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Huawei refutes suggestions state support drove its growth

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Huawei Technologies has lashed out at a US Media report that suggests the tech giant’s success is fuelled by billions of dollars in financial support from the Chinese government, arguing that its ties are no different from any other private company that operates in China. The vendor adds that it has invested between 10% and 15%of its revenue in research and development over the past three decades, which it attributes to its success. 

In a statement Thursday, Huawei said an article published by The Wall Street Journal was based on “false information and poor reasoning” and speculated “wildly” about the vendor’s growth position today. “Huawei’s success is the result of our 30 years of heavy investment in R&D, our focus on customer needs, and the dedication of our [more than] 190,000 employees,” it said. “The Wall Street Journal is a professional media outlet, so we have to question its motives and purpose for publishing this article.”


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Published on December 25, the article said Huawei had access to as much as $75 billion in financial support from the Chinese government, enabling the vendor to offer attractive service terms and undercut its competitors’ pricepoints by 30%. 

Citing analysts and customers, as well as a review of Huawei’s grants, credit facilities, tax breaks, and other financial details, The Wall Street Journal added that the biggest chunk in financial help totalled some $46 billion in loans, credit lines, and other support from state lenders. 

The vendor also enjoyed tax waivers as early as 25 years ago, according to the article, which said Huawei saved as much as $25 billion in taxes from 2008 to 2018 as a result of state incentives to drive China’s tech sector. The Chinese tech giant also received $1.6 billion in grants and $2 billion in land discounts, it added. 

To calculate Huawei’s state support, the US publication said it assessed how major state financial incentives–adjusted to account for changes in their scope over the years–allowed the Chinese tech vendor to spend more freely. Its calculations compared Huawei’s tax payments with the company’s projected tax liability in the absence of such incentives, it said. Its estimates excluded other forms of policy support available to Huawei, such as salary tax benefits, property-tax abatements, and subsidised raw materials, as well as tax breaks from standard accounting policies, such as tax deductibility for expenses including research and development, according to The Wall Street Journal. 

In its response, Huawei said it had invested close to $73 billion in R&D over the past 10 years, with $15 billion poured into such efforts in 2018 alone. It also poured more than $4 billion into 5G between 2009 and 2019, which it said was more than the total investment major equipment vendors in the US and Europe collectively had invested in 5G. 

Huawei further noted that its ties with the Chinese government were no different from that of other private company that operates in China. And while it acknowledged receiving some “policy support” from Beijing, it said this was no different from other tech companies in China as well as those overseas. 

“The fact is that every tech company that operates in China is entitled to certain subsidies from the government, as long as they meet certain conditions. This includes tech companies that come from overseas,” it said. “The subsidies provided to tech companies are primarily used to support research programs. Huawei applies for these government subsidies just like any other company does.”

“We have never received any additional or special treatment. Our working capital primarily comes from our own business operations and external financing, rather than government subsidies,” said the vendor, adding that its business operations had fuelled 90% of its working capital over the past decade. 

During the same period, it said it received R&D subsidies from governments in China as well as other countries that totalled less than 0.3% os its revenue. Last year, this figure accounted for 0.2% of its annual revenue, it added. 

Huawei noted that The Wall Street Journal had published a series of “disingenuous and irresponsible” articles about the Chinese vendor, which it said harmed its reputation. “Huawei reserves the right to take legal action to protect our reputation,” it said.

The US government repeatedly has accused Chinese networking vendors, namely Huawei, of sharing sensitive information with their government and providing backdoor access to private US business communications. The Trump administration had called for countries to boycott Huawei’s telecommunications systems, specifically its 5G equipment, and put pressure on its allies, including Europe, New Zealand, Australia, and the UK, to ban Huawei products, threatening that it would be “difficult” for the US to do business in countries that deployed Huawei equipment.

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Major tire recall issued by Cooper Tire & Rubber Co.

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Many years ago, a major recall was issued on Firestone tires that were failing and causing accidents that were sometimes fatal. Recalls in the automotive industry aren’t uncommon, and Cooper Tire & Rubber Co. has now issued a tire recall the covers more than 430,000 light truck tires in the US. The tires are being recalled due to sidewall bulges that could lead to tire failure.

Cooper says the recall covers only certain Discoverer, Evolution, Courser, Deegan, Adventurer, Hercules, Back Country, Multi-Mile, Wild Country, and Big O tires in multiple sizes. Some of those tires are also commonly used on Jeeps and other off-road vehicles as upgrades to factory rubber. Sidewall bulges pose a risk of sidewall separation that would make the tires lose air rapidly and increase the crash risk.

Cooper reports there has been no property damage, death, or injury due to the problem. The recall is expected to begin on March 25, and owners of the tires will be notified. Dealers will replace the tires at no cost. It’s unclear if there is any sort of caveat to the free replacement, such as miles or tire condition.

Some who’ve been using these tires for a while might find the recall results in newer and fresher tires. Having a blowout at high-speed certainly poses the risk of accidents and even death. Recently, automaker Hyundai issued a massive recall on electrified vehicles due to a potential risk of fire.

Reports indicate the recall in Hyundai’s instance will cost as much as $900 million and will see the automaker replacing battery systems in about 82,000 electric cars around the world. That particular recall was among the first for electric vehicles and will show how automakers and battery makers will work together for electric vehicle recalls in the future.

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Rumor claims Mercedes-AMG C63 will go hybrid

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One of the hottest AMG cars made by Mercedes-AMG is the C63. This car has traditionally had a big burly V-8 engine under the hood, making gobs of power. A new rumor has surfaced that claims that will change with the V-8 engine out and a hybrid four-cylinder powertrain in.

Automotive enthusiasts know that means an exhaust note that will lack the throaty rumble of the V-8 engine, but the hybridized four-cylinder will reportedly have massive amounts of power. What’s expected to live under the hood of the car is the AMG M139 turbocharged engine, which is used in the A45 S, combined with an electric rear-wheel-drive unit and integrated starter generator.

The turbocharger used on the four-cylinder also has electric assistance to reduce lag and improve throttle response. When all the electric and gas power is combined, rumor has it total output will be over 550 horsepower with maximum torque up to 590 pound-foot. The car will have active all-wheel drive, but a Drift mode will be standard for those who feel like putting on a smoke show.

All that power goes to the road via a nine-speed sport transmission, and the car will feature adaptive suspension and staggered tires. The vehicle will use a 400-volt electrical architecture rather than the 48-volt system used in other C-Class cars. Another interesting tidbit is that the car is tipped to drive about 40 miles on electricity alone.

One downside with hybridizing cars is the additional weight, with reports indicating the electric components add about 250 kilograms pushing the car close to 2000 kilograms overall. The upside is the smaller four-cylinder engine is reportedly 60 kilograms lighter than the outgoing V-8, and the vehicle will have a 50:50 weight distribution. The car is expected the land in the UK in early 2022, with the reveal by the end of the year.

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2021 Jeep Grand Cherokee L starts at $37,000

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Many SUV fans and Jeep fans are excited to hear that an all-new three-row Grand Cherokee was coming. Jeep has officially announced the starting prices for the all-new 2021 Jeep Grand Cherokee L line, including the entry-level Laredo, Limited, Overland, and Summit models. This vehicle marks the first three-row Grand Cherokee Jeep has ever offered.

The Laredo trim will start at $36,995 and promises a host of standard safety features. Standard features include adaptive cruise control and blind-spot monitoring along with all new LED exterior lighting, leather-wrapped steering wheel, tip and slide second-row seats, and a 10.25-inch frameless digital driver cluster with customizable menu options.

The next step up the ladder is the Limited model starting at $43,995. It includes Capri leather seats, a heated steering wheel, standard heated seats in the first two rows, remote start, and a power liftgate. The Overland model starts at $52,995, and 4×4 versions of this model include the Jeep Quadra-Trac II system and a unique Overland appearance.

Overland models get Nappa leather seats and door panels, standard ventilated front seats, premium navigation, LED ambient lighting, length adjustable front-row cushions, hands-free foot-activated power liftgate, and a dual-pane sunroof. Overland buyers can also opt for the optional Trail Rated-Road Group on 4×4 versions that adds skid plates, electronic limited-slip differential, 18-inch wheels, and all-season tires.

The Summit model starts at $56,995 and packs quilted leather seats, real wood veneers, 16-way adjustable front-row seats, and much more. The Summit Reserve starts at $61,995 and features quilted Palermo leather, open-pore waxed walnut wood trim, ventilated second-row seats, and a 950 Watt McIntosh audio system. None of the MSRP’s include the $1695 destination charge.

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