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Irvine-based EV maker Rivian gets $5-billion lifeline from Volkswagen

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Irvine-based EV maker Rivian gets $5-billion lifeline from Volkswagen

Irvine-based Rivian Automotive got a big financial boost on Tuesday, as Volkswagen agreed to invest up to $5 billion in a joint venture with the struggling manufacturer of electric trucks.

Under a partnership announced by the companies, the German automaker will provide $1 billion initially and as much as $4 billion more over time.

The infusion will give VW the ability to tap the company’s technology to develop “next generation” battery-powered vehicles and software.

The surprise investment comes during a tough time for the electric vehicle market, which has posed economic headwinds for Rivian and other EV makers.

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With their sleek design, Rivian trucks and sport utility vehicles initially drew plenty of interest among investors, fueling a massively successful initial public offering of stock in 2021; the company ended its first day of trading valued at nearly $88 billion. Amazon.com is Rivian’s largest shareholder.

But analysts said some car buyers were put off by the high price of Rivian’s latest offering of vehicles — the company’s R1T electric pickup truck starts at nearly $70,000, while its R1S SUV starts at almost $75,000.

Rivian reported a net loss of $1.52 billion for the three-month period that ended Dec. 31, compared with $1.72 billion during the same period a year earlier.

Signs of stress mounted. In March, Rivian postponed plans to build a new $5-billion manufacturing plant in Georgia to save money amid heavy losses.

A month earlier, Rivian announced a 10% cut to its workforce and lower production expectations.

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Last week another local EV manufacturer — Fisker Group Inc. of Manhattan Beach — filed for Chapter 11 bankruptcy protection after it failed to secure financing from undisclosed automakers.

Early this year, Apple pulled the plug on its self-driving electric vehicle program, reportedly after spending $10 billion over a decade.

And Lucid Motors, a maker of luxury electric vehicles in the Bay Area city of Newark, received a $1-billion infusion last month from an affiliate of the Saudi sovereign wealth fund — the kind of big backer that Fisker didn’t have.

Rivian’s shares, which were pummeled earlier this year, jumped 30% in extended trading on Tuesday. The shares closed at $11.96.

Tesla Inc., the biggest player in the business, also has been squeezed by weak sales and declining profits. The company said in April that it would lay off more than 10% of its workforce.

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Bloomberg News contributed to this report.

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Sierra Club workers vote to authorize strike amid layoffs, allegations of mismanagement

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Sierra Club workers vote to authorize strike amid layoffs, allegations of mismanagement

Unionized workers at the Sierra Club, a leading environmental organization, have voted overwhelmingly to authorize a potential strike amid layoffs and allegations of financial mismanagement.

The vote, in which 87% of about 180 staffers who cast ballots authorized union leaders to call a strike, raises the likelihood of a work stoppage at the historic institution, which has been roiled by downsizing efforts as fundraising has plummeted.

“What has intensified over the last year is a lack of reciprocity, respect and care for members of the union and a dismissal of their humanity,” said Cecilia Garcia-Linz, who has worked at the Sierra Club for 13 years and serves as president of the Progressive Workers Union, which represents Sierra Club employees. “Just because we love the planet and enjoy the work we do doesn’t mean we should forgo wages or other rights they are trying to take away.”

As contract talks have dragged on for the past several months, the union has filed claims of unfair labor practices with the National Labor Relations Board alleging that Sierra Club leaders have deliberately delayed bargaining and retaliated against union leaders by targeting them for layoffs, as well as unlawfully limited employees’ ability to speak out about their workplace conditions, among other charges.

Garcia-Linz said the union plans to call a strike as soon as Tuesday if progress isn’t made on contract negotiations and union leaders who have been laid off aren’t reinstated. A strike would be undertaken by the roughly 200 unionized workers in the Sierra Club’s national organization, not staffers employed by its various local chapters.

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Sierra Club spokesperson Jonathon Berman called the union’s allegations “baseless” and said the organization has offered robust pay raises and expanded benefits in negotiations.

“A common tactic from PWU National leadership has been to allege union busting and personally attack individuals within the organization whenever leadership cannot agree to one of their demands,” Berman said in an email.

The Sierra Club experienced a boost in fundraising and increased staffing significantly when former President Trump was in office as it and other groups positioned themselves as a line of defense against Trump administration policies widely viewed as being harmful to the environment. After Trump lost his reelection bid, fundraising fell and the organization has been forced to return to pre-2017 staffing levels, Berman said.

Berman said that after layoffs of about 70 employees — about 10% of the total workforce — and eliminating more than 80 vacant positions, the company is now on track to hit its revenue goals for the year. A strike, he added, would “undermine the Sierra Club’s operations and ability to fundraise.”

The total number of employees in the Sierra Club’s chapters and national staff are down from a high of 913 in 2022 to 718 this year, according to a May budget report compiled by the organization.

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A bargaining session with an outside mediator is scheduled for Monday, Berman said.

Much of the union’s ire has been focused on Sierra Club Executive Director Ben Jealous, who took over the organization last year after it went through a wrenching internal reckoning over racist views promoted by its founder, John Muir, more than a century ago and allegations of abuse by a former senior employee that arose out of the #MeToo movement.

Several workers said they were initially excited about the hiring of Jealous, who professed pro-labor sentiment on a listening tour at the beginning of his tenure, but the relationship began to sour when he announced deep cuts to staff and an organizational overhaul in April 2023 that he said would mitigate a budget deficit he had inherited.

In an interview this month, Jealous said the Sierra Club’s leadership was “being extremely transparent,” and that people may not have realized how precarious the group’s finances had been.

“These are the hard decisions that you have to make when you lead a more than century-old institution and you’re committed to it having a future as long as its past,” he said.

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In early June, unionized workers sent a letter to the Sierra Club’s board of directors informing them they had issued a vote of no confidence in the organization’s leadership, with more than 90% of 330 union-represented workers approving the rebuke.

In response to union allegations that Jealous has not reigned in spending and has hired friends for management posts, Berman said that travel budgets have been reduced and that many vacant senior-level positions had needed to be filled.

“Given the looming budget crisis Ben Jealous inherited, we moved quickly to fill those key roles with seasoned leaders,” Berman said. “Having worked with Ben Jealous before should not be a disqualifier.”

Erica Dodt, an elected member of the union’s executive committee and a bargaining team member who is about eight months pregnant, was laid off last month. She said that, along with concerns over losing her healthcare benefits, she worries that the turmoil is coming during a year when Trump is seeking reelection.

And Jennifer Cardenas, who worked as a Sierra Club field organizer in the Inland Empire for about two years before being laid off, said her team was hit hard by layoffs last year. The cuts, she said, had unraveled the team’s work on environmental justice issues in communities of color.

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“It’s really disheartening,” she said.

Staff writer Sammy Roth contributed to this report.

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Netflix adds stages to New Mexico production hub as part of major expansion project

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Netflix adds stages to New Mexico production hub as part of major expansion project

Netflix has expanded its New Mexico production facility to include four new soundstages, in a move that increases the streaming giant’s robust presence in the state with its film and television productions.

In addition to the stages, the expansion encompasses three mills, a production office, two stage support buildings and two backlot spaces spanning 108 acres on the property near Albuquerque, the streaming giant announced Thursday.

The Los Gatos, Calif.-based entertainment company acquired what was then known as ABQ Studios in 2018 and has shot several films and TV series in the region, such as supernatural thriller “Stranger Things” and gritty western “The Harder They Fall.” A representative for Netflix declined to comment on the cost of the new additions.

Thursday’s grand opening is part of a larger expansion project by Netflix. In 2020, the streamer unveiled plans to grow its New Mexico campus to include 10 new stages, postproduction facilities, offices, mills, backlots and other infrastructure.

“New Mexico has proven to be an exceptional production hub for us,” Ted Sarandos, co-chief executive of Netflix, said in a statement. “It offers a rich tapestry of landscapes, a talented workforce, and a supportive community. … Our continued investment in this region underscores our commitment to the local community and New Mexico’s vibrant cultural and economic landscape.”

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The streamer isn’t the only entertainment company that has used the facilities at what is now Netflix Albuquerque Studios. Before the company took over, non-Netflix productions filmed at least partially on the Mesa del Sol lot include Disney’s “The Avengers”; Lionsgate’s “Sicario”; and AMC Networks’ “Breaking Bad,” produced by Sony Television.

Productions have been flocking to New Mexico in recent years to take advantage of its tax incentive program. Film and TV tax credits in the state range from 25% to 40% of direct production and postproduction costs. In part because of generous tax incentives offered in New Mexico, Georgia and other filming hot spots, Los Angeles continues to contend with the threat of runaway production.

Netflix alone has invested nearly $575 million in New Mexico productions and hired more than 4,000 local cast and crew members since purchasing ABQ Studios, the company said. New Mexico-based shoots for the company have included “Stranger Things,” “The Harder They Fall,” “Army of the Dead” and “El Camino: A Breaking Bad Movie.”

While introducing the latest Albuquerque Studios expansion on Thursday, Netflix teased three upcoming projects shooting at the facility: western romance “Ransom Canyon,” medical procedural “Pulse” and supernatural series “The Boroughs.”

The streamer also pledged its “commitment to sustainability,” noting that the revamp incorporates solar and battery-storage systems, geothermal heating and cooling, electric appliances and 50 electric vehicle chargers.

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In big win for business, Supreme Court dramatically limits rulemaking power of federal agencies

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In big win for business, Supreme Court dramatically limits rulemaking power of federal agencies

In a major victory for business, the Supreme Court on Friday gave judges more power to block new regulations if they are not explicitly authorized by federal law.

The court’s conservative majority overturned a 40-year-old rule that said judges should defer to agencies and their regulations if the law is not clear.

The vote was 6 to 3, with the liberal justices dissenting.

The decision signals a power shift in Washington away from agencies and in favor of the businesses and industries they regulate. It will give business lawyers a stronger hand in challenging new regulations.

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At the same time, it deals a sharp setback to environmentalists, consumer advocates, unions and healthcare regulators. Along with the Biden administration, they argued that judges should defer to agency officials who are experts in their fields and have a duty to enforce the law.

This deference rule, known as the Chevron doctrine, had taken on extraordinary importance in recent decades because Congress has been divided and unable to pass new laws on pressing matters such as climate change, online commerce, hospitals and nursing care and workplace conditions.

Instead, new administrations, and in particular Democratic ones, sought to make change by adopting new regulations based on old laws. For example, the climate change regulations proposed by the Obama and Biden administrations were based on provisions of the Clean Air Act of 1970.

But that strategy depended on judges being willing to defer to the agencies and to reject challenges from businesses and others who maintained the regulations went beyond the law.

The court’s Republican appointees came to the case skeptical of the Chevron doctrine. They fretted about the “administrative state” and argued that unelected federal officials should not be afforded powers typically reserved for lawmakers.

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“Chevron is overruled,” Chief Justice John G. Roberts Jr. wrote Friday for the majority. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Judges “may not defer to an agency interpretation of the law simply because a statute is ambiguous,” he added.

In dissent, Justice Elena Kagan said the Chevron rule was crucial “in supporting regulatory efforts of all kinds — to name a few, keeping air and water clean, food and drugs safe, and financial markets honest. And the rule is right,” she said. It now “falls victim to a bald assertion of judicial authority. The majority disdains restraint, and grasps for power.” Justices Sonia Sotomayor and Ketanji Brown Jackson agreed.

Senate Majority Leader Charles E. Schumer (D-N.Y.) voiced outrage. “In overruling Chevron, the Trump MAGA Supreme Court has once again sided with powerful special interests and giant corporations against the middle class and American families. Their headlong rush to overturn 40 years of precedent and impose their own radical views is appalling.”

Experts said the impact of the ruling may not be clear for some time.

Washington attorney Varu Chilakamarri said the ruling means “industry’s interpretation of the law will be viewed as just as valid as the agency’s. It will be some time before we see the effects of this decision on the lawmaking process, but going forward, agency action will be under even greater scrutiny and there will likely be more opportunities for the regulated community to challenge agency rules and adjudications.”

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In decades past, the Chevron doctrine was supported by prominent conservatives, including the late Justice Antonin Scalia. In the 1980s, he believed it was better to entrust decisions about regulations to agency officials who worked for the president rather than to unelected judges. He was also reflecting an era when Republicans, from Richard Nixon and Gerald Ford to Ronald Reagan and George H.W. Bush, controlled the White House.

But since the 1990s, when Democrat Bill Clinton was president, conservatives have increasingly complained that judges were rubber-stamping new federal regulations.

Business lawyers went in search of an attractive case to challenge the Chevron doctrine, and they found it in the plight of four family-owned fishing boats in New Jersey.

Their case began with a 1976 law that seeks to conserve the stocks of fish. A regulation adopted by the National Marine Fishery Service in 2020 would have required some herring boats to not only carry a federal monitor on board, but also pay the salary of the monitor. Doing so was predicted to cost more than $700 a day, or about 20% of what the fishing boats earned on average.

The regulation had not taken effect, but it was upheld by a federal judge and the D.C. Circuit Court’s appellate judges who deferred to the agency’s interpretation of the law.

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