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Shares of Advanced Micro Devices Inc. fell at the market open Friday, a promised time after the chip maker reported the departure of Chief Executive Hector Ruiz and reported a wider second-quarter loss than analysts expected.

The shares bewildered 40 cents, or 7.8 percent, to $4.90 shortly after the commencement bell. The lay up has ranged from $4.53 to $16.19 over the past year.

Under Ruiz’s leadership, AMD rose to challenge larger rival Intel Corp. as never before in AMD’s nearly 40-year history.

Yet after six years as AMD’s CEO, the embattled Ruiz stepped along the course of Thursday being of the kind which pressure mounts on the Sunnyvale-based firm to dig itself away of a deep financial cavern and recover from a devastating fruit stumble that wound up benefiting Intel in a haughty plan of conduct.

Ruiz, 62, the only person to head AMD other than founder and longtime chief executive Jerry Sanders, exercise volition remain on the board of directors. One of the few Hispanic CEOs of a major U.S. incorporated body, Ruiz had also been AMD chairman but now takes on the title of executory chairman, a distinction that lets him retain some day-to-day responsibilities.

One of his biggest jobs be disposed be to help craft AMD’s strategy for slashing its manufacturing expenses, a greater transaction as antidote to any semiconductor collection but one of particular importance for AMD as it burns through ready money and struggles in a fierce battle with Intel.

He’s being replaced as CEO by AMD’s running water president and principal person operating officer, Dirk Meyer, 46, every engineer and chip designer who has been helping Ruiz run the visitor since 2006. That means he knows AMD’s operations intimately further in addition that he shares some of the responsibility for the house’s financial distress.

“I’m not a man of many regrets,” Ruiz said in an interview with The Associated Press. “We have a tremendous, talented group of people at this company, and we’ve gotten AMD to be a true contender. But being a contender and actually captivating, we’re not there nevertheless. … This is the disciplined time to pass the baton to someone like Dirk.”

Meyer had previously led AMD’s microprocessor division, the company’s primary business one. Microprocessors act as the brains of personal computers.

Nearly all the world’s personal computers and many of the servers inside corporate data centers run on chips made by AMD or its much larger Silicon Valley contend with, Intel Corp. Intel commands 80 percent of the global market for microprocessors. AMD has roughly the other 20 percent.

Meyer was involved in the design of AMD’s Opteron server chip, which marked the company’s 2003 foray into a lucrative segment of the server place of traffic where Intel had a stranglehold. The success of that chip - and Ruiz’s sales savvy in lining up new customers - helped AMD transform itself from a perennial second-fiddle to Intel into a serious emulating across all computing platforms.

But the semiconductor industry is notoriously giddy, prone to boom-and-bust cycles. AMD has crashed hard over the past two years, racking up billions in losses and struggling to recover the competitive border it squandered against Intel.

On cover: principal indicators, home prices, home sales, durable goods orders, and a ton of income reports

by dint of. James Cooper

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The second-quarter earnings season kicks into pre-eminent gear this week, by 159 S&P 500 companies stud to report. By the end of the week, half of the S&P 500 will have posted their results, offering a good idea of how the winners and losers are stacking up. For now, with only a scant 33 companies having reported, Thomson Reuters says earnings are expected to have existence down 14.7%, which would be the fourth consecutive quarter of negative growth.

The expected sector breakdown isn’t hard to figure. Energy and technology, currently projected to show gains of 28% and 16%, particularly, force of will lead the winners. The biggest loser will be financials, expected to postman a whopping 72% earnings degeneracy, similar to their first-quarter losses. The consumer discretionary sector, is projected to subsist down 20%, led by lots of red ink from auto makers. Homebuilders will actually be something of a more for the sector, in that their second-quarter losses are expected to be half the size of those in the second quarter of 2007.

The week will offer adequate supply of news relevant to both monetary companies and homebuilders. Given that falling home prices lie at the heart of the current dysfunction in the credit markets, Wall Street will be watching the Office of Federal Housing Enterprise Oversight’s abode estimation index for May for any sign that the drop in home prices is either slowing from a high to a low position or still picking up steam. The week also offers reports on sales of new and existing homes. Both have shown some signs of stabilizing in recent months, but inventories are restrain high, and pledge rates have backed up, eating into affordability.

One interesting item of second-quarter earnings is that profits outside of finance are expected to hold up surprisingly considerably. Thomson Reuters says analysts project earnings, excluding the financials sector, to be up 8.3%, and even further omitting a big boost from the energy sector, the projection is still 2.9%. That’s clearly a modest performance, still it’s far from the broad profits. douse typically seen in a recession. Right at present, earnings guidance from the S&P 500 companies shows a 1.9-to-1 ratio of negative to positive earnings pre-announcements. That’s below the 2.3-to-1 ratio this time last quarter, and it’s also less than the long-term mean proportion of 2.1-to-1.

The second half is shaping to be in addition challenging since companies outside finance. Unexpectedly high gasoline and fuel prices are robbing the buying power of consumer incomes and negating the stimulus from the put a tax upon rebates. Plus, the latest open of financial upheaval implies the credit crunch is getting worse, especially for would-be homebuyers. Despite the Fed’s rate cuts, fixed mortgage rates are up more than a half point since April. And growth overseas, a severe prop under economic progress and profits, is showing clear signs of slowing. As the pace of profits. reports picks up this week and next, investors will be increasingly focused on guidance for the third quarter and full-year 2008.

Here’s the weekly economic list from Action Economics.

  Top Economic Reports

Reports

Date

Time

For

Median Estimate

Last Period

Leading Indicators Index

Monday, July 21

10:00 a.m.

June

-0.1%

-0.1%

Existing Home Sales (millions)

Thursday, July 24

10:00 a.m.

June

4.930

4.909

Durable Goods Orders

Friday, July 25

8:30 a.m.

June

0.1%

0.1%

New Home Sales (millions)

Friday, July 25

10:00 a.m.

June

0.508

0.506

Consumer Sentiment Index (decisive)

Friday, July 25

9:55 a.m..

July

55.0

55.1

Original paragraph: http://www.businessweek.com/investor/content/jul2008/pi20080717_023861.htm?campaign_id=rss_null

KUALA LUMPUR, Malaysia Malaysian opposition leader Anwar Ibrahim has provided an alibi to police to establish he did not sodomize a male aide but power of choosing not give a DNA sample for fear it could exist manipulated to frame him, his lawyer said Friday.

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DNA evidence was fabricated when Anwar was similarly accused of buggery 10 years ago, and he does not trust the police not to do it again, his lawyer, Sivarasa Rasiah, said.

The new sodomy accusation against Anwar comes as the government is faced with growing public vexation by the ruling coalition, which suffered election losses in March to a resurgent opposition. Anwar has vowed to build without interruption that conquest and topple the government in September.

He was arrested on Wednesday and interrogated for hours over the accusation by a young male aide who claimed to have existence a victim of sodomy. Anwar was released Thursday in continuance bail, but remains a suspect in the contingency.

Sodomy, even between consenting adults, is punishable by up to 20 years in prison.

During the interrogation Anwar gave “filled details” of his alibi, Sivarasa said.

“We have given it in filled to the police. We know that they know everything that has to be known,” he before-mentioned, refusing to elaborate, citing the ongoing investigation.

He said Anwar allowed himself to have existence stripped during a medical examination and not only so had his body qualities regular. But he drew the line at giving a DNA swab, which he is not legally bound to do.

“Anwar has even more conception to credit of the probability that DNA make manifest will be fabricated again,” Sivarasa said. He suggested if Anwar was to give a exemplification, it could be planted forward the accuser, who is living in the state police supervision.

The accusation by the 23-year-old aide was a political bombshell, dealing a severe blow to Anwar’s resurgent three-party opposition coalition that won an unprecedented 82 seats in the 222-member Parliament in the March 8 elections.

The result reduced the ruling National Front compact’s strength to 140 seats, down from the two-thirds majority it enjoyed with respect to the last 41 years. Anwar now aims to engineer defections from the National Front to take over the rule by September.

He has dismissed the buggery accusation as a political plot to stop him from toppling the government. Prime Minister Abdullah Ahmad Badawi’s ministers have denied any conspiracy in opposition to Anwar.

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Darling also told The Times newspaper that taxpayers were at the limit of what they were of a mind to pay, a lifetime after official data showed a record deficit in Britain's public public funds, and reports that the government might swerve its budget rules.

"At Christmas most people remained hopeful there would be an improvement by the agency of the fall of the leaf," he said.

"Most people would now say it's far more profound. It's affecting every economy and everybody. I can't say how long it will last."

He added: "We are going end a very, very beset with difficulty time."

Darling aforesaid that the economic picture was "at the bottom end of my range" set not at home in his annual budget in March.

On public spending, the finance minister said he has been "very clear with my colleagues that there is no theme them writing in saying, 'Can we have some more money?' because the reply is already attached its track and it's a very short reply."

"I told them at the last meeting of Cabinet they've got to manage within the money they've got."

The Office for National Statistics said on Friday that public sector debt at the end of June was at 38.3 percent of GDP, but increased to 44.2 percent at what time the stroke of nationalised pledge lender Northern Rock is included.

Public public funds were at a record deficit of 15.5 billion pounds in June compared with the similar time last year, well over market expectations of a 12.3-billion-pound deficit.

The Financial Times, meanwhile, reported that finance council officials were working on plans to revise the rules to allow for increased borrowing lacking raising taxes amid the passing from hand to hand economic downturn.

One of the financial rules sets a government borrowing bound of 40 percent of general income.

In The Times interview, Darling played down the report and reiterated comments made Friday that the Treasury constantly reviews its fiscal rules.

He noted, however, that while voters will "be remunerative their fair ploughshare … you can't push that."

"My faculty of comparison is that there are a lot of people in this country who feel they be hard, they make their grant and they're sentiment squeezed."

Original body: http://us.rd.yahoo.com/dailynews/rss/business/*http://news.yahoo.com/s/afp/20080719/bs_afp/britainpoliticseconomyfinance

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In a court hearing in U.S. District Court in Brooklyn, Assistant U.S. Attorney Patrick Sinclair before-mentioned "the government is indeed contemplating additional charges."

He did not provide any details, but reported the government is moving to make ready a final decision about bringing additional charges in the next scarcely any months.

"We are looking to have that resolved by early fall at the unconditional latest," Sinclair told U.S. District Judge Frederic Block.

Ralph Cioffi and Matthew Tannin were charged on June 19 with conspiracy and securities fraud related to the demise of the two funds hindmost year, which spurred questions about oversight and risk management at Bear Stearns. The firm was sold in March to JPMorgan Chase & Co (JPM.N) in an emergency takeover brokered by the U.S. Federal Reserve.

Cioffi and Tannin, who were in court for Friday's brief audience distance but did not superscription the pass judgment, possess both pleaded not guilty.

A lawyer for Cioffi, Edward Little, told the judge at the hearing "there will definitely be a trial" in the case. A trial date has not yet been station. Judge Block scheduled another hearing distance in the case for September 26.

The charges marked the first major criminal case announced by federal prosecutors stemming from the subprime pledge strait. Cioffi and Tannin are accused of touting the funds' prospects to investors as an "awesome opportunity," while at the same time expressing private concern about an impending subprime mortgage meltdown.

Little has previously said that his client may be "an easy target" for the government for the reason that the Bear funds were among the first big blow-ups of the subprime crisis. A lawyer for Tannin, Susan Brune, has called her client "a scapegoat for a widespread emporium pass."

According to BusinessWeek magazine be unexhausted month, prosecutors have also been investigating whether Cioffi and Tannin broke the law in their dealings by banks. Investigators are muster evidence about possibly misleading comments that the two made to greater lending and trading partners, according to the report, which cited nation close to the explore.

If convicted of securities fraud, Cioffi and Tannin each face as much during the time that 20 years of imprisonment. If convicted of conspiracy, they cropped land face as much as five years in prison.

Cioffi is facing an adscititious insider trading charge.

The U.S. Securities and Exchange Commission has also brought easy securities imposition charges against the pair, accusing them of misrepresenting the funds' investments.

(Reporting by Martha Graybow, editing by means of Phil Berlowitz, Gary Hill)

Original text: http://us.rd.yahoo.com/dailynews/rss/occupation/*http://news.yahoo.com/s/nm/20080718/bs_nm/bearstearns_dc

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Microsoft’s stock has not recovered from the tumble it took in after-hours trading Thursday. At 10:15 this morning, shares were downward $2.06, 7.5 percent lower than the $27.52 closing price Thursday before the company announced profits. that missed Wall Street forecasts by dint of. a penny per share, and lowered its fiscal 2009 profit forecast. Here’s what analysts had to allege about the results in notes to investors this morning:

Sid Parakh, McAdams Wright Ragen:

“While core businesses crop out to be cruising along well, we are concerned about deteriorating playing of the Online business, despite the pricey $6 billion acquisition of aQuantive and continued significant investments being made in the division. While aQuantive has been in the fold for straightforward over three quarters, the sequential decline in revenues in recent quarters hints at execution issues within the Online business; especially considering the continuing rapid growth in the Online advertising market. Driven by its quest to capitalize on the large Online advertising market opportunity, Microsoft will likely have to continue investing in the craft for several years to come. Our concern surrounds the probability of achieving a passable return adhering these investments; a likelihood we proportion as low until at least in the mid-term.

“We likewise reiterate our believing that a Yahoo! acquisition (if it happens) will not just prove to be very expensive, yet will also be challenging from an integration standpoint and elect more than likely be a distraction to operations and employees at the company. Continuing conversations with Microsoft employees supports our antecedent communication of the near non-existence of undergo for the deal.”

Parakh expects online revenue to grow slower than prudent conduct’s expectations. He lowered his price target for the stock from $40 to $35 and maintains a “buy” rating.

Sarah Friar, Goldman Sachs:

“Microsoft’s commentary on the macro environment was wary, but upbeat on their positioning, given diversification, product cycles, etc. Their online advertising business continues to struggle with monetization as well as competitively. This section will continue to be a focus for Microsoft taken in the character of it looks to become greater expenditure in an attempt to gain positioning against chief rival Google. …

“Revenue in the Client [Windows] segment came in at $4.4 billion up 14% year over year and ahead of our estimate of $4.2 billion. The biggest driver of Client revenues was the PC market that returned to growing rates similar to the first moiety of the fiscal year of about 12%-14%. … We be left behind heedful on the Client business in the near term, as our CIO surveys signify that attempt upgrades of Vista are individual of the first initiatives to be pushed out in a weaker macro environment.”

David Hilal, FBR:

“While not perfect, given the weak relating to housekeeping backdrop, we thought the results and lead were solid. From a reward perspective, we were glad to see upside in the quarter, a bigger-than-expected spring in unearned revenue, and guidance for FY09 that exceeded former guidance and consensus. The softness in the results came from a profitability standpoint. … So, while the company is versed to impressively drive sales (revenue was up 18% [year-over-year] in the quarter), the upside is not falling to the bottom line. The sheer reason for this is the company’s efforts to increase investments, separately in its online business. While this may limit margin expansion in the interim, we believe it is the right strategic move, and we believe the strength in the rest of the avocation (which represents 95% of revenues) can help drive overall performance despite these increased investments. Because earnings can be managed added than revenues, on the supposition that we had to pitch upon one, for this reason we are glad to see the strength in revenues. We assert our Outperform rating and $40.00 price target. We believe the shares set forth an excellent entry point since they are commonly at every historical low valuation of 12x our CY09 EPS estimate.”

Here’s my story on the earnings.

The next bulky date on Microsoft’s financial calendar is Thursday, when the company hosts its annual Financial Analyst Meeting. We’ll be there providing gavel-to-gavel coverage.

Original paragraph: http://blog.seattletimes.nwsource.com/techtracks/2008/07/microsoft_shares_fall_after_earnings_news_analysts.html

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WASHINGTON

In a speech here on Thursday and in some interview, Gore played his usual role for example unpaid party visionary through arguing that we can ease the climate crisis, the housekeeping height and the crisis of dependence on foreign energy totally at once.

“We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet,” Gore before-mentioned in his speech. “Every bit of that’s got to change.” He urges a 10-year goal for getting 100 percent of our electricity from renewable sources and clean, in some measure than carbon-based, fuels.

It sounds equal a typical, idealistic Al Gore idea. But two things about this proposal merit attention. It points a country that uses too plenteous energy down the upright path. And Gore is showing that being environmentally responsible is economically sensible.

Democrats should be concerned about where they are in succession the gas-price issue right at this time, and the party’s own strategists are worried that its response so far is insufficient.

What the Democrats have been saying with regard to the Bush administration’s energy memory is certainly true: The money taxpayers threw at the oil and aeriform fluid sedulousness in Vice President Cheney’s energy delineate did nothing to help consumers at the pump.

And promises that else offshore drilling will magically bring down prices are not backed up by the evidence. “We be the subject of been drilling for more oil, and the prices have gone up,” Gore said in the interview. “A lot other thing oil has been ground, a lot more has been produced.”

In his harangue, Gore uttered the disturbing reality that “the exploding demand for oil, especially in places like China, is overwhelming the rate of new discoveries by so much that oil prices are almost certain to continue uphill over time no matter what the oil companies promise.”

But voters have this odd view that while they face a riddle, they want their politicians to do something. Drilling offshore sounds better than not acting at completely. That’s why McCain flipped on the issue and now backs drilling.

In a survey report released last week by Democracy Corps, Democratic pollster Stan Greenberg and strategist James Carville concluded that their party has “not still advanced a compelling narrative” forward the problem of high gas prices and that “John McCain enters the offshore drilling debate with voters’ favor.”

In an otherwise upbeat report on Barack Obama’s chances, they warn that the public “wants the government to act to address the immediate recompense consequences, and to act now for achieving animation independence in the medium- and long-term.”

“A majority of voters,” they continue, “believe that coupling an investment in alternative fuels with increased domestic production of oil is more desirable to other fuel investment combined by energy conservation alone.”

What Gore said on Thursday won’t expound the Democrats’ immediate problem on the drilling issue. But he is making what Greenberg and Carville denominate for: “a bigger offer” on manliness.

Gore’s core protestation is that the technology for alternative fuels

“The only manner to break free from the burden of rising gasoline prices and electricity rates is to get liberated” from a process through which we “bid up the price of every hold out drop of oil and every last clear of coal,” he related in the interview. Cheaper electricity, in turn, will speed the onset of electric cars.

The United States is now at a disadvantage in the global economy because we exercise disproportionate amounts of energy. According to the International Energy Agency, Americans application nearly twice as many tons of oil equivalent per person for the reason that cheat the Japanese and the Germans, and more than double that of the Swiss. Yes, our vast country may inevitably practice more energy than more closely put together nations, nevertheless surely we can do better.

Voters speak they hate gimmicks and insist they want valorous solutions. Well, Gore is testing that proposition. He says he wants to “expand the political while” for those actually running with regard to office. Will they take the opening?

postchat@aol.com

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BOSTON

Until then, I had drifted along through the do-it-yourself economy. I bused my own lunch trays. I booked my own movie tickets. I checked myself in at hotel kiosks. I even succumbed whereas an upscale seafood eating-house expected me to sweep my credit card through a handheld computer as if I were in a supermarket.

But maybe it was the election-year rants about the offshoring of American jobs from steelworkers to computer programmers that finally got me. The outsourcing of work to other countries has produced illimitable wrath. But what about the outsourcing of work to thee and me?

For every task shipped abroad by a corporation, isn’t there another one sloughed off onto that domestic loser, the consumer? For every job that’s going to a low-wage economy, isn’t in that place another going into our very own no-wage economy?

I’m not just talking about do-it-yourself gas pumping, which is by now so routine that the memory of an actual person washing your windshield has receded into the mists of AARP nostalgy. Back when gas cost $2 a gallon, self-service was offered at a discount. Today, gas is additional than $4, and, in principally powers of the country, full-service

What’s happening on land is happening in air. We are now expected to book our own guidebook, print our boarding passes and swindle everything at the airport except pat ourselves down for liquids.

In this self-service economy, we also serve (ourselves) by means of having intimate and endless conversations with voice-recognition machines simply to refill a prescription drug or check our bank balance. We are expected to interact with “labor-saving technology” without realizing that it’s labor-transferring technology. The job has not been “saved,” it has been taken out of the paid sector, where employees have a nasty habit of expecting salaries, and boor into the unpaid sector, where suckers ‘r’ us.

I am tempted to say that patron service has gone the way of the house invite but that reminds me that even medicine has been outsourced to patients who bribe do-it-yourself kits to test and track everything from HIV to blood pressure. The Internet ad for a do-it-yourself eye-surgery kit may have existence, I ask, a hoax. But in an era at the time that every operation short of brain surgery is done on an outpatient basis, nursing care has even now been outsourced to family members whose entire medical training consists of TiVo-ing “Grey’s Anatomy.”

The axis of this evil isn’t really globalization, it’s privatization. Consider all the greater jobs that have now grow apportionment of our corporal portfolio. We’ve become our own computer geeks in the same proportion that help lines become self-help lines. We’ve become our own annuity planners and financial analysts left to manage our 401(k)s. We are even expected to be health-care analysts, determining what one. star in the brilliant collection of drug-prescription plans covers the ever-changing cast of pills in our medicine cabinet.

All of this is framed in the language of free choice. As opposite to, say, independent time.

An MIT economist assures me cheerily that various Americans are willing to accept less service for lower cost. In a society built on the value of self-reliance, I am told, we may even feel good when we put together our own bookcase or install our own hard aim.

But I have however to find an economist who has figured through the human cost of “humiliate cost” or tallied up the transferrence of labor from companies to customers. I’ve yet to find a consumer who has added, subtracted or multiplied the effect of date we are now expenditure on the assist shift of life management.

Remember back when women were asking “Can We Have It All?” The answer turned out to be that we could have it all only if we could do it all … and all by ourselves. Now men and women consider both won equal opportunity in the do-it-all-by-yourself world. We have officially become our own nonprofit centers.

Welcome to the self-service economy, where we are not at all lacking work to subsist done. Let’s celebrate by dining disclosed in the same time. Bring your carrot policeman.

ellengoodman@terraqueous globe.com

From Nantes to Marseilles, city planners are building new, high-tech streetcar lines—with plenty of French flair

by Stefan Simons

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Trams are enjoying a comeback in France. From Nantes to Marseille, city planners are building recently made known, high-tech streetcar lines similar to central elements in urban redevelopment. And they haven’t forgotten any of the French flair the world has come to sweetheart.

It’s bright yellow with fiendish stripes—like some kind of futuristic tiger on rails—and it runs through Mulhouse at eight-minute intervals like a streak of comprehension. This city in France’s Alsace region was once a leader in the industrial revolution, but it is now visibly struggling with structural change. The new tram system has brought it fresh pride and and a new sense of self-confidence.

“We wanted a tram that called attention to itself,” says Deputy Mayor Michel Samuel-Weis, “in the manner that a symbol of economic vitality, environmental awareness and civic ameliorating—transportation as an integrated cultural concept.”

To make way for the new reticulated, which will unite five neighboring municipalities, streets, sidewalks and bike paths had to have existence thoroughly overhauled. Now trees have been planted, and the strips of land without interruption that the tracks run have been given novel green turf. When the city was awarding contracts for the two tramlines, they went looking conducive to artistic flair—on the rails themselves, though, rather than in the stations.

As an art collector with good connections, Samuel-Weis was able to attract internationally renowned artists to participate in the project. French artist Daniel Buren created of great dignity, omega-shaped arches over the tracks, which could in addition support the tram’s overhead lines. Zebra-like stripes in continuance the arches that run onto the asphalt and the facades of nearby buildings visually intertwine the tramline through the city.

For another one of the city’s new tramlines, German artist Tobias Rehberger is planning a tram-city integration upon a global scale. With his project, canaille who pass by a pavilion will experience—via the Internet and in real time—the weather in cities in a circle Europe whose names have exactly the same etymologies: Casa Molino in Italy, Mülhausen in Germany and Millhouse in England. At one tram discontinue, Rehberger also plans to put a give light to at the bottom of a buried shaft, with equal reason that it looks like the sunshine is shining straight from one side the Earth from Australia’s Shannon Rock.

As an extra artistic proper sphere, French electronic music composer Pierre Henry created unique tunes to accompany the announcements played at each station.

“Residents had a say in all the projects,” says Samuel-Weis. “They helped decide on the shape of the trams’ driver cabins and voted on color choices. The project was popular strange to say before the first tram left the station.”

Its launch has been a tremendous success in the city. Many residents now consider riding the tram cool and pleasurable. “It’s punctilious, adapted to practice and secure place,” a young head says, extolling the commencing system’s virtues. Citing examples like standing platforms that come up to the height of the tram doors, she says that it’s great for people with children. “Got a infant. carriage?” the head asks. “No problem! It’s not like the nightmare at bus stops and subway stations.”

An Answer from the Past

The French are hoping the revival of letters and arts of the tram will serve as an anti-poison to traffic jams and gridlock—and not just in Mulhouse. In almost two dozen French cities, trams have become the hallmark of urban transformation. Nantes and Grenoble were the first cities to bring back what many had long considered to have existence an outmoded form of forced exile. Since then, Bordeaux, Clermont-Ferrand, Marseille and even the southern side of Paris have also welcomed back urban rail lines. Lille and Lyon are looking into the idea; Caen, Brest, Nancy, and Toulon are in the planning stages. Throughout France, the network of tracks is group to grow to 576 kilometers (358 miles) by dint of. 2015.

With the automaker’s winning affordable-car formula under pressure at home, Chairman Li is pushing hard in quest of a breakthrough on the world arena

by Dexter Roberts

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Getty Images

As a boy growing up in rural China, Li Shufu was fascinated through cars. The son of rice farmers in the southeastern province of Zhejiang, Li started fabrication model autos when he was only 8 years old. "I used mud to make cars and tires, big ones," says Li, 44. That boyhood garran paid off well as far as concerns Li, who grew up to suit the founder and chairman of one of the most important automakers in China, Zhejiang Geely Holding Group.

Now Li has an even loftier goal: Transform Geely into a troop in the auto endeavors, not just in China but worldwide. With gasoline well over $4 a four quarts in the U.S., he figures the timing may be right for American consumers to ponder inexpensive, fuel-efficient Chinese-made names like Geely. While Detroit giants like General Motors (GM) are losing billions of dollars, slashing jobs, and shutting factories, Geely is taking advantage of solid growth in its home market, the world’s second-largest, to expand into new markets. Last month, toward instance, Li announced trying plans to make liberal a $500 the public plant in Mexico to produce vehicles for the U.S. and Latin America.

Not bad for a company that is only a dozen years former. While a teenager, Li heeded Deng Xiaoping’s call to assistant reform the country by opening a photo store with his brothers in his hometown of Taizhou, Zhejiang. He went into the refrigerator components business in 1984, began manufacturing wall- and floor-boarding materials a few years later, and in 1994 started making motorcycles. In 1998, Li produced his at the outset car, the Geely HQ hatchback, a hit that keeps selling.

Li’s company has succeeded largely by keeping costs down and offering the most affordable cars in China. For instance, Geely’s best-selling four-door sedan, the Free Cruiser, retails from $6,300 to $6,900. Last year, Geely sold 217,000 passenger cars in China, making it the No. 2 domestic husbandman with a 4.1% market quota. The biggest Chinese automaker is state-affiliated Chery, which last year held a 7.1% place of traffic stake (BusinessWeek.com, 7/11/08). That compares to GM’s 10.1% share of the passenger market and Volkswagen’s 17.5%.

Geely’s winning formulary is under strain at hearthstone, though. Chinese car buyers are becoming wealthier, construction higher-end models more practical for many consumers. At the same time, brands such as the Chevrolet Spark, Volkswagen (VOWG.DE) Golf, and Hyundai Elantra are constraining Geely at the low end. The company’s unit sales rose only 6% last year, vs. 21% for passenger vehicles overall.

Confronted by means of tougher competition in China, Li isn’t sitting silence. He plans to roll gone out an additional 15 models, including a hybrid, by 2010. Along with his plans to open the overseas manufacturing plant in Mexico, Geely has assemblage operations in Indonesia, Russia, and Ukraine. And things before that time are looking up for the company, with sales surging 27.2% to 107,000 cars in the first moiety of the year (faster than the overall sedan emporium, which is up 16.7%), driven in part by exports of the Free Cruiser as well as the Geely KingKong ($7,500-$10,100), a four-door 1.5- to 1.8-liter sedan, and Vision ($9,700-$15,300), a 1.8-liter four-door sedan.

Li also has pushed during a reorganization of the company. On July 1, the Shanghai-listed subsidiary acquired five operating associates from the privately held parent company. That should allow the publicly traded part of the group to consolidate numbers in its pecuniary results, improved in health meditative Geely’s overall business. "The acquisition should significantly enhance the group’s corporate structure," a spokesman said in a statement, "thus resulting in a more streamlined influence with much improved operating efficiency and a great quantity better transparency."

Restructuring at home might help, but cracking the American place of traffic will be a very greatly longer-term project. Chinese automakers don’t have a great deal of of a track memory selling in the U.S., and even the likes of Toyota ™, Honda (HMC) and Hyundai struggled at first to win over skeptical American consumers. Still, Li intends to sell 2 million cars by 2015, and he’s confident he can thrive against global competition. "Geely’s technology, quality, and service are not that divergent from Toyota, Honda, GM, or Ford," he boasts, "but the price of our cars is 50% cheaper."