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Business Updates: Global Markets Are Calm in Wake of Russia Sanctions

Feb 23, 2022 8:32PM

The Starbucks Workers United headquarters in Buffalo. Workers at more than 100 stores nationwide have filed for union elections.

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The Starbucks Workers United headquarters in Buffalo. Workers at more than 100 stores nationwide have filed for union elections.
The Starbucks Workers United headquarters in Buffalo. Workers at more than 100 stores nationwide have filed for union elections. Credit... Libby March for The New York Times

Noam Scheiber

The National Labor Relations Board dealt a blow to Starbucks’s legal strategy in response to a growing union campaign on Wednesday, rejecting the company’s argument that workers seeking to unionize in a geographic area must vote in a single union election.

In a ruling involving an election in Mesa, Ariz., the board noted the longstanding presumption that a single store is an appropriate unit for a vote — as union supporters have insisted.

Starbucks workers at more than 100 stores nationwide have filed for union elections and workers at two stores in Buffalo have already unionized.

Unions typically prefer smaller elections, which tend to increase their chances of winning, albeit on a smaller scale. Workers United, the union seeking to represent Starbucks employees, has complained that Starbucks has repeatedly resisted store-by-store elections despite gaining little traction on the issue as a way to delay votes and stop the union’s momentum.

Starbucks has argued that the elections should be marketwide because employees can work at multiple locations and because the stores in a market are managed as a relatively cohesive unit.

Before Wednesday’s ruling, the board had been unmoved by that argument in Buffalo as well. But unlike the earlier ad hoc decision in Buffalo, the action in the Arizona case sets a binding precedent and will likely make it more difficult for Starbucks to raise such objections going forward.

Nonetheless, the company indicated it would continue to press the issue. “Our position since the beginning has been that all partners in a market or district deserve the right to vote on a decision that will impact them,” Reggie Borges, a Starbucks spokesman, said in a statement, using the company’s term for its employees. “We will continue to respect the N.L.R.B.’s process and advocate for our partners’ ability to make their voices heard.”

In the short term, the board decision means that a vote count at a Starbucks store in Mesa can go forward after being postponed last week.

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Former President Donald J. Trump rallied supporters in Conroe, Texas, last month.

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Former President Donald J. Trump rallied supporters in Conroe, Texas, last month.
Former President Donald J. Trump rallied supporters in Conroe, Texas, last month. Credit... Meridith Kohut for The New York Times

Matthew Goldstein

The rollout of Truth Social, former President Donald J. Trump’s social media alternative to Twitter, has gotten off to a slow start.

On Wednesday morning, Mr. Trump’s account on the app, available free on Apple’s App Store since Monday, had just under 50,000 followers. That is a far cry from the tens of millions of followers he had on Twitter before the social media platform barred him last year after some of his supporters attacked the Capitol.

Mr. Trump’s account still has a single post, which the company calls “truths” as opposed to “tweets.”

The official debut of Truth Social on Monday was marred by error messages and a long waiting list for people who had already signed up to download the app. (This reporter was at 94,000 on the list but was able to download the app on Tuesday.)

Technical glitches for new apps are not uncommon, and the parent company, Trump Media Technology Group, had said it didn’t expect the new platform to be fully operational before the end of March. Truth Social posted a message from its own account that said “our team is working as fast as possible.”

The app’s glitchy start didn’t appear to have deterred investors, who continue to push up the share price of Digital World Acquisition, the special purpose acquisition company that Trump Media announced plans to merge with in October. On Tuesday, Digital World’s stock rose 14 percent to close at just over $96 a share.

Digital World has become the best performing SPAC — a kind of company that goes public first, raising money from investors to buy a private company. The stock has continued to rise even in the face of regulatory investigations into how exactly Digital World’s deal with Trump Media came about.

Because of an investigation by the Securities and Exchange Commission, it is unclear when the merger will close. If and when it does, Trump Media will gain access to nearly $1.3 billion in cash, which would help build its social media business.

Didier Reynders, the European Union’s commissioner for justice: “We can no longer turn a blind eye.”

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Didier Reynders, the European Union’s commissioner for justice: “We can no longer turn a blind eye.”
Didier Reynders, the European Union’s commissioner for justice: “We can no longer turn a blind eye.” Credit... John Thys/Agence France-Presse — Getty Images

Large companies operating in the European Union could be held responsible for environmental violations or human rights abuses committed by businesses in their supply chains under a law proposed on Wednesday by the European Commission, the bloc’s administrative arm.

“We can no longer turn a blind eye on what happens down our value chains,” said Didier Reynders, the European Union’s commissioner for justice.

Under the legislation, known as a due diligence law, businesses would need to establish regulations to detect, prevent and mitigate breaches of human rights, such as child labor, as well as environmental hazards in their supply chains. National governments would define the financial penalties for companies violating the rules.

Victims could sue for compensation in domestic courts of E.U. member nations, even if the harm occurred outside the bloc.

The commission proposed the rules after some member nations, including Germany and France, introduced different versions of due diligence law at the national level.

The legislation will now be discussed by the European Parliament and the 27 national governments, with all parties able to modify the language. The final draft will require passage by the E.U. lawmakers and member nations. The whole process could take a year or more.

The proposal would initially apply to companies with more than 500 employees and annual revenue over 150 million euros (about $170 million), a group that includes about 10,000 E.U. businesses, about 1 percent of the total. Around 2,000 companies based outside the bloc but doing business in the European Union, amounting to an annual revenue of more than €150 million, would also be covered. After two years, the range would be expanded to include smaller businesses in so-called high-impact sectors, such as textiles, food products and mining.

Businesses expressed concern over the proposal.

“It is unrealistic to expect that European companies can control their entire value chains across the world,” said Pierre Gattaz, president of BusinessEurope, a trade organization. “Ultimately these proposals will harm our companies’ ability to remain competitive worldwide.”

But Richard Gardiner of Global Witness said the legislation had the potential to become “a watershed moment for human rights and the climate crisis,” if the European Union resisted efforts to water down the proposed measures.

We’ve been investigating big corporations for decades, and when we reveal the harm they’re causing to people and planet, the response is invariably the same: ‘We weren’t aware,’” Mr. Gardiner said. “Today’s proposal from the commission may make that response illegal.”

But some analysts remained skeptical, pointing out that the commission’s final proposal, which was delayed several times, is much less ambitious than what was initially planned.

“This outcome is the result of an unprecedented level of corporate lobbying,” said Alberto Alemanno, a professor of European Union law at the business school HEC Paris. He said the final result “was downgraded into yet another narrow piece of tick-the-boxes compliance law.”

Julia Linares Sabater, a senior officer at the WWF European Policy Office, said the businesses affected “represent a drop in the ocean of the E.U.’s total economy.”

“The E.U. needs to be far more ambitious to successfully tackle the climate and biodiversity crises,” she added.

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Stocks fell again on Wednesday, pushing further into correction territory, as investors responded to the coordinated sanctions Western countries imposed on Russia and the Pentagon’s assessment that a full-scale military assault on Ukraine was most likely imminent.

The SP 500 fell 1.7 percent in afternoon trading, reversing earlier gains and adding to Tuesday’s drop of 1 percent. The Nasdaq composite was down 2.3 percent. And the Stoxx Europe 600 index, which had spent most of the day in positive territory, ended down 0.3 percent.

Tuesday’s trading saw the SP 500 drop as much as 1.9 percent. Even after rebounding off those lows by the end of the day, the index still closed more than 10 percent off its January peak. A drop that big is known on Wall Street as a correction and generally indicates a marked shift in sentiment among investors.

Russia is under increasing pressure as the United States and its allies have rolled out penalties in response to the crisis in Ukraine. The global response began Tuesday in an effort to deter President Vladimir V. Putin of Russia from further aggression. Germany halted a key natural gas pipeline for Russia, while Britain imposed sanctions on several Russian banks and three Russian billionaires.

Oil prices edged lower after they surged to nearly $100 a barrel during Tuesday’s session after Russia ordered troops into eastern Ukraine. On Wednesday, Brent crude was about 0.5 percent lower, at about $96.35 a barrel.

Correction: Feb. 23, 2022

An earlier version of this article misstated the last time stocks fell into a correction. It was February 2020 not February 2000. 

The Salton Sea in California, which is being considered for mining as in the rush to find new sources of metals and minerals needed for electric cars and renewable energy.

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The Salton Sea in California, which is being considered for mining as in the rush to find new sources of metals and minerals needed for electric cars and renewable energy.
The Salton Sea in California, which is being considered for mining as in the rush to find new sources of metals and minerals needed for electric cars and renewable energy. Credit... Gabriella Angotti-Jones for The New York Times

Ana Swanson

President Biden announced several public and private investments on Tuesday aimed at expanding the domestic supply of minerals that are needed to make electric vehicles, computers, solar panels and other products but are currently sourced from overseas.

“We can’t build a future that’s made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow,” Mr. Biden said at a White House event.

The initiative is part of a White House push to make the United States less dependent on foreign products, given supply chain disruptions that have resulted in shortages of goods, helping to fuel inflation. The investments announced on Tuesday were aimed at boosting domestic supplies of minerals — including lithium, cobalt and rare earths, many of which typically come from China — that are used in a wide array of technologies.

The Pentagon awarded MP Materials, an American mining company, $35 million to expand a rare earths project in Mountain Pass, Calif., with the company expected to invest another $700 million in the supply chain by 2024. The project would establish the first complete supply chain within the United States for permanent magnets, which are used in electric vehicle motors, wind turbines and defense applications, according to a White House statement.

Berkshire Hathaway Energy Renewables announced plans to break ground this spring on a California facility to test the commercial viability of a process that extracts lithium from geothermal brine. If the test is successful, the company could start commercial production of lithium hydroxide and lithium carbonate by 2026.

Redwood Materials said it would discuss a pilot project with Ford Motor and Volvo to extract lithium, cobalt, nickel and graphite from retired lithium-ion batteries used in electric vehicles, according to the White House statement.

The Biden administration has warned that a dependence on foreign lithium, cobalt, nickel and other minerals, particularly from China, poses a threat to America’s economy and security. It has promised to expand domestic supplies of semiconductors, batteries and pharmaceuticals, as well as the mining, processing and recycling of critical minerals.

The infrastructure law passed last year contained funding for projects to recover rare earths and other critical minerals from coal ash and mine waste, refine battery materials, and recycle electric vehicle batteries.

Mr. Biden said Tuesday that the United States had to import close to 100 percent of the critical minerals it needed from other countries, particularly China, Australia and Chile. “I was determined to change that, and we’ve seen what happens when we become dependent on other countries for essential goods,” he said.

The New York Sun was revived in 2002 and shuttered again in 2008.

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The New York Sun was revived in 2002 and shuttered again in 2008.
The New York Sun was revived in 2002 and shuttered again in 2008. Credit... Hiroko Masuike for The New York Times

Azi Paybarah

It said creatures were living on the moon, argued that Santa Claus is real and inspired Marlon Brando to plead, “I coulda been a contender.”

The New York Sun, which published a paper for more than 100 years before closing in 1950 and was briefly revived in the 2000s, is back as an online-only publication.

“We are a newspaper for this very moment,” Dovid Efune, The Sun’s publisher, said in a statement. Mr. Efune, a former top editor of The Algemeiner, a Jewish-interest print and online publication based in New York, bought The Sun in October from Seth Lipsky, who ran it from 2002 through 2008 and will do so again.

A former Wall Street Journal reporter and editorial writer, Mr. Lipsky in 1990 established The Forward, an English-language offshoot of the venerable Yiddish-language newspaper, and served as its editor for 10 years.

By 2001, Mr. Lipsky was raising funds to introduce a new version of The New York Sun, which debuted in 2002 and shuttered in 2008. That year, The New York Times described it as “an audacious bet that there was room for a cerebral, politically conservative daily in the already crowded New York City newspaper market.”

The Sun has made splashes from its inception. It debuted in 1833 and two years later began publishing a series of bogus articles about creatures found living on the moon. Later, in 1897, it answered a letter from a young reader with what became one of journalism’s most famous editorials: “Yes, Virginia, there is a Santa Claus.”

The 1954 film “On the Waterfront” (in which Mr. Brando says, “I coulda been a contender”) was inspired by The Sun’s coverage of labor union corruption. And the final scene of the 2006 film “The Devil Wears Prada” was filmed inside The Sun’s office.

Mr. Efune praised The Sun last year for “practicing precisely the form of journalism that’s so lacking in today’s media environment: values-based, principled and constitutionalist.”

Subscriptions to The Sun — which cost a penny when it debuted on newsstands in 1833 — will range from $12 a month for articles and access to comments, to $25 a month for audio, video and crossword puzzles, to $2,500 annually, for “invitations to regular phone briefings and exclusive events,” according to a company statement.

The Stellantis booth at CES in Las Vegas on Jan. 26.

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The Stellantis booth at CES in Las Vegas on Jan. 26.
The Stellantis booth at CES in Las Vegas on Jan. 26. Credit... Joe Buglewicz/Associated Press

Neal E. Boudette

The automaker Stellantis said its profit more than doubled in 2021 to 13.3 billion euros, a result of cost savings and higher car prices that more than offset disruptions to production and sales caused by the global shortage of computer chips.

The company, which was formed a year ago by the merger of Fiat Chrysler and France’s Peugeot, said revenue for the year was €149 billion ($168 billion). The two companies had combined revenue of €134 billion in 2020.

In a conference call with analysts, the company’s chief executive, Carlos Tavares, said Stellantis was watching the tension between Ukraine and Russia closely. The automaker has a plant in Russia, and Mr. Tavares said it was unclear how the economic sanctions imposed by Western nations on Russia would affect it.

The sanctions are intended to punish President Vladimir Putin of Russia for recognizing two breakaway regions of eastern Ukraine and deter him from invading Ukraine.

The Stellantis plant, in Kaluga, about 165 miles southwest of Moscow, makes small delivery vans and has the capacity to make up to 125,000 vehicles a year. Stellantis has been planning to export vans from the plant.

“If we cannot supply the plant, if that is the reality, we have either to transfer that production to other plants or just limit ourselves,” Mr. Tavares said.

Stellantis is the fourth-largest automaker in the world and sells cars under 14 brands, including Chrysler, Ram and Jeep in the United States and Peugeot, Opel and Fiat in Europe.

Next week, Mr. Tavares is scheduled to outline a long-term strategic plan for the company, which will include the development of more than two dozen electric models over the next several years.

The automaker’s 2021 profit was a big improvement from 2020, when Fiat Chrysler’s and Peugeot’s combined profit would have totaled just €4.8 million. In 2021, Stellantis benefited from €3.2 billion in cost savings made possible by the merger, the company said.

Stellantis sold 6.1 million cars and light trucks last year, up from 5.9 billion in 2020. Its North American operations generated about half of the company’s revenue and €11.3 billion in pretax profit.

“The current conditions are very positive for margins,” Mr. Tavares said.

A coal-fired power station in Gelsenkirchen, Germany, in January.

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A coal-fired power station in Gelsenkirchen, Germany, in January.
A coal-fired power station in Gelsenkirchen, Germany, in January. Credit... Martin Meissner/Associated Press

A renewed emphasis on energy independence and national security may encourage policymakers to backslide on efforts to decrease the use of fossil fuels that pump deadly greenhouse gases into the atmosphere.

Already, skyrocketing prices have spurred additional production and consumption of fuels that contribute to global warming. Coal imports to the European Union in January rose more than 56 percent from the previous year, Patricia Cohen reports for The New York Times.

In Britain, the Coal Authority gave a mine in Wales permission last month to increase output by 40 million tons over the next two decades. In Australia, there are plans to open or expand more coking coal mines. And China, which has traditionally made energy security a priority, has further stepped up its coal production and approved three new billion-dollar coal mines this week.

“Get your rig count up,” Jennifer Granholm, the U.S. energy secretary, said in December, urging American oil producers to raise their output. Shale companies in Oklahoma, Colorado and other states are looking to resurrect drilling that had ceased because there is suddenly money to be made. And this month, Exxon Mobil announced plans to increase spending on new oil wells and other projects.

Ian Goldin, a professor of globalization and development at the University of Oxford, warned that high energy prices could lead to more exploration of traditional fossil fuels. “Governments will want to deprioritize renewables and sustainables, which would be exactly the wrong response,” he said.

Europe’s transition to sustainable energy has always been an intricate calculus. READ THE FULL ARTICLE →

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Credit Credit... By Shira Inbar

Today in the On Tech newsletter, Shira Ovide writes about a pandemic surprise: Physical stores beat online shopping in 2021.

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