The_Wall_Street_Journal_Asia__September_13_2016

B4| Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

Tesla Motors Inc. is chang-
ing the way its Autopilot sys-
tem works following the fatal
crash in May of a car that was
driving under semiautono-
mous control.
The revision, which Tesla
Chief Executive Elon Musk
outlined Sunday, will depend
more on radar signals to help
guide Tesla vehicles along
roadways, and adds safeguards
to keep drivers engaged at
high speed.
The software updates will
be rolled out within the next
two weeks and delivered to
vehicles over the air, he said.
They will affect Tesla vehi-
cles built since October 2014,
before which the hardware
used by Autopilot wasn’t in-
cluded. Autopilot, which uses
cameras, radar and sensors to
steer vehicles and adjust their
speed, has come under scru-
tiny since the Florida crash
that killed Tesla driver Joshua
Brown in May, the first known
death of a driver using the
system. The car in the May 7
incident failed to brake auto-
matically because the system
didn’t distinguish a truck’s
white trailer from the bright
sky, Tesla has said.
The National Highway Traf-
fic Safety Administration is in-
vestigating the crash, focusing
on the emergency-braking and
forward-collision warnings.
The changes announced on
Sunday might have prevented
the accident, Mr. Musk said.
Mr. Musk told reporters on
a conference call that the
changes will make the system
even safer. “This is not going
from bad to good. It’s going
from good to, I think, great.”
Autopilot is regarded as a
major step toward self-driving
cars, though Tesla warns users
that the technology doesn’t
make Tesla vehicles autono-
mous and that drivers must
remain ready to take control.

BYTIMHIGGINS

Tesla

Revamps

Autopilot

Despite those warnings,

some experts have questioned

whether the technology might

lead users to rely too much on

the vehicle’s driving capabili-

ties. Consumer Reports, for

example, wrote that Autopilot

was “too much autonomy too

soon.”

As part of the changes to

Autopilot, the system will dis-

engage if drivers ignore three

warnings within the span of

an hour to keep their hands on

the wheel. To reactivate the

system, the vehicle would have

to be stopped and restarted.

Mr. Musk has vigorously de-

fended the Autopilot technol-

ogy, saying it improves safety.

When activating the system,

drivers must acknowledge by

clicking on a screen that they

are responsible for the vehicle.

Radar, which was added to

Tesla vehicles in October 2014,

had been a supplement to the

onboard camera and image-

processing technology, the

company said Sunday.

Using radar, which detects

objects by sending out pulses

of electromagnetic waves to

detect objects, to guide vehi-

cles is complicated because

the waves interact differently

than light waves with objects

in the roadway.

“The big problem in using

radar to stop the car is avoid-

ing false alarms,” Mr. Musk

wrote in a blog post on the

company’s website. “Slamming

on the brakes is critical if you

are about to hit something

large and solid, but not if you

are merely about to run over a

soda can.” Part of the solution,

according to Mr. Musk, is to

take advantage of Tesla vehi-

cles’ ability to communicate

with one another and collabo-

rate on their understanding of

road conditions.

“The net effect of this...is

that the car should almost al-

ways hit the brakes correctly

even if a UFO were to land on

the freeway in zero visibility

conditions,” Mr. Musk wrote.

Tesla’s decision to update

its radar software intensifies

Mr. Musk’s bet that radar is an

effective technology to help

cars navigate the world.

Alphabet Inc.’s Google unit

and others racing toward fully

self-driving cars are counting

on a technology known as li-

dar, which is similar to radar

but uses lasers. Mr. Musk reit-

erated on Sunday that he

doesn’t anticipate using lidar

because it doesn’t have the

same capabilities as radar.

Asked whether the im-

provements would have pre-

vented the fatal Florida crash,

Mr. Musk said he believed so

because the radar would have

detected the trailer.

Some Tesla drivers have ad-

mitted that Autopilot’s success

may have lulled them into a

false sense of security. “I look

down at my phone a little

more than I used to,” Jason

Hughes, an Autopilot user

from Hickory, N.C., told The

Wall Street Journal in July.

As he responds to Tesla

safety concerns, Mr. Musk also

faces controversy for propos-

ing in June to combine Tesla

and SolarCity Corp., where he

is chairman, and questions on

why one of his Space Explora-

tion Technologies Corp. rock-

ets exploded during routine

fueling on Sept. 1.

Tesla’s updated Autopilot technology will rely more on radar.

SPENCER PLATT/GETTY IMAGES

TATA STEEL

Indian Steelmaker

Posts Surprise Loss

Tata Steel Ltd., one of the

world’s biggest steelmakers, sur-

prised analysts Monday by post-

ing a 10-fold widening in its

first-quarter net loss as a slow-

down in demand and losses at

its U.K. business hurt margins.

The company, part of India’s

salt-to-software Tata Group ,

posted a net loss of 31.83 billion

rupees ($475.7 million) for the

three months ended June 30,

compared with a loss of 3.17 bil-

lion rupees a year earlier.

The net loss from discontin-

ued operations due to its divest-

ment of parts of its U.K. steel

business stood at 33.55 billion

rupees compared with 3.39 bil-

lion rupees a year earlier. Reve-

nue fell 5% to 263.32 billion ru-

pees, reflecting sluggish demand.

—Vibhuti Agarwal

LINDE

Gas Company Ends

Praxair Merger Talks

Industrial-gas giant Linde AG

ended merger talks with U.S. ri-

val Praxair Inc. because the Ger-

man company feared losing key

functions in a combination that

would have created the indus-

TECHNOLOGY @wsjd | wsjd.com

online communications ser-

vices that they perceive to

have undermined telecom

companies’ traditional voice

and text services.

They have long wanted the

EU to repeal some of the in-

dustry-specific regulations

they face, particularly on user

privacy. Failing that, they

have pushed to extend some

of the same telecom rules to

internet-based services.

“It would be better to re-

move rules for us,” said a

telecom executive who has

been briefed on the proposals.

“But this is real progress.”

A spokeswoman for the Eu-

ropean Commission said the

proposed rules are part of the

EU’s strategy to “encourage

investments in next-genera-

tion networks, set the right

conditions for modern digital

networks and provide a level

playing field for all market

players.”

The proposals still face po-

tentially years of debate and

changes before adoption. But

they represent a rare boost to

telecom companies in their

skirmishes with Silicon Val-

ley’s lobbying machinery.

While telecom executives

increasingly acknowledge that

services such as Snapchat and

WhatsApp help them sell

more expensive data plans, in

many parts of the world they

have also been on the defen-

sive about how those so-

called over-the-top services

have eaten into their tradi-

tional offerings. Tech compa-

nies say oversight from the

EU’s national telecom regula-

tors could raise costs and lead

to jurisdictional disputes, dis-

couraging them from launch-

ing new services.

Some of the world’s biggest

telecom companies are poised

to win a round in their global

slugfest with Silicon Valley—

at least in Europe.

The European Union’s exec-

utive arm is expected this

week to propose subjecting

online services such as Micro-

soft Corp.’s Skype and Face-

book Inc.’s WhatsApp to some

of the same rules that have

long regulated the telecom-

munications business, said

technology and telecom lob-

byists briefed by EU officials.

Skype, for example, might

have to offer emergency-call-

ing services for European cus-

tomers who use its online-

voice service to dial

traditional phone numbers.

In cases where it assigns

users telephone numbers—al-

lowing for the receipt of calls

from traditional phones—it

could also be required to let

those users take their num-

bers with them if they decide

to move to a different pro-

vider. Chat service WhatsApp

could be subject to new over-

sight from national telecom

regulators on topics such as

network security.

The draft proposals are

still in flux. But what is clear

is that the EU is proposing to

move in a direction telecom

executives have been pushing

for years. The executives say

they want a “level playing

field” with tech companies

amid all the new, mostly free,

By Sam Schechner

in Paris and

Stu Woo in London

Chat Apps to Face

TighterRulesinEU

Global mobile-phone messaging traffic

Dialing Up

Telecom firms have been playing defense against

tech firms offering voice and text alternatives.

Source: Ovum THE WALL STREET JOURNAL.

*Doesn't include picture or video messages

70

0

10

20

30

40

50

60

trillion messages

’13 ’14 ’15 ’16 ’17 ’18 ’19 ’

Forecasts

SMS App-based*

of developing new medicines.

Sanofi and Google already

have spent a year exploring

the potential of high-tech de-

vices to improve diabetes care

by, for example, using micro-

chips to continuously monitor

blood-sugar levels in patients.

Monday’s deal is the result of

that work, according to a com-

pany spokeswoman.

People with diabetes must

monitor their food intake and

exercise levels, as well as stick

to an often complex treatment

regimen. Stefan Oelrich, head

of diabetes at Sanofi, said On-

duo would work to bring these

aspects of diabetes treatment

together in a single product.

Such a product also could

attract interest from the gov-

ernments, employers and in-

surers who pay for health care

by providing a tool for mea-

suring the outcomes of various

treatments, he added.

Sanofi said the collabora-

tion initially would focus on

Type 2 diabetes, the much

more common form of the dis-

ease. This affects about 90% of

all diabetes patients and oc-

curs when the body produces

insulin but is unable to use it

effectively.

Paris-based Sanofi is one of

the world’s biggest makers of

diabetes drugs, though that

part of the business is under

pressure from increasingly

cost-conscious health systems.

Mr. Oelrich said one attrac-

tion of the Verily collaboration

for Sanofi is that it could yield

a new product much faster

than traditional drug develop-

ment.

He expects Onduo to launch

its first product within two to

three years, instead of the

roughly 10 years it takes to

develop a new medicine.

The two companies ap-

pointed Joshua Riff, formerly

a senior executive at United-

Health Group ’s Optum, as the

chief executive of Onduo,

which will be based in Cam-

bridge, Mass.

Sanofi SA has teamed up

with Verily Life Sciences LLC,

a unit of Google parent Alpha-

bet, to develop high-tech tools

for managing diabetes.

The French pharmaceutical

group Monday said the new

company, called Onduo, would

combine its expertise in diabe-

tes medicine with Verily’s

knowledge of miniaturized

electronics, analytics and soft-

ware development. The com-

panies didn’t disclose the fi-

nancial details of the deal.

The agreement is the latest

sign of convergence between

Silicon Valley and the pharma-

ceutical industry as technol-

ogy companies aim to tap

ever-higher demand for health

care products from aging pop-

ulations, while drugmakers

seek alternatives to the

lengthy and risk-laden process

By Denise Roland

in London and

Inti Landauro in Paris

Diabetes Venture Is Formed

Business

Watch

try’s largest player, valued at

roughly $60 billion, according to

people familiar with the talks.

Both companies—each valued

at around $30 billion—said on

Monday in separate statements

that they terminated talks that

were disclosed almost four

weeks ago.

Linde said its chief executive

and shareholder representatives

on the company’s supervisory

board decided to end talks be-

cause discussions over “gover-

nance aspects did not result in a

mutual understanding.”

Two people familiar with the

matter said Linde’s leadership

felt uncomfortable with a

merger because the company

and its Munich headquarters

would have lost too many key

functions.

—Eyk Henning

and Nina Trentmann

STARBOARD VALUE

Activist Shareholder

Takes Perrigo Stake

Starboard Value LP has built

a 4.6% stake in Perrigo Co., val-

ued at nearly $600 million, and

is urging the drug company to

refocus on its core business

The activist shareholder sent

Perrigo a letter Sunday criticiz-

ing the company for failing to

live up to performance targets it

set while successfully fending

off a $26 billion takeover offer

last year from Mylan NV. A copy

of the letter was reviewed by

The Wall Street Journal.

Starboard, fresh off victory at

Yahoo Inc., argues Perrigo man-

agement has been distracted by

the merger fight and attempts

to diversify away from its over-

the-counter drugs business, a

powerhouse in private-label

medicines including versions of

headache remedy Tyle-

nol, heartburn aid Pepcid and al-

lergy pill Claritin. Starboard ar-

gues the company should

command a far higher stock-

market value but has lost inves-

tor confidence, according to the

letter.

—David Benoit

and Jonathan D. Rockoff

Tata Steel posted a loss of $475.7 million in the June quarter.

JASPER JUINEN/BLOOMBERG NEWS

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a three night getaway in an

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