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IBM’s Ginni Rometty says automobile brands are becoming less important

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Automakers’ brands will take a backseat to new driving “experiences” as autonomous vehicles and car sharing become more popular, according to the chief executive officer of IBM.

In an interview with CNBC’s Karen Tso at the Frankfurt Motor Show Wednesday, Ginni Rometty said consumers are increasingly prioritizing digital experiences, for example the ability to connect a car to other smart devices, in their vehicles.

“The issue is that the experience is going to be more important than perhaps the car itself or just a brand and what it says,” Rometty said. “Your brand is defined by the experience.”

Rometty pointed to a new IBM survey which found 48% of consumers say vehicle brand won’t matter to them amid the rise of autonomous cars and ride-sharing platforms over the next decade. The survey also found that among 1,500 automotive executives, only 18% are operating on a “digital data platform today.”

Auto companies are making big investments in new technologies like autonomous and electric vehicles. BMW CFO Nicolas Peter told CNBC Monday these investments are creating an “add-on cost” that is challenging the broader automobile industry.

“This is now a world where you’ve got to be able to pull the innovation from anywhere and then make it look very seamless to whoever the person driving the car is,” she said.

As a data analytics and cloud provider, IBM has a big stake in the so-called digital transformation. IBM’s shares are up roughly 28% year-to-date.

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Saudi Aramco will not market IPO in the United States, report says

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An employee rides a bicycle next to oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.

Maxim Shemetov | Reuters

Saudi Aramco does not plan to market its domestic initial public offering (IPO) in the United States, two sources familiar with the matter said.

Aramco had said in its IPO prospectus earlier this month that the offering of shares would rely on the 144A rule of the U.S. Securities Act, which allows a non-U.S. issuer to tap the U.S. market.

The sources said Aramco will no longer rely on that rule, meaning it will not market the shares in the United States.

Aramco did not immediately respond to a comment request.

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Democrats hold on to Louisiana governor’s seat despite Trump

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Louisiana Gov. John Bel Edwards has stunned Republicans again, narrowly winning a second term Saturday as the Deep South’s only Democratic governor and handing Donald Trump another gubernatorial loss this year.

In the heart of Trump country, the moderate Edwards cobbled together enough cross-party support with his focus on bipartisan, state-specific issues to defeat Republican businessman Eddie Rispone, getting about 51% of the vote.

Coming after a defeat in the Kentucky governor’s race and sizable losses in Virginia’s legislative races, the Louisiana result seems certain to rattle Republicans as they head into the 2020 presidential election. Trump fought to return the seat to the GOP, making three trips to Louisiana to rally against Edwards.

In a victory rally of his own late Saturday, Edwards thanked supporters who danced, sang and cheered in celebration, while he declared, “How sweet it is!”

He added, “And as for the president, God bless his heart” — a phrase often used by genteel Southerners to politely deprecate someone.

“Tonight the people of Louisiana have chosen to chart their own path,” Edwards said.

Trump had made the runoff election between Edwards and Rispone a test of his own popularity and political prowess heading into the 2020 presidential race. On Saturday, Trump went on Twitter in a vigorous plug for Rispone.

The president’s intense attention motivated not only conservative Republicans, but also powered a surge in anti-Trump and black voter turnout that helped Edwards.

As he conceded the race, Rispone called on supporters to give a round of applause for Trump, saying: “That man loves America and he loves Louisiana.”

Democrats who argue that nominating a moderate presidential candidate is the best approach to beat Trump are certain to say Louisiana’s race bolsters their case. Edwards, a West Point graduate, opposes gun restrictions, signed one of the nation’s strictest abortion bans and dismissed the impeachment effort as a distraction.

Still, while Rispone’s loss raises questions about the strength of Trump’s coattails, its relevance to his reelection chances are less clear. Louisiana is expected to easily back Trump next year, and Edwards’ views in many ways are out of step with his own party.

In the final days as polls showed Edwards with momentum, national Republicans beefed up assistance for Rispone. That wasn’t enough to boost the GOP contender, who wasn’t among the top-tier candidates Republican leaders hoped would challenge Edwards as they sought to prove that the Democrat’s longshot victory in 2015 was a fluke.

He had ties to unpopular former Gov. Bobby Jindal and offered few details about his agenda. Edwards also proved to be a formidable candidate, with a record of achievements.

Working with the majority-Republican Legislature, Edwards stabilized state finances with a package of tax increases, ending the deficit-riddled years of Jindal. New money paid for investments in public colleges and the first statewide teacher raise in a decade.

Edwards expanded Louisiana’s Medicaid program, lowering the state’s uninsured rate below the national average. A bipartisan criminal sentencing law rewrite he championed ended Louisiana’s tenure as the nation’s top jailer.

Rispone, the 70-year-old owner of a Baton Rouge industrial contracting company, hitched his entire candidacy to Trump, introducing himself to voters in ads that focused on support for the president in a state Trump won by 20 percentage points.

But the 53-year-old Edwards, a former state lawmaker and former Army Ranger from rural Tangipahoa Parish, reminded voters that he’s a Louisiana Democrat, with political views that sometimes don’t match his party’s leaders.

“They talk about I’m some sort of a radical liberal. The people of Louisiana know better than that. I am squarely in the middle of the political spectrum,” Edwards said. “That hasn’t changed, and that’s the way we’ve been governing.”

Rispone said he was like Trump, describing himself as a “conservative outsider” whose business acumen would help solve the state’s problems.

“We want Louisiana to be No. 1 in the South when it comes to jobs and opportunity. We have to do something different,” Rispone said. “We can do for Louisiana what President Trump has done for the nation.”

The president’s repeated visits appeared to drive turnout for both candidates.

Tour guide Andrea Hartman, 40, cast her ballot for Edwards in New Orleans.

“I do not agree with what Rispone advocates,” she said. “I also don’t want Trump coming here and telling me who to vote for.”

Rispone poured more than $12 million of his own money into the race. But he had trouble drawing some of the primary vote that went to Republican U.S. Rep. Ralph Abraham, after harshly attacking Abraham in ads as he sought to reach the runoff.

“We have nothing to be ashamed of. We had over 700,000 people in Louisiana who really want something better, something different,” Rispone said.

Rispone also avoided many traditional public events attended by Louisiana gubernatorial candidates and sidestepped questions about his plans. He promised tax cuts, without saying where he’d shrink spending, and he pledged a constitutional convention, without detailing what he wanted to rewrite.

Both parties spent millions on attack ads and get-out-the-vote work, on top of at least $36 million spent by candidates.

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We expect a big expansion in trade from China, CEO says

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Parking berth for airplanes at Dubai International Airport, UAE.

SM Rafiq | Moment | Getty Images

DUBAI — Dubai Airports CEO Paul Griffiths isn’t worried about the growth in the Chinese economy — yet. The chief of the United Arab Emirates government-owned airport operator is still seeing positive trajectory in Chinese air travel to and from the major hub of Dubai, he told CNBC at the Dubai Airshow on Sunday.

Asked by CNBC’s Hadley Gamble about slowing traffic from China, Griffiths replied, “I’m not sure that’s the case.”

“We’re still seeing very positive growth on the Chinese routes, so much so that we’ve now introduced specific features throughout the airports — hot water dispensers, Mandarin menus at some of the restaurants, the ability to use Chinese payment services throughout the airport. So we are getting ready for a big expansion in trade from China. And I think as with a lot of markets in the past, we’ve been able to demonstrate we can buck the overall trends and still see growth where the others are not experiencing the same level of growth.”

China’s gross domestic product (GDP) growth was hit by a slowdown to 6% in the third quarter of this year from 6% in the previous quarter, its lowest in three decades. Growth trajectory remains highly uncertain as the trade war between China and the U.S. stretches into its 16th month, with high-stakes negotiations underway.

Dubai International Airport (DXB) posted a 2.4% decline in passenger traffic for this year’s third quarter, handling 23.2 million passengers between July and the end of September.

The first nine months of 2019 saw 4.5% fewer passengers than the same time period a year ago at 64.5 million. Griffiths attributed the declines to a 45-day long closure of a runway at DXB in the spring, and the grounding of the Boeing 737 MAX jet since March, the liquidation of major Indian carrier Jet Airways in April, which he said caused a “hiatus in Indian traffic.”

DXB is the world’s busiest airport for international travelers, CNBC reported last year, handling 89.1 million passengers in 2018.

 

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