THE Chevrolet Volt, a compact, petrol-electric hybrid launched by GM a year ago, was already selling poorly before it emerged last month that its batteries had caught fire in crash tests. GM is likely to fall several thousand short of its target of selling 10,000 Volts this year. Despite subsidies, electric cars and hybrids (which can run off batteries or a generator powered by an engine) are shifting sluggishly.The Volt’s battery problem should be fairly easy to fix. But the profusion of hybrid and all-electric cars now hitting the roads faces a far bigger challenge. Petrol- and diesel-engined vehicles are becoming much more fuel-efficient. That means motorists will remain reluctant to pay a fat premium for a green car.Between now and 2025 regulators in Europe, America and elsewhere plan to impose ever greater curbs on cars’ emissions of carbon dioxide (or higher fuel efficiency, which has much the same effect). This is forcing carmakers to invest both in developing electrics and hybrids and in making the conventional engine cleaner.

DRUG research is in dark times, as pipelines dry up and development budgets are cut. But one shaft of light pierces the gloom. “Personalised medicine” promises to craft drugs for individuals. Genetic tests will identify those who will benefit from specific medicines. Treatment will be more effective; waste will drop. Personalised medicine has sparked excitement among drugmakers, doctors, hospitals and patients. It has also sparked a legal brawl.On December 7th America’s Supreme Court heard arguments in Mayo v Prometheus. The suit, despite a name that suggests an ancient liver sandwich, may be crucial for biotechnology firms. America is the world’s hub for drug research. By definition, personalised medicine includes the study of genetic mutations and other personal characteristics. However, American law bars patents of nature and abstract ideas. The question is which discoveries in personalised medicine may be patented.Prometheus is part of a series of suits over biotech patents. Courts have been active because Congress has not. A recent patent reform provided little…

BARACK OBAMA invited a puzzling group of people into the White House on December 5th: university presidents. What should one make of these strange creatures? Are they chief executives or labour leaders? Heads of pre-industrial guilds or champions of one of America’s most successful industries? Defenders of civilisation or merciless rack-renters?Whatever they might be, they are at the heart of a political firestorm. Anger about the cost of college extends from the preppiest of parents to the grungiest of Occupiers. Mr Obama is trying to channel the anger, to avoid being sideswiped by it. The White House invitation complained that costs have trebled in the past three decades. Arne Duncan, the secretary of education, has urged universities to address costs with “much greater urgency”.A sense of urgency is justified: ex-students have debts approaching $1 trillion. But calm reflection is needed too. America’s universities suffer from many maladies besides cost. And rising costs are often symptoms of much deeper problems: problems that were irritating during the years of affluence but which are cancerous in an age of…

IN SEVEN years as head of Reuters, Tom Glocer brought the British-based news agency from the verge of bankruptcy to a state of rude health. But he has done less well as chief executive of Thomson Reuters, the company created when Thomson, a Canadian purveyor of professional information for lawyers, accountants and others, bought Reuters in 2008. Bloomberg, the firm’s American rival, has almost wiped out its once-clear lead (see chart). On December 1st Mr Glocer said he would step down at the end of the year. His replacement, James Smith, the chief operating officer, is a former Thomson man.The revenues of the professional division of Thomson Reuters grew by 10% in the year to the third quarter, but those of the markets division—which provides financial data and services, and accounts for more than half of total sales—managed only 1%. Last year that division launched a new information platform, Eikon, to compete with the terminals offered by Bloomberg, but just 8,000 customers have taken it up. The company has 400,000 financial-data subscribers in all.Thomson Reuters and Bloomberg are the big fish in the…

Fighting over spectrum, not the sofa

JULIUS GENACHOWSKI, the head of America’s Federal Communications Commission (FCC), has called wireless spectrum “the oxygen that sustains our mobile devices”. Yet unlike oxygen, the airwaves over which telecoms companies transmit their wireless signals are in ever shorter supply. According to the FCC’s calculations, America needs to make 300 megahertz (MHz) of additional spectrum available by 2014 to avoid a “crunch” that drives up consumers’ mobile-phone bills and holds back innovation.Some critics reckon the regulator’s projections are too pessimistic. But telecoms firms say an explosion of wireless data triggered by smartphones and tablet computers is indeed soaking up capacity fast. Hence the scramble for more airwaves. On December 2nd Verizon Wireless, the country’s largest mobile operator, announced a $3.6 billion deal to buy spectrum from several cable-television companies. AT&T, another telecoms behemoth, has been telling anyone who will listen that its $39 billion bid for T-Mobile USA, a smaller rival, should be approved in part because…

Correction to this articleNOT far from China’s coast, Macau’s casinos buzz with the energy and abandon of the wildly wealthy. Marble columns, gold decor and money are everywhere. But behind the glittering facades there are signs of something darker.Macau’s success is not built purely on the Chinese love of gambling. It is also fuelled by a stampede of nervous money fleeing the mainland. A look behind the scenes at Macau reveals a lot about Chinese corruption, and also about how scared many Chinese businessfolk are about the political climate back home.Since 2004 when American casino operators first opened there, Macau has grown faster than a dealer sorts chips. Gaming revenues in the first 11 months of the year were 44% higher than in 2010; Macau is now four times bigger than Las Vegas. The former Portuguese colony, a “special administrative region” of China since 1999, is now the world’s gambling capital.

THE darkest character in Joseph Heller’s dark novel, “Catch-22”, is Milo Minderbinder, a lowly mess officer who runs a huge business empire, M&M Enterprises, on the side. He flogs “surplus” army supplies, travels the world making deals and accumulating extravagant official titles (such as Caliph of Baghdad and Mayor of Cairo) and, in the spirit of popular capitalism, gives his fellow soldiers nominal shares in his ever-expanding business. M&M Enterprises almost crashes when the caliph-cum-mayor overextends himself by buying all the cotton in Egypt. There is so much of the stuff that he cannot get rid of it even by covering it in chocolate and serving it to the troops. The American government eventually steps in to solve his mounting problems: M&M Enterprises has grown too big to fail.Milo Minderbinder’s spirit is still alive in the land that almost destroyed him with its cotton. The Egyptian army has more on its hands than running armoured cars over people in Tahrir Square. It also runs about 10% of the economy. Military-backed companies produce cement, olive oil and household appliances as well as…

FOR some years the big drugmakers have been dreading an approaching “patent cliff”—a slump in sales as the patents on their most popular pills expire or are struck down by legal challenges, with few new potential blockbusters to take their place. This week the patent on the best-selling drug in history expired—Lipitor, an anti-cholesterol pill which earned Pfizer nearly $11 billion in revenues last year. In all, blockbusters with a combined $170 billion in annual sales will go off-patent by 2015.What is supposed to happen now is that lots of copycat firms rush in with “generic” (ie, chemically identical) versions of Lipitor at perhaps one-fifth of its price. Patients and health-care payers should reap the benefit. Pfizer’s revenues should suffer. The same story will be repeated many times, as other best-selling drugs march over the patent cliff (see chart).

But generics makers may face delays getting their cheaper versions to market. Ranbaxy, a Japanese-owned drugmaker, struggled to get regulators’ approval for its generic version of Lipitor, and only won it on the day the patent expired. More important, research-…

“SIX”, mutters the owner of Standard Broilers as he slips his hand out of a dead chicken and counts half a dozen mucky eggs from a pile into a bag in exchange for 21 rupees (40 cents). At the back of his reeking street stall, a cage full of half-alive birds watch. Food shopping in India is not a precious affair, even in Bandra, a posh suburb of Mumbai. German cars and $100 highlights are common here, but supermarkets are nowhere to be seen.Less than a tenth of India’s $450 billion of annual retail sales take place in “organised” shops resembling those of the rich world. But that could soon change. On November 24th the coalition government, led by the Congress party, said that in cities of over 1m folk, foreign firms could now own 51% of “multi-brand” retailers, such as supermarkets (up from zero), and 100% of single-brand chains (up from 51%).Its motives are benign. Facing a wobbly rupee and high inflation, it wants to show it is still capable of bold action to boost business confidence. Liberalisation should lower food prices by cutting out middle men and waste. Perhaps a third of crops rot on roadsides and in…

IN BUSINESS, virtue is not always rewarded. Ford briefly gained some kudos among politicians and the public for being the only one of Detroit’s big three carmakers not to file for bankruptcy in the wake of the financial crisis, but the firm is now stuck with higher costs than its rivals. The same was true of AMR, the parent company of American Airlines, one of the few big American carriers to have resisted using the bankruptcy laws to shed its liabilities to shareholders, creditors and its pension scheme. Continental has gone through bankruptcy twice (in 1983 and 1990), as has US Airways (2002 and 2004).However, on November 29th AMR abandoned its noble stance and filed for Chapter 11 bankruptcy, saying that this had become necessary for the firm “to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability”. Although the company has liabilities of around $30 billion, it has $4.1 billion of cash at hand, which it insists is more than enough to keep it flying during its restructuring. Passengers, staff and suppliers should notice no difference, it promised. Gerald Arpey, the airline’s boss, will step down in favour of the number two, Tom Horton, who is believed to have been more open to shedding liabilities through the bankruptcy courts.Network airlines are, in America and much of the rich world, licences to lose money or make…

REVOLUTIONS in technology bring benefits to millions, but the companies that make them happen do not always thrive. Even when demand is booming, competition to meet it can be brutal. Makers of telecommunications networks know this only too well. They perform the unseen miracles that allow ever more people to talk, work and play on ever smarter devices just about anywhere, but their rewards have been mostly meagre.Merger and failure have thinned their ranks. In 2009 Nortel, a Canadian equipment-maker, went bankrupt. This year Motorola’s wireless-network division was bought by Nokia Siemens Networks (NSN), a Finnish-German joint venture created in 2007. France’s Alcatel and America’s Lucent merged in 2006.None of these mergers has brought much success. NSN has yet to make an annual profit. On November 23rd it said it would shed 17,000 of its 74,000 workers and concentrate on mobile-broadband networks, for which demand is set to grow explosively, and on services (eg, managing and maintaining networks), where it is relatively strong. It had already sold a microwave-technology business; and on November 29th it announced the sale of another small unit. Alcatel-Lucent reported falling revenues and negative cashflow in the third quarter. Investors are said to be impatient with its boss, Ben Verwaayen.Must all struggle? All but two, it seems. “Telecoms equipment is a scale game,”…

THE capitalist dream was lived to the full by Ted Forstmann, a private-equity pioneer who died on November 20th. He loved buying firms and transforming their fortunes, from Gulfstream, a builder of corporate jets, to Dr Pepper, a maker of sugary drinks, and IMG, a sports-management agency that was his last big acquisition. He loved playing sport and gambling. He loved the ladies, too. A lifelong bachelor, he was said to have squired Princess Diana and other beauties.Mr Forstmann was a red-blooded conservative, not the puritanical sort that rules the Republican roost nowadays. He hated the sort of big government that instinctively throws money at a “problem” and usually makes it worse. But he was also a generous philanthropist, who paid for scholarships and advocated school vouchers before anyone really understood what these meant.In 1978, with his brother Nick and Brian Little (who died in 2001 and 2000 respectively), he founded Forstmann Little, one of the first private-equity firms, in those days known as “bootstrappers”, for their use of debt to pull up underperforming firms by their bootstraps. Mr…

FIELD-tested

YOUNG mums shopping in the Copley Mall in downtown Boston last month found themselves being questioned about their use of soap by students from Harvard Business School. The students were not doing odd jobs to earn beer money. They were preparing to help a firm in Brazil launch an antibacterial cleanser.Fieldwork—ie, going out and talking to people—is a big change for HBS. Its students used to sit in a classroom and discuss case studies written by professors. Now they may also work in a developing country and launch a start-up. “Learning by doing” will become the norm, if a radical overhaul of the MBA curriculum succeeds.The 900 students arriving in Boston this summer for their two-year course were told they would be guinea pigs. The new practical addition to HBS’s curriculum is known as “FIELD” (Field Immersion Experiences for Leadership Development). Not all the staff and students are overjoyed to be experimented on. But the man responsible, Nitin Nohria, who became dean of HBS in July 2010, says that “if it works, the FIELD method could become an equal partner to the…

FACEBOOK has been playing with fire and has got its fingers burned, again. On November 29th America’s Federal Trade Commission (FTC) announced that it had reached a draft settlement with the giant social network over allegations that it had misled people about its use of their personal data.The details of the settlement make clear that Facebook, which boasts over 800m users, betrayed its users’ trust. It is also notable because it appears to be part of a broader attempt by the FTC to craft a new privacy framework to deal with the swift rise of social networks in America.The regulator’s findings come at a sensitive time for Facebook, which is said to be preparing for an initial public offering next year that could value it at around $100 billion. To clear the way for its blockbuster flotation, the firm first needs to resolve its privacy tussles with regulators in America and Europe. Hence its willingness to negotiate the settlement unveiled this week, which should be finalised at the end of December after a period for public comment.Announcing the agreement, the FTC said it had found a number of cases where…

When Ratan Tata retires…

COMPANY bosses come and go, and their importance is often exaggerated by credulous business hacks. But in Ratan Tata’s case, the attention is merited. Since he took over Tata Sons in 1991, he has built a decaying family firm into India’s biggest and most international business, with sales of $83 billion. He is the undisputed colossus of corporate India. Small wonder the announcement of his successor on November 23rd made a splash.Cyrus Mistry will be the new chairman; the last person without the Tata surname to hold that post died in 1938. He will take over in December 2012, after shadowing Mr Tata for a year.Tata stands for a very Indian way of organising a firm. It is a giant, complex 143-year-old conglomerate under its fifth generation of family leadership. One Tata bigwig recently joked that were “Neutron” Jack Welch, a former boss of General Electric, to take charge of Tata, the firm would be ripped apart in the name of shareholder value. So Indians are curious to know whether Tata under Mr Mistry will move beyond family management without breaking up. What happens at…

Not all air travel is miserable

EXECUTIVES at aircraft-makers sometimes grumble that there are too many air shows nowadays. But it was well worth their turning up to Dubai’s, held on November 13th-17th, given the bumper orders they won. The star of the show was Qatar Airways’ wonderfully outspoken boss, Akbar Al Baker, who gave Airbus the runaround for almost three days—at one point publicly accusing it of still learning how to make planes—before agreeing to buy 55 of them, worth $6.4 billion at list prices. Even this whopping order was put into the desert shade by Emirates’ $18 billion order for Boeings, with options to buy a further $8 billion-worth. As the Dubai show ended, President Barack Obama, on a visit to Indonesia, witnessed Boeing sign a record $21.7 billion deal with Lion Air, with options to buy a further $14 billion-worth.Of course, orders this big enjoy substantial, undisclosed discounts from the sticker price. But the two main makers of full-sized commercial jets can look forward to years of guaranteed business, with firm orders at a record (see chart). The…

For some reason, shoppers shun Juárez

A STEEL fence is all that separates El Paso, in west Texas, from Ciudad Juárez, in northern Mexico, and it has never stopped business flowing across the border. Drinks, dentistry and divorces have been served up to bargain-seeking gringos for decades. But since fighting erupted among local drug-traffickers in 2007, Juárez has seen more violence than anywhere on Earth, battlefields aside. The murder rate last year was over 200 per 100,000 people, more than ten times the national average and 200 times the rate in El Paso. In a once-busy tourist area close to the border, well over half the shops are boarded up.Visitors “think Mexico is a country at war,” says one dentist with a practice close to the frontier. Since the violence ratcheted up, three-quarters of his mainly American patients have decided that crossing the border for half-price drilling is not worth the risk. It does not help that since September 11th 2001 crossing the border can take up to two hours, rather than a few minutes. Most gringo-oriented businesses have struggled: a few blocks…

SHALE gas has turned the American energy market on its head. Production has soared twelvefold since 2000, to 4.9 trillion cubic feet, or a quarter of the country’s total gas output. By 2035 the proportion could rise to half. As the shale gas flows, prices have come crashing down. Not long ago, America depended on imports of liquefied natural gas. Now it is likely to become a gas exporter. These benefits have not gone unnoticed in Europe.The old continent has nearly as much technically recoverable shale gas (natural gas trapped in shale formations) as America. Europe’s reserves are 639 trillion cubic feet, compared with America’s 862, according to America’s Energy Information Administration, a government agency. But technically recoverable does not mean economically recoverable, notes Peter Hughes of Ricardo Strategic Consulting.Costs are higher in Europe, for several reasons. First, European geology is less favourable: its shale deposits tend to be deeper underground and harder to extract.Second, America has a long history of drilling for oil and gas, which has spawned a huge and competitive oil-services industry…

WHEN it comes to e-commerce, America is still top dog, with some 170m punters scouring for bargains on the internet. However, China is not far behind, with 145m online shoppers, and it could become the world’s most valuable e-commerce market within four years.In a new report, the Boston Consulting Group (BCG) calculates that every year for the foreseeable future another 30m Chinese will go online to shop for the first time. By 2015 they will each be spending $1,000 a year—about what Americans spend online now. BCG calculates that e-commerce could rise from 3.3% of China’s retail sales today to 7.4% by 2015—a jump that took a decade in America.The Chinese government has heavily subsidised the rollout of high-speed access, so internet penetration now approaches rich-country levels. That boosts e-commerce, of course. But so, too, do the shortcomings of China’s costly, inefficient bricks-and-mortar retailers.For example, a quarter of Chinese shoppers seek products online because they are not available at physical stores. Also, until recently, China lacked a reliable and cheap method of shipping packages, so the e-commerce industry…

WHY do some companies flourish for decades while others wither and die? Jim Collins got his start as a management guru puzzling about corporate longevity. Given that Mr Collins has remained at the top of his profession for almost two decades, it is worth applying the same question to him.How has he produced one bestseller after another? His latest book, “Great by Choice”, is piled high in every bookstore. A previous one, “Good to Great”, sold more than 4m copies. And how has he achieved such oracular influence over bosses? In 2009, for example, Akio Toyoda, the president of Toyota, stunned the car industry by announcing that he had been reading Mr Collins’s “How the Mighty Fall” and had concluded that his company was in the fourth of Mr Collins’s five stages of decline.Part of the answer lies in timing. “Built to Last” (1994) was a counterblast to the craze for ripping firms apart and “re-engineering” them. “Good to Great” (2001) was an antidote to the despair that gripped America in the wake of September 11th 2001 and the dotcom bust. “How the Mighty Fall” (2009) appeared as Lehman Brothers disintegrated and…