’s own virus information page below every clip about coronavirus and has instituted a policy to remove videos “promoting medically unsubstantiated” prevention and treatment. YouTube pulled down two clips from Brazil’s president for breaking that rule and has removed “thousands” more, according to the company.But wavs of new footage about the virus is posted to YouTube daily, even as Google’s own shift to remote work has led it to reduce its staff for content moderation.An added moderation challenge is that it isn’t immediately apparent some problematic videos are connected to coronavirus. Searches for chloroquine and other experimental treatments produce videos from YouTubers, some of them claiming to be doctors, who only recently joined the site. YouTube hosts pages and pages of videos filed under the hashtag FilmYourHospital, a viral stunt that encourages people to shoot footage suggesting the virus is a hoax. State officials have warned hospitals about the trend. Sheltered in Michigan, VanWingen spent hours on the phone trying to get in touch with someone at YouTube to cut out the soap washing part. (As a rule, YouTube lets creators change text but not video content after uploading.) YouTube didn’t promote his video on its newly created news section for the virus or widely in its recommendations, according to the company, but the clip still continued to spread on its own. Ultimately, he posted a revised version of his PSA a week later, shorter and more “toned down.” It only received a fraction of the original’s traffic.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Zoom Video Communications Inc. was accused by a shareholder of hiding flaws in its video-conferencing app, part of a growing backlash against security loopholes that were laid bare after an explosion in worldwide usage.In a complaint filed Tuesday in San Francisco federal court, the company and its top officers were accused of concealing the truth about shortcomings in the app’s software encryption, including its alleged vulnerability to hackers, as well as the unauthorized disclosure of personal information to third parties including Facebook Inc.Investor Michael Drieu, who filed the suit as a class action, claims a series of public revelations about the app’s deficiencies starting last year have dented Zoom’s stock price -- though the shares are still up 67% this year as investors bet that the teleconferencing company would be one of the rare winners from the coronavirus pandemic.Read More: Zoom Grapples With Security Flaws That Sour Users on AppFrom Elon Musk’s SpaceX and Tesla Inc. to New York City’s Department of Education, agencies around the world have begun to ban usage of an app that’s risen during the coronavirus lockdown as a home for everything from virtual cocktail hours to cabinet meetings and classroom learning. On Tuesday, Taiwan barred all official use of Zoom, becoming one of the first governments to do so.Zoom Chief Executive Officer Eric Yuan has apologized for the lapses, acknowledging in a blog post last week the company had fallen short of expectations over privacy and security. Cybersecurity researchers warn that hackers can exploit vulnerabilities in the software to eavesdrop on meetings or commandeer machines to access secure files. Weak encryption technology has given rise to the phenomenon of “Zoombombing”, where uninvited trolls gain access to a video conference to harass the other participants. Recordings of meetings have also shown up on public internet servers.The company also routed data through servers in China and used developers there, Citizen Lab said in a report last week. Any official data routed through China poses a major risk for Taiwan, a self-ruled island that Beijing claims as part of its territory. Taiwan’s government rejects China’s assertion, viewing the island as a sovereign nation.“The rapid uptake of teleconference platforms such as Zoom, without proper vetting, potentially puts trade secrets, state secrets, and human rights defenders at risk,” researchers at the University of Toronto’s Citizen Lab wrote.Read more: Taiwan Bans Official Use of Zoom Over Cybersecurity ConcernsThe company said it had mistakenly sent traffic through Chinese data centers as it was dealing with a “massive increase” in demand. It said it has stopped using that capacity as backup for non-Chinese clients.Zoom is working on adding end-to-end encryption but that’s still months away, Yuan has said. Many of the problems stem from the fact that the app was geared toward enterprise clients with their own IT security teams, instead of the broad consumer app it’s become. The number of daily meeting participants across Zoom’s paid and free services has gone from around 10 million at the end of last year to 200 million now, the company said. Most of those people are using its free service.(Updates with Taiwan’s ban from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- In the face of a global health emergency, automakers are stepping in — or being summoned — to make ventilators. Can they manufacture at the scale required, with the world needing a 10-fold increase in production to cope with the surge in coronavirus infections? It will be a severe challenge.Car companies such as Ford Motor Co., General Motors Co. and Toyota Motor Corp. are a natural choice to mass-produce these medical devices. They churn out millions of vehicles every year, procuring and bringing together hundreds of parts from around the world at rapid speed. Ventilators needs anything from 400 to 1,000 components from tubes and sensors to pressure valves, humidification systems and filters. There is significant overlap between the engineering of ventilators and cars, which both bring together electronic, electric, hydraulic and mechanical aerodynamics expertise.The parts are mostly different, though. The constituents of a ventilator come from dozens of countries and through as many as nine layers of suppliers. At the same time, some specialty components, such as oxygenation membranes needed for mechanical ventilation, are made by only a few precision manufacturers— meaning that any attempt to effect a rapid expansion in global production is constrained by the ability of these companies to ramp up.The same disruption the coronavirus pandemic has wrought on automakers’ global supply chains will apply equally to their efforts to make ventilators. In normal times, such a switch might be feasible. However, automakers are only in this position because conditions are so abnormal. The coronavirus has wreaked havoc on supply chains. Logistics, transportation and manufacturing have been upended. Retooling factories will take time and the disease won’t wait.That makes the task even more formidable for companies such as Ford and GM, which have faced pressure from President Donald Trump to move more quickly and repurpose factories to turn out ventilators. Trump invoked the wartime Defense Production Act last week to help ventilator manufacturers procure supplies. Still, the administration’s effort doesn’t cover the full chain from raw materials to distribution, as my colleague Brooke Sutherland has written. The U.S. may need as many as 960,000 ventilators, the Society of Critical Care Medicine estimates, versus 200,000 that are available. India’s requirement is as many as 220,000 compared with an estimate of about 25,000 now, according to the Brookings Institution. These numbers depend on the speed of the disease’s spread and the severity of infections, and can change rapidly. Big manufacturers currently produce around 200 ventilators a week and need to make 10 times that number, according to Bloomberg Intelligence industrials and medical equipment analyst Nikkie Lu. The Indian government is urging local automakers to get involved. In the U.K. and Europe, the likes of McLaren Automotive Ltd. and Mercedes AMG High Performance Powertrains Ltd. are helping out.GM is sourcing 419 direct parts from 91 so-called tier-1 suppliers for ventilators made at its Kokomo plant in Indiana. While a significant portion are produced in North America, there are suppliers in more than 10 countries including China. GM is helping increase sourcing capacity within the supply chain of its ventilator partner Ventec Life Systems Inc., and is having to develop new sources of parts in its own.While China is reopening for business and putting a priority on medical equipment, other countries are in lockdown. That’s making it increasingly tough to get the right products to manufacturers, particularly where operations are dispersed. For example, New Zealand ventilator maker Fisher & Paykel Healthcare Corp. sources components from China for manufacture at home and in Mexico. ResMed Inc., a San Diego-based company that makes a ventilator used during the severe acute respiratory syndrome outbreak, does most of its manufacturing in Singapore and Sydney.There are other obstacles. This is a niche industry that’s complex and highly regulated. China has more than 20 mechanical ventilator makers that produce about 2,200 machines a week or about a fifth of total global output; only eight are certified to sell in Europe. Medical devices need to be produced in sterile and clean-room certified conditions. That means converting factories to scale up isn’t a simple matter. In recent weeks, some countries have complained of faulty tests and medical equipment coming from China. Officials there banned the export of medical supplies that don’t meet China’s standards.Then there’s protectionism. Trade barriers are going up in dozens of countries as the world moves into survival mode. Having shipped key medical supplies abroad going into the crisis, the U.S. has now joined the trend, using the defense act to order 3M Co. to halt exports of its protective masks to some nations and prioritize sales to the federal government. The U.S.-China trade war had already showed up the fragility of global supply chains. Covid-19 and the rush to make ventilators will be a telling marker of how effectively they still function. Conditions could hardly be more difficult for such a critical test. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Low gasoline prices are generally considered a negative for electric vehicles as their ICE competitors become cheaper to run, but Tesla is still outperforming its gasoline rivals