The Morning Download: Manufacturers Bring Factories Back Home, but Robots Do the Work

Good morning. After decades of transferring jobs to low wage regions such as Asia, manufacturing companies in the developed world are reviving factory work closer to home. But those jobs, such as they are, increasingly are performed by robots, not human beings.

"Adidas's 50,000 square-foot factory, in the Bavarian town of Ansbach, will rely on robots and customized automation to produce 500,000 pairs of athletic shoes a year—well below 1% of Adidas' total annual production of 300 million pairs—when full production starts in 2017," the WSJ reports.

Nike Inc., Apple Inc. and Jabil Circuit Inc. are moving some work closer to home, too, the WSJ says. Rising wages have weakened the advantages of performing work in developing markets such as Asia. But the shift also reflects the need for flexibility and speed in the age of the customer. "What factories are doing right now is mass production," KC Ong, senior vice president of operations at Jabil, a St.. Petersburg, Fla.-based circuit board and electrical parts maker for companies including Apple, told the WSJ. "In the future, it will be customization at satellite factories. We are standardizing in our factories so if we have to set up in a lot of different locations, then we can do it."

From founder to CIO and back again. Peter Yared, co-founder and CTO of startup Sapho, talked with CIO Journal about how his stint as CBS Interactive CIO, shapes his current efforts promoting his new business. "I now know innately that all the rules and compliance and processes that an IT organization has is for a good reason. They're not stupid. When they work with a startup they're taking a bet. It's a huge gift that they're willing to work with a smaller company and actually use the software and deploy it.

Census Bureau appoints CIO. The Census Bureau has named a new CIO, Kevin Smith, a veteran of the public and private sector with a background in IT modernization. Mr. Smith, who also will hold the title of associate director for information technology, ​will lead the bureau's information technology program by establishing common enterprise IT services in collaboration with all survey and program area​s, Census Director John H. Thompson said in a prepared statement.

SECURITY AND PRIVACY

Antivirus startup Cylance raises $100 million. The startup, which uses artificial intelligence to detect threats to computers and other devices, is now valued at $1 billion, the FT reports.

Ransomware attack claims university. The University of Calgary said Wednesday it paid $16,000 to release data held by hackers. In a statement acquired by Ars Technica, the university said that even after paying the ransom, "a great deal of work is still required by IT to ensure all affected systems are operational again, and this process will take time."

Massive botnet mysteriously disappears. Some sources tell Motherboard that recent actions taken by Russian authorities against a cyber criminal ring could explain the June 1 disappearance of a massive collection of botnets linked to ransomware and other malware campaigns.

REGULATIONS

States can set self-driving car regulations. The National Highway Traffic Safety Administration plans to release documents that will serve as the foundation for national regulations regarding autonomous vehicles next month. But in a blow to companies such as Alphabet Inc.'s Google, part of that framework will include room for states to set additional standards, the WSJ's Jeff Bennett and Mike Ramsey report. California, for example, has proposed barring self-driving cars that don't have steering wheels, pedals and a licensed driver ready to take the wheel in case of emergency.

MORE TECHNOLOGY NEWS

Uber, Fiat discuss a self-driving car partnership. Uber Technologies Inc. has held preliminary talks with Fiat Chrysler Automobiles NV about a potential partnership involving self-driving car technology, the Journal's Douglas MacMillan and Jeff Bennett report. Fiat Chrysler, viewed as a laggard in rapidly advancing driverless technology, is in talks with several tech companies, including Google, to bolster those efforts.

Alphabet looks to wirelessly connect homes to internet. Alphabet Chairman Eric Schmidt said the technology exists to deliver internet connections wirelessly at 1 gigabit per second, the Journal's Jack Nicas reports. Google Fiber, which provides equivalent speeds through fiber-optic cables in five U.S. cities, previously disclosed that it is testing wireless technology in Kansas City.

Apple moves to keep app developers happy. The company said Wednesday it would allow more apps to charge customers via subscriptions and change the revenue split for those apps with longtime subscribers to 15% for Apple and 85% for the developer from the longtime 30%/70% split, the WSJ's Daisuke Wakabayashi reports.

RBC goes south. Add Royal Bank of Canada to the ever-growing list of banks looking to bottle a bit of that Silicon Valley magic. RBS has opened a new Valley-based innovation lab and is partnering with a group of Canadian entrepreneurs there to set up a hub for Canadian-based startups to meet investors and customers, Reuters reports.

Singapore will turn off Internet access to government employees. Interestingly enough, the proposal comes as the nation gears up for a Smart Nation program that includes self-driving taxis and sensor-enabled traffic lights, Quartz reports.

Here we Go again. The 18-year-old reigning to-ranked Go player of the world says he is ready to play AlphaGo, Google's AI system that trounced one of the best Go players of all time in a series of matches several months ago, Quartz reports. A time and place has not been determined.

No surprises here for New Yorkers. The New York Attorney General's office said preliminary results of an investigation revealed "troubling" evidence of Time Warner Cable's "apparent failure" to deliver New York customers the internet speeds it promises, the WSJ's Shalini Ramachandran reports. A letter addressed to Charter Communications Inc., which recently acquired Time Warner Cable for $60 billion, noted that connections have become "so congested that large volumes of Internet data were regularly lost or discarded."

Smarter city. After switching out sodium vapor streetlights for LEDs in a multi-year, $57 million project, Los Angeles is using some of the excess power capacity to build out electric car charging stations, Wired reports.

I love the 80′s. Guns n' Roses frontman Axl Rose is demanding that Google remove several several unflattering photos that have spawned web memes. "Remember the 80s? He ate them," reads the tag to one such user-created gif, the Associated Press reports.

EVERYTHING ELSE YOU NEED TO KNOW

Soros goes bearish. After a long hiatus, George Soros has returned to trading, lured by opportunities to profit from what he sees as coming economic troubles. Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter. Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets.

Tide backtracks on pods. When Procter & Gamble Co. launched Tide Pods, the company touted the dissolvable laundry-detergent packets as "the ultimate perfect dose," Paul Ziobro and Sharon Terlep write. Four years later, the consumer-products giant has a different message: Some loads might require two or three pods.

Dell issues junk debt. Dell Inc. is set to sell roughly $3.3 billion of junk-rated bonds Wednesday, people familiar with the matter said, a big step toward financing its purchase of EMC Corp. Dell sold $20 billion of investment-grade, secured bonds last month and another $5 billion of institutional loans last week. Markets are watching the demand to gauge the appetite for speculative-grade debt, which hasn't been eagerly snapped up lately. But, as with other debt Dell has issued, the unsecured bonds are generating strong interest from investors, who are concerned about Dell's long-term computer-hardware prospects but like the interest and its cash flow.

Tom Loftus contributed to this article. The Morning Download comes from the editors of CIO Journal and cues up the most important news in business technology every weekday morning. Send us your tips, compliments and complaints. You can get The Morning Download emailed to you each weekday morning by clicking http://on.wsj.com/TheMorningDownloadSignup


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