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Porsche shutters e-bike, battery, software subsidiaries as part of company overhaul

Porsche is closing three of its subsidiaries as it copes with falling sales and declining profits, the German automaker announced Friday.

The automaker’s battery subsidiary, Cellforce Group, is perhaps the highest-profile casualty. The division had already been through a “realignment” in August after Porsche dropped plans to make its own batteries, turning Cellforce into a research and development arm. Now, Porsche says it’s pursuing a “technology-open powertrain strategy” — corporate-speak that indicates the automaker will rely more heavily on other companies for its batteries.

Porsche eBike Performance, which made e-bike drive systems, and Cetitec, a networking software subsidiary that served both Porsche and the wider Volkswagen Group, will also be shut down.

More than 500 people, who are employed at the three subsidiaries, will lose their jobs.

“We must refocus on our core business,” Porsche CEO and Executive Chair Michael Leiters said in a statement. “This is the indispensable foundation for a successful strategic realignment. This forces us to make painful cuts — including our subsidiaries.”

It’s a message that Leiters, who became CEO early this year, first delivered in March when the company announced plans to realign its business. “We will comprehensively reposition Porsche, make the company leaner, faster and the products even more desirable,” he said at the time.

Since then, Porsche has extracted itself from several endeavors, including an agreement reached in April to sell its equity stakes in Bugatti Rimac and Rimac Group to a consortium led by New York-based investment firm HOF Capital.

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Porsche’s electrification efforts got off to a strong start with the Taycan in 2019, but the company soon ran into trouble developing follow-on EVs. The Macan Electric was delayed by nearly two years as software development within Volkswagen’s Cariad division lagged behind expectations.

The entire company has suffered declining sales in key markets, including North America, where sales fell 11%, and China, where deliveries were off 21% in the first quarter of this year. European sales were also down 18%, though they rose slightly in Germany.

Porsche has blamed EV adoption for its woes, though the company’s continued poor performance in China, where electric vehicles have claimed more than half the market, suggests that consumer acceptance of EVs may not be the root cause.

The closure of Cellforce captures the change of fortunes for Porsche’s EV program. The German automaker had originally started the subsidiary to develop and manufacture batteries that would distinguish its EVs from other companies.

“The battery cell is the combustion chamber of the future,” Oliver Blume said in 2022 when he chaired Porsche’s executive board.

After struggling to develop EVs in a timely manner, Porsche has shifted much of its new vehicle efforts to reviving some of its internal combustion platforms, which were originally intended to constitute a minority of sales by 2030. The company is still planning to roll out new EVs though, and will soon sunset the gas-powered version of the Porsche Macan. Porsche is expected to bring an all-electric version of the Cayenne, and several variants, to market this year.

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The fax machine is the bottleneck in US healthcare, and VCs are starting to notice

Like many AI companies automating work that humans currently do, Basata will eventually face a harder question about where the line is between augmenting workers and displacing them. For now, the founders say the administrative staff they work with aren’t worried about that; they’re more worried about drowning.
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US defense contractor who sold hacking tools to Russian broker ordered to pay $10M to former employers

Peter Williams, a veteran cybersecurity executive who was the head of the hacking and surveillance tech division of U.S. defense contractor L3Harris, has been ordered to pay $10 million to his former employer. Williams was the central figure in one of the worst leaks of advanced hacking tools in the history of the United States and its closest allies.

On Wednesday, a judge ordered Williams to pay that amount in restitution on top of the $1.3 million he had already been ordered to pay to L3Harris. Williams, a 39-year-old Australian citizen who previously worked in one of Australia’s intelligence agencies, was until last year the general manager of Trenchant. Born out of the acquisition of two sister startups, Trenchant is L3Harris’ division that develops advanced spyware and hacking tools and sells them to the U.S. government and its allies in the Five Eyes intelligence alliance, a coalition of five English-speaking nations that share classified intelligence with one another. In addition to the U.S., the alliance includes Australia, Canada, New Zealand, and the United Kingdom.

Veteran cybersecurity reporter Kim Zetter first reported the new order to pay restitution in her newsletter. 

Williams’ lawyers did not respond to a request for comment.

Last year, Williams was arrested and accused of stealing seven unspecified trade secrets — almost certainly cyber exploits, which is code that hijacks software vulnerabilities, and surveillance technology — from Trenchant and then selling them to Operation Zero. The Russian firm acts as a broker, buying and selling hacking tools, and it says it works exclusively with the Russian government and local companies.

Williams pleaded guilty and was sentenced to more than seven years in prison. 

Williams made $1.3 million selling the trade secrets, which he used to buy luxury watches, a house near Washington, D.C., and family vacations. Trenchant told prosecutors that it suffered losses of up to $35 million due to Williams’ theft. 

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U.S. prosecutors said Williams “betrayed” the United States and its allies by giving Operation Zero, which the U.S. government calls “one of the world’s most nefarious exploit brokers,” tools that could have been used to hack “millions of computers and devices around the world.” 

As TechCrunch previously reported, Williams took advantage of his privileged “full access” to Trenchant’s internal network to siphon the tools out of the company’s offices. After Williams sold the hacking tools to Operation Zero, some of them ended up being used by Russian government spies in Ukraine, and later Chinese cybercriminals, according to former L3Harris employees who recognized the stolen code in cybersecurity research that Google published after investigating the cyberattacks in which those tools were deployed.

Williams also tried to frame one of his employees for the theft.

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Poland says hackers breached water treatment plants, and the US is facing the same threat

Poland’s intelligence service said it detected attacks on five water treatment plants where hackers could have taken control of the industrial equipment inside, including, in the worst case, tampering with the safety of the water supply.

The story is relevant beyond Poland’s borders: U.S. water infrastructure has faced similar threats in recent years. In 2021, a hacker briefly gained access to a water treatment plant in Oldsmar, Florida and attempted to increase the level of sodium hydroxide — a caustic chemical — to dangerous levels. The FBI and the U.S. Cybersecurity and Infrastructure Security Agency have since warned that water utilities remain a soft target for foreign hackers.

On Friday, Poland’s Internal Security Agency, the country’s top intelligence agency, published a report covering the last two years of the agency’s operations and threats the country faced. The report said Polish intelligence thwarted multiple acts of sabotage from Russian government spies and hackers, who targeted military facilities, critical infrastructure (essential systems such as power grids, water supplies, and transportation networks), as well as civilian targets. These attacks, according to the report, may have resulted in fatalities.  

“The most serious challenge remains the sabotage activity against Poland, inspired and organized by Russian intelligence services. This threat was (and is) real and immediate. It requires full mobilization,” read the report.

The report did not specify whether the hackers behind the attacks on the water treatment facilities were Russian government spies. But Poland has recently been the target of several attempts by Russian government hackers to attack its infrastructure, including a failed attempt to bring down the country’s energy grid. That breach was later attributed to poor security controls at the targeted facilities.

Poland’s experience is part of a growing global pattern of attacks on water and energy infrastructure. As recently as last month, a joint advisory from the Cybersecurity and Infrastructure Security Agency, the FBI, the NSA, and several other federal agencies warned that Iranian-backed hackers are actively targeting programmable logic controllers — the industrial computers that run water and energy facilities — at U.S. utilities. The same Iranian hacking group, CyberAv3ngers, previously broke into digital control panels at multiple U.S. water treatment plants in Pennsylvania in 2023, in attacks that federal agencies linked to escalating hostilities in the Middle East.

In other words, the attacks against Poland are not unique, they follow a strategy that the Russian government is applying both in war zones such as Ukraine, as well as against Western countries that it sees as longstanding enemies. The plan, according to Polish intelligence, is to destabilize and weaken the West, and cyberattacks and cyberespionage are just tools in a larger toolkit for Putin’s regime.

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