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BMW warns profits will fall, plans $13.6 billion in cost-cutting

FRANKFURT, Germany — BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, Mini and Rolls-Royce brands are to get a single sales division. Peter said that given the headwinds to earnings, "we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions." The company said the measures were needed "to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future." Automakers around the world have faced heavy up-front costs for technology expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo. BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules. BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S.

U.S. issues new tariff threat, this time against British-built cars

WASHINGTON — Britain is the United States' closest ally but their long friendship may be sorely tested as the two countries try to forge a new trade agreement after Britain's exit from the European Union. U.S. Treasury Secretary Steven Mnuchin said on Saturday in London that he was optimistic that a bilateral deal with Britain could be reached as soon as this year. But Mnuchin gave up no ground after a second meeting with his UK counterpart, Sajid Javid. Javid has insisted that Britain will proceed with a unilateral digital services tax, despite a U.S. threat to levy retaliatory tariffs on British-made autos. Mnuchin told reporters after Saturday's meeting that such taxes would discriminate against big U.S. tech companies like Alphabet Inc's Google, Apple, Facebook and Amazon. The UK Treasury declined to comment on the private meeting. The divide highlights the challenges ahead as the Trump administration seeks a new bilateral agreement with Britain, part of a broader push to rebalance relations with nearly all its major trading partners. The stakes are high — British Prime Minister Boris Johnson has pegged the trade deal with United States as a way to ease the pain of breaking with Europe, Britain's largest trade partner. U.S. President Donald Trump, has promised a "massive" trade deal to support Brexit, the product of a populist movement similar to his "America First" agenda. The goodwill and special relationship the two countries have enjoyed for decades may not count for much, experts say. "Trump is not going to be doing Johnson any favors," said Amanda Sloat, a senior fellow with the Brookings Institution in Washington. "He's not going to give him a trade deal without major concessions." Even before the digital tax issue arose, the Trump administration threatened to tax foreign car imports, which could hit British-made Jaguar, Land Rover, Mini, and Honda Civic hatchback cars. Stiff U.S. trade demands include increased access for U.S. farm goods, concessions that will be difficult for Britain's entrenched natural food culture to swallow. The United States also wants Britain to change the way its National Health Service prices drugs and allow in more U.S. pharmaceuticals, which could prove politically unpopular for Johnson's government. Washington's demand that London block Chinese telecoms equipment maker Huawei Technologies Co Ltd for national security reasons could also cloud talks.

2022 Rolls-Royce Cullinan Review | Three things I learned driving a $429,400 SUV

TROY, Mich. — Rolls-Royce is the epitome of the vehicle as a luxury good. It has features that are expensive and luxurious rather than functional, and they create an image that separates a Rolls-Royce from almost everything else, save perhaps Bentley. I recently spent a few days in the 2022 Rolls-Royce Cullinan, the brandÂ’s first and only SUV. ItÂ’s a legit people-hauler. Good luck getting your retriever and her food in the Ferrari Purosangue, but the Cullinan borders on a #vanlife operation. HereÂ’s three things I learned after driving in the opulent $429,400 Cullinan.  Fear not, itÂ’s easy to drive The intimidation factor is not what I expected. The Cullinan is about as long as a Chevy Tahoe and four inches wider. It does not drive that way. The steering is light but direct and communicative. Factor in four-wheel steering, and itÂ’s like driving a much smaller car. The driverÂ’s seating position is excellent and provided a clear view of my surroundings. With the Spirit of Ecstasy hood ornament leading the way, it felt majestic. ThatÂ’s what Rolls is going for, but the setting also gave me confidence with both corners clearly visible. It doesnÂ’t matter how much a car costs if you feel like you know what youÂ’re doing. RollsÂ’ famous Magic Carpet Ride makes for perhaps the smoothest experience IÂ’ve had in any car or SUV. The suspension is always adjusting, and almost no bumps or potholes could bother me or my passengers. It really is next-level comfort. Given that the chassis is working with 22-inch wheels, itÂ’s all the more impressive. The V12 engine puts out 563 hp and 627 lb-ft of torque. Get on the throttle and it will move, but with decorum. Yes, thereÂ’s an aura IÂ’ve driven plenty of luxury cars that donÂ’t live up to the hype. The Cullinan is not one of them. My Rolls had the Shooting Star headliner, a $7,975 option that turns your vehicle into a rolling planetarium. ItÂ’s one of those features that sounds contrived until you experience it. The celestial sky is mesmerizing, and when your passengers see the shooting-star feature, get ready for the oohs and ahhs. Rolls first launched the headliner in 2006 as a custom option, but now itÂ’s on most of its vehicles. The stars are illuminated by fiber-optic cables and six powerful light cannons, according to Rolls-Royce, and thereÂ’s up to 1,600 hand-cut holes in the headliner. You can personalize the constellations.