The Father Has Spent His Career at Ford. The Son Might Not.

Jenna Russell
Tue, September 26, 2023

WESTLAND, Mich. — On Friday morning just before 10, Steve Kellums, 54, and his son Keegan, 24, sat side by side in the older man’s living room in Westland, a short drive from the Ford Motor assembly plant where they both work. One week into the strike by 3,300 workers at the plant, they were anxiously awaiting an announcement from their union president on Facebook Live.

Bent over his cellphone, Keegan tried to tamp down sparks of optimism. He knew better than to imagine that the strike, at that point limited to his plant and two others in Missouri and Ohio, would end quickly, because the United Auto Workers and Ford management were so far apart.

“I know it’s going to get more ugly before it gets better,” Keegan said, taking a swig from a bottle of Pepsi.

Steve turned toward him. “Or, let’s be positive,” he said, sounding decidedly dadlike. “There’s at least a chance they could have come to an agreement.”

Father and son have leaned on each other since Sept. 15, when the autoworkers union began its first simultaneous strike against General Motors, Ford and Stellantis, Chrysler’s parent company. Both men were on strike for the first time in their lives, and have been talking each other through it day by day. They represent two ends of the spectrum among the workers, and two perspectives on the industry, a generational divergence that ripples through the broader workforce.

Their views reflect larger changes in the way younger people see work, and think about obligation to employers, a shift that has fed recent growth in support for unions and union organizing efforts at more private companies.

With 28 years behind him at Michigan Assembly — an immense plant in Wayne, 30 miles west of Detroit, that ordinarily churns out some of Ford’s most popular SUVs and trucks at slightly faster than one vehicle a minute — Steve Kellums hopes to retire by the time he turns 60, and he dreams of buying a small farm in Tennessee. He was hired in 1994, before a downturn in the industry and a recession drove Ford into financial crisis, and forced the union to make once-unthinkable concessions, including accepting a two-tier wage system with lower pay for newer workers.

When Keegan Kellums started at Ford in 2020, his pay reflected those tumultuous changes. He said he left Amazon, where he was making nearly $18 an hour as a packager, to start at Ford at just $16 an hour.

His father said it pained him to see how much had changed since the days when a job at Ford meant a comfortable middle-class life. He was making double his son’s wages when Keegan was hired.

“Twenty-five years later, they only offered him $3 more per hour than I got when I joined,” Steve said. “Is this the life I wanted for him? No.”

Now, the UAW is trying to eliminate two-tier wages, add retiree benefits for younger workers, and raise pay by 40% over the next four years, to make up for the compensation lost to givebacks over time. Ford has said it cannot afford those proposals.

On the picket line last week outside the plant in Wayne, it was hard to find a union member who did not have two or three generations of relatives employed by the company. For much of its history, since it began offering factory workers $5 a day to build the Model T in 1914, Ford’s wages and benefits allowed blue-collar employees to join the middle class. Jobs with the automaker were sought after. Turnover was low.

Keegan has ties to Ford on both sides of his family. His maternal grandfather worked for 42 years at Michigan Assembly. His father’s great-grandfather worked at another Ford plant in Dearborn. Keegan’s first new car, in high school, was a silver Ford Fusion; to make his payments, he worked at the nearby Henry Ford museum.

As a boy, he imagined a future with Ford, but was taken aback when his father did not embrace his plan.

“My dad said, ‘No, be something bigger than that, go to college — I come home tired every day,’” the younger Kellums recalled another day last week, sitting in the local union hall near tables piled with food donated to striking workers.

When Keegan was 9 or 10 and the country sank into recession, the union agreed to help keep Ford afloat through a bad time, but members now say Ford never restored their losses when profits surged again, leaving them disillusioned and less able to get by.

“I knew something was going on,” Keegan said of that time in his childhood. “The big birthday parties got smaller. We stopped going to Cedar Point, the amusement park, for vacation every summer.”

After high school, he worked as a cashier at Dollar Tree, making minimum wage and living at home, and then for Amazon, where he hoped to find more opportunity. But he found the workplace chaotic during the pandemic, with frequent changes in sick-time rules and people being fired with little warning.

When the job came up at Ford, he felt conflicted, but the prospect of joining a strong union made the difference.

“The union could protect me,” he said. “That was it, right there.”

The new job was a grueling adjustment for him — physically demanding, hot and dirty. Lacking seniority, he worked from 6 p.m. until 4:30 a.m. and came home exhausted, his arms coated in black grime. Like his father, who works days, Keegan is a material handler, “feeding the line” by swiftly moving heavy rolling racks of auto parts from the warehouse to the fast-paced assembly floor.

“I’m a big boy,” he said, “and it takes all my weight to move them.”

As his endurance grew, so did his pay; earlier this month, his hourly wage rose to $24. He had saved enough by last November to move out of his father’s house and into an apartment with two roommates.

When the call came to strike, father and son both said they felt ready. Steve took the bigger financial hit, because all union members are getting the same strike pay from the union — $500 a week. But Keegan faces more uncertainty; he had planned to sign a lease on a new apartment this November, but now, with no idea how long the strike will last, he wonders if he should move back in with his dad.

If that is what it takes to win a better contract, so be it, he said, noting that for younger, lower-paid workers like him, the strike feels like less of a risk than it might for older workers.

“The difference with my generation is, we don’t have a lot to lose,” he said. “We don’t have a pension. We don’t have kids.”

Each generation says it is fighting for the other: Keegan wants to see his father’s losses restored, while Steve wants to know that his son will be able to make a decent living at Ford, as he himself once did, before cuts to his hours and overtime reduced his income. “I couldn’t tell you the last time I had 40 hours,” he said.

In his son’s view of the future, though, Ford is just one option. “If I could find a good job somewhere else, I would,” Keegan said, “but what else is there around here?”

The announcement the men were waiting for Friday morning turned out not to be the strike’s end, but its expansion. Workers at 38 GM and Stellantis parts distribution centers in 20 states were called to walk out. Shawn Fain, the UAW president, did not expand the strike to additional Ford employees, though, citing progress in bargaining on job security and wages.

Encouraged by that glimmer of hope, Keegan said the strategy seemed sound, and that he approves of the union’s aggressive approach. “The older generation, in general, has been more passive,” he said. “I think my generation pushed them to take the first step.”

Steve wonders how willing the younger workers will be to accept even reasonable compromises at the bargaining table.

To save money while the strike goes on, Keegan said he would continue to go “grocery shopping” in his father’s pantry and visit often for home-cooked meals. At the union hall Thursday, Keegan’s girlfriend scooped up several donated tomatoes to give to his father, a skilled cook who can replicate their favorite Outback entree, Alice Springs Chicken.

After the announcement Friday morning, it was time for Steve to head to the picket line, where he serves as a strike captain outside Gate 19 for six hours a week. Keegan tagged along, although his own assigned day to picket was not until Sunday. Keegan knew his dad would join the line again with him then.

Keegan’s girlfriend has picketed as well, between her shifts at Walmart, where pay and benefits are lacking, she said, and there is no union to push for better. While the strike has made her more aware of the potential drawbacks of a job at Ford, the 22-year-old said it still looked like a better option.

Given the chance to work at Ford, she said, she would jump at it.

c.2023 The New York Times Company

Stephen King Gives 'Jimmy' Jordan A Frightening Fact Check On Crime

Ed Mazza
Updated Wed, September 27, 2023 


Bestselling author Stephen King called out House Judiciary Chair Jim Jordan (R-Ohio) for missing the point on crime even after holding a hearing on the subject.

With the federal government on the brink of a shutdown as House Republicans fail to advance funding bills, Jordan took the Judiciary Committee to Chicago for the hearing, which critics dismissed as a stunt.

Rather than focus on the actual causes of crime, Jordan blamed it on Democratic lawmakers.

“You’re not safe in Democrat-run cities,” Jordan wrote on X, formerly Twitter, as he shared a report on armed robberies in Chicago.

King, who has long spoken out against gun violence and in favor of tighter restrictions on firearms, pointed out what Jordan seems to have missed:



King has called out other lawmakers for failing to act to prevent gun violence.

Earlier this year he pointed to Reps. Lauren Boebert (R-Colo.) and Marjorie Taylor Greene (R-Ga.) for obsessing over Hunter Biden instead of the epidemic of deadly gun violence.

Producing power from cow poop: A Florida dairy aims to reduce climate impact of cattle

Ashley Miznazi
Mon, September 25, 2023 

At barn No. 5 at the Larson Dairy farm just north of Lake Okeechobee, a line of cows pump out milk bound for grocery stores shelves and family refrigerators across Florida.

Being cows, they are also producing a steady supply of something else — manure, a lot of it.

Poop is an inevitable byproduct of the cattle industry and, like cow burps and farts, it emits methane, a potent greenhouse gas that scientists point to as a major driver of climate change. But an innovative process now in operation at Larson helps reduce the climate impact of this dairy herd, capturing and cleaning methane locked in those cowpies and sending it to a natural gas pipeline near the farm.

Environmentalists and climate change experts, who have long criticized the cattle industry over pollution problems, have plenty of questions and concerns about the process.

But the end result is something that Jacob Larson, a third-generation Florida farmer, sees as a big step forward he could not imagine possible a few years ago: His dairy waste supplements the state’s energy supply and can perhaps even become a valuable product of its own.

“Just the thought process of turning manure into fuel is mind-boggling,” said Larson, during a tour of the dairy’s poop-to-power system, which emerged through a partnership with Brightmark, a waste-to-energy company based in California that has picked up much of the tab for installing and operating the equipment.

Turning poop into power

Since the source of this power is cow poop, the process itself is not particularly pretty. In the dairy barn, a spray system regularly wets down the manure with water to liquefy it, creating a brown stream that flows down a ditch into a concrete reservoir. From there, pipes take it into the heart of the system, something called an “anaerobic digester” lagoon.

The system appears relatively low-tech. From above, a digester consists of large black tarps spread over what looks like a mound. But underneath, it functions like an insulated, oxygen-free underground bunker. Manure goes through four chemical reactions as bacteria feed on it. Depending on the temperature and amount of nutrients in the manure, Brightmark says it can take days to weeks for “bio-gas” to form, cleaned and processed. The company delivered its first bio-gas to a nearby pipeline in August.

Anaerobic digesters are in place on four of Larson’s sprawling farms, fed by a steady supply of manure from some 12,000 cows. The poop-to-power calculation is complicated but by one expert estimate, 10 of the cows at barn No. 5 can produce enough bio-gas in a month to run a typical home over the same period.

“The Larsons take care of cows and produce high-quality cows and high-quality manure,” Larson said. “We commit our manure supply to Brightmark, and they take the manure supply from there.”

After processing, what’s left of the manure is run through a rotating composter that squeezes out water and remaining solids. The dried leftovers, stored in piles, and the remaining liquid are used as fertilizer on the farm.

“It’s like recycling, that’s the beauty,” said Rishi Prasad, an environmental science professor at Auburn University who is not affiliated with Brightmark but has studied the process involved. “You are basically recycling manure on the farm for energy, for feeding the plants like corn, and then that corn would go back to feeding the dairy cows.”

The methane challenge

Livestock operations, according to a United Nations assessment, account for about a third of all global methane emissions — with cows far and away the No. 1 source. Methane is a particularly problematic greenhouse gas — its warming effect some 28 times greater than carbon dioxide on a 100-year timescale, and more than 80 times more powerful over 20 years, according to the U.S. Environmental Protection Agency.

So reducing methane emissions could make a big difference and is one of the major challenges of curbing climate change. While some activists call for banning or shrinking the cattle industry, that goal hasn’t won much political or public support.

“The whole planet is not going to stop eating beef, or stop drinking milk or stop eating pizzas,” said Prasad, who studied anaerobic digesters as part of his pHd research at the University of Florida. “But we need to think about how we can make the food production industry more sustainable and reduce emissions so we can buy more time.”

California, where Brightmark is based, already has embraced the use of digesters and fueled expansion through a state policy called the Low Carbon Fuel Standard (LCFS) intended to reduce the impact of transportation fuels. Under the complex rules, California views digesters as “carbon-negative” so bio-fuel can be used as a “credit” to balance out fossil fuels in a commercial trading market.

It works this way. While there are no caps on emissions from dairy farms, oil and gas companies have strict limits on emissions produced by transportation fuel. To stay within emissions limits, those companies can either sell fuel with a lower carbon footprint or offset its use.

So at dairy farms, owners of the digesters can sell “carbon-negative” fuel to oil and gas companies like Chevron, which partnered with Brightmark — a transaction that helps offset its own emissions in the California system. Because digesters receive credit both for reducing methane emissions from manure and replacing a fossil fuel, dairy bio-gas is a particularly attractive commodity in the California market, 10 times more valuable than landfill gas.


Brightmark sees a promising future in Florida, where digesters also have been catching on. According to EPA’s database, as of May 2022, there were about 330 anaerobic digesters at livestock farms in the U.S. and over 30 in Florida. Larson Family Farms isn’t included on the list yet. The EPA also sees room for growth in Florida, with one report projecting up to 80 dairy farms as candidates.

“The mission for us is to re-imagine waste and really look at better ways to create environmental benefits associated with the things that we waste,” Bob Powell, CEO of Brightmark, said in an interview with the Miami Herald. “I definitely think the project with the Larsons is a flagship project and one that people can point to.”

Brightmark, Larson and other supporters see the systems as a win-win. Bio-gas creates a new use, and potential revenue stream, from a former waste product.

“We’re going to be offsetting on an annual basis 57,000 tons of CO2 equivalent out of the environment,” Powell said. “And to put that in perspective, that would be the equivalent of planting over 75,000 acres of forest each year.”

Not a cure for climate impacts

But the systems also are not silver bullets and even some supporters say that labeling them “carbon negative” oversells the benefits.

“I don’t think this falls under a carbon-negative scenario,” said Prasad, the Auburn associate professor. “But it is reducing the methane that goes back into the atmosphere by recycling it and not throwing it directly into the environment.”

Ruthie Lazenby, who focuses on energy law and policy at UCLA, said the anaerobic digesters also only deal with one part of the cow emissions problem. They don’t process burps and passed gas, she wrote in a report supported by the United States Department of Agriculture.

“It is imperative that policymakers and others recognize that manure bio-gas systems reduce emissions from only one part of this system—manure management,” Lazenby said in the report.

Manure also happens to be the smallest part of the problem. While agriculture operations overall account for 10% of global greenhouse emissions, only 12% of that comes from manure, according to the EPA. In one study, scientists recorded up to 95% of cow’s methane emissions came from burps and farts.

While the digesters can cut overall methane emissions from a dairy, she and others also worry whether selling bio-gas might actually encourage the expansion of a cattle industry that could potentially offset the benefits of manure-to-power systems. Lazenby believes the industry’s operations need to be more closely regulated.

“Embracing digesters is a profoundly pessimistic approach to greenhouse gas reduction and assumes that the best we can do is pay factory farms to capture a portion of their greenhouse gas emissions,” she said. “Not only that, it invests in a technology that requires the ongoing production of those very greenhouse gasses.”

A study from The Union of Concerned Scientists also showed that California’s system gave a competitive financial advantage to large-scale dairy operations. The EPA, which has embraced digesters, also favors larger operations. In the screening document titled, “Is Anaerobic Digestion Right for Your Farm?” the second question asks how large the farm is and said potential candidates for digesters should have at least 500 cattle.

One estimation calculated that each cow could bring in an extra $1,000 in revenue from carbon credits every year.

“On its face, using bio-gas to power homes and cars might be an attractive approach if you assume that these vehicles are going to be running anyway and this offers an opportunity to displace fossil fuels,” said study author Kevin Fingerman, an associate professor of energy and climate at Calpoly Humboldt State University. “The complication emerges when we ask if there would be as much methane vented if we didn’t have policy promotions for bio-gas.”

“By creating a new revenue stream, does that reinforce large-scale operations?” he said.

Climate impact also isn’t the only concern — particularly in Florida, where environmental groups have long argued that cow manure is also a contributor to water pollution problems and algae blooms — and a major source of damaging nutrients flowing south into Lake Okeechobee. Brightmark believes the digesters will help reduce impacts there as well. In the past, manure would be disposed of in an open-air lagoon with greenhouse gasses vented into the atmosphere.

“Because of the process creating a more stable fertilizer, it reduces phosphorus and nitrogen in the environment and it’s allowed a dramatic water positive impact in our farming communities,” Powell said.

But Prasad and others are skeptical about how much of a difference a digester makes in reducing pollution impacts from fertilizer.

“There is no such thing as a ‘stable fertilizer’ because it has nutrients,” Prasad said. “If you apply the digester’s fertilizer throughout the season everything adds up and putting it in the same places for years can become a problem.”

The EPA also considers the leftover material potentially problematic.

“Digestate [the leftover solids and liquid] is a nutrient-rich by-product from organic waste anaerobic digestion but can contribute to nutrient pollution without comprehensive management strategies. Some nutrient pollution impacts include harmful algal blooms, hypoxia, and eutrophication.”
For one farmer, a family legacy

Brightmark acknowledges that it has aspirations beyond the Larson farms. The company is also interested in developing larger operations, but says not every dairy farm it might contract with will wind up adding cows.

“Brightmark is evaluating farms based on certain sizes,” said Ryan Berger, a partnership coordinator with Brightmark. “Sometimes it does work out to add more cows to that. We have a number of farms that we’ve worked with that have added cows. We have another set of farms that we work with that really haven’t grown.”

For Larson, his family’s goal is to continue a legacy in providing a staple product for Florida — but with reduced impact on the community and state he loves.

“The hours are long, the work is hard and sometimes it’s dirty, but at the end of the day it’s pretty rewarding,” Larson said with a grin. “We feel a lot of responsibility. We’ve been blessed, and when much is given, much is required. We do know that we have a lot to give back.

One thing he does question is the contention from EPA and Brightmark that digesters can help reduce odors emanating from a dairy operation. Larson, who has been smelling cows his whole life, isn’t too sure about that.

“I can’t say it smells much better.”

Ashley Miznazi is a climate change reporter for the Miami Herald funded by the Lynn and Louis Wolfson II Family Foundation in partnership with Journalism Funding Partners.

Chinese social media censored a top economist for his bearish predictions. He now warns that China’s property crisis will take a decade to fix

Nicholas Gordon
Tue, September 26, 2023 

Graham Crouch—Bloomberg via Getty Images

How long will it take to fix China’s flailing real estate sector? One of the country’s most prominent economists, who was ejected from its social media platforms for his bearish predictions about the economy, thinks it might take 10 years to fix.

“Fixing the property sector may be a multiyear or even a decade’s work in front of us,” Hong Hao, chief economist for Shanghai-based hedge fund Grow Investment, said on CNBC Tuesday.

That will mean more pain for China’s suffering real estate sector, now two years into its debt crisis. A default in 2021 by China Evergrande Group, one of the country’s largest private developers, sparked contagion across the whole sector as financing dried up. Construction stopped, leading to protests as homebuyers realized they might never get the homes they paid for.

Now with China’s economy underperforming after the COVID pandemic, Beijing officials are grappling with how to wean the economy from real estate without torpedoing the economy in the short term.

For much of the past decade, Chinese developers like Evergrande went on a debt-fueled construction spree, building millions of new homes throughout the country. That’s led to an oversupply, dragging down prices.

“We built way too much housing for Chinese people,” Hong said on CNBC.

Demand is also in long-term decline. Investment bank Goldman Sachs estimated in August that China’s annual urban housing demand peaked at 18 million units in 2017, and will fall to 11 million units this year and 9 million units by 2030.

On Tuesday, Hong pointed to slowing rates of urbanization, with fewer rural Chinese moving to the cities for work. "Two years ago, we were selling 18 trillion yuan [$2.5 trillion] worth of property," he said. "This year, we'd be lucky to do even [10 trillion yuan], and going down the road, we'd be lucky to do even [5 trillion] or [6 trillion]."

Bearish takes

Hong is an outspoken commentator on China’s economy, growing his audience during his tenure as the head of research of BOCOM International, a division of state-owned Bank of Communications.

Yet Hong’s takes were censored last year amid China’s tough COVID lockdowns in cities like Shanghai. Hong argued that the lockdown, which trapped millions of people to their apartments in a bid to stop an outbreak, would hurt China’s economy and would encourage capital flight.

Both WeChat—the ubiquitous messaging platform—and Twitter-like Weibo suspended Hong’s accounts in May 2022. Hong soon resigned from BOCOM, which the company said was for personal reasons.

When Hong got a new gig at Grow International a few months later, he warned that those working at state-owned brokerages were starting to face restrictions about what they could say. “Even if you don’t speak the truth, market prices will tell the truth,” he told Reuters at the time.

Hong’s suspension was an early indicator of Beijing’s censorship of bad economic news. This year, regulators are asking analysts and economists to stop using negative language to describe China’s economy—think “subdued inflation” rather than deflation—and the statistics bureau has stopped releasing some indicators like consumer confidence and youth unemployment.

China’s economic recovery has stagnated. Retail sales and manufacturing have grown at lower-than-expected rates for much of the year, and foreign trade has plunged. Still, Chinese economic data beat forecasts last month, suggesting that government support measures may finally be having an effect.

China’s property crisis

China’s real estate sector contributes as much as a third of the country’s GDP. Yet the sector’s liquidity crisis shows no signs of ending anytime soon.

China Evergrande, whose default arguably triggered the crisis in the first place, missed a payment on an onshore yuan-denominated bond on Monday. The developer revealed over the weekend that it could not issue new debt. Chinese authorities are also probing the developer’s former CEO and CFO, reports Caixin.

The bankrupt developer faces a liquidation petition on Oct. 30.

Another major Chinese developer, Country Garden, is also having debt issues. The developer, which has four times as many projects as Evergrande, recently made a $22.5 million interest payment with just days to spare.

While China has relaxed some real estate policies in a bid to stabilize home prices, analysts think that the glory days of the sector are over.

That may be by design, as officials try to wean China off its real estate sector. On CNBC, Hong suggested that once China’s economy relies on other industries rather than the property sector, then “we will have a better, much healthier Chinese economy than before.”

“Not having an overbearing Chinese property sector actually is good for the Chinese economy going forward,” he said.

Fortune.com

China Puts Evergrande’s Billionaire Founder Under Police Control

Bloomberg News
Tue, September 26, 2023 

(Bloomberg) -- Hui Ka Yan, the billionaire chairman of beleaguered property developer China Evergrande Group, has been placed under police control, according to people with knowledge of the matter.

Hui was taken away by Chinese police earlier this month and is being monitored at a designated location, the people said, asking not to be identified because the matter is private.

It’s not clear why Hui is under so-called residential surveillance, a type of police action that falls short of formal detention or arrest and doesn’t mean Hui will be charged with a crime. Still, the measure means he is unable to leave the location, meet or communicate with others without approval, based on China’s Criminal Procedure Law. Passports and identification cards must be handed to police but the process shouldn’t exceed six months, according to the law.

The move is the latest sign that the saga at the world’s most indebted developer has entered a new phase involving the criminal justice system, after authorities earlier this month detained some staff at its wealth management unit and two former executives were also reportedly held. It adds to questions over the fate of Evergrande after setbacks to its restructuring plan in recent days roiled financial markets and raised the risk of a liquidation.

For Hui, who controlled one of the world’s biggest fortunes when Evergrande’s shares peaked in 2017, the development is another blow in a remarkable fall from grace. Once considered among the most politically connected businessmen in China with ambitions ranging from electric cars to soccer, the tycoon has now become the most high-profile casualty of President Xi Jinping’s crackdown on excessive leverage and speculation in the real estate sector.

Guangdong police and Evergrande didn’t respond to requests for comment.

Evergrande sits at the center of a years-long property crisis that has hurt the Chinese economy and hammered confidence in the housing market. On Friday, the developer said it scrapped key creditor meetings and has to revisit its plan to restructure its offshore debt. Since then, it has disclosed it was unable to meet regulatory qualifications to issue new bonds — a key component of the debt overhaul — while its mainland unit failed to repay an onshore bond.

A Bloomberg Intelligence gauge of Chinese developer stocks fell to the lowest since November on Wednesday morning. Homebuyer sentiment remains fragile ahead of a key holiday sales period that will test the effectiveness of stimulus measures rolled out in recent weeks.

The son of a wood cutter who grew up in poverty, Hui built Evergrande into China’s largest developer by using leverage to buy massive tracts of land and scoop up rivals, before branching out into industries ranging from bottled water to professional soccer and electric vehicles.

He was once Asia’s second-richest person, only to see his net worth slump as his property empire crumbled. Hui is now worth about $1.8 billion from $42 billion in 2017, according to the Bloomberg Billionaires Index. Evergrande has 2.39 trillion yuan ($327 billion) in liabilities.

The 64-year-old has been a Communist Party member for more than three decades. In 2008, he was elected to join the Chinese People’s Political Consultative Conference, an elite group comprising government officials and the biggest names in business. He later secured two other five-year terms.

Things took a turn for the worse in 2021, when Evergrande officially became a defaulter and authorities from its home province of Guangdong led what is poised to be one of the nation’s biggest debt restructurings.

Hui had been part of the CPPCC’s elite 300-member standing committee since 2013, but he was told not to attend the annual convention in March last year as his property group became the biggest casualty of the nation’s credit crunch.

China’s central bank has blamed Evergrande’s demise on its “own poor management” and “reckless expansion,” and the government has urged Hui to use his fortune to help repay investors.

©2023 Bloomberg L.P.


China Evergrande has 'no bullets' left as crisis lights up mainland social media about end-game for fallen billionaire Hui Ka-yan

South China Morning Post
Tue, September 26, 2023 

The debacle at China Evergrande Group is heating up some of the nation's social media platforms with discussions about its fate. Some argued the penny stock is worth a punt before another bid to beat the drop. Others said bankruptcy may be inevitable.

The drama took another turn for the worse when the developer's major onshore unit, Hengda Real Estate Group, failed to repay a 4 billion yuan (US$547 million) note on Monday, an obligation among US$327 billion of liabilities choking the homebuilder. It is talking to bondholders about a solution on a "non-evasion of debt" basis.

The unit is already being investigated by regulators for market breaches, a transgression that cripples Evergande's ability to sell and list new bonds in offshore markets under China's capital market rules. Several former executives have been detained over missing funds, local media outlet Caixin Global reported on Monday.

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"Not able to issue new notes means no more financing possibilities, just like no bullets to fight a war," Zhou Si, a user with 810,000 followers on Weibo, said in a post on the short-message platform on Tuesday.

"If it fails to restructure its debt, the only ending for [founder] Hui Ka-yan is bankruptcy," Xiaoma, another commenter, added.

Evergrande did not immediately reply to an email on Tuesday seeking comment. A call to its corporate headquarters in Shenzhen went unanswered.

Its shares fell 8.1 per cent to HK$0.395 on Tuesday, adding to a 22 per cent slump on Monday. The stock has crashed by more than HK$335 billion (US$42.8 billion) since hitting HK$25.80 in July of 2020, a month before Beijing unleashed its industry-crippling "three red lines" policy.

Some social media commenters see a chance to dabble in the stock, albeit with a dose of caution. "Please be cautious when you want to buy in," Xiaoheiyezhijing, a Weibo user with 629,000 followers, said on Monday. "It's okay to buy a little bit. It would be a disaster if you buy a lot."


'Plenty of time on the clock,' says Brock Silvers, managing director at Kaiyuan Capital in Hong Kong. Photo: Handout alt='Plenty of time on the clock,' says Brock Silvers, managing director at Kaiyuan Capital in Hong Kong. 

Brock Silvers, the managing director at Kaiyuan Capital in Hong Kong, is sanguine about the situation. Restriction of new notes would seriously complicate things, but the market does not have the full details behind it while the winding-up petition on October 30 is still a month away.

"Large restructurings are often roller-coaster rides, and all parties, including regulators, want a deal here," he said. "An agreement before the [court] deadline should not be ruled out. Plenty of time on the clock."

What chairman and founder Hui does in the next few days or weeks will determine if the group's US$20 billion debt restructuring proposal with friendly offshore creditors will survive in its current form and terms. Other, hostile, ones are seeking a court order in Hong Kong next month to liquidate the developer.

The restructuring proposal was cobbled together over two years of negotiations with friendly creditors, who stand to lose more than 96 per cent of their money in the worst-case outcome. Several creditor meetings have been scrapped, likely delaying its timeline, while the latest curbs on offshore bond sales, vital in replacing defaulted debt, could be the killer blow.

"Evergrande's difficulties in debt restructuring would be prolonged," said Tan Haojun, a financial columnist and commentator, said in a Weibo post on Tuesday. "Any violation could cause serious problems for a company with such a debt scale. It's more difficult and risky to bring Evergrande back to life."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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Evergrande stocks have tanked 27% this week, suggesting the worst is far from over for China's property sector

Huileng Tan
Tue, September 26, 2023 

China's property market is mired in a crisis.

Costfoto/NurPhoto/Getty Images

Chinese property giant Evergrande's shares have tanked 27% so far this week.

They slumped following a series of bad news over the last few days.

A former Chinese central bank official told Bloomberg that China's property market could take a year to recover.

Recent developments at Chinese property giant Evergrande aren't quite inspiring confidence in China's real estate market.

The company's troubles have been deepening recently, which have torpedoed its share prices.

On Tuesday, Evergrande's shares tanked 7% by midday, extending a slump that took the stock down as much as 25% on Monday. This means Evergrande's share price has plummeted 27% this week.

Evergrande is worth about 5.3 billion Hong Kong dollars, or $678 million, now – a massive fall from grace from the company's heydays in 2017 when it was worth nearly 420 billion Hong Kong dollars.

Evergrande's stock has been hit by a series of bad news in the last few days. They include the cancellation of key creditor meetings this week that were announced on Friday and another notice on Monday that it would be unable to issue new debt.

Late on Monday, Caixin, a Chinese financial news outlet, reported that Chinese authorities detained Pan Darong, a former chief financial official at Evergrande. Authorities also imposed restrictions on Xia Haijun, a former CEO at the property giant.

Evergrande's main domestic unit, Hengda Real Estate Group, also announced late on Monday it failed to make payments on the principal and interest for a 4 billion Chinese yuan, or $547 million, bond due on the same day.

The developments weighed on Evergrande shares, which have been massively volatile since the stock resumed trading on the Hong Kong stock exchange last month following a 17-month suspension since March 2022.

The massive slump in Evergrande shares also suggests that the worst is far from over for China's property sector, wrote Junrong Yep, a market strategist at online trading platform IG, in a Tuesday note seen by Insider.

Investment in property in China fell about 19% in August from a year ago — marking its 18th straight month of decline, according to Reuters calculations based on official data released on September 15.

In fact, the property sales could take as long as a year to recover, Li Daokui, a former People's Bank of China adviser told Bloomberg on Tuesday.

"The property market will come back as an important driver for the economy, however the magnitude of the impact of property as a growth engine will be much smaller," Li told Bloomberg.
A real estate crisis has loomed over China since 2021

Evergrande — once China's second-largest developer — faced a liquidity crisis in 2021 that triggered broader concerns about the country's real-estate sector. The sector, along with related industries, contributes as much as 30% to the country's GDP.

Evergrande had over $300 billion worth of liabilities by the end of 2022. The company filed for bankruptcy protection in the US on August 17.

China is trying to revive its property sector by stimulating consumer demand, but consumers are unlikely to be clamoring for new apartments amid record-high youth unemployment rate and slower economic growth, experts told Insider.

In fact, there are way too many empty homes in China. A former top China official said there could be enough vacant homes in China to house up to 3 billion people — which is nearly 10 times the population of the US.

China Evergrande shares on the Hong Kong Exchange were 7% lower 40 Hong Kong cents at midday on Tuesday.

Evergrande and former People's Bank of China adviser Li did not immediately respond to requests for comment from Insider.


Evergrande was just the beginning. China's property sector is in trouble.

Joel Mathis
Tue, September 26, 2023

Unfinished buildings at China Evergrande Group's Health Valley development on the outskirts of Nanjing, China.

China’s long-running property sector crisis is somehow getting worse. CNN reported that Evergrande, the giant developer whose 2021 default set off the crisis, is unable to complete its debt restructuring plan thanks to an investigation into one of its subsidiaries. The result of that announcement? On Monday, Evergrande’s stock plunged 21% in Hong Kong stock trading — “dragging down the stocks of other Chinese property developers” and deepening an economic mess that has shaken China’s already fragile economy.

Evergrande and companies like it were “once a booming industry and a key driver of the country's economic growth,” Reuters reported. But Evergrande isn’t the only Chinese developer struggling with a huge debt load: Country Garden Holdings, which has 108.7 billion yuan (more than $14 billion in U.S. dollars) in bond repayments due over the next year, has also signaled that it is at risk of default. The compounding crises could “delay the prospect of a recovery of both the property market and the broader Chinese economy.”

Indeed, Bloomberg argued, the latest headlines from China’s property sector have “undercut Xi Jinping’s push” to end the economic malaise overtaking his country. Xi’s government has taken “measures to prop up housing demand” — including loosening of mortgage restrictions — in the hopes of keeping the industry afloat, but “China’s aging population and an oversupply of housing” may mean there’s only so much officials can do.

'Companies have pulled back'

The problems of big developers are hurting the little guys in China, The New York Times reported. “Small businesses and workers are owed hundreds of billions of dollars” for completed work, and new development projects are no longer in the pipeline. That has rippled through the rest of the economy. “Companies have pulled back on hiring. Fewer and fewer people are buying homes.”

Will China’s problems spread to the West? Maybe not. “The reality is that the world is now a little less exposed to China than it used to be even a few years ago,” Cornell University’s Eswar Prasad said in an interview with The New Yorker. A Chinese stock market crash might not have a “huge negative effect” on American stocks. It’s true that “commodity-exporting countries, oil-exporting countries” might be hurt by the faltering Chinese economy, but “U.S. exports to China are limited” which means that Americans should mostly avoid “the dampening effect” of the property crisis.

The effects aren’t just economic. Business Insider pointed out that President Biden believes the property crisis reduces the possibility of a China-U.S. conflict over Taiwan. "He has his hands full right now," Biden said of Xi earlier this month. Xi’s efforts to spur his country’s economy are faltering, and some observers fear that means China might ratchet up its designs on Taiwan. Biden disagrees. "I don't think it's going to cause China to invade Taiwan,” Biden said. “Matter of fact the opposite, [the country] probably doesn't have the same capacity as it had before.”

'A decade's work in front of us'

The struggle continues.

South China Morning Post reported that Moody’s Investors Service has downgraded its analysis of the country’s property sector from “stable” to “negative.” That news “only increases the likelihood of more forceful and broad-based policy support” from Xi’s government in the coming months. But that stimulus will probably only stabilize the sector, not revive it. “A major stimulus-fueled rebound in China’s housing market is highly unlikely.”

So how long will it take to pull out of the crisis? Possibly a long time. “Fixing the property sector may be a multi-year or even a decade’s work in front of us,” economist Hao Hong told CNBC. One of the obstacles: The Chinese housing market is already vastly overbuilt — there are more homes and apartments available than people to fill them. “There is now an oversupply of real estate ... 1.4 billion people may not be able to live in them,” a former official said recently. Even with loosened mortgage rules, Chinese homebuyers probably won’t be able to save their country’s economy.

China Evergrande shares tumble for second day after unit misses bond payment
Reuters
Mon, September 25, 2023 

FILE PHOTO: Headquarters of China Evergrande Group in Shenzhen

HONG KONG (Reuters) - China Evergrande Group shares slid for a second consecutive session on Tuesday, dropping as much as 8% after a unit of the embattled property developer missed an onshore bond repayment.

Evergrande's main domestic unit, Hengda Real Estate Group, said in a Shenzhen stock exchange filing late on Monday it had failed to pay the principal and interest for a 4 billion yuan ($547 million) bond that was due by Sept. 25.

The news comes after Evergrande said on the weekend that it was unable to issue new debt due to an ongoing investigation into Hengda, sending Evergrande's share price plunging 22% on Monday.

Hengda said it will actively negotiate with bondholders in a bid to reach a solution as soon as possible while working to resolve the debt risks and to safeguard creditors' rights and interests.

The missed payment is the latest setback to hit Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021 and it defaulted on its offshore debt obligations later that year.

Evergrande has been seeking creditors' approval for its proposals to restructure offshore debt worth $31.7 billion that includes bonds, collateral, and repurchase obligations.

Under the plan unveiled in March this year, Evergrande proposed various options to offshore creditors, including swapping some of their debt holdings into new notes with maturities of 10 to 12 years.

($1 = 7.3102 yuan)

(Reporting by Donny Kwok; Editing by Sumeet Chatterjee and Edwina Gibbs)

Major Evergrande creditor group to seek liquidation if no new debt plan soon -sources

Scott Murdoch
Updated Tue, September 26, 2023

 Buildings developed by China Evergrande Group on the man-made Ocean Flower Island in Danzhou

SYDNEY (Reuters) - A major group of offshore creditors of China Evergrande Group is planning to join a court petition to liquidate the cash-strapped developer if it doesn't submit a new debt revamp plan by next month, two sources familiar with the matter said.

The creditor group holds a large portion of Evergrande offshore bonds and, if it decides to join, would add more weight to the petition filed against the developer by an investor in a Hong Kong court.

Evergrande's offshore debt restructuring plan, unveiled in March, has been thrown into uncertainty after the developer said on Sunday it was unable to issue new debt due to an ongoing regulatory investigation into its main unit in China.

Deepening turmoil in China's debt-laden property sector is threatening to undermine Beijing's efforts to get the sputtering economy back on more solid footing, and raising fears among investors of a spillover into the country's banking system.

Evergrande has been in the process of seeking creditors' approval for its proposals to restructure offshore debt worth $31.7 billion, which includes bonds, collateral, and repurchase obligations.

Under the plan, Evergrande, the poster child of China's property sector crisis, had proposed various options to offshore creditors, including swapping some of their debt holdings into new bonds with maturities of 10 to 12 years.

A group of Evergrande bondholders were surprised by the firm's weekend announcement which said it was unable to issue new notes, and have been seeking meetings with the developer to seek more information, said the two sources.

If Evergrande fails to submit a new debt restructuring plan by Oct. 30, that bondholders' group will support a winding-up petition -- or petition to liquidate -- already filed against the developer, said the sources, declining to be identified due to the sensitivity of the matter.

The group has been in favour of finding a restructuring resolution for Evergrande's debt, but the developer's weekend announcement has reduced hopes that would eventually happen, the sources added.

Top Shine Global, an investor in Evergrande unit Fangchebao, in June 2022 filed a petition to liquidate in Hong Kong because it said the developer had not honoured an agreement to repurchase shares the investor bought in the unit.

In July, the hearing for that winding-up petition against Evergrande was adjourned to Oct. 30, in order to wait for the result from the developer's meeting with creditors to vote on its debt restructuring plan.

Evergrande needs approval from more than 75% of the holders of each debt class to approve the plan.

That meeting is scheduled for mid-October. However, the latest disclosure by Evergrande puts the meeting, as well as its outcome, in doubt and it's not clear if the meeting with offshore creditors will go ahead as planned.

Evergrande did not immediately respond to Reuters request for comment.

MISSED PAYMENT

The liquidation petition against Evergrande is one of the many such proceedings launched against Chinese developers as the firms failed to meet debt payment obligations after an unprecedented liquidity crunch hit the sector in 2021.

Evergrande cited an analysis commissioned from consultancy Deloitte during a Hong Kong court hearing in July to say the recovery rate from its proposed debt restructuring plan would be around 22.5%, compared with 3.4% if the developer is liquidated.

"At this stage, the offshore creditors are getting desperate, knowing none or little would be left for them," said KT Capital Group senior researcher Fern Wang, who publishes on Smartkarma.

The liquidity crunch was triggered in part by government efforts to clamp down on high debt levels in the property sector and rein in speculation.

Many of the defaulted developers have been scrambling to get their offshore creditors' approval for debt restructuring plans to avoid collapse or being forced into liquidation proceedings.

Shares in Evergrande ended down 8.1% on Tuesday at their lowest level since Sept. 6, extending losses for the second consecutive day, after its main domestic unit said it missed an onshore bond repayment.

The unit, Hengda Real Estate Group, said in a Shenzhen stock exchange filing late on Monday that it had failed to pay the principal and interest for a 4 billion yuan ($547 million) bond due by Sept. 25.

Evergrande's stock plunged 22% on Monday, after its Sunday announcement about its inability to issue new notes.

The latest developments further darken the outlook for Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021 and it defaulted on its offshore debt obligations later that year.

These setbacks also come as the Chinese authorities have been trying to revive homebuyers' sentiment with a raft of measures, including a reduction in existing mortgage rates.

(Reporting by Scott Murdoch; aditional reporting by Donny Kwok in Hong Kong; Editing by Sumeet Chatterjee, Kim Coghill and Mark Potter)

China's property stocks fall by the most in nine months as Evergrande says it's unable to issue new debt

Joseph Wilkins
Mon, September 25, 2023 

Qi Yang/Getty Images; mikroman6/Getty Images

China's embattled property stocks have tanked by the most in nine months, according to Bloomberg data.

The Bloomberg Intelligence gauge of Chinese developer shares fell almost 7% after Monday's trading.

Major developer Evergrande fell by 25% after announcing it was unable to issue new debt.

China's property stocks have tanked by the most in nine months as the embattled industry struggles to cope with a slew of headwinds.

The Bloomberg Intelligence gauge of developer shares fell almost 7% after Monday's trading – having now shed over $55 billion from its value this year, per the outlet.

Among the biggest losers was embattled developer Evergrande – which is reeling from its abrupt cancellation of key creditor meetings and its announcement that it would be unable to issue any new debt.

Shares in the struggling developer – once China's second-largest — tanked 25% on Monday, continuing its wild price swings since the stock resumed trading on the Hong Kong stock exchange last month.

After facing a liquidity crisis in 2021, the firm's woes are symptomatic of the broader issues facing the sector.

Evergrande had around $300 billion worth of liabilities when troubles first began and this figure ballooned to about $340 billion by the end of 2022.

The real-estate crisis in the Asian nation shows little sign of easing, with policymakers in Beijing holding back from extending large-scale policy support for the industry. As many as 53 Chinese developers have collapsed in recent years as the once-booming market faces slowing demand and enormous debt burden repayments.

China is trying to revive the ailing industry by boosting consumer demand in other parts of the economy, but appetites for apartments is likely to remain subdued amid record-high youth unemployment rate and slower economic growth, experts told Insider.

Evergrande shares slide again after missed payment

Reuters Videos
Tue, September 26, 2023 


STORY: Evergrande shares tumbled for a second day on Tuesday (September 26).

They fell as much as 8% in Hong Kong trade, following news of more debt troubles.

Its main domestic unit - Hengda Real Estate - said it had failed to make payments due the day before.

That came after Evergrande said over the weekend that it was unable to issue new debt.

The firm says that’s due to an ongoing investigation into Hengda by regulators.

Evergrande shares lost more than a fifth of their value on Monday (September 25) following that news.

Now the company says it will negotiate with bondholders to find a solution to the missed payment.

But it’s all just the latest setback for Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021.

The firm has been seeking creditors’ approval to restructure offshore debts totalling almost $32 billion.

It needs approval from 75% of the holders of each type of debt to approve the plan.

The turmoil in the property sector has investors at home and abroad feeling nervous, with real estate accounting for around a quarter of China’s economy.

Sacred cow: Ball makers break taboos for India's favourite sport

Sean GLEESON
Tue, September 26, 2023 a

In this photograph taken on September 14, 2023, a worker polishes cricket balls at a workshop in Meerut in India's northern state of Uttar Pradesh (Money SHARMA)

Stitching together cricket balls is a wearisome task for leatherworker Bunty Sagar, whose labours are frowned upon by many fellow Indians even if he makes their favourite pastime possible.

In a nation where the majority Hindu faith views cows as sacred, Sagar's trade lies in the hands of those willing to handle their hides for long hours and little pay.

The work is tedious and repetitive, and its profitability has been threatened by the cow protection campaigns of Hindu activists seeking to end cattle slaughter.

Sagar had hoped study would lead him along a path to a different career but is resigned to his work after the early death of his father -- also a lifelong leatherworker -- left him the sole breadwinner.

"I don't feel anything negative about the job I do," the 32-year-old Hindu told AFP, sweating in a small and stifling production room alongside half a dozen others, moulding leather to the ball's solid cork centre.

"If I were to feel bad about my job, what would we eat?"

Though counting himself among India's millions of cricket obsessives, his factory's colossal order book has left him unable to share their excitement for next month's World Cup on home soil.

"I like watching cricket, but I can't because we're so busy," he said.

"I'm working eight hours a day, seven days a week," he added. "My job is what keeps our household running."

Nearly all of India's cricket balls are painstakingly made by hand in Sagar's hometown of Meerut, a short drive from the capital New Delhi.

Sanspareils Greenlands, the top manufacturer, makes all the balls for India's home Tests, while others meet the bottomless demand from domestic cricket associations.

The industry is a bedrock of the city's economy, with nearly 350 separate businesses involved in production, according to government figures.

Its success rests on abundant and cheap labour that has reduced the incentive for more mechanised processes used in other countries.

"It is the workforce that brings the ball-making process to a beautiful conclusion," factory owner Bhupender Singh told AFP.

- 'Like a god' -

That labour has traditionally been the realm of those who belong to the Jatav community, which sits at the bottom of the millennia-old caste hierarchy that divides Hindus by function and social standing.

Jatavs are a sizeable number of India's 200-million-strong Dalit castes once subject to the discriminatory practice of "untouchability".

The custom was outlawed in 1950 by the author of India's constitution, B.R. Ambedkar, a lawyer who championed the rights of fellow Dalits.

Pictures of the bespectacled Ambedkar adorn the otherwise bare walls of Meerut's cricket factories, in reverence for a man Sagar says he treats "like a god".

Caste remains a crucial determinant of one's station in life at birth: less than six percent of Indians married outside their caste, according to the country's most recent census in 2011.

But policies to guarantee places for Dalits in government jobs and higher education have brought some social mobility.

With more opportunities, few cricket ball-makers want their children to follow them into the trade.

Meerut's high unemployment rate has meanwhile forced others from higher castes to stomach any objections to what they would have once considered "unclean" labour.

"People are in need of income and are willing to work, especially since job opportunities are limited in this area", Singh said.

- Red lines -

Meerut has been the principal hub for Indian sports goods since soon after independence from British colonial rule in 1947.

Back then, skilled leatherworkers fled the city of Sialkot in modern-day Pakistan during the deadly partition of the subcontinent along religious lines.

Singh's business was established by his grandfather and he had hoped to expand its operations, but India's political climate has made life tough for the industry.

Since the election of Prime Minister Narendra Modi's government in 2014, Hindu activists have sought to disrupt and outlaw cattle slaughter, a business dominated by India's Muslim minority.

Their campaigns have occasionally seen deadly consequences, with Muslims suspected of involvement in the trade lynched by frenzied mobs, including in Meerut.

It has also led to supply issues that saw Singh's costs for tanned leather jump 50 percent last year, and prompted others to seek a greater share of alternative sourcing from buffalo and bull hides.

Ashish Matta, the owner of a wholesaler of a sports goods materials business in Meerut, was at pains to insist to AFP that the leather he dealt in did not come from cows.

But he also said the widespread use of leather made a mockery of taboos around its production.

"Leather is used to make various products -- shoes, belts, bags, purses, and even cricket balls," he said. "So I don't think there is any issue."

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