Huawei, the Chinese telecom giant caught in the center of the U.S.-China trade war, has scrambled to keep its business running after President Donald Trump moved to ban U.S. companies from supplying components to it last week. But Huawei is hardly the only company taking a hit. Many U.S. companies, which are Huawei’s suppliers, are also feeling the heat.
Chipmakers including Intel (INTC), Qualcomm (QCOM), Xilinx (XLNX), and Broadcom (AVGO) have stopped supplying Huawei until further notice, according to Bloomberg. Their shares have been slammed following the ban, which means they could lose a top client.
Broadcom stock, for example, fell more than 5% on Monday. In the third quarter of 2018, the semiconductor maker pocketed $285 million from Huawei, accounting for about 6% of its total revenue. Shares of NeoPhotonics, a San Jose, Calif.-based networking modules manufacturer, plunged more than 30% from last week following the ban, due to its dependence on Huawei.
Chipmakers' shares are getting slammed by the Huawei ban.
“They are good customers, and they buy products, which obviously helps their products be competitive in the global export market. And I hope they continue to do so,” said Hock Tan, CEO of Broadcom, referring to Huawei in March. “But certainly, the overhang of that is something that we are closely monitoring and are very concerned about.”
Top U.S.-based Huawei suppliers
Some companies have even revised their revenue projections in the wake of the ban. On Monday, Lumentum (LITE), a California-based optical and photonic products manufacturer, cut the lower end of its revenue guidance for the current quarter by 7.4%, to $375 million from $405 million. It has discontinued all shipments to Huawei following the U.S. Department of Commerce ban and said it “cannot predict when it will be able to resume shipments.” Sales to Huawei contributed 18% to Lumentum’s total revenue in its latest quarter.
Here is the list of Huawei’s top U.S. suppliers, according to Goldman Sachs:
Siri, what's the fastest way to T-Mobile-Sprint-Park to watch the Mariners?FG Trade/Getty Images
Greetings from Chicago! Coming to you live from my childhood home with my 15-year-old dog Hobie on my lap. I think this column needs a mascot, so he’s the official Slog dog (eat your heart out ugly pets). Since I’m in Chicago, I might as well start this off with some exciting Chicago news…
He's an old man but we love him.Timothy Kenney
Lori Lightfoot takes over the mayor’s office today: She is now officially the first gay woman of color to run a major city and is tasked with rebuilding public trust in the city government after a rocky tenure with now ex-Mayor Rahm Emanuel. She’s built out her administration over the last two months since the election but has kept many Emanuel-era administrators on at least for the short term. She ran as a political outsider, but now is running up against some of the problems of being an outsider, primarily building relationships with the established city politicians.
Speaking of city government elections: Seattle has our official list of 56 city council candidates. And what a crowded field it is! Not quite as crowded as the Democratic presidential nominees, but you know, pretty crowded. The Stranger is kicking our election coverage into high gear, but in the meantime, the least you could do is find out who your district’s candidates are. What, you don’t know what district you’re in? Come on! This Crosscut graphic might be a good resource for you.
Orcas want us to stop making such a goddamn racket: If you haven’t been reading “Hostile Waters,” the Seattle Times’ incredible series on orcas, then boy oh boy do I have a treat for you. They just published an installment on noise and how we make way to much of it in orca habitats. I don’t know if you ever opened your eyes in Puget Sound, but you can’t see shit. Orcas use sound to find their prey. But human activities have turned Puget Sound into an underwater version of STOMP, which prevents orcas from successfully finding the few chinook salmon still around.
Vashon Island has long been the poster child for unvaccinated kids: My roommate grew up on Vashon Island and I make vaccine jokes almost every single day (don’t worry, he’s got all his shots), but we might not get to make those jokes much longer (a good thing). A combination of community information organizing, national media attention, and the recently-passed state bill eliminating personal exemptions to the measles vaccine has drastically increased vaccine rates on the island. It's still one of the least vaccinated communities in the country, but they’ve increased to 74% of kindergarteners having their state-mandated vaccines. Get your jokes in while you still can!
Dear NWS Social Media person: You’re doing such a great job. Not only do you post mostly accurate weather for today and tomorrow, you give a pretty little picture to go along with it. Your work is seen and very appreciated.
Expect increasing showers today with highs slightly below normal. Some lingering showers will persist into Tuesday before drier & warmer weather returns midweek. #WAwxpic.twitter.com/91CQRosKiW — NWS Seattle (@NWSSeattle) May 20, 2019
FCC to okay merger between T-Mobile and Sprint: T-Mobile promised to roll out a nationwide 5G network quickly following the merger if it went through and the FCC chairman was all for it. This $26 billion merger would be the largest telecommunications deal in over a decade and give T-Mobile a huge share of the American market. But T-Mobile doesn't get off totally free, they've got annual benchmarks on just how much 5G they roll out to keep the FCC happy.
Game of Thrones is officially over: And the world has some thoughts about how eight seasons of dramatic genius ended with such a whimper. You won’t have to look far for hot takes, every single person with a Twitter handle is writing a scathing screed about some aspect of the finale. I didn’t mind it too much, but the writers went WAY too far with the whole, “show don’t tell” mantra of visual storytelling. I’m all for some good mise en scène, but half the fucking episode was characters slowly walking through intricate sets, silently reacting to things. Watch it again and pay attention to how fucking SLOW everyone is walking everywhere, it’s infuriating. George R.R. Martin had enough time to finish the last book in the dramatic pauses Tyrion’s took in between lines. And so I end my petty, spoiler-free review.
Trump lashes out at Iran and they fight back: So last Friday, I tried to give Trump the benefit of the doubt in reaction to a New York Times report that he told security officials he did not want to go to war with Iran, Then over the weekend he went full Twitter strong man and sent out terrible threats toward the Middle Eastern country. Iran responded on Twitter, the only language our president speaks, saying, “#EconomicTerrorism & genocidal taunts won’t ‘end Iran.’” Someone please stop this.
If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again! — Donald J. Trump (@realDonaldTrump) May 19, 2019
Ebola outbreak worsens as militia attacks on clinics and doctors increase: The Democratic Republic of Congo is experiencing the second largest Ebola outbreak in history, second only to the outbreak in West Africa starting in 2013. At least 1,100 people have died so far, though aid groups believe that number to be underestimating the death toll. It’s hard enough for local medical workers and international aid groups to fight one of the most devastating viruses on our planet without the added complication of dozens of armed militia groups frequently attacking clinics. Public trust in the government and state military is extremely low, leading people to be suspicious of public medical services. There are even rumors that the government introduced ebola to certain parts of the country to kill the people in those regions.
Washington is a magical place where Disney movies come to life:
About 7,000 white-collar jobs are being eliminated as part of Ford's massive organizational restructuring. The automaker says it will save $600 million per year as a result.
Rebecca Cook/Reuters
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Rebecca Cook/Reuters
Updated at 11:25 a.m. ET
Ford is eliminating about 7,000 white-collar jobs — or about 10% of its salaried workforce — as part of a previously announced company-wide global restructuring.
About 800 U.S. workers will be losing their jobs between now and August. Some workers are being laid off while others are being reassigned, Ford says.
It says the company's management team is shrinking by close to 20% as part of the restructuring, which will save Ford about $600 million a year.
In a letter to employees, Ford CEO Jim Hackett said the restructuring is reducing bureaucracy and making Ford "flatter" — meaning most teams have no more than 9 layers of management, rather than up to 14.
He acknowledged saying goodbye to colleagues is "difficult and emotional."
"We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few days to wrap up and say goodbye," he wrote.
Ford's massive restructuring, expected to cost about $11 billion, is designed to cut costs dramatically. The company has seen profits slump, and while its North American operations continue to make money — thanks largely to the wildly popular F-150 pickup — Ford's operations overseas are struggling.
Hackett has promised that the "organizational redesign" currently underway will turn the company around.
Ford(F) says workers will begin to be notified of cuts starting Tuesday, and the terminations will be completed by the end of August. About 2,400 of the jobs cuts are in North America, and 1,500 of the positions will be eliminated through a voluntary buyout offer.
The move is an effort to cut bureaucracy within the company and flatten the management structure in addition to its desire to cut costs, according to a letter CEO Jim Hackett sent to employees Monday morning.
Ford has been making cuts over the past several months as part of a massive restructuring that is expected to cost thousands of jobs across the globe. The company committed last year to spending $11 billion to reshape its business, hoping to boost sales overseas and modernize its fleet of vehicles by focusing more on electric and autonomous driving tech.
But Ford has been slow to give details of how it will spend the $11 billion and what jobs might be cut as part of the restructuring of the business. It has said it will close three plants in Russia, one factory in Europe and another in Brazil. But it has said the moves announced so far represent only about $1 billion of the $11 billion restructuring it plans to do.
Ford also faces global challenges. The domestic unit is the strongest part of the company, and Ford reported last quarter that sales and profits increased in North America. But it has struggled overseas, prompting significant restructuring there. Last year it reported losses in South America, Asia and Europe even as it made money in North America and from its finance arm.
In March, the company said it was cutting roughly 5,000 jobs in Germany through a "voluntary separation" program. It also said it would cut a number of jobs in the United Kingdom, but did not provide more information about those positions at that time.
Ford's struggles
Ford faces pressure to improve its profitability. Its profit margin has lagged those of some competitors. It has announced the costs of commodities it buys, such as steel and aluminum, have increased about $1 billion annually after tariffs were imposed on those products, even though it sources most of those raw materials from domestic mills. But its executives have said the effort to reshape the business is part of a longer term strategy and not a response to those increased costs.
Because of its restructuring efforts Ford's stock is up by about a third so far this year, though its was slightly lower in morning trading on the news. Still, that's more a reflection of how low Ford shares were coming into the year.
Ford's market value of $41 billion is only slightly higher than that of Tesla(TSLA), an automaker a fraction of its size that has rarely posted a profit. And it's worth about 40% less than Uber(UBER), which only recently went public and has yet to report a profit.
But Ford and the rest of the auto industry is facing a lot of pressure to prepare itself for the future. The major automakers all have to buy into new technology and plan for a world full of self-driving cars and customers who would rather buy rides than autos themselves. They also face competition from tech companies that are also interested in the market, like Tesla and Alphabet's(GOOGL) Waymo.
"It's Ford today. It was GM. All the automakers are looking to do this," said Michelle Krebs, senior analyst with Cox Automotive. "Everyone cut to the bone during the great recession, then they beefed up since then. They have to figure out how do you wring more money out of today's business to free up money for future business. The problem is we don't know when that future business will pay off."
Krebs said automakers are also preparing for a possible slowdown in auto sales and a possible slowing US economy. Ford sold 237,000 fewer cars and trucks globally in the first quarter, a drop of 14%. It has essentially dropped the traditional sedan from its US product lineup.
Ford is playing catch-up with other automakers, which are further along in their ambitions for electric and self-driving vehicles. It does not currently offer any battery-only electric vehicles, because it halted production of the electric Focus when it discontinued production of the gas version of that vehicle. It lags some other automakers in the race to bring self-driving vehicles to the market, though like other automakers it does have test versions of those vehicles on the road.
So Ford is looking to make new alliances as it restructures its business. It's teamed with Volkwagen to develop new products, and recently announced a $500 million investment in Rivian, which plans to debut an electric truck next year.
Other big auto companies are also looking toward the future. GM, for example, has brought in millions in investment by setting up a separate unit known as Cruise to focus on self-driving cars. GM has also sold stakes to Softbank and Honda. Ford has said it's looking at possible outside investors in its electric and self-driving car unit as well.
-- CNN's Vanessa Yurkevich contributed to this report
A T-Mobile and Sprint store sit side-by-side in a strip mall on April 30, 2018 in El Cerrito, California.
Getty Images
The chairman of the Federal Communications Commission says he plans to recommend the agency approve the $26.5 billion merger of wireless carriers T-Mobile US and Sprint, saying it'll speed up 5G deployment in the U.S.
FCC Chairman Ajit Pai also said Monday that the combination will help bring faster mobile broadband to rural Americans.
"Two of the FCC's top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives," he said in a statement.
Pai said the companies have committed to deploying a 5G network that would cover 97% of the U.S. population within three years of the closing of the merger and 99% of Americans within six years. In addition, 85% of rural Americans would be covered within three years and 90% covered within six years. T-Mobile and Sprint also guaranteed that 90% of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99% would have access to speeds of at least 50 Mbps.
Pai said T-Mobile US Inc. and Sprint Corp. would suffer "serious consequences" if they don't meet their FCC commitments, including the possibility of having to pay billions to the Treasury Department.
Both the FCC and Justice Department must approve the deal. The companies argue that the combination will lead to better "5G" service, the next generation of wireless. They've also promised to create U.S. jobs and say they will compete with cable companies as well as Verizon and AT&T. Public-interest and labor groups have raised concerns about wireless price increases and job cuts.
The Obama administration rebuffed the companies' earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry.
Shares of T-Mobile jumped nearly 7 percent in early trading, while Sprint's stock soared 27 percent.
WASHINGTON (Reuters) - Sprint Corp and T-Mobile US Inc has won the support of the chairman of the U.S. telecommunications regulator but will require a series of changes to their proposed $26 billion merger, including selling Sprint's Boost Mobile cell service.
Federal Communications Commission (FCC) Chairman Ajit Pai said on Monday he will recommend that the other four commissioners vote to approve the merger. A second member of the five-person FCC, Commissioner Brendan Carr, a Republican, also said he will vote to approve the deal.
Once an order is drafted, the full panel must vote to approve or reject the deal.
Sprint jumped 25.1% to $7.73 while T-Mobile was up 6% to $79.93.
The FCC will not formally vote on the merger on Monday but will first draft an order, two people briefed on the matter said. The Justice Department must also approve the deal.
In a filing with the FCC on Monday, the companies pledged to sell Boost Mobile, a prepaid wireless provider.
Altice USA, the fourth largest cable company, has urged the FCC to reject the deal because it was concerned the combined company could prevent it from offering phone service.
Altice has a Mobile Virtual Network Operator agreement with Sprint that would allow it to start offering mobile phone service later this year. The companies pledged they would not scrap the deal with Altice.
T-Mobile also promised that the new company would build a "world-leading 5G" network, the next generation of wireless service, to give rural Americans robust 5G broadband and enhance home broadband.
T-Mobile had said the companies were extending a deadline to complete their deal to July 29. The two are among just four national wireless carriers, with Verizon Communications and AT&T Inc leading the pack.
The FCC and Justice Department had been expected to make a decision in early June. They have been weighing a potential loss of competition, and subsequently higher prices for consumers, against the prospect of a more powerful No. 3 wireless carrier that can build a faster, better 5G network.
(Reporting by David Shepardson and Diane Bartz; Editing by Susan Heavey, Paul Simao and Jeffrey Benkoe)
A T-Mobile and Sprint store sit side-by-side in a strip mall on April 30, 2018 in El Cerrito, California.
Getty Images
The chairman of the Federal Communications Commission says he plans to recommend the agency approve the $26.5 billion merger of wireless carriers T-Mobile US and Sprint, saying it'll speed up 5G deployment in the U.S.
FCC Chairman Ajit Pai also said Monday that the combination will help bring faster mobile broadband to rural Americans.
"Two of the FCC's top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives," he said in a statement.
Pai said the companies have committed to deploying a 5G network that would cover 97% of the U.S. population within three years of the closing of the merger and 99% of Americans within six years. In addition, 85% of rural Americans would be covered within three years and 90% covered within six years. T-Mobile and Sprint also guaranteed that 90% of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99% would have access to speeds of at least 50 Mbps.
Pai said T-Mobile US Inc. and Sprint Corp. would suffer "serious consequences" if they don't meet their FCC commitments, including the possibility of having to pay billions to the Treasury Department.
Both the FCC and Justice Department must approve the deal. The companies argue that the combination will lead to better "5G" service, the next generation of wireless. They've also promised to create U.S. jobs and say they will compete with cable companies as well as Verizon and AT&T. Public-interest and labor groups have raised concerns about wireless price increases and job cuts.
The Obama administration rebuffed the companies' earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry.
Shares of T-Mobile jumped nearly 7 percent in early trading, while Sprint's stock soared 27 percent.
