OnlyFans—the subscription-based platform that provides a direct link between adult content creators and customers—has begun promoting its first app, but says the NSFW content that the platform has become known for will be taking a back seat for now.
Now available on all the major devices, including iOS, Roku, and Amazon Fire, OFTV’s content will be free to stream and will comprise a library of more than 800 videos, which includes original series from creators such as Mia Khalifa, Bella Thorne, and Holly Madison. Unlike the brand’s flagship offering, which has become synonymous with adult content, the app will allegedly exclusively feature nudity-free videos, including content from fitness instructors, chefs, musicians, comedians, and podcasters.
“OFTV provides a super convenient way for fans to watch content from favorite creators,” Tim Stokely, OnlyFans founder and CEO, told Bloomberg recently. “There’s no adult content on OFTV. Because it’s not being monetized and there’s no direct impact on creators’ earnings, we are able to be in the app store.”
Although the app initially launched in January, OnlyFans has only recently begun to promote it as a way to link non-pornographic creators to new audiences. According to Bloomberg, the app was created as part of a strategic play to help the company “shed its reputation as a purveyor of pornography and rebrand itself as a vital tool for all online creators.”
“From the onset of launching OnlyFans, we have been a creator-first platform to give creators further autonomy and power over their content,” Stokely said. “We’re all about giving creators more opportunities to get their content out there and more ways for our community to access it.”
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As membership platforms like Patreon and Substack have revolutionized the way creators connect with fans—and particularly during a pandemic that has forced everyone inside and strengthened the allure of direct monetization models—OnlyFans has undoubtedly been thinking about all of the money it’s leaving on the table by focusing exclusively on adult content. By expanding its offerings, the platform will simultaneously allow new creators to market themselves within the app while also diversifying its reach to capture new audiences.
“People who have come on to OFTV to watch one video may go on to choose another,” Stokely told Bloomberg. “It’s a wider audience, and perhaps a slightly different audience.”
WASHINGTON—The White House urged OPEC to boost oil production Wednesday, saying recent planned increases are insufficient as countries around the world seek to emerge from the Covid-19 pandemic.
National security adviser Jake Sullivan said in a statement that recent planned production increases by the Organization of the Petroleum Exporting Countries would “not fully offset previous production cuts” made by OPEC and its oil-producing allies during the pandemic.
“At a critical moment in the global recovery, this is simply not enough,” Mr. Sullivan said.
Brent crude, the international oil benchmark, fell 0.8% to $70.04 a barrel after the White House announcement. Oil prices have experienced volatility in recent days due to concerns over the Delta variant of Covid-19.
In July, OPEC and a group of Russian-led oil producers agreed to unleash millions of barrels of crude over the next two years, committing to restore all the cuts they made at the start of the Covid-19 pandemic. The group chose to move gradually, with monthly installments of new oil through the latter end of 2022.
shares are heading lower in late trading Thursday after the e-commerce and cloud computing giant reported mixed results for the June quarter, with better-than-expected profits but sales that fell shy of Wall Street estimates.
The miss reflects a shortfall in Amazon’s e-commerce business, which suffered a sharp deceleration from recent growth trends. The e-commerce slowdown was partially offset by better-than-expected results in the company’s cloud computing, advertising, and third-party seller segments.
For the quarter, Amazon (ticker: AMZN) posted sales of $113.1 billion, up 27% from a year ago, or 24% when adjusted for currency, right in the middle of the company’s guidance range of $110 billion to $116 billion, and a little shy of Wall Street’s consensus of $115.4 billion. Earnings were $15.12 a share, ahead of analysts’ $12.28 per share forecast. Operating income was $7.7 billion, toward the top of the company’s projected range of $4.5 billion to $8 billion, and just below the Wall Street consensus of $7.8 billion.
Revenue from online stores was $53.2 billion, up 16% from a year ago, or 13% adjusted for currency, well shy of the Street consensus forecast of $57.3 billion. That was below the 41% growth in the March quarter and 49% growth a year ago.
Amazon chief financial officer Brian Olsavsky said on a call with analysts that since May the company’s growth—aside from Prime Day—dropped into the mid-teens, from recent growth in the 35% ro 40% range, and 44% growth in the March quarter. The company sees growth for the September quarter int he 10% to 16% range.
Olsavsky pointed to wider availability of vaccines and consumers leaving the house more as factors in the slowdown, in addition to tough comparisons with a year ago.
Olsavsky added that the company expects a “pattern of difficult comps” to continue for the next few quarters until the company laps the pandemic period.
Third-party services revenue was $25.1 billion, up 38%, or 34% adjusted for currency, above the consensus forecast at $24.8 billion. But that was nonetheless a slowdown from 60% in the March quarter and 53% a year ago.
Amazon Web Services, the company’s cloud business, had revenue of $14.8 billion, up 37%, and well ahead of the Street estimate at $14.3 billion, accelerating from 32% growth in March and 29% growth a year ago.
“Other” revenue, mostly advertising, was $7.9 billion, up 87%, or 83% on a currency adjusted basis, well ahead of consensus at $7 billion, and consistent with recent strong advertising data from
Facebook,
Alphabet and other ad-driven businesses. Physical store revenue was $4.2 billion, up 11%, topping the Street view at $3.9 billion.
North American sales growth, excluding foreign exchange effects, slowed to 21% in the quarter, down from 39% in March and 44% a year ago. Operating margin in North America was 4.7%, down from 5.4% in March, though up from 3.9% a year ago. International sales were up 26%, down from 50% in the March quarter, and 41% in the year earlier quarter.
For the September quarter, Amazon is projecting sales of $106 billion to $112 billion, shy of the Street consensus at $118.6 billion, with operating income ranging from $2.5 billion to $6 billion, versus $6.2 billion a year ago. The company said guidance assumes about $1 billion in costs related to Covid-19.
Amazon shares are down 7.1% in late trading. The stock is up 11% in 2021 , trailing the
S&P 500
‘s 18% gain.
Write to Eric J. Savitz at eric.savitz@barrons.com
The makers of some of the world’s bestselling food and drink brands warned they would keep raising prices as they grapple with the strongest inflation in years.
Nestlé SA, Diageo PLC, Anheuser-Busch InBev SA and Danone SA all said Thursday that sales were rising as key markets rebound from the pandemic, but that the recovery was also leading to rapidly increasing costs for ingredients, packaging and transport.
Nestlé said its ice creams had gotten more expensive, spirits giant Diageo has raised prices on brands like Baileys and Casamigos tequila, and Budweiser brewer AB InBev is exploring higher prices for its beers. Meanwhile, Danone, which makes Activia yogurt and Evian water, said it would increase prices across all of its categories to try preserve its profitability.
“We do expect price increases to accelerate from what you saw in the first half,” said Nestlé Chief Executive Mark Schneider. “After several years of low inflation, all of a sudden it accelerated very strongly starting in March and is continuing to accelerate.”
Companies across many sectors are contending with rising costs from coffee to aluminum and shipping as the recovery from Covid-19 gains steam. That is leading to higher prices for many goods, pushing U.S. inflation to rise at the fastest pace for more than a decade.
Wayne Couzens, a serving police constable whose “primary role was uniformed patrol duties of diplomatic premises,” had pleaded guilty to Everard’s kidnap and rape in June.
The Crown Prosecution Service said in a statement that he had now admitted a charge of murder at the Old Bailey court and would be sentenced at a later date.
Everard, 33, went missing on March 3 after leaving a friend’s house in Clapham, south London, in the early evening. Her body was found on 10 March inside a builder’s bag in woodland near Ashford, Kent, more than 50 miles from where she was last seen.
Couzens had been arrested a day earlier at his nearby home in Kent, on suspicion of kidnap. He was later arrested on suspicion of murder.
Five members of Everard’s family were in the London courtroom as Couzens appeared by video link from Belmarsh high security prison to make his plea, according to PA News.
Metropolitan Police commissioner Cressida Dick was also present, PA reported.
“Couzens lied to the police when he was arrested and to date, he has refused to comment. We still do not know what drove him to commit this appalling crime against a stranger,” said Carolyn Oakley, CPS specialist prosecutor.
“Today is not the day for hearing the facts about what happened to Sarah. Today is a day to remember Sarah and our thoughts remain with her family and friends.”
Oakley described Couzens’ guilty plea as the result of “a great deal of hard work” by the prosecution team. She added that police “should be commended for their thorough and tireless investigation into Sarah’s disappearance.”
Police were criticized in March for their heavy-handed response to a vigil held to remember Everard and highlight the issue of women’s safety.
Her disappearance prompted thousands of women to share their own experiences of intimidation or harassment while walking alone at night in British cities and around the world.
Many also exchanged notes on the habitual precautions they take to try to stay safe when they walk alone — and voiced their anger and frustration that this feels necessary.
Doughnuts on a production line inside a Krispy Kreme Doughnuts store in Times Square in Manhattan.
Angus Mordant/Bloomberg
Krispy Kreme
led a group of six companies to the public markets on Thursday.
Besides the doughnut chain,
Acumen Pharmaceuticals,
D-MARKET Electronic Services & Trading,
Evercommerce,
Torrid Holdings,
and the
Glimpse Group
made their stock-market debuts.
So far this week, 17 companies, including those six, have listed their shares. There are no initial public offerings on tap for Friday because of the holiday weekend. On Wednesday, 10 companies went public, with
Didi Global,
the Uber of China, trading flat and closing at $14.14, 14 cents above its offering price.
On Thursday, Acumen Pharmaceuticals (ticker: ABOS) was one of the first to begin trading. The stock opened at $25.07 and closed at $20.10, up nearly 26% from the offering price.
The solid performance came after Acumen increased the size of its deal by nearly 20%. The biotech company, which is developing therapies to treat Alzheimer’s disease, collected about $160 million. It sold roughly 10 million shares at $16, the top of its $14-to-$16 range.
The Glimpse Group (VRAR), which develops and commercializes virtual and augmented reality software products, also opened. Shares kicked off at $11.75 and ended at $17.66, up 152% from its offer price. Glimpse delivered Thursday’s smallest deal. The company collected $12.3 million, after selling 1.75 million shares at $7, the midpoint of its $6-to-$8 price range.
Torrid Holdings (CURV) shares rose 15% from the offer price to close at $24.15. The direct-to-consumer retailer of plus-sized women’s clothes increased the size of its deal twice. It filed to offer 8 million shares at $18 to $21, which it boosted Wednesday to 10 million. It ended up selling 11 million shares at $21, the top of its expected range, raising $231 million. Sycamore Partners, the retail-focused private-equity firm, will own nearly 76% of Torrid after the IPO.
Krispy Kreme (DNUT), the most well-known of Thursday’s group, kicked off at $16.30 and ended at $21, up nearly 24% from the offer price. The doughnut chain increased the size of its deal by 10% but priced it well below its expected range to raise $500 million. Krispy Kreme had planned to offer 26.7 million shares at $21 to $24 each, but ended up selling 29.4 million shares at $17 each. JAB Holding, the European investment firm, will own about 39% of Krispy Kreme after the IPO
D-Market Electronic Services & Trading, or Hepsiburada (HEPS), jumped nearly 12% from its offer price to close at $13.43. Hepsiburada, which means “you can find anything you want here” in Turkish, is a leading e-commerce platform from Istanbul. The company raised $680 million after selling 56,740,000 American depositary shares at $12 each, the midpoint of its $11-to-$13 price range. Each ADS represents one class B ordinary share.
Lastly, EverCommerce (EVCM) stock opened at $20, but slipped back to close nearly 4% above its offer price at $17.60. EverCommerce’s IPO came in at $325 million after the comp[any sold 19.1 million shares at $17, the middle of its $16-to-$18 range. The company provides software for small and midsize service businesses.
About two weeks ago, millions of Google Chrome users were signed up for an experiment they never agreed to be a part of. Google had just launched a test run for Federated Learning of Cohorts—or FLoC–a new kind of ad-targeting tech meant to be less invasive than the average cookie. In a blog post announcing the trial, the company noted that it would only impact a “small percentage” of random users across ten different countries, including the US, Mexico, and Canada, with plans to expand globally as the trials run on.
These users probably won’t notice anything different when they click around on Chrome, but behind the scenes, that browser is quietly keeping a close eye on every site they visit and ad they click on. These users will have their browsing habits profiled and packaged up, and shared with countless advertisers for profit. Sometime this month, Chrome will give users an option to opt-out of this experiment, according to Google’s blog post—but as of right now, their only option is to block all third-party cookies in the browser.
That is if they even know that these tests are happening in the first place. While I’ve written my fairshare about FLoC up until this point, the loudest voices I’ve seen pipe up on the topic are either marketing nerds, policy nerds, or policy nerds that work in marketing. This might be due to the fact that—aside from a few blog posts here or there—the only breadcrumbs Google’s given to people looking to learn more about FLoC are inscrutable pages of code, an inscrutable GitHub repo, and inscrutable mailing lists. Even if Google bothered asking for consent before enrolling a random sample of its Chrome user base into this trial, there’s a good chance they wouldn’t know what they were consenting to.
(For the record, you can check whether you’ve been opted into this initial test using this handy tool from the Electronic Frontier Foundation.)
Since Google doesn’t have a good track record of being forthright about its privacy practices, we decided to write up the basics of this tech, the trial, and why FLoC’s promises aren’t actually all they’re cracked up to be.
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“WTF is a FLoC?”
In Google’s own words, it’s a “privacy-preserving mechanism for interest-based ad selection.” In normal human words, it’s a way to track users across the web for ad-targeting purposes, in a way that’s more privacy-friendly than the cookies and code advertisers have relied on until now—at least, that’s what Google says.
“How’s it supposed to work?”
It’s a bit complicated. When someone floats from site to site across the web using a FLoC-powered browser, that browser will use an internal algorithm to suss out an appropriate “interest cohort” to lump that person into, and these cohorts will get recalculated on a weekly basis. These specific cohorts, Google says, are built up of thousands of different users at any given time, making tracking and targeting your specific browser history nigh impossible for any sleazy adtech types.
Just as an example here: I’m in the middle of refurbishing my apartment, which means I spend a good two hours a day clicking through sites for stores like West Elm, Target, IKEA, and the like. In this situation, my browser could (pretty accurately) label me as a home decor nerd, and lump me into a cohort with thousands of other people that also spend hours poring over couches.
Under FLoC, every cohort is given a name that’s a jumble of letters, numbers, or both, so let’s just call the home-decor cohort HGTV, after the legendary channel of the same name.
The next time I visit a site for tips about, I don’t know, reupholstering my couch, that site can ask the cohort I’m a part of. When it gets notice that I’m a part of the HGTV cohort, the site can then keep track of my behavior on-site and the couch ads that I inevitably click on, and then aggregate that data with other folks from the same cohort as they trickle in.
Every so often, that aggregated data about what the HGTV cohort is into (couch reupholstering! removable wallpaper! granite countertops!) gets uploaded to any ad networks an individual site might be working with.
Let’s just say the network in question is Google Ads since just about every site is using it. If I try browsing an ad-supported news site—like the one you’re on right now—after checking out that Couch Content, that news site will also ask my browser about the cohort I’m in (HGTV).
Once that’s settled, my cohort ID gets beamed to that site’s partnering ad networks, which naturally includes Google’s network. Based on the data this ad-serving system gleaned on this cohort previously (ie, they could probably use a new couch), it reaches into its back catalog of ads from about 7 million different advertisers that are waiting to run. The ad platform finds an ad for a new sofa and plunks that on the news site, where I see it, immediately give up on the idea of reupholstering anything, and click.
“How is any of this different from the tracking we have now?”
The trackers that FLoC is meant to replace are known as “third-party cookies.” We have a pretty in-depth guide to the way this sort of tech works, but in a nutshell: these are snippets of code from adtech companies that websites can bake into the code underpinning their pages. Those bits of code monitor your on-site behavior—and sometimes other personal details—before the adtech org behind that cookie beams that data back to its own servers.
That’s one of the key differences between FLoC and the current cookie hell we’re enmired in. With FLoC, my thousand-person strong cohort is the only thing an outside advertiser sees. Anything else—like the names of sites that I visited or details about couches I’ve clicked on in the past—are stored locally within the browser. In the cookie case, all of these details are beamed to an external server where the company in charge can pretty much have free reign: they can pawn off this data to other adtech firms, or they can merge their data with data from other cookie co’s, or in some cases, they can give that data to police.
This is why Google’s pitch sounds semi-appealing. Sure, you’re still being behaviorally profiled in what’s inarguably a kind of icky way, but at least you can’t be picked out of a lineup.
“There’s gotta be a catch here.”
The catch is that Google still has all that juicy user-level data because it controls Chrome. They’re also still free to keep doing what they’ve always been doing with that data: sharing it with federal agencies, accidentally leaking it, and, y’know, just being Google.
“No way.”
Way.
“Isn’t that kind of… anti-competitive?”
It depends on who you ask. Competition authorities in the UK certainly think so, as do trade groups here in the US. It’s also been wrapped up into a Congressional probe, at least one class action, and a massive multi-state antitrust case spearheaded by Texas Attorney General Ken Paxton. Their qualms with FLoC are pretty easy to understand. Google already controls about 30% of the digital ad market in the US, just slightly more than Facebook—the other half of the so-called Duopoly—that controls 25% (for context, Microsoft controls about 4%).
While that dominance has netted Google billions upon billions of dollars per year, it’s recently netted multiple mounting antitrust investigations against the company, too. And those investigations have pretty universally painted a picture of Google as a blatant autocrat of the ad-based economy, and one that largely got away with abhorrent behavior because smaller rivals were too afraid—or unable—to speak up. This is why many of them are speaking up about FLoC now.
“But at least it’s good for privacy, right?”
Again, it depends who you ask! Google thinks so, but the EFF sure doesn’t. In March, the EFF put out a detailed piece breaking down some of the biggest gaps in FLoC’s privacy promises. If a particular website prompts you to give up some sort of first-party data—by having you sign up with your email or phone number, for example—your FLoC identifier isn’t really anonymous anymore.
Aside from that hiccup, the EFF points out that your FLoC cohort follows you everywhere you go across the web. This isn’t a big deal if my cohort is just “people who like to reupholster furniture,” but it gets really dicey if that cohort happens to inadvertently mold itself around a person’s mental health disorder or their sexuality based on the sites that person browses. While Google’s pledged to keep FloC’s from creating cohorts based on these sorts of “sensitive categories,” the EFF again pointed out that Google’s approach was riddled with holes.
“Behavior correlates with demographics in unintuitive ways,” wrote EFF technologist Bennet Cyphers. “It’s highly likely that certain demographics are going to visit a different subset of the web than other demographics are, and that such behavior will not be captured by Google’s “sensitive sites” framing.”
“And Google’s pitching this as a better alternative to cookies?”
I know, right?????????
“How do I get all this across to my uncle/parent/neighbor/estranged nephew that’s not tech-savvy, but wants to know what FLoC is all about?”
Just remind them that this is a privacy product being pushed by Google. Google. That’s all they need to know.
The situation may have put the company at risk of running afoul of US securities law by wading into the murky waters of potentially misleading investors.
“This is not the sort of thing that a responsible global company should be doing,” said Charles Whitehead, Myron C. Taylor Alumni Professor of Business Law at Cornell Law School.
In case you missed it, this week the carmaker entered the spotlight after announcing that, at least in America, it was changing its name to “Voltswagen,” and would use the new name in ads and on its electric vehicles. Volkswagen later backtracked and said it’s definitely not changing its name and that the whole thing was an April Fools’-inspired marketing ploy.
On Wednesday, it released yet anotherstatement explaining: “Volkswagen of America developed and implemented a marketing campaign to draw attention — also with a wink — to Volkswagen’s e-offensive” and the launch of its new ID.4 all-electric SUV in the United States.
But here’s the thing: People took the first, untrue statement about the name change seriously.
Wall Street analysts even released guidance about what such a change might mean for the carmaker’sstrategic direction. Wedbush analyst Dan Ives said in a note to investors Tuesday morning that such a name change “underscores VW’s clear commitment to its EV brand,” and went on to detail the market opportunity for electric vehicles in the United States, Europe and China in the coming years.
Volkswagen is indeed investing heavily in electric vehicles, but confusion over the name change could prompt scrutiny from the Securities and Exchange Commission or litigation from investors who feel misled by the joke. The Securities Exchange Act prohibits companies from making false or misleading statements to investors.
“It’s a great illustration of the power of the media and the need to be really careful about what you say because you can never know what will or won’t move a market,” said Jonathan Richman, a partner at law firm Proskauer. “From Volkswagen’s point of view, this was supposed to be amusing, but one person’s amusement might be another person’s profit or loss.”
Quipping about the status of a business that Volkswagen is positioning as more environmentally friendly also could irk investors, especially in light of the 2015 diesel emissions scandal the company has been trying to put behind it.
“Will the SEC inquire? Well, of course they will,” Whitehead said. “It’s gotten enough publicity and people are concerned about it and there are issues about whether or not companies should be doing this that I’m sure [the SEC is] going to make a phone call.”
A representative from Volkswagen’s headquarters said Wednesday afternoon the company had not been contacted by the SEC. The agency declined to comment on the matter.
There is precedent for the SEC taking action against cheeky statements regarding big companies. In 2018, Tesla CEO Elon Musk settled with the SEC for $20 million after the agency said his tweetabout securing funding to take the company private at $420 a share — an apparent joke about weed — misled investors.
If the SEC were to investigate the “Voltswagen” stunt, Whitehead said, it would likely look at whether the statement was intended to manipulate the company’s stock price or ifshareholders would consider a name change (or the fact that the name change was a joke) to be material information. Arguing either claim could be tricky.
On Tuesday, following the name change statement, Volkswagen’s ADR stock briefly jumped almost 10%, before closing nearly flat (the company’s shares have, however, been trending steadily upward in recent months).
“I don’t know that simply changing the name, or not changing the name for that matter, is going to be considered material … I don’t think it rises to that level,” Whitehead said. “These are all kind of gray areas, which is why a responsible company just doesn’t go down this path.”
Richman added: “To prove a claim you have to prove intent, meaning that there was a conscious or at least a grossly reckless disregard of the truth here. I would imagine that if this really was intended as an April Fools’ joke, it’s going to be very difficult to prove that Volkswagen intended to deceive the market.”
For its part, Volkswagen of America said it “cannot see any influence on the stock market price as a result of the advertising campaign.”
“This was not and is not the aim of the campaign,” Volkswagen of America said in a Wednesday statement to CNN Business. “It is a publicity measure in the context of the market launch of the ID.4 and the e-mobility push in the USA.”
A statement from Volkswagen’s headquarters earlier Wednesday said that the company has also issued April Fools’ Day press releases in the past: In 2003, it temporarily renamed the German town of Wolfsburg, where it’s headquartered, to “Golfburg” to promote the release of the Golf. And numerous other corporations have carried out April Fools’ pranks in the past, too, without raising the eyebrows of securities regulators.
But in the case of the “Voltswagen” statement, “there was nothing to indicate … that — nudge, nudge, wink, wink — this is really a joke, unlike the other gags that have been out there,” Whitehead said.
In fact, the company included some pretty specific details in the name change statement about what the shift would mean, including that it would use “Voltswagen” on the chrome badges on the backs of its electric vehicle. (It’s not.) And it didn’t help that the statement announcing the purported name change included noreference to April Fools’ Day — and it landed two days before the holiday.
As for the timing of the statement, Volkswagen of America said it “had a whole social media and marketing campaign about our e-mobility plans that was due to roll out” between the time of the name change statement and April 1, “when we were due to announce that it was a joke.”
Volkswagen’s(VLKPF) stock fell nearly 4% on Wednesday in the wake of news of the debacle. And that’s no joke.
WASHINGTON (Reuters) – German automaker Volkswagen AG’s U.S. unit issued a false news release on Tuesday claiming it would rename its U.S. operations as “Voltswagen of America” in a marketing stunt designed to call attention to its electric vehicle efforts, the company said on Tuesday.
VW came under criticism on social media for its misleading news release, some commenters recalling the company’s diesel emissions scandal and years of misleading customers and regulators.
“Volkswagen of America will not be changing its name to Voltswagen. The renaming was designed to be an announcement in the spirit of April Fool’s Day, highlighting the launch of the all-electric ID.4 SUV and signaling our commitment to bringing electric mobility to all,” a VW U.S. spokesman said in a statement.
The news release, posted on its website and accompanied by tweets, was reported by Reuters and other outlets globally and included a detailed description of its purported rebranding efforts and new logos. The company pulled it late Tuesday.
A Volkswagen spokesman in Germany called the rebranding a “nice idea” with a focus on marketing. Volkswagen Group of America CEO Scott Keogh did not respond to messages.
At least one analyst wrote a research note praising the name change. VW’s preferred shares closed 4.7% higher. Ordinary shares closed up 10.3%.
The world’s second-largest carmaker expects to double electric vehicle deliveries and boost profits for its core brand this year after stepping up its switch to fully electric vehicles.
Some VW officials have expressed frustration that its significant U.S. EV efforts have not drawn as much attention as Tesla or General Motors.
The Volkswagen brand aims to invest 16 billion euros ($19 billion) in electrification and digitalization by 2025. It has committed to sell one million EVs worldwide by 2025.
Volkswagen in 2015 admitted to using illegal software to rig diesel engine tests in the United States, sparking Germany’s biggest corporate crisis and costing the carmaker more than 32 billion euros ($38 billion) in fines, refits and legal costs.
In 2017, VW pleaded guilty to fraud, obstruction of justice and making false statements as part of a $4.3 billion settlement reached with the U.S. Justice Department over the automaker’s diesel emissions scandal.
Reporting by David Shepardson; Editing by Bernadette Baum and Howard Goller
The head of Jeep’s owner said he is open to dropping the Cherokee name from vehicles after recent criticism from the Native American tribe’s leader.
Carlos Tavares,
chief executive officer of the recently formed
Stellantis
STLA -2.71%
NV, said the company was engaged in dialogue with the Cherokee Nation over its use of the name. Jeep has two models, the Cherokee compact sport-utility vehicle and larger Grand Cherokee, that it sells in the U.S. and beyond.
Asked in an interview if he would be willing to change the Jeep Cherokee’s name if pushed to do so, Mr. Tavares said, “We are ready to go to any point, up to the point where we decide with the appropriate people and with no intermediaries.”
“At this stage, I don’t know if there is a real problem. But if there is one, well, of course we will solve it,” Mr. Tavares said, adding that he wasn’t personally involved in the talks.
Debate over the Cherokee name is among the issues facing Mr. Tavares, who took control of Stellantis when it was formed earlier this year from the merger of Fiat Chrysler Automobiles NV and Peugeot-maker PSA. In the interview Wednesday, Mr. Tavares also discussed whether to cut down on the company’s 14 brands, making Fiat plants more competitive and his plan to stick with China.
Jeep has two models, the Cherokee compact SUV and larger Grand Cherokee, that it sells in the U.S. and beyond.
Photo:
FCA/TNS/Abaca Press/Reuters
The Cherokee Nation is the largest Native American tribe in the U.S., with some 370,000 members, and Jeep has sold millions of vehicles named after it. The auto brand extended its use of the Cherokee name to a compact SUV, a smaller version of the Grand Cherokee, in 2013.
The leader of the Cherokee Nation recently said he would like to see Jeep stop using his tribe’s name on its SUVs.
Chuck Hoskin Jr.,
principal chief of the Cherokee Nation, said that he believed Jeep had good intentions but that “it does not honor us by having our name plastered on the side of a car,” according to a statement first released to Car and Driver last week.
“The Cherokee Nation has an open dialogue with Stellantis leadership, and look forward to ongoing discussions,” a spokesman for the tribe said Wednesday. “We appreciate Stellantis’ reaching out and thoughtful approach on this.”
“
‘It does not honor us by having our name plastered on the side of a car.’ ”
— Chuck Hoskin Jr., principal chief of the Cherokee Nation
Mr. Tavares’s remarks come in the wake of a broad reckoning over racial and social injustice in the U.S. that was sparked by the police killing of
George Floyd,
an unarmed Black man, in Minneapolis over Memorial Day weekend last year. In December, the Cleveland Indians decided to drop the baseball team’s longtime nickname after fans and Native American groups criticized it as racist. The Washington Football Team of the NFL has dropped a name that had been seen as a racial slur.
The Jeep Cherokee and Grand Cherokee SUVs are among the brand’s bestsellers in the U.S., accounting for 43% of Jeep’s sales in its largest market, according to company figures. Stellantis is rolling out a long-awaited redesign of the Grand Cherokee later this year.
Mr. Tavares said the auto industry’s practice of naming cars after Native American tribes was a sign of respect.
“I don’t see anything that would be negative here. I think it’s just a matter of expressing our creative passion, our artistic capabilities,” Mr. Tavares said.
The Jeep brand sits alongside profit-drivers like Ram in the U.S. and Peugeot in Europe. But the company’s sprawling portfolio of 14 brands also includes some that will need to prove their worth, Mr. Tavares said.
Mr. Tavares said he has asked each of his brand chiefs to work on a 10-year plan to develop more long-term visibility on product planning.
“I’m saying, ‘Look guys, I’m going to give you a chance. You need to convince me—you, the brand CEO—that you have a vision,’” Mr. Tavares said.
After several turnaround efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to mount meaningful comebacks in recent years. The Fiat brand struggles with aging models and weak sales, which has caused an overcapacity problem in the company’s Italian factories.
Even the storied Chrysler brand has waned in recent years, now selling only three models compared with the six it carried a decade ago. The brand’s U.S. sales have also slid to one-third their volume in 2015, according to company figures.
On the PSA side, the DS brand—which focuses on high-end sedans and SUVs—grew market share last year but continues to lag far behind some of its German competitors.
“After we give them a chance to fail, we need to be also fair,” Mr. Tavares said. “If the rest of the company is doing the right things and there is one part of the company that is pulling everybody down, we’ll have to take that into consideration.”
The Portuguese executive built his reputation in the automotive industry as a turnaround expert. Peugeot was bleeding money when it hired Mr. Tavares in 2013. Since then the French car maker has gone from losing 5 billion euros, equivalent to about $6 billion, in 2012 to becoming one of the most profitable mass-market car makers in the industry. Last year it reported a net profit of €2.17 billion, or roughly $2.62 billion, with an adjusted operating margin of 7.1% in its core automotive business.
This time, Mr. Tavares has a longer to-do list, including integrating the two companies’ European businesses and stemming losses in China.
In Europe, Mr. Tavares has been visiting Fiat Chrysler factories—including an Alfa Romeo facility 80 miles south of Rome—and encouraging them to benchmark their performance against PSA plants. Additionally, employees from Fiat Chrysler’s Fiat factory in Mirafiori, Italy, visited PSA’s Citroën’s plant in Madrid, and Mr. Tavares said they were surprised by the nonlabor cost savings they observed.
The auto executive said the new company could reach its cost-saving goals in Europe without closing factories.
Asked what lessons he had learned from the chip shortage that has idled car plants across the world, Mr. Tavares said large suppliers didn’t relay signals they were receiving about the looming crisis. “We were not protected,” he said. “That’s a clear lesson learned.”
Chinese regulators are taking a close look at Tesla operations after recent videos on social media appear to show a Model 3 battery fire and malfunctioning vehicles. WSJ explains how possible quality issues with Tesla cars could threaten the EV-maker’s meteoric rise. Photo Illustration: Michelle Inez Simon
Mr. Tavares said the industrywide shift toward electrification would continue to rely on government subsidies and other financial incentives for buyers until auto makers figure out how to lower production costs over the next few years.
“If we propose electric vehicles which are extremely efficient but nobody can buy because they are costly, what’s the point from an environmental perspective?” he said.
In China, the combined sales of Peugeot and Fiat Chrysler accounted for less than 1% of a market that sold 20 million vehicles last year, according to industry data. Fiat Chrysler has long struggled to turn a profit in the world’s largest automotive market, while the French car maker sold only 45,965 vehicles in China last year, continuing a rapid multiyear decline.
Mr. Tavares said Stellantis isn’t considering exiting China, removing an option that he said was still on the table when the company started trading in New York at the start of this year.
“We cannot be away from the biggest market in the world,” he said.
Write to Nick Kostov at Nick.Kostov@wsj.com and Nora Naughton at Nora.Naughton@wsj.com
