Beyond the county: GM recalls 1.4M vehicles, REI closed for Black Friday
Senate passes bill to push sharing of info on hacker threats
WASHINGTON — The Senate passed a bill Tuesday aimed at improving cybersecurity by encouraging companies and the government to share information about threats. It took roughly six years to win approval for such a program.
The Cybersecurity Information Sharing Act passed by a 74-21 vote. It overcame concerns about privacy and transparency from some senators and technology companies, such as Apple and Yelp.
The Senate rejected amendments, including one addressing concerns that companies could give the government personal information about their customers. Another failed amendment would have eliminated part of the bill that would keep secret information about which companies participate and what they share with the government.
The bill’s co-sponsors, Sens. Dianne Feinstein, D-Calif., and Richard Burr, R-N.C., said the measure was needed to limit high-profile cyberattacks, such as the one on Sony Pictures last year.
“From the beginning we committed to make this bill voluntary, meaning that any company in America, if they, their systems are breached, could choose voluntarily to create the partnership with the federal government. Nobody’s mandated to do it,” Burr said.
Companies would receive legal protections from antitrust and consumer privacy liabilities for participating in the voluntary program.
The House passed its version of the bill earlier this year with strong bipartisan support. The two versions of the bill will need to be reconciled before being sent to the White House for the president’s signature.
Sen. Ron Wyden, D-Ore., who opposed the bill, offered an amendment addressing privacy concerns, but it failed to pass. It would have required companies to make “reasonable efforts” to remove unrelated personal information about their customers before providing the data to the government.
“You just can’t hand it over,” Wyden said. “You’ve got to take affirmative steps, reasonable, affirmative steps, before you share personal information.”
Senators also rejected an amendment Sen. Patrick Leahy, D-Vt., had offered that would have removed a provision to keep secret more information about materials that companies provide to the government. Leahy criticized the bill’s new exemption from the U.S. Freedom of Information Act as overly broad because it pre-empts state and local public information requests, and it was added without public debate.
The Sunshine in Government Initiative, a Washington organization that promotes open government policies, urged the Senate last week to support Leahy’s amendment. The AP is one of at least nine journalism groups that are members of the organization.
Despite the lengthy road to pass the Senate bill, it’s unclear whether it would improve Internet security. Participation is voluntary and companies have long been reluctant to tell the U.S. government about their security failures.
“Passing the bill will have no effect on improving cybersecurity,” said Alan Paller, director of research for the SANS Institute. “That’s been demonstrated each time sharing legislation has been passed. The cost to companies of disclosing their failings is so great that they avoid it even if there is a major benefit to them of learning about other peoples’ failings.”
Senators passed an amendment by Sen. Jeff Flake, R-Ariz., that limited the bill to 10 years.
Cyberattacks have affected an increasing number of Americans who shop at Target, use Anthem medical insurance or saw doctors at medical centers at the University of California, Los Angeles.
More than 21 million Americans recently had their personal information stolen when the Office of Personnel Management was hacked in what that the U.S. believes was a Chinese espionage operation.
Sen. John McCain, R-Az., chairman of the Senate Committee on Armed Services, called the bill’s passage an important first step. He noted that in the past year the United States has been attacked in cyberspace by Iran, North Korea, China and Russia and that there had been attacks against the Joint Chiefs of Staff, the Pentagon, OPM and an email hacking of the director of the Central Intelligence Agency.
The U.S. and the technology industry already operate groups intended to improve sharing of information among the government and businesses, including the Homeland Security Department’s U.S. Computer Emergency Readiness Team.
“What this bill means is more internet users’ personal information being funneled, will be directed to, the National Security Agency under a cybersecurity umbrella,” said Greg Nojeim, senior counsel for the Center for Democracy and Technology, a Washington-based civil liberties group. “A company can’t both participate in this program and promise its users that it will not volunteer their personal information to the NSA.”
Presidential candidates Sen. Bernie Sanders, I-Vt., and Rand Paul, R-Ky., opposed the bill. The White House has said it supports the information-sharing bill.
— Associated Press
GM recalling 1.4M cars; oil leaks can cause engine fires
DETROIT — General Motors issued its third recall in seven years for cars that can leak oil and catch fire, in some instances damaging garages and homes.
The recall, which covers 1.4 million vehicles dating to the 1997 model year, is needed because repairs from the first two recalls didn’t work. More than 1,300 cars caught fire even after they were fixed by dealers, the company said.
A valve cover gasket can degrade over time, allowing oil to seep out. Under hard braking, oil drops can fall onto the exhaust manifold and catch fire. Flames can spread to a plastic spark plug wire channel and the rest of the engine.
GM says it has reports of 19 minor injuries in fires caused by the cars. The company is finalizing a fix for the latest recall, and will use state registration databases in an effort to track down the owners and notify them by mail, said spokesman Alan Adler.
In the previous recalls, in 2008 and 2009, GM told owners to park the cars outside until repairs can be made since most of the fires happened shortly after drivers turned off the engines. Adler said he doesn’t know if GM will make the same recommendation again.
The latest recall, mainly in North America, includes: the 1997-2004 Pontiac Grand Prix and Buick Regal; the 2000-2004 Chevrolet Impala; the 1998 and 1999 Chevrolet Lumina and Oldsmobile Intrigue; and the 1998-2004 Chevrolet Monte Carlo. All have 3.8-liter V6 engines.
In addition, GM will notify owners of 500,000 more cars that were not repaired in the previous recalls, he said.
The problem first surfaced in 2007, when 21 consumer complaints about engine fires in some of the cars prompted the National Highway Traffic Safety Administration to investigate. That probe found three injuries. Most of the blazes happened five to 15 minutes after the engines were turned off, according to agency documents.
In March 2008, GM recalled more than 200,000 U.S. cars with supercharged engines. A year later the automaker recalled almost 1.5 million more cars that weren’t supercharged. Dealers replaced the spark plug wire channels on all the vehicles.
GM decided to replace the left valve cover gasket on the supercharged engines, but it did not do so on cars without the high-performance engines. Company tests showed that if oil caught fire, it would be a small “pilot flame” that would extinguish itself, Adler said. So the company focused on removing or replacing nearby plastic parts. “You want to get anything that can burn away from it,” he said.
Earlier this year, when GM added 50,000 2004 models to the recalls, it replaced valve cover gaskets on those vehicles, Adler said.
The 1,300 fires were discovered when GM began investigating whether to recall some 2004 models that weren’t part of the earlier recalls, Adler said.
There is plenty of evidence of the problem in the consumer complaint database kept by National Highway Traffic Safety Administration, which the agency monitors for safety problems.
For instance, of the 242 consumer complaints filed about the 2001 Pontiac Grand Prix, more than one quarter were about engine fires. The first complaint was filed in December of 2005, and the most recent was last month.
Messages were left Tuesday for agency spokesman Gordon Trowbridge seeking comment on whether NHTSA should have noticed that the initial repairs appeared not be working.
In most of the complaints, fires broke out within a few minutes of the cars being parked, but some happened while the cars were being driven. In a small number, cars caught fire in a garage and damaged the building.
A supercharged Grand Prix caught fire in a garage in Charlotte, North Caroline, on Sept. 10, 2006, and the flames quickly spread, according to one complaint. “The fire caused extensive damage to my home and my neighbor’s home,” the car owner wrote. Owners are not identified in the NHTSA database.
Another driver in Spring Valley, Illinois, told NHTSA that a Grand Prix caught fire in September of 2011, three months after the recall repairs were made.
The recall is so large that it could have an impact on GM’s fourth-quarter earnings, although Adler said that hasn’t been determined.
“Since we have not decided on the remedy, we do not know whether the cost will result in a material charge to earnings,” he said.
— Associated Press
San Francisco to consider video recording of gun sales
SAN FRANCISCO — The San Francisco Board of Supervisors is voting on an ordinance requiring video recordings of all gun and ammunition sales, footage that could later be used in criminal investigations.
The proposal on Tuesday’s agenda led the city’s only gun shop to announce in September that it would close for good rather than subject customers to any surveillance requirements.
The ordinance would also require vendors to submit a weekly report to police on ammunition sales, including the type and amount of ammunition bought and information identifying the buyer. The provision applies to vendors who sell in San Francisco, or deliver to addresses in San Francisco.
— Associated Press
REI closed Black Friday; Will others follow?
NEW YORK — Don’t expect major retailers to follow REI’s move to close its stores on Black Friday, the biggest shopping day of the year.
REI, a chain that sells hiking boots, yoga mats and other outdoor and fitness apparel, said this week that it will not open its doors on the day after Thanksgiving. The day, which is called Black Friday, has grown into an American holiday shopping spectacle.
But many other retailers won’t be able to give up Black Friday as easily. Target, Wal-Mart and Macy’s didn’t return requests seeking comment on this story, but industry watchers say big retailers that sell toys, clothes and electronics depend on sales generated during that day.
REI, on the other hand, likely won’t lose many sales as a result. And what the company loses in sales, it will gain in goodwill from its employees and customers, marketing experts say.
“It makes them seem like they are socially responsible and doing the right thing,” says marketing consultant Allen Adamson of BrandSimple Consulting. “Younger consumers are very concerned about how companies behave and treat their employees.”
REI said it will pay its 12,000 employees to take the day off. In addition to closing its 143 stores, it will also close its two distribution centers and Seattle headquarters. It will still take orders online on Black Friday, but those orders won’t be filled until Saturday, says REI’s senior vice president of retailer Tim Spangler.
“We feel that Black Friday has gotten a little out of hand,” says Spangler.
The move comes as Black Friday sales have been dwindling as retailers have been spreading Black Friday-like deals more throughout the entire holiday shopping season. Indeed, in recent years, stores have been opening on Thanksgiving Day to better compete with online retailers.
As a result, U.S. shoppers spent $9.1 billion at stores on Black Friday last year, according to research firm ShopperTrak, a drop of 7 percent compared with the same day the year before.
Still, the day is an important one for most retailers during the critical holiday shopping season, a two-month stretch in November and December that accounts for about 20 percent of annual retail sales. And some retailers have gotten flak from some customers and employees for opening on the actual holiday.
While most retailers likely won’t follow REI, other specialty retailers that don’t depend on the day so heavily may close their doors on Black Friday, says Wendy Liebmann, CEO of retail consulting firm WSL Strategic Retail.
“It will be interesting to see who else will fall in line,” she says.
— Associated Press
Twitter’s 3Q report illustrates challenges facing new CEO
SAN FRANCISCO — Twitter’s losses are mounting as the messaging service struggles to grow its audience under recently hired CEO Jack Dorsey.
The challenges facing Dorsey came into sharper focus in a third-quarter report released Tuesday. The numbers covered the three months ending in September. That’s when Dorsey served as interim CEO before he was hired on a permanent basis.
Twitter ended the period with a core audience of 307 million active users, an increase of just 3 million from June. That wasn’t much better than a gain of 2 million users in the previous quarter, a letdown that led to the departure of Twitter’s previous CEO, Dick Costolo.
Revenue climbed 58 percent from last year to $569 million.
Twitter still lost $132 million. The company’s stock plunged 11 percent in extended trading.
?? Associated Press
Walgreens to buy Rite Aid for $9.41 billion
NEW YORK — Walgreens confirmed Tuesday that it will buy rival Rite Aid for about $9.41 billion in cash, creating a drugstore giant with nearly 18,000 stores around the world.
The deal comes less than year after Walgreens bought European health and beauty retailer Alliance Boots. Besides its namesake stores, Deerfield, Illinois-based Walgreens also owns Duane Reade stores in the U.S.
Walgreens said it will pay $9 for each share of Rite Aid Corp. That’s a 48 percent premium to Rite Aid’s closing price of $6.08 Monday. Shares of both companies jumped Tuesday after The Wall Street Journal first reported the deal.
The companies said the deal is worth $17.2 billion, when debt is included.
Rite Aid stores will initially keep its name after the deal closes, Walgreens said, but that may change over time. The deal is expected to close in the second half of next year.
Walgreens Boots Alliance Inc. has more than 13,100 stores around the world, and is the largest U.S. drugstore chain. Rite Aid has more than 4,600 stores in the U.S.
— Associated Press
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