Month: November 2018

Babies Born in Withdrawal New Complication in Opioid Cases

The expansive court case seeking to hold drugmakers responsible for the nation’s opioid crisis has a new complication: How does it deal with claims covering the thousands of babies born addicted to the drugs?

Attorneys representing the children and their guardians want their claims separated from the federal case in Cleveland that involves hundreds of local governments and other entities such as hospitals. They told a skeptical panel of judges in New York on Thursday that they have different legal issues, a need for faster relief because the babies need services in the first years of their lives. They also told the judges that as it is, they lack the leverage to exact a settlement from drug companies.

Babies, unlike governments or businesses, have been directly harmed by the actions of drugmakers and are entitled to their own payments, said Scott Bickford, a lead lawyer for the children and their guardians.

Bickford said more than 150,000 babies were born in opioid withdrawal from 2012 through 2016, and that the number grows each year

Federal cases consolidated

He said initial hospital stays for babies born to an opioid-addicted mother can cost $200,000 to $250,000 more than other infants born without complications. 

“Then you have to address their developmental and learning problems,” Bickford said in a Tuesday interview. “A lot of them have organ problems. A lot of them have problems we don’t even know about.”

Drug manufacturers and distributors oppose creating a new structure for the lawsuits over the children and judges on the Judicial Panel on Multidistrict Litigation hearing the matter in New York on Thursday wondered what good it would do.

Opioids — including prescription painkillers, heroin and synthetic substances including fentanyl — killed nearly 48,000 Americans last year, according to the U.S Centers for Disease Control and Prevention. The cost of treatment, providing an overdose antidote, foster care, jail stays, ambulance runs and addressing a growing homeless crisis have added up for governments and taxpayers. Studies have found that opioid addiction also has depleted the workforce, harming the economy.

More than 1,400 plaintiffs have had their federal cases consolidated under a single judge. They include county and local governments, hospitals, unions, American Indian tribes and individuals. Hundreds of others have sued in state courts. Cleveland-based federal Judge Dan Polster has been pushing the parties to reach a settlement.

Children need a voice

The judicial panel’s chairwoman, Judge Sarah Vance, said it’s unlikely any settlement would be reached without considering the children.

“It’s hard for me to see how the defendants are going to settle if they’ve got 150,000 children unhappy because their needs are unmet,” Vance said.

Angela Vicari, a lawyer for the drug manufacturers, told the judge that she wasn’t aware of the lawyers for the babies seeking to negotiate.

But lawyers for the children said they don’t have a voice in the committee of plaintiffs’ lawyers leading the case, making it hard to request the information from the industry that they believe would help prove their case. Attorney Kevin Thompson said it’s essential to request information on any industry laboratory studies on the impact of drugs passed from mothers to children.

Lawyers also worry that any settlement reached by government agencies won’t go to help the people who have been hurt. “They end up paving a road with that,” Bickford said.

Other plaintiffs in the omnibus opioid litigation have not objected formally and did not speak in court Thursday, but some are cool to the idea of separating the cases involving the children. One of the lead lawyers for the local governments, Paul Farrell Jr., said he is trying to get help for children born with opioid dependency and have prenatal care funded by the drug industry.

He said in an interview that the plaintiffs share a goal: holding drug manufacturers liable for the crisis. Unless that happens, he said, no one will get the payouts they’re seeking.

“You’ve only got to shoot the pig once,” he said Tuesday.

Indian tribes allowed to go it alone

Lawyers representing the children and their guardians say there is precedent for their request to go it alone, after Polster granted the American Indian tribes a separate test trial for their claims. In August, the judge denied similar status for the cases brought on behalf of babies.

That decision prompted the lawyers to ask the panel of judges to put their cases under another judge in West Virginia or Illinois.

A ruling is expected in the next several weeks.

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Repeat Outbreaks Pressure Produce Industry to Step Up Safety

After repeated food poisoning outbreaks linked to romaine lettuce, the produce industry is confronting the failure of its own safety measures in preventing contaminations.

The E. coli outbreak announced just before Thanksgiving follows one in the spring that sickened more than 200 people and killed five, and another last year that sickened 25 and killed one.

No deaths have been reported in the latest outbreak, but the dozens of illnesses highlight the challenge of eliminating risk for vegetables grown in open fields and eaten raw, the role of nearby cattle operations that produce huge volumes of manure and the delay of stricter federal food safety regulations.

A contested aspect of the regulation, for example, would require testing irrigation water for E. coli. The Food and Drug Administration put the measure on hold when the produce industry said such tests wouldn’t necessarily help prevent outbreaks. Additional regulations on sanitation for workers and equipment — other potential sources of contamination — only recently started being implemented.

FDA Commissioner Scott Gottlieb said he thinks the combination of rules, once fully in place, will make vegetables safer to eat.

“I don’t think any one element of this is going to be the magic bullet,” Gottlieb said.

Health officials say improved detection may make outbreaks seem more frequent. Still, that is intensifying pressure on growers and regulators to prevent, catch and contain contamination.

Prevention

It’s not yet known how romaine got contaminated in the latest outbreak.

The spring outbreak was traced to romaine from Yuma, Arizona. Irrigation water tainted with manure was identified as a likely culprit, and investigators noted the presence of a large animal feeding operation nearby.

Subsequently, growers in Arizona and California adjusted an industry agreement to expand buffer zones between vegetable fields and livestock. The industry says the change was in place for lettuce now being grown in Yuma, which hasn’t been implicated in the latest outbreak. But Trevor Suslow of the Produce Marketing Association said there isn’t consensus about the exact distances that might effectively prevent contamination.

He noted specific buffer zones aren’t required by the new federal rules on produce safety.

“They look to the industry to determine what is the appropriate distance,” Suslow said.

Growers in Yuma also started treating irrigation water that would touch plant leaves with chlorine to kill potential contaminants, Suslow said. But he said such treatment raises concerns about soil and human health.

Meanwhile, the proximity of produce fields to cattle operations is likely to continue posing a problem. Travis Forgues of the milk producer Organic Valley noted consolidation in the dairy industry is leading to bigger livestock operations that produce massive volumes of manure.

Testing

Already, the industry agreement in Arizona and California requires leafy green growers to test water for generic E. coli.

But James Rogers, director of food safety research at Consumer Reports, said it’s important to make water testing a federal requirement. Since romaine is often chopped up and bagged, a single contaminated batch from one farm that skips testing could make a lot of people sick, he said.

Teressa Lopez of the Arizona Leafy Greens Marketing Agreement also said federal regulation can ensure greater compliance, even though the industry agreement has stricter measures.

Despite industry measures implemented after a spinach outbreak more than a decade ago, health officials note d this month there have been 28 E. coli outbreaks linked to leafy greens since 2009.

The produce industry says the failure to prevent the Yuma outbreak could also reflect the limitations of testing water for generic E. coli.

Elizabeth Binh, a food science expert at Cornell University, said the tests look for the amount of fecal matter in water. The problem is, “some feces has pathogens in it, some feces doesn’t,” said Binh, who is part of a federal program helping farmers comply with the new produce regulations.

Testing for specific E. coli strains that are harmful is more difficult, and doesn’t rule out the possibility of other harmful bacteria, Binh said.

Containment

Whole-genome sequencing is making it easier to detect outbreaks, which is pressuring the produce industry.

The FDA warned against all romaine last week because it said it was able to identify it as a likely source early enough. The agency narrowed its warning to romaine from California’s Central Coast after the produce industry agreed to label romaine with harvest dates and regions, so people know what’s OK to eat.

The labeling is voluntary, and the industry said it will evaluate whether to extend it to other leafy greens. Gottlieb said improving traceability would allow targeted health alerts that don’t hurt the entire industry. The FDA recently hired a former Walmart executive who used blockchain technology to improve traceability in the retailer’s supply chain.

Stephen Basore, director of food safety at a Florida romaine grower, said he expects more regulations and self-imposed industry guidelines.

“Anytime there is an issue, the immediate response is saying our protocols aren’t enough,” he said.

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Deutsche Bank Offices Raided in Money Laundering Probe

Police raided six Deutsche Bank offices in and around Frankfurt on Thursday over money laundering allegations linked to the “Panama Papers”, the public prosecutor’s office in Germany’s financial capital said.

Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor’s office said.

Around 170 police officers, prosecutors and tax inspectors searched the offices where written and electronic business documents were seized.

“Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts,” Deutsche Bank said, adding it believed it had already provided all the relevant information related to the “Panama Papers”.

The news comes as Deutsche Bank tries to repair its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.

Christian Sewing was appointed as chief executive in April to help the bank to rebuild. He trimmed U.S. operations and reshuffled the management board but revenue has continued to slip.

Deutsche Bank shares were down more than 3 percent by 1220 GMT and have lost almost half their value this year.

Offshore links

The investigation was triggered after investigators reviewed so-called “Offshore-Leaks” and “Panama Papers”, the prosecutor said.

The “Panama Papers”, which consist of millions of documents from Panamanian law firm Mossack Fonseca, were leaked to the media in April 2016.

Several banks, including Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules as a result of the papers.

The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up offshore companies in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.

In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.

They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.

The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, where Deutsche Bank is involved.

Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments.

A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions.

Under scrutiny

Weaknesses in Deutsche Bank’s controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic. The bank has publicly said that it agreed it needed to improve its processes to properly identify clients.

In September, Germany’s financial watchdog – BaFin – ordered Deutsche Bank to do more to prevent money laundering and “terrorist financing,” and appointed KPMG as third party to assess progress.

In August, Reuters reported that Deutsche Bank had uncovered further shortcomings in its ability to fully identify clients and the source of their wealth.

Last year, Deutsche Bank was fined nearly $700 million for allowing money laundering through artificial trades between Moscow, London and New York. An investigation by the U.S.

Department of Justice is still ongoing.

Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with U.S. authorities last year over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.

 

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Suicide, Overdoses Help Cut US Life Expectancy

Suicides and drug overdoses helped lead a surge in U.S. deaths last year, and drove a continuing decline in how long Americans are expected to live.

Overall, there were more than 2.8 million U.S. deaths in 2017, or nearly 70,000 more than the previous year, the Centers for Disease Control and Prevention said Thursday. It was the most deaths in a single year since the government began counting more than a century ago.

The increase partly reflects the nation’s growing and aging population. But it’s deaths in younger age groups — particularly middle-aged people — that have had the largest impact on calculations of life expectancy, experts said.

The suicide death rate last year was the highest it’s been in at least 50 years, according to U.S. government records. There were more than 47,000 suicides, up from a little less than 45,000 the year before.

​A general decline

For decades, U.S. life expectancy was on the upswing, rising a few months nearly every year. Now it’s trending the other way: It fell in 2015, stayed level in 2016, and declined again last year, the CDC said.

The nation is in the longest period of a generally declining life expectancy since the late 1910s, when World War I and the worst flu pandemic in modern history combined to kill nearly 1 million Americans. Life expectancy in 1918 was 39.

Aside from that, “we’ve never really seen anything like this,’’ said Robert Anderson, who oversees CDC death statistics.

In the nation’s 10 leading causes of death, only the cancer death rate fell in 2017. Meanwhile, there were increases in seven others: suicide, stroke, diabetes, Alzheimer’s, flu/pneumonia, chronic lower respiratory diseases and unintentional injuries.

An underlying factor is that the death rate for heart disease, the nation’s No. 1 killer, has stopped falling. In years past, declines in heart disease deaths were enough to offset increases in some other kinds of death, but no longer, Anderson said.

The CDC’s numbers do sometimes change. This week, CDC officials said they had revised their life expectancy estimate for 2016 after some additional data came in.

What’s driving this?

CDC officials did not speculate about what’s behind declining life expectancy, but Dr. William Dietz, a disease prevention expert at George Washington University, sees a sense of hopelessness.

Financial struggles, a widening income gap and divisive politics are all casting a pall over many Americans, he suggested. 

“I really do believe that people are increasingly hopeless, and that that leads to drug use, it leads potentially to suicide,’’ he said.

Drug overdose deaths also continued to climb, surpassing 70,000 last year, in the midst of the deadliest drug overdose epidemic in U.S. history. The death rate rose 10 percent from the previous year, smaller than the 21 percent jump seen between 2016 and 2017.

That’s not quite a cause for celebration, said Dr. John Rowe, a professor of health policy and aging at Columbia University.

“Maybe it’s starting to slow down, but it hasn’t turned around yet,’’ Rowe said. “I think it will take several years.”

Accidental drug overdoses account for more than a third of the unintentional injury deaths, and intentional drug overdoses account for about a tenth of the suicides, said Dr. Holly Hedegaard, a CDC injury epidemiologist.

Other findings

The CDC figures are based mainly on a review of 2017 death certificates. The life expectancy figure is based on current death trends and other factors.

The agency also said:

A baby born last year in the U.S. is expected to live about 78 years and 7 months, on average. An American born in 2015 or 2016 was expected to live about a month longer, and one born in 2014 about two months longer than that.
The suicide rate was 14 deaths per 100,000 people. That’s the highest since at least 1975.
The percentage of suicides from drug overdose has been inching downward.
Deaths from flu and pneumonia rose by about 6 percent. The 2017-2018 flu season was one of the worst in more than a decade, and some of the deaths from early in that season appeared in the new death dates.
West Virginia was once again the state with the highest rate of drug overdose deaths. The CDC did not release state rates for suicides.
Death rates for heroin, methadone and prescription opioid painkillers were flat. But deaths from the powerful painkiller fentanyl and its close opioid cousins continued to soar in 2017.
The CDC did not discuss 2017 gun deaths in the reports released Thursday. But earlier CDC reports noted increase rates of suicide by gun and by suffocation or hanging.

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Norway’s Magnus Carlsen Retains World Chess Title

Norway’s Magnus Carlsen has solidified his claim to be the greatest chess player in the world.

Carlsen beat Fabiano Caruana of the United States 3-0 Wednesday in a rapid-chess tiebreaker game at the world chess championships in London.

Carlsen and Caruana played to 12 draws in their series of championship matches that started Nov. 9, games that lasted as long as seven hours each.

They decided to settle the impasse in games of speed chess, in which each player is given just 25 minutes to try to beat his opponent.

After the long excruciating series of ties topped off by three speed games, Carlsen would only say that he had a “really good day,” while Caruana admitted that he “had a bad day.”

Carlsen takes home a $621,000 prize while Caruana pockets $508,000.

Carlsen has been the world chess champion since 2013, when he took the title from India’s Viswanathan Anand.

Caruana was hoping to become the first American to win the title since 1972, when Bobby Fischer defeated the Soviet Union’s Boris Spassky in a thrilling series of matches that made global headlines.

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Trump Studying New Auto Tariffs After GM Restructuring

U.S. President Donald Trump said Wednesday that new auto tariffs were “being studied now,” asserting they could prevent job cuts such as the U.S. layoffs and plant closures that General Motors Co. announced this week. 

 

Trump said on Twitter that the 25 percent tariff placed on imported pickup trucks and commercial vans from markets outside North America in the 1960s had long boosted U.S. vehicle production. 

 

“If we did that with cars coming in, many more cars would be built here,” Trump said, “and G.M. would not be closing their plants in Ohio, Michigan & Maryland.” 

 

The United States has a 2.5 percent tariff on imported cars and sport utility vehicles from markets outside North America and South Korea. The new North American trade deal exempts the first 2.6 million SUVs and passenger cars built in Mexico and Canada from new tariffs. 

 

Several automakers said privately on Wednesday that they feared GM’s action could prompt Trump to act faster than expected on new tariffs. 

 

GM did not directly comment on Trump’s tweets but reiterated that it was committed to investing in the United States. On Monday, the company said it would shutter five North American plants, stop building six low-selling passenger cars in North America and cut up to 15,000 jobs. The company has no plans to shift production of those vehicles to other markets. 

 

The administration has for months been considering imposing dramatic new tariffs on imported vehicles. 

 

The U.S. Commerce Department has circulated draft recommendations to the White House on its investigation into whether to impose tariffs of up to 25 percent on imported cars and parts on national security grounds, Reuters reported earlier this month. 

 

“The President has great power on this issue – Because of the G.M. event, it is being studied now!” Trump said. 

 

Shock to industry

The prospect of tariffs of 25 percent on imported autos and parts has sent shock waves through the auto industry, with both U.S. and foreign-brand producers lobbying against it and warning that national security tariffs on EU and Japanese vehicles could dramatically raise the price of many vehicles. 

 

Trump has also harshly criticized GM for building cars in China. The United States slapped an additional 25 percent tariff on Chinese-made vehicles earlier this year, prompting China to retaliate. 

 

China currently imposes a 40 percent tariff on U.S. automobiles, while the United States has a 27.5 percent tariff on Chinese vehicles. 

 

U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday that he “will examine all available tools to equalize the tariffs applied to automobiles.” 

 

Additional tariffs on Chinese-made vehicles and parts would have a limited impact, said Kristin Dziczek, an economist at the Center for Automotive Research. She noted only a small number of vehicles were exported from China to the United States annually. 

 

The White House previously pledged not to move forward with imposing national security tariffs on the European Union or Japan while it was making constructive progress in trade talks. 

 

Trump wants the EU and Japan to buy more American-made vehicles. He wants the EU and Japan to make trade concessions, including lowering the EU’s 10 percent tariff on imported vehicles and cutting nontariff barriers. 

 

The White House in recent weeks has reached out to the chief executives of German automakers, including Daimler AG, MW AG and Volkswagen AG about meeting to discuss the status of auto trade.  

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Stocks Leap as Fed Chief Hints Interest Rate Increases May Taper Off

Federal Reserve Chair Jerome Powell boosted U.S. stock markets on Wednesday when he said interest rates were “just below” estimates of a level that neither brakes nor boosts a healthy economy. Many took his comments as a signal that the Fed’s three-year tightening cycle is ending. 

The S&P 500 and Dow posted their biggest percentage gains in eight months, while the Nasdaq saw its largest advance in just over a month following Powell’s speech to the Economic Club of New York. 

Powell said that while “there was a great deal to like” about U.S. prospects, “our gradual pace of raising interest rates has been an exercise in balancing risks.” 

Earlier in the day, in its first-ever financial stability report, the Fed cautioned that trade tensions, Brexit and troubled emerging markets could rock a U.S. financial system where asset prices are “elevated.” 

‘Close to neutral’

“[Powell is] now acknowledging he’s close to neutral, which suggests maybe not quite as many rate hikes in the future as investors believed,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago. “It’s certainly a change of language and welcome news to investors.” 

The U.S. Commerce Department affirmed that U.S. GDP grew in the third quarter at a 3.5 percent annual rate, but the goods trade deficit widened, consumer spending was revised lower and sales of new homes tumbled, suggesting clouds are gathering over what is now the second-longest economic expansion on record. 

The Dow Jones industrial average rose 617.7 points, or 2.5 percent, to 25,366.43, the S&P 500 gained 61.61 points, or 2.30 percent, to 2,743.78 and the Nasdaq Composite added 208.89 points, or 2.95 percent, to 7,291.59. 

Of the 11 major sectors in the S&P 500, all but utilities were positive. Technology and consumer discretionary were the biggest percentage gainers, each up more than 3 percent. 

The S&P 500 Automobile & Components index was up 1.4 percent after President Donald Trump said he was studying new auto tariffs in the wake of General Motors Co.’s announcement that it would close plants and cut its workforce. 

Humana cuts forecast

Health insurer Humana Inc. cut its 2019 forecast for Medicare drug plan enrollment but upped its estimated enrollment in the company’s Medicare Advantage plan. Its stock ended the session up 6.2 percent. 

Salesforce.com Inc. beat analysts’ earnings estimates and forecast better-than-expected 2020 revenue, sending its shares up 10.3 percent. Other cloud software makers rose on the news, with the ISE Cloud Index gaining 3.5 percent. 

Microsoft Corp briefly surpassed Apple Inc. in market cap but Apple took back its lead by closing. Nevertheless, Microsoft closed 4.0 percent higher as it benefited from optimism regarding demand for cloud computing services. 

Among losers, Tiffany & Co. shares dropped 11.8 percent after the luxury retailer missed quarterly sales estimates on slowing Chinese demand. 

Advancing issues outnumbered declining ones on the NYSE by a 3.95-to-1 ratio; on Nasdaq, a 3.58-to-1 ratio favored advancers. 

The S&P 500 posted 17 new 52-week highs and six new lows; the Nasdaq Composite recorded 37 new highs and 129 new lows. 

Volume on U.S. exchanges was 8.04 billion shares, compared with the 7.82 billion-share average over the last 20 trading days. 

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Chinese Photographer Missing Since Trip to Xinjiang     

Chinese photographer Lu Guang has gone missing during a visit to China’s Xinjiang province.

Lu’s wife Xu Xiaoli, who is in the United States, set up a Twitter account this week to spread information about the disappearance of the award-winning photojournalist, who covers sensitive issues in China, such as pollution, poverty, and AIDS.

Xu said Lu had been missing since Nov. 3 after disappearing during a trip to attend several photography events in China.  He was expected to meet a friend in Sichuan on Nov. 5, but failed to appear.  Xu says the wife of Lu’s host in Xinjiang said he had been taken away by national security agents.

A friend of the couple, Chinese artist Wu Yuren, told VOA that Xu considered traveling to China to search for her husband.  Wu said he managed to talk Xu into staying in the United States to publicize his disappearance. 

“We were all very shocked,” Wu told VOA’s Mandarin service.  “Ever since we came to the U.S., it’s rare to hear about someone we know disappeared like this.” 

Wu said Lu may have fallen prey to media suppression in China.  “He thought he had the experience of dealing with this,” Wu said, “But he could not have imagined how bad the situation is now.”

Xu told Radio Free Asia she has been calling officials in Xinjiang in search of word of her husband, but no one has picked up on the phone numbers published online.

Sophie Richardson, China director of Human Rights Watch, told VOA “the Chinese government has a long history of simply taking people whose views it doesn’t like, literally off the grid and disappearing them.” 

She continued, “I think every time this happens, authorities diminish their claim that this country is governed by rule of law.” 

The Associated Press cites Chinese officials as confirming that Lu and a fellow photographer were taken away by Xinjiang state security agents.

Xinjiang has recently been the subject of international concern, after news reports spread word that China has constructed internment camps there to conduct “re-education” of Muslim Uighurs and other ethnic groups.

A representative for Amnesty International, Patrick Poon, told Radio Free Asia that international concern caused by those reports has influenced the Chinese government to try to shut down information coming from the area.

Lu is the winner of a number of photojournalism awards, including the World Press Photo, a National Geographic Photography grant, and China’s highest domestic photography award.  He holds a U.S. “green card” (permission to work in the United States) and in 2005 became the first photographer from China to be invited by the U.S. State Department as a visiting scholar. 

VOA Mandarin service contributed to this report. 

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Trump: US Tariffs on More Foreign Vehicles Would Have Prevented GM Plant Closures

U.S. President Donald Trump touted the use of U.S. tariffs on foreign small trucks Wednesday, saying their placement on other foreign vehicles would have prevented the closure of several General Motors plants and the loss of thousands of coveted manufacturing jobs.

Trump noted on Twitter that brisk U.S. small truck sales in the country are due to a 25-percent tariff on small truck imports.

The president reiterated on Twitter that “countries that send us cars have taken advantage of the U.S. for decades.” Trump added he has “great power on this issue,” which he said “is being studied now.”

Trump has threatened to eliminate all federal subsidies to GM in response to the company’s planned closure of five plants and the elimination of 14,000 jobs in North America. Questions remain, though, about whether Trump has the authority to act against the automaker without congressional approval.

Federal tax credits of up to $7,500 are available to those who buy GM electric vehicles. Killing the subsidies may have little financial impact on GM because it is on the cusp of reaching its subsidy limit.

Many of the jobs would be eliminated in Midwestern U.S. states, a region where Trump has long promised a manufacturing rebirth.

GM, which said it has invested more than $22 billion in U.S. operations since it came out of bankruptcy in 2009, has tried to appease the Trump administration while justifying its decisions.

“We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing,” GM said in a statement Tuesday.

Before GM can shutter factories next year in Michigan, Ohio and Ontario, Canada, it must reach agreement with the United Auto Workers union. The union has vowed to fight the closures legally and in collective bargaining.

GM’s restructuring reflects changes in buying trends in North America, prompting vehicle manufacturers to shift away from cars and toward SUVs and trucks.

 

 

 

 

 

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Powell: Fed’s Gradual Rate Hikes Balance Against Risks

U.S. Federal Reserve Chair Jerome Powell said on Wednesday that while there was “a great deal to like” about U.S. prospects, the Fed’s gradual interest rate hikes are meant to balance risks as it tries to keep the economy on track.

“We know that things often turn out to be quite different from even the most careful forecasts,” Powell said in a speech that comes in the wake of last week’s volatile market selloff. “Our gradual pace of raising interest rates has been an exercise in balancing risks.”

Powell offered few clues on how much longer the U.S. central bank would raise interest rates in the face of a slowdown overseas and market volatility at home. Instead he highlighted a new financial stability report the Fed published earlier on Wednesday.

“My own assessment is that, while risks are above normal in some areas and below normal in others, overall financial stability vulnerabilities are at a moderate level,” he said at an Economic Club of New York luncheon.

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With An Eye on Past Problems, Facebook Expands Local Feature

Facebook is cautiously expanding a feature that shows people local news and information, including missing-person alerts, road closures, crime reports and school announcements.

Called “Today In,” the service shows people information from their towns and cities from such sources as news outlets, government entities and community groups. Facebook launched the service in January with six cities and expanded that to 25, then more. On Wednesday, “Today In” is expanding to 400 cities in the U.S. — and a few others in Australia.

The move comes as Facebook tries to shake off its reputation as a hotbed for misinformation and elections-meddling and rather a place for communities and people to come together and stay informed.

Here are some things to know about this effort, and why it matters:

The big picture

It’s something users have asked for, the company says. Think of it as an evolution of a “trending” feature the company dropped earlier this year. That feature, which showed news articles that were popular among users, but was rife with such problems as fake news and accusations of bias.

Anthea Watson Strong, product manager for local news and community information, said her team learned from the problems with that feature.

“We feel deeply the mistakes of our foremothers and forefathers,” she said.

This time around, Facebook employees went to some of the cities they were launching in and met with users. They tried to predict problems by doing “pre-mortem” assessments, she said. That is, instead of a “post-mortem” where engineers dissect what went wrong after the fact, they tried to anticipate how people might misuse a feature — for financial gain, for example.

Facebook isn’t saying how long it has been taking this “pre-mortem” approach, though the practice isn’t unique to the company. Nonetheless, it’s a significant step given that many of Facebook’s current problems stem from its failure to foresee how bad actors might co-opt the service.

Facebook also hopes the feature’s slow rollout will prevent problems.

How it works

To find out if “Today In” is available in your city or town, tap the “menu” icon with the three horizontal lines. Then scroll down until you see it. If you want, you can choose to see the local updates directly in your news feed.

For now, the company is offering this only in small and mid-sized cities such as Conroe, Texas, Morgantown, West Virginia, and Santa Fe, New Mexico. Large cities such as New York or Los Angeles have added challenges, such as an abundance of news and information, and may need to be broken up into smaller neighborhoods.

The posts in “Today In” are curated by artificial intelligence; there is no human involvement. The service aggregates posts from the Facebook pages for news organizations, government agencies and community groups like dog shelters. For this reason, a kid couldn’t declare a snow day, because “Today In” relies on the school’s official page. Discussion posts from local Facebook groups may also be included.

For now, the information is tailored only by geography, but this might change. A person with no kids, for example, might not want to see updates from schools.

Safeguards?

Facebook uses software filters to weed out objectionable content, just as it does on people’s regular news feed. But the filters are turned up for “Today In.” If a good friend posts something a bit objectionable, you are still likely to see it because Facebook takes your friendship into account. But “Today In” posts aren’t coming from your friends, so Facebook is more likely to keep it out.

 

 

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Porsche Shows off New Edition of Mainstay 911 Sports Car

Porsche says its future is in electric cars but for now it is rolling out a more powerful version of its internal combustion mainstay, the sleek 911 sports car.

Stuttgart-based Porsche, part of Volkswagen, is to show off the eighth version of its brand-defining model at the Los Angeles Auto Show.

 

The new 911 doesn’t look much different than earlier editions of the car. The new one has bigger wheel housings and a slightly wider body but the same long hood, sloping roof and prominent headlights that have marked successive versions since 1963.

 

The company said in a news release Wednesday that the new 911 Carrera S and 4S have flat six-cylinder turbocharged engines putting out 443 horsepower, 23 horsepower more than the predecessor. The Carrera S has a top speed of 191 mph and accelerates from zero to 60 mph (96.5 kph) in 3.5 seconds.

 

The rear-drive 2020 Carrera S has a base price of $113,200 and the 4S all-wheel drive version starts at $120,600, not including a $1,050 delivery fee. They can be ordered now and will reach dealers in summer 2019.

 

Porsche boss Oliver Blume says that the 911 remains “the core of our brand, we are making it even more emotional.”

 

Blume says nonetheless by 2025 about half of all new Porsche cars and SUVs will have electric motors, whether they are all-electric or hybrids combining batteries with internal combustion engines.

 

He was quoted by the Welt am Sonntag newspaper as saying that the company would be ready for a world in which some cities and countries are talking about banning internal combustion cars in coming decades. “It’s clear, the future belongs to electric mobility,” he said.

 

The company is developing an all-electric sports car, the Taycan, that would compete with sports car offerings by Tesla, BMW and others.

 

 

 

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US Charges 2 Iranians in First Online Ransom Case

In the first case of its kind, the U.S. Justice Department announced charges Wednesday against two Iranian hackers for allegedly launching so-called ransomware on the computer networks of U.S. municipalities, hospitals and other public institutions and extorting millions of dollars.

Ransomware is a type of malware used by cybercriminals to lock down computers and extort money from their users in exchange for providing the keys to unlock them. Once used primarily against individuals, ransomware has been increasingly employed in cyberattacks on businesses.

Faramarz Shahi Savandi, 34, and Mohammad Mehdi Shah Mansouri, 27, are accused of creating the SamSam Ransomware in December 2015 and installing it on the computer networks of more than 230 public and private entities in the United States and Canada, according to a 26-page indictment unsealed Wednesday.

With the targeted computer users unable to access their data, Savandi and Mansouri, operating out of Iran, would then demand a ransom payment made in the form of the virtual currency bitcoin in exchange for decryption keys for the encrypted data.

According to the indictment, the two Iranians received more than $6 million in cryptocurrencies from their victims which they converted into Iranian currency, or rial, using Iran-based bitcoin exchanges. About half of the infiltrated entities refused to make a ransom payment and suffered over $30 million in lost data, according to the indictment.

The victims included the cities of Atlanta, Newark and San Diego, the Colorado Department of Transportation, the University of Calgary in Calgary, Canada, and six U.S. public health care-related entities.

Deputy Attorney General Rod Rosenstein announced the six-count indictment at a press conference in Washington.

“Every sector of our economy is a target of malicious cyberactivity,” Rosenstein said. “But the events described in this indictment highlight the urgent need for municipalities, public utilities, health care institutions, universities, and other public organizations to enhance their cybersecurity.”

The two indicted Iranians remain at large and have been placed on the FBI’s wanted list. They’re charged with one count of conspiracy to commit wire fraud and two counts of intentional damage to a protected computer, among other related crimes.

The indictment marks the first time the Justice Department has brought charges against cybercriminals involved in a ransomware and extortion scheme, according to Rosenstein.  

Ransomware has grown in sophistication and distribution in recent years. According to a report by the cybersecurity firm Bitdefender, ransomware payments were expected to reach a record $2 billion in 2017.

‘Trend’ from Iran

The charges are also the latest in a string of indictments brought against Iranian hackers and cybercriminals in recent months. In March, prosecutors charged nine Iranian hackers with penetrating the computer networks of hundreds of American and foreign universities and other institutions to steal valuable research material. Unlike some of the previously indicted Iranian hackers, however, Savandi and Mansouri are not believed to have ties to Tehran.

“The actions highlighted today, which represent a continuing trend of cybercriminal activity emanating from Iran, were particularly threatening, as they targeted public safety institutions, including U.S. hospital systems and governmental entities,” said Amy Hess, executive assistant director of the FBI. “As cyberthreats evolve and cybercriminals develop more sophisticated techniques, so do we.”

The 35-month computer hacking scheme led by Savandi and Mansouri began in January 2016 with an attack on an unidentified business in Mercer County, New Jersey, and moved on to public entities such as the City of Newark and health care providers such as Kansas Heart Hospital in Wichita, Kansas. 

Assistant Attorney General Brian A. Benczkowski said the Iranian hackers carefully chose their targets. A few days prior to attacking the network of Kansas Heart Hospital, for example, they “conducted online searches concerning the hospital and accessed its website,” he said.

Kimberly Goody, manager of cybercrime analysis at cybersecurity firm FireEye, said the hackers probably chose to target health care and government organizations because “they provide critical services and believed their likelihood of paying was higher as a result.”

The indictment does not name the entities that paid a ransom.

Jeff Seldin contributed to this report.

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Scientist Claiming Gene-edited Babies Reports 2nd Pregnancy

A Chinese researcher who claims to have helped make the world’s first genetically edited babies says a second pregnancy may be underway.

The researcher, He Jiankui of Shenzhen, revealed the pregnancy Wednesday while making his first public comments about his controversial work at an international conference in Hong Kong.

He claims to have altered the DNA of twin girls born earlier this month to try to make them resistant to infection with the AIDS virus. Mainstream scientists have condemned the experiment, and universities and government groups are investigating.

The second pregnancy is in a very early stage and needs more time to be monitored to see if it will last, He said.

Leading scientists said there are now even more reasons to worry, and more questions than answers, after He’s talk. The leader of the conference called the experiment “irresponsible” and evidence that the scientific community had failed to regulate itself to prevent premature efforts to alter DNA.

Altering DNA before or at the time of conception is highly controversial because the changes can be inherited and might harm other genes. It’s banned in some countries including the United States except for lab research.

He defended his choice of HIV, rather than a fatal inherited disease, as a test case for gene editing, and insisted the girls could benefit from it.

“They need this protection since a vaccine is not available,” He said.

Scientists weren’t buying it.

“This is a truly unacceptable development,” said Jennifer Doudna, a University of California-Berkeley scientist and one of the inventors of the CRISPR gene-editing tool that He said he used. “I’m grateful that he appeared today, but I don’t think that we heard answers. We still need to understand the motivation for this.”

“I feel more disturbed now,” said David Liu of Harvard and MIT’s Broad Institute, and inventor of a variation of the gene-editing tool. “It’s an appalling example of what not to do about a promising technology that has great potential to benefit society. I hope it never happens again.”

There is no independent confirmation of He’s claim and he has not yet published in any scientific journal where it would be vetted by experts. At the conference, He failed or refused to answer many questions including who paid for his work, how he ensured that participants understood potential risks and benefits, and why he kept his work secret until after it was done.

After He spoke, David Baltimore, a Nobel laureate from the California Institute of Technology and a leader of the conference, said He’s work “would still be considered irresponsible” because it did not meet criteria many scientists agreed on several years ago before gene editing could be considered.

“I personally don’t think that it was medically necessary. The choice of the diseases that we heard discussions about earlier today are much more pressing” than trying to prevent HIV infection this way, he said.

If gene editing is ever allowed, many scientists have said it should be reserved to treat and prevent serious inherited disorders with no good alternatives, such as sickle cell anemia and Huntington’s disease. HIV is not an appropriate candidate because there are already safe ways to prevent transmission, and if contracted it can be kept under control with medications, researchers said.

The case shows “there has been a failure of self-regulation by the scientific community” and said the conference committee would meet and issue a statement on Thursday about the future of the field, Baltimore said.

Before He’s talk, Dr. George Daley, Harvard Medical School’s dean and one of the conference organizers, warned against a backlash to gene editing because of He’s experiment. Just because the first case may have been a misstep “should in no way, I think, lead us to stick our heads in the sand and not consider the very, very positive aspects that could come forth by a more responsible pathway,” Daley said.

“Scientists who go rogue … it carries a deep, deep cost to the scientific community,” Daley said.

Regulators have been swift to condemn the experiment as unethical and unscientific.

The National Health Commission has ordered local officials in Guangdong province to investigate He’s actions, and his employer, Southern University of Science and Technology of China, is investigating as well.

On Tuesday, Qui Renzong of the Chinese Academy of Social Science criticized the decision to let He speak at the conference, saying the claim “should not be on our agenda” until it has been reviewed by independent experts. Whether He violated reproductive medicine laws in China has been unclear; Qui contends that it did, but said, “the problem is, there’s no penalty.”

He called on the United Nations to convene a meeting to discuss heritable gene editing to promote international agreement on when it might be OK.

Meanwhile, more American scientists said they had contact with He and were aware of or suspected what he was doing.

Dr. Matthew Porteus, a genetics researcher at Stanford University, where He did postdoctoral research, said He told him in February that he intended to try human gene editing. Porteus said he discouraged He and told him “that it was irresponsible, that he could risk the entire field of gene editing by doing this in a cavalier fashion.”

Dr. William Hurlbut, a Stanford ethicist, said he has “spent many hours” talking with He over the last two years about situations where gene editing might be appropriate.

“I knew his early work. I knew where he was heading,” Hurlbut said. When he saw He four or five weeks ago, He did not say he had tried or achieved pregnancy with edited embryos but “I strongly suspected” it, Hurlbut said.

“I disagree with the notion of stepping out of the general consensus of the scientific community,” Hurlbut said. If the science is not considered ready or safe enough, “it’s going to create misunderstanding, discordance and distrust.”

Jennifer Doudna and David Liu are paid by the Howard Hughes Medical Institute, which also supports AP’s Health & Science Department.

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Ikea Moving Into City Centers to Adapt to Consumer Changes

An airport worker drops by Warsaw’s newest Ikea store during her lunch break to finish up plans for a home refurbishment. Around her, people drift in and out of the shop, placing small houseware items in big yellow bags as cafe tables fill up with people just stopping in for lunch.

The store is not one of Ikea’s out-of-the-way, maze-like warehouses that require a car to visit, but a shop like any other in a city center shopping mall. The Swedish retailing giant plans to open 30 such smaller stores in major cities around the world as part of a broader transformation to adapt to changing consumer habits.

Compared with just a decade ago, shoppers are more likely to be living in urban areas and not have a car, and often want a nearby location to look at goods like furniture in person before ordering things online.

“I like the idea because you can come any time,” said 29-year-old Angelika Singh, the airport worker, as she finalized an order for a new kitchen. “Mostly when you go to Ikea you need to have a whole day free, or at least half a day free, because it’s far.”

Warsaw’s store is located on two floors covering nearly 5,000 square meters (54,000 square feet), about one-fourth of a traditional big-box store. Similar stores have also opened in major cities like London and Madrid and more are expected, with one due next year in Paris, among other locations.

Shoppers can buy cushions, curtains and other home items. They can design the layout of bedrooms and kitchens at computer stations. But those hoping to buy a bookcase or bed will not find them stocked in a large warehouse, though they can order them at kiosks and have them delivered to their homes.

As such, it offers a very different shopping experience from the usual visit to one of the large warehouse stores.

“Ikea’s been doing pretty much the same for 70 years. It’s been a cash-and-carry company, and it still is for the majority of its sales,” said Andreas Flygare, the project manager for the Warsaw store. Now, he explained, the company must adapt to a consumer environment that has changed dramatically in the last 10 years.

“You have companies like Amazon and Uber that are raising the bar for what is expected. Because if you can have same-day delivery, or an Uber is two minutes away, it influences other companies, like Ikea,” he said in a recent interview in the store’s cafe. “It can be a quite tough environment. Everything is changing so fast.”

While Ikea is still profitable, its earnings have recently been growing more slowly than expected.

Thomas Slide, senior retail analyst at the market research firm Mintel, described it as a rational response to a “global trend towards urban living and a rebirth of the cities.”

“While Ikea used to be able to build its big blue warehouses on the edge of towns and cities and expect shoppers to come to them, now it has recognized it needs to be more flexible in its approach and take the Ikea experience to them, through digital channels and smaller stores closer to where people live and work,” Slide said.

Ikea isn’t the first to embrace such an approach. In the U.S., retailer Target has rolled out smaller stores to broaden its reach. French hardware store Leroy Merlin has done the same, as have Kingfisher-owned DIY store B&Q and sofa retailer DFS in Britain.

“While Ikea may not be on the cutting edge of this trend, it’s an important strategy to prepare the business for the future,” Slide said. “The challenge will be adding extra services through additional channels while also maintaining profitability.”

Chen Yu Ting, a 25-year-old from Taiwan who studies medicine in Warsaw, said it used to take him 40 minutes by bus to visit one of the large Ikea stores outside the city. But he is a short walk to the new store, and after an initial trip to buy pillows and bed sheets he now returns often for lunch, which is priced right for his budget.

“It’s more convenient, and now I just come here to eat,” he said.

His only complaint? The store doesn’t stock frozen meatballs.

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Chinese Scientist Faces Firestorm Over Genetic Editing

A Chinese researcher has publicly defended his claim he has created the world’s first genetically-edited babies.

He Jiankui addressed a crowd of fellow scientists Wednesday at a biomedical conference in Hong Kong, two days after he posted a video online claiming to have used a gene-editing technology dubbed CRISPR to alter the DNA of twin girls born to an HIV-positive father to prevent them from contracting the virus that causes AIDS.

Dr. He said he conducted his research in secret. His work has not been independently verified, and Dr. He has not submitted his report to any scientific journals where it could be examined by experts. But he told his colleagues that he felt “proud…proudest” of his achievement.

His claims have set off a firestorm of skepticism and criticism. The Southern University of Science and Technology, the university in the southern Chinese city in Shenzhen that employs him, says he has been on unpaid leave since February. The school denounced his research for violating “academic ethics and codes of conduct,” and the Chinese government is urging local authorities to launch an investigation into He’s work.

Shortly after He’s speech before the Second International Summit on Human Genome Editing, American biologist David Baltimore, a Nobel laureate in physiology or medicine and a leader of the summit, called Dr. He’s work “irresponsible” and a “failure of self-regulation by the scientific community.”

Genetic editing has the potential to remove inherited diseases from the gene pool, but scientists and ethicists worry it could be used to create so-called “designer babies.” They also worry any genetic changes could lead to other genes being altered in unpredictable ways.

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UN Report Says Fragile Climate Puts Food Security at Risk

Feeding a hungry planet is growing increasingly difficult as climate change and depletion of land and other resources undermine food systems, the U.N. Food and Agricultural Organization said Wednesday as it renewed appeals for better policies and technologies to reach “zero hunger.”

 

Population growth requires supplies of more nutritious food at affordable prices, but increasing farm output is hard given the “fragility of the natural resource base” since humans have outstripped Earth’s carrying capacity in terms of land, water and climate change, the report said.

 

About 820 million people are malnourished. The FAO and International Food Policy Research Institute released the report at the outset of a global conference aimed at speeding up efforts to achieve zero hunger around the world.

 

“The call for action is very clear. It is possible in our lifetime and it is also realistic to end hunger and malnutrition,” Inonge Wina, vice president of Zambia, told the gathering.

 

Food security remains tenuous for many millions of people who lack access to affordable, adequately nourishing diets for a variety of reasons, the most common being poverty.

 

But it’s also endangered by civil strife and other conflicts. In Yemen, where thousands of civilians have died in airstrikes by a Saudi-led coalition, the aid group Save the Children says 85,000 children under 5 may have died of hunger or disease in the civil war.

 

In Afghanistan, severe drought and conflict have displaced more than 250,000 people, according to UNHCR, the U.N. refugee agency.

 

FAO Director-General Jose Graziano da Silva noted that the number of hungry and malnourished people in the world has risen to levels last seen a decade ago.

 

“After decades of gains in fighting hunger, this is a serious setback and FAO and the U.N. sister agencies, together with member governments and other partners, are all very concerned,” Graziano da Silva said in a videotaped address to the conference.

 

Hunger is still most severe in Africa, but the largest number of undernourished people live in the Asia-Pacific region, the report said. It said good public policies and technology are the keys to improving the situation.

 

The FAO estimates that global demand for food will jump by half from 2013 to 2050. Farmers can expand land use to help make up some of the difference, but that option is constrained in places like Asia and the Pacific and urbanization is eating up still more land that once may have been used for agriculture.

 

Increasing farm output beyond sustainable levels can cause permanent damage to ecosystems, the report said, noting that it often causes soil erosion, pollution with plastic mulching, pesticides and fertilizers, and a loss of biodiversity.

 

China destroys 12 million tons of tainted grain each year, at a loss of nearly $2.6 billion, according to the report.

 

 

 

 

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Seoul’s Telecom Outage Highlights Need for Redundancy in Connected World

Residents in Seoul discovered how fragile their telecommunications system was this past weekend when a fire disrupted service for millions. The government and the provider vowed to implement changes to avoid a repeat of the event, but the system failure demonstrated a need for greater redundancy and preparation for future natural and technological disasters.

The fire affected customers of KT, the nation’s second largest telecommunications company. They found themselves unable to make calls, access the internet, complete ATM or credit card transactions, and watch television. Local media also reported an elderly woman died when she fell ill and her husband wasn’t able to reach emergency services during the service outage.

Lee Manjong, chairman of the Korean Association for Terrorism Studies and professor of the department of Law & Police at Howon University, told VOA that while it is nearly impossible to prevent widespread system outages, certain steps can be taken to avoid catastrophic failures.

“It is necessary to split the public safety net (fire, medical, and police emergency services) and make system backups (redundancies) compulsory,” he said.

Following the blaze, South Korea’s minister of Science and ICT (Information, Communications, and Technology), You Young-min, spoke to the CEOs of South Korea’s three major communication companies (SK Telecom, KT, and LG U+) to discuss their backup plans.

You said the companies “need to swiftly change their contract clauses on compensation issues and also need to come up with plans that would reroute traffic if such accidents, which shouldn’t happen again, happen.”

When asked for specifics on what steps the government planned on taking to prevent a similar event in the future, the ministry declined to offer specifics, stating that responsible parties would prepare fire prevention measures this year and set up a task force to implement recommendations.

Local broadcaster MBC also reported that telecommunication companies and the government held a 20-minute virtual natural disaster drill in May to simulate a system outage, but the simulation proved to be ineffective in real-world situations.

Interconnected services

The Seoul fire and resulting system outage demonstrated how interconnected services are in the 21st century.

“If a network is down, then it affects other networks such as finance, power, energy, and railway,” said Lee.

He said there are multiple ways the electronic infrastructure can be paralyzed. This includes physical damage, natural disasters, and cyber attacks. However, Lee notes disruptions caused by cyber incursions are more effective.

“Cyber attacks are more efficient as they can take place without access to the physical location of the target,” he said.

According to Lee, this is because the government is able to secure physical sites, so cyber-warriors choose “soft targets” connected through the Internet.

A distributed denial-of-service (DDos) attack could be launched from the Internet and attack telecommunication networks. This type of attack floods a computer network with incoming data packets and overwhelms the system, effectively shutting it down. Lee said such attacks on telecom systems could wreak havoc and paralyze communication.

He cautioned that a successful cyber attack on South Korea’s technological infrastructure could yield “unimaginable” damage because of the country’s reliance on networked services.

Fire and recovery

Saturday’s fire struck an underground facility of KT, destroying telephone lines and fiber optic cables, taking about 10 hours to suppress. 

Seoul authorities rate facilities on a scale from A to D. Buildings rated A, B, or C must have adequate fire prevention systems installed, while those receiving a D rating do not.

KT’s Ahyeon facility, where the fire took place, was one of 27 D-rated facilities belonging to the company. As such, fire scene investigators found there were no fire detectors or sprinkler system installed at the Ahyeon facility and only a single fire extinguisher present.

South Korea’s other telecommunication carriers utilize over 800 similar facilities throughout the country, none of which are required to have fire detection equipment or sprinklers installed.

Lee said government regulations must be altered to bridge the gaps to ensure that such facilities are required to have redundant services elsewhere in the event of a natural disaster or cyber attack.

Estimates are the blaze resulted in about $7 million in property damage. KT has announced it would compensate affected customers by awarding them a free month of service for their inconvenience. KB security expects that amount to total about $27.5 million.

In a text message to customers, KT said it was “deeply sorry for the inconvenience. We will adopt preventive measures such as safety inspections… to avoid a recurrence.”

Seoul officials told VOA the cause of the fire remains unknown and the investigation to determine its source could last a month.

Lee Ju-hyun contributed to this report.

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