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Toyota’s supply chain quandary

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Toyota’s supply chain quandary

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With great fanfare last month, Toyota put on an event showcasing its planned next generation of internal combustion engines, the clearest demonstration yet of its bet on the hybrid boom.

Beyond the immediate need to convince investors and analysts, Toyota’s chief executive and chief technology officer had another audience in mind too: the group’s suppliers.

“It is important for us to make clear which direction we are going to create a future together with these companies. That is why we declared today that we want to create together the future for internal combustion engines,” said Koji Sato, Toyota’s chief executive.

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Toyota’s famous “just-in-time” supply chain has long been a key element of its success, allowing the development of a lean production approach that has been adopted worldwide by multinationals. And executives have long said they feel a moral obligation to maintain the country’s millions of auto jobs.

That is all fine and good when things are going well, but what if things go wrong? What if there are corporate decisions they cannot make at sufficient speed due to the obligation to protect the supply chain and jobs?

“Toyota’s defence of its supply chain — which makes economic sense at the moment due to the continuing demand for hybrids — could become a liability at some point. And it’s not just about Toyota but about Japan’s auto industry as a whole,” said James Hong, autos analyst with Macquarie.

Such a dilemma might also confront carmakers in Germany, France and the US. It is one where risks and the benefits are complicated by the broader political economy.

The operations of auto companies often reflect the workings of the countries where they are founded. Their development over time can be very directly linked to subsidies, aid and unofficial support. This can have a deep impact on how the companies, and their home countries, view social obligations in areas like jobs. It can also provide the parachute during periods of difficulty.

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More jobs can equal more stability for companies across different sectors, in a similar way that the size of a big bank’s balance sheet size can render it too big to fail. When things get rough you have a built-in corpus of consumers, voters and lobbyists who are ready to argue for your survival. And industries like auto production carry more weight than others.

Auto industry-related employment — from fuel retailers to insurance to shipping — totals some 5.5mn jobs in Japan, according to the country’s automobile manufacturers association. The sector is estimated to account for 2.9 per cent of the nation’s GDP and 13.9 per cent of the manufacturing GDP. Sato said that Toyota did business with about 100 so-called tier-one suppliers, companies that sit at the top of the pyramid and provide products directly to big manufacturers. Beneath them are many more smaller companies who in turn supply the top tier.

“Be it in China, Japan or Europe, automaking is a highly political industry and I think it’s extremely rare to see a country sacrifice its automotive industry. It’s a bit like steel or banks or ships, you just don’t do it,” said Thomas Besson, head of autos research at Kepler Cheuvreux.

Renault in France, Volkswagen in Germany, BYD in China, Ford and GM in the US — they are all the products of their country’s political economies. Toyota is also clearly a product of Japan and a clearly successful one. The world’s largest carmaker is churning out record profits and sales. And Toyota’s defence of its supply chain is a reflection of the scale and variety of technological bets that protect it against uncertain regulations, politics and consumer preferences.

But if a carmaker must defend its supply chain and its jobs — be it in Japan, Germany or another country — then it is not overly difficult to see the risk that responsibility becomes a hindrance, slowing down innovation and burdening a company with unnecessary costs. 

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With the car industry in turmoil over the development of electric vehicles, that strategic issue is becoming more pressing. In Europe, a 2021 study for a supplier trade body by PwC estimated that a switch to EV production only in the region by 2035 would lead to the loss of some 500,000 jobs in power-train production for cars with internal combustion engines. This would be offset by 226,000 new jobs related to EV power-train production but there still would be less employment.

“The danger point . . . could arrive sooner than they are planning for due to EVs and China ramping up competition and supply even quicker than was estimated,” said Hong. “And the simple point is that you don’t need as many suppliers for EVs.”

david.keohane@ft.com

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U.S. figure skater Alysa Liu said she didn’t care if she medaled. She won gold

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U.S. figure skater Alysa Liu said she didn’t care if she medaled. She won gold

Team USA’s Alysa Liu celebrates after winning gold in the women’s event on Thursday.

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MILAN — Alysa Liu has won Olympic figure skating gold, the first U.S. woman to do so in over two decades.

It’s an ironic outcome for the 20-year-old, who said earlier this week that she wasn’t motivated by a medal.

“I’m OK if I do a fail program. I’m totally OK if I do a great program. No matter what the outcome is, it’s still my story,” Liu said after finishing Tuesday night’s short program in third place.

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Liu, 20, soared to new heights in Thursday’s free skate, dazzling the crowd with an absolutely joyful skate to Donna Summer’s “MacArthur Park Suite” in a shimmering gold dress.

Alysa Liu (C) celebrates next to silver medalist Kaori Sakamoto (L) and bronze medalist Ami Nakai (R), both of Japan.

Alysa Liu (C) celebrates next to silver medalist Kaori Sakamoto (L) and bronze medalist Ami Nakai (R), both of Japan.

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She and her signature raccoon-striped ponytail soared, exuding a carefree confidence and getting the crowd onto its feet. Her easygoing demeanor and look of genuine enjoyment have been her hallmarks since she returned to the sport in 2024 — two years after retiring at age 16 immediately following the Beijing Olympics, where she came in sixth.

Liu’s performance on Thursday shot her straight to the top of the leaderboard with two skaters behind her, guaranteeing her spot on the podium.

She stayed there through the end of the night. Japan’s Kaori Sakamoto, the penultimate skater, ended up with a silver medal, while the last skater of the night, her compatriot Ami Nakai, claimed bronze.

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It was a literal passing of the torch: Sakamoto, who won bronze in Beijing, is retiring after these Olympics; Nakai is just 17 and in her debut senior season.

USA's Amber Glenn competes on Thursday.

USA’s Amber Glenn competes on Thursday. She finished fifth overall.

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The Milano Ice Skating Arena erupted in cheers as reality sunk in. An exuberant Liu exchanged long hugs with her coaches and teammate Amber Glenn, who had a triumphant night of her own despite finishing off the podium in fifth place.

It was a redemptive skate for Glenn, who came into the night in 13th place after one costly mistake at the end of her first routine Tuesday. The free skate, her second chance, went much more smoothly — she nailed another triple axel and landed all of her jumps, despite putting a hand down to steady herself at one point. Glenn, who later told NBC she had been thinking of her six-year-old self, moved into first place and stayed there until the final group of the night.

The other member of the “Blade Angels,” Isabeau Levito, finished the night in 12th place.

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This is a developing story and will be updated.

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Iran and the US lean into gunboat diplomacy as nuclear talks hang in balance

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Iran and the US lean into gunboat diplomacy as nuclear talks hang in balance

DUBAI, United Arab Emirates (AP) — Iran and the United States leaned into gunboat diplomacy Thursday as nuclear talks between the nations hung in the balance, with Tehran holding drills with Russia and the Americans bringing another aircraft carrier closer to the Mideast.

The Iranian drill and the arrival of the USS Gerald R. Ford aircraft carrier near the mouth of the Mediterranean Sea underscore the tensions between the nations. Iran earlier this week also launched a drill that involved live-fire in the Strait of Hormuz, the narrow opening of the Persian Gulf through which a fifth of the world’s traded oil passes.

The movements of additional American warships and airplanes don’t guarantee a U.S. strike on Iran — but it does give President Donald Trump the ability to carry out one should he choose to do so. He’s so far held off on striking Iran after setting red lines over the killing of peaceful protesters and Tehran holding mass executions, while reengaging Tehran in nuclear talks earlier disrupted by the Iran-Israel war in June.

“Should Iran decide not to make a Deal, it may be necessary for the United States to use Diego Garcia, and the Airfield located in Fairford, in order to eradicate a potential attack by a highly unstable and dangerous Regime,” Trump wrote on his Truth Social website, seeking to pressure the United Kingdom over its plans to settle the future of the Chagos Islands with Mauritius.

Meanwhile, Iran struggles with unrest at home following its crackdown on protests, with mourners now holding ceremonies honoring their dead 40 days after their killing by security forces. Some of the gatherings have included anti-government cries, despite threats from authorities.

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Iran holds drill with Russia

The drill Thursday saw Iranian forces and Russian sailors conduct operations in the Gulf of Oman and the Indian Ocean, Iran’s state-run IRNA news agency reported. The drill will be aimed at “upgrading operational coordination as well as exchange of military experiences,” IRNA added.

China had joined the “Security Belt” drill in previous years, but there was no acknowledgment it participated in this round. In recent days, a vessel that appeared to be a Steregushchiy-class Russian corvette had been seen at a military port in the Iranian city of Bandar Abbas.

Iran also issued a rocket-fire warning to pilots in the region, suggesting they planned to launch anti-ship missiles in the exercise.

Meanwhile, tracking data showed the Ford off the coast of Morocco in the Atlantic Ocean midday Wednesday, meaning the carrier could transit through Gibraltar and potentially station in the eastern Mediterranean with its supporting guided-missile destroyers.

Having the carrier there could allow American forces to have extra aircraft and anti-missile power to potentially protect Israel and Jordan should a conflict break out with Iran. The U.S. similarly placed warships there during the Israel-Hamas war in the Gaza Strip to protect against Iranian fire.

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Anti-government chants made at mourning ceremonies

Mourning ceremonies for those killed by security forces in the protests last month also have increased. Iranians traditionally mark the death of a loved one 40 days after the loss. Both witnesses and social media videos showed memorials taking place at Tehran’s massive Behesht-e Zahra cemetery. Some memorials included people chanting against Iran’s theocracy while singing nationalistic songs.

The demonstrations began Dec. 28 at Tehran’s historic Grand Bazaar, initially over the collapse of Iran’s currency, the rial, then spread across the country. Tensions exploded on Jan. 8, with demonstrations called for by Iran’s exiled crown prince, Reza Pahlavi.

Iran’s government has offered only one death toll for the violence, with 3,117 people killed. The U.S.-based Human Rights Activists News Agency, which has been accurate in previous rounds of unrest in Iran, puts the death toll at over 7,000 killed, with many more feared dead.

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Associated Press writer Nasser Karimi in Tehran, Iran, contributed to this report.

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Zuckerberg grilled about Meta’s strategy to target ‘teens’ and ‘tweens’

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Zuckerberg grilled about Meta’s strategy to target ‘teens’ and ‘tweens’

Meta CEO Mark Zuckerberg arrives at the Los Angeles Superior Court ahead of the social media trial tasked to determine whether social media giants deliberately designed their platforms to be addictive to children on Feb. 18, 2026. Zuckerberg is scheduled to testify Wednesday.

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Meta CEO Mark Zuckerberg was clearly getting testy.

“That’s not what I’m saying at all,” said the tech billionaire. “I think you’re misunderstanding what I’m saying,” Zuckerberg responded. “You’re mischaracterizing what I’m saying,” he shot back.

The executive was testifying on Wednesday before a jury in Los Angeles in a marquee social media trial accusing Meta of deliberately designing features of Instagram to addict children, and the legal team for the family suing was intent on showing that Zuckerberg’s fingerprints were all over the company’s big decisions.

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Mark Lanier, a Texas trial lawyer and pastor with a folksy courtroom demeanor, directed Zuckerberg’s attention to a 2020 internal Meta document showing that 11-year-olds were four times as likely to keep coming back to Facebook, compared to older users. Instagram’s minimum age for signing up is 13.

“People who join Facebook at 11 years old? Lanier asked Zuckerberg. “I thought y’all didn’t have any of those?”

Lanier then went over Meta internal documents highlighting goals to increase the time 10-year-olds spend on Instagram.

“I don’t remember the context of this email from more than ten years ago,” Zuckerberg said. “I think the way we should build things is to build useful services for people to connect with their family and friends and learn about the world.”

One 2018 internal Meta document stated “If we wanna win big with teens, we must bring them in as tweens,” Lanier pointed out, saying that undercut Meta’s own policies.

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The legal team representing the plaintiff, a 20-year-old California woman known in court documents as “Kaley,” attempted to demonstrate that the top-down goal of Meta has always been to encourage users to get on their platforms as young as possible, and once there, to figure out ways to keep them around. Often features like “beauty filters,” made the app more alluring, Lanier argued.

When the company hired experts who affirmed that such appearance-enhancing filters contributed to body-image issues among young girls, Zuckerberg would not dispense with the filters tools, calling getting rid of them was “paternalistic.”

Under questioning in court, the billionaire Facebook founder responded: “What we allowed was letting people use those filters if they wanted but deciding not to recommend them to people,” he said. “So that was the balance we came to to let people express themselves the way they want.”

Kaley, who’s also identified as KGM in court documents, often used these filters, which her lawsuit says contributed to body dysmorphia and other mental health issues.

Had Zuckerberg looked at Kaley’s Instagram posts before the trial, Lanier asked? His staff had shown him some, he responded.

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Files are brought inside the Los Angeles Superior Court on Feb 18, 2026 as part of a major trial involving Meta and Google over whether their products harm young people.

Files are brought inside the Los Angeles Superior Court on Feb 18, 2026 as part of a major trial involving Meta and Google over whether their products harm young people.

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That’s when Lanier, who is known for orchestrating spectacles at trial, had five lawyers unspool a roughly 20-foot collage of hundreds of photos that Kaley posted to Instagram. Lanier implored Zuckerberg to dwell on the posts. Other observers in the room, including the media, were not able to see the photos.

When it was time for Meta’s lawyer to ask Zuckerberg questions, he emphasized that the company does not have an incentive for people to have harmful experiences on its services.

“From a business perspective, people think if we maximize the amount of attention people spend, that that’s good for us,” Zuckerberg said. “But if people feel like they’re not having a good experience, why would they keep using the product?”

Keeping users safe, especially teen users, has always been a priority, Zuckerberg said.

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“Questions about well-being I consider part of this for sure,” he said. “If you build a community and people don’t feel safe, that’s not sustainable and eventually people go and join another community.”

1,600 other plaintiffs

The appearance of Zuckerberg, the star witness of the trial, came in the second week of what’s expected to be a six-week proceeding. Other tech executives, social media specialists, addiction experts and others have also testified.

Kaley, the plaintiff, is expected to deliver the most emotional testimony later in the trial. Her lawsuit claims she began using social media at age 6, including YouTube, Instagram, TikTok and Snap. After becoming hooked on the platforms, she said her body image issues, depression and suicidal thoughts worsened. The suit points to features like beauty filters, infinite scroll and auto-play as being tantamount to a “digital casino.” Evidence of the harms of these features were concealed from the public, the lawsuit says.

Julianna Arnold, whose daughter died from fentanyl she bought from someone on Instagram, talks about watching Mark Zuckerberg testify outside the Los Angeles Superior Court on Feb. 18, 2026.

Julianna Arnold, whose daughter died from fentanyl she bought from someone on Instagram, talks about watching Mark Zuckerberg testify outside the Los Angeles Superior Court on Feb. 18, 2026.

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In response, Meta and Google, which owns YouTube, have said the accusations over-simplify the complexity of adolescent mental health issues. The companies argue social media use does not directly cause young people to be mentally unwell, so they should not be held legally liable for a user’s mental health struggles.

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Kaley’s legal team called expert witnesses who described multiple studies linking regular social media use with worsening depression, anxiety and body image issues.

The jury will determine to what degree social media platforms should be held legally culpable for plaintiff Kaley’s struggles. The trial is a bellwether case tied to 1,600 similar suits filed by families and school districts. How the jury decides is expected to influence settlement talks in all those pending cases.

While debates about social media addiction have raged for decades, it has taken until now for a major trial on the issue to unfold largely due to a federal legal shield that has protected Silicon Valley. A law known as Section 230 of the 1996 Communications Decency Act has allowed tech companies to fend off lawsuits over what users post to their sites. Social media firms have also won legal battles, including a key Supreme Court case, that have found how companies curate content on platforms is a type of protected free speech.

Despite these protections, the plaintiff’s lawyers in the Los Angeles case found a way to legally attack tech giants: by treating social media apps as unsafe products, viewing Instagram, YouTube and other services as defective under product liability law. The argument is that tech companies deliberately designed social media sites as harmful and dismissed internal warnings that the services could be problematic for teenagers.

The jury will ultimately have to assess Zuckerberg’s credibility, which was under attack on Wednesday.

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Lanier, Kaley’s lawyer, brought up an internal document showing how Meta communications staffers have pushed Zuckerberg to portray himself as more “human” and “relatable,” and “empathetic, and less “fake,” and “corporate,” and “cheesy.”

When questioned about his performance in various other public settings, whether in courtrooms or before Congress, Zuckerberg showed some humility.

He said: “I think I’m known to actually be pretty bad at this,” which drew some laughter from the courtroom.

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