The White House convened a meeting of business executives on Monday to discuss semiconductor supply chains amid a global chip shortage, with President Biden using the moment to pitch his $2.3 trillion infrastructure plan, which aims in part to bolster high-tech domestic manufacturing.
“China and the rest of the world is not waiting, and there’s no reason why Americans should wait,” Mr. Biden said.
At one point, he held up a silicon wafer and declared, “This is infrastructure.”
Participants in the meeting, described by the White House as a “virtual C.E.O. summit on semiconductor and supply chain resilience,” included executives from AT&T, Ford Motor, General Motors, Google, Intel, Samsung and Taiwan Semiconductor Manufacturing Company. The meeting was closed to the news media, aside from a brief portion when Mr. Biden gave remarks.
The global semiconductor shortage has disrupted auto production in the United States and elsewhere, underscoring both a short-term and long-term challenge for the Biden administration with economic and national security implications.
signed an executive order directing his administration to conduct a 100-day review of supply chains for semiconductors and several other types of critical goods.
His infrastructure plan also seeks to strengthen supply chains for chips and other important products.
It includes $50 billion for semiconductor research and manufacturing, and another $50 billion to create an office at the Commerce Department focused on the country’s industrial capacity and support for the production of critical products. It also includes $50 billion for the National Science Foundation, where Mr. Biden would create a technology directorate focused on areas like semiconductors.
The age of electric planes may still be years away, but the fight for that market is already heating up.
Wisk Aero, a start-up developing an electric aircraft that takes off like a helicopter and flies like a plane, on Tuesday sued another start-up, Archer Aviation, accusing it of stealing trade secrets and infringing on Wisk’s patents.
The lawsuit brings into public view a dispute between two little-known companies in a business that has become a playground for billionaires. It also entangles giants of aviation and technology. Wisk is a joint venture of Boeing and Kitty Hawk, which is financed by Larry Page, who co-founded Google. Archer’s investors include United Airlines, which is a major Boeing customer and plans to buy up to 200 aircraft from the start-up.
The niche market for electric vehicles and planes has become frenzied in recent months as so-called blank check companies, which have little more than a stock market listing and a pot of cash, have snapped up fledgling businesses with little or no revenue, let alone profits. Investors in the blank-check firms — formally known as special purpose acquisition companies, or SPACs — are hoping to acquire businesses that they believe could follow Tesla’s recent trajectory on the stock market. To entice those investors, start-ups like Archer promise top-notch technology and optimistic business plans.
the lawsuit accuses two engineers of downloading thousands of files containing confidential designs and data before leaving Wisk to join Archer. Wisk accused a third engineer of wiping history of his activities from his computer before leaving for Archer.
“Wisk brings this lawsuit to stop a brazen theft of its intellectual property and confidential information and protect the substantial investment of resources and years of hard work and effort of its employees and their vision of the future in urban air transportation,” the lawsuit says.
Archer denied wrongdoing.
“It’s regrettable that Wisk would engage in litigation in an attempt to deflect from the business issues that have caused several of its employees to depart,” Archer said in a statement. “The plaintiff raised these matters over a year ago, and after looking into them thoroughly, we have no reason to believe any proprietary Wisk technology ever made its way to Archer. We intend to defend ourselves vigorously.”
Archer also said it had placed an employee accused in the suit on paid leave “in connection with a government investigation and a search warrant issued to the employee, which we believe are focused on conduct prior to the employee joining the company.” Archer said it and three employees who had worked with the individual had been subpoenaed in that investigation and were cooperating with the authorities.
accused one of its former employees and Uber of stealing trade secrets to gain an advantage in the race to develop autonomous cars. The companies settled the case in 2018, and the former Waymo employee, Anthony Levandowski, a onetime confidant of Mr. Page’s, was sentenced in 2020 to 18 months in prison. Former President Donald J. Trump pardoned Mr. Levandowski in January.
Archer announced its merger in February with a SPAC, Atlas Crest Investment, in a deal that valued the company at $3.8 billion. Wisk said its suspicions were confirmed at that time when Archer released a presentation that contained designs similar to those in a Wisk patent filing.
when announcing the transaction.
“We had 35, 40 people on this — and we attacked this like venture growth would or anybody else,” Mr. Moelis said. “And we did it fast, too.”
A spokeswoman for Moelis declined to comment.
Other companies trying to make electric aircraft include Joby Aviation, which announced a $6.6 billion deal with a SPAC led by the LinkedIn co-founder Reid Hoffman in February, and the German start-up Lilium, which went public last month by merging with a SPAC led by a former General Motors executive, Barry Engle.
according to SPAC Research — more than in all of 2020.
But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission published two notices last month warning companies considering merging with SPACs to ensure that they are ready for all the legal and regulatory requirements being a public company entails. Many investors known as short sellers, who specialize in betting that share prices of companies are bound to fall, have targeted SPACs like Atlas Crest, which is among the 20 most-shorted SPACs.
The market for electric aircraft is in its infancy but holds huge promise. The prospect of “Jetsons”-like flying vehicles has inched closer to reality in recent years thanks to advances in battery and aircraft design. A high-stakes race to build the first viable electric plane is underway, and some airlines are betting that such vehicles can help them reach their goals of eliminating or offsetting their greenhouse gas emissions.
Scott Kirby, the chief executive of United, said the Archer aircraft were unlikely to be used for commercial flights but were ideal for short trips to and from an airport.
“They’re not only more environmentally friendly, they’re far quieter than a helicopter,” Mr. Kirby said Tuesday during an event hosted by the Council on Foreign Relations. “And, because they have 12 rotors, they’re, I believe, going to ultimately be safer.”
Still, widespread use of electric air taxis is likely years away. Such aircraft may never become more than a luxury used by very rich people because businesses and governments may come up with far cheaper ways to transport people without emissions.
Tesla said on Friday that it more than doubled the number of cars it delivered in the first quarter, bouncing back after the pandemic slowed sales in the same period a year ago.
The electric carmaker said it sold 184,8000 vehicles in the first three months of the year, up from 88,500 a year ago. It produced 180,338 vehicles, compared with 102,672 in the first quarter of 2020.
The company’s sales numbers, which cover the entire world, come a day after General Motors and Ford Motor reported that their U.S. sales were up modestly. Tesla does not break out its sales by region and a lot of its recent growth has been in China, where electric cars make up a much larger share of the auto market than in the United States.
Tesla was helped by the arrival of the Model Y, a roomier version of its Model 3 sedan. Those two cars accounted for almost all of its deliveries in the first quarter. It reported just 2,020 deliveries of its high-end cars — the Model S luxury sedan and the Model X sport-utility vehicle.
Tesla has halted production of the Model S and Model X while preparing its plant in Fremont, Calif., to build updated versions of the cars. The company said in a statement that it was “in the early stages of ramping production” of the new models, which generate much more profit than the Model 3 and Model Y.
The first-quarter sales numbers could lift Tesla shares, which have lost more than a quarter of their value since January when they hit a high of about $900. The impact won’t be known until next week, however, because the stock market is closed in observance of Good Friday. On Thursday, Tesla’s stock fell about 1 percent, closing at $661.75.
Analysts were surprised by the jump in sales. Most had been expecting deliveries of about 172,000 vehicles.
“The company yet again defied the skeptics and bears,” Dan Ives, a Wedbush analyst, said in a report. “It’s been a brutal sell-off for Tesla and EVs, but we believe that will now be in the rear view mirror.”
General Motors reported a modest rise in car sales in North America for the first quarter, but its operations continue to be hampered by a shortage of computer chips.
The automaker said on Thursday that it sold 642,250 cars and light trucks in the first three months of the year, up just 4 percent even though sales a year ago slowed sharply as the coronavirus pandemic took hold.
By contrast, Toyota Motor showed a strong rebound in sales compared with a year ago. The Japanese company reported sales in North America jumped 22 percent in the first three months of 2021, to 603,066 cars and light trucks. Its March sales were a record high for that month.
G.M. has had to halt or slow production at a handful of plants and has resorted to making some vehicles without parts containing computer chips, with the intention of installing those components later when the supply improves.
In a statement, G.M. said that it hoped its strategy for building cars without some components would help it “quickly meet strong expected customer demand during the year.”
That approach to building cars “underscores the dire nature” of the semiconductor shortage, an analyst at CFRA Research, Garrett Nelson, said in a report. “One of the key questions is how much better the U.S. auto sales recovery can get from here.”
The chip shortage is reflected in G.M.’s unusually low inventory of 334,628 vehicles. That is about 76,000 less than at the end of the fourth quarter, and half the number of vehicles its dealers held in stock a year ago.
G.M.’s sluggish sales were confined to its Chevrolet brand, whose sales fell 2 percent in the first quarter. That includes a 13 percent decline in sales of its full-size Silverado pickup truck, a critical profit maker for the company. The Buick, Cadillac and G.M.C. brands reported strong sales in the quarter.
Toyota also reported a drop in sales of its full-size pickup, the Tundra. But the decline was more than offset by big increases in sales of its RAV4, Highlander and 4Runner sport-utility vehicles and cars from its Lexus luxury brand.
Also on Thursday, Honda Motor reported its first-quarter sales in North America increased 16 percent, to 347,091 vehicles.
But production is only one piece of the puzzle. The transition away from gas-powered vehicles rests on convincing consumers of the benefits of electric vehicles. That hasn’t been easy because the cars have higher sticker prices even though researchers say that they cost less to own. Electricity is cheaper on a per mile basis than gasoline, and E.V.s require less routine maintenance — there is no oil to change — than combustion-engine cars.
The single biggest cost of an electric car comes from the battery, which can run about $15,000 for a midsize sedan. That cost has been dropping and is widely expected to keep falling thanks to manufacturing improvements and technical advancements. But some scholars believe that a major technological breakthrough will be required to make electric cars much, much cheaper.
“There’s a good sense that at least for the next maybe five years or so they’re going to keep declining, but then are they going to level off or are they going to keep declining?” Joshua Linn, a professor at the University of Maryland and a senior fellow with Resources for the Future, an environmental nonprofit, said about battery costs. “That won’t be enough, so then that’s given rise to a lot of attention to infrastructure.”
The federal government and some states already offer tax credits and other incentives for the purchase of electric cars. But the main such federal incentive — a $7,500 tax credit for the purchase of new electric cars — begins to phase out for cars once an automaker has sold 200,000 E.V.s. Buyers of Tesla and G.M. electric cars, for example, no longer qualify for that tax credit but buyers of Ford and Volkswagen electric cars do.
The Biden administration has released no details about its proposed E.V. tax credits.
Another big concern is charging. People with dedicated parking spots typically charge their E.V.s overnight at home, but many people who live in apartments or have to drive longer distances need to use public charging stations, which are still greatly outnumbered by gas stations.
“The top three reasons consumers give for not buying E.V.s are lack of charging stations, time to charge, and the cost of E.V.s,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “They seem to be really emphasizing all three. So, over all, it looks very promising.”
There are well over 100,000 gas stations in the United States, most with multiple pumps. Mr. Biden’s plan calls for a national network of 500,000 electric vehicle chargers within the decade, up from about 41,000 charging stations with more than 100,000 outlets today, according to the Energy Department.
Mayor Francis Suarez of Miami is selling his city as the world’s cryptocurrency capital. “We want to be on the next wave of innovation,” he told DealBook. To make that happen, Mr. Suarez said he was “refashioning” the city’s “fun in the sun” image. Thanks in part to the mayor’s marketing efforts, tech and finance titans have flocked to Miami during the pandemic.
Visions of Bitcoin City. Last month, the Republican mayor suggested Miami pay municipal workers and accept tax payments in Bitcoin, as well as invest city funds in the cryptocurrency. Local officials have agreed to study the proposals. The notion made him popular in the crypto community, advancing his rebranding campaign. His efforts have also won him campaign donations from tech investors, attracted money to cultivate Miami’s burgeoning tech sector and may soon pay a big county bill.
The cryptocurrency exchange FTX is seeking naming rights for the city’s N.B.A. arena, currently known as AmericanAirlines Arena. Miami-Dade County took over branding deals in 2018 and is supposed to pay the team $2 million per year, sponsor or no (American’s contract ended in 2019). The FTX agreement is nearly final, pending a Friday vote by county commissioners. “It’s awesome that we’ve attracted a huge cryptocurrency exchange,” Mr. Suarez said, noting that FTX’s bid “complements the brand” that Miami is establishing.
It would be the N.B.A.’s first crypto sponsorship of an arena, The Miami Herald notes, but it would also tie a county revenue stream to a relatively young exchange and C.E.O. FTX was founded in 2019 and is run by Samuel Bankman-Fried, a 28-year-old billionaire who was one of the biggest donors to President Biden’s campaign.
The tech center exodus and crypto boom converge in Miami. The pandemic prompted people to relocate to Florida from Silicon Valley and New York as Bitcoin gained legitimacy and value. The mayor sees the trends as interrelated, and he is seizing the moment. “People come here and start realizing that there’s way more tech talent than they thought,” he said.
All that’s missing is a regulatory scheme, Mr. Suarez said: Lawmakers are modeling Florida’s approach on Wyoming’s crypto policies. Ultimately, the success of the mayor’s effort won’t be apparent until it’s clear that people are making their moves permanent and maintaining their enthusiasm for crypto if — or when? — there is another market downturn.
HERE’S WHAT’S HAPPENING
Not so fast, AstraZeneca. American officials said early today that the company may have included “outdated information” from a U.S. clinical trial of its Covid-19 vaccine, providing “an incomplete view” of data that could cast doubt on promising news.
a huge infrastructure proposal. It will go beyond roads and bridges to also address climate change and racial and gender equity.
Microsoft will ease workers back to the office starting next week. The 57,000 employees who left the tech giant’s Redmond, Wash., headquarters because of the pandemic can choose to work from the office, home or both.
BlackRock investigates allegations of employee misconduct. The money-management giant hired a law firm after employees said that they had faced harassment and discrimination over their sex, race and religion. A senior executive, Mark Wiedman, apologized for making inappropriate comments at work events.
Goldman Sachs’s C.E.O. promises to ease the burden on junior bankers. David Solomon told employees that the firm would better enforce a ban on working Saturdays and hire more analysts, after a presentation by first-year bankers that described 100-hour work weeks drew media attention.
Personnel is policy. Or is it?
Though she lost the Democratic presidential primary, Senator Elizabeth Warren is exerting considerable sway over President Biden’s financial policies, judging by the number of people from her orbit who have been picked to join the administration. But her influence is increasingly being tested, The Times’s Alan Rappeport writes.
on Bitcoin and other cryptocurrencies.
manufacturers of batteries for electric vehicles. The International Trade Commission recently ruled in favor of LG Chem in a trade secrets case against SK Innovation, issuing a default judgment based on a problematic absence of documentation. SK says its partially built factory in Georgia is threatened by the decision.
ban on imports of a Botox competitor.) But a federal court could order SK to submit to monitoring and impose damages, if warranted, “without killing jobs and setting back the Georgia economy,” Ms. Yates said.
Automakers will need lots of batteries for electrical vehicles, and the decision could make American manufacturers less competitive, said Carol Browne, the former Obama administration “climate czar.” President Biden signed an executive order last month aimed at strengthening the domestic supply chain, including for EV batteries, and “one way to guarantee that is domestic production,” Ms. Browne said.
“The Georgia plant will not sit idle,” countered LG’s lawyer, David Callahan of Latham & Watkins. LG’s attorneys say SK exaggerates the order’s impact on American manufacturing and minimizes its I.P. violations. SK can “redesign” or settle, they suggested, but in any case “the demand for these batteries ensures that another manufacturer will step in” if it abandons the plant. (The Botox dispute was ultimately settled.)
The Biden administration can veto the I.T.C. by early April. Gov. Brian Kemp of Georgia has urged the president to do so, citing a 2013 reversal of a ruling in a dispute between Apple and Samsung. (The administration did not respond to a request for comment). Gov. Mike DeWine of Ohio — where LG is constructing a battery plant with General Motors — has asked the president to uphold the ruling, saying that “stolen intellectual property” shouldn’t be used to compete with his state’s workers. Mr. Biden is visiting Ohio today.
THE SPEED READ
The social media platform Discord has held talks to sell itself to Microsoft in a deal that could top $10 billion. (NYT)
WeWork said it lost $3.2 billion last year — less than in 2019 — in an investor presentation supporting its potential merger with a SPAC. (FT)
Box, the online storage provider, is reportedly considering a sale as it faces pressure from the activist investor Starboard Value. (Reuters)
Politics and policy
President Biden formally nominated Lina Khan, a critic of Big Tech, to the Federal Trade Commission. (NYT)
Sweden will link aircraft landing fees to greenhouse gas emissions, encouraging the use of newer, more efficient planes. (Reuters)
Shalanda Young is the front-runner for the nomination to lead the Office of Management and Budget, but Asian-American groups are pushing for Nani Coloretti, a former Obama administration official. (WaPo)
Cybersecurity researchers at the University of Toronto say TikTok isn’t a national security threat. (WSJ)
Companies including Mastercard and SoftBank pressed Group of 7 governments to coordinate tech issues like A.I. and cybersecurity. (FT)
The C.E.O. of a blockchain tech company won an auction of Jack Dorsey’s first tweet — sold as a nonfungible token — for $2.9 million. (CNBC)
Best of the rest
Ellen DeGeneres has faced a steep ratings decline, losing more than a million viewers after reports of a toxic workplace at her show. (NYT)
Should workers be paid while they sleep? (FT)
Americans over 65 are fully vaccinated, and ready to party. (NYT)
We’d like your feedback! Please email thoughts and suggestions to firstname.lastname@example.org.
Tesla faced numerous questions about its Autopilot technology after a Florida driver was killed in 2016 when the system of sensors and cameras failed to see and brake for a tractor-trailer crossing a road.
Now the company is facing more scrutiny than it has in the last five years for Autopilot, which Tesla and its chief executive, Elon Musk, have long maintained makes its cars safer than other vehicles. Federal officials are looking into a series of recent accidents involving Teslas that either were using Autopilot or might have been using it.
The National Highway Traffic Safety Administration confirmed last week that it was investigating 23 such crashes. In one accident this month, a Tesla Model Y rear-ended a police car that had stopped on a highway near Lansing, Mich. The driver, who was not seriously injured, had been using Autopilot, the police said.
In February in Detroit, under circumstances similar to the 2016 Florida accident, a Tesla drove beneath a tractor-trailer that was crossing the road, tearing the roof off the car. The driver and a passenger were seriously injured. Officials have not said whether the driver had turned on Autopilot.
crash near Houston in which a Tesla ran into a stopped police vehicle on a highway. It is not clear if the driver was using Autopilot. The car did not appear to slow before the impact, the police said.
Autopilot is a computerized system that uses radar and cameras to detect lane markings, other vehicles and objects in the road. It can steer, brake and accelerate automatically with little input from the driver. Tesla has said it should be used only on divided highways, but videos on social media show drivers using Autopilot on various kinds of roads.
“We need to see the results of the investigations first, but these incidents are the latest examples that show these advanced cruise-control features Tesla has are not very good at detecting and then stopping for a vehicle that is stopped in a highway circumstance,” said Jason Levine, executive director of the Center for Auto Safety, a group created in the 1970s by Consumers Union and Ralph Nader.
This renewed scrutiny arrives at a critical time for Tesla. After reaching a record high this year, its share price has fallen about 20 percent amid signs that the company’s electric cars are losing market share to traditional automakers. Ford Motor’s Mustang Mach E and the Volkswagen ID.4 recently arrived in showrooms and are considered serious challengers to the Model Y.
The outcome of the current investigations is important not only for Tesla but for other technology and auto companies that are working on autonomous cars. While Mr. Musk has frequently suggested the widespread use of these vehicles is near, Ford, General Motors and Waymo, a division of Google’s parent, Alphabet, have said that moment could be years or even decades away.
played a major role” in the 2016 Florida accident. It also said the technology lacked safeguards to prevent drivers from taking their hands off the steering wheel or looking away from the road. The safety board reached similar conclusions when it investigated a 2018 accident in California.
By comparison, a similar G.M. system, Super Cruise, monitors a driver’s eyes and switches off if the person looks away from the road for more than a few seconds. That system can be used only on major highways.
In a Feb. 1 letter, the chairman of the National Transportation Safety Board, Robert Sumwalt, criticized NHTSA for not doing more to evaluate Autopilot and require Tesla to add safeguards that prevent drivers from misusing the system.
The new administration in Washington could take a firmer line on safety. The Trump administration did not seek to impose many regulations on autonomous vehicles and sought to ease other rules the auto industry did not like, including fuel-economy standards. By contrast, President Biden has appointed an acting NHTSA administrator, Steven Cliff, who worked at the California Air Resources Board, which frequently clashed with the Trump administration on regulations.
Concerns about Autopilot could dissuade some car buyers from paying Tesla for a more advanced version, Full Self-Driving, which the company sells for $10,000. Many customers have paid for it in the expectation of being able to use it in the future; Tesla made the option operational on about 2,000 cars in a “beta” or test version starting late last year, and Mr. Musk recently said the company would soon make it available to more cars. Full Self Driving is supposed to be able to operate Tesla cars in cities and on local roads where driving conditions are made more complex by oncoming traffic, intersections, traffic lights, pedestrians and cyclists.
Despite their names, Autopilot and Full Self-Driving have big limitations. Their software and sensors cannot control cars in many situations, which is why drivers have to keep their eyes on the road and hands on or close to the wheel.
a November letter to California’s Department of Motor Vehicles that recently became public, a Tesla lawyer acknowledged that Full Self-Driving struggled to react to a wide range of driving situations and should not be considered a fully autonomous driving system.
The system is not “not capable of recognizing or responding” to certain “circumstances and events,” Eric C. Williams, Tesla’s associate general counsel, wrote. “These include static objects and road debris, emergency vehicles, construction zones, large uncontrolled intersections with multiple incoming ways, occlusions, adverse weather, complicated or adversarial vehicles in the driving paths, unmapped roads.”
Mr. Levine of the Center for Auto Safety has complained to federal regulators that the names Autopilot and Full Self-Driving are misleading at best and could be encouraging some drivers to be reckless.
“Autopilot suggests the car can drive itself and, more importantly, stop itself,” he said. “And they doubled down with Full Self-Driving, and again that leads consumers to believe the vehicle is capable of doing things it is not capable of doing.”
about 17.2 million have HBO Max accounts. That suggests that of the company’s new subscriber target, not all of them will necessarily be streaming HBO Max.
The company has a complicated setup around HBO Max. People can sign up for the service directly, and those who already pay for the premium cable channel through their cable or satellite provider also have access, but not everyone has set up their streaming account. The service is also offered for free or at a reduced price to AT&T’s wireless customers.
The jump into international markets shows how aggressively AT&T needs to expand its streaming enterprise. The addition of an advertising-based service means the company sees an opportunity to capture the ad dollars that have started to move away from traditional television. It’s unclear if the ad-supported version will be free or whether it will only be available at a reduced price from HBO Max’s current $15 per month cost.
Jason Kilar, the chief executive of WarnerMedia, the unit that manages HBO, said the service is expected to start making money after 2025. It should generate about $15 billion in sales by that year, he added.
HBO Max has become a key part of AT&T’s overall strategy to keep and grow mobile customers, so losing money is less of an immediate concern if it helps AT&T retain its core wireless subscribers. Mr. Kilar emphasized HBO Max’s value to the phone business, citing that 25 percent of HBO Max customers have come via AT&T.
He ended his presentation with a cliché from the Warner Bros. film archives: “It’s the beginning of a beautiful friendship.”
Lawmakers on Friday debated an antitrust bill that would give news publishers collective bargaining power with online platforms like Facebook and Google, putting the spotlight on a proposal aimed at chipping away at the power of Big Tech.
At a hearing held by the House antitrust subcommittee, Microsoft’s president, Brad Smith, emerged as a leading industry voice in favor of the law. He took a divergent path from his tech counterparts, pointing to an imbalance in power between publishers and tech platforms. Newspaper ad revenue plummeted to $14.3 billion in 2018 from $49.4 billion in 2005, he said, while ad revenue at Google jumped to $116 billion from $6.1 billion.
“Even though news helps fuel search engines, news organizations frequently are uncompensated or, at best, undercompensated for its use,” Mr. Smith said. “The problems that beset journalism today are caused in part by a fundamental lack of competition in the search and ad tech markets that are controlled by Google.”
The hearing was the second in a series planned by the subcommittee to set the stage for the creation of stronger antitrust laws. In October, the subcommittee, led by Representative David Cicilline, Democrat of Rhode Island, released the results of a 16-month investigation into the power of Amazon, Apple, Facebook and Google. The report accused the companies of monopoly behavior.
This week, the committee’s two top leaders, Mr. Cicilline and Representative Ken Buck, Republican of Colorado, introduced the Journalism and Competition Preservation Act. The bill aims to give smaller news publishers the ability to band together to bargain with online platforms for higher fees for distributing their content. The bill was also introduced in the Senate by Senator Amy Klobuchar, a Democrat of Minnesota and the chairwoman of that chamber’s antitrust subcommittee.
Global concern is growing over the decline of local news organizations, which have become dependent on online platforms for distribution of their content. Australia recently proposed a law allowing news publishers to bargain with Google and Facebook, and lawmakers in Canada and Britain are considering similar steps.
Mr. Cicilline said, “While I do not view this legislation as a substitute for more meaningful competition online — including structural remedies to address the underlying problems in the market — it is clear that we must do something in the short term to save trustworthy journalism before it is lost forever.”
Google, though not a witness at the hearing, issued a statement in response to Mr. Smith’s planned testimony, defending its business practices and disparaging the motives of Microsoft, whose Bing search engine runs a very distant second place behind Google.
“Unfortunately, as competition in these areas intensifies, they are reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests,” wrote Kent Walker, the senior vice president of policy for Google.
Senator Marco Rubio of Florida became the most prominent Republican leader to weigh in on the unionization drive at the Amazon warehouse in Bessemer, Ala., with a surprising endorsement of the organizing effort on Friday.
“The days of conservatives being taken for granted by the business community are over,” Mr. Rubio wrote in an opinion piece published in USA Today.
“Here’s my standard: When the conflict is between working Americans and a company whose leadership has decided to wage culture war against working-class values, the choice is easy — I support the workers,” he continues. “And that’s why I stand with those at Amazon’s Bessemer warehouse today.”
More than 5,800 workers at the Amazon warehouse, outside Birmingham, are voting by mail this month to decide whether to join the Retail, Wholesale and Department Store Union. Last week, President Biden posted a video message on Twitter referring to the vote in Alabama and espousing on the importance of unions in helping build the middle class, while excoriating employers who interfere in unionization efforts. He did not mention Amazon by name, but his remarks followed reports that the online retailer was engaged in aggressive anti-union tactics.
“We welcome support from all quarters,” the union’s president, Stuart Appelbaum, said in a statement. “Senator Rubio’s support demonstrates that the best way for working people to achieve dignity and respect in the workplace is through unionization. This should not be a partisan issue.”
The unionization drive has also continued to attract backing from Democrats. A spokesman for Speaker Nancy Pelosi said in an email on Friday that she supported the workers in their effort.
Mr. Rubio, who recalls marching in a union picket line with his father, a hotel bartender, accused Amazon of expressing “woke” values, while bowing to Chinese censorship. And he warned the company not to expect Republicans to come to its rescue and condone its anti-union efforts.
“Its workers are right to suspect that its management doesn’t have their best interests in mind,” Mr. Rubio wrote. “Wealthy woke C.E.O.s instead view them as a cog in a machine that consistently prioritizes global profit margins and stoking cheap culture wars. The company’s workers deserve better.”
The chief executive of Ant Group, the Chinese internet finance giant, has stepped down, the company said on Friday, a move that came in the middle of a business overhaul meant to address regulators’ concerns about its rapid growth.
Ant said its chief executive, Simon Hu, had asked to resign for personal reasons. The company’s chairman, Eric Jing, was named as Mr. Hu’s replacement, effective immediately. Mr. Jing, who will remain Ant’s chairman, previously served as chief executive until December 2019, when Mr. Hu took over the post.
Hundreds of millions of people in China use Ant’s Alipay app to make everyday payments, sock away savings and shop on credit. Ant, which was spun out of the e-commerce giant Alibaba, has faced rising scrutiny from China’s government, and officials scuttled the company’s plans last year to go public in Shanghai and Hong Kong.
The company had been preparing to raise more than $34 billion by listing its shares in November, in what would have been the largest initial public offering on record. Instead, days before Ant’s shares were scheduled to begin trading, Chinese officials summoned company executives — namely, Mr. Hu, Mr. Jing and Jack Ma, Alibaba’s co-founder — to discuss regulation. The I.P.O. was halted soon after, and financial watchdogs said Ant had taken advantage of gaps in China’s regulatory system and ordered it to revamp its business.
Mr. Hu joined Alibaba in 2005 and was president of its cloud division from 2014 to 2018. He joined Ant as president that year before becoming chief executive in 2019. Mr. Jing, also an Alibaba veteran, has been Ant’s executive chairman since April 2018. They are both members of the Alibaba Partnership, the company’s club of elite management partners.
Ford Motor said two members of the Ford family have been nominated to join the automaker’s board of directors, replacing one family member who is retiring and an independent director who has chosen not to seek re-election.
Alexandra Ford English, 33, daughter of Ford’s chairman, Bill Ford, and Henry Ford III, 40, son of Edsel B. Ford II, a current board member, are expected to be elected to the board by shareholders at the company’s annual meeting on May 13. Both are great-great-grandchildren of Henry Ford, who founded the company in 1903.
Ms. English is a director in corporate strategy at the company. Henry Ford III is a director in investor relations.
They will replace Edsel Ford II, 72, who is retiring after being on the board since 1988, and John C. Lechleiter, 67, who joined Ford’s board in 2013 and is a former president of Eli Lilly, the pharmaceutical company.
Although the Ford family only owns a small portion of the company’s common stock, it retains effective control of the automaker though Class B shares with super-voting rights.
The stock of Coupang, a start-up in South Korea that is sometimes called the Amazon of South Korea, drifted after trading publicly for the first time in New York on Thursday.
Coupang — the company’s name is a mix of the English word “coupon” and “pang,” the Korean sound for hitting the jackpot — was founded by a Harvard Business School dropout and has shaken up shopping in South Korea, an industry long dominated by huge, button-down conglomerates.
The initial public offering raised $4.6 billion and valued Coupang at about $85 billion, the second-largest American tally for an Asian company after Alibaba Group of China in 2014. Coupang’s shares rose 6.6 percent on Friday as trading began but ended the day down 2 percent.
Coupang is South Korea’s biggest e-commerce retailer, its status further cemented by people stuck at home during the pandemic and those in the country who crave faster delivery. In a country where people are obsessed with “ppalli ppalli,” or getting things done quickly, Coupang has become a household name by offering “next-day” and even “same-day” and “dawn” delivery of groceries and millions of other items at no extra charge.
— The New York Times
Shares of Lordstown Motors, an electric-vehicle start-up, fell more than 19 percent on Friday after an investment firm claimed the company had inflated the number of orders for its pickup trucks and overstated its technological and production capabilities.
The revelations are the latest to call into question the promises made by an electric vehicle company that has gone public by merging with a shell company that has a stock market listing, cash and no operating business. Lordstown, which gained prominence by buying a former General Motors factory in Ohio to make electric trucks for commercial users, completed its merger with a shell company and started trading on the stock market in October 2020.
In a lengthy post on its website, the investment firm, Hindenburg Research, said that Lordstown’s claim of having 100,000 “pre-orders” for its electric pickup truck included tens of thousands from small companies that do not operate fleets, and others who merely agreed to consider buying trucks but made no commitment to do so. Hindenburg said it had bet against Lordstown’s stock by selling its shares short, a maneuver used by some professional investors when they believe a stock is overvalued and poised to fall.
“Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” Hindenburg said.
A Lordstown spokesman said, “We will be sharing a full and thorough statement in the coming days, and when we do we will absolutely be refuting the Hindenburg Research report.”
One company that Lordstown said was prepared to buy 14,000 trucks, E Squared Energy, appears to be based in an apartment in Texas, have two employees and owns no vehicles. Hindenburg also unearthed a police report that showed a Lordstown prototype caught fire and burned to a shell during a test drive in January in Michigan.
On Friday morning, Lordstown shares were trading at just over $14 a share, down from their close the previous day of $17.71.
Former President Donald J. Trump hailed Lordstown in 2018 when it agreed to buy a plant in Lordstown, Ohio, that General Motors had closed, and former Vice President Mike Pence participated in an unveiling of the company’s truck in June. In September, Mr. Trump hosted Lordstown’s chief executive, Steve Burns, at the White House and praised the company’s technology.
Hindenburg Research gained prominence last year when it released a report saying Nikola, an electric truck start-up, and its executive chairman, Trevor Milton, had mislead investors and exaggerated the capabilities of that company’s technology. The revelations resulted in Mr. Milton’s departure from Nikola, and prompted General Motors to scale back a partnership with the company.
Nikola denied some of Hindenburg’s claims but recently acknowledged to the Securities and Exchange Commission that Mr. Milton had made statements that were “inaccurate in whole or in part.”
Target, a fixture in downtown Minneapolis, is giving up space in a large office building there, becoming the latest company to permanently allow its staff to spend more time working from home.
The retailer told employees it would cease operations in the City Center building in downtown Minneapolis and that the 3,500 employees working there would relocate to other nearby offices, while also working from home part of the time. More than a quarter of Target’s corporate employees in the Minneapolis area work in the City Center building.
“This change is driven by Target’s longer-term headquarters environment that will include a hybrid model of remote and on-site work, allowing for flexibility and collaboration and ultimately, requiring less space,” the company said Thursday.
Office landlords across the country have been struggling to retain tenants as the pandemic drags on and companies realize their staff has been able to work effectively in a remote setting. Empty office buildings are putting a squeeze on city budgets, which are heavily reliant on property taxes.
Salesforce, the software company based in San Francisco, adopted a flex model in which most of its employees would be able to come into the office one to three days a week. In a bet that more people would work from home after the pandemic ends, Salesforce acquired the workplace software company Slack in December.
After the move, Target said it would still occupy about three million square feet of office space in the Minneapolis area.
“It’s not easy to say goodbye to City Center, but the Twin Cities is still our home after all these years,’’ Target’s chief human resources officer, Melissa Kremer, said in an email to employees.
LinkedIn has stopped allowing people in China to sign up for new member accounts while it works to ensure its service in the country remains in compliance with local law, the company said this week, without specifying what prompted the move. A company representative declined to comment further.
Unlike other global internet mainstays such as Facebook and Google, LinkedIn offers a version of its service in China, which it is able to do by hewing closely to the authoritarian government’s tight controls on cyberspace.
It censors its Chinese users in line with official mandates. It limits certain tools, such as the ability to create or join groups. It has given partial ownership of its Chinese operation to local investors.
In 2017, the company blocked individuals, but not companies, from advertising job openings on its site in China after it fell afoul of government rules requiring it to verify the identities of the people who post job listings.
The backdrop to the suspension of new user registrations is not clear. The government has previously blocked internet services that it believes to be breaking the law. In 2019, Microsoft’s Bing search engine was briefly inaccessible in China for unclear reasons. Microsoft also owns LinkedIn.
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
The S&P 500 inched further into record territory on Thursday, rising 0.1 percent. The index gained 2.6 percent this week, its best weekly performance since early February.
The Nasdaq composite fell 0.6 percent, while the Dow Jones industrial average rose 0.9 percent.
The yield on 10-year Treasury notes jumped as much as 10 basis points, or 0.1 percentage points, to 1.64 percent, its highest level in more than a year.
Higher interest rates and tighter central bank policies are now considered to be the single biggest threat to so-called risk assets, mainly stocks, according to a Bank of America survey of fund managers. Investors have grown concerned that the stimulus bill and economic rebound will trigger inflation, prompting central banks to pull back on stimulus measures.
The Stoxx Europe 600 index dropped 0.3 percent, while the FTSE 100 index in Britain rose 0.4 percent.
Data published on Friday showed that the British economy declined 2.9 percent in January as the country entered its third lockdown, shut schools and left the European Union single market and customs union. Separate data for the same month showed the largest monthly drop in trade since records began in 1997. Exports to the European Union dropped 40 percent and imports fell nearly 30 percent. Some of the fall is because of stockpiling at the end of last year, but many businesses struggled to keep trading as they dealt with new customs requirements.
The economic relief plan that is headed to President Biden’s desk has been billed as the United States’ most ambitious antipoverty initiative in a generation. But inside the $1.9 trillion package, there are plenty of perks for the middle class, too.
An analysis by the Tax Policy Center published this week estimated that middle-income families — those making $51,000 to $91,000 per year — would see their after-tax income rise by 5.5 percent as a result of the tax changes and stimulus payments in the legislation. This is about twice what that income group received as a result of the 2017 Tax Cuts and Jobs Act.
Here are some of the ways the bill will help the middle class.
Americans will receive stimulus checks of up to $1,400 per person, including dependents.
The size of the payments are scaled down for individuals making more than $75,000 and married couples earning more than $150,000. And they are cut off for individuals making $80,000 or more and couples earning more than $160,000. Those thresholds are lower than in the previous relief bills, but they will still be one of the biggest benefits enjoyed by those who are solidly in the middle class.
Tax credits for parents
The most significant change is to the child tax credit, which will be increased to up to $3,600 for each child under 6, from $2,000 per child. The credit, which is refundable for people with low tax bills, is $3,000 per child for children ages 6 to 17.
The legislation also bolsters the tax credits that parents receive to subsidize the cost of child care this year. The current credit is worth 20 to 35 percent of eligible expenses, with a maximum value of $2,100 for two or more qualifying individuals. The stimulus bill increases that amount to $4,000 for one qualifying individual or $8,000 for two or more.
Cheaper health insurance
After four years of being on life support, the Affordable Care Act is expanding, a development that will largely reward middle-income individuals and families, since those on the lower end of the income spectrum generally qualify for Medicaid.
Because the relief legislation expands the subsidies for buying health insurance, a 64-year-old earning $58,000 would see monthly payments decline to $412 from $1,075 under current law, according to the Congressional Budget Office.
A rescue for pensioners
One of the more contentious provisions in the legislation is the $86 billion allotted to fixing failing multiemployer pensions. The money is a taxpayer bailout for about 185 union pension plans that are so close to collapse that without the rescue, more than a million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income.
The legislation gives the weakest plans enough money to pay hundreds of thousands of retirees their full pensions for the next 30 years.
Even as they are making more money thanks to the higher oil and gasoline prices, industry executives pledged at a recent energy conference that they would not expand production significantly. They also promised to pay down debt and hand out more of their profits to shareholders in the form of dividends.
“I think the worst thing that could happen right now is U.S. producers start growing rapidly again,” Ryan Lance, chairman and chief executive of ConocoPhillips, said at the IHS CERAweek conference.
Scott Sheffield, chief executive of Pioneer Natural Resources, a major Texas producer, predicted that American production would remain flat at 11 million barrels a day this year, compared with 12.8 million barrels immediately before the pandemic took hold.
Even the Organization of the Petroleum Exporting Countries and allied producers like Russia surprised many analysts this month by keeping several million barrels of oil off the market, The New York Times’s Clifford Krauss reports. OPEC’s 13 members and nine partners are pumping roughly 780,000 barrels of oil a day less than at the beginning of the year even though prices have risen by 30 percent in recent months.
Chevron said this week that it would spend $14 billion to $16 billion a year on capital projects and exploration through 2025. That is several billion dollars less than the company spent in the years before the pandemic, as the company focuses on producing the lowest-cost barrels.
“So far, these guys are refusing to take the bait,” said Raoul LeBlanc, a vice president at IHS Markit, a research and consulting firm. But he added that the investment decisions of American executives could change if oil prices climb much higher. “It’s far, far too early to say that this discipline will last.”
While the Biden administration’s stimulus bill, which will funnel nearly $1.9 trillion to American households, made its way through Congress, some politicians and economists began to raise concerns that it would unshackle a long-vanquished monster: inflation.
The worries reflect expectations of a rapid economic expansion as businesses reopen and the pandemic recedes. Millions are still unemployed, and layoffs remain high, The New York Times’s Nelson Schwartz and Jeanna Smialek report. But for workers with secure jobs, higher spending seems almost certain in the months ahead as vaccinations prompt Americans to get out and about, deploying savings built up over the last year.
Healthy economies tend to have gentle price increases, which give businesses room to raise wages and leave the central bank with more room to cut interest rates during times of trouble.
Over the long term, inflation can be a concern because it hurts the value of many financial assets, especially stocks and bonds. It makes everything from milk and bread to gasoline more expensive for consumers, leaving them unable to keep up if salaries stall. And once inflation becomes entrenched, it can be hard to subdue.
Inflation is expected to increase in the coming months as prices are measured against weak readings from last year. Analysts surveyed by Bloomberg expect the Consumer Price Index to hit an annual rate of 2.9 percent from April through June, easing to 2.5 percent in the three months after that before easing gradually to year-over-year gains of 2.2 percent in 2022, based on the median projection.
But those numbers are nothing like the staggering price increases of the 1970s, and evidence of renewed inflation is paltry so far.
The Bank of Japan said on Friday that it would scrap its annual minimum target for equity fund purchases, a decision that comes as Japan’s stock markets hit levels unseen since the collapse of the country’s economic bubble in the early 1990s.
The decision was announced as part of a three-month policy review meant to give the central bank more flexibility to address the economic effects of the coronavirus pandemic.
Under its previous policy, the bank aimed to invest around $55 billion annually in exchange-traded funds — baskets of equities that can be bought and sold on the stock market. That was part of a policy of monetary easing intended to stimulate inflation to combat sagging prices, which sap corporate profits.
Since 2010, when the purchases began, the bank has become Japan’s single largest stockholder. Share prices are now at their highest point in over three decades. Friday’s decision will give the bank the flexibility to make future purchases at more favorable prices. It will also help to address concerns that the program has distorted Japanese stock markets.
The bank will continue to invest in equities that track Japan’s Topix stock index “as necessary,” it said. It will maintain the upper limit of $110 billion in purchases per year that was set earlier in the pandemic, as part of emergency measures to stimulate the economy.
The bank also said that it would maintain its current interest rate targets while allowing long-term rates slightly more room to breathe, increasing the band to 0.25 percent from 0.2 percent.
on emergency mode to bolster growth in the face of the pandemic’s shock, it must now navigate an economy that is expected to strengthen rapidly in the coming months.
Officials will release an interest rate policy decision and their first economic projections of 2021 at 2 p.m. on Wednesday, and they are virtually certain to leave borrowing costs unchanged at near zero.
But analysts and Wall Street investors alike are eager to see whether growing economic optimism will shake up the outlook for policy in the months and years ahead.
The Fed slashed interest rates to rock bottom a year ago as the pandemic shut down huge swaths of the economy. It has also been buying $120 billion in bonds per month, a policy meant to keep credit cheap and help the economy rebound from a virus that has thrown millions out of work.
Jerome H. Powell, the Fed chair, has been clear for months that officials expect to be patient in removing that policy help — a cautious tone that he is expected to maintain at a news conference on Wednesday.
“This is one of the most critical Fed meetings we’ve had in a while,” said Michelle Meyer, head of U.S. economists at Bank of America Merrill Lynch. “Markets are really paying attention, and they’re going to dissect everything he says.”
That’s because the economic backdrop is shifting. Coronavirus vaccines are fueling hopes for reopening parts of the service sector. A freshly signed stimulus package will pump $1.9 trillion into the economy, with an eye on preventing evictions, funneling cash to parents and putting $1,400 checks directly into bank accounts.
Against that improving backdrop, economists in a Bloomberg survey expect the Fed to increase rates twice in 2023, the news outlet reported. In December, they expected rates to remain unchanged until 2024 or later.
As investors expect faster growth, higher inflation and a quicker-moving Fed, they have pushed up the yield on 10-year Treasury notes. That has weighed on stock indexes, which tend to fall when rates rise.
The Fed’s economic projections — which anonymously report officials’ forecasts for interest rates, unemployment, inflation and growth both through 2023 and in the longer run — could show a shift when they are released on Wednesday.
Wall Street will pay particular attention to the inflation forecast and the policy rate path. The Fed’s median interest rate forecast previously showed no rate increases over the next three years, but analysts expect that officials could now pencil in one move in 2023.
Wall Street has been paying close attention to the outlook for inflation in recent weeks. Key price indexes are expected to bounce back after weak readings last year, and some economists have warned that big government spending could keep them elevated.
That could put a spotlight on Federal Reserve officials’ inflation estimates, and on anything that Jerome H. Powell, the Fed chair, says about the outlook during his news conference after the central bank’s meeting on Wednesday.
The Fed is trying to use its policies to coax the economy back to full employment while lifting and stabilizing inflation, which has been slipping in recent decades. It wants to hit 2 percent annual price gains on average, and it has pledged not to raise rates from near zero until they are poised to hum along at a slightly faster pace for some time.
But some prominent onlookers have warned that the economy could overheat. They say inflation may jump well above the 2 percent average target, thanks to government outlays and booming demand in a reopening economy.
Fed officials have been consistently less concerned about that possibility, and will give an up-to-date snapshot of their own expectations in their first Summary of Economic Projections of 2021. The last set of estimates, released in December, showed inflation stabilizing at 2 percent.
“How much do they revise up inflation? That’s something I’ll be looking for,” said Seth Carpenter, chief U.S. economist at UBS and a former Fed employee.
Analysts broadly expect price gains to accelerate in the coming months for a mechanical reason: The data are about to lap very weak readings from last spring. The most closely watched inflation measures are compared against the same month a year earlier, a recipe for an automatic increase.
But Fed leaders have been clear that a short-lived bounce is not what they’re talking about when they say they want to see quicker increases.
“There’s a difference between a one-time surge in prices and ongoing inflation,” Mr. Powell said this month.
Investors expect a stronger economy and slightly higher inflation in 2021, and they will watch the Federal Reserve chair, Jerome H. Powell, at his news conference on Wednesday for any hints about what that portends for the central bank’s bond-buying plans.
The Fed has been buying $120 billion in Treasury and mortgage-backed bonds each month,and officials have said they will continue that pace until they see “substantial” further progress.
But Mr. Powell and crew haven’t defined “substantial” with any precision. What counts as sufficient economic healing — when the Fed might slow and stop its program — matters to markets because the buying helps to push up prices in bonds and stocks alike.
Some investors have begun to expect the Fed to taper off its buying sooner than they had been forecasting. Others think a recent increase in longer-term bond yields, which has been driven by investor expectations for growth and inflation, could prompt the Fed to revamp its program in the near term.
That’s because those higher market-based rates could make mortgages more expensive and corporate investments less attractive, working against the Fed’s goals. The central bank could shift the composition of its purchases or even buy more to keep interest rates historically low across the spectrum.
Mr. Powell has pushed back on the idea that a taper is imminent and has promised that the Fed will alert investors well before the slowdown starts. He has also pointed out that rates are moving up because of a brightening outlook, and has suggested that the change isn’t worrying for now.
“I would be concerned by disorderly conditions in markets or a persistent tightening in financial conditions that threatens the achievement of our goals,” Mr. Powell said at an event this month, while stressing that the Fed looks at a range of financial conditions.
The House Financial Services Committee is holding its second hearing on the GameStop frenzy on Wednesday, with a range of experts expected to expound on what the saga says about the stock market’s plumbing.
The hearing appears likely to have a more wonkish tone than the committee’s first hearing on GameStop, which put a spotlight on Robinhood, the trading app at the center of a remarkable rally that sent shares of the struggling video game retailer up by over 1,600 percent in January,
Witnesses will include stock exchange officials, market analysts, former regulators and academics. Prepared testimony suggests the witnesses will focus on what — if any — deficiencies in the American stock trading system were revealed by the surge of trading in GameStop.
Sal Arnuk, co-founder of trading firm Themis Trading, plans to spotlight the growing role of payment-for-order-flow, where retail brokerage houses such as Robinhood channel customer orders to specific trading firms in exchange for payments.
“These practices create a massive incentive for such brokers to sell their clients orders to sophisticated trading firms uniquely tooled to profit off of them,” Mr. Arnuk will say, according to preliminary testimony released by the House committee. “This is a needless conflict that can harm retail investors, and it degrades the integrity of the market ecosystem as a whole.”
Other witnesses, such as Alexis Goldstein, a senior policy analyst at Americans for Financial Reform, will underscore the growing dominance of the trading firms that pay retail brokerage firms to execute their orders.
Two major market-makers, Citadel Securities and Virtu Financial, “execute a larger volume of U.S. stocks than the New York Stock Exchange,” she said in prepared testimony, urging regulators to look at whether their growth has worsened the prices that are available to investors on the public exchanges.
The hearing is to begin at 10 a.m. Other participants include Michael Blaugrund, chief operating officer of the New York Stock Exchange; Vicki L. Bogan, a Cornell University professor who focuses on the financial and investment behavior of households; Dennis Kelleher, the chief executive of Better Markets, which advocates market reforms; and Michael Piwowar, executive director of the Milken Institute Center for Financial Markets and a former S.E.C. commissioner.
BMW became the latest carmaker to promote its commitment to electric vehicles Wednesday, moving up the introduction of a new electric sedan, hinting at plans for an electric Rolls-Royce, and saying that its Mini cars will run exclusively on batteries, though not until the 2030s.
BMW follows rivals like Volkswagen, General Motors and Volvo that have recently declared their intention to shift to electric vehicles. But BMW, based in Munich, is pursuing a more cautious strategy than some of the others.
Unlike Volkswagen, for example, BMW has not introduced a platform — a chassis and other components shared among numerous body styles — designed exclusively for electric propulsion. BMW models will accommodate either battery power or internal combustion engines, an approach that inevitably involves engineering compromises.
Oliver Zipse, the BMW chief executive, said the company’s strategy gave customers more choice. “Others focus on individual market segments and niches,” he said during a news conference Wednesday. “We, on the other hand, are taking a targeted approach across all market segments.”
Some analysts say BMW’s approach prevents it from fully exploiting the advantages of battery power, such as the opportunity to create roomier interiors.
BMW said Wednesday it would introduce its last new Mini with an internal combustion engine in 2025, but would continue to sell the model into the 2030s. In addition, BMW will begin selling its electric i4 BMW sedan this year, sooner than planned. Rolls-Royce, which has been owned by BMW since the late 1990s, will also offer an electric model, Mr. Zipse said, but he did not give details.
Unlike General Motors or Volvo, BMW and other German carmakers have not set a deadline to stop selling cars that run on fossil fuels. They argue that many regions lack charging stations for electric vehicles. “It is not realistic that the same technologies will prevail equally in every country at the same time,” Mr. Zipse said Wednesday.
BMW sold 2.3 million passenger cars last year, 8 percent fewer than in 2019. That is a relatively small number of vehicles compared with Volkswagen or Toyota, which sell four times that number, and could be a disadvantage as the industry goes electric.
BMW as well as Daimler will have trouble selling enough electric vehicles to justify the expense of retooling factories or developing dedicated platforms, Patrick Hummel, an auto industry analyst at UBS, said during a conference call with reporters last week.
“BMW and Daimler will not be in a position to replicate what Volkswagen is doing,” Mr. Hummel said.
The stimulus money promised under the American Rescue Plan will hit the bank accounts of many Americans on Wednesday — the first official payment date — though some financial institutions chose to make the cash available to people even before it arrived from the government.
Not everyone eligible to receive a payment will get one on Wednesday, though. Additional rounds of payments will be made in the coming weeks, including for people who will receive theirs by mail as a check or debit card. You can check the status of your payment with the Internal Revenue Service’s Get My Payment tool.
Payments top out at $1,400 per person, including children and adult dependents. To qualify for the full $1,400, a single person must have an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income must be $112,500 or less, and for married couples filing jointly, that number has to be $150,000 or below. Partial payments are available to people who earn more, but the amounts fall quickly.
The payments are calculated using the most recent information on file with the I.R.S., which could be your 2019 tax return if you haven’t yet filed for 2020.
If you’re newly eligible for a payment based on your 2020 income but haven’t yet filed your return, the law allows the Treasury Department to continue payments until September. If you don’t get one during that period, you can claim what you’re owed when you file your 2021 taxes.
Uber will reclassify more than 70,000 drivers in Britain as workers, it said on Tuesday. The decision, which will provide the drivers a minimum wage, vacation pay and access to a pension plan, is the first time the company has agreed to classify its drivers in this way, Uber said. It comes in response to a landmark British Supreme Court decision last month that said Uber drivers were entitled to more protections. The decision represents a shift for Uber, though the move was made easier by British labor rules that offer a middle ground between freelancers and full employees that doesn’t exist in other countries.
Google is cutting in half its commission on developers’ first $1 million in app sales, following a similar move by Apple that is aimed at appeasing developers and regulators who accuse the companies of abusing their dominance of the smartphone industry. Google said that starting July 1, it would take 15 percent of the first $1 million developers take in from certain app sales, down from 30 percent. Google will still charge 30 percent after the first $1 million.
The S&P 500 index is set to open slightly lower on Wednesday, futures indicated, before the latest Federal Reserve monetary policy decisions are announced.
The S&P 500 pulled back from a record high on Tuesday, but volatility in stock markets has subsided from earlier in the month when bond yields jumped higher at a rate that took investors by surprises and caught the attention of central bank officials.
Government bond prices fell on Wednesday, sending their yields higher. The yield on 10-year Treasury notes rose 2 basis points, or 0.02 percentage points, to 1.64 percent.
Most European stock indexes were down. The Stoxx Europe 600 index fell 0.3 percent, led by health care and industrial companies. In Britain, the FTSE 100 index dropped 0.4 percent and the CAC 40 in France was 0.2 percent lower.
Oil prices fell. Futures on West Texas Intermediate, the U.S. crude benchmark, fell 0.7 percent to $64.34 a barrel.
A Bank of America analyst maintained his “buy” rating on Uber after the company said it would reclassify all 70,000 of its drivers in Britain as workers, giving them additional benefits, following a court ruling last month. Justin Post, the analyst, said the change would increase driver costs in the country by 7 percent to 9 percent but the outcome “reflects evolution, not platform risk.”
The benefits could make Uber more appealing for drivers, force other companies to make similar changes and make it harder for new entrants in the market, Mr. Post wrote in a research note. Uber’s share price fell 2.2 percent on Tuesday before the announcement.
Amalgamated Bank, the New York-based lender with a history of supporting progressive causes, announced on Wednesday that it would endorse a bill calling for a federal commission to study the lingering effects of slavery — and the merits of providing reparations.
It is the first American bank to support H.R. 40. The legislation, named after the federal government’s promise to give freed families “40 acres and a mule,” was first proposed more than 30 years ago. Its current lead sponsor is Representative Sheila Jackson Lee, Democrat of Texas, and its 169 co-sponsors are all Democrats. (President Biden has endorsed forming a committee to study reparations, but he has not committed to signing the bill should Congress approve it, which isn’t assured.)
Amalgamated came to support the bill after racial justice protests last year. Lynne Fox, the lender’s chair and interim chief executive, told the DealBook newsletter that the protests convinced the bank’s leaders that they needed to address structural racism with “systemic changes” to society. The bank, which has $6 billion in assets, has previously embraced policies that it said would help reduce gun-related violence.
A bank’s support is symbolically important, according to Ms. Fox. “We acknowledge — and I think others in the financial industry need to acknowledge — the deep-rooted connections between the American financial sector and the slave economy,” she said.
Executives in the banking industry have noted that their firms’ histories have included financing slaveholders, and admitted more recently to racial discrimination against employees and customers. Lenders are under increasing pressure to promote racial equity, including by shareholders.
For her part, Ms. Fox declined to criticize other lenders directly. “We don’t see ourselves as judging other institutions’ conduct,” she said. “Talking is a good first step. We look forward to when other concrete steps are taken.”
Amalgamated has already moved to address racial equity within its walls,Ms. Fox said. Those steps include reviewing wage policies, forming an employee-led committee to review policies and practices, and providing antiracism training.
In its statement endorsing the legislation, Amalgamated pledged to do more: “We believe the commission created through H.R. 40 is an important first step towards achieving racial justice. The work shouldn’t stop there.”
The problems of Greensill Capital, a financial firm with ties to SoftBank and Credit Suisse, deepened Tuesday after its German unit entered insolvency proceedings.
Germany’s banking regulator, known as BaFin, said Tuesday that a judge had granted its request to open insolvency proceedings for Greensill Bank in Bremen. BaFin also formally determined that Greensill Bank was not able to repay all of its customers’ deposits, a step that allows depositors to receive compensation from public and private insurance funds.
The insolvency of the German unit was expected after Greensill Capital, which provides financing to companies and has been advised by former Prime Minister David Cameron of Britain, filed for a form of bankruptcy protection in Britain last week.
Credit Suisse acknowledged on Tuesday that it was likely to suffer losses from a loan it had made to the firm. It said that it had received $50 million from the administrator of Greensill Capital’s assets in Britain but that $90 million of the loan was outstanding.
Credit Suisse’s asset management unit oversaw $10 billion in funds that Greensill packaged based on financing it provided to companies. The loans allowed companies to stretch out payments to suppliers. Credit Suisse has returned $3 billion in cash to investors in the funds and said it was working to recover more money.
Credit Suisse said Tuesday that the funds’ managers “intend to announce further cash distributions over the coming months.” The bank has not specified what losses, if any, investors in the funds might ultimately suffer.
A year ago this week, Doug Parker, the chief executive of American Airlines, flew to Washington to begin what became a yearlong lobbying campaign for a series of taxpayer-funded bailouts during the pandemic.
He wasn’t alone. The campaign also included leaders from Alaska Airlines, Allegiant Air, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines — all with their hands extended. The flight attendant and pilot unions were also part of the lobbying.
A year later, as the stock market cruises to new heights, questions should be asked about the $50 billion in grants that were used to prop up the airline industry. Was it worth it? And was it necessary?
The good news is that the rescue money likely saved as many as 75,000 jobs, most remaining at full pay. And that money also kept the airlines from filing for bankruptcy, and in a position to ferry passengers all over the country to jump start economic growth as the health crisis subsides.
throw money at everything these days, from celebrity-backed blank-check companies with no profits to troubled video game retailers, Bitcoin and digital art. Why not airlines?
Even during the depths of the pandemic, in April last year, Carnival Cruise Line managed to raise $4 billion in debt from private investors, just as the airlines were still negotiating their first rescue deal with the government. That said, Carnival had to pay dearly for the money, with an interest rate of around 12 percent.
Frequently Asked Questions About the New Stimulus Package
The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.
Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more
This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.
There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.
The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.
Airline chiefs and labor union bosses convinced Congress that the industry was different — and more indispensable. They made the case that if airlines were to fall into bankruptcy, there would be no planes ready to help revive the economy when the time came. They argued that pilots couldn’t be laid off and quickly rehired, since they need to be in flight regularly or training on simulators to be certified to fly.
Would airlines have stopped flying in bankruptcy? Nope. In previous airline bankruptcies — and there have been dozens — the companies kept operating. The government could have provided financing under that scenario, similar to the way it did when it rescued General Motors in 2009, taking a major equity stake in the company so that taxpayers could share in the upside when it recovered.
the company will issue warrants that are worth about $230 million today — a small fraction of the $4 billion that the taxpayers bequeathed the carrier’s shareholders in the first round of bailouts.
Of course, we’ll never know what would have happened to the industry had it been forced to raise money on its own.
“Congress has saved thousands of airline jobs, preserved the livelihoods of our hard-working team members and helped position the industry to play a central role in the nation’s recovery from Covid-19,” Mr. Parker and a top lieutenant at American Airlines said in a statement after the latest round of bailouts last week. “Lawmakers from both parties have backed legislation that recognizes the dedication of airline professionals and the importance of the essential work they do.”
After the banking crisis of 2008 led to bailouts, the recriminations began when firms like Goldman Sachs had a banner year in the aftermath — and paid bankers record bonuses.
Will the same thing happen to the airlines? Under the terms of their bailouts, the chief executives’ compensation this year and last was capped at about half what they received before the pandemic.
Delta has already begun to issue special payments to some other managers. It says this is to compensate them in part for extra hours worked during the pandemic. “The payment of special bonuses to management while the airline is still burning cash is premature and inappropriate,” said Chris Riggins, a spokesman for the Air Line Pilots Association, in a statement this month.
The worst for the airline industry may be over, but the debate about the appropriateness of the pandemic bailouts is just getting started.