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Global Shortages During Coronavirus Reveal Failings of Just in Time Manufacturing

In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.

Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.

But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing.

In a time of extraordinary upheaval in the global economy, Just In Time is running late.

“It’s sort of like supply chain run amok,” said Willy C. Shih, an international trade expert at Harvard Business School. “In a race to get to the lowest cost, I have concentrated my risk. We are at the logical conclusion of all that.”

shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.

But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.

a shortage of lumber that has stymied home building in the United States.

Suez Canal this year, closing the primary channel linking Europe and Asia.

“People adopted that kind of lean mentality, and then they applied it to supply chains with the assumption that they would have low-cost and reliable shipping,” said Mr. Shih, the Harvard Business School trade expert. “Then, you have some shocks to the system.”

presentation for the pharmaceutical industry. It promised savings of up to 50 percent on warehousing if clients embraced its “lean and mean” approach to supply chains.

Such claims have panned out. Still, one of the authors of that presentation, Knut Alicke, a McKinsey partner based in Germany, now says the corporate world exceeded prudence.

“We went way too far,” Mr. Alicke said in an interview. “The way that inventory is evaluated will change after the crisis.”

Many companies acted as if manufacturing and shipping were devoid of mishaps, Mr. Alicke added, while failing to account for trouble in their business plans.

“There’s no kind of disruption risk term in there,” he said.

Experts say that omission represents a logical response from management to the incentives at play. Investors reward companies that produce growth in their return on assets. Limiting goods in warehouses improves that ratio.

study. These savings helped finance another shareholder-enriching trend — the growth of share buybacks.

In the decade leading up to the pandemic, American companies spent more than $6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, Britain, France, Canada and China increased their buybacks fourfold, though their purchases were a fraction of their American counterparts.

Repurchasing stock reduces the number of shares in circulation, lifting their value. But the benefits for investors and executives, whose pay packages include hefty allocations of stock, have come at the expense of whatever the company might have otherwise done with its money — investing to expand capacity, or stockpiling parts.

These costs became conspicuous during the first wave of the pandemic, when major economies including the United States discovered that they lacked capacity to quickly make ventilators.

“When you need a ventilator, you need a ventilator,” Mr. Sodhi said. “You can’t say, ‘Well, my stock price is high.’”

When the pandemic began, car manufacturers slashed orders for chips on the expectation that demand for cars would plunge. By the time they realized that demand was reviving, it was too late: Ramping up production of computer chips requires months.

stock analysts on April 28. The company said the shortages would probably derail half of its production through June.

The automaker least affected by the shortage is Toyota. From the inception of Just In Time, Toyota relied on suppliers clustered close to its base in Japan, making the company less susceptible to events far away.

In Conshohocken, Pa., Mr. Romano is literally waiting for his ship to come in.

He is vice president of sales at Van Horn, Metz & Company, which buys chemicals from suppliers around the world and sells them to factories that make paint, ink and other industrial products.

In normal times, the company is behind in filling perhaps 1 percent of its customers’ orders. On a recent morning, it could not complete a tenth of its orders because it was waiting for supplies to arrive.

The company could not secure enough of a specialized resin that it sells to manufacturers that make construction materials. The American supplier of the resin was itself lacking one element that it purchases from a petrochemical plant in China.

One of Mr. Romano’s regular customers, a paint manufacturer, was holding off on ordering chemicals because it could not locate enough of the metal cans it uses to ship its finished product.

“It all cascades,” Mr. Romano said. “It’s just a mess.”

No pandemic was required to reveal the risks of overreliance on Just In Time combined with global supply chains. Experts have warned about the consequences for decades.

In 1999, an earthquake shook Taiwan, shutting down computer chip manufacturing. The earthquake and tsunami that shattered Japan in 2011 shut down factories and impeded shipping, generating shortages of auto parts and computer chips. Floods in Thailand the same year decimated production of computer hard drives.

Each disaster prompted talk that companies needed to bolster their inventories and diversify their suppliers.

Each time, multinational companies carried on.

The same consultants who promoted the virtues of lean inventories now evangelize about supply chain resilience — the buzzword of the moment.

Simply expanding warehouses may not provide the fix, said Richard Lebovitz, president of LeanDNA, a supply chain consultant based in Austin, Texas. Product lines are increasingly customized.

“The ability to predict what inventory you should keep is harder and harder,” he said.

Ultimately, business is likely to further its embrace of lean for the simple reason that it has yielded profits.

“The real question is, ‘Are we going to stop chasing low cost as the sole criteria for business judgment?’” said Mr. Shih, from Harvard Business School. “I’m skeptical of that. Consumers won’t pay for resilience when they are not in crisis.”

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A New Crop in Pennsylvania: Warehouses

OREFIELD, Pa. — From his office in an old barn on a turkey farm, David Jaindl watches a towering flat-screen TV with video feeds from the hatchery to the processing room, where the birds are butchered. Mr. Jaindl is a third-generation farmer in Pennsylvania’s Lehigh Valley. His turkeys are sold at Whole Foods and served at the White House on Thanksgiving.

But there is more to Mr. Jaindl’s business than turkeys. For decades, he has been involved in developing land into offices, medical facilities and subdivisions, as the area in and around the Lehigh Valley has evolved from its agricultural and manufacturing roots to also become a health care and higher education hub.

Now Mr. Jaindl is taking part in a new shift. Huge warehouses are sprouting up like mushrooms along local highways, on country roads and in farm fields. The boom is being driven, in large part, by the astonishing growth of Amazon and other e-commerce retailers and the area’s proximity to New York City, the nation’s largest concentration of online shoppers, roughly 80 miles away.

“They are certainly good for our area,” said Mr. Jaindl, who is developing land for several new warehouses. “They add a nice tax base and good employment.”

promotional video posted on the economic development agency’s website, there are images of welders, builders and aerial footage of the former Bethlehem Steel plant, which closed in the 1990s. The narrator touts the Lehigh Valley’s ethos as the home of “makers” and “dreamers.”

“We know the value of an honest day’s work,” the narrator intones. “We practically wrote the book on it.”

Jason Arias found an honest day’s work in the Lehigh Valley’s warehouses, but he also found the physical strain too difficult to bear.

Mr. Arias moved to the area from Puerto Rico 20 years ago to take a job in a manufacturing plant. After being laid off in 2010, Mr. Arias found a job packing and scanning boxes at an Amazon warehouse. The job soon started to take a toll — the constant lifting of boxes, the bending and walking.

“Manufacturing is easy,” he said. “Everything was brought to you on pallets pushed by machines. The heaviest thing you lift is a box of screws.”

One day, walking down stairs in the warehouse, Mr. Arias, 44, missed a step and felt something pop in his hip as he landed awkwardly. It was torn cartilage. At the time, Mr. Arias was making $13 an hour. (Today, Amazon pays an hourly minimum of $15.)

In 2012, Mr. Arias left Amazon and went to a warehouse operated by a food distributor. After a few years, he injured his shoulder on the job and needed surgery.

“Every time I went home I was completely beat up,” said Mr. Arias, who now drives a truck for UPS, a unionized job which he likes.

Dr. Amato, the regional planning official, is a chiropractor whose patients include distribution workers. Manufacturing work is difficult, but the repetitive nature of working in a warehouse is unsustainable, he said.

“If you take a coat hanger and bend it back and forth 50 times, it will break,” he said. “If you are lifting 25-pound boxes multiple times per hour, eventually things start to break down.”

Dennis Hower, the president of the local Teamsters union, which represents drivers for UPS and other companies in the Lehigh Valley, said he was happy that the e-commerce boom was resulting in new jobs. At the same time, he’s reminded by the empty storefronts everywhere that other jobs are being destroyed.

“Every day you open up the newspaper and see another retail store going out of business,” he said.

Not everyone can handle the physicality of warehouse work or has the temperament to drive a truck for 10 hours a day. In fact, many distribution companies are having a hard time finding enough local workers to fill their openings and have had to bus employees in from out of state, Mr. Hower said.

“You can always find someone somewhere who is willing to work for whatever you are going to pay them,” he said.

Two years ago, there were no warehouses near Lara Thomas’s home in Shoemakersville, Pa., a town of 1,400 people west of the Lehigh Valley. Today, five of them are within walking distance.

“It hurts my heart,” said Ms. Thomas. “This is a small community.”

A local history buff, Ms. Thomas is a member of a group of volunteers who regularly clean up old, dilapidated cemeteries in the area, including one in Maxatawny that is about two miles from her church.

The cemetery, under a grove of trees next to a wide-open field, is the final resting place of George L. Kemp, a farmer and a captain in the Revolutionary War. Last summer, the warehouse developer Duke Realty, which is based in Indianapolis, argued in county court that it could find no living relatives of Mr. Kemp and proposed moving the graves to another location. A “logistics park” is planned on the property.

Meredith Goldey, who is a Kemp descendant, was not impressed with Duke’s due diligence. “They didn’t look very hard.”

Ms. Goldey, other descendants and Ms. Thomas pored through old property and probate records and found Mr. Kemp’s will.

The documents stipulated that a woman enslaved by Mr. Kemp, identified only as Hannah, would receive a proper burial. While there is no visible marker for Hannah in the cemetery, the captain’s will strongly suggests she is buried alongside the rest of the family.

“This is not the Deep South,” Ms. Thomas said. “It is almost unheard-of for a family to own a slave in eastern Pennsylvania in the early 19th century and then to have her buried with them.”

Several descendants of Mr. Kemp filed a lawsuit against Duke Realty seeking to protect the cemetery. A judge has ordered the two sides to come up with a solution by next month. A spokesman for Duke Realty said in an email that the company “is optimistic that the parties will reach an amicable settlement in the near future.”

Ms. Thomas worries that if the bodies are exhumed and interred in another location, they will not be able to locate Hannah’s remains and they will be buried under the warehouse.

“She will be lost,” she said.

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100 Million Vaccine Doses Held Up Over Contamination Concerns, Emergent Reveals

WASHINGTON — The chief executive of Emergent BioSolutions, whose Baltimore plant ruined millions of coronavirus vaccine doses, disclosed for the first time on Wednesday that more than 100 million doses of Johnson & Johnson’s vaccine are now on hold as regulators check them for possible contamination.

In more than three hours of testimony before a House subcommittee, the chief executive, Robert G. Kramer, calmly acknowledged unsanitary conditions, including mold and peeling paint, at the Baltimore plant. He conceded that Johnson & Johnson — not Emergent — had discovered contaminated doses, and he fended off aggressive questions from Democrats about his stock sales and hundreds of thousands of dollars in bonuses for top company executives.

Emergent’s Bayview Baltimore plant was forced to halt operations a month ago after contamination spoiled the equivalent of 15 million doses, but Mr. Kramer told lawmakers that he expected the facility to resume production “in a matter of days.” He said he took “very seriously” a report by federal regulators that revealed manufacturing deficiencies and accepted “full responsibility.”

“No one is more disappointed than we are that we had to suspend our 24/7 manufacturing of new vaccine,” Mr. Kramer told the panel, adding, “I apologize for the failure of our controls.”

Federal campaign records show that since 2018, Mr. El-Hibri and his wife have donated more than $150,000 to groups affiliated with Mr. Scalise. The company’s political action committee has given about $1.4 million over the past 10 years to members of both parties.

Mr. El-Hibri expressed contrition on Wednesday. “The cross-contamination incident is unacceptable,” he said, “period.”

Mr. Kramer’s estimate of 100 million doses on hold added 30 million to the number of Johnson & Johnson doses that are effectively quarantined because of regulatory concerns about contamination. Federal officials had previously estimated that the equivalent of about 70 million doses — most of that destined for domestic use — could not be released, pending tests for purity.

confidential audits, previously reported by The Times, that cited repeated violations of manufacturing standards. A top federal manufacturing expert echoed those concerns in a June 2020 report, warning that Emergent lacked trained staff and adequate quality control.

“My teenage son’s room gives your facility a run for its money,” Representative Raja Krishnamoorthi, Democrat of Illinois, told Mr. Kramer.

Mr. Kramer initially testified that contamination of the Johnson & Johnson doses “was identified through our quality control procedures and checks and balances.” But under questioning, he acknowledged that a Johnson & Johnson lab in the Netherlands had picked up the problem. Johnson & Johnson hired Emergent to produce its vaccine and, at the insistence of the Biden administration, is now asserting greater control over the plant.

The federal government awarded Emergent a $628 million contract last year, mostly to reserve space at the Baltimore plant for vaccine production. Among other things, lawmakers are looking into whether the company leveraged its contacts with a top Trump administration official, Dr. Robert Kadlec, to win that contract and whether federal officials ignored known deficiencies in giving Emergent the work.

Mr. El-Hibri told lawmakers that the government and Johnson & Johnson were aware of the risks.

“Everyone went into this with their eyes wide open, that this is a facility that had never manufactured a licensed product before,” he said. While the Baltimore plant was “not in perfect condition — far from it,” he argued that the facility “had the highest level of state of readiness” among the plants the government had to choose from.

the coronavirus leaked from a laboratory in China, the “lies of the Communist Party of China,” mask mandates and the Biden administration’s call for a waiver of an international intellectual property agreement.

“You are a reputable company that has done yeoman’s work to protect this country in biodefense,” exclaimed Representative Mark E. Green, Republican of Tennessee, adding, “So you gave your folks a bonus for their incredible work.”

Emergent is skilled at working Washington. Its board is stocked with former government officials, and Senate lobbying disclosures show that the company has spent an average of $3 million a year on lobbying over the past decade. That is about the same as two pharmaceutical giants, AstraZeneca and Bristol Myers Squibb, whose annual revenues are at least 17 times higher.

Democrats pressed Mr. Kramer and Mr. El-Hibri about their contacts with Dr. Kadlec, who previously consulted for Emergent. Documents show that Emergent agreed to pay him $120,000 annually between 2012 and 2015 for his consulting work, and that he recommended that Emergent be given a “priority rating” so that the contract could be approved speedily. Dr. Kadlec has said he did not negotiate the deal but did sign off on it.

“Did you or any other Emergent executives speak to or socialize with Dr. Kadlec while these contracts were being issued?” Representative Nydia M. Velázquez, Democrat of New York, asked Mr. Kramer.

“Congresswoman,” he replied carefully, “I did not have any conversations with Dr. Kadlec about this.”

A Times investigation found that Emergent has exercised outsize influence over the Strategic National Stockpile, the nation’s emergency medical reserve; in some years, the company’s anthrax vaccine has accounted for as much as half the stockpile’s budget.

The investigation found that some federal officials felt the company was gouging taxpayers — an issue that also came up at Wednesday’s hearing when Representative Carolyn B. Maloney, Democrat of New York, demanded to know how much it cost to make the vaccine and what it sold for. Mr. El-Hibri promised to supply the information later.

Company executives also view their coronavirus work as one of the “prime drivers” of its 2020 revenues, according to a memorandum released on Wednesday by committee staff members. The executives were rewarded for what the company’s board called “exemplary overall 2020 corporate performance including significantly outperforming revenue and earnings targets.”

Mr. Kramer received a $1.2 million cash bonus in 2020, the records show, and also sold about $10 million worth of stock this year, in trades that he said were scheduled in advance and approved by the company. Three of the company’s executive vice presidents received bonuses ranging from $445,000 to $462,000 each.

Sean Kirk, the executive responsible for overseeing development and manufacturing operations at all of Emergent’s manufacturing sites, received a special bonus of $100,000 last year, in addition to his regular bonus of $320,611, in part for expanding the company’s contract manufacturing capability to address Covid-19, the documents show. Mr. Kirk is now on personal leave.

Emergent officials “appear to have wasted taxpayer dollars while lining their own pockets,” Ms. Maloney charged.

Mr. Krishnamoorthi asked Mr. Kramer if he would consider turning over his bonus to the American taxpayers.

“I will not make that commitment,” Mr. Kramer replied.

“I didn’t think so,” Mr. Krishnamoorthi shot back.

Rebecca R. Ruiz contributed reporting.

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Rural Areas Are Looking for Workers. They Need Broadband to Get Them.

As a manufacturer of asphalt paving equipment, Weiler is exactly the type of company poised to benefit if the federal government increases spending on roads and bridges. But when Patrick Weiler talks about infrastructure, the issue he brings up first has next to nothing to do with his company’s core business.

It’s broadband internet service.

Weiler is based in Marion County, Iowa, a rural area southeast of Des Moines. Internet speeds are fine at the company’s 400,000-square-foot factory, because Weiler paid to have a fiber-optic cable run from the nearby highway. But that doesn’t help the surrounding community, where broadband access can be spotty at best. That is a problem for recruitment — already one of the biggest challenges for Weiler and many other rural employers.

“How do you get young people to want to move back into these rural areas when they feel like they’re moving back into a time frame of 20 years ago?” asked Mr. Weiler, the company’s founder and chief executive.

Rural areas have complained for years that slow, unreliable or simply unavailable internet access is restricting their economic growth. But the pandemic has given new urgency to those concerns, at the same time that President Biden’s infrastructure plan — which includes $100 billion to improve broadband access — has raised hope that the problem might finally be addressed.

address to Congress last month. “This is going to help our kids and our businesses succeed in the 21st-century economy.”

Mr. Biden has received both criticism and praise for pushing to expand the scope of infrastructure to include investments in child care, health care and other priorities beyond the concrete-and-steel projects that the word normally calls to mind. But ensuring internet access is broadly popular. In a recent survey conducted for The New York Times by the online research platform SurveyMonkey, 78 percent of adults said they supported broadband investment, including 62 percent of Republicans.

Businesses, too, have consistently supported broadband investment. Major industry groups such as the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers have all released policy recommendations in the last year calling for federal spending to help close the “digital divide.”

Quantifying that divide, and its economic cost, is difficult, in part because there is no agreed-upon definition of broadband. The Federal Communications Commission in 2015 updated its standards to a minimum download speed of 25 megabits per second. The Department of Agriculture sets its standard lower, at 10 m.p.s. A bipartisan group of rural-state senators asked both agencies this year to raise their standards to 100 m.p.s. And speed-based definitions don’t take into account other issues, like reliability and latency, a measure of how long a signal takes to travel between a computer and a remote server.

recent study by Broadband Now, an independent research group whose data is widely cited, found that 42 million Americans live in places where they cannot buy broadband internet service, most of them in rural areas.

According to the F.C.C.’s definition, most of Marion County has high-speed access to the internet. But residents report that service is slow and unreliable. And with only one provider serving much of the county, customers have little leverage to demand better service.

Marion County, with 33,000 people, has economic challenges common to rural areas: an aging work force, anemic population growth and a limited set of employers concentrated in a few industries. But it also has assets, including its proximity to Des Moines and a group of employers willing to train workers.

Local leaders have plans to attract new businesses and a younger generation of workers — but those plans won’t work without better internet service, said Mark Raymie, chairman of the county Board of Supervisors.

“Our ability to diversify our economic base is dependent on modern infrastructure, and that includes broadband,” he said. “We can say, ‘Come and work here.’ But if we don’t have modern amenities, modern infrastructure, that sales pitch falls flat.”

Mr. Weiler’s daughter Megan Green grew up in Marion County, then left to go to college and start her career. When she moved home in 2017 to work for her father’s company, it was like returning to an earlier technological era.

“Our cellular service is more spotty, our wireless is more temperamental, and we definitely only have one choice,” Ms. Green, 35, said. “It’s a bit of a generational thing. We rely on internet access.”

Ms. Green moved home for family reasons. But finding others willing to do the same has been difficult. Broadband isn’t the only factor — shortages of housing and child care also rank high — but it is a major one. Recruiting is Weiler’s “No. 1 challenge,” Ms. Green said, despite wages that start around $20 an hour, before overtime.

The experience of the past year has accentuated the problem. When the pandemic hit last year, Weiler sent home any workers who didn’t have to be on the factory floor. But they quickly encountered a problem.

“I was shocked to know how many of our employees could not work from home because they did not have reliable internet access,” Ms. Green said. “We’re talking ‘seven minutes to download an email’ type internet access.”

Other local companies had a similar experience. In June, the Greater Des Moines Partnership, a regional business group, commissioned a study on how to improve the area’s digital infrastructure. With the state and federal governments considering significant investments, the group hopes its study will give it priority for funding, said Brian Crowe, the group’s head of economic development.

For Marion County and other rural areas, the widespread experiment with working from home during the pandemic could present an economic opportunity if the infrastructure is there to allow it. Many companies have said they will allow employees to continue to work remotely all or part of the time, which could free workers to ditch city life and move to the country — or take jobs at companies like Weiler while their spouses work from home.

“All of a sudden, it’s not going to be the case that in order to work for leading companies, you have to move to the cities where those companies are located,” said Adam Ozimek, chief economist for Upwork, a platform for freelancers. “It’s going to spread opportunity around.”

But broadband experts say there is no way that rural areas will get access to high-speed, reliable internet service without government help. If a place doesn’t have internet access in 2021, there is a reason: generally too few potential customers, too dispersed to serve efficiently.

“The private sector’s just not set up to solve this,” said Adie Tomer, a fellow at the Brookings Institution who has studied the issue. He likened the challenge to rural electrification almost a century ago, when the federal government had to step in to ensure that even remote areas had access to electrical power.

“This is exactly what we saw play out in terms of economic history in the 1910s, ’20s, ’30s,” he said. “It really is about towns being left behind.”

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Lordstown Motors Shares Plunge as Investors See Problems

Mr. Burns’s tenure at Workhorse was decidedly mixed. Workhorse has lost money for years, and its annual revenue was never more than $10 million when Mr. Burns ran the company. One of his initiatives was a bid to supply delivery vehicles to the U.S. Postal Service. While the company was a finalist, it lost to another bidder in February.

Workhorse paid Mr. Burns $1.24 million from 2015 to 2018, according to Equilar, a firm that analyzes corporate compensation. He probably forfeited his stock options at Workhorse by resigning in 2019, but the company gave him a consulting agreement with stock options that Equilar valued at $10.7 million.

What really propelled Mr. Burns and Lordstown was the merger with DiamondPeak.

Backed by some of the principals of the New York investment firm Silverpeak, DiamondPeak raised $250 million from investors when it went public in March 2019, about a year before special purpose acquisition companies became the hottest thing on Wall Street. In securities filings, DiamondPeak said it would probably acquire a real estate business, which made sense because it was led by David Hamamoto, a former Goldman Sachs banker who specialized in that industry.

DiamondPeak decided to buy Lordstown after Mr. Hamamoto was introduced to Mr. Burns in June by Goldman bankers. The deal prospectus said Goldman had known Mr. Burns because of a prior investment banking relationship with him at Workhorse.

Both sides were eager. Lordstown and its backers needed more money, and DiamondPeak was on a deadline to complete a merger to comply with the terms of its initial public offering.

The merger included a fresh investment of $500 million from BlackRock, Fidelity Investments, Wellington Management and others.

Shares of DiamondPeak, later renamed Lordstown Motors, took off even before the merger closed. Some of the sponsors of DiamondPeak were registered in a prospectus late last year to allow them to sell some of their shares in the combined company, along with other investors in the financing deal. Included in the prospectus were some of the bankers at Brown Gibbons Lang, an investment bank, and lawyers with BakerHostetler, a Cleveland-based law firm that reviewed the financing package. Altogether, insider sales have totaled $11 million since the end of December.

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U.S. Asks Mexico to Investigate Labor Issues at G.M. Facility

WASHINGTON — The Biden administration announced on Wednesday that it was asking Mexico to review whether labor violations had occurred at a General Motors facility in the country, a significant step using a new labor enforcement tool in the revised North American trade deal.

The administration is seeking the review under the novel “rapid response” mechanism in the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement and took effect last summer. Under the mechanism, penalties can be brought against a specific factory for violating workers’ rights of free association and collective bargaining.

The administration “received information appearing to indicate serious violations” of workers’ rights at the G.M. facility, in Silao in the central state of Guanajuato, in connection with a recent vote on their collective-bargaining agreement, the Office of the United States Trade Representative said.

The vote was stopped last month amid accusations that the union at the facility had tampered with it, according to news reports. Mexico’s Labor Ministry said on Tuesday that it had found “serious irregularities” in the vote and ordered that it be held again within 30 days.

filed a complaint under the rapid response mechanism in which they alleged labor violations at the Tridonex auto parts plants in the Mexican city of Matamoros, across the border from Brownsville, Texas.

The Biden administration will review that complaint, an official in the trade representative’s office said. It could then ask Mexico to conduct a review of that matter akin to the one it is seeking of the G.M. facility.

Oscar Lopez contributed reporting from Mexico City.

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For Clean Energy, Buy American or Buy It Quick and Cheap?

Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.

“I was doing cartwheels,” said Ms. Fahy, who represents the area.

Before long, however, she was caught in a political bind.

A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.

Since President Biden’s election, Democratic politicians have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a looming climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden said in an address to Congress last month.

final approval of the nation’s first large-scale offshore wind project on Tuesday, called it an important step to “create good-paying union jobs while combating climate change.”

But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.

That tension could become apparent as the White House fleshes out its climate agenda.

“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”

There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.

And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.

recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.

Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.

Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.

“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.

Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.

But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.

Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.

thousands of employees in recent decades.

Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.

“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”

more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.

2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment, and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.

All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.

But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.

“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”

Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.

“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.”

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Wind Project Shows Democratic Tensions Over Energy

Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.

“I was doing cartwheels,” said Ms. Fahy, who represents the area.

Before long, however, she was caught in a political bind.

A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.

Since President Biden’s election, Democratic politicians have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a looming climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden said in an address to Congress last month.

final approval of the nation’s first large-scale offshore wind project on Tuesday, called it an important step to “create good-paying union jobs while combating climate change.”

But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.

That tension could become apparent as the White House fleshes out its climate agenda.

“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”

There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.

And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.

recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.

Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.

Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.

“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.

Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.

But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.

Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.

thousands of employees in recent decades.

Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.

“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”

more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.

2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment,and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.

All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.

But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.

“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”

Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.

“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.”

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Complaint Accuses Mexican Factories of Labor Abuses, Testing New Trade Pact

WASHINGTON — The A.F.L.-C.I.O. and other groups plan on Monday to file a complaint with the Biden administration over claims of labor violations at a group of auto parts factories in Mexico, a move that will pose an early test of the new North American trade deal and its labor protections.

The complaint focuses on the Tridonex auto parts factories in the city of Matamoros, just across the border from Brownsville, Texas. The A.F.L.-C.I.O. said workers there have been harassed and fired over their efforts to organize with an independent union, SNITIS, in place of a company-controlled union. Susana Prieto Terrazas, a Mexican labor lawyer and SNITIS leader, was arrested and jailed last year in an episode that received significant attention.

The trade deal, the United States-Mexico-Canada Agreement, was negotiated by the Trump administration to replace the North American Free Trade Agreement and took effect last summer. While it was negotiated by a Republican administration, the deal had significant input from congressional Democrats, who controlled the House and who insisted on tougher labor and environmental standards in order to vote in favor of the pact, which needed approval from Congress.

The trade pact required Mexico to make sweeping changes to its labor system, where sham collective bargaining agreements known as protection contracts, which are imposed without the involvement of employees and lock in low wages, have been prevalent.

released in December by an independent board created by the United States to monitor the labor changes said that Mexico had made progress but that significant obstacles remained. The report noted that the protection contract system was still in place, and that most unionized workers still could not elect their leaders in a democratic manner.

Ben Davis, the director of international affairs for the United Steelworkers and the board’s chair, said the complaint to be filed on Monday “has all the elements of the structural problem that we face with worker rights in Mexico.” The rapid response mechanism, he said, is a way to hold companies accountable.

“This is the first time that we’ve had anything like this in a trade agreement,” he said, “and so we think it’s pretty important for it to be used, to be used effectively and hopefully to be something that we can apply in other places.”

It remains to be seen how the Biden administration will respond to the complaint. An administration official said the administration would “carefully review” rapid response mechanism complaints.

The United States trade representative, Katherine Tai, previously served as the chief trade counsel for the powerful House Ways and Means Committee. In that post, she played a key role in negotiations between House Democrats and the Trump administration over revisions to the trade agreement.

Ms. Tai has said that enforcing the agreement is a priority, and the first meeting of the commission that oversees the pact — consisting of Ms. Tai and her counterparts from Canada and Mexico — is set to take place next week, according to a spokeswoman for the Mexican Embassy in Washington.

At a Senate hearing last month, Ms. Tai said there were “a number of concerns that we have with Mexico’s performance of its commitments under U.S.M.C.A.,” without offering specifics.

“We did our very best to put in the most effective tools for enforcement that we know how,” she said at another point in the hearing. “And they may not be perfect, but we’re not going to know how effective they’re going to be if we don’t use them.”

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