Daily Business Briefing
June 17, 2021Updated
June 17, 2021, 10:47 p.m. ET
June 17, 2021, 10:47 p.m. ETCredit…Henry Nicholls/Reuters
This week, the European Central Bank proposed using gender diversity among criteria for approving board members at the banks it supervises. Such mandates are one lever for increasing representation of women in an industry still dominated by men.
Another lever — the focus of a recent qualitative study — is to change how banks distribute opportunities and rewards, the DealBook newsletter reports.
When women were asked by Women in Banking & Finance, a nonprofit group in London, to reflect on their careers, common complaints included that they were heard differently simply because they were women and that they were required to find an innovative niche to succeed in the finance industry. Men, on the other hand, were more often welcome on traditional paths. It was even worse for Black women, for whom “the headwinds were more intense and the tailwinds were fewer,” according to the report.
Half of women interviewed specifically mentioned “mediocre” men, who they said could survive more easily than women with comparable abilities. When prompted to explain, women cited factors that included men belonging to a social group where other members are gatekeepers; always being around, while women are more likely to take parental leave; and a greater reluctance for companies to “manage out” men because they are viewed as breadwinners.
Competent, empathetic managers and bonuses for collaboration could be one fix. Women said empathetic managers gave them the access and freedom to pursue career-enriching opportunities, but they said their firms did not reward inclusive managers. Instead, the report’s authors suggested solutions like restructuring bonuses to be based at least partly on team performance, regular assessments of the allocation of stretch assignments and promotions by gender and formal programs for easing in employees returning from parental leave.
The banking industry has relatively few female leaders. Only 8 percent of chief executives at European credit and investment institutions, and a fifth of positions in management bodies at Europe’s largest banks, are women, according to the European Banking Authority. At U.S. financial services firms, women accounted for just under 22 percent of leadership roles in 2019, according to the most recent analysis from Deloitte. If current trends continue, the analysis found, gender equality in leadership roles at financial services firms may not come until 2085.
Read moreCredit…Nicolas Asfouri/Agence France-Presse — Getty Images
The Federal Communications Commission on Thursday proposed further restrictions on purchases of telecommunications equipment that pose national security risks, strengthening its opposition to Chinese providers of 5G wireless and other technologies.
The F.C.C. voted unanimously to explore the proposal to ban U.S. companies from all future purchases of telecommunications equipment from companies like Huawei and ZTE of China. It also proposed the agency consider revoking prior authorizations of equipment purchases from the list of five companies deemed threats to national security.
The agency’s actions demonstrate the bipartisan push in Washington to beat back China’s stronghold on parts of the telecommunications and technology supply chain. President Biden has continued the Trump administration’s tough stance against China’s use of its government-connnected technology companies to surveil its own citizens and to stake a leadership role in cutting-edge technologies like 5G and automated manufacturing and driving.
The proposals set into motion a longer process that includes public comment and an eventual vote. Rural telecommunications companies that have relied on providers like ZTE for wireless technology have protested restrictions.
Jessica Rosenworcel, the acting chair of the F.C.C., said the proposal was intended to secure U.S. networks.
“Insecure network equipment can undermine our 5G future, providing foreign actors with access to our communications,” she said. “This, in turn, may mean the ability to inject viruses and malware in our network traffic, steal private data, engage in intellectual property theft, and surveil companies and government agencies.”
Huawei criticized the agency’s proposal.
“Blocking the purchase of equipment, based on a ‘predictive judgment,’ related to country of origin or brand is without merit, discriminatory and will do nothing to protect the integrity of U.S. communications networks or supply chains,” a Huawei representative said.
The agency will begin to take public comments on the proposal and then go before the four commissioners for a final vote, probably in several weeks. It will need a majority of votes to pass and is expected to gain unanimous support.
Read moreCredit…Todd Heisler/The New York Times
Employees at MSNBC, the 24-hour cable news channel with a slate of prominent liberal anchors, said on Thursday that they planned to form a union representing about 315 workers including producers, bookers, writers and fact checkers.
The announcement is the latest example of a workers’ rights movement that has swept major media organizations, as print, digital and broadcast journalists seek to unionize amid a precarious outlook for their industry. Recently, employees at The Atlantic, The Daily News of New York and Insider, as well as tech workers at The New York Times, have announced their intent to unionize.
The MSNBC bargaining unit would be represented by the Writers Guild of America, East, which said a clear majority of the network’s employees had signed a letter seeking voluntary recognition of a union. The Writers Guild represents many news and entertainment outlets, including ABC News and CBS News, whose involvement dates to the guild’s beginnings in 1954.
Two star MSNBC hosts, Chris Hayes and Joy Reid, immediately expressed support for the unionization effort. “Extremely proud of my colleagues,” Mr. Hayes wrote on Twitter, adding an emoji of a fist in solidarity.
Management at MSNBC was informed of its employees’ effort on Thursday afternoon. “We’re looking forward to continuing the type of direct, open and honest communication that has already resulted in meaningful change at the network,” Rashida Jones, the network’s president, said in a statement.
In a follow-up memo to staff, Ms. Jones said the network would request a formal vote on unionization by employees, rather than voluntarily recognize the new union. “I respect our employees’ right to decide whether they want to be represented by a union, and I believe our employees should be able to make such an important decision through a standard election process,” she wrote. “It is important to give everyone who would be included the chance to understand what this would mean before making their choice.”
The Writers Guild objected to requiring a formal vote. “MSNBC needs to follow its own progressive principles and honor the decision made by its editorial employees to unionize,” the executive director of the guild, Lowell Peterson, said in a statement late Thursday.
Digital journalists at NBC News, a corporate sibling of MSNBC, unionized in 2019 with the NewsGuild of New York, which also represents journalists at The Times. They have not yet settled on a contract with NBC.
“We as journalists believe that democracy works, as a nation, state, country, city or in a workplace; things work better when policies are made with input from the people,” said Andrew Joyce, a segment producer at “The Rachel Maddow Show” who helped lead the MSNBC organizing effort.
The prospective new union would also include workers at “The Choice,” a digital news and commentary service available on NBC’s streaming network, Peacock.
In a message on Thursday, the MSNBC bargaining unit wrote, “We are standing up for each other and our work — because this is who we are.” It was a play on a marketing campaign by NBC News and MSNBC featuring anchors and correspondents explaining their commitment to the news with the slogan “This is who we are.”
Ms. Jones, who started as the network’s president this year, is the first Black woman to run one of the three major cable news networks. Stephanie Brumsey, a segment producer of the weekend show “The Cross Connection,” said before Ms. Jones’s follow-up memo that she was “very hopeful” that the new leadership would voluntarily recognize the union. “It’s not the old guard that’s there,” she said.
Read moreCredit…David Zalubowski/Associated Press
Southwest Airlines’ operations appeared to return to normal on Thursday after three days of widespread flight delays and cancellations caused by technological problems.
As of midmorning, the airline had canceled only about 1 percent of its scheduled flights for the day, though 10 percent of its flights were delayed, according to FlightAware, a flight tracking service. About half of Southwest’s scheduled flights on Tuesday and Wednesday were delayed. On Monday, more than 1,500 Southwest flights ran late, accounting for about a quarter of all flight delays within the United States. The disruptions infuriated thousands of passengers, many of whom complained on social media.
The turmoil began on Monday night when a problem with a weather data provider prevented Southwest from safely flying its planes temporarily. The issue was resolved, but the airline faced a technological issue of its own on Tuesday. That was fixed within hours, but nevertheless had a cascading effect on flights that day and the next. The airline said it was investigating the outages, but had no reason to believe they were caused by a breach.
The flight delays and cancellations took place during a generally slow part of the week, but they come as overall travel is picking up. Summer is typically the busiest season for air travel in the United States and this year’s is expected to be supercharged as newly vaccinated Americans take vacations or visit relatives and friends, in some cases for the first in more than a year. The Transportation Security Administration screened more than two million people at airports on Sunday, more than at any point since the pandemic began.
Southwest’s troubles seemed to be subsiding, but Thursday wasn’t without problems. Southwest and Delta Air Lines were among many companies whose websites were briefly inaccessible early in the day because of problems at an internet firm that provides services to many businesses.
Read moreCredit…Sasha Maslov for The New York Times
“New York City Mayoral Candidates Spar in Heated Final Debate,” a Wall Street Journal headline announced on Thursday.
Readers of the Rupert Murdoch-owned newspaper should expect much less of that kind of thing in the future.
On Thursday, The Journal’s editor in chief, Matt Murray, told the staff that the paper was shuttering its Greater New York section.
“This morning, we informed the Greater New York staff that we’re shutting down the team and ceasing publication in print and digital on July 9,” Mr. Murray wrote in an internal email, which was obtained by The New York Times. “Team members will have the chance to apply for other jobs.”
Eight journalists worked at Greater New York. The Independent Association of Publishers’ Employees, the union that represents Journal staff members, said in an email on Thursday that the job status of those journalists was unclear.
“We first heard about the elimination of GNY this morning from our members, and still have not received a formal notice of any layoffs or position eliminations,” a union spokesman said.
Greater New York started in 2010 with headlines like “Rats Mob the Upper East Side.” Its stand-alone print edition was folded into the larger paper in 2016.
Mr. Murray said in his staff memo that The Journal would start a new digital section, Life & Work, to be staffed by more than 60 journalists. In print, their work will appear in the Personal Journal section. The editor also announced the creation of a Speed & Trending news desk to cover breaking news.
The closing of Greater New York comes during a spirited New York mayoral race and the reopening of the city after it was battered by the coronavirus pandemic.
It also comes during a fierce competition for new subscribers among the nation’s top three newspapers: The Times (nearly eight million total print and digital subscribers), The Washington Post (about three million digital subscribers) and The Journal (about 2.5 million digital subscribers). Many publications in small and midsize cities across the country have struggled or failed, but the Big Three have added subscribers while seeking a national and international audience.
A separate Metro section has not been part of The Times’s print version since March 18, 2020, at the start of pandemic restrictions. A spokesman for the paper said The Times had decided not to revive the Metro print section, adding: “It remains part of our mission to aggressively chronicle New York and the region, and readers will find a great deal of metro coverage in the print paper every day. We also have plans to grow our Metro staff.”
Edmund Lee contributed reporting.
Read moreCredit…Tony Dejak/Associated Press
Lordstown Motors, the struggling electric vehicle start-up, told securities regulators on Thursday that it did not have “binding” orders for a pickup truck it was developing, correcting statements made by its president on Tuesday.
The company, which announced the resignation of its chief executive and its chief financial officer on Monday, has made several confusing and contradictory statements in recent weeks. On Tuesday, its president, Rich Schmidt, said the company had binding orders but refused to name any customers or say whether they had put down deposits. In a filing to the Securities and Exchange Commission, the company said Thursday that it had “no binding purchase orders or commitments from customers.”
Mr. Schmidt had also claimed, at an event of the Detroit-based Automotive Press Association, that Lordstown had enough money to begin production in late September. But last week, the company said in an S.E.C. filing that it did not have enough cash to begin production and might not survive.
Lordstown gained attention by purchasing a shuttered General Motors factory in Lordstown, Ohio, in 2019. At the time, G.M. was under pressure from President Donald J. Trump to find a buyer for the plant. Mr. Trump invited Lordstown’s founder and chief executive, Steve Burns, to the White House last September. Mr. Burns resigned on Monday.
In October, Lordstown merged with DiamondPeak Holdings, a special purpose acquisition company, allowing it to join the Nasdaq stock exchange and raise hundreds of millions of dollars from investors.
But the company has struggled to turn its electric pickup truck concept into reality. One of its prototypes burned down during testing in February, and another dropped out of a 280-mile off-road race in Baja California after just 40 miles.
The company has invited investors, analysts and journalists to its factory next week to discuss work on its truck. But Lordstown said in its S.E.C. filing on Thursday that it would delay its annual shareholders meeting to Aug. 19.
The company’s shares have swung wildly, climbing to more than $30 in February before sliding down to about $7. Lordstown was down about 2 percent on Thursday morning after its latest S.E.C. filing and ended the day down about 4 percent.
Read moreCredit…Jeenah Moon/Reuters
JPMorgan Chase said on Thursday that it would buy Nutmeg, a prominent British digital wealth management company, as it looks to expand its business in Britain.
Terms of the deal were not disclosed.
It is another effort by the banking giant, the biggest in the United States by assets, to broaden its footprint in a country where it has operated for more than 160 years. To date, though, Citigroup and Goldman Sachs are the only American lenders to offer consumer accounts in Britain.
Nutmeg is meant to complement the digital-focused retail bank that JPMorgan plans to open in Britain later this year.
Nutmeg, which opened for business in 2012, is among the most prominent of Britain’s so-called roboadvisers, a new class of financial companies that use software to manage customers’ investment portfolios. It now also offers a service in which human advisers oversee investment decisions.
The company says it oversees 3.5 billion pounds, or $4.9 billion, in assets for more than 140,000 customers. But it has yet to turn a profit, as it focuses on growing its business.
The two already share a business relationship: Nutmeg relies on exchange-traded funds overseen by JPMorgan’s asset management business for one of its investment strategies.
“I am truly impressed with the digital experience that Chase is building for the U.K.,” Neil Alexander, Nutmeg’s chief executive, said in a statement. “This new chapter in our story will see Nutmeg’s customers benefit from a wider range of products and services in the future, and allow us to expand into new markets.”
JPMorgan’s chief executive, Jamie Dimon, has signaled that he is keen to strike acquisitions to expand his bank’s business, particularly on the digital side. In his most recent letter to shareholders, Mr. Dimon wrote, “Acquisitions are in our future, and fintech is an area where some of that cash could be put to work.”
In its announcement of the acquisition, JPMorgan said it had not yet decided whether to keep the Nutmeg name.
The deal is expected to close by year end, subject to regulatory approval.
Move over, Nyan Cat. Mattel is the latest creator to jump on the hottest craze in cryptocurrency as it puts its first digital art featuring its Hot Wheels vehicles up for sale.
On Tuesday, the toymaker will offer three pieces of digital art in the form of nonfungible tokens, or NFTs, for auction on its Mattel Creations website as part of its Hot Wheels NFT Garage Series. The one-of-a-kind works will feature classic cars from its archive: Twin Mill, Bone Shaker and Deora II.
The auction will run for a week, and in another first for Mattel, the winner will be allowed to pay in the Ethereum, a cryptocurrency.
The company said it was planning NFT auctions for its other toy brands. “Mattel is creating a new way for innovation and artistry to converge in the toy space and will continue to express its brands in the NFT format,” it said in a statement.
The move is part of an evolution of physical toys as collectible art, Richard Dickson, the company’s president and chief operating officer, said in an interview.
“Part of our effort to make Mattel relevant is to make sure that our brands are timeless and timely,” he said. “We need to be on top of current conversations.”
On Monday, CNN also got into the NFT game, announcing that it would sell digital moments from its television archives in a series called Vault by CNN.
NFTs rely on blockchain technology, similar to the computer code that makes many cryptocurrencies possible. They have become popular in the art world because they allow artists to have more control over their works by selling limited-edition digital goods directly to consumers. But critics say the market could crash if cryptocurrencies tumble.
With its announcement, Mattel joins other unlikely creators in selling NFTs, including the National Basketball Association, “Disaster Girl” and even The New York Times.
Initial claims for state jobless benefits rose last week, the Labor Department reported Thursday.
The weekly figure was about 402,000, up 37,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 118,000, up 47,000 from the prior week. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 412,000, an increase of 37,000.)
In four states — Alaska, Iowa, Mississippi and Missouri — it was the final week in which some or all federal pandemic unemployment benefits were paid, including a $300 supplement to other benefits. A total of 26 states have announced plans to discontinue federal benefits this month or next, even though they are funded through September.
New state claims remain high by historical standards but are one-half the level recorded in early February. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
Stocks on Wall Street were little changed on Thursday as investors considered the rise in initial jobless claims last week despite an ongoing recovery in the U.S. employment market. The Labor Department said about 402,000 Americans filed new claims for unemployment benefits, up 37,000 from the previous week. Traders also digested the Federal Reserve’s latest economic projections on Wednesday, with officials forecasting two interest rate hikes by the end of 2023.
“We see four major factors currently constraining labor supply: lingering virus fear, especially for workers in high-contact industries; persistent child care disruptions; early retirements cushioned by lofty 401(k) accounts; and the disincentive from elevated replacement income from jobless benefits,” analysts at Oxford Economics wrote in a note. “Importantly, this combination of constraints weighs more than the parts.”
European stocks were slightly lower, with the Stoxx Europe 600 closing down 0.1 percent. Markets in Asia were mixed.
Oil prices fell, with West Texas Intermediate crude, the U.S. benchmark, declining 1.5 percent to about $71.04.
The yield on 10-year U.S. Treasury notes declined to 1.52 percent. On Wednesday, the yield had jumped eight basis points, or 0.08 percentage points, to 1.58 percent after the projections by Fed policymakers were published.
Credit…Doug Mills/The New York Times
The United States and Britain have agreed to end a long-running trade spat over aircraft subsidies, and not impose certain retaliatory tariffs for five years, the nations announced on Thursday.
The tariffs related to a 17-year dispute between the United States and the European Union over subsidies for Boeing and Airbus, and over much of that time, Britain was a member of the bloc. The agreement mirrors one reached between the United States and European Union on Tuesday.
The pact announced on Thursday also said the two nations would work together to “address the challenge posed by nonmarket economies, such as China” in the civil aircraft sector. China has built a state-sponsored aerospace manufacturer, Commercial Aircraft Corporation of China, to compete with Boeing and Airbus.
Britain and the United States agreed to explore a coordinated approach to screen investments in the aircraft industry financed by China and other nonmarket economies. These investments could lead to “appropriation of critical technologies,” and potential national security risks, a joint statement published by the British government on Thursday said. The two countries also plan to cooperate on an approach to screen investments by British or U.S. companies in China, like joint ventures and the development of production facilities.
Last week, President Biden and Prime Minister Boris Johnson of Britain revived the 80-year-old Atlantic Charter to signal their eagerness to work together on major issues including climate change, cybersecurity and autocratic governments such as China.
The agreement to end of the aircraft dispute “strengthens our special relationship and builds on the revitalized Atlantic Charter, which affirms our ongoing commitment to sustaining and defending our enduring values against new and old challenges,” the joint statement said.
In March, the United States suspended retaliatory tariffs against Britain for four months to work out a longer-term solution to the aircraft dispute. This would support British producers in several industries, but especially Scotch whisky, which faced a 25 percent tariff in the United States.
Britain had already suspended its own retaliatory tariffs in January, after it left the European Union’s single market and customs union. This decision essentially separated Britain from the dispute between the European Union and the United States, as the British government was trying to smooth over its relationship with the new Biden administration, with the eventual goal of securing a free-trade agreement.
Kroger’s digital sales increased 16 percent in the three months through May 22, from a year earlier, as it continued to benefit from the e-commerce boom propelled by the pandemic. Compared with prepandemic sales in 2019, digital sales more than doubled, the Cincinnati based company said. Total company sales were $41.3 billion in the first quarter, compared to $41.5 billion for the same period last year.
Wise, a British financial technology company focused on cross-border payments, said it would go public via a direct listing on the London Stock Exchange. The company, which said it had been profitable since 2017, added that it would use a dual-class share structure giving the founders greater voting rights. It’s a win from the British government which has been trying to attract more large tech companies to list in London instead of New York, especially since Brexit has eroded some of the activity of this financial center.
A group of union employees at The New Yorker and two other publications, Ars Technica and Pitchfork, has reached a deal with their parent company, Condé Nast. The deal includes base pay of $55,000 for employees at all three unions, rising to $60,000 by April 2023. Under the agreement, many employees at the three publications will receive wage increases of at least 10 percent, the unions said in a statement. The agreement includes a cap on increases for health care costs and defined working hours. Last week, The New Yorker Union unveiled a website including the statement that it was “on the verge of a strike.”
Today in the On Tech newsletter, Shira Ovide writes that we need a vigorous debate about what Americans might gain or lose if government officials force changes to technology services and companies. But fearmongering over China is standing in the way of such a debate.