Gigacasting 2.0: Tesla reinvents carmaking with quiet breakthrough

 Tesla Gigafactory in Gruenheide

Thu, September 14, 2023 

By Norihiko Shirouzu

AUSTIN, Texas (Reuters) - Tesla has combined a series of innovations to make a technological breakthrough that could transform the way it makes electric vehicles and help Elon Musk achieve his aim of halving production costs, five people familiar with the move said.

The company pioneered the use of huge presses with 6,000 to 9,000 tons of clamping pressure to mold the front and rear structures of its Model Y in a "gigacasting" process that slashed production costs and left rivals scrambling to catch up.

In a bid to extend its lead, Tesla is closing in on an innovation that would allow it to die cast nearly all the complex underbody of an EV in one piece, rather than about 400 parts in a conventional car, the people said.

The know-how is core to Tesla's "unboxed" manufacturing strategy unveiled by Chief Executive Musk in March, a linchpin of his plan to churn out tens of millions of cheaper EVs in the coming decade, and still make a profit, the sources said.

While Tesla has said its unboxed model involves producing large sub-assemblies of a car at the same time and then snapping them together, the size and make-up of the modular blocks is still the subject of speculation.

Terry Woychowski, president of U.S. engineering company Caresoft Global, said if Tesla managed to gigacast most of the underbody of an EV, it would further disrupt the way cars are designed and manufactured.

"It is an enabler on steroids. It has a huge implication for the industry, but it's a very challenging task," said Woychowski, who worked for U.S. automaker GM for more than three decades. "Castings are very hard to do, especially the bigger and the more complicated."

Two of the sources said Tesla's previously unreported new design and manufacturing techniques meant the company could develop a car from the ground up in 18 to 24 months, while most rivals can currently take anywhere from three to four years.

The five people said a single large frame - combining the front and rear sections with the middle underbody where the battery is housed - could be used in Tesla's small EV which it aims to launch with a price tag of $25,000 by the middle of the decade.

Tesla was expected to make a decision on whether to die cast the platform in one piece as soon as this month, three of the sources said, though even if they do press ahead the end product could change during the design validation process.

Neither Tesla nor Musk responded to questions from Reuters for this story.

3D PRINTING AND SAND

The breakthrough Tesla has made centres on the how the giant molds for such a large part are designed and tested for mass production, and how casts can incorporate hollow subframes with internal ribs to cut weight and boost crashworthiness.

In both cases the innovations, developed by design and casting specialists in Britain, Germany, Japan and the United States, involve 3D printing and industrial sand, the five people said. All spoke to Reuters on condition of anonymity because they are not authorised to speak to the media.

So far, automakers have shied away from casting ever-bigger structures because of the "gigacast dilemma": creating molds to make parts of 1.5 metres squared or more boosts efficiency but is expensive and comes with myriad risks.

Once a large metal test mold has been made, machining tweaks during the design process could cost $100,000 a go, or redoing the mold altogether might come to $1.5 million, according to one casting specialist. Another said the whole design process for a large metal mold would typically cost about $4 million.

That has been deemed prohibitive by automakers - especially as a design might need half a dozen tweaks or more to achieve a perfect die from the perspective of noise and vibration, fit and finish, ergonomics and crashworthiness, the sources said.

But Musk's vision from the start was to find a way to cast the underbody in one piece, despite the risks, the sources said.

To overcome the obstacles, Tesla turned to firms that make test molds out of industrial sand with 3D printers. Using a digital design file, printers known as binder jets deposit a liquid binding agent onto a thin layer of sand and gradually build a mold, layer by layer, that can die cast molten alloys.

According to one source, the cost of the design validation process with sand casting, even with multiple versions, is minimal - just 3% of doing the same with a metal prototype.

That means Tesla can tweak prototypes as many times as needed, reprinting a new one in a matter of hours using machines from companies such as Desktop Metal and its unit ExOne.

The design validation cycle using sand casting only takes to two to three months, two of the sources said, compared with anywhere from six months to a year for metal mold prototypes.

TAILOR-MADE ALLOYS

The subframes in a car underbody are typically hollow to save weight and improve crashworthiness. At the moment, they are made by stamping and welding multiple parts together leaving a void in the middle.

To cast subframes with hollows as part of one gigacasting, Tesla plans to place solid sand cores printed by the binder jets within the overall mold. Once the part has been cast, the sand is removed to leave the voids.

But despite that greater flexibility achieved in both the design process and the complexity of the large frames, there was still one more major hurdle to clear.

The aluminium alloys used to produce the castings behaved differently in sand and metal molds and often failed to meet Tesla's criteria for crashworthiness and other attributes.

The casting specialists overcame that by formulating special alloys, fine-tuning the molten alloy cooling process, and also coming up with an after-production heat treatment, three of the sources said. And once Tesla is happy with the prototype mold, it can then invest in a final metal one for mass production.

The sources said Tesla's upcoming small car has given it a perfect opportunity to cast an EV platform in one piece, mainly because its underbody is simpler,

The kind of small cars Tesla is developing – one for personal use and the other a robotaxi – don't have a big "overhang" at the front and the back, as there is not much of a hood or rear trunk.

"It's like a boat in a way, a battery tray with small wings attached to both ends. That would make sense to do in one piece," one person said.

The sources said, however, that Tesla still had to make a call on what kind of gigapress to use if it decides to cast the underbody in one piece - and that choice would also dictate how complex the car frame would be.

To punch out such large body parts fast, the people said Tesla would need new bigger gigapresses with massive clamping power of 16,000 tons or more, which would come with a hefty price tag and might need larger factory buildings.

Three of the five sources said one problem with presses using high clamping power, however, was that they cannot house the 3D printed sand cores needed to make hollow subframes.

The people said Tesla could solve these obstacles by using a different type of press into which molten alloy can be injected slowly - a method that tends to produce higher quality castings and can accommodate the sand cores.

But the process takes longer.

"Tesla could still choose high-pressure for productivity, or they could choose slow alloy injection for quality and versatility," one of the people said. "It's still a coin toss at this point."

(Editing by David Clarke)

Tesla's Carmaking 'Breakthrough' Also Comes With Plenty Of Downsides

In theory, casting an entire underbody in one piece could be revolutionary.

By
Collin Woodard
PublishedYesterday

Photo: Tesla

After previously announcing that it would be able to cast the front and rear subsections of the Model Y in a move to cut costs and reduce complexity a couple of years ago, it sounds like Tesla is close to another engineering breakthrough. Five people recently spoke with Reuters, claiming Tesla will soon be able to cast essentially the entire underbody in one piece. Theoretically, that would allow Tesla to develop a new vehicle in two years or less and cut costs even further, allowing it to actually sell that elusive $25,000 electric car we’ve been promised.

Terry Woychowski, president of the engineering company Caresoft Global and former General Motors employee, told Reuters that if Tesla could actually pull it off, it would be a huge deal. But even he wasn’t exactly quick to predict a rapid Tesla victory over legacy automakers.

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“It is an enabler on steroids. It has a huge implication for the industry, but it’s a very challenging task,” he told Reuters. “Castings are very hard to do, especially the bigger and the more complicated.”

To be fair to Tesla, it does sound like it’s made a number of breakthroughs. One downside to casting large pieces is that making changes to the test mold can be incredibly expensive. Smaller tweaks can reportedly easily cost $100,000, while redoing a mold could be more like $1.5 million. Considering it regularly takes several changes to get a design right, you’re spending a whole lot of money before you’ve even started production. But Tesla found a company that uses sand to 3D-print molds.

One source told Reuters that using these sand-based molds would likely cost about three percent of the total cost of creating a traditional mold even with multiple tweaks. It could also speed up the process, cutting the time it takes to get the molds right from six months or a year to just a couple of months.

As great as that sounds, though, there’s also a downside. To cast these underbodies quickly, Tesla would need to use more powerful presses that are too strong for the sand-based molds. Alternatively, they could take a slower approach with less powerful presses that create higher-quality castings but can’t be done as quickly.

Assuming it all works, though, there’s another downside that we’ve already covered. Casting the underbody in one piece also essentially makes the car impossible to repair if it gets into a wreck. So you may be able to buy a $25,000 Tesla, but if you crash, you’ll probably have to go out and buy another $25,000 Tesla to replace it. And we can’t imagine insurance companies are going to be happy about that, so prepare to pay higher monthly premiums.

There’s also the risk of cracks forming in the metal, which Tesla previously claimed to have solved by creating a super special aluminum alloy that wouldn’t have that problem. Except, as at least one Model Y owner has already found out, that isn’t necessarily the case.

Now, it’s entirely possible that the photos shown above are the only example of cracks forming during manufacturing, and that owner just got unlucky. And it’s also entirely possible that Tesla has been able to tweak the alloy it plans to use to cast the underbody as one piece to ensure that doesn’t happen. But that doesn’t mean there isn’t real reason to be concerned here.

If Tesla can pull the whole thing off and do it correctly, it’ll be seriously impressive. But at the same time, it’s far too early to say that Tesla has revolutionized auto manufacturing — and also a little too early to start questioning why legacy automakers aren’t following Tesla’s lead. With so many challenges, risks and upfront costs, it’s no wonder they’re not exactly rushing to beat Tesla to the punch.

JALOPNIK

Latvia Gets New Prime Minister Evika Silina With Parliament Majority

Aaron Eglitis
Fri, September 15, 2023 




(Bloomberg) -- Latvia’s Evika Silina secured a parliamentary majority to become the Baltic nation’s new prime minister as she promised to bolster defense spending in the face of Russian military aggression.

Lawmakers in Riga voted 53-39 on Friday to install the new three-party coalition. Silina’s center-right New Unity party forged an alliance with the Union of Greens and Farmers and the center-left Progressives, potentially moving policy in the nation of 1.9 million to the left.

“As long as one of our neighbors is an aggressive state, Latvia’s government’s first priority will be security,” Silina, 48, told parliament ahead of the confirmation vote. Latvia has already pledged to spend 3% of its economic output on defense, above the NATO benchmark of 2%.

Silina becomes Latva’s second female prime minister. Along with Kaja Kallas of Estonia and Lithuania’s premier, Ingrida Simonyte, Silina’s ascent means that all three Baltic nations — which reclaimed their independence from the Soviet Union in the early 1990s — have a woman as head of government.

Silina succeeds Krisjanis Karins, who brought down the previous government last month after falling out with his nationalist coalition partners. Amid speculation that he’ll seek a high-level position in the European Union, Karins will become her foreign minister.

Latvia, a member of the European Union as well as NATO, has been one of the harshest critics of Russia’s invasion of Ukraine, supplying Kyiv with weapons and advocating for tougher sanctions against Moscow.

US may send limited number of ATACMS missiles to Ukraine — WSJ
The New Voice of Ukraine
Fri, September 15, 2023 

The launch of an ATACMS missile from the M270 MLRS in South Korea in 2017

The United States is nearing a decision on providing long-range ATACMS missiles to Ukraine, as reported by U.S. newspaper the Wall Street Journal on Sept. 15.

According to sources cited by the U.S. newspaper, the White House is reportedly reconsidering its plans to provide ATACMS missiles to Ukraine. This reconsideration may be influenced by concerns within the Pentagon regarding the potential depletion of U.S. missile stocks.

Read also: US leans towards giving Ukraine long-range missiles and cluster bombs — report

As a result, Washington might be inclined to approve the transfer of a restricted quantity of ATACMS missiles.

It is anticipated that the delivery of ATACMS missiles will be contingent on Ukraine’s commitment to refrain from using U.S. weaponry for offensive actions on the territory of Russia, which is considered the aggressor in this context, as reported by the Wall Street Journal.

Read also: Who is delaying transfer of F-16s and ATACMS missiles to Ukraine, and why — expert interview

U.S. officials have also mentioned that it will be “months” before Ukraine receives precision-guided GLSDB munitions with a range of approximately 145 kilometers.

“While ATACMS may not directly help Ukrainian forces break through the defense (constructed by Russian occupiers in southern Ukraine), officials hope they will enable Ukraine to strike certain logistical nodes and headquarters critical to the maintenance of the occupied Ukrainian territory,” the report stated.

Previously, UK newspaper the Financial Times, citing its own sources, reported that U.S. President Joe Biden is close to making a decision to provide Ukraine with long-range ATACMS missiles.

According to media reports, Ukrainian President Volodymyr Zelenskyy is scheduled to meet with Biden next week.

U.S. television news channel ABC News, citing its sources, indicated that the United States is likely to include ATACMS in a future military aid package to Ukraine.

According to CNN, discussions about sending ATACMS to Ukraine have intensified in recent weeks. However, the Pentagon has not officially confirmed that a decision on the delivery of ATACMS is any closer.

Exclusive-IMF to urge China to shift growth model towards consumption, Georgieva says

Updated Fri, September 15, 2023 

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -The International Monetary Fund plans to tell China to boost weak domestic consumption, address its troubled real estate sector and rein in local government debt, problems that are dragging down both Chinese and global growth, IMF Managing Director Kristalina Georgieva told Reuters.

Georgieva said in an exclusive interview the messages will be delivered to Chinese authorities in a forthcoming IMF "Article IV" review of China's economic policies. The Fund will strongly urge Beijing to shift its growth model away from debt-fueled infrastructure investment and real estate, she said.

"Our advice to China is use your policy space in a way that helps you shift your growth model towards more domestic consumption," Georgieva said. "Because the traditional way of infrastructure, pumping in more money, in this current environment is not going to be productive."

China's aging population and falling productivity were playing a "suppressing role" in its growth rate, along with companies in the United States and Europe shifting supply chains away from China. China's problems in the real estate sector have also caused consumers to rein in spending, Georgieva said.

"We actually project that without structural reforms, medium term growth in China can fall below 4%," Georgieva said.

The IMF in July forecast China's 2023 growth rate at 5.2% and 4.5% in 2024, but warned it could be lower given the contraction in real estate.

Georgieva also said it was important for China to address consumer confidence in its real estate sector by financing the completion of apartments that buyers have already paid for, rather than bailing out troubled developers.

ANEMIC GLOBAL GROWTH

The IMF is preparing to issue a new set of global growth forecasts ahead of IMF and World Bank annual meetings Oct. 9-15. Georgieva said separately the institutions would decide on Monday whether to proceed with the meetings in earthquake-hit Morocco.

The new forecasts are expected to reflect concerns about anemic GDP growth around the world, as most large economies are still lagging pre-pandemic growth rates.

The United States is the only large economy to have recovered pre-pandemic growth, while China is four percentage points below pre-pandemic trends, Europe down two percentage points and the world down three percentage points.

With China generating about a third of global growth this year, its growth rate "matters to Asia, and it matters to the rest of the world," Georgieva said.

Asked about U.S. Commerce Secretary Gina Raimondo's recent comment that some U.S. firms viewed China as "uninvestible", Georgieva said: "There is some outflow from China. It is a trend that we need to carefully monitor, how it evolves over time."

She added there were some areas - including digital economy and green technologies - that remained attractive for investors.

She cautioned it was important to ensure China's big push on electric vehicles was not done using subsidies in a way that created unfair competition.

(Reporting by Andrea Shalal and David Lawder; Editing by Chris Reese and Tom Hogue)

FDI

A $188 Billion Exodus Shows China’s Heft Fading in World Markets

Jeanny Yu and Charlotte Yang
Fri, September 15, 2023 

(Bloomberg) -- A massive retreat of funds from Chinese stocks and bonds is diminishing the market’s clout in global portfolios and accelerating its decoupling from the rest of the world.

Foreign holdings of the nation’s equities and debt have fallen by about 1.37 trillion yuan ($188 billion), or 17%, from a December-2021 peak through the end of June this year, according to Bloomberg calculations based on the latest data from the central bank. That’s before onshore shares witnessed a record $12 billion outflow in August alone.

The exodus coincides with China’s economic slump due to years of Covid restrictions, a property market crisis, and persistent tensions with the West — concerns that have helped make the “avoid China” theme one of the biggest convictions among investors in Bank of America’s latest survey. Foreign fund participation in the Hong Kong stock market has dropped by more than a third since the end of 2020.

“Foreigners are just throwing in the towel,” said Zhikai Chen, head of Asia and global EM equities at BNP Paribas Asset Management. There’s anxiety about the property market and a slowdown in consumer spending, he said. “Disappointment on those fronts has led to a lot of foreign investors rethinking their exposure.”

While China’s weakness was once seen as dragging down the rest of the world, particularly the emerging-markets group, that has clearly not been the case this year. Down about 7% in 2023, the MSCI China Index is staring at a third straight year of losses that will mark the longest losing streak in over two decades. The broader MSCI Emerging Markets Index is up 3% as investors chase returns in other places like India and parts of Latin America.

The divergence comes as China’s bid to achieve self-sufficiency across supply chains and souring ties with the US have made other markets less susceptible to its ebbs and flows. In addition to the economic decoupling, another reason has been the artificial intelligence boom, which has boosted markets from the US to Taiwan while giving less of a lift to mainland shares. China’s weighting in the EM gauge has dropped to around 27% from more than 30% at the end of 2021.

At the same time, a strategy of stripping China out of emerging-market portfolios is fast gaining traction, with launches of equity funds that exclude China already reaching a record annual high in 2023.


“China risks are several – LGFV, housing stock overhang, demographics, dependency ratio, regulatory volatility, geopolitical isolation,” said Gaurav Pantankar, chief investment officer at MercedCERA, which oversees approximately $1.1 billion of assets in the US. “Investment opportunities within EM exist in various pockets.”

READ: ETF Investors Pour Cash Into EM’s Non-China Growth Engines

In the debt market, global investors have pulled about $26 billion from Chinese government bonds in 2023, while plowing a collective $62 billion into notes from the rest of emerging Asia, data compiled by Bloomberg show. Roughly half of the $250 billion-$300 billion inflow that accompanied China’s inclusion into government bond indexes since 2019 has been erased, according to an analysis by JPMorgan Chase & Co.

Selling pressure on the yuan has pushed the currency to a 16-year low versus the dollar. The central bank’s loose policy stance, in contrast to tightening in most major economies, is weakening the yuan and giving foreigners another reason to shun local assets.

In terms of corporate debt performance, China appears to have fully decoupled from the rest of Asia as a crisis in its real estate sector heads into its fourth year. The market has become more locally-held with approximately 85-90% owned by domestic investors.

All of this comes against the backdrop of China’s deteriorating economy, which has caused a rethink of the market’s allure as an investment destination. Wall Street banks including Citigroup Inc. and JPMorgan doubt whether Beijing’s 5% growth target for this year can be met.

Yet the gargantuan size of China’s economy and its key role in the manufacturing supply chain mean the market will remain a crucial part of portfolios for many investors, albeit to a lesser extent.

One channel through which China can still impact international financial markets is via globally traded commodities. Being the biggest importer of energy, metals and food, its influence extends beyond securities portfolios, creating ties to the global economy that are likely to prove more durable. The nation’s world-leading position in clean energy, from solar panels to electric vehicles, is one example of the expanded potential for trade as the world tries to meet its climate obligations.

“An economy which slows down doesn’t do so everywhere,” said Karine Hirn, partner at East Capital Asset Management. “We find good value in sectors with structural growth outlook, such as new energy vehicles, consumer-related and parts of renewables supply chain.”

The CSI 300 Index, a benchmark of onshore shares, fell 0.7% on Friday as foreigners sold even after data on retail sales and industrial production for August exceeded estimates. As the weakness persists, global funds’ positioning in China has already reached the lowest level since October, when the nation’s reopening from stringent Covid curbs sparked a sharp rebound over the next three months. In contrast, allocation to US equities — which have outperformed global peers this year — is rising.

For money managers like Xin-Yao Ng, investing in China requires a subtle balance of being wary of the structural challenges while seeking opportunities from individual stocks.

“I am structurally cautious about China’s long-term economic outlook, and conscious of fatter tail risks relating to geopolitics,” said Ng, an investment manager of Asian equities at abrdn Asia Ltd. “But China is still a very wide and deep universe with a lot of different opportunities. Broad valuation is very low now,” he said, adding that it’s an “interesting stock picking market” for fundamental investors.

--With assistance from Hooyeon Kim, Marcus Wong, Pearl Liu, Wenjin Lv and Jason Rogers.

Most Read from Bloomberg Businessweek

Can India’s Eurasian trade corridor give China a run for its money?

Aakash Hassan

CHRISTIAN SCIENCE MONITOR
Fri, September 15, 2023 

At a summit of world leaders, Indian Prime Minister Narendra Modi announced an ambitious new economic corridor project that will link India with the Middle East and Europe.

European Commission President Ursula von der Leyen has described the project as “a green and digital bridge across continents and civilizations.” U.S. President Joe Biden called it “game-changing,” and Saudi Arabia’s Crown Prince Mohammed bin Salman praised the “historic” announcement.

This new link, Mr. Modi said at the G20 last week, “will drive sustainable development for the entire world.”

It’s true that the India-Middle East-Europe Economic Corridor (IMEC), if completed, will accelerate trade between the regions, and would likely help boost political cooperation and energy security. It’s also a clear challenge, experts say, to China’s Belt and Road Initiative (BRI), a massive infrastructure corridor stretching across Asia, Africa, and Latin America that gives China considerable international influence. However, details on the IMEC remain thin. It’s not yet clear how the corridor will be built, or who will foot the bill.

“It’s significant because of the sheer scale. The number of participants and the geography covered is immense,” says Michael Kugelman, director of the South Asia Institute at the Wilson Center think tank in Washington. “Of course, the sheer scale could also prove to be its undoing – too ambitious and complex to see the light of day.”

The IMEC plan is broken into two segments: Through a combination of railroads, ship routes, and roadways, the eastern corridor will connect India to the Persian Gulf, and the northern corridor will connect the Persian Gulf to Europe. Hydrogen pipelines and electricity cables will also be built along the rail routes, according to a memorandum of understanding signed by India, the United States, Saudi Arabia, the United Arab Emirates, the European Union, Italy, France, and Germany.

The IMEC announcement comes just a month before 90 countries are expected to gather in Beijing for a major BRI conference. Since 2013, China has poured billions into the project, which has been touted as the brainchild of Chinese leader Xi Jinping and involves more than 150 countries and dozens of international organizations.

In fact, some IMEC backers, including Saudi Arabia and the UAE, are already part of the BRI. Others view China’s sweeping initiative as a form of “debt-trap diplomacy” – securing geopolitical influence by lending poorer nations unrepayable sums for infrastructure projects.

“Many of the countries involved in this [IMEC] scheme won’t want to approach it with a China lens, but that’s an unavoidable frame from a U.S. perspective,” says Mr. Kugelman. “U.S. officials have already depicted this project as transparent, inclusive, and noncoercive, drawing a sharp and explicit contrast with what it believes to be the BRI investment model.”

India has been at loggerheads with China on the BRI, as one of its major offshoots, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-administered Kashmir, part of a hotly disputed Himalayan territory currently divided between India, Pakistan, and China. New Delhi considers northern Kashmir to be illegally occupied by Islamabad and says any country that participates in the expansion of the CPEC will “directly infringe on India’s sovereignty and territorial integrity.”

India signed a deal with Iran in 2016 to develop its own CPEC-like corridor, but the project has faced many roadblocks and was further derailed by U.S. sanctions on Iran.

India and China have also been locked in a tense border faceoff since soldiers from both sides were killed in a 2020 clash, and Mr. Xi skipped the Delhi summit.

So far, China doesn’t seem very threatened by the IMEC, stating shortly after the summit that it welcomes the new corridor. “At the same time, we advocate that various connectivity initiatives should be open, inclusive, and form synergy, and should not become geopolitical tools,” the foreign ministry said in a statement to Indian press.

Chinese officials know that “when it comes to infrastructure building, they are the No. 1 in the world,” says Pravin Sawhney, a journalist and expert on India’s national security, voicing concerns about the IMEC’s future. “They are the ones who have the deep pockets, and they know BRI is 10 years ahead.”

Yet the BRI finds itself on shaky ground as well.

China’s economic growth is slowing, leading to deflation and fears of stagnation. And amid growing accusations of predatory lending, partner countries have started demanding to renegotiate the terms of their loans. Italy is poised to pull out of the BRI altogether.

Whether India can use this moment of uncertainty to shift the scales of influence depends on its ability to get the IMEC off the ground.

“As of now, we don’t know who will fund it, [and] nobody knows who will ultimately agree to it,” says Mr. Sawhney. “As far as the USA is concerned, there are so many commitments they have made in infrastructure building which remain incomplete. The latest is the Indo-Pacific Economic Framework,” an initiative launched last year and promoted as an opportunity to balance China’s influence in Asia.

Mr. Kugelman shares some of these concerns but believes the project still carries promise.

“Despite the challenges, the geopolitics of this are too important to overlook,” he says. “Three different regions and the U.S. working together to promote connectivity, on a large scale, in a broad expanse of territory home to key land and sea routes for trade.”

Officials involved in the IMEC say they’ll have a more detailed plan for building out the corridor in the next couple of months. Meanwhile, analysts are watching the progress of this megaproject carefully, seeing it as an indicator of U.S. investment in India, as well as attitudes toward China.

X Corp. Agrees to Try to Settle Lawsuits Over Mass Layoffs

Ed Ludlow and Joel Rosenblatt
Thu, September 14, 2023

BRUTALIST ARCHITECTURE 2023

(Bloomberg) -- Elon Musk’s X Corp. has agreed to try to settle claims by thousands of former Twitter employees who say they were cheated of severance pay, according to a memo by a lawyer for the workers seen by Bloomberg News.

“After 10 months of pressing them in every direction we have succeeded in getting Twitter to the table,” attorney Shannon Liss-Riordan wrote in the memo to her clients, which was obtained from a former Twitter employee who declined to be identified disclosing confidential information. “Twitter wants to mediate with us in a global attempt to settle all claims we have filed.”

The company formerly known as Twitter has been accused in multiple suits of numerous labor and workplace violations, including failing to pay severance to thousands of workers fired late last year after Musk’s $44 billion acquisition of the social media platform. Almost 2,000 former Twitter employees have resorted to fighting their claims in arbitration as the company has demanded, but Liss-Riordan has complained in court filings that Twitter hasn’t shown up.

X is complying with a court order to mediate, a person familiar with the matter said, asking not to be identified discussing private information.

The private negotiations with a mediator are set for Dec. 1 and Dec. 2, according to Liss-Riordan’s memo.

“We are very proud to be representing nearly 2,000 former Twitter employees, in individual arbitrations as well as more than a dozen class action lawsuits in court,” Liss-Riordan said in a statement Wednesday night. “We are working hard to recover what they are owed.”

She declined to elaborate or comment specifically on the scheduled mediation.

X Corp. spokespeople didn’t immediately respond to requests for comment, sent after regular business hours.

A San Francisco federal judge ruled in January that workers who filed one of the earliest challenges to Twitter over severance pay were obligated under their contracts to go through arbitration, in which private judges resolve disputes in closed-door hearings.

Bed Bath & Beyond employees sue over 401(k) plan losses

Jonathan Stempel
Thu, September 14, 2023 

Shoppers leave a Bed Bath & Beyond store in Danvers

(Reuters) -Employees of the former Bed Bath & Beyond on Thursday sued the committee that oversaw its 401(k) retirement plan, saying its "imprudence" caused them to suffer millions of dollars in losses after the home furnishings retailer filed for bankruptcy.

The proposed class action filed in Newark, New Jersey, federal court arose from Bed Bath & Beyond's termination of the 401(k) plan on Aug. 1, a little over three months after the company sought Chapter 11 protection.

Former employees said they lost more than $5 million when their MassMutual "guaranteed investment account," which they thought had little risk, suffered a 10% loss because rising interest rates hurt the value of its underlying investments.

They said the 401(k) committee breached its fiduciary duties by failing to replace the account with similar investment options, such as money market funds and stable value funds, that carried less principal risk if the company went bankrupt.

Lawyers for Bed Bath & Beyond did not immediately respond to requests for comment after market hours. A spokesman for a firm overseeing the 401(k) plan's termination did not immediately respond to requests for comment.

Overstock.com bought and now operates its website under the Bed Bath & Beyond name. It is not a defendant, and a spokeswoman said the company had no involvement in terminating the 401(k).

In guaranteed investment accounts, an insurer typically invests in stocks and bonds, and pays investors a fixed return.

The former employees said the MassMutual account was invested mainly in long-term bonds that could lose value if interest rates rose. They also said MassMutual had the right to make up losses if its contract were terminated.

According to the complaint, Bed Bath & Beyond knew as early as 2019 that its business model was not viable, and had "ample opportunity" in 2020 and 2021 to replace the account before rates began rising.

Had it done so, "it would have terminated the MassMutual Contract by notice and avoided the risk of Plan losses that could result from BBB's bankruptcy and a decrease in value of the GIA's underlying portfolio," the complaint said.

The lawsuit seeks to recoup all losses resulting from violations of the federal Employee Retirement Income Security Act, which generally protects 401(k) investors.


The case is Harvey et al v Bed Bath & Beyond Inc 401(k) Savings Plan Committee et al, U.S. District Court, District of New Jersey, No. 23-20376.

(Reporting by Jonathan Stempel in New York; Editing by Diane Craft and Christopher Cushing)

NO LONGER NEOLIBERAL

Mexico’s Populist Leader Drops Austerity to Investor Chagrin

AUSTERITY IS BAD FOR YOU AND ME

Maria Elena Vizcaino and Michael O'Boyle
Thu, September 14, 2023

(Bloomberg) -- Investors in Mexico’s $91 billion of foreign sovereign bonds are coming to an uneasy realization: Perhaps Andres Manuel Lopez Obrador is the populist they’d once feared him to be.

The 69-year-old president had, after all, campaigned in 2018 with vows to build out programs for youths and the elderly, create more jobs and revamp state-owned Petroleos Mexicanos. But in practice, he turned out to be so frugal as Covid ripped through Latin America that he was criticized for spending too little to help working-class Mexicans.

So when Lopez Obrador unveiled a budget plan last Friday that would result in the nation’s largest fiscal deficit since 1988, it caused some angst on Wall Street. Investors sent Mexico’s foreign bonds due in 2033 sliding to the lowest since January earlier this week.

Read More: Mexico Plans Biggest Budget Gap in 36 Years as AMLO Ends Term

This sudden pivot toward fiscal largesse couldn’t come at a worse moment. For the first time in two decades, interest rates are soaring in Group-of-Seven economies, handing investors such high returns on ultra-safe corporate and government bonds that they have little incentive to chase higher yields in riskier countries implementing policies that worry them.

The risk is that Lopez Obrador is creating a bigger deficit by committing to popular, hard-to-cancel social projects right before his term ends. It’ll be up to his successor — after next year’s election — to contend with any fiscal shortfalls that could, eventually, weigh on the nation’s credit score.

“It’s the end of austerity ahead of elections,” said Valerie Ho, a money manager at DoubleLine Group in Los Angeles. “The next administration will be more challenged, and the market may start thinking about the possibility of rating downgrades.”

The country’s debt is already rated BBB- at Fitch Ratings, the lowest investment-grade score. S&P Global Ratings and Moody’s Investors Service, meanwhile, both still score Mexico one level higher — largely due to Lopez Obrador’s penny-pinching ways.

Fitch’s projections still indicate only a gradual increase in the nation’s ratio of debt to gross domestic product over the medium term, according to Carlos Morales, director of sovereign ratings.

And of course, it would take rating downgrades into junk territory by at least two of the three major assessors to officially strip Mexico of its investment-grade title. But such a move would force investors in high-grade indexes to pull out of the nation’s debt and likely make the country’s borrowing costs higher.

The loss of an investment-grade rating would also threaten to interrupt decades of work by Mexico’s financial authorities after the market mayhem of the so-called Tequila Crisis in the mid-1990s. Officials have largely opted for conservative budgets to narrow the deficit and keep total government debt levels low.

Until recently, Lopez Obrador was a part of that effort. In the first part of his administration, he slashed salaries, sold the luxury presidential jet and refused to engage in the type of stimulus that helped other economies stay afloat during the worst of the coronavirus pandemic.

“We cannot put the country into debt,” he said during a Thursday press conference, explaining that the government wouldn’t spend more than what is authorized by Congress.

But with his latest budget plan, the country’s fiscal deficit is expected to balloon to 4.9% in 2024, compared to just 3.3% this year — a reflection of projects ranging from an ocean-connecting rail link to a new gasoline refinery and growing support for Pemex, the highly indebted state oil company.

On Wall Street, the question is whether a shift in Mexico’s spending habits is reason enough to take a more cautious approach. The nation’s government has about $91 billion of outstanding international bonds, according to data compiled by Bloomberg.

The bonds have outperformed for most of Lopez Obrador’s administration due to his frugality and boast some of the lowest risk-premiums in Latin America. The country has also lured the likes of Pacific Investment Management Co. to BlackRock Inc. as US companies shift their supply chains out of China and into Mexico.

But to Jaime Valdivia, the chief economist at Galapagos Capital, the market is too complacent. While investors have grown comfortable with the government’s financial strategies in recent years, he said, Lopez Obrador saved so that now he could spend.

The finance ministry’s own estimates show that the next government will need to bring the fiscal deficit down to around 2.1% to prevent further erosion of the country’s debt levels. With the economy estimated to grow just 1.5% next year, the risk is that elevated spending could eventually become unsustainable, said Carlos Serrano, chief economist at BBVA Mexico.

“I am concerned about this inertia,” he said. Especially when it comes to social programs, “once you have a program in place, removing it is very complicated.”

(Updates with Fitch projections in eighth paragraph and AMLO’s comments in 12th paragraph.)

Most Read from Bloomberg Businessweek

So Biden’s Old. But Did He Try to Destroy American Democracy?

Michael Tomasky

NEW REPUBLIC

Fri, September 15, 2023 

We’re talking—and talking—about Joe Biden’s age this week. He’s old. It’s a real issue. It’s a legitimate concern. No one likes the fact that he’s 80. It dampens enthusiasm for his reelection. And there has been a large volume of reporting that suggests that many people, including many Democrats, aren’t especially enthusiastic about his vice president.

I recall hearing a news item recently that explained that among the cohort of poll respondents who dislike both Biden and Donald Trump, while their preference is for neither man to run, if pressed, they favor Trump strongly. I’m sure this is not just because of Biden’s age. It has to do with inflation and, I believe, the general state of trauma in which most Americans, having taken collective blow after blow, now live. This last point is little discussed, but it is the topic of Ana Marie Cox’s shimmering cover story in the October issue of The New Republic, which I think explains more about the dyspeptic national mood than anything else I’ve read.

And yet: I think about those poll respondents mentioned above. Really? Is Joe Biden that bad? They’d really rather have Trump?

Biden’s age was a topic of conversation on Morning Joe earlier in the week, and Al Sharpton asked a good question: “What is Biden too old to do?” Is he too old, Sharpton wondered, to steal nuclear secrets and other classified documents? In knowing violation of the law, as Trump may have just accidentally admitted to Megyn Kelly Thursday?

It’s an excellent question—it flips conventional logic on its head and forces us to consider the problem of Biden’s age not in the usual moral vacuum but in a moral context vis à vis his likely opponent.

In that spirit let’s pose a few more of these inquiries. Is Joe Biden too old:

•  to insist that his inaugural crowds were the biggest of all time, sending his quaking and feckless and ill-attired press secretary out there to tell an obvious and totally unnecessary and pointless—but all too tone-setting—lie on his very first day in office?

•  to have an adviser, trying to spin her way out of that lie, speak in all seriousness of “alternative facts” that he believed in and adhered to?

•  to demand personal loyalty from his FBI director at a private dinner, at a time when it was known that his own campaign might be under FBI investigation?

•  to invite the Russian foreign minister to the Oval Office and reveal highly classified information to him there that “jeopardized a critical source of intelligence on the Islamic state”?

•  to fire the aforementioned FBI director and admit on national television that he did so because the FBI was investigating him?

•  to doctor a hurricane forecast with a Sharpie to make it seem like an obvious lie he told was correct, potentially frightening millions of people in one state into worrying that their homes might be destroyed or they might have to flee when they were never under threat?

•  to get the Boy Scouts—the Boy Scouts!—to boo his predecessor?

•  to assert that a crowd of white nationalists carrying torches and chanting “You will not replace us” included “very fine people”?

•  to try to buy Greenland?

•  to try to find a way to bomb Mexico?

•  to want to use a nuclear weapon on North Korea?

•  to say that he believed a murderous autocrat over his own country’s intelligence agencies?

•  to constantly mock the United States military and its generals and say that he—whose “military experience” ended in boarding school and, later, included a bone-spur deferment that got him out of being drafted into the armed services during the Vietnam War (thereby forcing some other young, less connected man from Queens to go in his stead)—knew better than all of them?

•  to say that certain members of Congress should “go back” to their own countries, when most of them were in fact born in the United States and the one who wasn’t became a citizen in 2000 at age 17?

•  to watch a dangerous virus spring to life across the globe and be warned universally by experts that his government had better be buying ventilators and masks—and resolutely refuse to do so?

•  to say, just as that virus was reaching American shores, that “when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done”?

•  to make that statement, and many, many others like it, even while knowing that the truth was much uglier and the virus much more dangerous (“deadly stuff”) because he wanted to “play it down”?

•  to suggest seriously that people should inject chloride as a cure for that virus?

•  to wallow in such inaction that said inactions were responsible, according to a highly respected medical journal, for 461,000 excess U.S. deaths?

•  to order the tear-gassing of peaceful protesters so that he could walk to a church and use it as a prop, standing in front of it, holding a Bible?

•  to threaten to withhold crucial aid to a foreign head of state unless said head of state agreed to announce an investigation into his top political opponent?

•  to openly encourage an armed assault on the U.S. Capitol, marking the first time the Capitol was stormed by a mob since the War of 1812, and the first time ever it was stormed by Americans?

•  to make attempt after attempt to steal an election, telling lie after lie after lie on social media, eventually losing 61 of 63 court cases?

•  to make himself, day after exhausting day, hour after ceaseless hour, the center of attention, demanding that we focus our thoughts on him, as authoritarian leaders do?

I’ve barely scratched the surface here. The point, of course, is that no, Joe Biden is not “too old” to have done these things—people can be corrupt and venal and stupid and hateful and arrogant at any age. These are just things that Biden would never, ever do, because within his long life and political career there is an abundance of proof that he respects the Constitution, tradition, and our governing institutions.

So, to those voters more repulsed by Biden’s age than Trump’s deeds: Is your memory really that short? Do you seriously want to live through all this again? And all the above, of course, is to say nothing of the far worse things Trump has already told us he will do if he’s returned to the White House, from insisting on loyalty to him rather than the Constitution to handing Ukraine to Vladimir Putin.

I don’t believe that most voters are that shallow. Some may be, but most aren’t. However, they have to be reminded of all these things. The Democrats are going to have to inspire voters to recall what those four years of chaos, corruption, and misrule were like: living through the 30,753 lies, the constant tension and drama, the horrors of those early days of Covid that could have been much better (as they were in other countries), and the rest of the nonsense that peppered the tenure of the also-advanced-in-age Trump, when he had his chance to do it right seven years ago, and failed.