Category: Company News

  • UK trade minister Fox says EU 'irresponsible' to refuse to reopen Brexit deal

    It would be irresponsible for the European Union to refuse to reopen negotiations over Britain’s exit deal, British trade minister Liam Fox said in an interview aired on Sunday.

    Prime Minister Theresa May has said she is seeking changes to the Withdrawal Agreement she negotiated with Brussels in order to win the support of parliament, but the EU has said the deal cannot be renegotiated.

    “Are they really saying that they would rather not negotiate and end up in a ‘no deal’ position?,” Fox told Sky News in a pre-recorded interview. “It is in all our interests to get to that agreement and for the EU to say we are not going to even discuss it seems to me to be quite irresponsible.”

  • How Jeff Bezos' 'change of heart' helped turn Amazon into a top US advertising spender

    If it seems like you’re seeing Amazon ads all over the place, there’s a reason why: Jeff Bezos no longer hates them.

    Amazon’s CEO once famously said ads are “the price you pay when your product is unremarkable.” But during the company’s internal all-hands meeting in November, an employee asked the CEO if he’s had a “change of heart” on buying ads for Amazon’s own products.

    “Yes, I changed my mind,” Bezos said with a laugh during the meeting, a recording of which was shared with CNBC.

    The company’s promotion of everything from its Echo devices to Amazon Web Services led to a 72.5 percent increase in U.S. ad spending last year to $1.8 billion, according to Kantar Media, which tracks TV, digital, outdoor billboards and other platforms, but not social media. That pushed Amazon into the fifth spot among U.S. advertisers and represented by far the biggest increase among the top 10 companies. Amazon didn’t even make the top 20 until 2015.

    Bezos’ about-face on advertising reflects the dramatic change in Amazon’s business, which is no longer predominantly an e-commerce marketplace. While most of its revenue still comes from online sales, Amazon now has a whole portfolio of branded products and services that consumers and businesses need to see on TV ads and elsewhere. The four companies ahead of Amazon are Procter & Gamble, AT&T, Berkshire Hathaway (owner of brands including Geico, Kraft Heinz and Fruit of the Loom) and Comcast.

    During Sunday’s Super Bowl between the New England Patriots and Los Angeles Rams, Amazon will be airing ads for the fourth straight year. Each 30-second spot costs a record $5.25 million this year, and Amazon is expected to run multiple ads during the game.

    Those costs are showing up on Amazon’s financial results. In its most recent earnings statement this week, Amazon reported a record $13.8 billion marketing expense for 2018, up 37 percent from the prior year. That accounted for 5.9 percent of Amazon’s total revenue, the highest ratio in 18 years. Within its marketing budget, “advertising and other promotional costs,” which includes referrals commissions, accounted for $8.2 billion, up from $6.3 billion in 2017, it said.

    Amazon disclosed in its regulatory filing that the growth in costs was primarily related to increased hiring of marketing and sales people, as well as more spending on “online marketing channels.”

    Joe Swallen, chief research officer at Kantar, said that while Amazon is becoming more of a product company, it also has to invest more in defending its own turf because Walmart, Target and Best Buy are stepping up promotion of their online commerce businesses.

    “Even with its massive customer base and dominant share of online sales, Amazon needs to spend heavily on advertising to counteract the expanding focus of traditional retailers on e-commerce,” he said.

    Much of that is going to television. According to Kantar, Amazon spent 37 percent, or $679 million, of its U.S. ad budget last year on TV ads, up from 32 percent in 2015.

    That’s where Amazon can reach a wider audience, even if targeting and measurement is less sophisticated than on digital channels, said Harikesh Nair, a marketing professor at Stanford University.

    “TV still provides high reach, making it good for building awareness rapidly,” Nair said.

    Promoting its brand to mainstream America is important because Amazon has expanded into so many different areas, including hardware, grocery stores and entertainment. Google, Microsoft, Walmart and Hulu are all competitors and require Amazon to broaden its spending, said Carl Mela, a marketing professor at Duke University.

    “To build share in these markets requires a substantial marketing investment,” Mela said.

    Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

    WATCH: Amazon Echo is a key part of the company’s future, says NYT columnist

  • Jeff Bezos used to hate spending money on ads, but told employees in November he 'changed his mind'

    If it seems like you’re seeing Amazon ads all over the place, there’s a reason why: Jeff Bezos no longer hates them.

    Amazon’s CEO once famously said ads are “the price you pay when your product is unremarkable.” But during the company’s internal all-hands meeting in November, an employee asked the CEO if he’s had a “change of heart” on buying ads for Amazon’s own products.

    “Yes, I changed my mind,” Bezos said with a laugh during the meeting, a recording of which was shared with CNBC.

    The company’s promotion of everything from its Echo devices to Amazon Web Services led to a 72.5 percent increase in U.S. ad spending last year to $1.8 billion, according to Kantar Media, which tracks TV, digital, outdoor billboards and other platforms, but not social media. That pushed Amazon into the fifth spot among U.S. advertisers and represented by far the biggest increase among the top 10 companies. Amazon didn’t even make the top 20 until 2015.

    Bezos’ about-face on advertising reflects the dramatic change in Amazon’s business, which is no longer predominantly an e-commerce marketplace. While most of its revenue still comes from online sales, Amazon now has a whole portfolio of branded products and services that consumers and businesses need to see on TV ads and elsewhere. The four companies ahead of Amazon are Procter & Gamble, AT&T, Berkshire Hathaway (owner of brands including Geico, Kraft Heinz and Fruit of the Loom) and Comcast.

    During Sunday’s Super Bowl between the New England Patriots and Los Angeles Rams, Amazon will be airing ads for the fourth straight year. Each 30-second spot costs a record $5.25 million this year, and Amazon is expected to run multiple ads during the game.

    Those costs are showing up on Amazon’s financial results. In its most recent earnings statement this week, Amazon reported a record $13.8 billion marketing expense for 2018, up 37 percent from the prior year. That accounted for 5.9 percent of Amazon’s total revenue, the highest ratio in 18 years. Within its marketing budget, “advertising and other promotional costs,” which includes referrals commissions, accounted for $8.2 billion, up from $6.3 billion in 2017, it said.

    Amazon disclosed in its regulatory filing that the growth in costs was primarily related to increased hiring of marketing and sales people, as well as more spending on “online marketing channels.”

    Joe Swallen, chief research officer at Kantar, said that while Amazon is becoming more of a product company, it also has to invest more in defending its own turf because Walmart, Target and Best Buy are stepping up promotion of their online commerce businesses.

    “Even with its massive customer base and dominant share of online sales, Amazon needs to spend heavily on advertising to counteract the expanding focus of traditional retailers on e-commerce,” he said.

    Much of that is going to television. According to Kantar, Amazon spent 37 percent, or $679 million, of its U.S. ad budget last year on TV ads, up from 32 percent in 2015.

    That’s where Amazon can reach a wider audience, even if targeting and measurement is less sophisticated than on digital channels, said Harikesh Nair, a marketing professor at Stanford University.

    “TV still provides high reach, making it good for building awareness rapidly,” Nair said.

    Promoting its brand to mainstream America is important because Amazon has expanded into so many different areas, including hardware, grocery stores and entertainment. Google, Microsoft, Walmart and Hulu are all competitors and require Amazon to broaden its spending, said Carl Mela, a marketing professor at Duke University.

    “To build share in these markets requires a substantial marketing investment,” Mela said.

    Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

    WATCH: Amazon Echo is a key part of the company’s future, says NYT columnist

  • Russia, US suspend nuclear treaty in a diplomatic standoff sparking jitters over a new arms race

    WASHINGTON — The United States and Russia suspended a crucial nuclear weapons treaty on Saturday, a move that has sparked concerns of a budding arms race between the world’s two biggest nuclear powers.

    Withdrawal from the Intermediate-Range Nuclear Forces, or INF, Treaty comes after Secretary of State Mike Pompeo gave Russia 60 days to come back into compliance with the terms of the nuclear weapons pact. Pompeo added that the process could be reversed if Russia came back into compliance.

    “Russia has not taken the necessary steps to return to compliance over the last 60 days,” Pompeo said in a statement. “It remains in material breach of its obligations not to produce, possess, or flight-test a ground-launched, intermediate-range cruise missile system with a range between 500 and 5,500 kilometers.”

    He added: “The United States has gone to tremendous lengths to preserve the INF Treaty, engaging with Russian officials more than 30 times in nearly six years to discuss Russia’s violation, including at the highest levels of government.”

    Russian President Vladimir Putin maintains that Moscow has not violated the treaty, but will start developing new missiles in the wake of the INF’s suspension.

    “The American partners have declared that they suspend their participation in the deal, we suspend it as well,” Putin said Saturday, during a televised meeting with foreign and defense ministers, according to Reuters. Putin also said that he would not deploy weapons to Europe and other regions unless the U.S. did so.

    The INF treaty, signed in 1987 by President Ronald Reagan and Soviet leader Mikhail Gorbachev, prohibited the development and deployment of ground-launched nuclear missiles with ranges of 310 miles to 3,420 miles. The agreement forced each country to dismantle more than 2,500 projectiles, and kept nuclear-tipped cruise missiles off the European continent for three decades.

    In October, Trump said the U.S. would withdraw from the Cold War-era pact, and sent national security advisor John Bolton to personally deliver the decision to the Kremlin. Russia, Trump said, has violated the arms agreement by building and fielding the banned weapons “for many years.”

    NATO has also called on Moscow to “return urgently to full and verifiable compliance.” “It is now up to Russia to preserve the INF Treaty,” NATO foreign ministers said in a joint statement.

    “Withdrawing without exhausting all available diplomatic options to resolve the compliance dispute makes it more difficult for Washington to control the narrative around the collapse of the treaty, and allows Russia to pursue the development and deployment of intermediate-range systems without restriction,” Abigail Stowe-Thurston, a researcher at the Federation of American Scientists, told CNBC.

    “Now that the administration is following through on its decision to withdraw, it is Congress’s responsibility to decide whether to fund the development and deployment of similar systems,” she added.

  • This former Apple engineer has analyzed the microbes in his body 600 times — here's what he learned

    Most of us would find it off-putting to imagine that there are many trillions of bacteria, viruses and fungi living in our body, invisible to the naked eye. But Richard Sprague, a Seattle-based software engineer, has dedicated years of his life — and tested himself hundreds of times — to unravel their mysteries.

    Sprague started his career at Apple in the 1990s, where he worked as a software engineer on an early version of what is now Apple TV. He left to form a media start-up, which was later acquired by Microsoft, where he remained for more than a decade.

    At that point, Sprague started thinking about the next consumer technology breakthrough, which he could get in on early. And that led him to a surprising space: biology.

    More specifically, he stumbled upon to an emerging field of research known as the “microbiome.” That can broadly be defined as “the entire community of microbes found in any specific place and time,” said Jonathan Eisen, a microbiologist and professor at the University of California, Davis in California.

    In recent years, Eisen and his peers in the scientific world have had tools at their disposal to better understand the microbiome, and figure out how it relates to human health and well-being.

    Sprague isn’t a scientist, but he’s found his own way to help.

    In the past decade, technology has made it possible for people to cheaply analyze not only our own genes, but the genes of our non-human roommates, too. These days, scientists generally agree that about half the cells in a typical human body are human, half are microbial, and there’s value in studying both.

    Sprague identifies with the burgeonning “quantified self” movement, which is big in Silicon Valley and involves tracking and collecting all kinds of data about the body to improve one’s health.

    In 2014, he decided to do all he could to understand his body with these newly available tests. He was one of the first to try 23andMe to analyze his DNA, and was early into direct-to-consumer “microbiome” tests, including one from venture-backed uBiome, where he worked as a citizen scientist-in-residence.

    “About five years ago, I started learning about all the non-human genes that are just sitting there, which co-evolved with humans and are clearly doing something,” he said.

    At this point, Sprague might be the most “tested” citizen scientist in the world. He has analyzed the microbes in his gut, his nose, his mouth and his skin more than 600 times, he estimates.

    Sprague has published a lot of this data online. He’s also created charts and other graphics to better visualize the data, and look for potential patterns. He’ll often incorporate his sleep, food and exercise routines, which he methodically tracks with an iPhone.

    In the process, Sprague has had to collect a lot of his own feces, which is the main ingredient used in gut microbiome studies. But he’s also learned from taking samples from other nooks and crannies in his body. According to Eisen, the UC Davis professor, there are mouth, skin and other related studies of the microbiome underway also.

    Sprague doesn’t claim to offer any hard and fast conclusions that will apply to everyone, but he’s found a few interesting things about his own body.

    For one thing, the microbiome changes over time. Sprague realized quickly that he would get wide variations in his results, especially with when he took a sample from his nose (unlike the gut or mouth, the nose is in more regular contact with the external environment). He also noticed some differences when he embarked on a trip to China from Seattle, where he currently lives. Sprague brought along enough kits to test himself daily, and he blogged that he noticed a blooming of a microbe called coprobacter.

    A couple other things he noticed:

    • Among the beverages marketed as being a source of probiotics, kombucha doesn’t seem to do much for Sprague’s microbes. But Kefir, a fermented milk drink, was a microbial favorite. As Sprague put it in a blog post,, “although I can’t put my finger on anything quantitative, I do notice that I seem to be a little more energetic on days when I drink kefir.”
    • Diet can have a big impact on Sprague’s sleep. He noticed that when he ate potato starch, he was able to increase the amount of a microbe called bifidobacterium, an ingredient found in many commercial probiotics, in his gut. “I learned that this microbe likes to eat a particular kind of resistant starch in potatoes, so I’d drink it about 8 hours before sleep and tested myself,” he explained. “I saw a bloom (of it), and sure enough, my sleep that night was amazing.” He believes it increased his levels of melatonin, which induces sleep.

    Far more rigorous research would need to be done on a much broader and more diverse population of people before anyone should draw conclusions.

    Scientists, like Eisen, applaud Sprague for his efforts while also recognizing that it’s not typically possible to make broad inferences about human health. “I think the number one issue is to make sure people are doing this with eyes wide open to the methods and also the challenges,” he said.

    In other words, as long as citizen scientists don’t try to “sell” their conclusions to others, Eisen encourages this sort of engagement that gets people thinking more deeply about microbes.

    At this stage, scientists are still figuring out all the possible links between the microbiome and disease, which is extremely complex. “You see changes associated with everything, and the challenge is figuring out if any of those changes are important,” he added.

    One of the only known medical applications involving the microbiome today is treating a bacterial infection called C.diff, which often occurs in hospitals after antibiotics wipe out the normal bacteria that’s present in the gut. Treatment with a so-called “fecal transplant”, which involves taking feces from a healthy person’s gut, has been shown to have a cure rate of more than 90 percent.

    In the meantime, Sprague is willing to offer himself up as a resource to those who are interested in learning more about their microbiome.

    “I like to think of myself as a microbe mind reader,” he said.

    WATCH: How to use the Apple Watch’s ECG feature

  • Former Obama economic advisor: Here's why Howard Schultz is wrong on debt

    This week, ex-Starbucks CEO Howard Schultz announced a potential Presidential run as an independent candidate during an interview on CBS. Frustrations with both parties’ handling of the nation’s finances, particularly the high levels of debt are part of his reasoning to potentially run as an independent candidate.

    Yet a couple of former high-ranking government officials insist the Brooklyn-born billionaire got it wrong. One of them is Jason Furman, the former head of Obama’s economic council, who rebuked what he called Schultz’s “obsession” with America’s $21 trillion-plus debt.

    “America is not a company,” Furman, now a professor at Harvard University, told CNBC this week. “And in fact, many successful companies are much more leveraged than the United States,” he said, adding that the present value of America’s growth far exceeded its debt obligations.

    Both Furman and former Treasury Secretary Lawrence Summers insist that it’s time for Washington to end its “delusion” with debt reduction. In a Foreign Affairs essay, the economists argued that large deficits are a function of falling revenues, rather than surging entitlement spending.

    “More spending is not, by itself, something to be afraid of,” they wrote, arguing that high levels of debt could be sustained in the medium-term, given that low interest rates mean borrowing costs are lower.

    Given the areas in which America requires large investments–such as infrastructure, education and public services–the problem is less about cutting spending and more about increasing revenues, Furman told CNBC. While he called the debt “like termites slowly chipping away at the wood,” he insisted it wasn’t an immediate danger.

    “We’ve not been on a spending spree in fact we’ve been on a tax cutting spree,” the former chairman of the National Economic Council said, referencing President Donald Trump’s signature tax-reduction bill.

    Yet deficit hawks point to government spending, which currently approximates to 20.3 percent of GDP and is projected to rise to 22.7 percent by 2029, according to Congressional Budget Office figures, as the real problem.

    The federal government is expected to run a deficit of $1 trillion this year, and the CBO forecasts that debt as a share of the economy will top 90 percent of growth by 2029, up from itscurrent level of 78 percent.

    Addressing the economic imbalances again at a book event in New York this week, Schultz stressed that if America was a company, at $21.5 trillion of debt, adding $1 trillion a year, we would be facing insolvency.”

    And some economists agree that the U.S.’s burgeoning debt is a long-term concern with implications for fiscal and monetary policy. Morgan Stanley wrote recently that the growing debt is putting a ceiling on the central banks’ ability to raise interest rates, and makes the economy more vulnerable to long-term macroeconomic shocks.

    “While it is not unusual to see corporations running up debt during a boom like this, it is unusual to see the government follow suit,” said Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist.

  • Betting on the Super Bowl? The IRS will want a piece of your winnings

    If you win money in a Super Bowl bet on Sunday, remember while you’re celebrating that Uncle Sam can be a bit of a party crasher.

    No matter where you wager — whether at a casino, through a pool or fantasy league, or at your neighbor’s annual bash — the IRS expects you come to clean each year at tax time.

    “Any gambling winnings you receive is considered income by the IRS,” said CPA Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting in Chicago. “You have to report it.”

    Roughly 22.7 million Americans are expected to wager an aggregate $6 billion on Sunday’s matchup between the New England Patriots and the Los Angeles Rams in Atlanta, according to a recent survey from the American Gaming Association. Of those bettors, 1.8 million plan to bet illegally through a bookie, and others are expected to place wagers through online offshore books.

    And, of course, there are a ton of other unregulated bets that happen beyond those channels. And while you might be less likely to tell the IRS about smaller amounts you win, just be aware that it is considered taxable income.

    For casual gamblers placing wagers through regulated sports betting in states that allow it, the IRS makes it a bit easier for you by placing reporting requirements on the payor (i.e., the casino), as well. A handful of states have legalized sports betting since last May, when the U.S. Supreme Court struck down a 1992 federal law banning it, and more than two dozen others are considering the move, according to the gaming group.

    Generally speaking, if you win more than $5,000 and the amount is 300 times the original bet, the payor is required to withhold 24 percent of your winnings for federal taxes. There could be instances, however, that trigger withholding when your win is under that threshold.

    And, your final tax bill could be higher or lower than the amount withheld, depending on your other income and a variety of other factors. And even if no tax is withheld, you’re not off the hook for claiming the income on your tax return.

    One way to reduce what you owe on your winnings is to write off your gambling losses. Of course, you’d need to be able to back up your claims with documentation.

    “People don’t often think about keeping track of their losses,” Luscombe said. “They just lose, walk away, and then they finally win and have no records to offset it with losses.”

    Additionally, you can only take a deduction for any gambling losses if you itemize your deductions on your tax return. The majority of taxpayers are not itemizers because they’re financially better off with the standard deduction, which was nearly doubled under new tax law that took effect in 2018.

    More from Personal Finance:
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    Here’s what many Americans are doing to get out from under debt. But beware the risks
    These red flags on your 2018 tax return could spark interest from the IRS

    And, even if you do itemize, you cannot claim losses in excess of your actual winnings, said Andrew Whalen, CEO of Whalen Financial in Las Vegas.

    And, he said, if you win $10,000 or more, the casino likely will require you to fill out a government form intended to prevent anti-money laundering.

    Then there’s a W-2G that the casino might or might not send you, depending on how much you win. For sports betting — which is treated differently, from a tax standpoint, than some other forms of gambling — you should receive one if you win at least $600 and, again, at least 300 times the original bet.

    “Even if you don’t get a W-2G, you still are required to report the income,” Whalen said.

    Fantasy sports winnings get slightly different tax treatment: If you have winnings above $600, you should receive a tax form, but it will be on a Form 1099-MISC, not a W-2G.

    Remember, those forms also go to the IRS. And if you fail to report the income, you can pretty much count on hearing from the agency.

    Professional gamblers, meanwhile, face some separate rules, which changed under the new tax law. When they deduct their expenses (i.e., traveling to and from a casino), they must add them to their gambling losses when calculating the value of the deduction instead of writing them off separately as a business expense.

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  • The grand Super Bowl tradition of soaking coaches with Gatorade means big dollars for Pepsi

    Nothing says victory like a coach getting dunked with Gatorade.

    A tradition that started in 1987, the Gatorade dunk has evolved into an iconic event that has put the PepsiCo’s sport drink brand on center stage.

    While not the biggest day for Gatorade retail sales, the Super Bowl is the biggest day of the year “in terms of exposure and showcase of what we do,” said Brett O’Brien, General Manager of Gatorade.

    “It’s such a massive sporting event, there’s no better time to see Gatorade powering the athlete,” he told CNBC recently, noting that Gatorade’s actual sales peak during the warmer months.

    “This would be there biggest dunk of the year,” said Eric Smallwood, president of APEX Marketing Group, who estimates that Gatorade has received over $18 million worth of publicity after appearing in 22 of 33 Super Bowls.

    To commemorate the Super Bowl in the Peach State, the company is rolling out a limited time only Peach flavored Gatorade in the Atlanta area this week.

    O’Brien also said the company loved the exposure it gets from gamblers trying to guess which color of Gatorade will be part of the dunk. It’s one of the most popular prop bets at Las Vegas sports books every Super Bowl. “It’s comes down to the players, it’s all about them,” said O’Brien. “They will vote and say this is the color we want the most.”

    Rams running back Todd Gurley tweeted his vote is for “ice punch” flavor, which may be affecting some odds.

    Gurley tweet

    “Todd Gurley is one of our guys,” said O’Brien, when stalling about which team he’s rooting for. “I hope the best for him. They are both big Gatorade teams so either way is a win for us.”

  • VW revives the dune buggy with an electric concept vehicle that brings the past into the future

    Cue the Beach Boys. Along with their California-tinged sound, one of the staples of the ’60s surf scene was the dune buggy, typically a modified version of the equally iconic Volkswagen Beetle, and now the automaker is ready to show off an all-new, retro-futuristic dune crawler.

    But this time, the VW dune buggy concept vehicle set to debut at the Geneva Motor Show in March will be environmentally friendly, riding on the same electrified platform that will be shared with dozens of battery-electric vehicles, or BEVs, the German company plans to bring to market by 2025.

    “A buggy is more than a car. It is vibrancy and energy on four wheels,” VW’s global design chief Klaus Bischoff said in a statement accompanying a pair of shots teasing the dune buggy concept’s debut. “These attributes are embodied by the new e-buggy, which demonstrates how a modern, non-retro interpretation of a classic can look and, more than anything else, the emotional bond that electric mobility can create.”

    Also known as beach buggies and sand rails, they became wildly popular with the launch of the Meyers Manx, produced by California surfer and entrepreneur Bruce Meyers. Debuting in 1964, Meyers came up with the idea of lifting the body off the original Volkswagen Beetle and replacing it with a fiberglass, open-topped shell, making a few other modifications that would let it operate on sand dunes, as well as public roads.

    Volkswagen estimates that as many as 250,000 of the original Beetles were modified into dune buggies and other unique models by the 1980s. Meyers himself relaunched his company in 2000, still relying on the first-generation Beetles that continue to ply U.S. highways.

    Volkswagen isn’t offering many details about the new e-buggy, but the teaser pics reveal that it picks up on the classic design first pioneered by the Manx, with a long nose, a stubby tail, a shortened windshield, roll bar and high side sills rather than doors. Knobby, oversized tires suggest that, like the original sand rails, the VW e-buggy concept is designed to operate both on and off-road.

    But there’s at least one big difference between a classic sand-crawler and the e-buggy: the drivetrain. The Manx, and pretty much every VW-based buggy that followed relied on the automaker’s simple – and famously reliable – air-cooled four-cylinder engine. The e-buggy concept, however, is all-electric.

    The body is mounted onto a platform dubbed the MEB, a modular “architecture” that will be used for the majority of future all-electric products that the Volkswagen Group will sell through brands as diverse as Europe-based entry marques Seat and Skoda, as well as upscale Audi.

    Two MEB-based battery-electric vehicles also will be produced for the Volkswagen brand in Tennessee, the automaker last month announcing an $800 million expansion of its Chattanooga assembly line.

    Appropriately enough for this California-inspired concept, the MEB somewhat resembles a skateboard. Instead of mounting its engine up front — or in back, as with the original Beetle — the battery pack and motors are tucked underneath the floorboard. That approach lowers the center of gravity, making the platform more stable. It also means that space normally devoted to the engine compartment can be transformed into additional passenger or cargo space.

    While the e-buggy is being described as purely a concept vehicle, it wouldn’t be the first retro-tinged show car the automaker has introduced with an eye towards production. VW revealed an all-electric take on its classic, hippy-era Microbus during the January 2016 Consumer Electronics Show in Las Vegas. It has since announced that what will be known as the I.D. Buzz will roll into showrooms in 2022.

    Whether VW would want to get into the dune buggy business is far from certain. But the concept coming to the Geneva Motor Show might offer a hint that another once-believed model is ready for a revival.

    The third-generation Beetle is currently winding down and will go out of production by the end of the 2019 model-year, Volkswagen confirmed last August with the debut of the “Final Edition.”

    “There are no immediate plans to replace it,” said Hinrich Woebcken, then the head of the Volkswagen Group of America. But he left the door open slightly when he quickly added that “I would also say, ‘Never say never.’”

    Beetle fans will be watching the debut in Geneva next month to see if the automaker just might be ready to bring back the Beetle in all-new form.

  • The shutdown has ended, yet some small businesses still struggle to move on

    The partial government shutdown has come to an end. Yet for small-business owners who are waiting on loans, the clock is still ticking.

    The government closure shuttered some agencies, including the Small Business Administration, for 35 days.

    Now that the SBA has finally reopened, it faces a backlog of loans to process.

    The Consumer Bankers Association pegged the tally of outstanding loans at about 300 for each day of the shutdown, or about $2 billion in lending, according to a letter it sent to President Donald Trump and Congressional leaders Jan. 22. The partial shutdown began on Dec. 22.

    The SBA works to with lenders to process and guarantee funding for small businesses. The agency does not loan money directly. It does, however, set guidelines for loans with the aim of reducing risk for lenders and making capital more available to small businesses. The SBA did not respond to a request for comment.

    “Small business is going to be the first place you’re going to see the impact of the shutdown, because a lot of these loans stop as soon as the shutdown occurs,” said David Pommerehn, associate general counsel and senior vice president at the Consumer Bankers Association.

    Lawmakers agreed on Jan. 25 to keep the government open for three weeks, or until Feb. 15.

    That is little comfort to small-business owners who are still waiting to get checks in their hands.

    That includes Carlos Chavira, who owns a Dedham, Massachusetts, restaurant named Pancho’s Taqueria with his sister, Nohely. Together, they opened their first location several years ago.

    Last year, they signed a lease for a second restaurant in nearby Needham.

    However, they still need funding in order to open that new location. And while the six-figure sum they were seeking has been pre-approved by a bank, they are still waiting on the SBA.

    That has Chavira nervous about the upcoming Feb. 15 deadline.

    “Hopefully, we get approved by then and we don’t have to wait a little longer,” Chavira said.

    If you own a small business and are facing a shutdown-related shortfall — either because of a wait for loans or because of lost business — financial experts say there are some key considerations to keep in mind.

    “For a small-business owner, liquidity is key,” said Greg Ghodsi, managing director of 360 Wealth Management, a division of Raymond James. “When liquidity dries up, it makes operating the business on a day-to-day basis next to impossible.”

    Many banks continued to process SBA loans through the shutdown, though final approval from the SBA had to wait. Bank of America is one of those institutions.

    “Is it frustrating for the borrower? Yes, it is, but we’ve been able to work with all of our borrowers,” said Chris Ward, small-business lending executive at Bank of America.

    The bank has continued with its other lending activities, such as unsecured lines of credit, term loans, equipment loans and small-business cards, Ward said.

    Last year, Bank of America completed about $8.6 billion in new small-business loans; about $400 million of that was SBA-related lending.

    One thing for small-business owners to watch: That any traditional business loans they take do not conflict with their plans to pursue SBA loans, according to the Consumer Bankers Association. Check to see if there is a “credit elsewhere” requirement in the SBA loan program that could prohibit you from taking traditional loans or temporary bridge loans.

    Small-businesses owners who want access to capital may turn to non-bank lending.

    If you decide to go that route, you should be extra-cautious about the lender you choose and go over the terms and disclosures carefully, said Joyce Klein, director of FIELD at the Economic Opportunities Program at the Aspen Institute.

    There are a range of products you can access online, from installment loans to lines of credit. And their terms may require daily payments through your bank account or take a certain percentage of merchant transactions.

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    “You have to be very careful,” Klein said. “It can be not easy to understand how the pricing of the capital, the payment structure of the capital, the prepayment requirements of the capital, relate to your cash flow and financing needs.”

    You may also face high financing charges, even if you pay off the loan ahead of schedule.

    The risks of non-bank lending prompted the Aspen Institute and certain lending organizations to form a Small Business Borrowers’ Bill of Rights. The document lays out the rights borrowers should have and a set of practice standards for lenders and brokers. It also includes a list participating financial institutions.